A critical analysis of the auditing and reporting functions of Nigeria Extractive Industry Transparency Initiative (NEITI) Act 2007

This thesis is based on an investigation of the legal aspects of the management of petroleum revenue in Ghana in order to promote sustainability and thereby avoid the replication of the resource curse syndrome. The Parliament passed the laws for the regulation and management of petroleum revenue, the Petroleum Revenue Management Act (PRMA) 2011 and Petroleum (Exploration and Production) Act 2016. The thesis argues that the current state of the law, and regulatory environment have far-reaching impacts on the promotion of transparency, accountability and sustainability in the socially beneficial management of petroleum revenue. Some inherent challenges that may inhibit the management of petroleum revenue include possible non-prosecution of mismanagement of oil revenue because of the powers of the Attorney General to exercise nolle prosequi. There have also been considerable infractions such as not fulfilling auditing and reporting requirements, non-remission of revenues into the appropriate funds or accounts, and failure of sufficient engagement in impactful investments in priority areas stipulated in the PRMA. The research further analyses how the best practices as contained in the Extractive Industry Transparency Initiative standards and Generally Accepted Principles and Practices for Sovereign Wealth Funds can be adapted in implementing the PRMA. It recommends the establishment of the Ghana Extractive Industry Transparency Initiative as a corporate body with powers to promote transparency in petroleum revenue. It further proposes the establishment of the Sovereign Wealth Fund as a specialised corporate entity to manage the funds. It recommends the earmarking of certain percentage of petroleum revenue for the promotion of developmental projects in host communities. It concludes that there is a need to strengthen the legal regime for the management of petroleum revenue through enabling environment for sustainability, transparency and accountability and checking against infractions in the legal regime in order to avoid the resource curse.

The quest for transparency spans countries, policymakers, NGOs, and industries.Transparency can be defined as disclosing to the public, in a timely and reliable manner, information that governments and/or corporations previously con-sidered confidential. Recent examples include the Carbon Disclosure Project,the Aarhus convention on access to environmental information, the Cartagena Protocol on Biosafety and its provisions on global genetically modified organism flows, and a wide array of financial information (e.g., in the G8 declaration of Lough Erne in 2013). Stemming from the “right to know,”advocates from NGOs and development organizations view transparency as a cure for corruption and a benefit for democratic accountability; transparency should lead to stakeholder empowerment and improve legitimacy, learning, investment certainty, and better governance. In this article I look at the efforts to establish financial transparency as a norm for the extractive sector. This sector is important because its activities are accompanied by a high level of corruption, especially in resource-rich developing countries. I show that those efforts are not enough and there is good evidence to demand more. I argue that such transparency norms should be extended to environmental pressures in order to facilitate progress on the circular economy and resource efficiency. My conclusions point at synergies between knowledge generation across financial and environmental information.

The article argues that the current state of the law and regulatory environment have far-reaching impacts on the promotion of transparency and accountability in the socially beneficial management of petroleum revenue. The Extractive Industries Transparency Initiative (EITI) Standards are targeted at entrenching transparency and accountability and the gains that they portend. Ghana had long subscribed to the implementation of the EITI standards. The country has gained the status of an EITI-compliant country. It has established the Ghana Extractive Industry Transparency Initiative (GHEITI) in compliance with the EITI requirements. The article argues it is pertinent to examine how well it has implemented the standards in the petroleum industry. According to the article, benchmarking and comparing these principles in the areas of transparency, accountability and prudent management of petroleum revenue, which have been developed over time through best practices, could offer a viable option in Ghana's bid to avoid the resource curse. The article recommends the establishment of the GHEITI as a corporate body with powers to promote transparency in petroleum revenue. It is an international framework mechanism that is a notable instrument for accountability and transparency. It concludes that there is a need to strengthen the legal regime for the management of petroleum revenue through enabling the environment for transparency, accountability and checking against infractions in the legal regime in order to avoid the resource curse.

This article assesses the Extractive Industries Transparency Initiative (EITI), a public‐private partnership designed to help resource‐rich countries avoid corruption in the management of extractive industry revenues. Thirty‐two nations have adopted EITI, and the numbers of implementing nations are rapidly increasing. However, the EITI partnership is not as effective as it could be for three reasons. First, the partners (governments, civil society, and business) have different visions of EITI. Second, some implementing governments have not allowed civil society to participate fully in the process or have not consistently provided civil society with the information they need to hold their governments to account. In this regard it is a limited partnership. Third, in many participating countries, the public and legislators may not be aware of EITI. Thus, although public participation is essential to the success and potential positive spillovers of EITI, the public is essentially a silent partner, limiting the ability of the EITI to succeed as a counterweight to corruption. Copyright © 2011 John Wiley & Sons, Ltd.

