SPACES FOR CHANGE (S4C) Volume 4 I Sept. – October 2012 I Nigeria I West Africa E-Newsletter of Spaces for Youth Development and Social Change Website: www.spacesforchange.org
Blog: www.spacesforchange.blogspot.com
Twitter: @spaces4change
From the editor’s interest deskand feedback from the Nigerian
Dear Re
official
Dear Reader, In this edition:
Making the Sovereign Wealth Fund More Accountable Where Else is Home? Eko Atlantic City is not for the Poor Flood, Flooded Niger Delta PIB: Good to go or not? Protect Nigerian Youths from Violent Attacks Now The Ribadu Report: Why Oil Sector Reform is Imperative PIB: Examining the Power of Regulatory Agencies to Receive Gifts
Greetings Nigeria!
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Lagos,
Nigeria has joined the league of nations - such as China, Kuwait, Singapore and Norway – that are managing sovereign wealth funds (SWF). Proposed as a replacement mechanism for the current saving scheme, the Excess Crude Account, the SWF forms part of a broader economic strategy to consolidate oil revenue savings, which will in turn, help the country‟s economy absorb shock when world oil prices are volatile.
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authorities, international development agencies and the civil society including the media.
Be it an economic or social problem that we want to address, we stay connected to our vision of nurturing responsible and committed young people, and increasing their capacity to contribute to a peaceful and environmentally sound society, based on democratic values, social justice and fundamental human rights for all.
A policy briefing paper we released in September 2012 proffered rights-based strategies for bolstering transparency and accountability in the management of the fun, particularly its economic planning and investment decisionmaking processes. Issued at a time when discussions around the design and implementation of macro-economic policies and programmes are often left to technical experts, with minimal efforts to engage citizens or effectively communicate policy decisions to them, the paper generated considerable
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Should regulatory agencies receive gifts from the same entities they regulate? Another policy briefing paper we released in October 2012 examined the unrestricted power of regulatory bodies to receive gifts under the Petroleum Industry Bill (PIB). Our policy papers, the campaign around the devastating floods, plus our youthfocused programs implemented between September and October present experiences and initiatives that have pioneered integrating actions. Be it an economic or ● ● social problem that we want to address, we stay connected to our vision of nurturing responsible and committed young people, and increasing their capacity to contribute to a peaceful and environmentally sound society, based on democratic values, social justice and fundamental human rights for all. Happy Reading…
Victoria Ibezim-Ohaeri Executive Director
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Making the Sovereign Wealth Fund More Accountable Spaces for Change (S4C) has launched a robust campaign to mobilize support for the Sovereign Wealth Fund (SWF). Combining rigorous desk study with online crowd-sourcing techniques, S4C conducted a high-level research to identify the salient features of the legal and institutional frameworks establishing the recently-launched Sovereign Wealth Fund. More specifically, the research examined ways of integrating international human rights precepts of transparency and accountability into the legislative and policy instruments relevant to the Fund, particularly the National Sovereign Investment Authority (NSIA) Act assented to by President Goodluck Jonathan in May 2011.
September proffered a rights-based approach for aligning the NSIA‟s activities with Nigeria‟s human rights – social and economic rights obligations, and the highest standard of accountability and transparency. This policy paper was issued under the auspices of S4C’s Policing the Policy (PtP) Journal Series. The PtP uses the human rights paradigm to police and analyze social and economic policies and programs of government focusing on five broad thematic areas: economic governance; security and conflict, housing and environmental justice; and youth development. It would be recalled that the proposal and efforts to establish the NSIA as a replacement for the current oil savings mechanism, the excess crude account (ECA), was greeted with stiff opposition mainly from the state governors. First off, the governors fear that the SWF portends fewer cash to share and spend. Secondly, the opposition primarily stemmed from the absence of constitutional backing for the initiative, and again, the increasing erosion of public
According to Investopedia, a SWF is a state-owned pool of money sourced from trade or fiscal surpluses, which can then be invested in various financial assets. Premised on Nigeria's Finance Minister, Ngozi Okonjotrust in the federal the need for fiscal prudence, Iweala government‟s capacity to proceeds from SWF manage financial resources. investments will provide capital injections in times of financial crisis, Intense opposition to the establishment of a enhance the management of the country‟s oil SWF deepened with a legal action instituted by wealth, and ensure that future generations the governors before a local court seeking the benefit from the wealth of finite extractive interpretation and effect of Sections 80 & 162 of resources. Taking off with an initial fund of $1 the 1999 Constitution. That section obligates the billion, an institutional framework, the Nigerian government to maintain a special account to be Security Investment Authority (NSIA) was also called the „the Federation Account‟ into which established to provide policy, technical and shall be paid all revenues collected by the investment guidance for the Fund‟s operations. Government of the Federation.