Following the can of worms uncovered by the Farouk Lawal-led subsidy probe committee, the Nigeria Extractive Industry Transparency initiative (NEITI), in a strong message to players in the oil and gas sector said it is on ‘red alert.’
According to NEITI, “The House of Reps Adhoc Committee preliminary Reports, has no doubt put NEITI and its auditors on ‘red alert’ on the need for a thorough job in the on-going NEITI comprehensive audit which just commenced.”
The audits, which would cover the periods 2009-2011 for the oil and gas industry and 2007-2010 for the solid minerals sector, are to be concluded by the end of this year.
Since the scope of the on-going audit this time covers the downstream sector, including subsidy payments, the Executive Secretary of NEITI, Mrs. Zainab Ahmed, has already directed the auditors to demonstrate courage, integrity and professionalism in the discharge of this sensitive national assignment.
Ordinarily the news of an impending thorough audit should send jitters across the entire industry chain, but in reality, nobody seems to be shaken not because they are clean, but because findings and recommendations from previous audits have received little or no attention in terms of implementation. The situation is now such that all entities covered by its audits perceive it as a mere routine exercise, thinking that either the transparency agency lacks the necessary powers or that there is no will to enforce its recommendations.
Even NEITI has admitted challenges with the implementation of its recommendations. Chronicling the history of its audits beginning from 1999 to 2008 in the oil and gas industry, NEITI disclosed that the implementation of its recommendations has been a challenge despite identified corruption and revenue leakages in the sector. Each of its cycle of industry audits, the agency said, issued findings and recommendations which clearly identified and highlighted the problems within the sector and proposed solutions and ways to implement them, yet their implementation never saw the light of day.
“Implementation of these remedial issues over these years had remained one of the major challenges inspite of the efforts being made by NEITI under the Inter Ministerial Task Team set up by the Federal Government for this purpose,” the agency lamented.
It must be noted that the task of entrenching accountability and transparency in the oil and gas sector lies squarely with NEITI which was set up primarily to fight corruption and loss of revenue in the extractive industry and backed by the NEITI Act of 2007 to carry out this mandate.
President Goodluck Jonathan, while speaking during the national conference on Extractive Industries Transparency Initiative (EITI), organised by NEITI in Abuja, stressed the need for the agency to efficiently stand up to its responsibility and tackle the challenge of revenue leakages associated with the sector. The President harped on the need to promote accountability and transparency in the sector and rid it of corruption in view of recent experiences with the industry.
According to Jonathan, “By signing onto the global EITI initiative, the government has undertaken that it will ensure that resources from oil, gas and other minerals are used for the benefit of all Nigerians. Our recent experiences with the petroleum industry underscore the need to promote transparency and accountability and generally strengthen the governance processes in the industry so as to ensure maximum returns from the exploitation of our natural resources.”
He explained that, “The global EITI initiative which Nigeria signed up in 2003 aims to ensure that natural resources benefit all citizens especially where they depend on those resources for their development.”
The need therefore, to have a vibrant accounting system in place to avert future revenue leakages cannot be overemphasied and NEITI as the agency set up and backed by an Act of parliament to check revenue flows in the oil sector should more than ever be alive to its responsibility and wield the axe on erring entities when necessary.
However, frowning at revelations from the probe committee, the transparency agency said it has followed the entire proceeding with keen interest, adding that as an agency set up to, among other things, develop a framework for transparency and accountability in the management of revenues from the Nigerian extractive industries, especially the oil and gas, it has every stake and legitimate interest in not only the probe, but the process and the outcome of the exercise.
The agency explained that the preliminary findings of the Adhoc committee was not surprising “given the prevailing poor institutional linkages, infrastructural weakness, governance and process lapses as well as some kind of impunity which appear to frustrate all efforts at enthroning openness, transparency and good business ethics in the oil and gas industry over the years.”
“The Reports of the Farouk Lawal-led House Adhoc Committee so far is not quite shocking for NEITI as it is acquainted with the level of corruption and abuses in the oil and gas sector, even given the amount of funds that could not be accounted for being mentioned in the report. Besides, NEITI reports had made similar shocking revelations in the areas of under payments and receipts, poor computation of financial flows, physical crude liftings and general concerns on the management of the processes, but the reports got very little or no attention,” the agency lamented.
But why the recommendations of an agency, set up by government and backed by an Act of parliament to fight corruption in the extractive sector, for the betterment of the nation’s economy, does not get due attention remains a mystery.
The agency has however, posited that speedy and coordinated efforts on the Petroleum Industry Bill (PIB) and passage of the legislation with contents and provisions that would bring about openness, competition, competence, integrity, professionalism and positive fiscal regimes was needed urgently in the oil and gas sector as another way forward.