Rosa Luxemburg Stiftung 1

SIKHO LUTHANGO

10 07 2019PAPER

Africarsquos poverty the worst in the world continues to rise as inequality widens and the poverty line deepens (Mcferson 2010) It also lags behind other regions in key economic and social indicators by the United Nations Human Development Index which include education health and literacy (UNDP 2019) Paradoxical is what can only describe the situation in Africa because while the continent boasts about its vast deposits of gold platinum diamonds and valuable minerals there is a lack of transparency of revenue flows between companies and government official secrecy and data manipulation which aids smuggling and theft and hence little to no benefit is felt by most of its people (Mcferson 2010) The real annual value of extraction and exports of African natural resources is not precisely known Resource revenues only benefit unaccountable political elites and their cronies whilst repressing political participation and denying communities equitable distribution of these revenues (Mcferson 2010)

To date there are a couple of transparency and resource governance initiatives which aim to improve natural resource governance to ensure effective participation and achieve accountability in the sector such as the Publish What You Pay campaign Revenue Watch Institute Natural Resource Charter Resource Governance Index Africa Mining Vision and Africa Progress Panel

The Extractive Industry Transparency Initiative (EITI) is also one such initiative and itrsquos been just over a few weeks since the 2019 EITI Global Conference was held in Paris on the 18th -19th of June The conference highlighted how the EITI can tackle corruption tax evasion and illicit financial flows and evaluated its mandate in creating a multi-stakeholder dialogue and openness in addressing extractive sector challenges in relation to corruption (EITI 2019a) Beneficial ownership transparency was also a dominant theme of the programme

This paper argues that transparency championed by the EITI is not enough in countries like Nigeria which are characterized by bad governance in the form of corruption and patronage since it does not fundamentally alter the incentives for corrupt practices Politicians and oil companies will continue to be corrupt as long sanctions are not imposed for such behaviour at the expense of local communities socio-economic growth and a narrowing inequality rate This is why it is important to consider moving away from voluntary approaches towards a more binding instrument that is not dependent on a countryrsquos institutions for effective implementation of anti-corruption laws

WHATrsquoS THE POINT OF TRANSPARENCY IN NIGERIA

THE ELEPHANT IN THE 2019 EXTRACTIVE INDUSTRY TRANSPARENCY INITIATIVE (EITI) CONFERENCE

Rosa Luxemburg Stiftung

and the conference was attended by representatives of implementing countries supporting countries civil society organizations (CSOs) Trans-National Companies (TNCs) and private sector ldquoinvestorsrdquo This conference also officially launched the new 2019 EITI Standard a set of requirements that describe how the EITI works and which implementing countries must comply with

EITI A short sketch

The EITI is a voluntary global standard that aims to ensure that companies disclose payments to governments It uses transparency the cornerstone of the EITI to initiate public debate to improve public financial management and accountability (EITI 2016) It is also worth noting that since its inception the EITI has shown that it has the potential to evolve from exclusively dealing with reconciling company revenue disclosures of tax payments to governments and government disclosure of payments by further including requirements for gender environmental payments and monitoring contract transparency and beneficial ownership in its 2019 Standard for which it had been widely criticized (Garuba amp Ikubaje 2010 Abutudu amp Garuba 2011 Carter 2014 EITI 2019b) The EITI has also made strides in encouraging revenue disclosure by state owned entities which are complicit in sector wide corruption

Founded in 2003 the EITIrsquos main aim is to promote sector wide systematic transparency through revenue disclosure It relies on discussion monitoring and civil society advocacy through its Multi-Stakeholder-Initiative (MSI) to expose corruption and spark public debate However it is unclear what the EITI aims to achieve through public debate and the EITI 2019 conference exposed the elephant in the room- whatrsquos the point of transparency in countries with bad governance and weak institutional frameworks without accountabilityThe EITIrsquos success in combating corruption is dependent on civil society the judicial system and the media However in most of its implementing countries civil society is not capacitated functional or independent In this regard the EITI can be criticized for being largely acontexual (Mainhardt-Gibbs 2010 Sovacool et al 2016) Furthermore the fact that the EITI does not include minimum procedural guidelines for the composition of the MSI is major weakness for the EITIrsquos goal to promote debate and civil society advocacy The EITI

Standard also ignores the fact that the prevention of corruption is dependent on accountability to change the behaviour of those who benefit from it and that the reliance on disclosure will have little or no impact on corruption without it One is therefore left with no choice but to question the purpose of EITI disclosures in a context where accountability institutions are weak and there is no other country that comes in mind besides Nigeria Africarsquos largest oil producer to illustrate this glaring contradiction

Nigeria A ldquostar childrdquo without shine

Post-independent Nigeria was the first African country to implement the EITI and has also shaped its evolution It is also considered the EITIrsquos ldquostar childrdquo and tracking its progress in implementing the EITI is only fitting (Ejiogu Ejiogub amp Ambituuni 2018) It is however characterized by accountability institutions that can be described as ldquocursedrdquo due to centuries of military coups and dictatorships decentralized despotism through colonialism and patronage politics (Sala-i-Martin amp Subramanian 2003 Watts 2004 Williams 2011) Ultimately as argued by the institutions curse theory Nigeriarsquos underdevelopment is caused by the way in which oil revenues are managed and its institutional context non-participatory and non-inclusive reinforces this Cursed institutions are also characterized by a lack of checks and balances to root out corruption and maladministration

This context describes why Nigeria is ranked 144 out of 180 by the corruption watchdog Transparency International which indicates that it has a high prevalence of corruption (Transparency International 2018) After 20 years of democracy Africarsquos biggest economy is haunted by high unemployment and it has about 90 out of 190 million people living on less that $190 per day which now makes it the number 1 country with the most people living in poverty despite the fact that the oil sector accounts for 65-70 percent of its government income (Adebayo 2018 World Poverty Clock 2019) In addition Nigeria has a high inequality rate and is ranked 157 of 189 countries by the Human Development Index (UNDP 2018) Furthermore Nigeria continues to struggle to translate its oil wealth into socio-economic growth (Adebayo 2018)

2

Rosa Luxemburg Stiftung

The term ldquocursedrdquo is borrowed from the natural resource literature which aims to debunk why some resource rich countries are more often than not characterized by poor development outcomes It aims to portray political institutional decay that allows efficient and effective plunder of natural resource revenues of the state for private gain by politicians ndash an institutional context that affects oil producing countries the most (Mehlum Moene amp Torvik 2006 Robinson Torvik amp Verdier 2006) This argument reflects the evolution of the ldquonatural resource curserdquo literature which first saw natural resources as the primary cause for poor development outcomes towards what can now referred to as the ldquoinstitutions curserdquo first coined by Victor Menaldo (2016)

The ldquoinstitutions curserdquo describes a scenario where institutions are mostly characterized by dysfunctional patronage or rent-seeking such as in the Nigerian case through the state-owned Nigerian National Petroleum Corporation (NNPC) Nigerian politicians use the NNPC as a patronage tool in the form of hidden stipulations on contracts (Katsouris 2019) This is mainly because of the lack of so-called ldquoimpartiality enhancing institutionsrdquo that are necessary to curb the power of corrupt political elites

ldquoImpartiality enhancing institutionsrdquo are political institutions that are designed to act in the interest of the public and to amplify the voice of marginalized citizens by reducing the power of stakeholders who have undue influence on the legal and political framework (Kolstad and Wiig 2009) The emphasis here is on the need to develop institutions of democratic accountability and to improve decision making institutions about how oil rents should be spent In addition it is about creating a space for engagement and inclusivity for affected communities of aggressive extractivism It also includes the need to support civil society and the media to counter-balance the power of powerful stakeholders the government and oil companies to encourage public debate that will expose corruption and demand accountability For example despite being a former British colony with traditional leadership Botswana allowed an ldquounusual degreerdquo of participation in its political processes and placed effective constraints for those in power (Acemoglu Johnson amp Robinson 2001) It also ensured through local political institutions such as the kgotla that there was some degree of accountability of political elites Consequently participation in

decision making structures encouraged political stability that allowed Botswana to build an effective non-corrupt bureaucracy which ensured that the large revenue from diamonds was spent effectively and not expropriated by the political elite (Acemoglu et al 2001) Consequently in contrast to Nigeria Botswana is ranked 34180 on the Transparency Internationalrsquos 2018 corruption perception index indicating that is much less corrupt

Civil society participation in the MSI

The EITI relies heavily on its MSI to achieve its accountability goals and according to EITI requirements the MSI must be composed of representatives from government extractive companies and a full independent active and effective participation of civil society (EITI 2015 Mainhardt-Gibbs 2010 Sovacool et al 2016) These individuals are expected to oversee the implementation of the EITI carry out the work plan formulate policy and the programme design and the government is required to ensure that the invitation to participate in the group is open and transparent Furthermore it is required that all stakeholders are adequately represented but not equally represented

The absence of minimum guidelines for the MSI is a major weakness of the EITI because while the MSI could have the potential to promote and amply the voices of marginalized groups- especially since it is a power sharing institutional arrangement- it does not specify guidelines for its composition except for the very recent one that relates to a gender balance (Goetz amp Jenkins 2001 EITI 2019c) This is odd because the global experience of MSIrsquos shows that it is theoretically supposed to collapse the wide distance of formal accountability institutions from communities to enable direct engagement with government and extractive sector companies (McGee amp Gaventa 2010) The EITI does not meet this basic standard

The National Stakeholder Working Group (NSGW) the multi-institutional arrangement of the Nigeria EITI (NEITI) is an example how the EITI is currently unable to achieve meaningful civil society participation that is likely to lead to a robust debate and demands for accountability The NSWG consists of 15 board members who are drawn from government the six geopolitical zones of Nigeria Trans National Oil Companies (TNOCs) civil society labour unions

3

Rosa Luxemburg Stiftung

and experts from the industry (Asgill 2012) The NEITI does not stipulate how representatives of the NSWG should be chosen something the EITI probably hoped to achieve through the domestication and institionalisation of its principles This leaves too much room for political appointees by the president who has the power to appoint and dismiss members as wished (Ejiogu et al 2018)

