Transparency doesn’t guarantee accountability in extractive sectors, experts warn

Extractive industries
Extractive industries

Transparency and accountability frameworks for states and extractive industries will be the focus of a panel discussion at the Faculty of Environmental Studies (FES) Tuesday.

The panel, Rethinking the Government of Extraction: Critiquing Global Transparency Discourse in the Oil Sector, will share research and findings from an international conference held in July in Abuja, Nigeria. Panellists will discuss the issues Nov. 4, from 12:30 to 2pm, at 140 Health, Nursing and Environmental Studies Building, Keele campus.

Isaac Asume Osuoka
Isaac Asume Osuoka

Isaac Asume Osuoka, a postdoctoral fellow in the Faculty of Environmental Studies and former Canada Vanier Scholarship holder, convened the July conference along with Social Action Nigeria, Ike Okonta of the New Centre for Social Research in Nigeria, the Gulf of Guinea Citizens Network and Professor Anna Zalik of York’s FES.

On Tuesday, Osuoka will be joined by Augustina Adusah-Karikari of the Ghana Institute of Management and Public Administration, and Newton International Fellow at the University of Birmingham, in examining the implications of global transparency discourse in the oil and minerals sector. The panel will be chaired by Zalik. Participants at the July conference concluded that formal transparency frameworks, such as Extractive Industries Transparency Initiatives (EITI), offer inadequate and potentially distracting mechanisms to the broader pursuit of accountable and meaningful development, socio-economic justice and environmental protection.

From left, Isaac Asume Osuoka, Anna Zalik, Nnimmo Bassey, former chair of Friends of the Earth International and Right Livelihood award recipient, Sarah Bracking, Chidi Odinkalu,Humphrey Assisi Asobie and Faith Nwadishi
From left, Isaac Asume Osuoka, Anna Zalik, Nnimmo Bassey, former chair of Friends of the Earth International and Right Livelihood award recipient, Sarah Bracking, Chidi Odinkalu, Humphrey Assisi Asobie and Faith Nwadishi

The conference, Beyond Transparency: Oil and the Crisis of Democratic Governance in Nigeria and the Gulf of Guinea, focused on Nigerian domestic policies, especially the Nigerian Extractive Industries Transparency Initiative (NEITI), which was introduced in line with global transparency policy and practice in the extractive sector. In principle, transparency practice seeks to reverse negative impacts of export-commodity-dependence, in particular the looting of public revenues. Activists, too, hoped that if companies “publish what [they] pay,” citizens would be in a better position to hold their government to account. But participants at the conference were unanimous in declaring that current transparency practices were insufficient markers of sectoral transformation in the oil and gas industry, and rather must be concomitant with national development goals set through a regime of popular sovereignty.

Also, global- and national-level transparency instruments should thoroughly integrate global financial transactions, challenge corporate secrecy and incorporate environmental costs if they aim to meet the aspirations of citizens for accountability in the management of natural resources. Equally problematic, the oil and gas sectors of northern countries have not followed the principles for EITI compliance expected of Global South exporters. Canada is a supporter of the global EITI of which NEITI forms part, but the Canadian government has yet to implement EITI within Canada’s own domestic oil and gas industry.

In her keynote presentation, Professor Sarah Bracking of University of Manchester and the University of  KwaZulu-Natal pointed out that a major problem arising from internationalization of transparency discourse and the EITI is that it caused civil society to take the “eye off the ball.” This results from EITI addressing a small part of the problem at the country level, while transactions between firms, trade mispricing and offshore and transfer pricing are not incorporated. Bracking emphasized that the EITI covers neither international private sector corruption nor the use of offshore tax havens.

With respect to Nigeria and other countries of the Gulf of Guinea region, Osuoka underlined that “there has been poor accountability in the management of revenues accruing from the exploitation of natural resources in these countries.” While the NEITI was welcomed as a salutary measure to change things and indeed has been implemented rigorously in the Nigerian context, substantive change in the use of oil profits has not ensued. “The reports of NEITI and other bodies set up by government have exposed monumental infractions resulting in the dispossession of the public treasury. Also, the United Nations Environmental Program revealed through a study that the impacts of oil pollution in Ogoniland are much worse than previously imagined. But these revelations have not translated into improved government accountability,” says Osuoka. “The expectation was that via disclosures of government and company payments, the people would be in a better position to hold the government to account. If Nigeria is to be used as an example, then that positive outcome has not been achieved yet.”

Participants from Nigeria, including those closely involved with the implementation of the NEITI, agreed. Faith Nwadishi of Publish What You Pay Nigeria and international board member of the EITI indicated that although NEITI has made significant progress in collecting and making data available publicly and online regarding the Nigerian oil and gas sector, most of the recommendations of the NEITI audits have remained unimplemented.

Anna Zalik
Anna Zalik

Former chair of NEITI, Professor Humphrey Assisi Asobie, stated that contrary to achieving any reduction in poverty in Nigeria, evidence abounds that impoverishment has worsened since the establishment of NEITI. He and other speakers acknowledged that EITI has been operating on the basis of a double standard. The call for the Global South to implement EITI while significant northern countries remain non-compliant with EITI at home is an expression of colonial relations in international affairs and the interests of private capital, according to Zalik. “Although a range of non-governmental organizations and advocates have put considerable efforts into moving Canada toward EITI compliance and indeed more substantive disclosure, Canada’s oil, gas and mining sector seeks to retain corporate privacy protections and block demands for the disaggregated data required for substantive monitoring.”

More than 70 participants at the Abuja conference agreed that there is a need to link transparency to a more holistic approach to resource governance in which democracy, meaningful development and the role of communities in the management of resources would be central. To achieve these goals, popular forces must be revived to champion citizen-centred politics. The principles of a democratic state, including strong regulation of transnational corporations, as well as robust engagement of broader civil societies, scholars, media and other popular forces are required. In the case of meaningful extractive sector reform, civil society engagement should not be limited by dependency on donors.

The conference and Osuoka’s ongoing research are supported in part by a Social Sciences and Humanities Research Council of Canada Partnership Development Grant, Building Substantive Transparency, held jointly by Social Action, Nigeria and the New Centre for Social Research, Nigeria and the Faculty of Environmental Studies at York. The grant concerns the relationship between oil and gas sector transparency discourse and democratic social change in Nigeria, and other oil producers of the Gulf of Guinea and Canada.