The Nation Newspaper

Tag: NEITI

  • Experts mull transparency in extractive industry

    Experts mull transparency in extractive industry

    WORRIED by the deepening level of corruption in the extractive industry in sub-Sahara Africa, a cross-section of experts have set machinery in motion to address the ugly trend.

    One group in the vanguard of this initiative is the Civil Society Legislative Advocacy Centre (CISLAC), a nongovernment, nonprofit organisation, with collaboration with other stakeholders.

    The organisation which facilitated an interface and discussion forum tagged: ‘CSO Engagement of the NEITI Process in Nigeria: The CISLAC Experience’, in Lome, capital of Benin, recently, engaged critical stakeholders in the extractive industry, pointing out to them why they must all join hands  together to promote transparency in the sector.

    Mr. Hashimu Salaudeen, who was CISLAC Head of delegation at the Benin Republic advocacy trip which included investor, parliamentarian, civil societies and regulators, recalled how the Nigeria Extractive Industries Transparency Initiative policy came to be, its implementation in Nigeria, what the scenario was before the implementation and what it is now after the adoption of the EITI policy.

    He also spoke on the need for Benin to quickly embrace the EITI policy because the francophone countries are still at the formative process of going into full natural resources extraction, especially crude oil. This to him will help the country avoid some of the potholes Nigeria fell into.

    Painting the Nigeria scenario, he noted that Nigeria is a country with rich natural resources though at present depends on oil and gas as its main source of revenue. He observed that the sector was opaque and riddled with corruption as its activities and revenue was known only by a few government officials and oil firms, which made even called for accountability cumbersome.

    He however said that with the origin of the EITI in 2002 and Publish What You Pay movement, demands, especially by civil societies, for openness and transparency increased globally and Nigeria was not left out.

    A parliamentarian, Hon. Adam Bi, in one of the meetings, commended the initiative as it is good for his country to have an insight into what other countries especially Nigeria has gone through as it would be a good guide for Benin and a rich experience to learn from.

    He also stated that the advocacy trip is also good for his country to have an insight to the transparency issues before his country starts exploration.

    Mr. Awo Marcel a staff of the Ministry of Petroleum research and Mines, after listening to the presentation said that Benin is ready and interested to put in place the necessary steps to implement the EITI benchmark through a cross-ministerial concept including organising workshop across ministry for better understanding and appreciation of the issues.

    During the advocacy with civil society groups, Mr. Roger Kpokpo, of Global Aids, said that the insight provided by CISLA representative has helped to expand his knowledge base on the need to ensure accountability in the extractive industry and why all stakeholders must be involved.

    For Mr. Gandaho Ramleg, though there is a law in place, it did not clearly state the sharing of the revenue to positively affect the host communities.

    He however fears that there is danger because the seeming peace in his country is a product of pathological silence of the citizens to what is going on in the country, which could change when Benin begins full exploration of crude oil.

    A representative of Gender for Development Action (GADA) Miss Obiageli Ukeoma, after listening to some of issues raised by the stakeholders during the discussions, commended the stakeholders for wanting to ensure transparency in the extractive sector. She urged the stakeholders to work towards having a law in place even before companies that would be involved in the extractive industries starts operation.

  • NEITI’s $2bn recovery

    NEITI’s $2bn recovery

    THE Nigeria Extractive Industries Transparency Initiative’s (NEITI) laudable audit gambit has put it in positive public klieg light. The bold initiative has turned NEITI against, especially the Petroleum Product Pricing Regulatory Agency (PPPRA) that has publicly engaged it in a war of words. Yet, the initiative has admirably recovered $2billion into the public till after the implementation of its audit reports.

    NEITI’s track records, according to Zainab Ahmed, its executive secretary, speak volumes: from 1999-2004, its audit of oil and gas establishments led to the recovery of $1 billion; in 2005 it recovered about $515million while it also recovered $447million between 2006-2008. The total recoverable revenue emanating from the NEITI audits reportedly stands at $9.6billion.

