NEITI: Why Nigeria Needs Disclosure of Real Owners of Oil Assets

The Nigeria Extractive Industries Transparency Initiative (NEITI) has said it was important for Nigeria to push for disclosure of beneficial owners of companies in the country’s oil, gas and mining industries, to check financial corruption and illicit use of revenues from the industries.

The Executive Secretary of NEITI, Mr. Waziri Adio stated this in a statement, which was made available to THISDAY in Abuja by the Director of Communications of NEITI, Dr. Orji Ogbonnanya Orji.

“Knowing how much companies paid in the form of taxes, royalty, rents etc. and how much government received is important, but not enough. Knowing those who are the real owners of the companies is critical to checking corruption, money laundering, drug and terrorism financing, tax avoidance and evasion,” Adio said during a consultative forum on Open Government Partnership (OGP).

He called on the federal government to enact a special legislation that will compel companies in the extractive sector to make public the names and identities of their real owners, adding that the president can issue an executive order on compulsory beneficial ownership disclosure by companies engaged in extractive activities in Nigeria.

Adio explained that such legislation can be embedded or even become part of the Petroleum Industry and Governance Bill (PIGB) as well as part of the amendment to the Companies and Allied Matters Act (CAMA) of the country.

He stated that nine countries, including Nigeria have published EITI reports that disclosed the beneficial owners of one or more companies, while 43 EITI implementing countries have published roadmaps on beneficial ownership with Nigeria and 19 others set to establish public registers of beneficial owners by 2020.

Adio stated that NEITI’s road map on beneficial ownership disclosure would provide clear definition of who beneficial owners are, the level of details to be disclosed and institutional framework that are required for effective implementation of beneficial ownership disclosure.

The document, he noted, also defined Politically Exposed Persons (PEPs) and their reporting obligations, challenges around data collection, reliability, accessibility, timeliness and provided clear guides on them.

He identified the absence of specific legal framework that imposes mandatory beneficial ownership disclosure as a major challenge to the implementation of ownership transparency in Nigeria, but acknowledged the existence of laws like the CAMA, Freedom of Information (FoI) Act, Code of Conduct and Tribunal Act and Public Complaints Commission Act as relevant legislations for beneficial ownership.

According to him, other policies of the Nigerian government that support efforts at ownership disclosures were the Financial Action Task Force, Bank Verification Number, Automation and Access to Corporate Affairs Commission’s register.