Initiatives aimed at ensuring transparency and accountability in the Nigerian Petroleum Industry : a critical appraisal of the Nigeria Extractive Industry Transparency Initiative (NEITI), the NEITI Act and the Petroleum Industry Governance Bill (PIGB)

• Author: Yolandi Meyer
• DOI: 10.10520/EJC-19c16160a6
• Date: 03 December 2019
• Published date: 03 December 2019
• Pages: 1-28
• Record Number: sapr1_v34_n1_a4

Article

Southern African Public Law

https://doi.org/10.25159/2522-6800/4761

https://upjournals.co.za/index.php/SAPL

ISSN 2219-6412 (Print) | 2522-6800 (Online)

Volume 34 | Number 1 | 2019 | #4761 | 28 pages

© Unisa Press 2019

Initiatives Aimed at Ensuring Transparency and

Accountability in the Nigerian Petroleum Industry: A

Critical Appraisal of the Nigeria Extractive Industry

Transparency Initiative (NEITI), the NEITI Act and

the Petroleum Industry Governance Bill (PIGB)

Yolandi Meyer

LLB LLM LLD (University of Pretoria)

Post-Doctoral Research Fellow, South African Research Chair in International Law,

University of Johannesburg

ymeyer8@gmail.com

Abstract

This article seeks to analyse initiatives that have aimed to increase the level of

transparency and accountability in the petroleum sector in Nigeria during the

past few decades. Nigeria has vast deposits of natural-resource wealth; however,

harvesting these resources in order to provide an optimal financial return has

often been challenging. Furthermore, the financial gains have not always

translated into an improved socio-economic standing of the country’s citizens.

It is argued that the main reasons for this are mismanagement of natural-

resource wealth and a lack of transparency and accountability in the petroleum

sector. This article discusses recent initiatives that aim to deal with these issues,

namely: the Extractive Industries Transparency Initiative (EITI), specifically

the Nigerian Extractive Industries Transparency Initiative (NEITI), the NEITI

Act and the Petroleum Industry Governance Bill (PIGB). The article examines

whether these initiatives can contribute to a more transparent and accountable

petroleum sector and whether they can ultimately translate into objectifiable

results and improve the overall socio-economic situation in Nigeria.

Keywords: Nigerian Extractive Industries Transparency Initiative; Extractive

Industries Transparency Initiative; NEITI Act; Nigeria; Petroleum Industry

Governance Bill

2

Introduction

1

The situation in Africa regarding the extractive industries sector has become an issue of

grave concern during the past few decades. The continent has always boasted one of the

world’s largest concentrations of natural resources. Industry has taken notice of this

abundance of natural resources, as is evident from the large number of corporations

interested in investing on the continent.

2

With the independence of many African states

during and after the 1960s, resource-rich states such as Nigeria have been very

successful economically during certain periods of prosperity. In addition, despite the

economic crises of the 1970s and 2008, there is still a great demand for raw natural

resources from the African continent.

3

The problem, however, is that exporting African states often have weak regulatory

systems and high levels of corruption, and this leads to extensive social abuses and the

over-exploitation of resources.

4

Claims against multinationals in cases such as Wiwa v

Royal Dutch Petroleum

5

illustrate some of the potentially negative impacts, in terms

both of the environment and of human rights, that are often associated with the activities

of corporations operating in the extractive industry sector in Africa. There has been

conflict over natural-resource management in Nigeria since oil in large quantities was

discovered in the country in 1956. According to Nwapi, ‘… there has hardly been a

sorer spot in Nigeria’s polity than how to develop and manage the resources.’

6

1

This work is based on research supported by the National Research Foundation of South Africa

(Grant Number 85104).

2

Darryl Linington, ‘Africa Predicted to be the World’s Second-fastest Growing Region in 2020’ (IT

News Africa, 30 October 2018) <http://www.itnewsafrica.com/2018/10/africa-predicted-to-be-the-

worlds-second-fastest-growing-region-in-2020/> accessed 30 October 2018.

3

Raf Custers and Ken Matthysen, ‘Africa’s Natural Resources in a Global Context’ (IPIS Research

Paper August 2009) <www.Ipisresearch.be/att/20090812_Natural_Resources.pdf> accessed 11 April

2014.

4

Some examples of African legislation dealing with resource extraction include: Ghana’s Petroleum

Revenue Management Act (2011), Chad’s Petroleum Revenue Management Act (1999), Tanzania’s

Oil and Gas Revenues Management Act (2015), Cameroon’s Petroleum Code (1999); DRC’s Decree

no 16/010 (2016); Nigeria’ Petroleum Act (2004) and the Constitution of Nigeria (1999) which

provides that the Federal government controls all oil deposits.

5

In Wiwa v Royal Dutch Petroleum, Royal Dutch Petroleum was sued in a US court in 1996 for its

complicity with the Nigerian military in committing various human rights violations against the

Ogoni people of Nigeria. These atrocities included torture and the execution of protestors. Among

the victims was Ken Saro-Wiwa, an internationally recognised activist and writer. The surviving

family members of the victims brought the claims against Shell, and after several years of litigation,

the parties reached a settlement in 2009, on the eve of the trial, of US$15.5 million, payment of some

of the plaintiffs’ legal fees, and the establishment of a trust to benefit the Ogoni people. See Wiwa v

Royal Dutch Petroleum Co, No 96 Civ 8386 (KMW) (HBP), 1998 US Dist LEXIS 23064 (SDNY

Sept 25, 1998).

6

Chilenye Nwapi, ‘A Legislative Proposal for Public Participation in Oil and Gas Decision-Making in

Nigeria’ (2010) 54(2) Journal of African Law 184; see also United Nations Development Programme

(UNDP), ‘Niger Delta Human Development Report’ (UNDP 2006) 3, which further discusses the