Extractive Sector Corruption Media Report: June 2017

The reason PWYP – Nigeria collates and reproduces media report of corruption in the extractive is to ensure that they are kept on the front burner of the national fight against corruption until something happens. The flash of corruption report and the sudden seal lips and cold pens have contributed to corruption cases being forgotten or kept unattended to.

Again, our reporting approach justifies why Nigeria’s full implementation of EITI principles is strategic to the reduction of corruption in the extractive sector. To our members across the country, it helps to renew our efforts to push further transparency to reduce the spate of corruption in the sector that is the economic mainstay of Nigeria.

Media reports on extractive sector corruption show a huge impunity in public office with state colluding with its friends to defraud the citizens. However, if Nigerian state is committed to using the extractive industry wealth to secure social and economic transformation of our society in the coming years we will find ourselves on the part of development just like in the First Republic.

This month, we encourage stakeholders to monitor, follow and put pressure on the authorities to resolve the following reported extractive sector corruption report by Nigeria media in the month of June 2017.

By June 7, 2017, the Guardian Newspaper reporting the Nigeria Extractive Industries Transparency Initiative (NEITI) stance on corruption in the extractive sector revealed that Nigeria earned $592.34 billion from oil and gas in 15 years. In spite of the huge revenue, NEITI accused NNPC of not remitting revenues accordingly to the federal account.

Daily Trust June 6, 2017, reported the House of Representatives Ad hoc Committee investigation of missing $17billion crude oil and Liquefied Natural Gas Revenue. The Committee was reported to have uncovered $15billion unremitted to Federation Account, the fund was said to have been traced to a foreign bank. Documents submitted by the Nigeria National Petroleum Corporation (NNPC) to the Committee show. Mr. Rabiu Bello, NNPC representative confirmed to journalists that the monies were missing.

PWYP – Nigeria encourages citizens and all anti-corruption agencies to follow the Ad Hoc Committee activities and ensure that its report is made public and culprits prosecuted.

By June 6, 2017, Vanguard Newspapers reported the Niger Delta people to have accused the Federal Government of Nigeria of corruption and insecurity in the modular refineries project in the region. Amplifying their voice, Mr. Christian Ahiakwo, Chairman, Rivers State House of Assembly Committee on Environment, speaking ahead of the Environment summit slated by his committee in collaboration with the State’s Ministry of Environment and the Waste Management Agency for June 13th and 14th 2017 at the Assembly complex accused the federal government of issuing 56 licenses for the modular refineries and out of the 56, none is from the Niger-Delta.

To him, that is a major corruption that must not be allowed to stand. He argued, while the Nigerian state was projecting itself before the international community to have employed the approach to empower oil host communities through modular refineries, many do not know corruption and insecurity have consumed the entire process.

June 6, 2017, Vanguard reported the United Labour Congress (ULC), Lagos State Council to have in a press release signed by its chairman Mr. Tokunbo Korodo, appealed to the federal government of Nigeria to release Mr. Ifeanyi Ubah, the Chairman of Capital Oil and Gas Plc. Mr. Ubah has been under state grip for corruptly diverting over 80 million liters of PMS amounting to 11 billion Naira without authorization from the Nigerian National Petroleum Corporation (NNPC).

June 27, 2017, the Nation reported the Court of Appeal sitting in Abuja to have set aside a portion of an arbitral award gotten by Shell Nigeria Exploration and Production Limited and Exploration and Production Limited against the Nigerian National Petroleum Corporation (NNPC).

In the verdict, the court ordered NNPC to pay the two companies over $2.5billion for corruptly abusing a Production Sharing Contract (PSC) between them in relation to the operation of an oil field identified as Erha Deepwater Project.

In the suit, NNPC was accused of assuming their responsibilities, under the PSC, including determining what should be paid to the Nigerian government as petroleum profit tax (PPT), and in doing so, NNPC over lifted petroleum products valued at $1,207,500,000 to pay its unilaterally assessed tax on their behalf.

In pronouncing the verdict, the Court held that oil companies lacked the power to determine what profit tax to be paid,  such responsibilities reside solely with the Federal Inland Revenue Service under the Nigeria’s laws.

On 14 June 2017, the Guardian reported Mr. Waziri Adio, the Executive Secretary, Nigeria Extractive Industries Transparency Initiative NEITI, to have disclosed that the Nigerian Liquefied Natural Gas (NLNG) paid $489.226 million, about N151.6 billion in various forms of taxes to the Federal, States and Local Governments in 2016.

Mr. Adio put the total outstanding dividends and loan repayments by NLNG to NNPC not remitted to the Federation Account at over $15.8billion.He noted that these payments were traced to NNPC accounts by its independent auditors but observed that there was no trace of NNPC’s remittance of the money to the Federation Account as required by sections 80(1) & 162 (1) of the Constitution.

He further called on the House of Representatives to probe the alleged loss of $15.9 billion dividends accruing to the Federal Government.

In a defense, the NLNG through its General Manager, External Relations Division Mr. Kudo Eresia-Eke denied NLNG owing outstanding dividend payments to the Federal Government.

In view of the above media reports, we call on the Nigerians to hold governments and companies to account for the ways in which their natural resources revenues are managed.

Audu Liberty Oseni: Communication Officer, Publish What You Pay-Nigeria