    Despite these laudable recoveries, the PPPMC and most oil and gas companies have become uncomfortable with the body. Rather than see the initiative as a challenge to uphold probity and accountability in their establishments, they tend to see it more as an adversary outfit. For instance, the PPPMC has been trying to rubbish its audit report over a recommendation calling the agency to refund into the Federation Account an over-recovery of N4.423billion.

    We do not think that there should be any hullabaloo over this matter if there is no concealed animosity against the initiative’s audit moves that have obviously ruffled feathers in that important sector of the economy. This is aside the fact that NEITI was able to subsequently know that the disputed over-recovery of N4.423billion by the PPPRA was remitted to the Central Bank of Nigeria (CBN) account. Over-recovery applies when the landing cost of products based on import parity principle is below the approved PPPRA ex-depot benchmark. Hence, marketers are required to pay over-recovery into Petroleum Subsidy Fund (PSF) account at the CBN.

    NEITI reportedly demanded during the audit for relevant documents but PPPRA tendered other documents that did not show that the money was remitted. It waited till after the release of the audit report that did not favour it before releasing those documents showing that the money was actually paid to a designated account in the CBN. The implication of this is that the PPPRA deliberately withheld some vital documents, ostensibly to embarrass NEITI. Otherwise, why were documents relating to this over-recovery withheld initially?

    We are not persuaded by Reginald Stanley, PPPRA executive secretary’s claim that the report was not signed off by the agency’s management. How can the agency sign off an audit that, ab initio, it wanted to frustrate? What the report did was to merely query the shortfall between what was paid and what government received and that ought not to have led to any bickering.  The truth is that the PPPRA and other aggrieved oil and gas concerns should take the NEITI audit in good faith.

    We are deeply concerned about the unabated institutional rot and gargantuan thefts that have become routine in the oil sector. The country needs more of such outfits like NEITI to restore reasonable sanity and accountability to the oil and gas industry. The PPPRA outburst is uncalled-for. After all, NEITI had indicted other big oil companies in the past. For example, its audit in 2008 indicted Mobil Oil for owing $83.28 million in Education Tax. But for NEITI’s whistle blowing, the Federal Government would not have so far recovered about $2 billion debt owed it by oil firms operating in the country.

    The battle for financial transparency in the oil sector is in the country’s interest. What NEITI is doing will go a long way in reducing money being lost to private pockets in that important sector.

  • NEITI recovers $2b from audit implementation

    NEITI recovers $2b from audit implementation

    •Traces disputed N4.423b PPPRA remittance to CBN

    The Nigeria Extractive Industries Transparency Initiative (NEITI) has helped the federal government to recover $2billion following the implementation of its audit reports.

    Its Executive Secretary, Mrs. Zainab Ahmed, disclosed this to our correspondent at Abuja yesterday.

    She informed that $1 billion was recovered from the first NEITI oil and gas audit of 1999 – 2004.

    Ahmed further explained that the 2005 NEITI audit report also helped the federal government to recover another $515million.

    She added that the transparency agency recovered $447million following the implementation of the 2006-2008 oil and gas audit report.

    Total recoverable revenue emanating from the NEITI audits, according to her, is $9.6billion.

    She explained that NEITI later traced the disputed N4.423billion Petroleum Product Pricing Regulatory Agency (PPPRA) remittance to the Central Bank of Nigeria (CBN) account after the agency tendered documents it did not present in the course of the audit.

    According to her, such discrepancies are bound to occur when there is no full information from agencies.

    Ahmed said: “It was by sitting together and meeting with PPPRA and they provided documents that we didn’t see during the course of audit.

    “We saw that the remittances were actually made. So, this kind of things happen when you don’t get the full information that you require in the course of audit and audit does not last forever and so you have to end the data gathering and write the report. So that is what happened in the case of DPR.”

  • Disputed N4.423b between PPPRA, NEITI traced to CBN

    Disputed N4.423b between PPPRA, NEITI traced to CBN

    The N4.423 billion in dispute between the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Nigeria Extractive Industries Transparency Initiative (NEITI) has been reconciled and traced to the Petroleum Support Fund (PSF) account domiciled with the Central Bank of Nigeria (CBN).

