A major benefit of the implementation of Contract Transparency in Nigeria will be an end to systematic abuse of Tax Holidays granted indiscriminately to extractive companies, the Executive Director, Centre for Transparency Advocacy, Faith Nwadishi has said.
Speaking at a workshop organised for CSOs and media on the implementation of contract transparency, with the support of FOSTER, in Owerri on Monday, Nwadishi said achieving contract disclosure will also help check environmental abuse by extractive companies, among other benefits.
She explained that countries engage in extractive business to generate revenue for development and to benefit their citizens, regretting however, that over the years, the opacity in extractive contracts in Nigeria, have prevented Nigerians from tracking such contracts and holding government and companies to account, a situation that has led to the under development of the country.
“The revenue that should accrue from natural resource wealth is not translating to the developments seen on ground, hence the call for the implementation of contract transparency to enable Nigerians scrutinize the terms of the contracts.
“For example, the granting of tax holidays should be looked out for in contracts, some underserving companies are given pioneer status tax breaks. Some have 25 years tax holiday. Citizens should be able to scrutinize such incentive and query their rationale. when such cases are constantly flagged, the abuse will end, and more revenue will accrue to government,” Nwadishi said.
Speaking further, she wondered why extractive companies are indiscriminately destroying the environment and livelihoods of host communities without remediation and without been held to account, adding, “it is part of the contract for them to extract oil and destroy the environment?
“We also need to scrutinize what type of contracts the country has signed in the area of gas. Gas is supposed to generate more revenue than oil, are extractive companies allowed to take gas freely? can they flare freely? what penalties are stated in the contracts and to what extent are companies defaulting? these are things to look out for when analysing the contract,” she added.
According to Nwadishi, extractive industry contracts are usually very technical which necessitated the need for a workshop to build capacity of journalists and CSOs to report and engage the contract terms. “It is important for people who will want to advocate for contract transparency implementation to understand what a good contract is, it also help in tracking their implementation,” she added.
Expressing the hope that the Petroleum Industry Bill (PIB) which has been in the making for about two decades, will be passed by the end of this year, she said “We have contract transparency provision in the PIB, we are hoping it will remain as provided for.”
She further stated that achieving contract transparency implementation in Nigeria will help the country meet requirement 2.4 of the EITI which Nigeria is a signatory to.
The EITI expects Nigeria to put in public domain all contracts that have been signed in Nigeria from Jan 1, 2020. It is also encouraged to include other contracts signed before Jan 1, 2020
In his presentation, Leonard Ugbuaja said the public portal of contract transparency must contain summary of contracts, key terms of contract and basic elements critical to understanding the terms, for it to be a meaningful portal.
Also remarking, Dr Mike Uzoigwe, Technical Lead, Demand-Side Accountability at the Facility for Oil Sector Development (FOSTER) stressed that it was high time demand-side actors do more than talking.
“In the area of contract transparency, as citizens and critical actors in the sector, we should more vigorously engage the process. We must continue to monitor the progress of the PIB and ensure it is passed with contract transparency provisions,” Uzoigwe stressed.