VZCZCXRO3962
OO RUEHMA RUEHPA
DE RUEHUJA #2099/01 3240917
ZNR UUUUU ZZH
O 200917Z NOV 09 ZDK
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7527
INFO RUEHOS/AMCONSUL LAGOS 2323
RUEHJO/AMCONSUL JOHANNESBURG 0127
RUEHZK/ECOWAS COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 ABUJA 002099 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USAID AFR/SD FOR CURTIS, ATWOOD AND SCHLAGENHAUF 
STATE PASS TO USTDA-PAUL MARIN, EXIM-JRICHTER 
STATE PASS TO USTR-LAURIE-ANN AGAMA 
STATE PASS TO OPIC-BARBARA GIBIAN AND STEVE SMITH 
STATE FOR EEB/ESC/IEC/ENR-DAVID HENRY, CBA 
STATE PASS TO S/CIEA-DAVID GOLDWYN AND MICHAEL SULLIVAN 
JOHANNESBURG FOR JASON NAGY 
USDOE FOR GEORGE PERSON AND THOMAS SPERL 
TREASURY FOR ANTHONY IERONIMO, ADAM BARCAN 
DOC FOR 3317/ITA/OA/BURRESS AND 3130/USFC/OIO/ANESA/REED 
 
E.O. 12958:  N/A 
TAGS: ENRG EPET EINV ETRD ECON NI
 
SUBJECT:  S/CIEA GOLDWYN ENCOURAGES STRENGTHENING TRANSPARENCY 
INITIATIVES IN NIGERIA'S EXTRACTIVE INDUSTRY 
 
ABUJA 00002099  001.2 OF 003 
 
 
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SUMMARY 
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¶1. (SBU) Promoting transparency in Nigeria's energy industry was a 
centerpiece of U.S. Coordinator for International Energy Affairs 
(S/CIEA) David Goldwyn's visit to Nigeria November 9-11.  Goldwyn 
met with the Nigerian Extractive Industry Transparency Initiative 
(NEITI) Chairman Professor Assisi Asobie and NEITI stakeholders to 
discuss the findings of NEITI's most recent audit report (2005) and 
the challenges and opportunities for strengthening transparency 
initiatives in Nigeria.  Goldwyn congratulated Nigeria for having 
the NEITI process up and running with the involvement of 
stakeholders and civil society organizations.  The NEITI Chairman 
identified lack of GON capacity and lack of GON cooperation with oil 
producers in furnishing data as major hurdles, while also praising 
the Yar'Adua administration for not having pressured NEITI so far. 
The Chairman said the political will to fight corruption remains 
shallow without executives of agencies and parastatals translating 
Presidential declarations into action.  The U.S. Coordinator urged 
NEITI and civil society organizations to work together in devising 
and conducting an effective communication and advocacy strategy for 
the implementation of NEITI's audit recommendations.  Goldwyn also 
raised transparency issues in his meetings with government officials 
throughout the trip.  END SUMMARY. 
 
--------------------------------------------- ------ 
CHAIRMAN ASOBIE DISCUSSES NEITI'S 2005 AUDIT REPORT 
--------------------------------------------- ------ 
 
¶2. (SBU) U.S. Coordinator for International Energy Affairs, David 
Goldwyn (S/CIEA) exchanged views with Chairman of the Nigerian 
Extractive Industry Transparency Initiative (NEITI) Professor Assise 
Asobie on strengthening transparency and good governance in the 
Nigerian extractive industry on November 9.  The discussions started 
with Asobie outlining the outcomes of NEITI's recently released 2005 
audit report on the Nigerian oil and gas sector.  (Note: NEITI, 
established in 2004, has conducted two audits:  a combined one for 
1999-2004 and a stand alone one for 2005.  End Note).  Asobie noted 
that the findings of the 2005 audit were sIQbW4m the most important findings of the 2005 
audit report as lack of Department of Petroleum Resources (DPR) 
capacity to monitor and account for oil production and revenue 
flows; lack of capacity by the Central Bank of Nigeria (CBN) and the 
Nigerian Federal Inland Revenue Service (FIRS) to reconcile revenue 
and production figures; lack of cooperation by federal agencies and 
Qand production figures; lack of cooperation by federal agencies and 
oil producers to share oil production and financial data; and 
discrepancies between  data maintained by the DPR and oil producers. 
 He complained that the Nigerian National Petroleum Corporation 
(NNPC) and other GON entities frequently did not attend NEITI 
meetings and sent low-level staff members when they did attend. 
 