Furthermore even if there was a stipulation for nominating trade union and civil society representatives there are only three positions available for CSOs trade unions and representatives from the extractive industry respectively out of 15 board members As it stands the current experience is that NSWG members are chosen because of their ties to government officials or the ruling party and consequently the board can be seen as lacking independence This has fueled the perception that the NSWG does not have a real commitment to fight corruption (Ejiogu et al 2018) In this arrangement civil society is outnumbered by government representatives who are known to be in a ldquosick alliancerdquo that breeds imperialism with TNOCs (Watts 2004) This alliance is a consequence of organized capitalism where the state and economy fuse to create state monopoly capitalism characterized by a formation of cartels which include Royal Dutch Shell Exxon-Mobil Chevron-Texaco Elf and Agip in Nigeria The dependence of the state on TNOCs also reinforces this alliance

This means that the government together with the extractive industry have a majority representation in the NSWG to influence and make decisions and one can only see this for what it is a self-imposed disclosure and transparency tool that will only yield limited outcomes to combat corruption because those who should face the full brunt of the law for corruption are responsible for controlling the flow and standard of information that is meant to drive public debate (Lindstedt and Nauren 2010)

Civil society participation in Nigeria

Civil society participation in the NEITI process is also weak due to a lack of technical capacity to understand the information produced (Asgill 2012) There is also a weak comprehension of NEITI reports due to a lack of expertise in the oil industry This creates a knowledge gap which makes it difficult for CSOs to engage in debates about amongst others royalties taxes and

penalties (Abutudu amp Garuba 2011) So one can conclude that Nigerian CSOs have limited institutional capacity to engage with EITI reports and to disseminate information to spark public debate as envisioned by the EITI

Nigeriarsquos institutional context reinforces this limitation The EITI sees civil society as having the potential to compensate for the EITIrsquos lack of enforcement by insisting on policies or sanctions outside of the NEITI structures through the mobilization of citizens to pressurize compliance to cases exposed through its reports Outside of the MSI civil society is expected to carry the burden to seek accountability in the form of justice remedy criminalization or compensation for corrupt industry activities (Abutudu amp Garuba 2011)

However the reliance on civil society to obtain accountability through debate is a denial that some countries like Nigeria are cursed with unresponsive untrustworthy and corrupt institutions In essence this means that nothing can be done about the information that the NEITI publishes In addition the information that is revealed by the NEITI cannot be used to institute legal action against government officials and companies - which is another major weakness of the NEITI (Abutudu amp Garuba 2011) This is unless the government ldquoinstitutionalizes the NEITIrdquo to make it more binding by enacting laws and reforms directed to achieve accountability In Nigeria the EITIrsquos star child there has been some form of institutionalization of transparency however there still isnrsquot significant change in the incentives to discourage corruption because of the lack of accountability Transparency without accountability

Section 3 of the NEITI Act 2007 contains a secrecy clause The secrecy clause contained in section 3(d and e) causes oil companies to withhold important information that may be used to hold them accountable by civil society and communities The Act is just one example of how a countryrsquos institutional framework can easily render the EITI meaningless In addition Section 16 of the Act also excludes criminal liability and jail terms Furthermore there is no stipulation for revoking licenses as part of a sanctioning mechanism and this provision prevents the possibility of successful prosecutions In doing so it protects TNOCs and government officials at the expense of communities affected by extractivism

4

Rosa Luxemburg Stiftung

The NEITI is only given powers to sue in civil action and this excludes the power to initiate criminal prosecution (Ihugba 2014) It is an Act of the National Assembly and is within the Attorney Generalrsquos jurisdiction to prosecute The NEITI Act thus uses a soft law characterized by voluntary directives (Ihugba 2014) Consequently as of yet no oil company has been prosecuted or had their license suspended by the NEITI based on an NEITI recommendation (Ihugba 2014) This should show that beyond transparency there isnrsquot much that can be achieved without accountability in the extractive sector The 10 year delay of the Petroleum Industry Governance Bill (PIGB) which has already passed through the National Assembly and is said to be a step into the right direction for combating corruption is a good example The PIGB mostly seeks to empower institutions to tackle bad governance that leads to inefficiency ineffectiveness and rent-seeking in the management and distribution of oil revenues In addition the PIGB also aims to overcome inequity secrecy and corruption in the oil sector (Olawoyin 2018)

This delay exposes the lack of political will to reform the oil industry in Nigeria by not properly institutionalizing the EITI and by not putting mechanisms in place to identify and deal with corruption risk spots as envisioned (de Montclos 2014) For example in the absence of a clear governance framework Nigeria lost USD 104 billion and Naira 3787 billion through under-remittances inefficiencies and theft in the oil and gas sector However this still does not mean that the PIGB is perfect because it is criticized for failing to increase oil industry transparency to the fullest extent in drawing up oil contracts leaving some room for corruption (Oni 2019)

The lack of accountability in Nigeriarsquos institutional framework is also revealed by Auwal Musa the executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and ChairNational Contact of Transparency International (Nigeria) in an interview with Kingsley Jeremiah Musa argues that there have been many indictments on NNPC dealings without any consequences making the entity a ldquorepublic within a republicrdquo mostly unaccountable to its citizens (Musa 2019) This is why the Nigerian oil sector needs more than transparency it needs strategic measures of accountability and this is not offered by the EITI This case reflects the weakness in the EITIrsquos soft law approach in countries which are cursed by institutions

Whatrsquos the point A Conclusion

The soft law approach has yielded limited outcomes especially in relation to remedying corporate impunity and corruption and this was also expressed by Nigerian extractive stakeholders at a retreat in held in August 2018 at Kuramo Waters Lagos The major concern expressed by stakeholders was that the NEITI Act does not empower it to enforce compliance and prosecute offenders and only focuses on audits and dissemination of reports and this limits its effectiveness and seriousness it is accorded by extractive institutions (Trust Africa 2018) A tracing of the history of remedial issues also revealed that since the NEITIrsquos last report in 2015 many have been side-lined in subsequent reports (e360 2018) It was then proposed that there is an urgent need to review and amend the law but as argued cursed institutions do not easily welcome change especially when it is incremental in nature such as in the form of transparency - basically a ldquogo big or go homerdquo situation

Furthermore there is no shortage of well-crafted laws in Nigeria the problem lies in implementing the laws (Asgill 2012) Kolstad and Wiig (2009) argue that enacting more laws and increasing the capacity of patrimonial governments will not lead to the achievement of impartiality enhancing institutions and that doing so will make patrimonial governments such as Nigeria become more powerful Instead it is more important to ensure that those who benefit from opaque transparency are punished and the EITIrsquos weakness is its focus on transparency alone

The re-elected President Muhammadu Buhari has been given a second chance to take on the vested interested in politics and the oil sector that drive corruption and the NEITI is good place to begin but not unless the transparency championed by the NEITI is met with accountability The country is on the right track in deepening transparency reforms through initiatives such as the EITI For example it is through the NSGW of the NEITI that the recovery of USD 24 million for the Federal Government of Nigeria was achieved in 2017 In addition there is now awareness of environmental impacts of oil which now also include payments to citizens and transparent royalty negotiations for communities (Abutudu amp Garuba 2011 EITI 2017) Furthermore an NEITI associated online extractive transparency platform Extractive360com was also launched

5

Rosa Luxemburg Stiftung

in Abuja and these are good signs of a deepening transparency culture (Jeremiah 2019)

It thus cannot be denied that the EITI has made positive strides in exposing corruption through revenue disclosures but this is not enough for combating corruption in the extractive sector In the next EITI conference which occurs every three years the EITI needs to be explicit about how it can combat corruption and be honest about the possible impact it can have in countries that have weak institutional and governance frameworks especially in relation to remedial issues for communities

It can begin by configuring its own structures in this case the MSI by providing minimum procedural guidelines for the effective and inclusive participation of civil society to counter-balance the power of politicians and companies in the determination of taxes royalties and shaping extractive polities (Oshionebo 2018) The conversation also needs to shift away from the focus on disclosure to include accountability by establishing stronger linkages with accountability institutions to encourage and facilitate the move away from its current soft law approach and become more authoritative in the sanctioning of companies and government officials (Fox 2010) The NEITI example exposes the weaknesses of voluntary guidelines in a context of bad governance Therefore a more binding international instrument that will address corruption and corporate impunity outside of a countryrsquos institutions may be necessary (Kanzleiter amp Becker 2018)

Sikho Luthango is a Programme Manager for Labour Relations and Economy at the Rosa Luxemburg Stiftung Southern African office based in Johannesburg She holds a Masters of Philosophy in Public Policy and Administration (with Distinction) from the University of Cape Town South Africa Her research interests include Mineral Resource Governance Land Governance and Climate Justice from an eco-feminist perspective

Other publications include

httprosaluxcozapublicationmalendu-constitutional-court-judgement-right-to-say-no-to-mining-xolobeni

httprosaluxcozapublicationa-feminist-agenda-is-needed-in-the-labour-movement-and-the-left

References

Acemoglu D Johnson S amp Robinson J (2001) An African Success Story Botswana Available httpseconomicsmitedufiles284

Adebayo B ldquoNigeria overtakes India in extreme poverty rankingrdquo (2018 June 26) CNN News Retrieved httpseditioncnncom20180626africanigeria-overtakes-india-extreme-poverty-intlindexhtml

Alstine J (2014) Transparency in resource governance the pitfalls and potential of ldquoNew Oilrdquo in Sub-Saharan Africa Global Environmental Politics 14(1) 20-39

Asgill S (2012) The Nigerian Extractive Industries Transparency Initiative (NEITI) Tool for Conflict Resolution in the Niger Delta or Arena of Contested Politics Critical African Studies 4(7) 4-57 doi 10108021681392201210597798

de Montclos MP (2014) The politics and crisis of the Petroleum Industry Bill in Nigeria Journal of Modern African Studies 52 ( 3) 403-424 doi101017Soo22278X1400024X

E360 (2018) NEITI Reports How Poor Implementation Of Remediation Erodes Gains From Oil Sector Extractive 360 Available httpsextractive360com20181030neiti-reports-how-poor-implementation-of-remediation-erodes-gains-from-oil-sector

Ejiogu A Ejiogu C amp Ambituuni A (2018) The dark side of transparency does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control British Accounting Review 1-17

Extractive Industries Transparency Initiative (2015) EITI Secretariat Retrieved from httpseitiorgdocumentstandarddownload

Extractive Industries Transparency Initiative (2017) EITI Secretariat Retrieved from httpseitiorgnewsazerbaijan-withdraws-from-eiti

Extractive Industry Transparency Initiative (2017) Nigeria EITI recognizes progress in addressing natural resource governance Available httpseitiorgnewsnigeria-eiti-recognises-progress-in-addressing-natural-resource-governance

