FG to Accelerate Open Disclosure of Nigeria’s Oil, Gas Assets’ Ownership

The federal government yesterday officially launched the Opening Extractives Programme (OEP), a global five-year scheme to unveil the real owners of assets in Nigeria’s oil, gas and mining sectors.

To be jointly implemented by the Extractive Industries Transparency Initiative (EITI) and Open Ownership, the initiative was introduced to accelerate progress of beneficial ownership transparency in selected resource-rich countries.

The government said the programme was part of the ongoing reforms in the extractive industries.

The Minister of Finance, Budget, and National Planning, Dr. Zainab Ahmed, who delivered the keynote during the event organized by the Extractive Industries Transparency Initiative (NEITI) in Abuja, said it would help stem corruption and money laundering in the sectors.

Represented by the Minister of State for Budget and National Planning, Mr. Clem Agba, Ahmed stated that despite several roadblocks erected by companies operating in the sector in the past, the federal government had continued to push for more transparency in the industry.

Ahmed explained that having been selected as one of the pilot countries for beneficial ownership, NEITI at the time developed the first set of templates used to gather information and data on who the real owners of Nigeria’s extractive assets were, but met with brick walls at every turn.
“It was a completely new area of work for NEITI which very early in the day identified BO disclosure as a game changer and pushed the boundaries of transparency and accountability in our extractive industries.

“By the time we were conducting the oil and gas audit, we requested companies to disclose their real owners. As expected, we were confronted with numerous challenges placed by some of the companies.

“There were delays in responses and in some instances, non-compliance to the beneficial ownership template by some of the affected companies. In other instances, some of the companies refused outright to fill the NEITI audit templates specifically designed for BO reporting,” she recalled.

She stated that other challenges included the fact that companies never updated their information, as there were discrepancies between beneficial owners’ data and the one provided by the Corporate Affairs Commission (CAC), stressing that the companies saw the exercise as a form of witch-hunt.

“We were also aware that some politically exposed persons and senior government officials used surrogates to front for themselves and so it was difficult to track and most importantly there were no statutory obligation or law that enabled the process,” she added.

However, Ahmed stressed that the situation was changing with the President Muhammadu Buhari’s government as a result of its commitment to the open government system, including opening a register of all beneficial owners of oil companies operating in Nigeria, signing of open government partnership and deployment of open data instruments.

With the launch of the programme, she stated that Nigeria has now fully institutionalised beneficial ownership reporting, thus moving away from the experimental stage and providing for sanctions for defaulters.

The Executive Secretary, NEITI, Dr. Ogbonnaya Orji, in his remarks, stressed that the programme was a global initiative to support national governments to deepen implementation of beneficial ownership transparency, saying that though its execution may be difficult, it was doable.

According to him, secrecy in corporate ownership of assets in the extractive industries remained a clear danger to countries everywhere in the world.

“It creates a real and present danger to our collective development aspirations, especially in all developing countries. But what is most gratifying is that governments in developed and developing nations are coming together to strategies on how best to lift the veil of secrecy over the ownership of extractive assets in most of the resource-rich countries,” he noted.

Orji added that anonymous companies remained a major obstacle to fighting money laundering and corruption as they enable political actors carry out their criminal acts thereby preventing Nigeria from getting the full benefits of its natural resources.

He stated that the discussions had become even more important, given the country’s history in the fight against corruption, insecurity, terrorism financing, money laundering and illicit financial flows which have become the bane of the society.

The executive secretary who mentioned the interconnectedness of crimes worldwide explained that the new Petroleum Industry Act (PIA) now mandates the upstream industry regulator to disclose beneficial owners of licenses, leases and others.

“We live in an interconnected world where anonymous companies have tentacles across the globe. Opacity in any part of the globe is a threat to openness all over the world and regardless of our location, we are all at risk of the dangers posed by this anonymity,” he added.

According to him, the revelations in the Panama papers and most recently the Pandora Papers, clearly show that the whole world must work together to ensure that the menace of secrecy in ownership of corporate institutions is halted.

He restated that in the last eight months various Memoranda of Association (MoUs) had been entered into with the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Nigerian Financial Intelligence Unit (NFIU), adding that the data collection process of NEITI was being fully automated.

In his remarks, the Chief Executive Officer, Nigeria Upstream Petroleum Regulatory Commission (NUPRC) Mr. Gbenga Komolafe, said signing of the Petroleum Industry Act (PIA) had brought about the much-desired assurances and trust for investors in the Nigerian oil and gas industry.

He noted that the establishment of the NUPRC represents a major milestone in the reform and operationalization in the oil and gas industry, given the decade-long journey to the enactment of the PIA.

While applauding NEITI’s efforts in the implementation of global standards for the promotion of an open and accountable system in the management of extractive resources across the world, he explained that the impact of the organization’s role in Nigeria and globally had been very significant.

“The NUPRC and NEITI share a common vision of transparency and accountability in Nigeria’s energy sector. The NUPRC is fully committed to work with NEITI to deepen Nigeria’s implementation of contract transparency and beneficial ownership disclosures in the country in a bid to ensure that the revenues from natural resource assets support national development and help reduce poverty.

“At the NUPRC, we have implemented beneficial ownership reporting system, as it is a statutory requirement which demands full disclosure of beneficial ownership information.

“To this end, the Nigerian Oil and Gas Asset Beneficial Ownership Register (NOGABOR) portal has been developed by commission’s ICT team and is live. The commission is engaging the oil and companies to ensure their mandatory compliance,” he stated.

Komolafe stated that the NUPRC was committed to collaborating on maintaining information on beneficial ownership, maintain data on companies that own extractive licenses as well as create a better and healthy business climate.

“The results of these Is that citizens will be aware of who they are doing business with or competing against and will also encourage appropriate stakeholder engagement which is a part of Nigeria’s open government action plan.

“The commission hereby assures you and all our invaluable stakeholders of a transparent, cost efficient, safe, and sustainable framework, for the management of our nation’s hydrocarbon resources, in the best interest of our country, investors and in line with global best practice,” he noted.

Also, the Executive Director EITI, Mark Robinson, who attended virtually, pledged the support of the international body, stressing that the implementation will strengthen natural resource governance in the country. He noted that it would help resource-dependent nations to earn more money from their resources when information is made easily accessible.

Some of those who pledged commitment to the new initiative included the Oil Producers Trade Section (OPTS) , a body of 29 major oil companies, represented by Doyin Adelabu at the event and Minister of Mines and Steel, Olamilekan Adegbite, represented by the Director, Human Resources, Mr. Suleiman Kabir.

Others were the Registrar, CAC, represented by Director, Compliance, Hakeem Mohammed, Chairman, NEITI Board, Olusegun Adeyemi and representatives of civil society groups.

Adeyemi listed some of the challenges associated with secret ownership of companies in the sector as loss of revenue, insecurity, infrastructure deficit and erosion of public trust, which he said is difficult to recover

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