The Nigeria Extractive Industries Transparency Initiative (NEITI) has constituted a special team to work towards the development of a road map for full implementation of Beneficial Ownership disclosures in Nigeria.
The Executive Secretary of NEITI, Waziri Adio remarked that the decision to set up the team was in recognition of the dangers that the secrecy behind real owners of major companies pose to the economy, peace and security in Nigeria.
The Committee drawn from the NEITI Secretariat is headed by the Director of Legal Services, Peter Ogbobine. Other members are Chris Ochonu of the Communications Department, Abubakar Abdullahi, Administration Department and Ibrahim Shittu, representing the Technical Department.
The Committee is expected to organize a workshop where ideas from experts would be harvested to develop a sustainable road map for Beneficial Ownership Disclosures implementation in Nigeria. Other functions of the Committee include identification of experts and possible multi-lateral agencies to support the event. The Committee is also expected to produce a comprehensive report that will lead to the development of the road map. Already, the Committee has commenced wide consultations with NEITI stakeholders such as the civil society, the media, companies, covered entities and other partners for inputs ahead of the workshop. Members of NEITI’s National Stakeholders Working Group, NSWG are expected to lead this effort by providing policy and strategic direction.
NEITI’s first major step towards beneficial ownership implementation came through a policy brief released ahead of the global summit on Anti- Corruption held in London on May 12th, 2016. The policy brief urged the Federal Government to lead the growing global campaign for full disclosures of ownership of companies across the world.
It noted that as an Agency, with legitimate mandate to enthrone transparency and accountability in Nigeria’s extractive industry, the call was consistent with Nigeria’s membership of the global Extractive Industries Transparency Initiative.
The special policy brief observed that Nigeria as a country was highly exposed to the negative impacts of anonymous companies with huge loss of revenues consequences.
“Developing countries lose $2 for every $1 that flows into their countries as a result of either tax avoidance, evasion or both because of activities of secret companies. There was also the questionable granting of pioneer status to certain unknown upstream companies whose ownership identity was shrouded in secrecy. The transaction done under the guise of pioneer status resulted in revenue loss to the nation to the tune of over $1.7 billion. These are in addition to other associated vices such as transfer pricing, cost padding and process manipulation with huge revenues loss implications to the country involved”.
The NEITI Policy brief on beneficial ownership had called on President Buhari’s administration to take disclosure of beneficial ownership as an important element of state policy. This would be easier by putting in place necessary legal frameworks required to drive home the global initiative.
“The government needs to direct for the opening of a public register of beneficial owners of corporate companies that bid for, operate or invest on extractive assets as part of urgent measures to embrace the policy. The register should contain factual information such as the real identity of the owners, ownership structure and control among others. The measure would conform to the new standards of the global extractive industries transparency initiative expected to take full effect in January 2020”.
The recent constitution of the team on Beneficial Ownership by NEITI is, therefore, a fundamental step towards the realization of the 2020 implementation deadline.