The global Extractive Industries Transparency Initiative (EITI) and Open Ownership (OO) have set up a ground-breaking, cross-sector partnership with anchor funding from the BHP Foundation, to end the use of anonymous companies linked to corruption and mismanagement in the extractive sectors of Nigeria and other signatory countries.
The new initiative which is termed, ‘Opening Extractives,’ aims to make a dramatic and sustainable difference to the level of publicly-available information on the ownership of extractive companies in order to eliminate corrupt acts that can divert extractive industry revenue away from local communities.
By extension, it would strengthen the Beneficial Ownership framework which Nigeria has signed to publicly disclose the identities of owners of extractive operations in the country.
In choosing to adopt the new measure, the EITI explained that anonymous companies remain a major obstacle in the fight against money laundering and corruption.
It stated that they also enable corrupt and criminal actors, often with close political connections, to hide behind chains of companies registered in multiple jurisdictions.
With its expected boost to the Beneficial Ownership framework, the EITI a more systematic approach to the analysis and publication of beneficial ownership data could be progressed and extended.
“Publishing details of company ownership enables effective taxation and brings data to light that can be used to identify and address corruption. It can help build fairer markets, encourage responsible investment and manage business risk,” said the EITI in a statement containing information on the new measure.
It quoted the Chief Executive Officer of BHP Foundation, James Ensor to have said about the measure that: “Opening Extractives will ultimately improve the quality of life of millions of people in resource-rich countries.
“Natural resources are ultimately owned by the citizens of every country in which the resources industry operates. Beneficial ownership transparency is critical to ensuring the revenues generated by the natural resources industry provide maximum benefit to every single citizen.
“But to be successful it requires governments, industry and civil society to work together – which is why this initiative is so important.”
Similarly, Thom Townsend who is the Executive Director of OO said: “We are at a tipping point to move from commitments to the implementation of beneficial ownership transparency, and Opening Extractives will accelerate progress.”
Townsend further explained that: “Anonymous companies are the getaway vehicle of choice for stolen public money, and beneficial ownership transparency is the most effective way to close this down. The Luanda Leaks were a powerful reminder of how some resource-rich countries have suffered and how public information can thwart corrupt activity.”
Also, EITI’s Executive Director, Mark Robinson said: “I am confident that this unique partnership is a recipe for delivering a step change in natural resource governance.”
Robinson added that: “The project will seek to mobilise political and stakeholder commitment and build the technical capability required to publish and use complex data. It has the potential to scale beyond the extractive sector and beyond the program’s initial group of focus countries.”