03 June 2016, Sweetcrude, Abuja – The international coalition for advocacy in extractive industries transparency and accountability, Publish What You Pay (PWYP), has urged the federal government to develop procedures and systems that would collect and verify oil production data declared by companies.
The group’s recommendation is coming on the heels of the 2013 oil and gas sector audit report released recently in Abuja by the Nigeria Extractive Industries Transparency Initiative (NEITI), which highlighted the fact that the country lacks accurate oil production measurement system, leaving the country to rely on data provided by the operating companies, a development, it pointed out, that is a source of revenue leakage.
In a statement signed by the national coordinator, PWYP Nigeria, Faith Nwadishi, the organisation said, “Government should develop procedures and systems to collect and verify production data declared by companies, review tax reporting system and put in place a sector-specific fiscal regime for the country.”
It added that “As a government desirous of diversifying the economy and creating employment, we urge the government to intensify the reform in the sector and create an enabling environment for private sector participants to take advantage of the sector.
“The government should also intensify efforts to formalise the operation of small and medium scale miners to improve their contribution to the revenue flow.”
On remedial issues, the PWYP urged the NEITI’s Inter-Ministerial Task Team (IMTT) to look at the previous reports and their recommendations and design a plan on how to address the shortcomings, especially in the preparation of reporting template and reliability of reported data. In addition, the coalition noted that the accuracy of data, timing of the reconciliation exercise, legal and taxation environment and rigorous follow up on reporting entities, should be looked into.
“We urge the IMTT on the need to look at the previous reports, the remedial issues and recommendations and come out with a plan on how to address the shortcomings, especially in the preparation of a reporting template and reliability of reported data, in addition to the accuracy of data, timing of the reconciliation exercise, legal and taxation environment and rigorous follow up on reporting entities,” the statement said.
PWYP further called on state governments to intensify efforts to create an enabling environment for diversification of revenue sources by improving the solid minerals sector within their states while calling for the need for mineral exports to be properly taxed.
“We also urge the government to make efforts towards broadening the mining sector, especially the exploration and mining of metallic, energy and exotic gemstones which are capable of increasing the revenue base of the solid mineral sector as our solid mineral sector is mostly based on industrial minerals,” the statement added.
It added further that “the NEITI should activate Section 16 (1-5) of the NEITI Act 2007 to collaborate with the relevant government agencies to indict and prosecute companies which payments to the government were unable to be reconciled.”
Furthermore, the PWYP called on civil society organisations to hold the government and the companies accountable, especially considering the impact of increased activity to our environment.
According to PWYP, this can be done through the monitoring of the compliance of extant Environmental Impact Assessment (EIA) to reduce exposure to environmental hazards and diseases associated with extractive activities and the implementation of the community development agreement to ensure transparency and accountability in the solid mineral sector and other related issues.
On the timeliness of audit reporting, citing Section 4.8 of the EITI standard’s provision on data timeliness which provides that implementing countries are expected to produce the EITI reports on an annual basis, Nwadishi noted that with the publication of the 2012 report in May of 2016, Nigeria ran foul of the provision, and urge the NEITI to begin the 2014 report as soon as possible to meet the December 2016 deadline while recommending that the agency utilise other innovative ways to make the reports more timely.