Civil Society Legislative Advocacy Centre (CISLAC), along with civil society organizations under the Accountability in Extractive Sector (AES) cluster, has called on the government to expedite action in updating the duplicated, inaccurate, and incomplete information in the beneficial ownership register to provide authentic data on persons with significant control in the country’s extractive industry.
The call was part of a number of recommendations by participants in a two-day training workshop for CSOs and the media on the use of beneficial ownership information to improve natural resource governance in Nigeria.
The workshop was organized in partnership with the Niger-Delta Open Government Partnership Observatory (NOGO) cluster and the Media Initiative for Transparency in Extractive Industries (MITEI) with support from the United States Agency for International Development (USAID) under the Strengthening Civic Advocacy and Local Engagement (SCALE) project implemented by Palladium.
Participants noted the significant progress by the Federal Government in the implementation of beneficial ownership transparency reforms, which culminated in the launching of an Open Central Register of Beneficial Ownership on May 25, 2023.
Apart from signing the Companies and Allied Matters (Amendment) Bill 2020 into law, participants said the opening of the register, also known as the Persons with Significant Control (PSC), makes it possible for the disclosure of all beneficial owners of corporate entities in the country and the adoption of Beneficial Ownership Data Standard.
They observed that while the extractive industry remained the backbone of the Nigerian economy, the country was losing an average of $15 billion and $18 billion to Illicit Financial Flows (IFFs) in the Extractive Industry every year as a result of the non-disclosure of information on persons with significant control of assets in the industry.
Transparency of ownership and control of companies, partnerships, trusts, and other legal entities that can hold assets and open bank accounts, participants pointed out, was critical to determine where illicit funds were moving to and those behind them.
Consequently, they insisted tackling corruption and financial crimes in the extractive industry should be seen as a multi-agency task that must not be implemented by the government and its agencies.
These agencies, they said, also need beneficial ownership information to efficiently handle the investigation and prosecution of those holding the ultimate responsibility in financial and economic crimes.
The need for wider public engagement on the existence of the BO register and its relevance to extractive and corporate sector transparency and accountability.
Also, they stressed the need to deepen the capacity of tax and customs authorities, policing and prosecution authorities as well as the media on the use of the register is crucial as a veritable tool for tackling corruption and financial crimes.
In addition, participants underlined the need for strategic collaborations between the Corporate Affairs Commission (CAC) and the relevant agencies like the Federal Inland Revenue Service (FIRS), Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and the Bureau of Public Procurement (BPP) towards collective impact.
“The interoperability of data between government agencies, linked to a central procurement portal, as beneficial ownership declarations should be required of all parties entering into government contracts,” the participants demanded.
They also called for the deployment of an approach that clearly defined the roles and responsibilities of various relevant stakeholders in defending the system or preventing the misuse of information on persons with significant control in the extractive industry.
The consensus during the workshop was that while the rapid uptake of beneficial ownership (BO) reforms was significant, the quality, accuracy, and utility of the data to curb Illicit Financial Flows (IFFs) and revenue leakages was dependent on the comprehensiveness and implementation of the BO legal and regulatory frameworks, the effectiveness of online register, and the strategic collaborations towards the effective use of the register.
In his opening remarks, the Executive Director of CISLAC, Auwal Ibrahim Musa (Rafsanjani) said the establishment of a publicly accessible central register for warehousing personal information of natural persons that own, control, and benefit from corporate entities was proposed by the Financial Action Task Force (FATF).
Rafsanjani said while legitimate corporate businesses have an integral role in national development, the involvement of Politically Exposed Persons who conceal corruptly acquired wealth through the complex networks of companies deliberately created to hide their identities has further increased the risks posed to non-fortified economies.
Citing the examples of some high-profile oil scandals, like the Glencore, Siemens, Halliburton, and Malabu, Rafsanjani said these had a net impact on revenue leakages that became unbearable for the country’s finances and the citizens’ economic well-being.
“Without transparent ownership of Nigerian and international companies operating within the Nigerian jurisdiction, we will not be able to stop the bleeding from illicit financial outflows, which costs us around 18 billion US dollars, annually,” he said.
Being the backbone of the country’s economy, he said the extractive industry must be made to run transparently and accountably, adding that Nigeria proved its desire to implement beneficial ownership transparency (BOT) when its signed up to the Open Government Partnership initiative in 2016 as part of its commitment to those principles.
Apart from participating in the beneficial ownership pilot in 2015, he said the country also complied with the principles and requirements of the global Extractive Industries Transparency Initiative (EITI) to establish a beneficial ownership (BO) register by January 1, 2020.
To further demonstrate that commitment, he said the Nigerian Extractive Industries Transparency Initiative (NEITI) in December 2019 published Africa’s first beneficial ownership register, and the first such register globally to focus on the oil, gas, and mining sectors.
Besides, he said the CAC consolidated on the progress recorded by ensuring the enactment of the 2020 Companies and Allied Matters Act (CAMA) to give the legal backing and provide for a larger register for all corporate entities in the country.
To advance the legal and technical requirements to achieve the beneficial ownership transparency reforms in Nigeria, Rafsanjani said the CAC established a public Persons with Significant Control Register to collect beneficial ownership data in line with Open Ownership’s data standard.
He said an updated register with accurate data on persons with significant control of the extractive industry would significantly enhance the fight against corruption and criminality by facilitating investigations by law enforcement agencies into the true ownership and control of companies and limited liability partnerships.
Besides, he said the register would support civil society organizations in promoting citizens’ participation in public accountability and governance, as well as strengthening the capacity of the media to perform their traditional roles as watchdogs of society.
He urged civil society and the media not to relent on their roles and responsibilities, by ensuring sustained interventions to galvanize support from government and non-state champions for the advancement and realization of this commitment towards a more transparent and accountable extractive sector governance regime.
“While the register remains a significant tool in the fulfillment of the commitments to strengthen anti-corruption reforms and corporate accountability, it is only as important as its utilization in detecting, preventing, reporting, and sanctioning corruption in the sector,” Rafsanjani said.
The AES cluster anchored by CISLAC comprises the Better Community Life Initiative (BECOLIN) in Imo state; Community Conciliation and Development Initiative (CCADI) in Port-Harcourt, Rivers state; Connected Advocacy for Empowerment & Youth Development Initiative (Connected Advocacy) in Edo state; Good Governance Team (GGT) Nigeria in Abuja; Institutional and Sustainable Development Foundation (ISDF) in Abuja; International Centre for Women Empowerment and Child Development (ICWECD) in Delta state; Policy Alert in Akwa Ibom State; Social Development Integrated Center (Social Action) in Abuja/Rivers state; Speak Out Africa Initiative in Abuja, and Support for Training and Entrepreneurship Program (STEP) in Akwa Ibom State.
