Policy experts in the extractive industries sector have said that the strict implementation of the provisions of the contracts transparency and beneficial ownership in the Petroleum Industry Act is crucial for the growth and development of the country’s economy.
The experts who made the observation on Friday at a Virtual Learning Session on Beneficial Ownership and Contract Transparency in Nigeria organized by Policy Alert with the support of Open Society Initiative for West Africa (OSIWA) urged the federal government, through the successor regulatory agencies, to take this seriously.
For the Executive Director of Centre for Transparency Advocacy, Faith Nwadishi, publishing details of contracts and revealing the beneficial owners of extractive industries assets as provided for in some of the country’s recent legislations would minimize the massive losses the government has suffered over the years through illicit financial flows and the corrupt involvement of Politically Exposed Persons (PEPs) in the sector.
Nwadishi charged civil society organizations and resource-rich communities to leverage on the provisions of Sections 119-123 and 320 of Company and Allied Matters Act (CAMA) 2020 and Sections 7, 32, and 83 of the Petroleum Industry Act (PIA) 2021 to unravel the real owners of extractive companies and the terms of deals entered with the government and communities as the first step toward accountability in the sector.
“These are opportunities for citizens to hold government actors to account, because these are not just policies now, but legislations”, she said.
Insisting that the beneficial ownership register hosted by Nigeria’s companies’ registry should be made publicly accessible, Nwadishi decried a situation where mining companies ignored the requirement by the Nigerian Minerals and Mining Act 2007 for them to provide Community Development Agreements (CDAs) with host communities before commencing operations.
On his part, the Executive Director of Human and Environmental Development Agenda (HEDA), Olarenwaju Suraj, said the case of Oil Prospecting License (OPL) 245, popularly called Malabu Oil scandal, “clearly demonstrates what contract secrecy and dodgy ownership of extractive industries assets can do to the country’s valued resources.”
Suraj narrated how his organization had been fighting over the years to unravel the corrupt secrets of the deal and bring its perpetrators to book, and how corruption had been fighting back viciously.
He said it was time for civil society organizations (CSOs) and citizens to move beyond pleading for compliance on laws to trying litigations when laws are flouted.
“Where these laws are not respected by companies, or when government ministries, departments and agencies (MDAs) flout their own laws, CSOs should try litigation. Test the laws by going to Court to get the interpretation of relevant provisions,” he said.
Suraj advised that Chinese and Indian companies, whose countries are not members of the Extractive Industries Transparency Initiative (EITI) and Open Government Partnership (OGP) should not be exempted from the implementation of laws on beneficial ownership and contract transparency since Nigeria where they operate is committed to those frameworks.
The HEDA helmsman said apart from some unscrupulous civil servants collaborating with politicians, some extractive companies also aid them to engage in corrupt practices that impact negatively on the extractive sector of the country’s economy.
He said: “Poor governance, corruption and abuse of office are not always about the politicians alone, but also the civil servants too. We need information about civil servants’ who perpetrate atrocities in the extractive sector. There is the need for a paradigm shift of focus, by not looking at politicians only as behind mis-governance, but also investigating the activities of civil servants who act as accomplices.
“The truth is that it will be very tough for any politician to get away with any crime in office related to contract or corruption issues without the active conspiracy, collaboration, and encouragement of civil servants. We need to start to engage with this level of governance.”
The Executive Director of Policy Alert, Tijah Bolton-Akpan, expressed optimism that the provisions of the Petroleum Industry Act (PIA) 2021 on disclosure of contract terms and company ownership could be a game-changer in the government’s anti-corruption drive in the sector.
However, he maintained that it would be crucial for the PIA Implementation Committee to ensure the right tools, skills, and administrative frameworks were in place within the various regulatory agencies, namely the Nigeria Upstream Petroleum Regulatory Commission, the Nigeria Midstream and Downstream Petroleum Regulatory Authority and other relevant agencies government agencies, for the smooth take-off and effective implementation.
He called on the successor agencies under the PIA 2021 to work with other agencies, such as the Nigerian National Petroleum Company (NNPC) Limited, the Corporate Affairs Commission, the Code of Conduct Bureau, the Nigeria Financial Intelligence Unit, and the Mining Cadastre Office, among others, to ensure effective implementation of these transparency and accountability reforms in the oil, gas and mining sectors.
Tijah-Bolton observed that corruption in the extractive sector, particularly the oil and gas industry, has become an existential threat given the realities of climate change and other environmental issues.
“With the imminence of the energy transition, if we do not act fast to plug leakages from the sector, it may soon become too late for the government and resource-rich communities to derive any real benefits as fossil fuels are fast becoming uneconomical, in addition to being unfashionable and unsustainable,” he said.