‟ Put simply, the The SWF will provide a solid framework for the governors argue that the non-provision of the management of the country‟s oil windfall SWF in the Constitution amounts to a savings, which will in turn, help the economy prohibition to its establishment. absorb shock when world oil prices are volatile. Describing the Fund as a far-sighted initiative, At the international scene, the vagueness, nonNigeria‟s Coordinating Minister for the Economy clarity and secrecy of the investment strategies and Minister of Finance, Dr. Ngozi Okonjofor managing SWF assets are among the key Iweala, stated that the Fund places Nigeria factors fuelling opposition to the SWF. In some “firmly on the path to economic cases, the strategies are only known to the transformation”. managers, but deliberately kept away from the public, making it virtually impossible to hold Based on the research study findings, a 7-paged managers accountable for imprudent investment policy briefing paper, Making The Sovereign decisions. S4C’s policy paper therefore Wealth Fund More Accountable: A advocated for the infusion of human rights Rights-Based Approach released in considerations in macro-economic planning,
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highlighting the enormous potentials and benefits they hold for addressing the critical concerns fuelling resistance to the SWF. The triumvirate human rights principles of transparency, participation and accountability simply mean that governments are obliged to provide mechanisms through which citizens can hold the state accountable; participate in policy making, and access the information required to do so. Also, institutionalizing human rights within the NSIA fiscal consolidation framework and investment operations is in keeping with Nigeria‟s obligation to protect, respect and fulfill social and economic rights. For instance, the concept of progressive realisation encoded in human rights law (Article 2 of the ICESCR) recognises prevailing resource constraints, but commits governments to deploy available resources towards achieving the full realisation of economic, social and cultural rights as expeditiously and effectively as possible, to the advantage of the most vulnerable sections of the population. Along these lines, the Nigerian government through the NSIA has an obligation to ensure that the operations of the investment mechanisms are as transparent as possible. Depending on the type of mechanism, its size, and the scope of its activities, it is highly desirable to establish communication, engagement, monitoring and reporting guidelines with respect to the Fund‟s management. Such a standard would not only contribute to domestic financial stability, but also enhance international financial stability by increasing the transparency, accountability, and predictability of the investment operations. For the full text of the policy paper, please click on the link below:
http://issuu.com/spaces.for.change/docs/maki ng_the_sovereign_wealth_fund_more_account able
Where Else is Home? Consistent with its mandate to nurture a generation of Nigerian youth who are patriotic, encourage them to be useful members of the community, while developing their capacity to
become involved in development issues, Spaces for Change(S4C) issued out a call to young Nigerians to submit short poems and articles in commemoration of Nigeria‟s Independence Day. The call, which was widely disseminated in its discussion group on Facebook:http://www.facebook.com/groups/sp acesforchange and across diverse social media sites generated substantial feedback and contributions. Out of the 28 short poems and 11 articles received, 12 were published on the S4C blog, while a good number of them were read publicly during a dedicated Independence Day program on the popular radio talk show, Kobanji Direct aired live on Radio Continental, 102.3 FM, Lagos. S4C‟s mission is to see young people participate in decision-making processes, address issues that affect their lives at community, national, regional and international levels. Along these
lines, the Independence Day radio program presented an opportunity for a broad spectrum of Nigerians, especially the youth, to undertake a deep introspection into the social, economic and political challenges affecting the nation, and jointly, explore ways of remedying the unequal distribution of economic resources, unemployment, and the promotion of responsible economic development. Through the radio program, S4C‟s executive director, Ms. Victoria Ohaeri, directly engaged a larger audience of over 500,000 radio listeners who tuned in, and participated in the discussions via text messages and telephone calls. The online discussions, the collated poems and articles, the radio program and other routine offline actions form part of a broader organizational strategy for engaging and
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mobilising young people to act for change. YomiOjoâ€&#x;spoem, Where Else is Home,is our star feature. Take a look:
For where else is home But a land we have known?
representatives of Lagos coastal communities recently affected by ocean surges, the United Nations Development Programme (UNDP), to discuss the rationale, the potential impacts, the risk factors and the possibility as well as the capability to mitigate unavoidable consequences of the Eko Atlantic City project. An issue that dominated the discussions was whether the Eko Atlantic project complies with Nigeria's federal legislation, the Environmental Impact Assessment (EIA) Act, 1992 which prohibits the execution of private or public infrastructural projects without prior consideration of the environmental impacts. Another topic that featured prominently in the deliberations is the recent demolition of Makoko community, which further raises a third question of whether the poor have a right to live in the city.