Extractive Industry Transparency Initiative EITI (2019c) The EITI Standard 2019 The Global Standard for the Good Governance of Oil Gas and Mineral Resources Available httpseitiorgnewseiti launches-2019-eiti-standard

Extractive Industry Transparency Initiative (2019a) EITI Global Conference 2019 Available httpseitiorgeventeiti-global-conference-2019

Extractive Industry Transparency Initiative (2019b) EITI Launches 2019 EITI Standard Available httpseitiorgnewseiti-launches-2019-eiti-standard

6

Rosa Luxemburg Stiftung

and the conference was attended by representatives of implementing countries supporting countries civil society organizations (CSOs) Trans-National Companies (TNCs) and private sector ldquoinvestorsrdquo This conference also officially launched the new 2019 EITI Standard a set of requirements that describe how the EITI works and which implementing countries must comply with

EITI A short sketch

The EITI is a voluntary global standard that aims to ensure that companies disclose payments to governments It uses transparency the cornerstone of the EITI to initiate public debate to improve public financial management and accountability (EITI 2016) It is also worth noting that since its inception the EITI has shown that it has the potential to evolve from exclusively dealing with reconciling company revenue disclosures of tax payments to governments and government disclosure of payments by further including requirements for gender environmental payments and monitoring contract transparency and beneficial ownership in its 2019 Standard for which it had been widely criticized (Garuba amp Ikubaje 2010 Abutudu amp Garuba 2011 Carter 2014 EITI 2019b) The EITI has also made strides in encouraging revenue disclosure by state owned entities which are complicit in sector wide corruption

Founded in 2003 the EITIrsquos main aim is to promote sector wide systematic transparency through revenue disclosure It relies on discussion monitoring and civil society advocacy through its Multi-Stakeholder-Initiative (MSI) to expose corruption and spark public debate However it is unclear what the EITI aims to achieve through public debate and the EITI 2019 conference exposed the elephant in the room- whatrsquos the point of transparency in countries with bad governance and weak institutional frameworks without accountabilityThe EITIrsquos success in combating corruption is dependent on civil society the judicial system and the media However in most of its implementing countries civil society is not capacitated functional or independent In this regard the EITI can be criticized for being largely acontexual (Mainhardt-Gibbs 2010 Sovacool et al 2016) Furthermore the fact that the EITI does not include minimum procedural guidelines for the composition of the MSI is major weakness for the EITIrsquos goal to promote debate and civil society advocacy The EITI

Standard also ignores the fact that the prevention of corruption is dependent on accountability to change the behaviour of those who benefit from it and that the reliance on disclosure will have little or no impact on corruption without it One is therefore left with no choice but to question the purpose of EITI disclosures in a context where accountability institutions are weak and there is no other country that comes in mind besides Nigeria Africarsquos largest oil producer to illustrate this glaring contradiction

Nigeria A ldquostar childrdquo without shine

Post-independent Nigeria was the first African country to implement the EITI and has also shaped its evolution It is also considered the EITIrsquos ldquostar childrdquo and tracking its progress in implementing the EITI is only fitting (Ejiogu Ejiogub amp Ambituuni 2018) It is however characterized by accountability institutions that can be described as ldquocursedrdquo due to centuries of military coups and dictatorships decentralized despotism through colonialism and patronage politics (Sala-i-Martin amp Subramanian 2003 Watts 2004 Williams 2011) Ultimately as argued by the institutions curse theory Nigeriarsquos underdevelopment is caused by the way in which oil revenues are managed and its institutional context non-participatory and non-inclusive reinforces this Cursed institutions are also characterized by a lack of checks and balances to root out corruption and maladministration

This context describes why Nigeria is ranked 144 out of 180 by the corruption watchdog Transparency International which indicates that it has a high prevalence of corruption (Transparency International 2018) After 20 years of democracy Africarsquos biggest economy is haunted by high unemployment and it has about 90 out of 190 million people living on less that $190 per day which now makes it the number 1 country with the most people living in poverty despite the fact that the oil sector accounts for 65-70 percent of its government income (Adebayo 2018 World Poverty Clock 2019) In addition Nigeria has a high inequality rate and is ranked 157 of 189 countries by the Human Development Index (UNDP 2018) Furthermore Nigeria continues to struggle to translate its oil wealth into socio-economic growth (Adebayo 2018)

2

Rosa Luxemburg Stiftung

The term ldquocursedrdquo is borrowed from the natural resource literature which aims to debunk why some resource rich countries are more often than not characterized by poor development outcomes It aims to portray political institutional decay that allows efficient and effective plunder of natural resource revenues of the state for private gain by politicians ndash an institutional context that affects oil producing countries the most (Mehlum Moene amp Torvik 2006 Robinson Torvik amp Verdier 2006) This argument reflects the evolution of the ldquonatural resource curserdquo literature which first saw natural resources as the primary cause for poor development outcomes towards what can now referred to as the ldquoinstitutions curserdquo first coined by Victor Menaldo (2016)

The ldquoinstitutions curserdquo describes a scenario where institutions are mostly characterized by dysfunctional patronage or rent-seeking such as in the Nigerian case through the state-owned Nigerian National Petroleum Corporation (NNPC) Nigerian politicians use the NNPC as a patronage tool in the form of hidden stipulations on contracts (Katsouris 2019) This is mainly because of the lack of so-called ldquoimpartiality enhancing institutionsrdquo that are necessary to curb the power of corrupt political elites

ldquoImpartiality enhancing institutionsrdquo are political institutions that are designed to act in the interest of the public and to amplify the voice of marginalized citizens by reducing the power of stakeholders who have undue influence on the legal and political framework (Kolstad and Wiig 2009) The emphasis here is on the need to develop institutions of democratic accountability and to improve decision making institutions about how oil rents should be spent In addition it is about creating a space for engagement and inclusivity for affected communities of aggressive extractivism It also includes the need to support civil society and the media to counter-balance the power of powerful stakeholders the government and oil companies to encourage public debate that will expose corruption and demand accountability For example despite being a former British colony with traditional leadership Botswana allowed an ldquounusual degreerdquo of participation in its political processes and placed effective constraints for those in power (Acemoglu Johnson amp Robinson 2001) It also ensured through local political institutions such as the kgotla that there was some degree of accountability of political elites Consequently participation in

decision making structures encouraged political stability that allowed Botswana to build an effective non-corrupt bureaucracy which ensured that the large revenue from diamonds was spent effectively and not expropriated by the political elite (Acemoglu et al 2001) Consequently in contrast to Nigeria Botswana is ranked 34180 on the Transparency Internationalrsquos 2018 corruption perception index indicating that is much less corrupt

Civil society participation in the MSI

The EITI relies heavily on its MSI to achieve its accountability goals and according to EITI requirements the MSI must be composed of representatives from government extractive companies and a full independent active and effective participation of civil society (EITI 2015 Mainhardt-Gibbs 2010 Sovacool et al 2016) These individuals are expected to oversee the implementation of the EITI carry out the work plan formulate policy and the programme design and the government is required to ensure that the invitation to participate in the group is open and transparent Furthermore it is required that all stakeholders are adequately represented but not equally represented

The absence of minimum guidelines for the MSI is a major weakness of the EITI because while the MSI could have the potential to promote and amply the voices of marginalized groups- especially since it is a power sharing institutional arrangement- it does not specify guidelines for its composition except for the very recent one that relates to a gender balance (Goetz amp Jenkins 2001 EITI 2019c) This is odd because the global experience of MSIrsquos shows that it is theoretically supposed to collapse the wide distance of formal accountability institutions from communities to enable direct engagement with government and extractive sector companies (McGee amp Gaventa 2010) The EITI does not meet this basic standard

The National Stakeholder Working Group (NSGW) the multi-institutional arrangement of the Nigeria EITI (NEITI) is an example how the EITI is currently unable to achieve meaningful civil society participation that is likely to lead to a robust debate and demands for accountability The NSWG consists of 15 board members who are drawn from government the six geopolitical zones of Nigeria Trans National Oil Companies (TNOCs) civil society labour unions

3

Rosa Luxemburg Stiftung

and experts from the industry (Asgill 2012) The NEITI does not stipulate how representatives of the NSWG should be chosen something the EITI probably hoped to achieve through the domestication and institionalisation of its principles This leaves too much room for political appointees by the president who has the power to appoint and dismiss members as wished (Ejiogu et al 2018)

Furthermore even if there was a stipulation for nominating trade union and civil society representatives there are only three positions available for CSOs trade unions and representatives from the extractive industry respectively out of 15 board members As it stands the current experience is that NSWG members are chosen because of their ties to government officials or the ruling party and consequently the board can be seen as lacking independence This has fueled the perception that the NSWG does not have a real commitment to fight corruption (Ejiogu et al 2018) In this arrangement civil society is outnumbered by government representatives who are known to be in a ldquosick alliancerdquo that breeds imperialism with TNOCs (Watts 2004) This alliance is a consequence of organized capitalism where the state and economy fuse to create state monopoly capitalism characterized by a formation of cartels which include Royal Dutch Shell Exxon-Mobil Chevron-Texaco Elf and Agip in Nigeria The dependence of the state on TNOCs also reinforces this alliance

This means that the government together with the extractive industry have a majority representation in the NSWG to influence and make decisions and one can only see this for what it is a self-imposed disclosure and transparency tool that will only yield limited outcomes to combat corruption because those who should face the full brunt of the law for corruption are responsible for controlling the flow and standard of information that is meant to drive public debate (Lindstedt and Nauren 2010)

Civil society participation in Nigeria

Civil society participation in the NEITI process is also weak due to a lack of technical capacity to understand the information produced (Asgill 2012) There is also a weak comprehension of NEITI reports due to a lack of expertise in the oil industry This creates a knowledge gap which makes it difficult for CSOs to engage in debates about amongst others royalties taxes and

penalties (Abutudu amp Garuba 2011) So one can conclude that Nigerian CSOs have limited institutional capacity to engage with EITI reports and to disseminate information to spark public debate as envisioned by the EITI

Nigeriarsquos institutional context reinforces this limitation The EITI sees civil society as having the potential to compensate for the EITIrsquos lack of enforcement by insisting on policies or sanctions outside of the NEITI structures through the mobilization of citizens to pressurize compliance to cases exposed through its reports Outside of the MSI civil society is expected to carry the burden to seek accountability in the form of justice remedy criminalization or compensation for corrupt industry activities (Abutudu amp Garuba 2011)