    The resolution of the disputed amount followed a reconcilaitory meeting by the two organisations.

    A communique, which was signed by the Executive Secretaries, Mrs. Zainab Ahmed and Mr Reginald Stanley of the NEITI and PPPRA, said: “There is nothing outstanding against the PPPRA.”

    The communique said the meeting evolved strategies for NEITI and PPPRA to address other issues arising from the NEITI Report, adding that it used the platform of the Inter-Ministerial Task Team (IMTT) set up by President Godluck Jonathan to address remedial issues arising from NEITI’s Report.

    The executive secretaries also resolved to ensure the effective communication network between the two agencies for Inter-agency cooperation.

     

    The statement reads in parts: “Following the sustained media engagement between Petroleum Products Pricing Regulatory Agency (PPPRA) and the Nigeria Extractive Industries Transparency Initiative (NEITI), over the recently released 2009-2011 Industry Audit in the Oil and Gas Sector, and the findings as they affect PPPRA, a joint meeting between the two Agencies was held today (yesterday), August 13, 2013, in Abuja, with the Managements of the two Agencies in attendance.”

  • PPPRA to NEITI: Desist from confusing the public

    PPPRA to NEITI: Desist from confusing the public

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has asked the Nigerian Extractive Industry Transparency Initiative (NEITI) to desist from confusing the public on its audit report.

    The report had directed the PPPRA to remit N4.423 billion, arising from over-recovery, to the Federation Account.

    Over-recovery applies when the landing cost of products based on import parity principle is below the approved PPPRA ex-depot benchmark. Marketers pay over-recovery into Petroleum Subsidy Fund (PSF) account at the Central Bank of Nigeria (CBN).

    Defending its audit report, the Executive Secretary of the PPPRA, Reginald Stanley, said: “NEITI appeared to have embarked on a wild-goose chase, instead of addressing the issues at stake.”

    He further said contrary to NEITI’s report, there was no time the report was ‘signed-off’ by the PPPRA management, and challenged NEITI to make public, a copy of the ‘sign-off’ to prove its claim.

    He continued: “We challenge NEITI to tell Nigerians where the N4.423 billion it claims was warehoused. If NEITI is, indeed, desirous of efficiently in doing its job, we challenge it to go and consult the records at the CBN, where the PSF account is domiciled.”

  • PPPRA to NEITI: Stop confusing the public

    PPPRA to NEITI: Stop confusing the public

    The Petroleum Products Pricing and Regulatory Agency has appealed to the Nigeria Extractive Industry Transparency Initiative to desist from confusing the public further on its audit report which said that the agency should remit N4.423 billion to the Federation Account.

    In a swift reaction to NEITI’s statement affirming that it stood by its controversial audit report, the Executive Secretary of the PPPRA, Mr. Reginald Stanley, told reporters in Abuja on Wednesday that “NEITI appeared to have embarked on a wild-goose chase, instead of addressing the issues at stake.’’

    He said there was never a time the audit report was `signed-off’ by the management of the PPPRA, challenging NEITI to make a copy of the sign-off public, to prove its claim against PPPRA.

    On July 29, NEITI released its 2009-2011 audit report on the oil and gas sector, recommending that the PPPRA should remit N4.423 billion, arising from “over-recovery’’ to the Federation Account.

    “We challenge NEITI to tell Nigerians where the N4.423 billion it claims was warehoused. If NEITI is indeed, desirous of efficiently doing its job, we challenge it to go and consult the records at the Central Bank of Nigeria, where the Petroleum Support Fund (PSF) account is domiciled.

    “It should also go a step further by visiting the records at the Federal Ministry of Finance to confirm if certain amount of money as claimed was remitted accordingly or not by the PPPRA.

    “To all intents and purposes, it is apparent that NEITI is on a wild-goose chase and self-seeking in its putrid claims,’’ the News Agency of Nigeria quoted the PPPRA boss as saying to journalists.

