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NEITI Seeks End to Oil Block Ownership Secrecy

by on May 11, 2016
 

The Nigeria Extractive Industries Transparency Initiative (NEITI) has pushed for an end to the secrecy surrounding owners of oil blocks in the country, saying such actions pose a threat to the Nigeria’s economy and security.

NEITI which has in the past attempted to reveal beneficial owners of oil blocks in the country, urged President Muhammadu Buhari to end the practice.

The agency in a maiden policy brief, titled “The Need to Know Who Owns What in Nigeria’s Extractive Sector” on Tuesday called on the President to champion policies and laws mandating public disclosure of the real owners of companies operating in all sectors in Nigeria, especially those in the extractive sector.

NEITI noted that even when not always illegal or misused, secret companies are hardly in the interests of developing countries.

“Anonymous companies are used to deny countries of valuable revenues through tax avoidance, and sometimes outright tax evasion,” NEITI stated in the report.

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“Then, the shroud of secrecy around them is used not only to mask possible corrupt relationships with government officials but also to obscure probable links to money laundering, drug trafficking, and terrorism financing.”

The eight-page report is coming on the heels of three important developments that have put the danger of secret companies on the front burner: the Panama papers’ leak which has revealed some of the prominent business executives and politicians (including Nigerians) behind some offshore companies; the May 12th London Anti-Corruption Summit where world leaders, including President Buhari, will gather to make commitments on stronger partnership for fighting corruption, including on how to end the prevalence of secret companies; and the requirement that all EITI-implementing countries such as Nigeria must have a public register of the real owners of all extractive companies operating in their jurisdictions by January 2020.

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The report said: “It is in the best interest of Nigeria and Nigerians as full ownership disclosure has practical implication for increasing government revenues, reducing the incidence of corruption and money laundering, and cutting off funding for drug lords and terrorists.

“It is therefore important for the President Buhari administration to prioritize this aspect of transparency and champion policy and legal frameworks for lifting the veil of secrecy on ownership of companies in the extractive sector in Nigeria.

“Apart from Nigeria being seen to be in the vanguard of a global movement, the promotion, expansion and deepening of ownership disclosure of all companies that operate Nigeria’s oil, gas and solid minerals sector align with the change agenda and the ongoing oil sector reforms of the President Muhammadu Buhari administration.”

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The global Extractive Industries Transparency Initiative (EITI) has directed all implementing countries to publish their roadmaps for reporting the real owners of extractive companies by January 2017 and create publicly accessible registers of beneficial owners of extractive companies by January 2020.

NEITI added: “It should also be recalled that world leaders attending the May12 summit in London are expected to commit to having a public registry of the beneficial owners of all companies operating within their territories.

“It should be noted that beneficial owners are not necessarily the same as legal owners in that beneficial owners are the flesh and blood humans who benefit from and exercise control over the running of companies, not just legal owners who might be other companies or individuals acting in trust for or as fronts of the real owners.

 

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