However the reliance on civil society to obtain accountability through debate is a denial that some countries like Nigeria are cursed with unresponsive untrustworthy and corrupt institutions In essence this means that nothing can be done about the information that the NEITI publishes In addition the information that is revealed by the NEITI cannot be used to institute legal action against government officials and companies - which is another major weakness of the NEITI (Abutudu amp Garuba 2011) This is unless the government ldquoinstitutionalizes the NEITIrdquo to make it more binding by enacting laws and reforms directed to achieve accountability In Nigeria the EITIrsquos star child there has been some form of institutionalization of transparency however there still isnrsquot significant change in the incentives to discourage corruption because of the lack of accountability Transparency without accountability

Section 3 of the NEITI Act 2007 contains a secrecy clause The secrecy clause contained in section 3(d and e) causes oil companies to withhold important information that may be used to hold them accountable by civil society and communities The Act is just one example of how a countryrsquos institutional framework can easily render the EITI meaningless In addition Section 16 of the Act also excludes criminal liability and jail terms Furthermore there is no stipulation for revoking licenses as part of a sanctioning mechanism and this provision prevents the possibility of successful prosecutions In doing so it protects TNOCs and government officials at the expense of communities affected by extractivism

4

Rosa Luxemburg Stiftung

The NEITI is only given powers to sue in civil action and this excludes the power to initiate criminal prosecution (Ihugba 2014) It is an Act of the National Assembly and is within the Attorney Generalrsquos jurisdiction to prosecute The NEITI Act thus uses a soft law characterized by voluntary directives (Ihugba 2014) Consequently as of yet no oil company has been prosecuted or had their license suspended by the NEITI based on an NEITI recommendation (Ihugba 2014) This should show that beyond transparency there isnrsquot much that can be achieved without accountability in the extractive sector The 10 year delay of the Petroleum Industry Governance Bill (PIGB) which has already passed through the National Assembly and is said to be a step into the right direction for combating corruption is a good example The PIGB mostly seeks to empower institutions to tackle bad governance that leads to inefficiency ineffectiveness and rent-seeking in the management and distribution of oil revenues In addition the PIGB also aims to overcome inequity secrecy and corruption in the oil sector (Olawoyin 2018)

This delay exposes the lack of political will to reform the oil industry in Nigeria by not properly institutionalizing the EITI and by not putting mechanisms in place to identify and deal with corruption risk spots as envisioned (de Montclos 2014) For example in the absence of a clear governance framework Nigeria lost USD 104 billion and Naira 3787 billion through under-remittances inefficiencies and theft in the oil and gas sector However this still does not mean that the PIGB is perfect because it is criticized for failing to increase oil industry transparency to the fullest extent in drawing up oil contracts leaving some room for corruption (Oni 2019)

The lack of accountability in Nigeriarsquos institutional framework is also revealed by Auwal Musa the executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and ChairNational Contact of Transparency International (Nigeria) in an interview with Kingsley Jeremiah Musa argues that there have been many indictments on NNPC dealings without any consequences making the entity a ldquorepublic within a republicrdquo mostly unaccountable to its citizens (Musa 2019) This is why the Nigerian oil sector needs more than transparency it needs strategic measures of accountability and this is not offered by the EITI This case reflects the weakness in the EITIrsquos soft law approach in countries which are cursed by institutions

Whatrsquos the point A Conclusion

The soft law approach has yielded limited outcomes especially in relation to remedying corporate impunity and corruption and this was also expressed by Nigerian extractive stakeholders at a retreat in held in August 2018 at Kuramo Waters Lagos The major concern expressed by stakeholders was that the NEITI Act does not empower it to enforce compliance and prosecute offenders and only focuses on audits and dissemination of reports and this limits its effectiveness and seriousness it is accorded by extractive institutions (Trust Africa 2018) A tracing of the history of remedial issues also revealed that since the NEITIrsquos last report in 2015 many have been side-lined in subsequent reports (e360 2018) It was then proposed that there is an urgent need to review and amend the law but as argued cursed institutions do not easily welcome change especially when it is incremental in nature such as in the form of transparency - basically a ldquogo big or go homerdquo situation

Furthermore there is no shortage of well-crafted laws in Nigeria the problem lies in implementing the laws (Asgill 2012) Kolstad and Wiig (2009) argue that enacting more laws and increasing the capacity of patrimonial governments will not lead to the achievement of impartiality enhancing institutions and that doing so will make patrimonial governments such as Nigeria become more powerful Instead it is more important to ensure that those who benefit from opaque transparency are punished and the EITIrsquos weakness is its focus on transparency alone

The re-elected President Muhammadu Buhari has been given a second chance to take on the vested interested in politics and the oil sector that drive corruption and the NEITI is good place to begin but not unless the transparency championed by the NEITI is met with accountability The country is on the right track in deepening transparency reforms through initiatives such as the EITI For example it is through the NSGW of the NEITI that the recovery of USD 24 million for the Federal Government of Nigeria was achieved in 2017 In addition there is now awareness of environmental impacts of oil which now also include payments to citizens and transparent royalty negotiations for communities (Abutudu amp Garuba 2011 EITI 2017) Furthermore an NEITI associated online extractive transparency platform Extractive360com was also launched

5

Rosa Luxemburg Stiftung

in Abuja and these are good signs of a deepening transparency culture (Jeremiah 2019)

It thus cannot be denied that the EITI has made positive strides in exposing corruption through revenue disclosures but this is not enough for combating corruption in the extractive sector In the next EITI conference which occurs every three years the EITI needs to be explicit about how it can combat corruption and be honest about the possible impact it can have in countries that have weak institutional and governance frameworks especially in relation to remedial issues for communities

It can begin by configuring its own structures in this case the MSI by providing minimum procedural guidelines for the effective and inclusive participation of civil society to counter-balance the power of politicians and companies in the determination of taxes royalties and shaping extractive polities (Oshionebo 2018) The conversation also needs to shift away from the focus on disclosure to include accountability by establishing stronger linkages with accountability institutions to encourage and facilitate the move away from its current soft law approach and become more authoritative in the sanctioning of companies and government officials (Fox 2010) The NEITI example exposes the weaknesses of voluntary guidelines in a context of bad governance Therefore a more binding international instrument that will address corruption and corporate impunity outside of a countryrsquos institutions may be necessary (Kanzleiter amp Becker 2018)

Sikho Luthango is a Programme Manager for Labour Relations and Economy at the Rosa Luxemburg Stiftung Southern African office based in Johannesburg She holds a Masters of Philosophy in Public Policy and Administration (with Distinction) from the University of Cape Town South Africa Her research interests include Mineral Resource Governance Land Governance and Climate Justice from an eco-feminist perspective

Other publications include

httprosaluxcozapublicationmalendu-constitutional-court-judgement-right-to-say-no-to-mining-xolobeni

httprosaluxcozapublicationa-feminist-agenda-is-needed-in-the-labour-movement-and-the-left

References

Acemoglu D Johnson S amp Robinson J (2001) An African Success Story Botswana Available httpseconomicsmitedufiles284

Adebayo B ldquoNigeria overtakes India in extreme poverty rankingrdquo (2018 June 26) CNN News Retrieved httpseditioncnncom20180626africanigeria-overtakes-india-extreme-poverty-intlindexhtml

Alstine J (2014) Transparency in resource governance the pitfalls and potential of ldquoNew Oilrdquo in Sub-Saharan Africa Global Environmental Politics 14(1) 20-39

Asgill S (2012) The Nigerian Extractive Industries Transparency Initiative (NEITI) Tool for Conflict Resolution in the Niger Delta or Arena of Contested Politics Critical African Studies 4(7) 4-57 doi 10108021681392201210597798

de Montclos MP (2014) The politics and crisis of the Petroleum Industry Bill in Nigeria Journal of Modern African Studies 52 ( 3) 403-424 doi101017Soo22278X1400024X

E360 (2018) NEITI Reports How Poor Implementation Of Remediation Erodes Gains From Oil Sector Extractive 360 Available httpsextractive360com20181030neiti-reports-how-poor-implementation-of-remediation-erodes-gains-from-oil-sector

Ejiogu A Ejiogu C amp Ambituuni A (2018) The dark side of transparency does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control British Accounting Review 1-17

Extractive Industries Transparency Initiative (2015) EITI Secretariat Retrieved from httpseitiorgdocumentstandarddownload

Extractive Industries Transparency Initiative (2017) EITI Secretariat Retrieved from httpseitiorgnewsazerbaijan-withdraws-from-eiti

Extractive Industry Transparency Initiative (2017) Nigeria EITI recognizes progress in addressing natural resource governance Available httpseitiorgnewsnigeria-eiti-recognises-progress-in-addressing-natural-resource-governance

Extractive Industry Transparency Initiative EITI (2019c) The EITI Standard 2019 The Global Standard for the Good Governance of Oil Gas and Mineral Resources Available httpseitiorgnewseiti launches-2019-eiti-standard

Extractive Industry Transparency Initiative (2019a) EITI Global Conference 2019 Available httpseitiorgeventeiti-global-conference-2019

Extractive Industry Transparency Initiative (2019b) EITI Launches 2019 EITI Standard Available httpseitiorgnewseiti-launches-2019-eiti-standard

6

Rosa Luxemburg Stiftung

The term ldquocursedrdquo is borrowed from the natural resource literature which aims to debunk why some resource rich countries are more often than not characterized by poor development outcomes It aims to portray political institutional decay that allows efficient and effective plunder of natural resource revenues of the state for private gain by politicians ndash an institutional context that affects oil producing countries the most (Mehlum Moene amp Torvik 2006 Robinson Torvik amp Verdier 2006) This argument reflects the evolution of the ldquonatural resource curserdquo literature which first saw natural resources as the primary cause for poor development outcomes towards what can now referred to as the ldquoinstitutions curserdquo first coined by Victor Menaldo (2016)

