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Nigeria

Open Contracting and Licensing in Extractives (NG0018)

Overview

At-a-Glance

Action Plan: Nigeria Action Plan 2019-2021

Action Plan Cycle: 2019

Status: Active

Institutions

Lead Institution: NNPC and Ministry of Mines and Steels

Support Institution(s): NNPC, Ministry of Petroleum Resources (MPR), Department for Petroleum Resources, Federal Ministry of Finance, Budget and National Planning Civil Society Legislative Advocacy Centre (CISLAC), Publish What You Pay, BudgIT, Stakeholders Democracy Networks, Global Rights, Nigeria, Miners Association, Natural Resource Governance Institute (NRGI), African Centre for Leadership, Strategy & Development (Centre LSD), ANEEJ, ONE Campaign, Policy Alert, PLSI.

Policy Areas

Access to Information, Anti-Corruption, E-Government, Extractive Industries, Fiscal Openness, Open Contracting and Public Procurement, Open Data, Publication of Budget/Fiscal Information

IRM Review

IRM Report: Pending IRM Review

Starred: Pending IRM Review

Early Results: Pending IRM Review

Design i

Verifiable: Pending IRM Review

Relevant to OGP Values: Pending IRM Review

Potential Impact: Pending IRM Review

Implementation i

Completion: Pending IRM Review

Description

Brief description:
There have been commendable efforts in the extractive sector to enhance transparency and accountability. For instance, the National Oil Company, NNPC, has published monthly operational and financial statements since 2015, engaged with CSOs and citizens’ groups and openly broadcasted bid opening rounds for new licenses. NNPC has also committed and actively participated in the global processes, including the OECD and the Extractives Industries Transparency Initiative (EITI) Commodity working group, working towards bringing further transparency to commodity trading by State-Owned Enterprises globally. The Ministry of Mines and Steel launched the ‘Road Map for the Growth and Development of the Nigerian Mining Industry’ in September 2016 which identified some initiatives within the short, medium and long-term timeline which the Ministry can undertake to better position Nigeria’s mining sector.
Despite these efforts, the extractive sector still has not fully delivered on developing and improving the well-being of the vast majority of citizens. The pace of reform has been slow and there is still widespread opacity in the industry which has allowed corruption to thrive. In the case of the oil and gas sector, deepening issues of underassessment, underpayment and under-remittance/non-remittance of revenues due to government have limited what the government can deliver to improve the lives of citizens. A backlog of remedial actions, especially as identified by NEITI audit reports, to improve accountability across financial, processes and production has not been prioritized or implementation has been too slow leading to further leakage and loss in citizens’ confidence.

A first step towards achieving transparent, broad-based and effective citizens’ participation in the extractive sector is to publish contracts which are the fundamental documents that set out the terms of all investments and projects in the sector. Contract disclosure in the oil, gas and mining sector is increasingly a global norm with progress by governments, international financial institutions and the EITI making bold steps to disclose or require public disclosure. The Government of Nigeria has made several commitments to publish petroleum contracts including at the 2016 UK Anti-Corruption Summit where the President committed to working towards full implementation of the Open Contracting Standard, and the 7 Big Win’s that commits to publishing all established fiscal rules and contracts within two to four years. A growing number of companies with operations in Nigeria also have expressed support for contract disclosure, the majority of these companies have noted, however, that in their view the decision to publish contracts must be initiated and implemented by the government.

Transparency and accountability remain the basis of a sound corporate governance regime. The OECD’s position is that information disclosure and higher standards of accountability in SOEs, coupled with other governance reforms, can contribute to improved efficiency and performance of SOEs. Best practice and global standards demand that information disclosure, including both financial and non-financial data, is essential for the government, so it can be an effective owner; oversight from the National Assembly; the media to raise awareness on SOE efficiency; and taxpayers and the general public to have a comprehensive picture or SOE performance. Transparency, driven by enhanced disclosures, constitutes a major component of an SOE’s accountability to shareholders, potential investors and business partners, and an increasingly engaged civil society.

