23 February 2018, Sweetcrude, Lagos — The Nigerian Natural Resource Charter, NNRC (a non-governmental organisation that promotes policy reforms in the extractive sector) has urged the Federal Government to demonstrate transparency in the oil and gas sector as it will generate investments.
NNRC gave the charge at the launch of its 2017 Benchmark Exercise Report, BER on Thursday in Lagos.
According to the NGO’s Project Coordinator, Ms. Tengi George-Ikoli, transparency in the sector is necessary to bring Nigeria’s oil and gas sector at par with its contemporaries at the international sphere, and to attract investment.
“The federal government needs to work harder to engender greater transparency in the Oil and Gas sector. If the ongoing plans to bring the sector at par with developed countries of the world, to attract the right level of investment and growth for the economy, transparency has to be at the forefront of the government’s agenda”.
“This should be the focus of any government vying for elections in 2019”, she added.
Transparency and Accountability issues were considered at all chapters of the 2017 Benchmarking Exercise Report (BER) released by NNRC however, the BER’s are solely focused on assessing the petroleum sector as was the case in our 2012 and 2014 Benchmarking Exercise Reports.
The 2017 Benchmarking Exercise Report (BER) catalogued developments within the oil and gas sector in the last three years using the 12 ‘economic principles’ or as we refer to them ‘precepts’, as a tool to assess governance in the sector.
The precepts consider the decision making process required to achieve efficient resource management from the foundations of resource governance to effectively administering the revenues accrued for sustainable development.
Precept 2 of the Natural Resource Charter framework specifically addresses resource governance as it pertains to transparency and accountability. It assesses the extent to which a government is held accountable to an informed public in its management of the nation’s natural resources. It states that a nation, in which the quality of public information about natural resources is low and its timeliness poor, increases the difficulty in holding the government and companies to account. Also, it posits that in a nation where transparency is lacking and accountability weak, it is very hard to achieve sustainable development.
“Transparency has many dimensions and can be best described as involving ready access to reliable, comprehensive, timely, understandable, and internationally comparable information. It involves disclosing and publishing information in a robust manner and encompasses engagement from multiple stakeholders. In addition to fighting corruption, which is epidemic in the oil and gas sector, transparency supports accountability and reduces inefficiencies. It also enhances relations between stakeholders as it boosts trust between society, government, and companies, helping to avoid misperceptions and reducing local tensions”, a part of the report said.
The just-released Benchmarking Exercise Report, BER, shows that the government has taken steps to improve transparency and accountability of public institutions, a development which stakeholders in the industry laud as commendable.
The Report equally notes that equally put in place are instruments to track public spending while information management systems have been deployed in government agencies with some recording significance improvements in service delivery.
Equally notable from the report are efforts by the government to implement the principles of the open government partnership by launching the Nigeria open contracting portal.
The report, however, highlighted that public institutions in the oil and gas sector are yet to prioritise proactive disclosure of information and in places where this is available, it is quite limited, outdated and yet to meet internationally accepted standards.
It further stated that oversight functions by requisite institutions are still ineffective yielding sub-optimal outcomes while accountability mechanisms expected to serve as a deterrent against fraud are not strictly enforced.
The BER also notes that on issues of licensing, exploration and monitoring, that there has not been significant change since 2014.
Nigeria, the BER notes, still do not meet the natural resource charter benchmark.
Laws, policies, and practices reveal the absence of strategic impact assessment and poor disclosure of exploration and licensing information.
According to the report, monitoring of operations across every stage of projects is ineffective as the government agencies responsible lack some technical capacity and are not always sufficiently resourced.
“Oversight institutions are weak, inefficient and in some cases, compromised. It is however expected that the component parts of the Petroleum Industry Bill will adequately address this when finally passed into law. But for the time being, not much has been achieved”.
However, the report said in spite of the relative achievements and other efforts of the government to improve on transparency, so much is still left to be done.
“The need for greater transparency in Nigeria’s oil and gas sector cannot be overemphasized if government’s efforts at growing the sector and effectively competing are to be achieved”.
“The government must in the coming months prove to Nigerians that they have a plan to address this in the manifestos which we expect will be rolling out in quick succession shortly”.
“We all have a role to play in ensuring this and we hope that these deliberations will result in a plan to collectively hold the government accountable for improving petroleum resource management”.