This chapter critically examines the challenges involved in implementing the Extractive Industries Transparency Initiative (EITI) in sub-Saharan Africa. The EITI is a policy mechanism being supported by donors and Western governments as a key to facilitating economic improvement in resource-rich developing countries. Proponents of the EITI argue that poor governance and a lack of transparency are the main reasons why resource-rich sub-Saharan Africa is underperforming economically, and that implementation of the EITI, with its foundation of “good governance”, will help address these problems. However, as the chapter illustrates, this task is by no means straightforward: the EITI is not necessarily a blueprint for good governance in the region’s resource-rich countries. Although it is acknowledged that the EITI is a policy mechanism that could ultimately prove effective in generating significant institutional change in host African countries, on its own it is incapable of facilitating reduced corruption, prudent management of mineral and/or petroleum revenues, or mobilizing citizens to hold corrupt government officials accountable for embezzling profits from extractive industry operations.

In this paper, I assess the EITI a multisectoral partnership designed to help resource rich countries avoid corruption in the management of extractive industry revenues. I hypothesize that the EITI partnership is not as effective as it could be for three reasons. First, the partners (governments, civil society, and business) have different visions of EITI. Second, some implementing governments have not allowed civil society to participate fully in the process or have not consistently provided civil society with the information they need to hold their governments to account. In this regard it is a limited partnership. Third, in many participating countries, the public and legislators may not be aware of EITI. Thus, although public participation is essential to the success and potential positive spillovers of EITI, the public is essentially a silent partner, limiting the ability of the EITI to succeed as a counterweight to corruption.

Corruption and mismanagement of the extractive revenues have recently become burning issues in the extractive industry, as prevailing levels of poverty and underdevelopment in many resource-rich countries are largely attributed to lack of transparency and accountability in revenue management. Ensuring transparency and accountability in the management of extractive revenues requires concerted efforts of all stakeholders in the extractive industry. In view of the overall significance of transparency and accountability mechanisms in combating corruption in the extractive industry, there is a discernible trend towards adoption of contractual, legal policy measures at a national level of many resource-rich developing countries and economies in transition. At the international level, the stakeholder and civil society movement of developing a soft law norm also indicates an emerging consensus on the importance of transparency in the management of extractive industries.

This article considers the so-called resource curse plaguing fragile states with abundant extractive resources. It critically assesses the assumption that nonstate actors such as extractive industries, civil society organizations, and investors have the ability to exert effective pressure on - and can significantly assist - governments in promoting transparency, accountability, and sound management of extractive revenues. As a contribution to this under-researched area, the role of economic actors (extractive industries, investors, financial institutions, consumers) and the effect of market incentives and regulation is examined.

Nigeria has been acclaimed as a model for the implementation of the principles established under the Extractive Industries Transparency Initiative (EITI). The goal of the principles is to promote accountability and effective management of resource revenues, which in turn would result in improvements in public welfare and better developmental outcomes, such as a more equitable distribution of wealth, improved socio-economic conditions, and poverty alleviation. However, a look at the socioeconomic condition in Nigeria raises questions regarding the impact of the achievements of NEITI on public welfare. Corruption remains endemic in the oil and gas industry, the sector on which the implementation of the EITI principles has been almost entirely focused. This article analyzes Nigeria’s experience with the implementation of NEITI with a view to theorizing about the reasons behind the lack of, or minimal, improvements in the lives of ordinary Nigerians as well as the persistence of corruption despite Nigeria’s acclaimed achievements in EITI implementation. The article argues that while EITI is an important driver of economic progress in Nigeria, it should not be viewed as enough to overcome the broader problems hindering improvements in public welfare. Other factors are necessary to translate the gains of EITI into visible public welfare improvements. The article identifies those factors and analyzes how they hold back the gains of EITI in Nigeria as well as its implications for emerging extractive countries signing or considering signing up with EITI.

En este artículo, se exploran los elementos condicionantes de las dinámicas económicas y políticas en torno a la extracción de hidrocarburos en dos países del golfo de Guinea: Ghana y GuineaEcuatorial. Para ello, atenderemos a las similitudes y diferencias entre ambos casos, a partir de los elementos teóricos señalados por el paradigma de la maldición de los recursos, perspectiva que utilizaremos de manera crítica. Las diferencias en relación con la importancia cuantitativa de los recursos petroleros respecto del total del ingreso nacional, el desarrollo regulatorio, la transparenciaen la gestión de las rentas petroleras y la calidad institucional son algunas de las divergencias más importantes. No obstante, estos casos también presentan importantes similitudes; por ejemplo, enrelación con el escaso rol que desempeña la especialización petrolera para favorecer la inserción regional, así como el gran reto de articular encadenamientos productivos entre la industria extractiva y el entramado empresarial local.