The ldquoinstitutions curserdquo describes a scenario where institutions are mostly characterized by dysfunctional patronage or rent-seeking such as in the Nigerian case through the state-owned Nigerian National Petroleum Corporation (NNPC) Nigerian politicians use the NNPC as a patronage tool in the form of hidden stipulations on contracts (Katsouris 2019) This is mainly because of the lack of so-called ldquoimpartiality enhancing institutionsrdquo that are necessary to curb the power of corrupt political elites

ldquoImpartiality enhancing institutionsrdquo are political institutions that are designed to act in the interest of the public and to amplify the voice of marginalized citizens by reducing the power of stakeholders who have undue influence on the legal and political framework (Kolstad and Wiig 2009) The emphasis here is on the need to develop institutions of democratic accountability and to improve decision making institutions about how oil rents should be spent In addition it is about creating a space for engagement and inclusivity for affected communities of aggressive extractivism It also includes the need to support civil society and the media to counter-balance the power of powerful stakeholders the government and oil companies to encourage public debate that will expose corruption and demand accountability For example despite being a former British colony with traditional leadership Botswana allowed an ldquounusual degreerdquo of participation in its political processes and placed effective constraints for those in power (Acemoglu Johnson amp Robinson 2001) It also ensured through local political institutions such as the kgotla that there was some degree of accountability of political elites Consequently participation in

decision making structures encouraged political stability that allowed Botswana to build an effective non-corrupt bureaucracy which ensured that the large revenue from diamonds was spent effectively and not expropriated by the political elite (Acemoglu et al 2001) Consequently in contrast to Nigeria Botswana is ranked 34180 on the Transparency Internationalrsquos 2018 corruption perception index indicating that is much less corrupt

Civil society participation in the MSI

The EITI relies heavily on its MSI to achieve its accountability goals and according to EITI requirements the MSI must be composed of representatives from government extractive companies and a full independent active and effective participation of civil society (EITI 2015 Mainhardt-Gibbs 2010 Sovacool et al 2016) These individuals are expected to oversee the implementation of the EITI carry out the work plan formulate policy and the programme design and the government is required to ensure that the invitation to participate in the group is open and transparent Furthermore it is required that all stakeholders are adequately represented but not equally represented

The absence of minimum guidelines for the MSI is a major weakness of the EITI because while the MSI could have the potential to promote and amply the voices of marginalized groups- especially since it is a power sharing institutional arrangement- it does not specify guidelines for its composition except for the very recent one that relates to a gender balance (Goetz amp Jenkins 2001 EITI 2019c) This is odd because the global experience of MSIrsquos shows that it is theoretically supposed to collapse the wide distance of formal accountability institutions from communities to enable direct engagement with government and extractive sector companies (McGee amp Gaventa 2010) The EITI does not meet this basic standard

The National Stakeholder Working Group (NSGW) the multi-institutional arrangement of the Nigeria EITI (NEITI) is an example how the EITI is currently unable to achieve meaningful civil society participation that is likely to lead to a robust debate and demands for accountability The NSWG consists of 15 board members who are drawn from government the six geopolitical zones of Nigeria Trans National Oil Companies (TNOCs) civil society labour unions

3

Rosa Luxemburg Stiftung

and experts from the industry (Asgill 2012) The NEITI does not stipulate how representatives of the NSWG should be chosen something the EITI probably hoped to achieve through the domestication and institionalisation of its principles This leaves too much room for political appointees by the president who has the power to appoint and dismiss members as wished (Ejiogu et al 2018)

Furthermore even if there was a stipulation for nominating trade union and civil society representatives there are only three positions available for CSOs trade unions and representatives from the extractive industry respectively out of 15 board members As it stands the current experience is that NSWG members are chosen because of their ties to government officials or the ruling party and consequently the board can be seen as lacking independence This has fueled the perception that the NSWG does not have a real commitment to fight corruption (Ejiogu et al 2018) In this arrangement civil society is outnumbered by government representatives who are known to be in a ldquosick alliancerdquo that breeds imperialism with TNOCs (Watts 2004) This alliance is a consequence of organized capitalism where the state and economy fuse to create state monopoly capitalism characterized by a formation of cartels which include Royal Dutch Shell Exxon-Mobil Chevron-Texaco Elf and Agip in Nigeria The dependence of the state on TNOCs also reinforces this alliance

This means that the government together with the extractive industry have a majority representation in the NSWG to influence and make decisions and one can only see this for what it is a self-imposed disclosure and transparency tool that will only yield limited outcomes to combat corruption because those who should face the full brunt of the law for corruption are responsible for controlling the flow and standard of information that is meant to drive public debate (Lindstedt and Nauren 2010)

Civil society participation in Nigeria

Civil society participation in the NEITI process is also weak due to a lack of technical capacity to understand the information produced (Asgill 2012) There is also a weak comprehension of NEITI reports due to a lack of expertise in the oil industry This creates a knowledge gap which makes it difficult for CSOs to engage in debates about amongst others royalties taxes and

penalties (Abutudu amp Garuba 2011) So one can conclude that Nigerian CSOs have limited institutional capacity to engage with EITI reports and to disseminate information to spark public debate as envisioned by the EITI

Nigeriarsquos institutional context reinforces this limitation The EITI sees civil society as having the potential to compensate for the EITIrsquos lack of enforcement by insisting on policies or sanctions outside of the NEITI structures through the mobilization of citizens to pressurize compliance to cases exposed through its reports Outside of the MSI civil society is expected to carry the burden to seek accountability in the form of justice remedy criminalization or compensation for corrupt industry activities (Abutudu amp Garuba 2011)

However the reliance on civil society to obtain accountability through debate is a denial that some countries like Nigeria are cursed with unresponsive untrustworthy and corrupt institutions In essence this means that nothing can be done about the information that the NEITI publishes In addition the information that is revealed by the NEITI cannot be used to institute legal action against government officials and companies - which is another major weakness of the NEITI (Abutudu amp Garuba 2011) This is unless the government ldquoinstitutionalizes the NEITIrdquo to make it more binding by enacting laws and reforms directed to achieve accountability In Nigeria the EITIrsquos star child there has been some form of institutionalization of transparency however there still isnrsquot significant change in the incentives to discourage corruption because of the lack of accountability Transparency without accountability

Section 3 of the NEITI Act 2007 contains a secrecy clause The secrecy clause contained in section 3(d and e) causes oil companies to withhold important information that may be used to hold them accountable by civil society and communities The Act is just one example of how a countryrsquos institutional framework can easily render the EITI meaningless In addition Section 16 of the Act also excludes criminal liability and jail terms Furthermore there is no stipulation for revoking licenses as part of a sanctioning mechanism and this provision prevents the possibility of successful prosecutions In doing so it protects TNOCs and government officials at the expense of communities affected by extractivism

4

Rosa Luxemburg Stiftung

The NEITI is only given powers to sue in civil action and this excludes the power to initiate criminal prosecution (Ihugba 2014) It is an Act of the National Assembly and is within the Attorney Generalrsquos jurisdiction to prosecute The NEITI Act thus uses a soft law characterized by voluntary directives (Ihugba 2014) Consequently as of yet no oil company has been prosecuted or had their license suspended by the NEITI based on an NEITI recommendation (Ihugba 2014) This should show that beyond transparency there isnrsquot much that can be achieved without accountability in the extractive sector The 10 year delay of the Petroleum Industry Governance Bill (PIGB) which has already passed through the National Assembly and is said to be a step into the right direction for combating corruption is a good example The PIGB mostly seeks to empower institutions to tackle bad governance that leads to inefficiency ineffectiveness and rent-seeking in the management and distribution of oil revenues In addition the PIGB also aims to overcome inequity secrecy and corruption in the oil sector (Olawoyin 2018)

This delay exposes the lack of political will to reform the oil industry in Nigeria by not properly institutionalizing the EITI and by not putting mechanisms in place to identify and deal with corruption risk spots as envisioned (de Montclos 2014) For example in the absence of a clear governance framework Nigeria lost USD 104 billion and Naira 3787 billion through under-remittances inefficiencies and theft in the oil and gas sector However this still does not mean that the PIGB is perfect because it is criticized for failing to increase oil industry transparency to the fullest extent in drawing up oil contracts leaving some room for corruption (Oni 2019)

The lack of accountability in Nigeriarsquos institutional framework is also revealed by Auwal Musa the executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and ChairNational Contact of Transparency International (Nigeria) in an interview with Kingsley Jeremiah Musa argues that there have been many indictments on NNPC dealings without any consequences making the entity a ldquorepublic within a republicrdquo mostly unaccountable to its citizens (Musa 2019) This is why the Nigerian oil sector needs more than transparency it needs strategic measures of accountability and this is not offered by the EITI This case reflects the weakness in the EITIrsquos soft law approach in countries which are cursed by institutions

Whatrsquos the point A Conclusion

The soft law approach has yielded limited outcomes especially in relation to remedying corporate impunity and corruption and this was also expressed by Nigerian extractive stakeholders at a retreat in held in August 2018 at Kuramo Waters Lagos The major concern expressed by stakeholders was that the NEITI Act does not empower it to enforce compliance and prosecute offenders and only focuses on audits and dissemination of reports and this limits its effectiveness and seriousness it is accorded by extractive institutions (Trust Africa 2018) A tracing of the history of remedial issues also revealed that since the NEITIrsquos last report in 2015 many have been side-lined in subsequent reports (e360 2018) It was then proposed that there is an urgent need to review and amend the law but as argued cursed institutions do not easily welcome change especially when it is incremental in nature such as in the form of transparency - basically a ldquogo big or go homerdquo situation

Furthermore there is no shortage of well-crafted laws in Nigeria the problem lies in implementing the laws (Asgill 2012) Kolstad and Wiig (2009) argue that enacting more laws and increasing the capacity of patrimonial governments will not lead to the achievement of impartiality enhancing institutions and that doing so will make patrimonial governments such as Nigeria become more powerful Instead it is more important to ensure that those who benefit from opaque transparency are punished and the EITIrsquos weakness is its focus on transparency alone

The re-elected President Muhammadu Buhari has been given a second chance to take on the vested interested in politics and the oil sector that drive corruption and the NEITI is good place to begin but not unless the transparency championed by the NEITI is met with accountability The country is on the right track in deepening transparency reforms through initiatives such as the EITI For example it is through the NSGW of the NEITI that the recovery of USD 24 million for the Federal Government of Nigeria was achieved in 2017 In addition there is now awareness of environmental impacts of oil which now also include payments to citizens and transparent royalty negotiations for communities (Abutudu amp Garuba 2011 EITI 2017) Furthermore an NEITI associated online extractive transparency platform Extractive360com was also launched

5

Rosa Luxemburg Stiftung

in Abuja and these are good signs of a deepening transparency culture (Jeremiah 2019)

It thus cannot be denied that the EITI has made positive strides in exposing corruption through revenue disclosures but this is not enough for combating corruption in the extractive sector In the next EITI conference which occurs every three years the EITI needs to be explicit about how it can combat corruption and be honest about the possible impact it can have in countries that have weak institutional and governance frameworks especially in relation to remedial issues for communities

