Implement EITI Standard (NG0019)

Brief description:
The EITI process in Nigeria collects and publishes information about Nigeria’s extractive industry and disbursement of revenue. The annual Oil and Gas Audit, Solid Minerals Audit and Fiscal Allocation and Statutory Disbursement Audit provide data and information about the management and utilization of extractive revenue.

The audit makes various recommendation and identifies those responsible for implementing remediation. To ensure that citizens benefit from the utilization of revenue derived from the sector, there must be a mechanism to engage various segments of the public to hold government accountable and engage them in informed debate. Empowering the citizens with information from the audit will help them to understand how much government receives from the sector, how it is distributed and allocated; and empower them to demand better utilization for improved service delivery and sustainable development.

The EITI standards is a tool for continuous improvement of audit and monitoring the extractive sector, provision of data and information; and engagement of stakeholders.

General problem:
While Nigeria is highly rated on the implementation of various EITI standards, challenges of low implementation of audit remediation by government entities and companies; enforcement of sanctions and prosecution of identified offenders; blockage of revenue leakages and recovery of revenue losses and availability of accurate data in the sector remains a challenge. The low participation of groups like women and youths in conversation around the extractive sector limits their ability to hold government accountable and advocate better utilization of extractive revenue. There is also the issue of how to turn available data into actionable tool for the public and how this can be utilized.

Specific OGP issue:
This commitment will focus on civic participation and public accountability

Rationale for the commitment:
The negative impact of oil and gas exploration, mining; and improper utilization of revenue affect citizens, especially women and youths whose livelihood and future are destroyed. Empowering these groups and other citizens with the relevant information about the sector and providing opportunities to engage government officials on the management of resources will lead to better outcomes for everyone.

Main objective:
To improve implementation of audit remediation and ensure gender, youth and disability inclusion.

Anticipated impact:
Increased implementation of remediation; and number of citizens and groups engaged.

See action plan for milestone activities.

5. Work with women, youth and vulnerable groups to enhance transparency in the extractive sector through full implementation of EITI Standards and audit remediations

Main Objective

“To improve implementation of audit remediation and ensure gender, youth and disability inclusion.”

Milestones

1. Quarterly status/progress update on identified remedial issues by covered entities responsible for remediation
2. Identify and prioritize key reoccurring remedial issues in NEITI oil and gas, mining report
3. Produce audit reports in an accessible format that ensures inclusion of women, youths and vulnerable groups in advocacy of issues raised
4. Develop framework for good practices on ensuring full participation of women in the extractives sector
5. Data disclosure by companies on employment statistics disaggregated by gender
6. Publish a publicly available beneficial ownership register of companies in the oil, gas and mining gas sector

Editorial Note: For the complete text of this commitment, please see Nigeria’s action plan at https://www.opengovpartnership.org/documents/nigeria-action-plan-2019-2021/

Commitment Analysis

This commitment builds on the previous action plan. It aims to enhance transparency in the extractive sector through implementation of the Extractives Industries Transparency Initiative (EITI) audit recommendations and to increase inclusion of women, youth, and the disabled in the sector’s decision-making process. Nigeria currently holds a rating of “satisfactory” progress made in meeting the EITI Standards, ^[77] which require the availability of information for monitoring extractive sector revenue, expenditures, and benefits to communities. ^[78]  Activities about remedial issues were also undertaken in commitment 3 of Nigeria’s 2017–2019 national action plan. These activities included stakeholder reports on annual plans to address remedial issues and briefing sessions by stakeholders responsible for remediation actions. ^[79] Under that commitment, the Civil Society Legislative Advocacy Centre (CISLAC) and Publish What You Pay (PWYP) disseminated reports and convened stakeholders to discuss remedial issues. The National Stakeholders Working Group (NSWG) held two sessions on remedial issues. ^[80]

Under the current action plan, this commitment includes six milestones. The commitment’s first two activities seek to monitor and identify key remedial issues with quarterly Nigeria Extractive Industries Transparency Initiative (NEITI) reports. The commitment focuses three activities on greater inclusion of women within the sector. Activities call for companies to disclose employment gender statistics and for the production of audit reports in accessible formats for women, youth, and vulnerable populations. Additionally, an activity plans to develop a framework for increasing women’s participation in the extractive sector ^[81] by implementing employment gender quotas and including women as oil corporation board members, directors, and departmental heads. ^[82] The commitment also foresees publishing a beneficial ownership register of companies in the extractives sector. ^[83]

As written, this commitment is relevant to the OGP value of access to information because it seeks to develop a publicly available beneficial ownership register of companies in the extractives sector. The commitment also aims to release audit reports in accessible formats to facilitate their better understanding by the wider public, including women and youth. Disclosing gender disaggregated employment data could also improve availability of information on women’s participation in the industry.