    .

     

     

  • NEITI’s audit report, inaccurate, misleading – PPPRA

    NEITI’s audit report, inaccurate, misleading – PPPRA

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has dismissed the audit report of the Nigeria Extractive Industries Transparency Initiative (NEITI) which said the agency should remit N4.423 billion to the Federal Government.

    The Executive Secretary of the PPPRA, Mr. Reginald Stanley, told the News Agency of Nigeria (NAN) in Abuja on Sunday that NEITI’s report “is steeped in inaccuracies and gross misrepresentation of facts.

    “The report has glaring potential to mislead the public and further cast aspersions on the activities of the PPPRA as a key administrator of the Petroleum Support Fund (PSF),” Stanley stated

    On July 29, NEITI released its 2009-2011 audit report on the oil and gas sector, recommending that the PPPRA should remit N4.423 billion, arising from “over-recovery’’ collected to the Federation Account for the period in review.

    The report also ordered other establishments to refund various sums of money to the Federal Government.

    “The PPPRA wishes to state unequivocally that the statement credited to the NEITI chairman is misleading and a gross misrepresentation of facts.

    “We note with dismay, NEITI’s admission to the fact that it had no absolute control of its sources of data as they were derived information and data provided through its own independent auditors as well as companies doing business in the sector.

    “Such over-reliance on secondary data must have accounted for the glaringly flawed computations presented in the report,” the PPPRA chief told NAN.

    Stanley explained that the N4.423 billion “over-recovery” that the PPPRA was asked to remit, was not correct, noting that only the Nigerian National Petroleum Corporation still had an outstanding payment of about N3.98 billion to be paid into Central Bank of Nigeria’s account.

     

  • Minister summons NNPC over unremitted $8.476b NLNG dividends

    Minister summons NNPC over unremitted $8.476b NLNG dividends

    • NEITI unveils $1.7b exchange rate difference, N175.9b discrepancies

    The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala yesterday summoned the Nigeria National Petroleum Corporation (NNPC) Group Managing Director (GMD), Andrew Yakubu, for the corporation’s refusal to remit a total of $8.476billion as reported by the previous Nigeria Extractive Industries Transparency Initiative (NEITI) audit.

    She said the NNPC received $4.84billion as dividends and repayment from the Nigerian Liquiedfied Natural Gas (NLNG), which it was yet to remit to the Federation Account.

    Besides, the report revealed that the corporation received another $3.99billion without remitting it to the Federation Account.

    The minister spoke at the public presentation of the the NEITI 2009-2011 oil and gas physical and audit report in Abuja. She asked the GMD to see her for private discussions on the financial issues.

    Okonjo-Iweala noted that after a robust discussion with the NNPC boss, she , as the Minister of Finance could afford to depend on the remittance for additional revenue.

    Her words: “GMD, you are welcome back. I missed you because I was citing some of the words from NEITI and I said some of us are assembled here (the right people) because they pointed out some remittances from NLNG, amounting to over $8billion for a period of time-2006-2009, which we need to discuss.

    “As the Minister of Finance, I don’t want it on the floor here. We need a very robust conversation about this money because I can depend on it as a Minister of Finance that this is additional revenue. “

    The minister also drew attention of the stakeholders at the event to the issue of exchange rate.

    She said that the areas of discussion with the corporation, included the exchange rate differences, which were not resolved in the declaration of revenue by NNPC.

    The NEITI chairman, Mr. Ledum Mittee said the NEITI report observed poor inventory management, which accounted for the difficulty in determining balances for imported products.

    The report, said Mittee, noted, “NEITI also discovered a lingering worrisome situation where there is no agreed pricing methodology between NNPC and the companies for determination of fiscal values for royalty and PPT computations.

    “In addition, the MoU for joint venture partners JV’s which expired in 2008 is yet to be renewed, yet the companies covered by JV are still using the expired MoU in their transactions with Nigeria, resulting in a difference between NNPC and covered entities positions over $1.7billion between 2009-2011, which are reported by the auditors as revenue losses to the Federation.”