It can begin by configuring its own structures in this case the MSI by providing minimum procedural guidelines for the effective and inclusive participation of civil society to counter-balance the power of politicians and companies in the determination of taxes royalties and shaping extractive polities (Oshionebo 2018) The conversation also needs to shift away from the focus on disclosure to include accountability by establishing stronger linkages with accountability institutions to encourage and facilitate the move away from its current soft law approach and become more authoritative in the sanctioning of companies and government officials (Fox 2010) The NEITI example exposes the weaknesses of voluntary guidelines in a context of bad governance Therefore a more binding international instrument that will address corruption and corporate impunity outside of a countryrsquos institutions may be necessary (Kanzleiter amp Becker 2018)

Sikho Luthango is a Programme Manager for Labour Relations and Economy at the Rosa Luxemburg Stiftung Southern African office based in Johannesburg She holds a Masters of Philosophy in Public Policy and Administration (with Distinction) from the University of Cape Town South Africa Her research interests include Mineral Resource Governance Land Governance and Climate Justice from an eco-feminist perspective

Other publications include

httprosaluxcozapublicationmalendu-constitutional-court-judgement-right-to-say-no-to-mining-xolobeni

httprosaluxcozapublicationa-feminist-agenda-is-needed-in-the-labour-movement-and-the-left

References

Acemoglu D Johnson S amp Robinson J (2001) An African Success Story Botswana Available httpseconomicsmitedufiles284

Adebayo B ldquoNigeria overtakes India in extreme poverty rankingrdquo (2018 June 26) CNN News Retrieved httpseditioncnncom20180626africanigeria-overtakes-india-extreme-poverty-intlindexhtml

Alstine J (2014) Transparency in resource governance the pitfalls and potential of ldquoNew Oilrdquo in Sub-Saharan Africa Global Environmental Politics 14(1) 20-39

Asgill S (2012) The Nigerian Extractive Industries Transparency Initiative (NEITI) Tool for Conflict Resolution in the Niger Delta or Arena of Contested Politics Critical African Studies 4(7) 4-57 doi 10108021681392201210597798

de Montclos MP (2014) The politics and crisis of the Petroleum Industry Bill in Nigeria Journal of Modern African Studies 52 ( 3) 403-424 doi101017Soo22278X1400024X

E360 (2018) NEITI Reports How Poor Implementation Of Remediation Erodes Gains From Oil Sector Extractive 360 Available httpsextractive360com20181030neiti-reports-how-poor-implementation-of-remediation-erodes-gains-from-oil-sector

Ejiogu A Ejiogu C amp Ambituuni A (2018) The dark side of transparency does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control British Accounting Review 1-17

Extractive Industries Transparency Initiative (2015) EITI Secretariat Retrieved from httpseitiorgdocumentstandarddownload

Extractive Industries Transparency Initiative (2017) EITI Secretariat Retrieved from httpseitiorgnewsazerbaijan-withdraws-from-eiti

Extractive Industry Transparency Initiative (2017) Nigeria EITI recognizes progress in addressing natural resource governance Available httpseitiorgnewsnigeria-eiti-recognises-progress-in-addressing-natural-resource-governance

Extractive Industry Transparency Initiative EITI (2019c) The EITI Standard 2019 The Global Standard for the Good Governance of Oil Gas and Mineral Resources Available httpseitiorgnewseiti launches-2019-eiti-standard

Extractive Industry Transparency Initiative (2019a) EITI Global Conference 2019 Available httpseitiorgeventeiti-global-conference-2019

Extractive Industry Transparency Initiative (2019b) EITI Launches 2019 EITI Standard Available httpseitiorgnewseiti-launches-2019-eiti-standard

6

Rosa Luxemburg Stiftung

and experts from the industry (Asgill 2012) The NEITI does not stipulate how representatives of the NSWG should be chosen something the EITI probably hoped to achieve through the domestication and institionalisation of its principles This leaves too much room for political appointees by the president who has the power to appoint and dismiss members as wished (Ejiogu et al 2018)

Furthermore even if there was a stipulation for nominating trade union and civil society representatives there are only three positions available for CSOs trade unions and representatives from the extractive industry respectively out of 15 board members As it stands the current experience is that NSWG members are chosen because of their ties to government officials or the ruling party and consequently the board can be seen as lacking independence This has fueled the perception that the NSWG does not have a real commitment to fight corruption (Ejiogu et al 2018) In this arrangement civil society is outnumbered by government representatives who are known to be in a ldquosick alliancerdquo that breeds imperialism with TNOCs (Watts 2004) This alliance is a consequence of organized capitalism where the state and economy fuse to create state monopoly capitalism characterized by a formation of cartels which include Royal Dutch Shell Exxon-Mobil Chevron-Texaco Elf and Agip in Nigeria The dependence of the state on TNOCs also reinforces this alliance

This means that the government together with the extractive industry have a majority representation in the NSWG to influence and make decisions and one can only see this for what it is a self-imposed disclosure and transparency tool that will only yield limited outcomes to combat corruption because those who should face the full brunt of the law for corruption are responsible for controlling the flow and standard of information that is meant to drive public debate (Lindstedt and Nauren 2010)

Civil society participation in Nigeria

Civil society participation in the NEITI process is also weak due to a lack of technical capacity to understand the information produced (Asgill 2012) There is also a weak comprehension of NEITI reports due to a lack of expertise in the oil industry This creates a knowledge gap which makes it difficult for CSOs to engage in debates about amongst others royalties taxes and

penalties (Abutudu amp Garuba 2011) So one can conclude that Nigerian CSOs have limited institutional capacity to engage with EITI reports and to disseminate information to spark public debate as envisioned by the EITI

Nigeriarsquos institutional context reinforces this limitation The EITI sees civil society as having the potential to compensate for the EITIrsquos lack of enforcement by insisting on policies or sanctions outside of the NEITI structures through the mobilization of citizens to pressurize compliance to cases exposed through its reports Outside of the MSI civil society is expected to carry the burden to seek accountability in the form of justice remedy criminalization or compensation for corrupt industry activities (Abutudu amp Garuba 2011)

However the reliance on civil society to obtain accountability through debate is a denial that some countries like Nigeria are cursed with unresponsive untrustworthy and corrupt institutions In essence this means that nothing can be done about the information that the NEITI publishes In addition the information that is revealed by the NEITI cannot be used to institute legal action against government officials and companies - which is another major weakness of the NEITI (Abutudu amp Garuba 2011) This is unless the government ldquoinstitutionalizes the NEITIrdquo to make it more binding by enacting laws and reforms directed to achieve accountability In Nigeria the EITIrsquos star child there has been some form of institutionalization of transparency however there still isnrsquot significant change in the incentives to discourage corruption because of the lack of accountability Transparency without accountability

Section 3 of the NEITI Act 2007 contains a secrecy clause The secrecy clause contained in section 3(d and e) causes oil companies to withhold important information that may be used to hold them accountable by civil society and communities The Act is just one example of how a countryrsquos institutional framework can easily render the EITI meaningless In addition Section 16 of the Act also excludes criminal liability and jail terms Furthermore there is no stipulation for revoking licenses as part of a sanctioning mechanism and this provision prevents the possibility of successful prosecutions In doing so it protects TNOCs and government officials at the expense of communities affected by extractivism

4

Rosa Luxemburg Stiftung

The NEITI is only given powers to sue in civil action and this excludes the power to initiate criminal prosecution (Ihugba 2014) It is an Act of the National Assembly and is within the Attorney Generalrsquos jurisdiction to prosecute The NEITI Act thus uses a soft law characterized by voluntary directives (Ihugba 2014) Consequently as of yet no oil company has been prosecuted or had their license suspended by the NEITI based on an NEITI recommendation (Ihugba 2014) This should show that beyond transparency there isnrsquot much that can be achieved without accountability in the extractive sector The 10 year delay of the Petroleum Industry Governance Bill (PIGB) which has already passed through the National Assembly and is said to be a step into the right direction for combating corruption is a good example The PIGB mostly seeks to empower institutions to tackle bad governance that leads to inefficiency ineffectiveness and rent-seeking in the management and distribution of oil revenues In addition the PIGB also aims to overcome inequity secrecy and corruption in the oil sector (Olawoyin 2018)

This delay exposes the lack of political will to reform the oil industry in Nigeria by not properly institutionalizing the EITI and by not putting mechanisms in place to identify and deal with corruption risk spots as envisioned (de Montclos 2014) For example in the absence of a clear governance framework Nigeria lost USD 104 billion and Naira 3787 billion through under-remittances inefficiencies and theft in the oil and gas sector However this still does not mean that the PIGB is perfect because it is criticized for failing to increase oil industry transparency to the fullest extent in drawing up oil contracts leaving some room for corruption (Oni 2019)

The lack of accountability in Nigeriarsquos institutional framework is also revealed by Auwal Musa the executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and ChairNational Contact of Transparency International (Nigeria) in an interview with Kingsley Jeremiah Musa argues that there have been many indictments on NNPC dealings without any consequences making the entity a ldquorepublic within a republicrdquo mostly unaccountable to its citizens (Musa 2019) This is why the Nigerian oil sector needs more than transparency it needs strategic measures of accountability and this is not offered by the EITI This case reflects the weakness in the EITIrsquos soft law approach in countries which are cursed by institutions

Whatrsquos the point A Conclusion

The soft law approach has yielded limited outcomes especially in relation to remedying corporate impunity and corruption and this was also expressed by Nigerian extractive stakeholders at a retreat in held in August 2018 at Kuramo Waters Lagos The major concern expressed by stakeholders was that the NEITI Act does not empower it to enforce compliance and prosecute offenders and only focuses on audits and dissemination of reports and this limits its effectiveness and seriousness it is accorded by extractive institutions (Trust Africa 2018) A tracing of the history of remedial issues also revealed that since the NEITIrsquos last report in 2015 many have been side-lined in subsequent reports (e360 2018) It was then proposed that there is an urgent need to review and amend the law but as argued cursed institutions do not easily welcome change especially when it is incremental in nature such as in the form of transparency - basically a ldquogo big or go homerdquo situation

Furthermore there is no shortage of well-crafted laws in Nigeria the problem lies in implementing the laws (Asgill 2012) Kolstad and Wiig (2009) argue that enacting more laws and increasing the capacity of patrimonial governments will not lead to the achievement of impartiality enhancing institutions and that doing so will make patrimonial governments such as Nigeria become more powerful Instead it is more important to ensure that those who benefit from opaque transparency are punished and the EITIrsquos weakness is its focus on transparency alone

