Open Contracting and Licensing in Extractives (NG0018)
Action Plan: Nigeria Action Plan 2019-2021
Action Plan Cycle: 2019
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 AreasE-Government, Extractive Industries, Open Contracting and Procurement, Open Data
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.
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.
To promote/enhance citizens’ engagement by increasing access to information on extractive sector revenue and production.
This commitment will improve contracts terms to be favorable.
See action plan for milestone activities.
NG0015, 2019, Audits and Controls
Implement Open Contracting and the Open Contracting Data Standard
NG0016, 2019, Beneficial Ownership
Transparent Tax Revenue Reporting
NG0017, 2019, Legislation & Regulation
Open Contracting and Licensing in Extractives
NG0018, 2019, E-Government
Implement EITI Standard
NG0019, 2019, Audits and Controls
Establish Beneficial Ownership Registry
NG0020, 2019, Beneficial Ownership
Strengthen Asset Recovery Legislation
NG0021, 2019, Anti-Corruption Institutions
Implement National Anti-Corruption Strategy
NG0022, 2019, Anti-Corruption Institutions
Improve Compliance with Freedom of Information Act with Focus on Records Management
NG0023, 2019, Capacity Building
Improved Compliance with Mandatory Publication Provisions Requirement (FOIA)
NG0024, 2019, Capacity Building
Implement Permanent Dialogue Mechanism
NG0025, 2019, Gender
Aggregate Citizens' Feedback on Programs
NG0026, 2019, E-Government
Freedom of Association, Assembly, and Expression
NG0027, 2019, Civic Space
Enhance Participation of the Vulnerable
NG0028, 2019, Capacity Building
Implement New Computer Program in 6 Government Ministries to Improve Service Delivery
NG0029, 2019, Capacity Building
Legal Instrument to Strengthen SERVICOM
NG0030, 2019, Legislation & Regulation
Citizen Participation in Budget Cycle
NG0001, 2017, Audits and Controls
NG0002, 2017, Capacity Building
Extractive Sector Transparency
NG0003, 2017, Beneficial Ownership
Tax Reporting Standards
NG0004, 2017, Fiscal Transparency
World Bank Doing Business Index
NG0005, 2017, Infrastructure & Transport
Beneficial Ownership Register
NG0006, 2017, Beneficial Ownership
Anti-Corruption Informationi Sharing
NG0007, 2017, Anti-Corruption Institutions
Asset Recovery Legislation
NG0008, 2017, Capacity Building
Anti-Corruption Activity Coordination
NG0009, 2017, Anti-Corruption Institutions
FOIA Compliance for Annual Reporting
NG0010, 2017, Capacity Building
FOIA Compliance for Disclosure
NG0011, 2017, E-Government
Permanent Dialogue Mechanism
NG0012, 2017, Fiscal Transparency
Joint Governmnet-Civil Society Legislation Review
NG0013, 2017, Oversight of Budget/Fiscal Policies
Technology-Based Citizens' Feedback
NG0014, 2017, E-Government