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International Efforts to Promote Transparency and Fight Corruption

Western governments have generally been reluctant to pressure Nigeria’s government over its appalling human rights record, in large measure because of Nigeria’s economic and geopolitical importance in Africa and beyond. But in recent years members of the international community have sponsored new efforts to promote transparency in resource-rich states such as Nigeria.  

The Nigerian government has helped improve the transparency of its finances by being the first country to sign on to one of these efforts, the Extractive Industries Transparency Initiative (EITI). EITI is a voluntary initiative aimed at encouraging oil and mining companies to publish the payments they make to the governments of developing world countries in which they operate. Human Rights Watch has participated in EITI’s development as well as that of the complementary NGO-led Publish What You Pay campaign.³⁷⁸

Like other international initiatives, EITI suffers from inherent limitations in that it currently extends only to enhancing the transparency of government income. The value of that alone is tremendous, but EITI does little to enhance the transparency of governmentexpenditure in Nigeria, especially at the state and local level. As one Nigerian activist associated with EITI put it, “It is not enough to publish what they [the Nigerian government] earn. They must also publish how they spend it.”³⁷⁹

There have also been limited international efforts to help countries like Nigeria go after corrupt officials and stolen funds. The US government in August 2006 announced that it was launching an effort to “internationalize efforts against kleptocracy.” Among other things, this seeks to deny corrupt officials access to international banking institutions; deny safe haven to “kleptocrats” themselves and take stronger action against those who bribe foreign officials.³⁸⁰ The UK government has also helped in the pursuit of corrupt officials through the workings of its own criminal justice system. In 2006 UK authorities arrested and attempted to prosecute two Nigerian governors on charges of money laundering when they were found on British soil, although both were able to escape back to Nigeria while out on bail.³⁸¹

EFCC head Nuhu Ribadu told Human Rights Watch that these and other efforts had not gone far enough but had yielded some success in making it harder for corrupt Nigerian officials to salt away the proceeds of corruption abroad. He said this was important because it was far easier for the EFCC to pursue such assets if they stayed within Nigeria.³⁸²       

In Rivers State, donor governments and multinational oil companies have backed the state government’s Rivers State Sustainable Development Plan (RSSDP). The RSSDP is essentially a parallel channel that directs state government largesse into development-related projects outside of its mainline ministries; the program adheres to more rigorous standards of transparency than the state government itself. During its pilot phase, representatives of donor agencies and multinational oil companies assumed direct oversight powers over the award of contracts under the program and reported success in preventing those revenues from being diverted improperly. Funding for the program is meant to come almost entirely from the Rivers State government.

The RSSDP has yet to get underway in earnest; only $20 million was set aside for it by the state government in 2006 and relatively little work has been carried out on the ground. The Rivers State government has since introduced legislation that, if passed, would greatly increase the funding of the program beginning in 2007. As the project moves from its pilot phase, however, the direct oversight role of international actors will at the same time be phased out. In interviews with Human Rights Watch, international officials involved with the program’s development expressed skepticism that it would ultimately prove more transparent or more effective in its use of government funds than existing government structures.³⁸³ It is not clear how much the state government has allocated towards the program in 2007 because the recently passed state budget for that year has not been made available to the public.

The Role of Multinational Oil Companies

Historically, oil companies operating in the Niger Delta have contributed to Nigeria’s epidemic of corruption in a number of important ways. Under military rule, many companies were working with governments that had institutionalized corruption as a tool of governance and their involvement in corruption became almost inevitable.³⁸⁴  The overall situation has improved since 1999, but the problem has not been resolved.

In April 2006, independent auditors announced that they had discovered a $232 million gap between what oil companies said they had paid to the Nigerian government and what the central bank said it had received. ³⁸⁵ It is not at all clear that this gap is the result of malfeasance on the part of oil companies as opposed to governmental corruption or something else altogether. But at the very least it is clear evidence of mismanagement on a colossal scale that forms part of the context within which companies do business.

Companies operating in the Delta face enormous pressure to reinvest some of their profits into the communities around their operations—pressure made more intense by government’s own failure to do the same. They are also under constant pressure to compensate communities for losses they claim to suffer from pollution caused by company activities.

All of that is understandable, but the manner in which companies respond to those demands is often deeply flawed. Payments and projects are often undertaken with a view towards securing short-term peace rather than working towards development. In some cases, “contracts” are awarded to youths in exchange for their agreeing not to sabotage company facilities; such payments increase the power of unaccountable armed groups and local politicians involved in the extortionate demands.³⁸⁶ These are often the same actors who use their wealth and command of violence to control local-level politics in some areas.

In 2006, several companies paid large ransoms to secure the release of kidnapped employees. Many of those payments were made through corrupt Rivers State government officials who siphoned off a portion of the ransoms before passing the remainder along to the kidnappers.³⁸⁷ While companies’ need to secure the safety of their employees is a paramount interest, it is nonetheless an important fact that the manner in which ransom payments were delivered helped in a small way to fuel patterns of state-level corruption and contributed to spawning a cottage industry of kidnappings from which some government officials are alleged to have profited.