Press Statement: Reforms in the Extractive Sector, Slow and Not Deep Enough

Press Statement: Reforms in the Extractive Sector, Slow and Not Deep Enough

REFORMS IN THE EXTRACTIVE SECTOR, SLOW AND NOT DEEP ENOUGH

The Civil Society Legislative Advocacy Centre (CISLAC) having observed the state of affairs in the extractive sector in the past four months wish to state that the reforms initiated by the present administration have been slow and are not deep enough.

We note the high expectations heralded by the anti-corruption stance of the government and numerous promises made during the electoral campaigns. These include the commitment to addressing corruption in the oil and gas sector through drastic reforms, plugging of leakages, passing of the Petroleum Industry Bill into law and implementing recommendations from the Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports.

CISLAC recalls that many of these commitments were also conveyed as recommendations in a memo CISLAC and her partners had submitted to the Minister of State for Petroleum who was then GMD of the Nigerian National Petroleum Corporation (NNPC) in the early stages of this administration, to strengthen governance and improve transparency and accountability in the sector.

CISLAC, however, observes that after three years in government, most of these promises remain unfulfilled. We note some efforts made to reorganise the NNPC to make it more profitable, the efforts by the NNPC to become more open by publishing monthly transaction reports, the development and launching with so much fanfare of the 7 Big Wins and the review of the oil and gas policies, among several steps taken. These, though commendable, have not translated to real reforms.

We further observe that these efforts have not gone deep enough to create the changes and facilitate reforms badly needed in the sector. We further say that the implementation is progressing at such slow speed that is at variance with the urgency needed in the sector.

CISLAC and indeed all Nigerians can see, for instance, that very few of the tangible and key performance indicators in the 7 Big Wins have been met.  Only the PIGB of all the needed legislative reforms needed has gone through the legislative process awaiting presidential assent; the others are still at the Committee stage. We also note that the NNPC that is reported to have paid itself the sum of 216 Billion Naira in 2017 as subsidy or under-recovery, captured as operational cost, cannot be said to have been reformed in any substantial way. It still continues to play the role of regulator and operator with its attendant challenges.

We lament that beyond the PIGB, other legislations which are critical for efficiency in the sector and touches on the interest of oil producing communities have remained elusive.  Concerning the implementation of recommended remedial actions from previous audit reports, this administration has done very little. We note that the Inter-ministerial Task Team (IMTT), the structure responsible for implementing remedial actions, have been practically non-existent under this administration.

CISLAC is aware that the IMTT under previous administrations was weak and ineffective. It was however expected that there would be a change. The last time the IMTT met was in June 2015. Remedial issues continue to recur in NEITI reports and more than 20 issues from 2013/2014 are yet to be resolved four years later, leading to continuous loss of revenues to the nation.

CISLAC further observes that several of the sector specific commitment to the Open Government Partnership (OGP) such as information disclosure across the value chain of the sector, open contracting and beneficial ownership of oil licenses, also remain elusive.

We therefore urge the federal government to devote substantial part of its remaining time in office, to expediting progress and deepening reforms in the extractive sector.

We call on the President to urgently assent to the PIGB that has been transmitted to his office by the National Assembly (NASS). This will strengthen governance and promote strong and independent regulation of the sector.

While commending the NASS for proceeding to the Public hearing stage of the outstanding components of the PIB, we call on them to  expedite the process that will lead to the passage of the Petroleum Host Communities Bill, the Fiscal Framework Bill and the Petroleum Industry Administrative Bill into law assented to by the president before August 2018. We further call on respective Committees in the NASS to be more proactive in their oversight role by being timely and effective, as the poor implementation of remedial actions from the NEITI reports and progress in reforms in the sector is largely caused by weak and ineffective legislative oversight.

We call on the executive and the legislature to ensure adequate funding for NEITI to enable them effectively fulfil their mandate as enshrined in the NEITI Act 2007 so that Nigeria, which was once considered a pace setter and leading light in the implementation of the Extractive Industries Transparency Initiative (EITI), would not suffer retrogression.

We call on the Chairman of the National Stakeholder Working Group (NSWG) of NEITI to collaborate with the office of the Vice-President to initiate the process for reconstituting the IMTT, mandate it the draw up a remediation action plan and oversee the implementation of the plan with quarterly reports forwarded to the office of the Vice-President. This will make the IMTT more accountable, effective and also improve the level of implementation of NEITI recommendations. This demonstration of political will for implementation will, in addition to adequate funding, make the EITI more meaningful in impacting the lives of our citizens.

We call on the Ministry of Justice to intensify efforts and collaboration and fast-track the process of implementing open contracting and beneficial ownership as committed to in the OGP.

We call on the federal government to ensure that the oil and gas sector and the NNPC is not manipulated in any way to syphon our collective commonwealth for use in funding political campaigns and the ambitions of individuals as has been done in the past.

We call on CSOs, the media and all citizens to remain vigilant and active in advocating for real and deep reforms in this strategic sector of our economy, bearing in mind the transient nature of its resources and the looming loss of relevance confronting us arising from developments on the global scene.

 

Auwal Ibrahim Musa

Executive Director, CISLAC

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