The Extractive Industry Transparency Initiative (EITI) is the leading global transparency standard for the extractive industry. It aims to improve governance standards in the extractive industry by providing a public platform for information sharing and multi-stakeholder dialogue. However, the success of the initiative has been brought into question by numerous scholars. This paper aims to shed new light on this work by presenting a unique analytical framework. The framework hypothesises that improved transparency, through the EITI, can lead to improved extractive industry governance: increased accountability, reduced corruption and increased trust. However, this improvement of governance can only take place when combined with three scope conditions: 1) transparency condition, 2) publicity condition, and 3) accountability condition. The paper applies this framework to the single case study of Zambia, and finds that the EITI has failed to meaningfully improve these three governance outcomes in the extractive industry in Zambia. The paper argues that the reason for this is that none of the three necessary scope conditions are sufficiently present. The paper advocates for policymakers to support the growth of these three conditions in contexts of poor extractive industry governance, to ensure transparency standards have meaningful impact.

The global promotion of transparency for the extractive sector—oil, gas and mining—has become increasingly accepted as an appropriate solution to weaknesses in governance in resource-rich developing nations. Proponents argue that if extractive firms disclose publicly their payments to governments, citizens will be able to hold governments accountable. This will improve the management of natural resources, reduce corruption, and mitigate conflict. These beliefs are embodied in the Extractive Industries Transparency Initiative (EITI), initially a unilateral effort launched by Tony Blair that has evolved into a global program. Why has transparency become the solution of choice for managing natural resource wealth, and how has the EITI evolved? This article argues that intersecting transnational networks with complementary global norms facilitated construction of transparency as a solution for management of resource revenues. This in turn promoted the gradual expansion of the institutional architecture, membership, and scope of the EITI despite significant political barriers.

The Extractive Industries Transparency Initiative (EITI) sets standards to improve the governance of extractive industries and thereby stimulate sustainable development. Member countries implement this standard through a multi‐stakeholder group (MSG) which facilitates deliberation between government, civil society and business representatives. This deliberation could enable what we call ‘social‐ecological reflexivity’: the ability to reconfigure oneself in response to critical reflection on one's performance in governing not only the economic, but also the social and environmental dimensions of sustainable development. Such reflexivity is crucial for countries to not only comply with the EITI standard, but also improve governance quality to address the social and environmental impacts from extractive industries. Drawing on a fully operationalised conceptual framework, we analyse social‐ecological reflexivity in the implementation of the EITI in Indonesia, a country that is heavily impacted by extractive industries. We draw on content analysis of the MSG meeting minutes and EITI‐Indonesia reports between 2012 and 2019. We show that the EITI‐Indonesia has not (yet) generated deep social‐ecological reflexivity. First, there is limited recognition and rethinking of extractive industry governance and no real response in the form of governance reforms. Second, there are even signs of what we call ‘anti‐reflexivity’, whereby members of the multi‐stakeholder group ignore and resist public debates around the negative impacts from extractive industries. In analysing the different components and degrees of reflexivity around the EITI‐Indonesia, the article provides vital insights into the (study of) conditions under which global norms such as the EITI find meaning in and affect specific contexts.

Co-development of East African regional water scenarios for 2050

The Extractive Industries Transparency Initiative (EITI) is a global standard that aims to improve governance quality in the extractive industries sector, particularly through enhanced transparency, participation and accountability. This article analyses to what extent and how the EITI improves governance quality and thereby addresses the environmental and social impacts from extractive industries in Indonesia, a country with pronounced conflicts over natural resources. Drawing on semi-structured interviews and analyses of EITI meeting minutes and reports, we conclude that the implementation of the EITI in Indonesia helped to strengthen civil society participation and empowerment to engage in extractive industry governance, both within and beyond the EITI-Indonesia multi-stakeholder group. The EITI falls short, however, in enhancing transparency and accountability due to important limitations in the information disclosure and misalignment between the country's decentralised governance of extractive industries and the EITI's national implementation. This also means that environmental and social impacts have not become subject to serious debates within the multi-stakeholder group. We lay out some broader policy and research implications and argue that both policymakers and scholars should look beyond the narrow scope of the EITI requirements and consider the EITI's success in light of its ability to foster wider governance reforms.