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CSO advocates transparency in extractive industry

The Centre for Transparency Advocacy (CTA), a Civil Society Organisation (CSO), says that contract transparency in the extractive industry remains the way to achieve development in the country.

Ms Faith Nwadishi, CTA’s Executive Director, disclosed this at a media roundtable on Contract Transparency on Thursday in Abuja.

Nwadishi said that contract transparency was key to economic growth and development.

The roundtable was organised by CTA, Media Initiative for Transparency in Extractive Industry  and Contract Transparency Network.

She said that Nigeria, being a signatory to the Extractive Industries Transparency Initiative (EITI) must ensure transparency in signing contracts in the oil and gas and extractive industries in general.

She said that the media and the CSOs have a big role to play in ensuring that contract transparency was attained in the country

According to her, the two groups being at the demand side must know the right questions to ask and ensure proper education of the people on the importance of contract transparency.

She noted that Nigeria had won awards as a signatory to the EITI, adding that adopting the principle of transparency in contract should not be a challenge.

Mr Leo Ugboaja, a researcher, while presenting a research paper on “Opportunities for Implementing Contract Transparency in the Oil and Gas Industry in Nigeria”, said that the concept of contract transparency involved public disclosure of all the terms and conditions of a contract.

Ugboaja said that the disclosure would enable parties outside a contract to understand the substance and essence of the contract.

He added that it would enable them monitor the performance of the contract by the contracting parties based on the terms and conditions of the contract.

“The implementation of contract transparency is also an obligation on EITI signatory countries under Requirement 2.4 of the EITI Standards 2019 (the “EITI Standards”).

“The standards provide that implementing countries are required to disclose any contracts and licences that are granted, entered into or amended from Jan.1, 2021.

“Implementing countries are encouraged to publicly disclose any contracts and licenses that provide the terms attached to the exploitation of oil, gas and minerals,’’ the researcher said.

He noted that contracts relating to the right to explore and produce oil and gas are made between the Department of Petroleum Resources (DPR) and oil exploration and production (E&P) companies.

Read also: It’s no longer possible to manage our refineries — NNPC

Ugboaja also said that contracts relating to the actual production, sale, marketing and transportation of oil and gas were made between the NNPC and various private companies.

These contracts, he said, were not available to the public adding that members of the public, whose lives were affected by these contracts, are not aware of their terms and conditions

“This secrecy is bad for the economy and welfare of the citizens. Remember the contract with Process & Industrial Developments Limited in which $9.6 billion was awarded against Nigeria for breach of contract in an arbitration; as well as the Malabu case,’’ he said.

The researcher said that the idea of including contract transparency in the new Petroleum Industry Bill currently before the National Assembly was commendable.

Ugboaja said that the ongoing efforts to reform the regulatory regime for the oil and gas industry provided, perhaps, the best opportunity to embed contract transparency as a major principle in the governance of the industry in Nigeria.

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