For close followers of developments in the Nigerian petroleum industry, last Tuesday’s reconstitution of the National Stakeholders’ Working Group (NSWG) of the Nigerian Extractive Industries Transparency Initiative (NEITI) by President Muhammadu Buhari, held more than an ordinary meaning.
Few weeks ago, concerns mounted about Nigeria facing the embarrassing consequence of being suspended from the global transparency and accountability group, the Extractive Industries Transparency Initiative (EITI).
The country’s membership status in the group currently hangs in the balance. When the EITI’s Deputy Head/Regional Director for Africa & the Middle East, Eddie Reich, visited Abuja recently, he warned that Nigeria ran the risk of being suspended from the group for failing to satisfy one of the key guidelines for compliant member-countries.
One of those fundamental guidelines is that implementing countries must mandatorily ensure the publication of the audit report on the activities of their extractive industries latest by the last day of the preceding business year.
Nigeria, which had been acknowledged as a model in compliance with the EITI rules and standards over the years, has been excluded from the list of the 45 countries that have so far published their audit reports in line with acceptable standards and regulations.
Mr. Reich, who spoke in Abuja during the recent visit to Nigeria of the newly-elected EITI international Chair, Fredrik Reinfeldt, said for failing to meet the deadline for the release, submission and publication of the 2013 NEITI oil and gas audit report, Nigeria may be sanctioned.
“Nigeria’s failure to publish approved report of the audit of its extractive industry on or before the deadline of December 31 every year breached EITI regulations, rules and standards expected of compliant member countries,” Mr. Reich said.
To be fair, NEITI’s inability to submit the report before the deadline was not entirely its fault. It was a result of the peculiar political circumstance the agency found itself.
Shortly after his assumption of office on May 29, 2015, President Buhari had ordered the immediate dissolution of the Boards of about 247 federal government agencies and parastatals in August last year. One of the affected agencies was NEITI.
But, the president’s decision did not envisage the international consequences affecting NEITI’s mandate today, particularly the gains of its implementation of the EITI process in Nigeria. Without the Board in place, Nigeria’s preparedness for the validation of its EITI membership status this month was sure to be put in jeopardy.
The EITI guidelines recognise the Board of the implementing countries as the only acceptable authority with the power to approve and publish audit reports.
Therefore, although the acting Executive Secretary of NEITI, Ogbonnanya Orji, said the report of the audit had been ready long before the expiration of the December 31, 2015 deadline, it could not be published as a result of the August 2015 dissolution of the Board.
During his visit to Nigeria, Mr. Reinfeldt said that he was not certain how Nigeria would escape the sanctions, which may include the country’s suspension from the group during the EITI International Board meeting in Lima, Peru on February 22.
Although he said reasons by NEITI for missing the deadline were understandable, Nigeria’s sanctions would be guided by the EITI rules and regulations.
Regardless, the new EITI Chair said Nigeria still stood a chance of escaping the sanctions if the federal government made a swift move, by immediately reconstituting the NEITI Board to enable it approve the pending audit report.
“I can’t say with any confidence, which way the decision would go (at Lima). But, there is a significant possibility of Nigeria’s suspension. Nigeria may however escape being suspended from the global Extractive Industries Transparency Initiative (EITI) if the federal government moves swiftly within six months to remedy the limitations to its membership status.
“The country has the opportunity of getting the suspension automatically lifted if the audit reports are published within the next six months,” Mr. Reich explained.
That, perhaps, is why the announcement of the reconstituted Board on Tuesday, a day after the international Board meeting began in Lima, Peru, was crucial.
The new board, which has cerebral journalist, Waziri Adio, as head of its secretariat as executive secretary, includes the Minister of Solid Minerals Development, Kayode Fayemi, as Chairman, as well as the Permanent Secretary, Federal Ministry of Finance; President, Miners Association of Nigeria, and his counterpart in the Nigeria Mining and Geosciences Society as members.
Other members include the Group Managing Director, Nigeria National Petroleum Corporation (NNPC), Ibe Kachikwu; President, Nigeria Union of Petroleum and Natural Gas (NUPENG), Igwe Achese and representatives of the six geo-political zones and Civil Society Organizations.
With the Board now in place, the immediate challenge is for its members to settle down quickly to work and ensure that the approval process for the report is established and the published document summited to the EITI secretariat within the allowable period.
The approval and publication of the audit report would automatically restore Nigeria to her position in the EITI group.