By Chineme Okafor in Abuja
The Nigeria Extractive Industries Transparency Initiative (NEITI) revealed Wednesday that it would unveil the identities of crude oil blocks and solid minerals rights holders in the country by January 2020 in line with global trend under ‘beneficial ownership’ practice.
Speaking at a press briefing in Abuja on the recent award of a satisfactory status to Nigeria by the global Extractive Industries Transparency Initiative (EITI) on the implementation of transparency and accountability principles in its extractive industry, the Executive Secretary of NEITI, Mr. Waziri Adio, explained that NEITI’s push for the implementation of the ‘beneficial ownership’ practice in extractive sectors was on course.
The Stolen Assets Recovery Initiative (STAR) of the World Bank and United Nations Office on Drugs and Crime (UNODC), had described beneficial ownership as the natural person who ultimately owns or controls a customer or the natural person on whose behalf a transaction is being conducted, while the beneficial ownership guides are intended to help public authorities or other interested parties looking to find information on such entities incorporated under the laws of a country concerned.
The guides, STAR explained, would provide basic information to assist what steps to take to ascertain the identity of beneficial owners and other related parties.
On the status of the guide in Nigeria’s extractive sector, Adio stated that NEITI plans to meet the January 1, 2020 deadline on it, after which an open register of every one holding oil blocks licences and solid minerals rights in Nigeria will become public.
“Everybody is talking about beneficial ownership now. If you are aware of the Paradise and Panama Papers, people hide behind anonymous companies to perpetrate all kinds of things, deny countries of revenues, do money laundering, commit crimes including serious crimes like terrorism, drug financing and all others. This is an existential issue for most countries especially countries like our own where we need all the monies that we can get.
“This is something that beyond the EITI, Nigeria is committed to. At a London anti-corruption summit, countries made commitments and Nigeria made a commitment that we are going to have a register of beneficial owners of the companies that operate in Nigeria.
“The president came back and one of the commitments he made was that we are going to join the Open Government Partnership (OGP) and in December that year, we joined the OGP and one of our commitments in the national action plan for OGP is that we are going to have a register of the beneficial owners of companies that operate within Nigeria, that is on the larger scale,” said Adio.
He further explained: “On the micro level, we also have a commitment under the EITI that we are going to have a register of all the companies operating in the extractive sector in Nigeria by 1st of January 2020. I want to tell you that whether it is under EITI or commitment under OGP, there is political will and support at the highest level – this is a commitment the president (Muhammadu Buhari) made himself; different agencies are working on this.
“We are leading the one in the extractive sector, and our hope is that we are working with regulators in the extractive sector – the MCO (Mining Cadastral Office) in the solid minerals sector, the DPR (Department of Petroleum Resources) in the oil and gas sector, and some others.”
“We hope to beat the deadline. We hope we are going to have a register of beneficial owners before the end of this year. It will not be a perfect register, but it will be a good place to start,” he added.
On the government’s recent claims that international oil companies (IOCs) owed the country over $20 billion in tax debt, which was not captured in NEITI’s past audit reports of operations in the oil and gas sector, Adio, stated that he wasn’t too sure about the source of the debt, adding that it might be from the 1993 Production Sharing Contracts (PSCs) which the government failed to review and update its expired terms.
“If you remember, there was a ruling of the Supreme Court that the federal government should work with the state governments of Rivers, Bayelsa and Akwa Ibom, to recover some money based on the fact that 1993 PSCs stated that when the price of oil goes beyond $20 barrel, the term should be negotiated, and we did a report on Sunday which also focused on the second part of that same law which looks at 15 years after.
“My sense is that the money that the companies are asked to pay is on the account of that $20 threshold which the Supreme Court has ruled on. The 1993 PSC were put in place at a time when the prices of oil was very low and technologies for offshore production of oil were very expensive and uncertain, and for us to boost our production, we needed to give all kinds of incentives to the companies,” he suggested.
On the EITI’s latest ranking of Nigeria, Adio, stated that only seven countries including Nigeria, have achieved the highest status, and that the recognition meant well for Nigeria.
“EITI Validation is a major achievement that did not come easy. We are very proud of this milestone. All Nigerians should, from the president down to the ordinary person on the street. Our country hardly gets in the news for the right reasons. Our ranking on most governance and development indexes, even when improving, leaves much to be desired.
“As a country, we get constantly beaten up and we also beat ourselves up a lot. But this is an area we are doing very well, and a very important area too,” he stated.