¶4. (SBU) Asobie said NEITI plans to conduct road-shows to publicize 
the outcomes of its 2005 report and engage the public, an important 
validation criterion under the Extractive Industry Transparency 
Initiative (EITI) guidelines.  Goldwyn queried if NEITI has a 
communications plan to make this happen and Asobie replied that no 
plan existed.  Goldwyn said that effective communication remained 
vital not only to get the 2005 audit report validated but also to 
garner public support for NEITI's overall work.  He recommended that 
NEITI devise a simple communication plan and embark upon its 
implementation.  Asobie said NEITI is also exploring the possibility 
of expanding its activities into the solid minerals sector, given 
that each Nigerian state is blessed with such resources. 
 
--------------------------------- 
 
ABUJA 00002099  002.2 OF 003 
 
 
IMPLEMENTING AUDIT RECOMMENDATIONS 
--------------------------------- 
 
¶5. (SBU) Goldwyn urged NEITI to focus on pressuring the government 
and other stakeholders to implement its audit recommendations. 
Incorporation by the Petroleum Industry Bill (PIB) of most of 
NEITI's recommendations validated their importance.  He suggested 
that NEITI use the PIB to push the GON into action on the 
recommendations.  He said the DPR should demand the required data 
from the companies that it regulates.  Goldwyn encouraged NEITI to 
lobby the GON for a specific budget for training of DPR staff and 
purchase and installation of metering devices at well-heads, flow 
stations, and terminals to monitor spillage and prevent theft.  He 
suggested sending a report to the Federal Executive Council 
recommending installation of metering devices within a specified 
period.  Goldwyn encouraged NEITI to hold discussions on metering 
devices both to show how such equipment can help fight spillage and 
theft but also to press the GON to act upon NEITI's recommendations 
on installing more devices.  Implementing the NEITI recommendations 
would improve compliance with EITI requirements and help NEITI 
validate of its 2005 audit.  Goldwyn promised to raise NEITI'S 
concerns in his subsequent meetings with various GON stakeholders 
and industry representatives. 
 
--------------------------------------------- -- 
POLITICAL WILL TOO SHALLOW TO MAKE A DIFFERENCE 
--------------------------------------------- -- 
 
¶6. (SBU) Asobie said he sees the GON's political will on 
transparency as too shallow unless agency and parastatal executives 
translated Presidential declarations on transparency into action. 
Lack of a strong political opposition does not encourage the 
government to respond to pressures for more openness.  The 
government is likely to yield to public pressure as the 2011 
national elections approach, so civil society organizations need to 
be more creative and consistent to get results, according to Asobie. 
 He said the Yar'Adua administration has not pressured NEITI up to 
now, perhaps because the audits conducted so far have covered 
periods before this government came to power.  Asobie said the 
2006-08 audit report, which could be conducted in 2010, will be a 
real test of the administration's commitment to the EITI process. 
 
--------------------------------------------- ------- 
NEITI SHOULD EXPAND TO STATES AND REACH OUT TO LABOR 
--------------------------------------------- ------- 
 
¶7. (SBU) Goldwyn asked if states took up transparency initiatives. 
Asobie responded that NEITI worked with Bayelsa State to introduce 
transparency initiatives into the state's revenue and expenditure 
structure.  NEITI then planned to replicate the model in other 
states.  He reported that Kwara State Governor and Chairman of the 
Nigerian Governors Forum Bukola Saraki has requested a presentation 
QNigerian Governors Forum Bukola Saraki has requested a presentation 
on NEITI's activities to the Governor's Forum, and NEITI hopes to 
use that platform to promote the idea to the rest of the nation's 
governors. 
 
