What Nigeria Is Doing To Push The Frontiers Of Contract Transparency – Dr. Orji
In this recent interview in Abuja, Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Orji Ogbonnaya Orji, gave details of how the organisation is collaborating with relevant agencies to ensure the effective implementation of contract transparency in Nigeria’s extractives industry. He also spoke about the challenges he met upon assumption of office, his efforts at addressing them as well as the strategies NEITI is adopting to help improve accountability in the management of revenue flows from the extractives sector. Juliet Ukanwosu reports for extractive360. Excerpts
What did you identify as the immediate challenges facing NEITI when you assumed office in February 2021?
I categorized the challenges into two; the first is what needed little or no money to do but simple leadership, while others were those that required money and some planning. Restoring clean, friendly working environment was number one, unifying our staff to the original NEITI family that I was part of where staff come to work early, approach their duties efficiently without coercion, with little or no supervision and sometimes stay in office far beyond closing time until assigned tasks are accomplished. For me, it was quite urgent to restore friendly and productive work culture, so I followed this up through strategic meetings with management and staff to seek advice, support, set a new strong tone, unfold new agenda and new plans that pointed clearly to a new direction for our organization.
In charting a new direction for NEITI, what were the major challenges that confronted you?
The first major one was office accommodation. Since inception of NEITI, over 17 years ago, we have operated from rented accommodation with its attendant problems. I considered this an issue that I must deal with to free NEITI and the government from the huge burden of paying rent. Also, by February last year when I took over, NEITI was without a Board – the National Stakeholders Working Group (NSWG) – thereby putting our country on the edge of suspension by the global (EITI). It is a requirement for which we were in violation. And so bringing this to the attention of government with the urgency it deserved was another top priority. There was also the urgency to reconnect our multi-stakeholders and citizens with NEITI and vice versa through the scope and quality – in terms of the content, context and comprehension – of our reports. There was also the issue of staff welfare which was a matter of concern to our entire workforce. In addition was the need to restore Nigeria’s leadership role among the 55-member EITI -global community. And finally, to anchor our actions on these and other issues on a new strategic plan that ensures that NEITI reports help government’s revenue drive while driving reforms in the sector.
Nigeria currently Chairs the Global Contract Transparency Network, what are the tasks before the Committee?
Nigeria assumed leadership of the global Contract Transparency Network comprising of 20 member countries in January 2022. The implementing countries include Indonesia, Philippines, Mexico, Armenia, Cameroun, Chad, Democratic Republic of Congo, Ghana, Malawi, Guinea, Mongolia, Mozambique, Myanmar, Senegal, Sao tome e’ Principe, Togo, Zambia and Tanzania. I currently Chair this network on behalf of Nigeria. I took over from Alexandria Walls of Mexico who led the global body from inception in 2018. Nigeria’s tenure as the Chair of the network is for a period of four years. On the local level have we established the Joint Inter-Agency Committee on Contract Transparency, which is developing a National Roadmap and a Work-plan for the implementation of contract disclosure in the oil, gas and mining industries. The contracts to be disclosed include the terms and conditions set out in the contracts for exploration and exploitation of Nigeria’s oil and gas assets under the Joint Operating Agreements, Production Sharing Contracts, Service Contracts and Sole- Risk Contracts. The disclosures would also cover contracts in the solid minerals sector amongst others. The joint committee was carefully drawn from relevant government agencies with direct responsibilities in managing Nigeria’s interests in various funding arrangements in the sector governed by contractual obligations. The Agencies include; the Federal Ministry of Justice, Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) Ltd. Other members are the Nigeria Upstream Petroleum Regulatory Commission and the Mining Cadastral Office. NEITI is expected to serve as the secretariat.
Nigeria recently won the OGP Award for its implementation of Beneficial Ownership transparency in the extractives. Give us an insight of how the selection was made and what role NEITI played?
Nigeria won the first position at the Open Government Partnership (OGP) Global Awards in Seoul, South Korea, on December 15th 2021, beating other countries in Africa and the Middle East that are implementing the OGP to win the award. Nigeria was considered for the honour following a painstaking independent review of reforms embarked upon by implementing countries. The review tracked and assessed milestones achieved by the Nigerian government in setting up a Beneficial Ownership registry to end anonymous companies in the country. NEITI led the Extractive Industries Thematic Group that implemented Beneficial Ownership disclosures as part of President Muhammadu Buhari administration’s commitment to the OGP. In picking Nigeria for the global honour, the Summit considered the Buhari administration’s overall commitment to reforms in the oil, gas and mining sectors and the governments support to NEITI to establish a beneficial ownership register of Companies in business in Nigeria’s extractive sector. Also considered are the broader reforms in beneficial ownership disclosure by the Corporate Affairs Commission (CAC) through the amendment of the Companies and Allied Matters Act and the recent Petroleum Industry Act, which made specific provisions for Beneficial Ownership transparency. Other agencies that worked with NEITI were the NNPC, the defunct Department of Petroleum Resources (DPR), the Corporate Affairs Commission (CAC), Mining Cadastre Office (MCO) and Nigerian Civil Society representatives. The OGP Summit in Seoul also recognized Nigeria’s commitment to integrate Beneficial Ownership information and use it as a tool to fight insecurity, illicit financial flows, tax evasion and money laundering.
Petroleum products availability and subsidy payments are among issues on the front burner for Nigerians today, what is NEITI’s position on this?
At the moment, the NNPC and the Nigeria Midstream and Downstream Regulatory Authority have done a good job in their sustained interventions to restore normalcy. I was in touch with top managements of the relevant organizations and I am aware of the amount of work and pressure that have gone into this. But let me say this, fuel scarcity is just a mere symptom, subsidy is the main disease.
The issue of oil theft is a recurring decimal in NEITI’s Audit Reports, what is your organisation doing to help tackle the menace?
This is a huge problem that is currently impacting very negatively and seriously, especially on our downstream and midstream operations. For example, many IOCs and big firms are gradually divesting in the downstream sector because the problems of oil theft, vandalism, and deliberate sabotage have been quite difficult to manage. This is despite efforts by various security agencies to secure these huge investments. Many that can afford it, because it is very capital intensive, are moving into upstream. And that’s why you see revenues from Petroleum Sharing Contracts (PSCs) outstripping returns from Joint Venture (JV). From our reports in the last six years (2015 – 2020), Nigeria has lost about 299.31mmbbls to crude theft. NEITI, as part of our monitoring functions, is reviewing the situation very critically and will soon be sending our policy advice on this to the government. Our Board is already discussing the implications as well as possible short, medium and long term interventions. But for us, it is an issue of major concern.
How would you describe the present level of transparency in Nigeria’s extractive industry and how can NEITI help improve accountability in the management of revenue flows?
I can tell you that it has tremendously improved, our intervention working with the companies, government and civil society has made a big difference. For instance, information and data disclosure is fast becoming a routine and a culture that has led to huge information and data being placed on the public domain. Record keeping has also improved while reforms are breaking barriers of opacity. The Petroleum Industry Act is also bringing new changes. On improved revenue management, we need to widen the scope of our investigations and engagement with the covered entities on process, physical and fiscal issues that underpin oil, gas and mining operations and governance value chain to enthrone honesty, competition, efficiency, cost effectiveness and value for money. We need to implement emerging issues with the letters and principles of EITI standards. We also need to broaden the spectrum of stakeholder’s engagement especially with companies, government, the civil society and the media with effective communication strategy. These stakeholders must understand that in transparency and accountability everyone wins. Robust implementation of the PIA is also key because the law will create a new positive business environment for the sector if we allow consistency, trust and vision to drive the process.
