CISLAC Position On The Status Of Remediation In NEITI Implementation In Nigeria

FROM REPORTS TO REMEDIATION: CISLAC POSITION ON THE STATUS OF REMEDIATION IN NEITI IMPLEMENTATION IN NIGERIA ,LAGOS AIRPORT HOTEL, MAY 28 2014
INTRODUCTION
It is no longer news that Nigeria is a EITI implementing country and the first country in the world to have an EITI process backed by law. It is also no longer news that Nigeria attained EITI Compliant Status in 2011 and has one of the most robust reporting processes that has been celebrated as innovative among EITI implementing countries by exceeding the basic standards of mere financial audit of payment and receipts between government and oil companies and including physical and process audits. In achievement, it is on record that Nigeria has conducted four cycle of Audits 1999-2004, 2005, 2006-2008, and 2009- 2011 for the oil and gas sector and on (2007-2010) for the Solid Minerals sector. Presently, the NEITI is undertaking her first Fiscal Allocation and Statutory Disbursement Audit 2007-2011. These earned the Nigeria the award of the best Performing EITI implementing country from the EITI international in 2013.
CONCERNS
The concerns of the Civil Society Legislative Advocacy Centre is that not much has really changed in the past 10 years of implementing the NEITI as far as actual changes that would tackle corruption in the extractive sector, enhance genuine institutional accountability and blockage of leakages that result in governments loss of revenue and ultimately translate oil revenues into enhanced welfare, better living conditions and development for our people, is concerned.
We are concerned that so far the NEITI process has been reduced to the churning out of various forms of reports and that remediation action which entails the implementation of recommendations from the reports to correct the deficiencies identified has remained elusive. Indeed beyond the NEITI audit reports, there have been several other reports which have only served to confirm and reinforce the NEITI reports.
We recall that the Harts Groups was contracted for the 1999-2004 audit at the cost of 2.3 million USD (about N345 Million at N150 to $1) , the two audits for 2009-2011 cost about N364 million. By the end of the ongoing 2012 audits, we would have expended well over the regions of N1 billion on NEITI audits alone. This is without the costs of the KPMG report commissioned the Ministry of Finance and the several presidential probe panels and the National Assembly Panels set up post 2012 fuel subsidy crisis.
The major outcomes of the NEITI reports, apart from winning laurels as numerated above are:
the uncovering of the sum of $9.7 Billion loss to the nation out of which $2.4 Billion has been recovered
the provision of detailed reports that gives Nigerians information on events in the oil and gas sector which where hitherto unknown
there has been increased revenue to the government since the commencement of NEITI implementation
We are concerned that Nicholas Shaxson’s rhetorical enquiry about the NEITI reports being just glorious audits as far back as 2009 may be materializing five years after. During her visit, the EITI Chair Clare Short during her visit to Nigeria in 2013 called on the Federal Government to implement the recommendations in the NEITI reports. In the wake of the Nuhu Ribadu Report and the controversy surrounding missing funds between the CBN and the NNPC that the chair of the NEITI Board, Mr. Ledum Mitee lamented that the issues are not new and are only recurrent because of the government’s failure to implement the recommendations from previous NEITI reports.
Beyond the above outcomes, the systemic, process, institutional and policy loopholes that leads to the loss of revenues remain and can only facilitate continuous losses and leakages. We are concerned that just as all previous reports have discovered the same problems, the 2012 audit, which is already in progress and to be paid for with tax payers money, may throw up the same issues because no remedial action has taken place between the last audit and now. We consider this a disservice to the Nigerian people.
POSITION
We must move beyond reports to remediation. In our previous shadow reports of the NEITI process, CISLAC has insisted that we must go beyond validation and move from Audit to Action. Remediation is the missing gap in the implementation of the NEITI in Nigeria and it is the ultimate goal. Of what use are reports if all they do is reveal scandalous losses and corruption of monumental proportions? How useful is it for Nigerians to know that over $7 million are unaccounted for? That there is no metering facility and we depend on buyers to determine how much resources are extracted from our shores? That the NNPC sells crude oil under terms set by her and using interest rates set by her as though it is above the law? That there is underassessment of royalty rates when we pay people to ensure that does not happen and worse still that this has been going on for 10 years since we started knowing and nothing is been done about it?
The recovery of less than 30% of what has been uncovered is a unsatisfactory considering the cost incurred in conducting the NEITI audits and maintaining the secretariat. Nigerians expect more value for money from the NEITI process than so far recorded
Detailed reports that do not translate into real changes in the way natural resources are managed and impact on the lives of the people may serve for analysis and feed research but does not really interest the Nigerian people who are becoming weary of such. No one pays for information that increases agony. Nigerians pay for audit reports because they hope it would ultimately improve their lives.
The increase in revenue that is lost to corruption and plundered is of no use to the people. Indeed, it only fuels anger, frustration, distrust and negative feelings.
We are aware that these issues go beyond the NEITI as an institution. For instance, for a long time the inter-ministerial Task Team, IMTT made up of heads of relevant agencies and which should take responsibility for implementing remediation was docile due to lack of commitment. It was re-constituted in December 2013. About six months down the line, they have been having meetings, we understand that there have been commitments by concerned stakeholders, about 35 remedial issues have been identified and they are in the process of designing a remediation strategy. The strategy should clearly state what is to be done, by who (or what institution) and by what time. The public needs to know who to hold accountable at every point in time. We believe this should be treated with greater urgency considering the limited time lapse in between the mandatory reports. They are six months in place and nothing has changed yet. We need to be able to determine in another six months, if anything changes and hold them accountable to commitments they themselves initiated.
We call on all the agencies and entities that constitute the IMTT to be committed to participating in meetings by sending appropriate representations and following through commitments made by fulfilling their obligations made in such meetings. They must avoid previous practices of sending incompetent or nominal representatives who cannot commit or act to IMTT meetings thereby incapacitating the IMTT and rendering it impotent.
We call on the IMTT to expedite action on their process, design and publish a remediation action plan with time lines and make it public so that the public can hold them accountable. The NEITI as the Chair and Secretariat of the IMTT should provide regular progress report on remediation to the public. Failure to do this would be considered a lack of commitment on their own part and derogation from the positive perception of their commendable performance hitherto.
We are aware that the notorious phrase of Political Will constitutes a stumbling block to implementing remediation. We remind the federal government that a NEITI process without remediation is window dressing, waste of public resources and an addition of salt to the injury of Nigerians. All the relevant agencies are funded with public resources and regulated by law and delegated mandates. The federal government has a duty to ensure that they perform their duties and remediation is one of these.
The National Assembly must show more commitment to the NEITI process by intensifying their oversight role over the relevant agencies. The progress report on remediation issues should become a major component of oversight reports demanded by the NASS from relevant MDAs.
The passage of a people-oriented PIB would substantially resolve a lot of the remediation issues going forward. The National Assembly should expedite the passage of the PIB before the end of this legislative session and the president should assent as soon as this is done.
We call on the media to make remediation issues the focus of their coverage. Columns, features, talk shows and incisive reporting specifically centered on remedial issues should be undertaken. This should be strategic. There are several issues. Media persons should streamline and zero on specifics and keep them in the front banner of public discourse consistently.
Signed:
Auwal Ibrahim Musa(Rafsanjani)
Executive Director, CISLAC