Eko Atlantic City is NOT for the Poor!
Is the Eko Atlantic City Project EIA Act, 1992 compliant? This is the trillion dollar question! There doesn't seem to be an unequivocal answer to this question. All indications point to the fact that the answer is NO!!!
Where Else is Home? Where else is home Like the land of our own Where our olds have grown And many renowned Yet with pain they have sown All the treasures we know And many fought and drown Just make us a home
When asked whether there would be a low-cost housing estate in Eko Atlantic City when completed, the Lagos State Commissioner for Environment, Mr. Tunji Bello retorted, "are there low-cost houses in New York City?...Is there anywhere in the world where the poor live beside the ocean view?" This statement was made at a roundtable, Sustainability of Coastal Environments: The Uncertainties and Risks of Infrastructural Developments in Lagos held on Thursday, 27 September, 2012 at the Nigerian Institute for Oceanography and Marine Research, Victoria Island, Lagos. The event was organized by Heinrich Boll Foundation. The auditorium was filled to capacity as officials of the Lagos State Government united with urban experts, local and international environmentalists, journalists,
In 2008, the Lagos State House of Assembly passed a law to provide for regulation of waterfront infrastructure, sand dealing and dredging operations in the state: The Lagos State Waterfront Infrastructure Development Law, 2009 (LAWID). LAWID empowers the Lagos State Ministry of Waterfront Infrastructure Development to grant permit for sand dredging or dealing within, around and on waterfronts and embankments. It is likely that Lagos State passed the LAWID Law to facilitate commencement of the Eko Atlantic City Project and other coastline alteration projects in lieu of EIA certification from the Federal Ministry of Environment. Following a barrage of questions, angry outbursts, and hot exchanges among development experts and participants who are deeply concerned about the worsening flooding and climatic conditions in communities
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within the project‟s proximity, stakeholders advised the Lagos State government not to see the growing objections as an affront to the project. Many still believed that the Eko Atlantic City Project is “a fantastic idea‟… Nevertheless, the wide range of extant social issues and environmental concerns must be addressed. The proponents must be brought back to conform and comply with due process of law and executive/administrative processes. Using the hash tag #EkoAtlantic, Spaces for Change (S4C) livestreamed the event‟s discussions on its twitter handle: @spaces4change allowing a broad spectrum of online users from across the world to get instant updates about the key issues discussed and statements made at the forum. Using the social media to enlarge the interactive space enabled more concerned Nigerians and urban advocates to contribute to the discussions and send feedback on issues that are of interest to them.
Flood, Flooded Niger Delta A normal trip from Port Harcourt, Rivers State capital to Mbiama, the popular commercial town in Ahoada West Local Government Area of Rivers State, South-South Nigeria usually takes about one hour, thirty minutes. That wasn‟t the case in October when flood ravaged several
communities in Nigeria, which made road travel extremely difficult, or totally impossible in some cases. Alerts issued by the National Emergency Management Authority (NEMA) stated that “Jebba and Kainji dams had attained their highest water levels in 29 years and states at risk of imminent flood were notified to take necessary precautionary measures by relocating people from the flood prone areas to avert loss of lives and property”. The Niger Delta region of Nigeria that sits on a low-lying plain was among the locations worst hit by the flood, with more than 75 percent of indigenous communities totally submerged. In order to draw public attention to the extreme levels of devastation, and in particular, influence the government to take concrete action to mitigate the sufferings of local people, Spaces for Change (S4C) deployed its array of offline and online platforms to report and portray the realities of people living in the affected communities. Capitalizing on the organization‟s strong following on the social media, messages, images and eye-witness reports sourced from organizations working in the region were widely disseminated using our social media portals on Facebook, Twitter and LinkedIn. Dedicated blog posts featuring articles, photos and field reports from the region invited high traffic to our blog site and feedback from our teeming readers regarding ways they can help. Social Development Integrated Centre (Social Action), a Niger Delta-based organization, regularly shared reports of its assessment tours to various flood-affected communities. On one of such tours conducted on October 9-10, 2012 to inaccessible communities such as Mbiama, Akinima, Akioniso and Oruama in Ahoada West Local Government Area of Rivers State, Social Action documented official responses to the flooding, with a special focus on the federal, state and local governments‟ interventions, including the multinational oil companies working in the area, especially Shell. The assessment revealed that heavy traffic was common place on the flooded East-West Road – the only link-road to most states in the southsouth region. Most inner city roads have been flooded to the point where only heavy-duty vehicles could pass. Most of the communities visited have been submerged, rendering thousands homeless, and without food. Scant media reportage of the situation in these
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communities was also delaying help from reaching those in critical need.
