Introduction

The Nigeria Extractive Industries Transparency Initiative (NEITI) (pdf — 388 Ko) is the Nigerian subset of a global initiative aimed at following due process and achieving transparency in payments by Extractive Industries (EI) to governments and government linked entities.

In furtherance of this noble initiative, President Olusegun Obasanjo, on February 20 2004, launched the Nigeria Extractive Industries Transparency Initiative (hereinafter "NEITI"), under the leadership and control of the National Stakeholders Working Group (NSWG). NSWG is composed of 28 individuals made up of; Civil Society (2); Media (1); Government (14); Indigenous and Multi-National companies (3); the Organised Private Sector (4); National Assembly (2) and State's (Regional) Houses of Assembly (2) members.

On the 15th of March 2005, the NSWG engaged the Hart Group, through an international competitive tender, to conduct comprehensive and independent Financial, Physical and Process Audits of Nigeria's Oil & Gas Industry. The audit was in three elements:

1. Financial Audit; with the outcome being a reconciled picture that shows what has been paid, how much and to whom?

2. Physical Audit; with the outcome being a reconciled figure and a coherent map that gives a complete picture of the amount of oil or gas that has been produced, lifted, lost, refined or exported in a given period under review.

3. Process Audit; a critical examination of crucial extractive industry processes like levels and justification of Capital Expenditure proposals; checks and balances in importation of products; comparative analysis, benchmarking and recommendation for improvements.

Audit Program: Status

The Hart Group presented an Interim Financial Audit report to the NEITI Secretariat on the 31st of December 2005. Thereafter, NEITI presented the report to the public on the 12th of January 2006 followed by an International High Level Consultative Round table.

On the 17th of January 2006, NEITI presented a 2nd Financial Audit Interim Report and an Interim Physical Audit Report which were both subjected to Roundtable discussions. The public presentation of the reports coincided with the Abuja International Advisory Group (IAG) meeting and the NEITI 2nd Year anniversary.

The Final Financial, Physical and Process Audit Reports were presented to the public on the 11th of April 2006 followed by the High Level Consultative Roundtable discussions.

On the 3rd of May 2006, the NEITI Secretariat presented the Final Audit Reports to the Federal Executive Council chaired by Mr. President, highlighting some differences. The detailed findings are available on NEITI's website www.neiti.org.

The President-in-Council called for further investigation and resolution of these differences by the 30th of June 2006. Following this request, NEITI Secretariat held an executive remediation strategy implementation meeting with the Hart Group and covered entities on the 11th of May 2006.

Revised final NEITI Audit reports, incorporating the resolution of all discrepancies is expected to be made available to the public before the end of the year.

From 1999 to 2004, the Federal Government through its agencies/parastatals received from Elf Petroleum Nigeria Limited, taxes amounting to US$3.717million. These figures have been reconciled and signed off with NEITI. Please refer to the table below for details.

In addition, to further consolidate on the gains of the EITI process in Nigeria, the Nigerian National Assembly is presently examining the "Nigeria Extractive Industries Transparency Initiative Bill 2004" which it hopes to pass into law before the exit of the current Administration by May 2007.