14 companies make NEITI’s 100% compliance list

…Agency appoints auditors

From Uche Usim, Abuja

The Nigeria Extractive Industries Transparency Initiative (NEITI) has expressed satisfaction as 14 companies and agencies have met a compliance level of 100 per cent in its ongoing independent audit of the oil and gas industry covering 2015.  

According to NEITI’s spokesman, Dr. Orji Ogbonnaya Orji, the 14 companies are Chevron Nigeria Ltd, Consolidated, Continental, Eroton, Esso Exploration, Mobil Producing Nigeria Unlimited and Niger Delta Petroleum Resources. 

Other oil companies within the 100 per cent compliance ranking include Nigeria Gas Company, Orient Energy, Star Deepwater Petroleum and Waltersmith Petroman. Remarkably, two government agencies, the Federal Inland Revenue Service (FIRS) and the Nigeria Content Development and Monitoring Board also recorded 100 per cent compliance in the ranking. 

According to him, five companies, namely, Shoreline, Statoil, Petrobas, Mid Western and ND Western, scored between 98 per cent to 94 per cent to book their respective places in the top compliance ranking category. 

“In the same direction, 20 companies scored between 80 per cent and 88 per cent, while 12 others recorded between 72 per cent and 75 per cent in an exercise industry experts have described as successful and innovative.

Orji said NEITI’s decision to carry out a compliance ranking for companies and relevant government agencies covered by NEITI process is to push the boundaries of implementation of EITI in Nigeria as provided for in the law and global standards.   

“The 2015 independent oil and gas audit by NEITI is set out to examine payments made by companies including taxes, royalties, rents, signature bonuses where applicable and receipts by relevant government agencies. The audit will also report on quantities of oil and gas produced, exported or imported. It will carry out validation of payments by companies against receipts by government agencies to determine if companies paid what they ought to pay and if government received what it should receive,” he explained. 

The compliance ranking report, Orji noted, further showed that only four companies representing 6 per cent, failed to make submissions before the deadline. Of these four companies, two made submissions after the ranking deadline had elapsed and therefore scored zero ranking, while two others failed to comply at all.  

“The criteria for the compliance ranking focused mainly on two major critical areas in the NEITI audit value chain. These are timeliness and completeness in submission of information and data requested by NEITI in the audit templates. While timeliness measured when the covered entities submitted the templates, the completeness considered how many of the applicable templates were submitted,” he said.

Orji quoted the Executive Secretary of NEITI, Mr. Waziri Adio, as saying that “we decided to rank companies and government agencies covered by the NEITI audit process so as to incentivise timely and complete compliance.”

Adio added: “Given that this is the first time we are doing this, we are very impressed with the compliance rate. We commend the high fliers and call for improvement from others. We want to see a situation where all the entities score 100 per cent possibly by next year.

“The data collection and voluntary submission of information and data in NEITI/EITI Audit process is a major step in the independent audit value chain. NEITI wishes to state that this exercise does not represent full compliance assessment with the audit process, as the audit is not yet completed.”

All entities will be further ranked in terms of their cooperation with the NEITI auditors, the accuracy of their data and level of reconciliation, among others.

“The process began on 2nd May 2017 when the audit templates were dispatched by NEITI to affected companies and relevant government agencies. This was followed by a workshop to enlighten all the companies and relevant government agencies on their roles in populating the audit templates. 

“At that workshop, the entities were duly informed of NEITI’s plan to rank them in terms of compliance. NEITI also published the company compliance ranking procedure and the deadline in the national dailies. The deadline was later moved from June 1st  to August 3rd 2017. This became necessary to enable more entities complete the templates and return same to NEITI. During the ranking exercise, 65 covered entities, made of up of 55 oil and gas companies and 10 relevant government agencies, participated. 

The exercise will equally review policies and procedure of revenue collection, report on cases of underpayments and under assessments. The audit process will weigh the financial, physical and process transactions during the period under review on the scale of transparency and accountability as required by the global EITI standard and provisions of NEITI Act.    

It is important to further clarify that all information and data submitted will still be subjected to further verification, validation and reconciliation by the independent auditor engaged by NEITI through painstaking international competitive bid process.

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