Economic Confidential, February, 2009

FOCUS ON NEITI

Nigeria Extractive Industries Transparency Initiative (NEITI)

NEITI Secretariat, The Presidency

40 Jimmy Carter Street, Asokoro

Abuja.

Web: http://www.neiti.org.ng 

Email: info@neiti.org, infoneiti@gmail.com

What is NEITI?

 The Nigeria Extractive Industries Transparency Initiative (NEITI) is the Nigerian subset of a global initiative aimed at following due process and achieving transparency in payments by Extractive Industry (EI) companies to governments and government-linked entities.

Mission

To promote transparency and engender due process in the Nigerian Extractive Industries.

Implementation Plan

 For effective implementation of its mandate, NEITI conducts comprehensive audits of the extractive sector, build capacities of regulatory agencies and the civil society, and mobilize Nigerians in support of extractive revenue transparency.

 NEITI's implementation plan is composed of the following tasks:

A comprehensive Audit (Financial, Physical and Process) of the Nigerian Extractive Industries; starting with Oil & Gas in the first instance.

Change Management and Local Content surveys including acreage allocation, purchasing and administrative reforms.

Build back capacity within government agencies relevant to oil & gas revenue management. Also improve capacity of civil society to be fully engaged in the EI transparency process.

A Communications Strategy to make the Audit figures and recommendations accessible to the public.

NEITI Law to codify and institutionalize revenue transparency.

NSWG Membership

A National Stakeholders Working Group, composed of representatives of Government Agencies, Extractive Companies, Civil Societies and Geo-political zones, was set up to provide guidance and feedback for the initiative.

On 29 January 2008, President Umaru Musa Yar’Adua inaugurated the reconstituted National Stakeholders Working Group (NSWG) at the Presidential Villa in Abuja. The reconstituted board replaced the pioneer NSWG, which had 28 members and had been inaugurated in February 2004. The new NSWG has 15 members and was constituted in accordance with the NEITI Act 2007.

The new NSWG members are: Professor Assisi Asobie, Chair, NSWG; Mr. Basil Omiyi, Vice-Chair, Shell Petroleum and Representative of the Extractive Industries; Comrade Shehu Sani, Human Rights Activist and Representative of Civil Society; Mr. Peter Esele, President of NUPENG and Representative of Labour Unions in the Extractive Sector; Engr. Abubakar Lawal Yar'Adua, Group Managing Director, NNPC; Alhaji Jafaru Aliyu Paki, Former Adviser to the President on Petroleum Matters and Representative of North-West Zone; Dr. M. I. Yahaya, Retired Bank Executive and Representative of North-Central Zone; Alhaji Aliko Mohammed, Retired Media Administrator and Representative of North-East Zone; Mr. Leke Alder,

Lawyer/Brand Strategist and Representative of South-West Zone; Mr. T. K. Ogoriba, Civil Society Activist and Representative of South-South Zone; Mazi Sam Ohuabunwa, Industrialist and Representative of South-East Zone; Alhaji Ibrahim Dankwambo, the Accountant-General of Federation, Ms. Ifueko Omoigui   

Chairperson, Federal Inland Revenue Service (FIRS), Mallam Haruna Yunusa Sa'eed, Former Accountant-General, Kaduna State, Mallam Mahmud Jega, Editor, Daily Trust Newspaper.

NEITI Principles and Criteria

 At the June 2003 London conference, participants agreed the EITI Principles that are the cornerstone of the initiative. In the pilot phase of the initiative it was recognised that clear guidance was required to assist countries and companies interested in supporting the initiative.

The NEITI Principles:

We share a belief that the prudent use of natural resource wealth should be an important engine for sustainable economic growth that contributes to sustainable development and poverty reduction, but if not managed properly, can create negative economic and social impacts.

“We affirm that management of natural resource wealth for the benefit of a country's citizens is in the domain of sovereign governments to be exercised in the interests of their national development.

“We recognise that the benefits of resource extraction occur as revenue streams over many years and can be highly price dependent.

“We recognise that a public understanding of government revenues and expenditure over time could help public debate and inform choice of appropriate and realistic options for sustainable developmen.

“We underline the importance of transparency by governments and companies in the extractive industries and the need to enhance public financial management and accountability.

“We recognise that achievement of greater transparency must be set in the context of respect for contracts and laws.

“We recognise the enhanced environment for domestic and foreign direct investment that financial transparency may bring.

“We believe in the principle and practice of accountability by government to all citizens for the stewardship of revenue streams and public expenditure.

“We are committed to encouraging high standards of transparency and accountability in public life, government operations and in business.

“We believe that a broadly consistent and workable approach to the disclosure of payments and revenues is required, which is simple to undertake and to use.

“We believe that payments' disclosure in a given country should involve all extractive industry companies operating in that country.

“In seeking solutions, we believe that all stakeholders have important and relevant contributions to make - including governments and their agencies, extractive industry companies, service companies, multilateral organisations, financial organisations, investors, and non-governmental organisations.

NEITI Guidelines

Its guidelines provide a practical guide to host governments, companies, and independent third parties in reporting payments and revenues related to extractive industries. They include definitions, scope, and principles of reporting as well as templates for reporting.

Source Book of Guidance for EITI Implementation

In January 2005, the International EITI Secretariat in the UK Department for International Development (DFID) produced the first version of the EITI Source Book. The Source book seeks to build on the EITI Principles agreed at Lancaster House in June 2003. Since the Lancaster House conference, EITI has evolved considerably, and there is now demand for clear guidance on how EITI should be implemented. The Source book seeks to provide this guidance and will continue to be developed as we learn the lessons of implementation in more countries.

Building on the experiences of the leading EITI countries, the Source book provides an illustrative guide to assist countries wishing to implement the initiative, and companies and other stakeholders wishing to support implementation. It summarises the EITI principles and criteria; provides guidance for governments implementing EITI; and guidance for companies which are either involved or interested in supporting the initiative.