10 May 2016, Sweetcrude, Houston, Texas – The Nigeria Extractive Industries Transparency Initiative (NEITI) has called on President Muhammadu Buhari to initiate policies and laws mandating public disclosure of the real owners of companies that operate in Nigeria, especially in the extractive sector.
The agency in a statement yesterday said the presence of anonymous companies was a threat to Nigeria’s economy and security adding that even when not always illegal or misused, secret companies are hardly in the interests of developing countries.
NEITI in its maiden policy brief titled: “The Need to Know Who Owns What in Nigeria’s Extractive Sector,” explained that the policy brief was coming at a time new developments such as the Panama papers’ leak which has revealed some of the prominent business executives and politicians including Nigerians behind some offshore companies, have put the danger of secret companies on the front burners of the society.
It noted that, “Anonymous companies are used to deny countries of valuable revenues through tax avoidance, and sometimes outright tax evasion.
“Then, the shroud of secrecy around them is used not only to mask possible corrupt relationships with government officials but also to obscure probable links to money laundering, drug trafficking, and terrorism financing,” the brief added.
NEITI stated that beneficial owners are not necessarily the same as legal owners, explaining that beneficial owners are the flesh and blood humans who benefit from, and exercise control over the running of companies.
While urging government to consider such laws, NEITI explained that it is in the best interest of Nigeria and Nigerians as full ownership disclosure has practical implication for increasing government revenues, reducing the incidence of corruption and money laundering, and cutting off funding for drug lords and terrorists.
“It is therefore important for the President Buhari administration to prioritise this aspect of transparency and champion policy and legal frameworks for lifting the veil of secrecy on ownership of companies in the extractive sector in Nigeria.
“Apart from Nigeria being seen to be in the vanguard of a global movement, the promotion, expansion and deepening of ownership disclosure of all companies that operate Nigeria’s oil, gas and solid minerals sector align with the change agenda and the ongoing oil sector reforms of the President Muhammadu Buhari administration,” the agency stated.
The brief further stressed that the agency mandated by law to promote transparency and accountability in Nigeria’s oil, gas and solid minerals sector, a good place to start the disclosure of beneficial ownership will be the country’s extractive sector which it said still have some complex ownership structure.
Emphasising the need for Nigeria to key into the beneficial ownership drive of the global Extractive Industries Transparency Initiative (EITI), NEITI stated that, “Nigeria can and should establish its public register of beneficial owners of companies involved in exploration, production, trading, import, export, and provision of other services in the extractive sector of the country well ahead of the 2020 deadline.
“There is nothing that says Nigeria cannot beat this deadline by at least two years. Taking this leap will provide another opportunity to solidify its credential as leader among EITI-implementing countries and a champion of transparency and accountability in the extractive sector.”