The National Assembly Complex, Abuja, FCT

Nigeria: NEITI, CSOs request contract transparency clauses in PIB

*Nigerians must be allowed to know what oil and gas contracts contain ─Facility for Oil Sector Reform (FOSTER)

Isola Moses | ConsumerConnnect

The Nigerian Extractive Industries Transparency Initiative (NEITI) and civil society organisations (CSOs) have advocated the inclusion of contract transparency clauses in the Petroleum Industry Bill (PIB) currently being considered in the country’s national Assembly (NASS).

The organisations Thursday, October 29 said doing this would save the country billions of Naira being lost to opaque agreements in the oil and gas industry annually.

They made the call at the maiden media roundtable on contract transparency organised by the Centre for Transparency Advocacy (CTA) in collaboration with the Media Initiative for Transparency in Extractive Industries (MITEI) and Contract Advocacy Network (CONTRANET).

Nigeria is reportedly battling to resolve a dispute with a British engineering firm, Process & Industrial Development Limited (P&ID) over the alleged breach of a 2010 gas contract agreement by the Nigerian National Petroleum Corporation (NNPC) and the Ministry of Petroleum Resources.

Sources said legal authorities, including the officials in the Office of the Attorney-General of the Federation and Minister for Justice, were left in the dark about the details of the contract until the matter resulted in a dispute in court.

Aside from this, stakeholders have always expressed concerns over the impact of confidentiality clauses in contracts signed by the joint venture operators in the country’s oil and gas industry, according to report.

To curb the losses, civil society groups have urged the National Assembly to pay special attention to the clause on contract transparency in the PIB currently undergoing passage.

Mr. Waziri Adio, Executive Secretary of NEITI, in a goodwill message to the event, said the lawmakers should ensure they monitored closely those clauses in the PIB that would promote and preserve contract transparency.

Adio, represented by Kazeem Lameed, NEITI’s Communication and Advocacy Officer, stated that operators in the country’s oil and gas industry have no excuse not to disclose terms and conditions in their contracts, except they have something to hide.

Section 83 (3) and (5) of the PIB, which focuses on contract transparency in Nigeria’s oil and gas sector, provides that all NNPC contracts shall not be confidential, but shall also be published within one year of its effective date, he remarked.

According to him, the clause makes provision for mandatory oil revenue savings and systemic disclosure to avoid the country’s interest being jeopardised or mortgaged.

Leo Ugboajah, Representative of the Facility for Oil Sector Reform (FOSTER), also lamented the absence of laws making contract transparency mandatory in the country at the moment, except those in the PIB currently pending in the National Assembly.

Mr Ugboajah, in his presentation titled, ‘Research of Findings on the Impact of Lack of Contract Transparency’, charged the CSOs that since the subject is covered by the PIB, they must do all within their powers to ensure contract disclosure was mandatory.

He stressed that in order to ensure that local contractors operating without a legislative backing do not succeed in getting the clause expunged from the PIB.

Nigerians must be allowed to know what the contracts contain.

He explained: “The CSOs must be on the watch out, because a simple mistake could cause the county a fortune. Service contracts are more important, because they determine the amount of revenue the country earns from the industry, not the license contracts.”

Earlier, Ms. Faith Nwadishi, Executive Director of CTA, had said the Extractive Industry Transparency Initiative (EITI), a global transparency group to which Nigeria is signatory, has made contract transparency mandatory in the oil and gas industry.

Nwadishhi said findings by CTA and other partners in a report presented at the event, showed that several contracts in the extractive industries were not publicly disclosed.

Such contracts included agreements and licenses in the oil and gas industry awarded to service companies for the production of oil and gas from various mineral assets held by joint venture arrangements.

She stated: “The passage of the PIB has been ongoing for almost 20 years. The PIB gives us the opportunity for Nigeria to meet the requirements of the EITI. If the PIB now makes it mandatory, we should have a law that has taken it up much higher.”

Nwadishi, however, expressed fears that local contractors could push for the contract transparency clauses to be removed from the PIB.

“We must look out for local contractors, people who don’t have that standard of contract transparency who will want to do a push back.

“They want to do business as usual. This is when we will amplify our voices so that members the National Assembly will look for that provision,” she urged industry stakeholders.

She added that “the National Assembly must hasten the process for the passage of the PIB, as some sections in the bill would enhance transparency in extractive industries contracts.

“The passage of the PIB would not only boost transparency in contracts, but also help to address secrecy in some of the deals.”

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