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CAMA 2020: ‘Nigeria sets record on extractive sector ownership disclosure’


By Ambrose Nnaji

THE Companies and Allied Matters Act, 2020 (CAMA 2020) signed into law by the President Muhammadu Buhari, Nigeria has set the record of few countries with legal framework for beneficial ownership disclosure not only in its extractive sector, but also for every company, the Nigerian Extractive Industries Transparency Initiative (NEITI), has noted.

Buhari had signed into law CAMA 2020 to replace the 1990 Act. CAMA 2020, the legislation governing firms, affects residents and foreigners doing business. The bill was focused on supporting the government initiative to improve ease of doing business.

The law introduces new provisions to reflect modern commercial realities as well as reduce compliance costs and regulatory hurdles for businesses.

It establishes an efficient means of regulating businesses, minimise the compliance burden of small and medium enterprises, enhance transparency and shareholder engagement and promote a friendly business climate.

The Assistant Director, Communications and Advocacy at the NEITI, Mrs Obiageli Onuorah, said the CAMA 2020 requires individuals and companies in sections 119-123 to declare their ownership and structure, adding that CAMA is the ultimate game changer.

In 2013, Nigeria began its journey towards revealing the owners of assets in the extractive industries. Mrs Onuorah recalled that years later, at the anti-corruption summit, which took place in London, Buhari had pledged, alongside other world leaders, to work towards revealing real owners of companies.

According to Mrs Onuorah, a communique issued at the end of that summit, highlighted the key role that beneficial ownership (BO) disclosure would play in the fight against corruption and illicit financial flows, especially in resource rich and developing countries.

“We will enhance transparency over who, ultimately, owns and controls them, to expose wrongdoing and to disrupt illicit financial flows. As recent events have shown, we need to take firm collective action on increasing beneficial ownership transparency,” an excerpt from the communique.

Further, the communique spelt out how partnerships between local and international jurisdictions would enhance and facilitate the use of BO to track incidence of corruption among collaborating countries. It specifically said: “We will support developing countries to collect beneficial ownership information and use it in public contracting and other sectors work.” she noted

According to Mrs Onuorah, in its earliest policy published in May 2016, NEITI highlighted the dangers of secrecy in the ownership of extractive sector assets in Nigeria. She remembered the NEITI had called on the government to implement and institutionalise ownership transparency as a “systematic and more sustainable way of fighting corruption”.

She noted that work went on towards getting a register containing real owners of firms in Nigeria’s extractive industry in place by January 1, 2020, the deadline given by the global Extractive Industries Transparency Initiatives (EITI) for implementing countries to comply with the requirement.

According to her, by last December, NEITI’s beneficial ownership register was in place, adding that the register is publicly accessible on a portal linked to the NEITI website.

The EITI is a global standard for the good governance of oil, gas and mineral resources which seek to address the key governance issues in the extractive sectors.

When implemented by a country, the EITI ensures transparency and accountability about how a country’s natural resources are governed. This ranges from how the rights are issued, to how the resources are monetised, to how they benefit the citizens and the economy.

The standard is composed of two parts. Part I deals with the implementation of the Standard and part II deals with the governance and management of the international EITI.

Mrs Onuorah noted the EITI in its 2019 Standards required implementing countries to “document the government’s policy and multi stakeholder group’s discussion on disclosure of beneficial ownership”. The global body she said further recommended that implementing countries should ”maintain a publicly available register of the beneficial owners of the corporate entity (ies) that apply for or hold a participating interest in an exploration or production oil, gas or mining license or contract”.

Owners of extractive assets, she said, were persons, who directly or indirectly ultimately owned or controlled at least five percent of a corporate entity. According to her, by the CAMA Law 2020 and the NEITI register of beneficial owners of companies, Nigeria has met the above requirements demanded of it by the EITI, adding that it’s a breakthrough for the country and NEITI.

As NEITI and, indeed Nigeria, celebrate the opportunities provided by the provisions of CAMA 2020, implementing sections 119-123 of the Act and the Requirement 2.5 (e) of the 2019 EITI Standard, needed ingenuity. Section 2.5 (e) of the EITI Standard states that: “The multi-stakeholder group (MSGs) should assess any existing mechanisms for assuring the reliability of beneficial ownership information and agree an approach for corporate entities to assure the accuracy of the beneficial ownership information”, she noted.

She said though CAMA 2020 did not set any specific penalty (ies) for a breach of the provisions of Sections 119-123 of the law, it nevertheless gives bite to the EITI requirement 2.5 which recommended that MSGs should require companies to attest to the beneficial ownership declaration form through a “sign-off by a member of the senior management team or senior legal counsel, or submit supporting documentation”.

Onuorah said although recent cases like the Oil Prospecting Licence (OPL) 245 (Malabu Oil) were signals that where the intention was anything but noble, entities would hide or misrepresent facts and politically exposed persons and government officials may use proxies as fronts, the NEITI Act 2007 in sections 16 subsections 3, 4 and 5 have envisaged some of these challenges and provided sanctions for misrepresentation of facts, Mrs Onuorah stated.

This, she said, ranged from the fine of N30 million, to the revocation of the licence of the company, including jail terms and fines for directors or other persons involved in the management of the company.

NEITI would invoke this Section of its Act when the need arose, leaning on the legal backing of sections 2 (e) and (1) of the NEITI Act and Sections 119-123 of the CAMA Law, she warned.

The Assistant Director said other laws could aid ownership transparency, including the Nigerian Code of Conduct and Tribunal Act 1990. This, she stated, required senior government officials, including politically exposed persons, to disclose their assets and interests in companies. The Public Procurement Act and the Money Laundering Prevention Act, which mandated banks and designated non-financial institutions to identify and verify identity of BO of accounts of legal entities carrying out financial transactions, she added.

Again, the Bank Verification Number (BVN) requirement by the Federal Government, she noted, had also put faces to corporate and private accounts through the use of bio-metric data.

Mrs Onuorah maintained with the support of the monitoring and whistle-blowing role of the media, professional bodies and the civil society, beneficial ownership disclosure would deepen and strengthen transparency and accountability in Nigeria’s extractive sector adding that it’s a key mandate of NEITI.

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