General problem:
Recent years have seen intense debates between the government, the NASS and companies around issues like fiscal obligations and environmental liabilities. Contract transparency would establish an even playing field of information and encourage better informed debates. Disclosing contracts, which to date remain shrouded, could be another way to demonstrate the new way of doing business. Contract transparency could have deterred some of the poor oil deals struck in the past, such as the lopsided oil-for-product swap deals which the current government swiftly canceled. Establishing this practice now would deter future lopsided deals, creating a strong anti-corruption legacy.

Currently NNPC does not disclose a detailed annual report that would include the audited book of accounts, its finances, the cost of its operations and significant spending on non – commercial activities. It equally does not disclose notable earnings by its subsidiaries and sales level data of the state’s share of production or other revenues collected in-kind in terms of volumes and revenues received on crude oil, gas and refined product sales.

Specific OGP issue:
This commitment will focus on civic participation and public accountability.

Rationale for the commitment:
Publishing contracts will give the general public the ability to hold public officials accountable for contracts they enter into with their private entities.

Main objective:
To promote/enhance citizens’ engagement by increasing access to information on extractive sector revenue and production.

Anticipated impact:
This commitment will improve contracts terms to be favorable.

See action plan for milestone activities.


Commitments

  1. Participatory Budgeting

    NG0015, 2019, Anti-Corruption

  2. Implement Open Contracting and the Open Contracting Data Standard

    NG0016, 2019, Access to Information

  3. Transparent Tax Revenue Reporting

    NG0017, 2019, Legislation & Regulation

  4. Open Contracting and Licensing in Extractives

    NG0018, 2019, Access to Information

  5. Implement EITI Standard

    NG0019, 2019, Anti-Corruption

  6. Establish Beneficial Ownership Registry

    NG0020, 2019, Access to Information

  7. Strengthen Asset Recovery Legislation

    NG0021, 2019, Anti-Corruption

  8. Implement National Anti-Corruption Strategy

    NG0022, 2019, Anti-Corruption

  9. Improve Compliance with Freedom of Information Act with Focus on Records Management

    NG0023, 2019, Access to Information

  10. Improved Compliance with Mandatory Publication Provisions Requirement (FOIA)

    NG0024, 2019, Access to Information

  11. Implement Permanent Dialogue Mechanism

    NG0025, 2019, Dispute Resolution & Legal Assistance

  12. Aggregate Citizens' Feedback on Programs

    NG0026, 2019, E-Government

  13. Freedom of Association, Assembly, and Expression

    NG0027, 2019, Civic Space

  14. Enhance Participation of the Vulnerable

    NG0028, 2019, Capacity Building

  15. Implement New Computer Program in 6 Government Ministries to Improve Service Delivery

    NG0029, 2019, Capacity Building

  16. Legal Instrument to Strengthen SERVICOM

    NG0030, 2019, Legislation & Regulation

  17. Citizen Participation in Budget Cycle

    NG0001, 2017, Access to Information

  18. Open Contracting

    NG0002, 2017, Access to Information

  19. Extractive Sector Transparency

    NG0003, 2017, Access to Information

  20. Tax Reporting Standards

    NG0004, 2017, Fiscal Openness

  21. World Bank Doing Business Index

    NG0005, 2017, Infrastructure & Transport

  22. Beneficial Ownership Register

    NG0006, 2017, Anti-Corruption

  23. Anti-Corruption Informationi Sharing

    NG0007, 2017, Anti-Corruption

  24. Asset Recovery Legislation

    NG0008, 2017, Capacity Building

  25. Anti-Corruption Activity Coordination

    NG0009, 2017, Anti-Corruption

  26. FOIA Compliance for Annual Reporting

    NG0010, 2017, Access to Information

  27. FOIA Compliance for Disclosure

    NG0011, 2017, Access to Information

  28. Permanent Dialogue Mechanism

    NG0012, 2017, Fiscal Openness

  29. Joint Governmnet-Civil Society Legislation Review

    NG0013, 2017, Fiscal Openness

  30. Technology-Based Citizens' Feedback

    NG0014, 2017, E-Government

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