From Chuks Okocha, Okon Bassey in Port Harcourt and Donald Andoor in Abuja, 07.28.2005
Thursday, July 28, 2005
Minister of Solid Mineral Resources, Mrs. Oby Ezekwesili has accused oil and gas companies operating in the country of corrupt practices, and said that was the reason why they avoid disclosure of their annually generated revenue and expenditures.
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Ezekwesili who was speaking in Port Harcourt at the road show of the Nigeria Extractive Industry Trans-parency Initiative (NEITI) said it was to check the sharp practices in the oil industry that President Olusegun Obasanjo has sent a bill to the National Assembly to ensure that the annual revenues and expenditures of oil and gas companies are audited and published.
Also in Abuja yesterday, the House of Representatives began moves to pass the NEITI bill which was formally tabled on the floor of the House.
According to Ezekwesili, "the NEITI bill will ensure that audits are done annually and disclosure and publication of payments and receipts of revenues are mandatory."
The minister who doubles as the chairperson of the transparency group in Nigeria further said "it is public knowledge that the state of information asymmetry, opaqueness, corruption and revenue embezzlement that has characterised our extractive industry could not have happened if national multinational companies and previous governments had been requested to disclose publicly their disaggregated basic payments and receipts for extractive resources."
"These huge financial improprieties show that business elites have vested interests in avoiding disclosure and publication, showcased by their continued insistence on confidentiality clauses, on dated exploration and production contracts.
"The NEITI Bill would avoid gagging clauses in licenses agreements enabling disclosure of key financial data as required by law in every developed country," she said.
She said disclosure and publication would enable Nigerians hold their government account able in the management of revenues, generate questions about government management of their resources and ensure that questions are transparently answered.
According to the minister "disclosure and publication will bring about improved corporate and energy security as opaque governance leads to social divisiveness and instability, which in turn leads to disruption of production activities as evident in the Niger Delta. Long term reputational damage from dealings in an opaque climate accentuates the poor perception of the industry and leads to unrest and resentment against extractive companies."
She dismissed the position of the oil and gas companies that publication of their revenues and expenditures would be against the spirit of competition.
"Infact foreign direct investment analysts require such disaggregated information on company payment to; calculate the in-country cost of doing business, to work out the profitability of investment and to identify company subsidiaries in particular countries that are performing well. The higher the level of disclosure and publication, the better the investors will be able to make informed and accurate investment decisions to the advantage of the Nigeria Extractive Industry."
She lamented the intransigence of the corrupt few and their cronies that deny the Nigerian public basic information to call their government and partners to account over the management of resource revenue.
However, while introducing the bill for an act for the establishment of NEITI on the floor of the House of Represen-tatives yesterday, the House Leader, Hon. Abdu Ningi, decried the lack of openness in the running of the affairs of the NNPC.
For instance, he said, "Crude oil is now selling at 60 US dollars per barrel, we pegged our budget for 30 US dollars per barrel yet the NNPC is saying we don't have cash backing which will enable the smooth implementation of the budget, this is a contradiction...
"In the USA, oil companies don't operate in secrecy, in Saudi Arabia the multi-national oil companies don't operate in secrecy. In fact in Saudi Arabia, the residents will even tell you what is happening with the excess crude proceeds..."
Ningi said "this is why we have to critically examine the bill on the Nigeria Extractive Industries Transparency Initiative (NEITI)."
He informed the House that although, Extractive Industries Transparency Initiative has already been put in place by President Obasanjo, to gather information in both the petroleum and solid minerals exploration sector, the body has no legal instrument through legislation to support its operations.
He explained that the bill when passed would further empower NEITI to operate as an autonomous self-accounting body with credible people drawn from different backgrounds ranging from the civil societies, media, academia, organised private sector, students and many others with the powers to gather information in the sector and make same available to all Nigerians.
He regretted the situation where the NNPC, CBN and the Ministry of Finance have different figures as a “result of manipulation from the multi-national oil companies because of the technical nature of the operations of the oil sector," adding "the body is to evaluate how the day-to-day transaction goes on."
As soon as the leader of the House finished introducing the bill, Honourables Faruk Lawan, Cairo Ojougboh, Bashir Nadabo, Lola Abiola-Edewor, Obotem Obotem and Yakubu Barde rose up in its support.
Lawan in supporting the bill said Nigerians were being short-changed. He stressed that it took his committee two months to get the NNPC to respond to its queries on the joint venture proceeds and other information on crude exploration.
"Right now we are having problems with the budget implementation. We used 30 US dollars per barrel as the benchmark. We also know that the international crude price is 60 US dollars per barrel, yet we are having problems with the budget implementation. How do we explain this?" he queried adding, "There is need for this body because the sector is too technical for us to go in to investigate."
Abiola-Edewor in her contribution in support of the bill regretted that the activities in the oil sector were being conducted in secrecy because the NNPC connives with the multi-national oil companies and there was need for a body to bring about transparency in the sector.
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