COMMUNIQUE ISSUED AT THE END OF A FIVE-DAY
CAPACITY BUILDING WORKSHOP ON OIL AND GAS SECTOR GOVERNANCE BY THE CIVIL
SOCIETY STEERING COMMITTEE (CSSC) OF NIGERIA EXTRACTIVE INDUSTRIES TRANSPARENCY
INITIATIVE (NEITI), HELD FROM
8 – 12 JUNE, 2015, AT CHELSEA HOTEL, ABUJA
Preamble:
President Buhari
In
continuation of the NEITI-CSSC work on oil and gas remediation issues from the
NEITI audit (1999 – 2012), the World Bank in collaboration with the Nigeria
Extractive Industries Transparency Initiative (NEITI) held a five-day capacity
building workshop for the members of NEITI Civil Society Steering Committee from
8th to 12th June 2015 at Chelsea Hotel, Abuja.
The
workshop which was aimed at enhancing the capacity of CSSC members to
strengthen their participation in the NEITI process, NEITI audit remediation
issues on oil/gas sector and advocacy, attracted Civil Society Organizations (drawn
from media, women groups, professional groups, academia, labour, youth groups,
PWYP, Host communities, etc) from the six geo-political zones of Nigeria, who are
working on issues of transparency, accountability and due process in the
management of extractive industries in Nigeria.
The training
featured several presentations on: Introduction to oil and gas industry in
Nigeria; Understanding NEITI oil and gas audit reports; Exposure to simplified
2012 NEITI oil and gas audit report; NEITI remediation status update; Trend
analysis and interpretation of NEITI oil and gas audit reports (1999-2012).
Other presentations at the workshop includes: Understanding remediation issues
in the NEITI oil and gas report; and enhancing stakeholder’s capacity skills on
advocacy.
After
extensive deliberations on the state of affairs in the oil and gas sector, and
in line with Mr. President’s invitation to civil society in his inaugural
speech to support, understand and cooperate with him in his intention to reform
the petroleum sector, the workshop rose with the following resolutions:
1. The
federal government should implement a phased divestment of its shares in the
Upstream oil and gas Joint Ventures. This call has become necessary in view of
the huge cash call debt obligation which the JV arrangement has imposed on the
nation’s lean resources. This divestment will open the arrangement for private
sector participation and enhance increased inflow of revenue to the federation.
Above all, it will reduce the corrupt practices, wastes and other leakages
associated with the management of the JVs over the years. Part of the proceeds
from divestment should be strategically channeled to the development of
infrastructure, agriculture, power, transport, solid minerals, education and
health sectors while the remaining should be reserved for future generation.
2. That
corruption, of massive proportion, in the oil and gas sector, particularly the abuse
of the petroleum subsidy regime and all oil and gas audit remediation issues,
should be urgently and thoroughly investigated and addressed by the Federal
Government. The CSSC find it unacceptable that in two years (2011-2012) over
N3.2Trillion was paid as subsidy as revealed by NEITI audit reports. . We also
call on all the NEITI Inter-Ministerial Task Team (IMTT) members to show more
commitment in addressing all remediation issues including the unremitted
$11.6bn dividends paid by the Nigeria Liquefied Natural Gas (NLNG) to NNPC on
behalf of the federation. We therefore call on special Presidential
intervention on the nagging issue of the failure of the IMTT to carry out its
mandate on remedial issues outlined y the NEITI audit reports.
3. That the daily allocations of 445,000 barrels
of crude oil to NNPC should be reviewed downwards in view of the fact that the
four refineries operate around 20 percent capacity utilization. The allocation
of crude oil beyond the refineries capacity to refine and which is subsequently
exported and re-imported under swap and offshore processing arrangements, constitutes
huge economic losses as it creates room for abuse and corruption. . Government
should create enabling environment for private investment in building
refineries. Meanwhile, Government should carry out the necessary turn-around
maintenance of all refineries to make them operate at their optimum capacity
and efficiency.
4. On
the issue of PIB, CSOs are concerned that after 8 years of legislative efforts
to pass the bill into law and after incurring billions of Naira, the bill has
not been passed. We therefore call on President Muhammadu Buhari and the 8th
National Assembly to demonstrate their patriotism and political will to promote
transparency and accountability in the oil and gas sector by ensuring that the bill
is passed and signed into law within the first 100 days of the life of this
administration, to set a solid legal foundation for the new transparent fiscal
and operational regimes of Nigeria oil and gas sector.
5. That
CSOs request the President to begin the implementation of remediation issues
identified in the NEITI audits in line with his campaign promises. It was noted
that the non-implementation of remediation issues puts Nigeria at risks of being
sanctioned by EITI in January 2016, when Nigeria is due for validation.
6. That
the idea of “pioneer status and certification” as an incentive policy to new businesses
should be reviewed in the divestment of already producing OMLs, to curb the
present abuse in the oil and gas sector which results in revenue losses to Nigeria.
7. That
the opaque and discretionary process of awarding oil blocks as currently being
practiced by the Federal Government should be discouraged and made to go
through normal bidding process which was discontinued since 2007 . The
principle of discretionary award of oil blocks contradicts the principles of
due process, transparency and competition captured in the NEITI Act 2007. The
non-adherence to these principles has resulted in loss of huge revenues to the
Federation and denies Nigerians value from natural resources.
8. That
the Department of Petroleum Resources (DPR) should as a matter of urgency
develop and enforce a regulatory framework for the installation of uniform metering
system at all oil well-heads in Nigeria in line with international best
practices.
9. That
Mr. President should immediately direct NEITI to conduct the Fiscal Allocation
and Statutory Disbursement (FASD) audit
in all the 36 states and 774 LGAs. This audit will reveal how states and LGAs
are spending their allocations from Oil and Gas sector.
10. Federal
Government should show more commitment to the implementation of EITI in Nigeria
by increasing the budgetary allocation to NEITI to realize its mandate
11.
The NEITI Law should be reviewed to
incorporate the new EITI standards which will promote more openness and
accountability in the Nigeria oil and gas sector.
12. We
urge Mr. President to start his Administration’s change agenda from the oil and
gas sector and at the same time diversify the economy with full support and
involvement of the Civil Society Organizations working on the extractive
sector.
The
Civil Society Steering Committee of NEITI is committed to the following:
1. Support,
understand and encourage Mr. President in all his efforts to reposition and rid
Nigeria oil and gas sector of corruption.
2. Work with relevant agencies to address all
remedial issues especially with the IMTT by effective monitoring of the process.
3. Protection
of EITI principles in Nigeria and the recertification by EITI in 2016 by
holding the government accountable for its implantation to ensure that revenues
from the extractive sector is prudently managed to support national development
and poverty reduction..
4. Create
awareness by providing Nigerians with oil and gas sector information at our
disposal.
5. Protection
of common interest of Nigerians in the oil and gas sector.
Signed
Faith Nwadishi
12
June, 2015
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