The re-elected President Muhammadu Buhari has been given a second chance to take on the vested interested in politics and the oil sector that drive corruption and the NEITI is good place to begin but not unless the transparency championed by the NEITI is met with accountability The country is on the right track in deepening transparency reforms through initiatives such as the EITI For example it is through the NSGW of the NEITI that the recovery of USD 24 million for the Federal Government of Nigeria was achieved in 2017 In addition there is now awareness of environmental impacts of oil which now also include payments to citizens and transparent royalty negotiations for communities (Abutudu amp Garuba 2011 EITI 2017) Furthermore an NEITI associated online extractive transparency platform Extractive360com was also launched

5

Rosa Luxemburg Stiftung

in Abuja and these are good signs of a deepening transparency culture (Jeremiah 2019)

It thus cannot be denied that the EITI has made positive strides in exposing corruption through revenue disclosures but this is not enough for combating corruption in the extractive sector In the next EITI conference which occurs every three years the EITI needs to be explicit about how it can combat corruption and be honest about the possible impact it can have in countries that have weak institutional and governance frameworks especially in relation to remedial issues for communities

It can begin by configuring its own structures in this case the MSI by providing minimum procedural guidelines for the effective and inclusive participation of civil society to counter-balance the power of politicians and companies in the determination of taxes royalties and shaping extractive polities (Oshionebo 2018) The conversation also needs to shift away from the focus on disclosure to include accountability by establishing stronger linkages with accountability institutions to encourage and facilitate the move away from its current soft law approach and become more authoritative in the sanctioning of companies and government officials (Fox 2010) The NEITI example exposes the weaknesses of voluntary guidelines in a context of bad governance Therefore a more binding international instrument that will address corruption and corporate impunity outside of a countryrsquos institutions may be necessary (Kanzleiter amp Becker 2018)

Sikho Luthango is a Programme Manager for Labour Relations and Economy at the Rosa Luxemburg Stiftung Southern African office based in Johannesburg She holds a Masters of Philosophy in Public Policy and Administration (with Distinction) from the University of Cape Town South Africa Her research interests include Mineral Resource Governance Land Governance and Climate Justice from an eco-feminist perspective

Other publications include

httprosaluxcozapublicationmalendu-constitutional-court-judgement-right-to-say-no-to-mining-xolobeni

httprosaluxcozapublicationa-feminist-agenda-is-needed-in-the-labour-movement-and-the-left

References

Acemoglu D Johnson S amp Robinson J (2001) An African Success Story Botswana Available httpseconomicsmitedufiles284

Adebayo B ldquoNigeria overtakes India in extreme poverty rankingrdquo (2018 June 26) CNN News Retrieved httpseditioncnncom20180626africanigeria-overtakes-india-extreme-poverty-intlindexhtml

Alstine J (2014) Transparency in resource governance the pitfalls and potential of ldquoNew Oilrdquo in Sub-Saharan Africa Global Environmental Politics 14(1) 20-39

Asgill S (2012) The Nigerian Extractive Industries Transparency Initiative (NEITI) Tool for Conflict Resolution in the Niger Delta or Arena of Contested Politics Critical African Studies 4(7) 4-57 doi 10108021681392201210597798

de Montclos MP (2014) The politics and crisis of the Petroleum Industry Bill in Nigeria Journal of Modern African Studies 52 ( 3) 403-424 doi101017Soo22278X1400024X

E360 (2018) NEITI Reports How Poor Implementation Of Remediation Erodes Gains From Oil Sector Extractive 360 Available httpsextractive360com20181030neiti-reports-how-poor-implementation-of-remediation-erodes-gains-from-oil-sector

Ejiogu A Ejiogu C amp Ambituuni A (2018) The dark side of transparency does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control British Accounting Review 1-17

Extractive Industries Transparency Initiative (2015) EITI Secretariat Retrieved from httpseitiorgdocumentstandarddownload

Extractive Industries Transparency Initiative (2017) EITI Secretariat Retrieved from httpseitiorgnewsazerbaijan-withdraws-from-eiti

Extractive Industry Transparency Initiative (2017) Nigeria EITI recognizes progress in addressing natural resource governance Available httpseitiorgnewsnigeria-eiti-recognises-progress-in-addressing-natural-resource-governance

Extractive Industry Transparency Initiative EITI (2019c) The EITI Standard 2019 The Global Standard for the Good Governance of Oil Gas and Mineral Resources Available httpseitiorgnewseiti launches-2019-eiti-standard

Extractive Industry Transparency Initiative (2019a) EITI Global Conference 2019 Available httpseitiorgeventeiti-global-conference-2019

Extractive Industry Transparency Initiative (2019b) EITI Launches 2019 EITI Standard Available httpseitiorgnewseiti-launches-2019-eiti-standard

6

Rosa Luxemburg Stiftung

The NEITI is only given powers to sue in civil action and this excludes the power to initiate criminal prosecution (Ihugba 2014) It is an Act of the National Assembly and is within the Attorney Generalrsquos jurisdiction to prosecute The NEITI Act thus uses a soft law characterized by voluntary directives (Ihugba 2014) Consequently as of yet no oil company has been prosecuted or had their license suspended by the NEITI based on an NEITI recommendation (Ihugba 2014) This should show that beyond transparency there isnrsquot much that can be achieved without accountability in the extractive sector The 10 year delay of the Petroleum Industry Governance Bill (PIGB) which has already passed through the National Assembly and is said to be a step into the right direction for combating corruption is a good example The PIGB mostly seeks to empower institutions to tackle bad governance that leads to inefficiency ineffectiveness and rent-seeking in the management and distribution of oil revenues In addition the PIGB also aims to overcome inequity secrecy and corruption in the oil sector (Olawoyin 2018)

This delay exposes the lack of political will to reform the oil industry in Nigeria by not properly institutionalizing the EITI and by not putting mechanisms in place to identify and deal with corruption risk spots as envisioned (de Montclos 2014) For example in the absence of a clear governance framework Nigeria lost USD 104 billion and Naira 3787 billion through under-remittances inefficiencies and theft in the oil and gas sector However this still does not mean that the PIGB is perfect because it is criticized for failing to increase oil industry transparency to the fullest extent in drawing up oil contracts leaving some room for corruption (Oni 2019)

The lack of accountability in Nigeriarsquos institutional framework is also revealed by Auwal Musa the executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and ChairNational Contact of Transparency International (Nigeria) in an interview with Kingsley Jeremiah Musa argues that there have been many indictments on NNPC dealings without any consequences making the entity a ldquorepublic within a republicrdquo mostly unaccountable to its citizens (Musa 2019) This is why the Nigerian oil sector needs more than transparency it needs strategic measures of accountability and this is not offered by the EITI This case reflects the weakness in the EITIrsquos soft law approach in countries which are cursed by institutions

Whatrsquos the point A Conclusion

The soft law approach has yielded limited outcomes especially in relation to remedying corporate impunity and corruption and this was also expressed by Nigerian extractive stakeholders at a retreat in held in August 2018 at Kuramo Waters Lagos The major concern expressed by stakeholders was that the NEITI Act does not empower it to enforce compliance and prosecute offenders and only focuses on audits and dissemination of reports and this limits its effectiveness and seriousness it is accorded by extractive institutions (Trust Africa 2018) A tracing of the history of remedial issues also revealed that since the NEITIrsquos last report in 2015 many have been side-lined in subsequent reports (e360 2018) It was then proposed that there is an urgent need to review and amend the law but as argued cursed institutions do not easily welcome change especially when it is incremental in nature such as in the form of transparency - basically a ldquogo big or go homerdquo situation

Furthermore there is no shortage of well-crafted laws in Nigeria the problem lies in implementing the laws (Asgill 2012) Kolstad and Wiig (2009) argue that enacting more laws and increasing the capacity of patrimonial governments will not lead to the achievement of impartiality enhancing institutions and that doing so will make patrimonial governments such as Nigeria become more powerful Instead it is more important to ensure that those who benefit from opaque transparency are punished and the EITIrsquos weakness is its focus on transparency alone

The re-elected President Muhammadu Buhari has been given a second chance to take on the vested interested in politics and the oil sector that drive corruption and the NEITI is good place to begin but not unless the transparency championed by the NEITI is met with accountability The country is on the right track in deepening transparency reforms through initiatives such as the EITI For example it is through the NSGW of the NEITI that the recovery of USD 24 million for the Federal Government of Nigeria was achieved in 2017 In addition there is now awareness of environmental impacts of oil which now also include payments to citizens and transparent royalty negotiations for communities (Abutudu amp Garuba 2011 EITI 2017) Furthermore an NEITI associated online extractive transparency platform Extractive360com was also launched

5

Rosa Luxemburg Stiftung

in Abuja and these are good signs of a deepening transparency culture (Jeremiah 2019)

It thus cannot be denied that the EITI has made positive strides in exposing corruption through revenue disclosures but this is not enough for combating corruption in the extractive sector In the next EITI conference which occurs every three years the EITI needs to be explicit about how it can combat corruption and be honest about the possible impact it can have in countries that have weak institutional and governance frameworks especially in relation to remedial issues for communities

It can begin by configuring its own structures in this case the MSI by providing minimum procedural guidelines for the effective and inclusive participation of civil society to counter-balance the power of politicians and companies in the determination of taxes royalties and shaping extractive polities (Oshionebo 2018) The conversation also needs to shift away from the focus on disclosure to include accountability by establishing stronger linkages with accountability institutions to encourage and facilitate the move away from its current soft law approach and become more authoritative in the sanctioning of companies and government officials (Fox 2010) The NEITI example exposes the weaknesses of voluntary guidelines in a context of bad governance Therefore a more binding international instrument that will address corruption and corporate impunity outside of a countryrsquos institutions may be necessary (Kanzleiter amp Becker 2018)

Sikho Luthango is a Programme Manager for Labour Relations and Economy at the Rosa Luxemburg Stiftung Southern African office based in Johannesburg She holds a Masters of Philosophy in Public Policy and Administration (with Distinction) from the University of Cape Town South Africa Her research interests include Mineral Resource Governance Land Governance and Climate Justice from an eco-feminist perspective

Other publications include

httprosaluxcozapublicationmalendu-constitutional-court-judgement-right-to-say-no-to-mining-xolobeni

httprosaluxcozapublicationa-feminist-agenda-is-needed-in-the-labour-movement-and-the-left

References

Acemoglu D Johnson S amp Robinson J (2001) An African Success Story Botswana Available httpseconomicsmitedufiles284

