By YEMISI IZUORA
Beneficial ownership transparency has emerged as an important policy tool in countries particularly in Nigeria for combating corruption, stemming illicit financial flows, and fighting tax evasion.
Nigeria, in 2019, committed herself to pushing ahead with legally requiring the collection of beneficial ownership information and publishing it in an open register according to international standards.
Immediate past President Muhammadu Buhari, in a show of strong transparency commitment a typical example in August 2020, signed the new beneficial ownership registry into law as part of the Companies and Allied Matters Act
Since then critical stakeholders have take up the challenge to persuade key organizations and implementing agencies to sustain drive to ensure enforcement and compliance in that direction.
The Civil Society Legislative Advocacy Centre (CISLAC), with support from the United States Agency for International Development (USAID), has taken up the challenge to ensure implementation of the policy.
The CISLAC, is mobilizing resources and encouraging multi-sectoral engagement and conversations as a means of promoting public awareness and support to the policy.
Recently in Lagos the media and some Civil Society Organizations, CSOs, Government Agencies converged to ascertain progress in the Beneficial Ownership implementation process; identify possible factors, actions and inactions that have contributed to delays; and to contribute to the advancement of the effective implementation in the extractive sector.
The Federal Government officially unveiled the Opening Extractives programme on 9 November 2021, which was applauded by stakeholders who considered Nigeria’s commitment to expand the frontiers of transparency and accountability as commendable by using beneficial ownership data to disclose the real owners of companies operating in the extractive sector.
In the opinion of most people Nigeria has made great strides in implementing beneficial ownership transparency since 2017.
It was also seen as a major feat when the country launched the Persons of Significant Control register and, prior to this, developing Africa’s first digital beneficial ownership register for the extractives sector in 2019.
At the launch event, government representatives, CSOs and companies affirmed that the programme will be part of ongoing transparency reforms in the extractive sector. With the launch Nigeria is considered as having fully institutionalised beneficial ownership reporting and is evolving its systems to include sanctions for defaulters. Key industry operators believe that the move will go a long way in promoting transparency because access to quality beneficial ownership data strengthens accountability by improving governance of energy and mining revenues.
They reiterated that the collaboration with the programme would assist in curtailing corruption and illicit financial flows in Nigeria.
Dr Ogbonnaya Orji, Executive Secretary of Nigeria EITI (NEITI), explained that secrecy in corporate ownership of assets in the extractive industries remains a clear danger to the country’s economy.
As part of NEITI’s objectives, the programme would support the government’s anti-corruption agenda and help eliminate corruption by promoting transparency and accountability in the extractive industry.
The NEITI, notes that beneficial ownership data can be used as a tool for building business confidence, attracting investments and good governance of natural resources.
In 2003, Nigeria voluntarily signed up to the global Extractive Industries Transparency Initiative (EITI). The decision to accede to the EITI and establish the Nigeria Extractive Industries Transparency Initiative (NEITI) was taken in the context of the comprehensive socio-economic reform programme of the Government embarked upon by the Federal Government which commenced on May, 29, 2003
The reform programme, which was encapsulated in the National Economic Empowerment Development Strategy (NEEDS), focused on four main areas namely to improve Nigeria’s macro-economic environment; pursue structural reforms; strengthen public expenditure management and implement institutional and governance reforms.
Implementing the EITI in Nigeria by establishing the NEITI was part of the institutional and governance reforms. Nigeria joined the EITI basically to promote prudent management of revenues from its abundant natural resources to reduce poverty and ensure sustainable development. The NEITI therefore represents the Nigerian national sub-set of the global EITI.
Building Stronger Network For Collaborative Action
The CISLAC has remained in the vanguard of supporting institutional reforms especially promoting transparency and accountability in the extractive industry.
At a two day CSO and Media training on the use of Beneficial Ownership Information to improve Natural Resource Governance in Nigeria, organized by the Accountability In Extractive Sector, AES Cluster, within the framework of the Strengthening Civic Advocacy and Local Engagement (SCALE) with support from the United States Agency for International Development (USAID) in Lagos, Auwal Ibrahim Musa, Executive Director of CISLAC, expressed the urgent need for CSOs to strongly mobilize resources towards engaging state actors to ensure implementation of fiscal policies that will save the country extractive industry from collapse due to monumental fraud.
Musa, said it was in recognition of the need to expand the frontiers of our collective struggle for transparency and accountability in Nigeria, that necessitated the training. He stated that the Financial Action Task Force (FATF) stresses the need for the establishment of a publicly accessible central register for warehousing personal information of natural persons that own, control and benefit from corporate entities.
While legitimate corporate businesses have an integral role in national development, the involvement of Politically Exposed Persons who conceal corruptly acquired wealth through the complex networks of companies deliberately created to hide their identities has further increased the risks they pose to non-fortified economies.
According to him, The Glencore, Siemens, Halliburton and Malabu oil scandals, to cite a few high-profile cases, had a net impact on revenue leakages that was unbearable for the country’s finances and the citizens’ economic well-being.
He stated that without transparent ownership of Nigerian and international companies operating within the Nigerian jurisdiction, and the country will not be able to stop the bleeding from illicit financial outflows, which costs the nation around 18 billion US dollars, annually.
“Being the backbone of our economy, the extractives industry must be run transparently and accountably. Nigeria proved its desire to implement beneficial ownership transparency (BOT) commitments when it participated in the beneficial ownership pilot in 2015, signed up to the Open Government Partnership initiative in 2016 and complied with the principles and requirement of the global Extractive Industries Transparency Initiative (EITI) to establish a beneficial ownership (BO) register by 1st January 2020.
“NEITI published Africa’s first beneficial ownership register, and the first globally to focus on the lucrative oil, gas and mining sectors in December 2019. The Corporate Affairs Commission (CAC), on its part, made more far-reaching contributions to the process through the enactment of the 2020 Companies and Allied Matters Act (CAMA) which gave legal backing and made provisions for a larger register for all corporate entities in the country.” he said.
Further to this, Musa, noted that the CAC, towards advancing legal and technical requirements to achieve BOT reforms in Nigeria, established a public Persons with Significant Control Register and is now collecting beneficial ownership data in line with Open Ownership’s data standard, making Nigeria the first country in Africa to do so.
The expectation he observed is that the Register would greatly enhance the fight against corruption and criminality by facilitating investigations by law enforcement agencies into the true ownership and control of companies and limited liability partnerships; supporting civil society organisations in promoting citizens’ participation in public accountability and governance, as well as strengthening the capacity of the media to perform their traditional roles as watchdogs of the society.
He went on to say that “In the course of these achievements, civil society partners sustained interventions to galvanize support from government and non-state champions for the advancement and realization of this commitment towards a more transparent and accountable extractive sector governance regime.”
He vowed not to rest in the ongoing struggle as the register is not an end in itself but a means to an end, adding “While it remains a significant effort in the fulfillment of the commitments to strengthen anti-corruption reforms and corporate accountability, it is only as important as its utilization in detecting, preventing, reporting and sanctioning corruption in the sector.”
He said the workshop convened in recognition of the crucial role of the media as the fourth pillar of democracy and the need for building local stakeholders’ capacity on the importance of quality and timely beneficial ownership data, and to share skills, tools and methodologies to analyse and use the data.
Musa, further challenged the media to strengthen and sustain their capacity and collaboration with CSOs and exercise their civic responsibility towards improving natural resource governance and the fight against corruption.