The process for comprehensive independent audit of the oil and gas sector by the Nigeria Extractive Industries Transparency Initiative (NEITI) has commenced.
The independent audit to be conducted in line with the principles and standards of the global extractive industries transparency initiative will cover the period 2015 and 2016 respectively.
The Executive Secretary of NEITI, Waziri Adio announced this in Lagos at a workshop for major oil companies and relevant government agencies expected to participate in the exercise.
Mr. Adio explained that the workshop was designed to acquaint the participants with the structure and content of the template, the kind of questions that NEITI would ask and the answers expected to be provided by the covered entities “ This workshop is also to seek your views, suggestions and inputs as well as listen to your concerns on how to make the exercise hitch-free.” Mr. Adio added.
The workshop witnessed presentations on EITI processes, methods, principles and standards including emerging issues in beneficial ownership and contract transparency. The benefits of implementation of EITI in Nigeria’s extractive industry to the country, the citizens and investors also topped discussions at the interactive session.
The Executive Secretary announced that NEITI will introduce a ranking reward system to incentivize participation of covered entities. Under the ranking system, companies will be graded on the ladder based on their efficiency in the population of the templates, quality and depth of information and data provided quick response to set deadlines among other considerations.
He further explained that he ranking system will be shared with over 51 member countries of the global EITI, multi-lateral organizations to serve as reference points on adherence to business ethics for major investment decisions in Nigeria.
The Executive Secretary stressed that NEITI is not against the companies and their businesses. “NEITI is committed to working closely with the companies under the EITI framework to create good business environment conducive for inflow of more foreign direct investments into the sector. For this to happen we encourage all companies to embrace transparency, accountability and corporate governance in conformity with EITI standards”. He remarked.
Mr. Adio however, warned that NEITI will not hesitate to invoke relevant sanctions under the law on companies and other covered entities that fail to cooperate with NEITI during the exercise.
All major international oil/gas companies operating in Nigeria were represented at the Workshop. Also in attendance were relevant government agencies such as the NNPC, the FIRS, DPR, NDDC, NLGN etc. The event was also attended by a cross section of the media and the civil society.
In their respective contributions while reviewing the templates, the representatives of companies welcomed the objective of the workshop, describing same as fundamental step in building partnership and trust with NEITI in the execution of its mandate. They urged NEITI to note very carefully all the observations and issues raised by the companies at the workshop with a view to ensuring that the reviewed template suite the peculiar operations of the diverse covered entities slated to participate fully in the process.
NEITI has already commenced distribution of the templates to participating companies and government agencies. All populated templates with required comprehensive information and data are expected to be returned to NEITI on or before the 31st of next Month. NEITI is expected to conclude the independent audit and make its findings public by the end of the year.
The independent audit of the oil and gas sector by NEITI for the period 2015 and 2016 will examine fiscal, physical and process issues including revenues and investment flows from, within and among the companies and relevant government agencies.
The audit will also undertake special verification and validation of information and data on payments by companies to government entities as well as government receipts. Other areas of focus of the audit include major financial transactions, quantities and volumes of crude production, report on balances payable or receivable on certain financial transactions, taxes, royalties on project by project basis including social contributions among others.
The overall goal is to ascertain if fiscal, physical and process transactions in the oil/gas sector during the period under review were in line with transparency, accountability standards and principles of the global extractive industries transparency initiative which NEITI is implementing in Nigeria.