    On decline of the government crude oil productions, crude liftings and revenue accruable to the Federation, the report identified that there was inadequate funding of the JV operations.

    It also noted that all refineries are operating below their name plate capacities resulting in a situation where 80 per cent of crude oil allocated to local refineries is exported for off-shore processing, crude oil and product exchange.

    The chairman explained, “the report has negative consequences on revenue accruable to the Federation Account. According to the report, “the combined loss to Nigeria in the Offshore Processing, Crude and Products Exchange within the period under review was over $866million.”

    NEITI disclosed that Nigeria made total subsidy payments of N3trillion to importers of refined petroleum products.

    It said: “This is made up of N1.4trillion fuel subsidy claims by the NNPC for the period 2009-2011 and a total of N1.60trillion paid to other marketers during the same period. The report observed that the disparity between subsidy claims paid from the Federation Account and that made by the Petroleum Products Pricing Regulatory Agency (PPPRA) was N175.9billion during the same period.”

    Mr Mittee however said Nigeria recorded a total crude oil production of over 2.5billion barrels, an increase of 4.8 per cent over 2006-2008.

    Meanwhile, the Group Managing Director of the NNPC has reiterated the commitment of the Corporation to work with the NEITI in the pursuit of its mandate in ensuring transparency and accountability in the oil and gas industry and the entire extractive industry in general.

  • NEITI recovers $2b revenue

    NEITI recovers $2b revenue

    The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday said it had recovered a total of $2 billion out of the potential revenue loss of $9.8 billion from the Federation Account.

    The body said it achieved this feat through additional assessments in collaboration with relevant agencies under the Inter-Ministerial Task Team (IMTT).

    The Chairman of NEITI National Stakeholders Working Group (NSWG), Ledum Mitee disclosed these to State House correspondents after leading the Board and Management of NEITI on courtesy call to President Goodluck Jonathan at the Presidential Villa, Abuja.

    ”I wish to report that since its inception, NEITI has recorded some significant achievements: the four cycles of audits, which have been conducted have revealed a potential revenue loss to the Federation Account of about $9.8 billion from under-assessments and under-payments of taxes, rents, process manipulation and poor interpretation of agreements between government and companies.

    “Through collaboration with relevant agencies working under the aegis of the Inter-Ministerial Task Team (IMTT) the sum of $2 billion has so far been actually recovered from additional assessments,” Mitee said.

    He raised the alarm that its functions are being hampered by a-50 per cent reduction in its budgetary allocation from 2011 to-date.

    President Jonathan, in a statement by his Special Adviser on Media and Publicity, Dr. Reuben Abati commended the performance of the NEITI since its establishment in 2003.

    Towards integration of NEITI into the economic agenda of government, he said that the government would re-examine the law setting up NEITI in order to strengthen it.

     

  • NEITI raises alarm over dwindling fund

    NEITI raises alarm over dwindling fund

    The Nigeria Extractive Industries Transparency Initiative (NEITI) on Monday raised alarm that its functions are being hampered by 50 percent reduction in its budgetary allocation from 2011 to-date.

    The Chairman of NEITI National Stakeholders Working Group (NSWG), Ledum Mitee, disclosed this to State House correspondents after leading the Board and Management of NEITI on courtesy call to President Goodluck Jonathan at the Presidential Villa, Abuja.

    He said that from inception the organization have so far recovered $2 billion from the potential revenue loss of $9.8 billion to the Federation account, which he said was achieved through additional assessments in collaboration with relevant agencies under the Inter-Ministerial Task Team (IMTT).

    He said: “We came to present to the President a report of what we have been doing so far. The fact that we won an international award at the Sydney global EITI conference held last month, Nigeria was adjured the best. Out of the 39 countries that are implementing EITI, Nigeria’s mode of implementation has been rated the best.”

    “What we have tried to identify is that between 2011 and 2013, there has been some 50 percent reduction in our budgetary allocation which we thought was threatening the smooth operation of our work.”