News - Oil & Gas - January 2, 2021

EITI contract transparency: NEITI to publish NNPC, DPR, others’ contracts details

Only 37 countries have so far implemented EITI guidelines on disclosure on extractive contracts

Pursuant to the global transparency group, the Extractive Industries Transparency Initiative (EITI) January 1, 2021 deadline for compliance with contract transparency requirements by EITI implementing countries, Nigeria said it is obliged to make the terms of contracts in the oil and gas, and solid minerals industries available to Nigerians.
On December 10, 2020, the global transparency group announced the deadline it said all its 55 member countries implementing the EITI Standard must comply with as a step forward in extractive sector transparency.
Under the new guidelines announced in Oslo, member countries are henceforth required to publish details of all new and amended contracts, licenses and agreements concluded with extractive companies operating in their domains.
Member countries are also required to document their government’s policy on the disclosure of contract details and licenses governing the exploration and exploitation of oil, gas and minerals resources.
EITI explained on its website that when countries commit to contract transparency, “they accept to publicly disclose the full text of any contract, license, concession or other agreement governing the exploitation of oil, gas and minerals.”
The EITI Chair, Helen Clark, who made the announcement, said EITI member countries were encouraged to publish contracts concluded before the January 1, 2021 date.
The requirement for member countries to publish new contracts and contract amendments were introduced in the 2019 EITI Standard.
The EITI said several contracts in many of its member countries remained unpublished due to confidentiality clauses, thereby increasing the opacity of the extractive sector and making it more vulnerable to corrupt practices.
The global transparency group said contract transparency was a powerful disincentive for officials to conclude extractive contracts that are partial or result in personal gains.
The EITI said under such opaque circumstances, large sums of money are at stake in extractive industry agreements, adding that subjecting contract agreements to public scrutiny was more likely to result in fairer agreements, drafted in a way consistent with each country’s legal framework.
Apart from curbing corruption, the group said publishing contracts would also help the extractive sector fulfill its potentials and capacity to contribute to national development in resource-rich countries.
To date, 37 countries that implement the EITI have disclosed some or all extractive contracts, in addition to the growing use of contract information in the extractive industries.
The Director, Communication and Advocacy, Nigeria Extractive Industries Transparency Initiative (NEITI), Ogbonnaya Orji confirmed Nigeria reputed to be one of the leading countries in implementing EITI principles has already concluded plans to ensure strict compliance with the new requirement.
He said effective from the January 1, 2021 deadline, all contracts by the Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR) and other relevant government agencies in the oil and gas industry would be made open for public scrutiny.
Similar contracts between the Mining Cadastre Office (MCO) and operators in the solid mineral sector would also be made public.
Mr Orji said as a signatory to the global EITI principles, NEITI Nigeria has already developed an implementation plan to ensure that the country meets the announced deadline.
In addition, he said the transparency agency has developed a draft implementation plan on Contract Transparency with the support of development partners and multi-stakeholders following a series of validation workshops.
The workshops, the director said, was to ensure that the covered entities, including the NNPC, DPR, MCO and the operating companies understood the content of the implementation plan and how it would affect their operations going forward.
“From this year (2021), all NNPC contracts will be published as soon as they are entered into and their contents disclosed to the public through the NNPC official website.
“We expect that similar contracts by the DPR will also be made public through all channels of public communication. Same as the MCO and all the other relevant covered entities. That is what NEITI is pushing for,” he said.
The Executive Director, Centre for Transparency Advocacy (CTA), Faith Nwadishi, who is championing the campaign for the inclusion of public disclosure of contracts in the extractive industries, also disclosed that the Federal Government is expected to establish n online portal for people to access contract details from January 1 deadline.
CTA, in collaboration with civil society groups under the aegis of Contract Advocacy Network (CONTRANET) and Media Initiative for Transparency in Extractive Industries (MITEI), has been sensitizing Nigerians on the strategic importance of contract transparency.
Ms Nwadishi, who is also a former board member of global EITI and Executive Director, Women in Extractives, said the general expectations of CSOs and Nigerians was that the contents of contracts awarded under the 2020 marginal oil fields bid round would be made public through the portal.

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