Adebayo B ldquoNigeria overtakes India in extreme poverty rankingrdquo (2018 June 26) CNN News Retrieved httpseditioncnncom20180626africanigeria-overtakes-india-extreme-poverty-intlindexhtml

Alstine J (2014) Transparency in resource governance the pitfalls and potential of ldquoNew Oilrdquo in Sub-Saharan Africa Global Environmental Politics 14(1) 20-39

Asgill S (2012) The Nigerian Extractive Industries Transparency Initiative (NEITI) Tool for Conflict Resolution in the Niger Delta or Arena of Contested Politics Critical African Studies 4(7) 4-57 doi 10108021681392201210597798

de Montclos MP (2014) The politics and crisis of the Petroleum Industry Bill in Nigeria Journal of Modern African Studies 52 ( 3) 403-424 doi101017Soo22278X1400024X

E360 (2018) NEITI Reports How Poor Implementation Of Remediation Erodes Gains From Oil Sector Extractive 360 Available httpsextractive360com20181030neiti-reports-how-poor-implementation-of-remediation-erodes-gains-from-oil-sector

Ejiogu A Ejiogu C amp Ambituuni A (2018) The dark side of transparency does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control British Accounting Review 1-17

Extractive Industries Transparency Initiative (2015) EITI Secretariat Retrieved from httpseitiorgdocumentstandarddownload

Extractive Industries Transparency Initiative (2017) EITI Secretariat Retrieved from httpseitiorgnewsazerbaijan-withdraws-from-eiti

Extractive Industry Transparency Initiative (2017) Nigeria EITI recognizes progress in addressing natural resource governance Available httpseitiorgnewsnigeria-eiti-recognises-progress-in-addressing-natural-resource-governance

Extractive Industry Transparency Initiative EITI (2019c) The EITI Standard 2019 The Global Standard for the Good Governance of Oil Gas and Mineral Resources Available httpseitiorgnewseiti launches-2019-eiti-standard

Extractive Industry Transparency Initiative (2019a) EITI Global Conference 2019 Available httpseitiorgeventeiti-global-conference-2019

Extractive Industry Transparency Initiative (2019b) EITI Launches 2019 EITI Standard Available httpseitiorgnewseiti-launches-2019-eiti-standard

6

Rosa Luxemburg Stiftung

in Abuja and these are good signs of a deepening transparency culture (Jeremiah 2019)

It thus cannot be denied that the EITI has made positive strides in exposing corruption through revenue disclosures but this is not enough for combating corruption in the extractive sector In the next EITI conference which occurs every three years the EITI needs to be explicit about how it can combat corruption and be honest about the possible impact it can have in countries that have weak institutional and governance frameworks especially in relation to remedial issues for communities

It can begin by configuring its own structures in this case the MSI by providing minimum procedural guidelines for the effective and inclusive participation of civil society to counter-balance the power of politicians and companies in the determination of taxes royalties and shaping extractive polities (Oshionebo 2018) The conversation also needs to shift away from the focus on disclosure to include accountability by establishing stronger linkages with accountability institutions to encourage and facilitate the move away from its current soft law approach and become more authoritative in the sanctioning of companies and government officials (Fox 2010) The NEITI example exposes the weaknesses of voluntary guidelines in a context of bad governance Therefore a more binding international instrument that will address corruption and corporate impunity outside of a countryrsquos institutions may be necessary (Kanzleiter amp Becker 2018)

Sikho Luthango is a Programme Manager for Labour Relations and Economy at the Rosa Luxemburg Stiftung Southern African office based in Johannesburg She holds a Masters of Philosophy in Public Policy and Administration (with Distinction) from the University of Cape Town South Africa Her research interests include Mineral Resource Governance Land Governance and Climate Justice from an eco-feminist perspective

Other publications include

httprosaluxcozapublicationmalendu-constitutional-court-judgement-right-to-say-no-to-mining-xolobeni

httprosaluxcozapublicationa-feminist-agenda-is-needed-in-the-labour-movement-and-the-left

References

Acemoglu D Johnson S amp Robinson J (2001) An African Success Story Botswana Available httpseconomicsmitedufiles284

Adebayo B ldquoNigeria overtakes India in extreme poverty rankingrdquo (2018 June 26) CNN News Retrieved httpseditioncnncom20180626africanigeria-overtakes-india-extreme-poverty-intlindexhtml

Alstine J (2014) Transparency in resource governance the pitfalls and potential of ldquoNew Oilrdquo in Sub-Saharan Africa Global Environmental Politics 14(1) 20-39

Asgill S (2012) The Nigerian Extractive Industries Transparency Initiative (NEITI) Tool for Conflict Resolution in the Niger Delta or Arena of Contested Politics Critical African Studies 4(7) 4-57 doi 10108021681392201210597798

de Montclos MP (2014) The politics and crisis of the Petroleum Industry Bill in Nigeria Journal of Modern African Studies 52 ( 3) 403-424 doi101017Soo22278X1400024X

E360 (2018) NEITI Reports How Poor Implementation Of Remediation Erodes Gains From Oil Sector Extractive 360 Available httpsextractive360com20181030neiti-reports-how-poor-implementation-of-remediation-erodes-gains-from-oil-sector

Ejiogu A Ejiogu C amp Ambituuni A (2018) The dark side of transparency does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control British Accounting Review 1-17

Extractive Industries Transparency Initiative (2015) EITI Secretariat Retrieved from httpseitiorgdocumentstandarddownload

Extractive Industries Transparency Initiative (2017) EITI Secretariat Retrieved from httpseitiorgnewsazerbaijan-withdraws-from-eiti

Extractive Industry Transparency Initiative (2017) Nigeria EITI recognizes progress in addressing natural resource governance Available httpseitiorgnewsnigeria-eiti-recognises-progress-in-addressing-natural-resource-governance

Extractive Industry Transparency Initiative EITI (2019c) The EITI Standard 2019 The Global Standard for the Good Governance of Oil Gas and Mineral Resources Available httpseitiorgnewseiti launches-2019-eiti-standard

Extractive Industry Transparency Initiative (2019a) EITI Global Conference 2019 Available httpseitiorgeventeiti-global-conference-2019

Extractive Industry Transparency Initiative (2019b) EITI Launches 2019 EITI Standard Available httpseitiorgnewseiti-launches-2019-eiti-standard

6

Rosa Luxemburg Stiftung

Fox J (2010) The Uncertain relationship between transparency and accountability Development in Practice17(4-5) 663-671 doi 10108009614520701469955

Garuba DS amp Ikubaje JG (2010) The Nigeria Extractive Industries Transparency Initiative and Publish What You Pay Nigeria In McNeil M amp Malena C (Eds) Demanding good governance Lessons from social accountability initiatives in Africa The World Bank Washington DC

Goetz AM amp Jenkins R (2001) Hybrid forms of accountability citizen engagement in institutions of public-sector oversight in India Public Management Review 3(3) 363-383 doi 10108014616670110051957

Ihugba BU (2014) A critical analysis of the auditing and reporting functions of Nigeria Extractive Industry Transparency Initiative (NEITI) Act 2007 lessons for EITI countries Journal of International Trade Law and Policy 13(3) 232-245

Jeremiah K (2019) Nigeria Stakeholders Advocate Accountability Transparency in Extractive Industries The Guardian Available httpsallafricacomstories201904030562html

Kanzleiter B amp Becker B (2018) The right to have rights In Grimm M Krameritsch J amp Becker B (Eds) Business as usual after Marikana Corporate Power and Human Rights Jacana Media South Africa Johannesburg 394-416

Katsouris C (2019) Nigeria Buharirsquos Second Chance At Oil and Gas Reform in Nigeria Catham House Available httpsallafricacomstories201904050124html

Kolstad I amp Wiig A (2009) A Itrsquos the rents stupid The political economy of the resource curse Energy Policy 37 5317ndash5325

Lindstedt C amp Naurin D (2010) Transparency is not enough making transparency effective in reducing corruption International Political Science Review 31(3) 301ndash322 doi 1011770192512110377602

Mainhardt-Gibbs H (2010) Survey of civil Society participation in the Extractive Industries Transparency Initiative and the role of the World Bank Bank Information Center Retrieved from httpseitiorgdocumentsurvey-of-civil-society-participation-in-eiti-role-of-world-bank

McFerson HM (2010) Extractive Industries and African Democracy Can the lsquolsquoResource Cursersquorsquo be Exorcised International Studies Perspectives 11 335ndash353

McGee R amp Gaventa J (2010) Review of impact and effectiveness

of transparency and accountability initiatives Retrieved from wwwtransparency-initiativeorgwp-contentuploadssynthesis_report_final1pdf

Mehlum H Moene K amp Torvik R (2006a) Institutions and the resource curse The Economic Journal 116(508) 1-20

Musa AI (2019) Interview with Jeremiah Kingsley for the Sunday Magazine Sunday Magazine 9 June Available httpsguardianngsunday-magazinemusa-government-aiding-illicit-financial-flows

Olawoyin O (2018) Nigeria Petroleum Industry Bill Lessons Nigeria Can Learn From Ghana Premium Times Available httpsallafricacomstories201809040014html

Oni D (2019) Eni and Shell face new Nigeria action Available httpswwwpetroleum economistcomarticlespolitics-economicsafrica2019eni-and-shell-face-new-nigeria-action

Robinson JA Torvik R amp Verdier T (2006) Political foundations of the resource curse Political Journal of Development Economics79 447ndash 468

Transparency International (2018) Corruption Perception Index 2018 Available httpswwwtransparencyorgcpi2018

Trust Africa (2018) Trust Africa Supports The Nigeria Extractive Industries Transparency Initiativersquos (NEITI) Retreat For Legislators On Remedial Issues Available httpwwwtrustafricaorgenresourcenewsitem3373-trustafrica-supports-the-nigeria-extractive-industries-transparency-initiative-s-neiti-retreat-for-legislators-on-remedial-issues

United Nations Development Programme (2018) Human Development Reports Retrieved httphdrundporgencountriesprofilesNGA

World Poverty Clock (2019) World Poverty Clock Available httpsworldpovertyioindexhtml

7

ROSA LUXEMBURG STIFTUNG JOHANNESBURG

237 Jan Smuts Avenue Parktown North 2193 | PO Box 52063 Saxonwold 2132 | Telephone +27 (0) 11 447 52224 | Website wwwrosaluxcoza

The views and opinions expressed by the author do not necessarily represent those of the Rosa Luxemburg Stiftung