were expressed with calls made for more engagement on the bill.
“This flood is the worst our community has ever witnessed since 1954”, says Mr. Adose Simon, a 68-year-old indigene of Oruama.
An energy expert, Mr. Zaka Bala claimed the PIB that was recently submitted by the Federal Government to the National Assembly is good to be passed into law. However, S4C’s Victoria Ibezim-Ohaeri argued that a whole lot still needs to be reviewed in the latest draft.
“Flood has virtually destroyed everything we ever had including homes, crops in the farm, fishing and poultry business as well as other petty businesses” he said. At Akioniso, the team met a handful of community people living in a makeshift hut made of sticks and sack bags. The hut currently shelters children at night and serves as a kitchen for the entire community during the day. At Akinima, the Headquarters of Ahoada West Local Government Area, the story was the same. There was no single building standing except the local government council building which now serves as a camp for the thousands who could not afford to relocate to Ahoada and Port Harcourt city. In all, the team visited three out of the five centres including the community town hall that is under construction. In some of the places visited, they met trapped families who had sought refuge in upper floors of storey buildings. According to Mr. Wisdom James, a second year student of Management Sciences of the Rivers State University of Science and Technology took the team round the village in his canoe, “the problem here is increasing mosquito bites. If help does not reach us in time, more people would die from malaria than from hunger.
According to Mrs. Ibezim-Ohaeri, “a number of issues such as addressing the issue of environmental pollution by oil companies and Petroleum Equalisation Fund were not properly addressed in the new bill.” She also alleged that a section of the bill permits the regulator of the sector to accept gifts from the oil companies, noting that this is asking the regulator to be open to bribe-taking. The latest draft of the PIB is currently with the National Assembly, where deliberations are on-going ahead of its planned signing to law. It would be recalled that S4C convened a threehour multi-stakeholder online conference on July 14, 2012 featuring five renowned industry experts whose extensive analysis of the Petroleum Industry Bill (PIB) drew attention to specific sections requiring serious legislative scrutiny. For instance, while Section 221 of the Bill seeks to deregulate the pricing of petroleum products in the downstream product sector, Section 100 retains the Petroleum Equalization Fund (PEF) which operates as a subsidy, set aside to reimburse petroleum products
As at the time of visit the hapless and trapped citizens were yet to receive any assistance from the federal, state or local governments or their agencies.
PIB: Good to go or not Spaces for Change‟s (S4C’s) executive director was among the panel of analysts specially invited on CHANNELS TV breakfast show, Sunrise, on October 6, 2012 to debate whether the latest draft of the Petroleum Industry Bill (PIB) is ready to passed into law or not. Divergent views
marketing companies any loss they might suffer for selling fuel at uniform benchmark prices. Experts say the two provisions sharply contrast with each other, “and that the retention of the PEF defeats the core objectives of a deregulated regime”.