If implemented fully, this commitment could have a minor potential impact on improving transparency in the extractive sector. The Beneficial Ownership Register was launched prior to this commitment (See commitments 6 and 4). ^[84] It was already operational by the time this action plan was signed; therefore, this milestone is not counted in the assessment of potential impact. The NEITI register is the first beneficial ownership register in the region. It is user-friendly and searchable by companies, assets, and individuals and also allows bulk download of data, which enables systematic analysis of listed companies.

In terms of tracking remedial issues, NEITI already highlights remedial issues through its annual audit report and policy briefs. ^[85] However, relevant institutions have had difficulty bridging the budgetary gaps (remediations) identified by NEITI and adopting NEITI’s recommendations. ^[86] NEITI lacks the legal mandate to sanction non-complying institutions and does not have sufficient political support for its recommendations. ^[87] The government’s Inter-Ministerial Task Team (IMTT) has also not been able to solve remedial issues, ^[88] and CSOs have called for changes in its composition to introduce further political accountability. ^[89] Overall, as written, this commitment builds incrementally on previous efforts, and achieving its goal to improve implementation of audit remediation would be contingent on the action of actors outside of NEITI.

This commitment could lead to some progress on availability of data on women’s participation in extractive industries. Since NEITI’s 2018 report, companies (including NNPC) have provided employment data disaggregated by gender. ^[90] The development of more disaggregated data could help companies make informed decisions to improve women’s participation and employment within this sector. ^[91] Yet, NEITI acknowledges that the availability of new data does not necessarily translate into greater accountability. ^[92] Meanwhile, more accessible audit reports respond to low levels of public engagement in the EITI process, with discussions of EITI reports mostly limited to publication events. ^[93]  Data on the sector are often delayed and published in formats incomprehensible to those without technical expertise. ^[94] Finally, the commitment’s guide on good practices for ensuring women’s representation in the decision-making process of the extractive industry could improve the sector’s impact on women in oil-bearing communities, although the action plan does not include an enforcement mechanism. By 2020, only 12% of the national multistakeholder group (MSG) overseeing the activities of NEITI was female. ^[95] Across the sector, the Kebetkache Women Development & Resource Centre notes that women have minimal representation in management, senior staff, and technical units and in community Cluster Development Boards and Community Trust and Regional Development Councils under the Global Memorandum of Understanding. ^[96]

Implementation of audit recommendations is important to ensuring Nigeria’s successful implementation of the EITI standard. Public engagement on EITI reports and communities most affected by the activities of the extractive sector is another important dimension for the extractive sector’s accountability. The IRM recommends continuing efforts in these directions, potentially looking at reforming NEITI’s legal framework for ensuring fulfilment of audit recommendations.                 

Commitment 5. Work with women, youth, and vulnerable groups to enhance transparency in the extractive sector through full implementation of EITI Standards and audit remediations

● Verifiable: Yes

● Does it have an open government lens? Yes

● Potential Impact: Minor

● Completion: Limited

● Did it open government? No early results to report yet

This commitment built on ongoing efforts to strengthen governance of the extractives sector, with a focus on implementation of audit remediation and inclusion of women, youth, and people with disability. The Nigerian Extractive Industry Transparency Initiative (NEITI) continued to report on oil, gas, and mining entities’ responses to remedial issues highlighted in NEITI reports. IRM did not find evidence specific to quarterly reports on remediation or a list of priorities of remedial issues (Milestones 1 and 2). However, NEITI reported that 60% of items in the legacy audit report and 67% of items in the 2017–2018 audit report have been fully addressed. NEITI stated that three observations were ongoing and one was unresolved from the 2019 audit report, as of December 2022. NEITI’s 2020 audit report identified 16 observations and made recommendations toward mitigating remedial issues. [87]

NEITI published accessible information on the extractives sector for the public as well as continued to produce information on the participation of women, youth, and other groups in the governance of the extractive sector during the implementation period. NEITI produced a nine-page ‘at a glance’ version of the 2020 Oil and Gas Industry Report and a one-page 2020 Solid Minerals report with information presented in a simple and visual format (Milestone 3). [88] NEITI continued to publish gender disaggregated employment data as part of their audit reports (Milestone 5). Women employees made up 18% of the workforce of the 60 oil and gas companies who complied with the request for information. [89] Of the 29 companies in the mining industry that supplied data, women made up 14% of the workforce in 2020. [90] IRM did not find evidence that NEITI developed a guide for inclusion of women in extractive sector governance (Milestone 4). However, NEITI did publish a 2020 paper on the impact of mining on women, youth, and other communities, which includes recommendations to government, civil society, communities, and companies. [91] Civil society noted that there are currently no women represented on the NEITI board. [92] NEITI continued to maintain the beneficial ownership portal for the extractives industries as established under the previous action plan (Milestone 6). [93]