CSOs URGES FEDERAL GOVERNMENT TO STEP UP IMPLEMENTATION OF OIL AND GAS SECTOR REFORMS

CSOs URGES FEDERAL GOVERNMENT TO STEP UP IMPLEMENTATION OF OIL AND GAS SECTOR REFORMS

 

The Accountability in the Extractive Sector (AES) Cluster of the Strengthening Advocacy and Civic Engagement (SACE) project urges the Federal Government to step up its implementation of the reforms in the oil and gas sector.  It would be recalled that the Federal Government under this administration has committed to the implementation reforms to enhance transparency, accountability and efficiency in the oil and gas sector. This included the Short and Medium Term Priorities to grow Nigeria’s Oil & Gas Industry 2015–2019 conveniently called 7 Big Wins which was unveiled in October 2016 by the President with much fanfare and media hype. There were also sector specific commitments in the National Action Plan of the Open Government Partnership. This is in addition to the already established subscription to the EITI principles and standards through the NEITI since 2007.

The AES cluster is a group of 30 civil society organizations spread across the country and working to promote transparency and accountability in the extractive sector in Nigeria.

We note that in the 7 Big Wins, the government committed to collaborating with the National Assembly to conclude and pass the Petroleum Industry Reform Bill and Petroleum Fiscal Reform Bill by December 2016 and draft new regulations consistent with it. We are one year past the time line and this is yet to be accomplished. This is in spite of the fact that that N100 Million was budgeted for this purpose in 2017.

The AES cluster wishes to remind the government, which is in dire need of funds,  consistently operates a budget deficit and depends heavily on borrowing to finance its budget, that the nation is estimated  to have lost estimates amounting to billions of Dollars or trillions of Naira in investments in the past five (5) years. We find it strange that despite making it a promise during the campaign and with repeated pronouncements by both the executive and the legislature hat is dominated by the same party, the PIB remains elusive with barely one year left in the life of this administration.

We are concerned that another N120 Million is proposed in 2018 budget for the passage of the PIB, even when there is not a sign of the executive making any visible efforts toward the drafting of a Bill. The AES cluster observes with scepticism the intent behind the proposal to expend N610 Million for the implementation of the 7 Big Wins, including the sum of N200 Million for Oil and Gas Reforms in 2018.

While we acknowledge that petroleum and gas policies have been developed in furtherance of the 7 Big Wins, we consider this to be marginal progress, considering that more far-reaching actions such as the clean-up of Ogoniland and establishing sufficient mechanisms of public disclosure of operations and financials are only being scratched in the surface.

We lament that we are approaching the year 2018 and with elections already set for February 2019, leaving this government with practically six (6) months of governance, it is becoming glaring that the 7 Big Wins may end up as another reform cloud that bears no rain.

The AES cluster further recalls that in the National Action Plan 2015-2017 of the Open Government Partnership, the Federal Government committed to disclosing oil, gas and mining contracts in the area of exploration and production, exports and off taking and swaps on a publicly accessible portal in both human and machine readable formats. There is also a commitment to develop beneficial ownership register for companies that hold exploration, production and export licenses and publish in publicly accessible formats that are human and machine readable by 2019. This is in line with the plan in the 7 Big Wins to publish all established fiscal rules and contracts by 2019 and is expected of EITI implementing countries. We know that these would require review of policies and legislations which either are yet to commence or are progressing at snail speed. The AES cluster is apprehensive as efforts toward realising these are not progressing as expected and the time is running out on this administration.

We wish to remind the Federal Government that several countries have made progress in achieving these ideals and Nigeria, which is seen as a leading light and pace setter in the EITI family, cannot afford to fail in meeting them, especially under a government that professes change and makes anti-corruption her cardinal objective.

All the above are in addition to several outstanding remedial issues from cumulative NEITI audit reports. These include issues around disparity in interpretation of fiscal terms between NNPC and some of her partners in the 2000 MoU, effective measurement of crude using adequate metering facilities, weak arrangements in domestic crude allocations, operations of the NNPC related to non-remittance to the federation account, etc.

The AES cluster recalls that following the release of the 2014 NEITI Audit report, the Senate set up a committee to consider the recommendation for direction in providing oversight to ensure their implementation. We note with great disappointment that beyond the media hype and grandstanding, nothing has come out of the Committee’s work begging the question of if it ever convened.

We are highly disturbed at the manner in which governments of oil producing states earning 13% derivation transfers from the federation account and which are extremely dependent on extractive revenue for survival manage this fleeting fund. The AES notes the wastefulness, opacity and purposeless that characterise the use of resources at sub-national levels.

The AES cluster therefore calls on the Ministry of Petroleum Resources to undertake an evaluation of its performance in the implementation of the 7 Big Wins with a bid to developing a responsive and result oriented implementation plan that recognises the urgency brought about by the little time left of this administration and expedite the process of implementation.

We call on the executive and the legislature to close ranks and expedite the passage of the PIB in all its ramifications to provide clarity and certainty and attract the needed investment into the sector.

We call on the Ministry of Justice to expedite progress on the needed frameworks that will ensure that the declaration of beneficial ownership becomes mandatory in line with Nigeria’s OGP commitments.

We call on the National Assembly to institutionalise the practice of debating the report of the NEITI in plenary and following through with effective oversight to ensure that its recommendations are implemented.

We call on the governments of all oil producing state to be prudent, open, transparent in the management of the 13% derivation fund received from the federation account and devise an inclusive way of expending it for people oriented development in their respective states. The AES cluster further calls on the Federal Government to ensure that resources are made available to the NEITI to conduct the Fiscal Allocation and Statutory Disbursement Audit for citizens to see how governments in their states have been applying their commonwealth

We call on the Federal Government to demonstrate political will to implement recommendations in NEITI reports as a way of complementing the expected gains of all the reforms in the oil and gas sector.

The AES cluster wishes to re-echo the words of the president in launching the 7 Big Wins that “Oil and gas still remains a critical enabler for the successful implementation of our budget, as well as the source of funds for laying a strong foundation for a new and more diversified economy.” It is therefore only responsible to ensure that we do all that is necessary to manage it well in the interest of all citizens across all generations.

The AES cluster is committed to continuing to work with all Nigerians to demand that resource revenues translate into improved welfare for our citizens, bearing in mind the transient nature of natural resources and the threat that technology and globalization poses to its sustainability.

 

Signed:

 

 

Auwal Ibrahim Musa (Rafsanjani)

Executive Director, CISLAC

For: AES Cluster

12/11/2017

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