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To view the full video of the panel discussion, please click here: http://www.channelstv.com/home/wpcontent/uploads/2012/10/vlcsnap-2012-10-0621h51m18s245.png
Protect Nigerian Youths From Violent Attacks Now! In two separate incidents, about 50 Nigerian youths lost their lives in the most gruesome and barbaric manner. The grisly massacre of 46 polytechnic students in Mubi, Adamawa State and the lynching of four students of the University of Port Harcourt (UNIPORT) in Aluu Community, near Port Harcourt Rivers State, have highlighted the need for the Nigerian government to take the constitutional protection of the right to life, and other inalienable fundamental freedoms, more seriously. In the wake of these gory incidents, Spaces for Change (S4C) issued a press statement condemning the attacks on Nigerian youths in very strong terms, and urged for greater protection of the lives of young citizens across the country. On Independence Day, October 1, 2012, 46 students were massacred in Mubi Polytechnic, Adamawa State when gunmen wearing military uniforms invaded the students‟ off campus hostels in the town under curfew. Eye witness accounts established that the murdered and the wounded were clubbed, stabbed or shot to death based on their tribal, ethnic and religious leanings. Several days after the killings, the victims‟ identities remain largely uncovered, just as the local media was replete with conflicting statistics of the number of casualties and the cause of the killings. The Mubi massacre occurred just days after parents were forced to withdraw their wards from the violence-ridden
Maiduguri, Borno State after 2 students of the University of Maiduguri were brutally killed by unknown gun men. Reminiscent of the barbarism witnessed in the Stone Age, four students, identified as Lloyd, Tekena, Ugonna and Chidiaka, aged between18 25, of the University of Port Harcourt were beaten to death and set ablaze by an irate mob on Sunday morning, (October 7, 2012) in Aluu, Ikwerre Local Government Area of Rivers State. Peeved by allegations that the four suspects allegedly stole laptops and phones, Aluu community leader, Alhaji Hassan Walewa allegedly sanctioned the cruel acts by the community youths. Video clips of the gruesome killings went viral on the internet, spurring a nationwide and global outrage, with majority of the reactions continuing to question Nigeria‟s commitment to protect the human rights of its citizens. Particularly objectionable is that both the Aluu and Mubi incidents lasted for several hours without any rapid response mechanism or intervention by state security forces. Majority of the wounded also died due to the delay in accessing emergency medical assistance. S4C is deeply saddened that these escalating attacks are happening at a time “security” received the record highest resource allocation in the 2012 national budget. Senior officials of the Rivers State government told S4C that the State Governor, Mr. Rotimi Amaechi has ordered full scale investigation into this Aluu community mob action. In its statement, S4C welcomed the Rivers State government‟s arrest of the Aluu community leader and 12 other persons in connection with the murder of four UNIPORT students. “We continue to hope that the arrests will lead to meaningful investigations and conclusive fair trials that deliver justice to the victims‟ families”, the organization‟s executive director said. In its concluding observations, S4C urged the Nigerian government and the international
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community to recognize the growing resort to jungle justice as evidence of rapidly eroding public confidence in the criminal administration of justice systems in Nigeria. Too many unresolved acts of criminality and thievery: fuel subsidy corruption, pension scams, oil theft, 3 Million US Dollars “sting operation”, 16 million US Dollar power probe discoveries, among many others further erode the people‟s trust in the formal channels for redressing wrongs. It further called on all responsible institutions, particularly the police and the judiciary to swiftly identify and prosecute all perpetrators of these unacceptable acts, and to use these two cases to demonstrate their preparedness to combat criminality, fight impunity and take its human rights protection mandate more seriously.
The Ribadu Report: Why Oil
Sector
Reform
is
Imperative The Petroleum Revenue Special Task force was set up by the Honourable Minister of Petroleum Resources, Diezani Allison Madueke after an unprecedented uprising in January 2012 forced high-level probes into the administration of fuel subsidies. The goal of the Task Force led by former anti-corruption czar, Mallam Nuhu Ribadu was “to support the programme of the Federal Government of Nigeria in enhancing optimization, probity and accountability in the operations of the Petroleum Industry”. On an assignment covering the entire Petroleum Value Chain, the Task Force set out to confirm “if existing systems, laws, processes and functions across the value chain provide reasonable assurance that revenues from the Petroleum Industry are captured, complete,recorded intact, properly accounted for and that revenue due is demanded and collected”.
