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Nigeria: How Natural Resource Data Is Helping To Build Trust In Host Communities

Workers At An Oil Mining Site

In 2003, Nigeria signed-up to the Extractive Industries Transparency Initiative (EITI), a global standard promoting good governance in oil, gas and mineral resources, to ensure transparent use of her resource revenue for citizens benefit.

The Nigeria Extractive Industries Transparency Initiative (NEITI) the EITI sub-set in the country, which has been a trailblazer among the EITI member countries, went beyond the EITI’s requirement of periodic audits of ‘what companies paid’ and ‘what government received’, to begin publication of various policy papers containing vital information on resource data.

Through NEITI, the country has been able to re-visit historical issues, track gaps and present authoritative data on the actual impact of resource extraction on host communities, as against the previously held exaggerated or underestimated assumptions.

It has also brought to the fore cases of revenue leakages and the substantial amount of revenue government has lost over the years.

Other actors, such as the Nigeria Natural Resource Charter (NNRC), and the Natural Resource Governance Institute (NRGI), also increased their advocacy, populating the sector with critical resource data.

Oil Spill

For instance, the NNRC have published three Benchmarking Exercise Report (BER), using the traffic light system of green, amber and red to access Nigeria’s petroleum sector governance. The 2012, 2014, and 2017 BER address challenges along Nigeria’s natural resource value chain, under what is tagged; Precepts one to 12. The reports note areas where the country has made progress and highlight areas requiring improvements. They have since become tools for citizens advocacy.

Specifically, Precept 5, which bothers on ‘Managing Local Impacts’, deals extensively on opportunities for translating benefits of extractive activities to local communities. It explains how to build an environment of trust and collaboration to support the effective management of local impacts and how inculcating robust strategic impact assessments can inform decision making about extractive activities in new areas.

Precept 5 also details how to improve on approaches to mitigate the environmental and social costs of resource extraction as well as how to facilitate the emergence of local benefits from resource extraction through enhanced local content policy.

The Precepts have contributed to empowering host community members and advocates in Nigeria with information needed to peer review with other countries, ask informed questions and demand policy changes, having gotten the understanding that while the unfortunate costs of resource extraction borne by host communities is not peculiar to Nigeria, priority should however, be placed on minimizing the costs to communities much as it is placed on maximizing the benefits from resources.

Gas flaring

Community groups and advocates have largely come to better understand the international best practice of how companies should respond to incidents such as spills, with a view to minimizing impact. They also now better understand how to engage with and or, hold companies and government to account in the case of negligence. This has largely helped in building trust and collaboration among host communities and have been critical for averting frequent violent conflicts.

For instance, experts believe that the blame and counter blame game that characterized the incident which inflamed tension and unfortunate events in Ogoniland in 1995, would have been minimised had there been sufficient authoritative data to properly situate faults and apportion responsibilities.

Ogoni clean-up excercise

Today, available data, particularly, the United Nations Environmental Programme (UNEP) report, has helped to significantly build trust in the area. The independent report not only established the cause of the spill that devastated Ogoniland, but noted to what degree the damage was done.

It also laid responsibility on Shell, the operator in the area and recommended a multi-billion-naira cleanup exercise that meets international standard, to be funded by the Shell JV and the Nigerian government. A cleanup exercise has commenced, trust building and more collaboration between government and the communities is ongoing. It is believed that resumption of resource extraction from the oil rich area will resume sooner than later.

A worker at an oil facility

The curtailed restiveness in Nigeria’s Niger Delta region is another case in point of how the use of natural resource data has helped to build trust and reduce militancy, where the use of military force failed.
Data on oil revenue, its disbursement/allocation by the Federation Accounts Allocation Committee (FAAC), as well as data on derivation and other special intervention to the Niger Delta region, has largely contributed to ease the age-long sense of exploitation and abandonment felt by the people.

Similarly, the independent audit conducted on the sector by NEITI has helped to put into the right perspective the amount of revenue lost to leakages, under remittances, under assessments etc., as against the previously assumed numbers. This has put the Nigerian National Petroleum Corporation (NNPC), on the spotlight and prompted the corporation to begin a public disclosure of its monthly operations as it strives to build trust.

Although much work remains to be done, the journey to enthroning a transparent governance system in Nigeria’s extractive sector has undoubtedly begun.

As the oil sector continue to evolve following the availability of insightful resource data presented in ways that can be easily understood even by the every-day Nigerian, thereby paving the way for improved citizen participation in conversations around extractive resources, restiveness and militancy will eventually give way to advocacy and peaceful dialogue, and position the country to better compete with other oil frontiers.

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