¶8. (SBU) Goldwyn inquired about NEITI's relations with the labor 
unions.  Asobie replied that labor unions have not been too 
interested in NEITI's work to date because they have been engaged in 
narrow fights over wage and benefit increases for their members.  He 
noted that professional associations, such as the lawyers' 
association, are not supporting organizations like NEITI in the 
fight against corruption.  Goldwyn encouraged NEITI to reach out and 
work with labor unions and professional associations, as both wield 
significant clout within civil society. 
 
------------------------------------------- 
ROUNDTABLE WITH CIVIL SOCIETY ORGANIZATIONS 
------------------------------------------- 
 
¶9. (SBU) Goldwyn held a roundtable discussion on the NEITI process 
with leaders of civil society organizations (CSO), Chairman Asobie, 
and the World Bank's NEITI Coordinator on November 10.  Goldwyn 
 
ABUJA 00002099  003.2 OF 003 
 
 
opened the discussion by stating that energy security represented a 
core element of U.S. foreign policy and inviting attendees to air 
their opinions on how the U.S. can help foster transparency and good 
governance in Nigeria's oil and gas sector.  Comments ranged from 
lack of GON commitment to the NEITI process to lack of capacity 
within the NEITI Secretariat and the CSOs themselves.  Attendees 
complained that the NEITI Act of 2007 gave the President of Nigeria 
too much power, including appointing the CSO representative and the 
rest of the NEITI governing board.  One organization complained 
about the lack of gender balance on NEITI's governing board (only 
one female out of 15 members) and said that unless gender equality 
is instituted real progress cannot be achieved.  Some CSOs doubted 
GON political will and commitment to transparency and good 
governance and said the GON should desist from politicizing federal 
agencies such as the DPR and FIRS by appointing politically 
connected people who lack requisite qualifications.  One CSO asked 
what the U.S. is doing to help the NEITI process. 
 
¶10. (SBU) Goldwyn responded that, as a follow-up to Secretary 
Clinton's August visit to Nigeria, the U.S. and Nigeria are 
developing a Bi-national Commission to collaborate on transparency 
issues, among others.  He added that the U.S. has committed $6 
million in 2008 and 2009 to strengthen EITI initiatives globally, 
which will help NEITI and the CSOs to build their capacity.  Goldwyn 
gave the attendees credit that the NEITI process is up and running 
and that stakeholders and CSOs are on board with the process.  He 
advised them to build on this momentum and achieve results by 
working together on a common communications and advocacy strategy to 
implement NEITI recommendations.  Asobie encouraged CSOs to exert 
their influence on the NEITI process by actively participating as 
observers in the National Stakeholders Working Group (NSWG).  The 
World Bank representative discussed the various capacity-building 
measures it is implementing for all stakeholders, including the 
CC3\QQi 
Sec. Dr. Ochi Achi Niuv said the Ministry's budget office had 
good cooperation with NEITI and praised the results of the first 
audit.  He was non-committal on the budgetary issue. 
 
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COMMENT 
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¶12. (SBU) Goldwyn's engagement with NEITI and the CSOs in a single 
forum promoted frank exchanges and useful discussions among these 
partners.  His rapport with NEITI and the CSOs, stemming from his 
previous work as consultant, enabled the USG to convey important 
Qprevious work as consultant, enabled the USG to convey important 
messages for promoting transparency and good governance in this 
resource-rich and important country.  The Mission hopes the 
interaction between NEITI and the CSOs will lead to greater trust 
and improved partnership.  NEITI's plans to venture into the solid 
minerals sector, while still saddled with three years of delinquent 
audits, might be an unnecessary distraction at this point.  END 
COMMENT 
 
¶13. (U) This cable has been cleared with S/CIEA. 
 
SANDERS