The Ribadu report reaffirms the findings of previous national and international independent investigations that detailed the horrendous malfeasance entrenched in oil industry operations, perpetrated by both private oil majors with the active connivance of government officials. Out of the 67 licenses awarded between 1 January 2005 and 31 December 2011; an outstanding balance of $566 million remains unpaid in signature bonuses. For the 7 discretionary allocations reviewed, the Task Force found $183million outstanding and due to the nation‟s treasury. Although the report exposed the massive revenue losses resulting from the grant of seven discretionary oil licences, the latest version of the Petroleum Industry Bill (PIB) still retains a clause that allows the president to make discretionary awards, instead of using open bids. That casts a big question mark on the reform bill‟s commitment towards tackling oil-related corruption.” The Task Force also exposed the massive theft of both crude and refine products which has resulted in huge revenue losses. The Nigerian National Petroleum Corporation (NNPC) reports that thieves stole 3.2 million metric tons of products from its pipeline network between 2001 and 2010 and that about 40 percent of products currently channeled through PPMC also recorded 4,468 product pipeline breaks in 2011, 98 percent of them from sabotage; and values the products stolen from its pipeline network between 2001 and 2010 at N178 billion. The agency responsible for collecting gas flare penalties, the Department of Petroleum Resources (DPR) is currently unable to independently track and measure gas volumes produced and flared. It depends largely on the information provided by the operators. It was also found that operators have not been complying with revised gas flare regimes. As with other independent investigations into the Nigerian oil industry operations, Shell, Total and Addax Petroleum were linked to a range of shady dealings, underpayments and debts that have deprived the country of billions of petrodollar earnings. Of this amount, the DPR stipulated that ADDAX is liable to pay $1.5 billion royalties under the 2003 fiscal regime and there is currently a dispute between Addax and NNPC on the one hand, and the DPR on the other.The absence of a strong legal foundation, coupled with the weakness of enforcement
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mechanisms for preventing and punishing corporate wrongdoings of such magnitude, have simply paved the way for impunity by oil majors to thrive. In the wake of the report‟s release, a number of electronic and print media agencies - such as Television Continental, Lagos, Galaxy TV Lagos, National Mirror Newspapers, NewsWatch and so forth - specially invited Spaces for Change to present expert commentaries and analytical submissions regarding the taskforce‟s findings. Beyond the outrage in the media, the latest revelations inform the need for lawmakers to take the PIB very seriously, and ensure that ironclad transparency and accountability clauses are inserted into the Bill before it is passed.
Examining the Power of Regulators to Receive Gifts
Assets Management Corporation to receive gifts of money, or other property, from third parties. Spaces for Change‟s policy briefing paper argues that such gift-giving may not only upset the pursuit of transparency and accountability urgently needed in the oil sector, but that gift cultures are also fraught with ambiguities and intrinsic susceptibility to corruption. Outwardly, giving gifts appear harmless, as they are deeply rooted in cultural norms and familial ties across jurisdictions. At the same time, gift exchanges have historically been used to facilitate or cover up blatant graft, and more recently, have evolved into a frequent tool for bribery, tax evasion and money laundering. Consequently, many countries have been forced to draft new code of ethics for officials; overhaul gift regulations as part of their anti-corruption wars, and fix institutional loopholes that help mask gift-giving for illegal purposes.
Should regulatory agencies receive gifts from the same entities they regulate? This question was the main focus of an in-depth research and analysis of the Petroleum Industry Bill (PIB) that Spaces for Change conducted in September 2012. Among other findings, a policy paper that emerged from the analytical study established that the unrestricted power to receive to receive gifts conferred on the proposed regulatory bodies will not only hinder efforts to introduce sweeping reforms in the oil and gas industry, but also ridicules the Nigerian government‟s commitment to make the sector less corruption prone, more transparent and accountable.
The PIB did not specify situations in which such gift-giving to the UPI, DPRA or the Corporation may be allowed. Beyond the fractional obligation on the giver to specify the terms and conditions, the Bill is silent on the criteria for conceptually understanding the logic of the gift. And again, the one-part obligation ostensibly heaps the onus of proving motive on the giver, while absolving the receiving agencies from a corresponding standard of accountability. Although the proviso to S. 33, 63 and 139 prohibits members and staff of the named agencies from accepting gifts for their personal use, the PIB overlooks the practical difficulty in distinguishing between gifts to the agency per se, and that of its officials, leaving the door open to the complex maneuvers, obligation and reciprocity inherent in gift-giving.
