Written by Dotun Oloko
Nigeria’s new president, Muhammadu Buhari, is visiting the United States this week, with international corruption just as high on the agenda as it was for his historic election campaign.
This was the first time an incumbent president has been defeated by popular vote in Nigeria. Nigerians were won over by a vision of a fairer society, and a desire to put a long history of predatory officials and corrupt companies conspiring to loot public funds behind us.
There are many examples of that history which tell us that we cannot win this fight without help from the U.S. and elsewhere. In one deal in 2011, two New York Stock Exchange-listed oil companies – Shell and Italy’s Eni – negotiated a deal with the Jonathan administration for the rights to one of Nigeria’s biggest oil blocks, called “OPL 245”. The $1.1 billion dollars should have been used by the Nigerian government to provide essential services, but it never reached state coffers. Instead, it was diverted into the private pockets of a corrupt former oil minister and his associates.
This was a devastating loss for Nigeria; $1.1 billion is half of Nigeria’s health budget. It could have gone into better schools to help curb rampant illiteracy, better healthcare, or better national transportation systems and roads.
It is also bad for Shell and Eni’s shareholders and investors: the deal is currently under criminal investigation in Nigeria, Italy and the United Kingdom; the CEO and former CEO of Eni are under formal investigation; and, $190 million in proceeds have been frozen. Although Shell and Eni deny wrongdoing, the deal could be cancelled, which would jeopardize both companies’ long-term strategic goals. It doesn’t need to be like this. Nigeria will need support from the international community to investigate systemic corruption, trace its stolen assets and prevent other dirty deals being carried out. One measure already agreed but not yet implemented would have exposed the payments for OPL 245 before they went astray. Section 1504 of the Dodd-Frank Act, which Congress passed five years ago with bi-partisan support, requires companies listed on U.S. stock exchanges to publish their payments to governments for oil, gas and mining assets.
This simple transparency measure is backed by major investors, hundreds of civil society organizations and major oil companies, who recognize it as good for business and for society. But it is also facing fierce resistance from a dwindling group of Big Oil companies and their lobbying arm, the American Petroleum Institute, who pay lip service to transparency in public yet are doing all they can to gut these proposals behind the scenes. It still has not been implemented by the Securities and Exchange Commission (SEC). Interestingly, had the SEC promulgated its first rule for the implementation of Section 1504 within 270 days, as it was mandated to do by Congress, it is debatable whether Shell and Eni would have continued with a deal in which they knew their payment would end up in private hands.
Corruption in Nigeria is not something that President Buhari or the Nigerian people can fight alone. The kind of state looting we are trying to put behind us is not possible without the collusion of companies and facilitators in the United States. That is why systemic solutions like the transparency measures in section 1504 of the Dodd-Frank Act are so important. Publishing a strong rule and ensuring international law enforcement cooperation are the least that the U.S. can do to help Nigeria in its fight for a fairer society. This will help Nigeria on the path to ensuring oil wealth is the basis for sustainable development, rather than a source of conflict and a magnet for corruption.
Dotun Oloko is a Nigerian whistleblower turned anti-corruption advocate.