Sections 33 (1), S. 63 (1) and S. 139 (1) of the PIB empowers the two regulatory agencies: the Upstream Petroleum Inspectorate (UPI) and the Downstream Petroleum Regulatory Agency (DPRA), including the National Petroleum
Whereas the Bill empowers regulatory agencies to receive gifts, the provisos to sections 33, 63 and 139, prohibit staff and agencies from receiving gifts for their personal use. S. 32 (2)(e) recognizes gifts as a source of funding for the Inspectorate and the DPRA. While the prohibition against receiving gifts for personal use is a proactive measure, the big question then is, “is a gift distinctly made to an agency capable of influencing its officials to perform acts that confer any undue advantage or benefits to the giver? From the standpoint of reasonableness, would a gift to the Inspectorate for instance, by a company bidding for an oil prospecting license be said to be free from any colourations of reciprocal exchange? Is there any
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probability that Inspectorate‟s receipt of a gift by an entity it regulates may spur the relaxation of its regulatory oversight towards the giver‟s environmental felonies? These questions, among numerous concerns, impel the need to lower the incentives for corruption, check abuse and require greater transparency in the gift-receiving mandate. Absent necessary controls, gifts may present an entry barrier to unscrupulous companies planning to obtain inefficient subsidies, monopoly benefits and regulatory laxness in the future. Dozens of state and senate hearings and investigations into the BP Deepwater Horizon Oil Spill lamented the unspeakable abuse laden in the gift culture which fostered the “close connection” that existed between the agency‟s inspectors and oil and gas industry employees to the extent that the Minerals Management Service (MMS) became inseparable from its regulated entities. Consequently, this closeness – which the Washington Post described as “cozy ties to industry” - is alleged to have precipitated MMS‟s lax efforts to oversee oil and gas production. The co-chairman of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling also affirmed that the MMS was “overly susceptible to industry influence, certainly outgunned and possibly captured”. (Christopher Carrigan, Harvard University). Bids for the hosting of sporting events and other international competitions are another area beleaguered by gift-induced corruption. A few examples highlight the potentials for fraud and undue advantages inherent in gift exchanges. In a well contrived plot to bring the winter games to Nagano, Yoshiaki Tsutsumi, president of the Japanese Olympic Committee, arranged a US$20 million “donation” to the Olympic museum in Lausanne, a pet project of Juan Antonio Samaranch, the president of the IOC. Equally blatant was the Beijing Olympic Bid Committee. It gifted the IOC museum a priceless national treasure, a 2200-year-old terracotta soldier from the Ch‟in tomb. Irrespective of their precise approaches, serious bidding cities clearly conceived their gifts in terms of obligation, reciprocation, and self-interest. Is the obligation inherent in the gift really tantamount to corruption? The Special Bid Oversight Commission suggested so. (Douglas Booth, 1999).
As the Nigerian National Assembly commences its legislative deliberations on this Bill, it must show glaring determination to raise the stakes against corruption in the oil sector. Should the National Assembly opt for partial prohibition of gifts, such arrangement must be backed by strict corporate communication procedures detailing how the public, including other oversight legislative mechanisms can independently access, track gifts offered and accepted by those agencies. Also, they must clearly specify the agencies‟ conditions and criteria for receiving political and charitable contributions, gifts, hospitality and related expenses. Finally, and most importantly, S. 4 of the PIB requires all agencies and companies established under the Act to be bound by the Nigerian Extractive Industries Transparency Initiative (NEITI) Act. That means that NEITI‟s supervisory role provides a robust window for an independent monitoring, identification and reporting of irregularities that may be associated with gifts. The inclusion of gifts as a funding source for the UPI and DPRA (S. 32 (2)(e) and 62 (2) (g) firmly situates gifts within the sphere of NEITI‟s watchdog functions. NEITI is equally expected to ensure transparency and accountability in the application of resources from payments received from extractive industries and promotes conformity with the principles of the EITI. To download the full paper, please click: http://issuu.com/spaces.for.change/docs/pib.th e_power_to_receive_gifts_.october_2012
About Spaces for Change (S4C) Established in May 2011, Spaces for Change (S4C) is a non-profit, human rights organization working to infuse human rights into social and economic decision-making processes in Nigeria. Using the human rights framework and youth-centered strategies, the organization aims to increase the participation of the often unheard Nigerian youth, women and marginalized constituencies in social and economic development, and also help public authorities and corporate entities to put a human rights approach at the heart of their decision-making.
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CONTACT US! Address: 3 Oduyemi Street, 1st Floor, Opposite Ikeja Local Government Secretariat, Anifowoshe, Ikeja, Lagos State, Nigeria Email: info@spacesforchange.org ; spacesforchange.s4c@gmail.com Telephone: +234-1-8921097; +234-81-84339156 Website: www.spacesforchange.org Blog: www.spacesforchange.blogspot.com Discussion Room: http://www.facebook.com/groups/spacesforchange/
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YouTube: https://www.youtube.com/spacesforchange Twitter: @Spaces4Change E-Library: You can access or download our research reports and policy papers on the following site: http://issuu.com/spaces.for.change/docs/
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