• Main News
  • About Us
  • Contact
Premium Times Opinion
Monday, August 8, 2022
  • Home
  • Democracy and Governance
    • Bámidélé Upfront
    • Jibrin Ibrahim
    • Okey Ndibe
  • Economy
    • Ifeanyi Uddin
  • Issues of the Day
    • Adeolu Ademoyo
    • Aribisala on Tuesday
    • Dele Agekameh
    • Pius Adesanmi
  • Politics
    • Ebeneezer Obadare
    • Femi Fani-Kayode
    • Garba Shehu
    • Hannatu Musawa
    • Zainab Suleiman Okino
  • Guest Columns
  • Faith
    • Article of Faith
    • Sunday Ogidigbo
    • Friday Sermon
    • Elevated Sight
  • Home
  • Democracy and Governance
    • Bámidélé Upfront
    • Jibrin Ibrahim
    • Okey Ndibe
  • Economy
    • Ifeanyi Uddin
  • Issues of the Day
    • Adeolu Ademoyo
    • Aribisala on Tuesday
    • Dele Agekameh
    • Pius Adesanmi
  • Politics
    • Ebeneezer Obadare
    • Femi Fani-Kayode
    • Garba Shehu
    • Hannatu Musawa
    • Zainab Suleiman Okino
  • Guest Columns
  • Faith
    • Article of Faith
    • Sunday Ogidigbo
    • Friday Sermon
    • Elevated Sight
No Result
View All Result
Premium Times Opinion
Home Opinion

Ending Corporate Secrecy: Eternal Vigilance Is the Price of Openness, By Yemi Osinbajo

by Premium Times
October 28, 2017
Reading Time: 7 mins read
1

Beneficial Ownership

…establishing a publicly accessible register of beneficial owners of companies may the easiest part. Making the register count will take a lot of work. It will be important to develop mechanisms to verify the data disclosed and to build the capacities of tax authorities, law enforcement agencies, media and civic groups and even citizens to wade through, interrogate, make sense of and use the data in the registers.


The EITI and its various partners are deserving of gratitude for the valuable time and resources they have poured into this effort and for not relenting in the campaign to end corporate secrecy.

I will be preaching to the converted if I say that hidden corporate ownership poses real and present danger to most countries, especially the developing ones, such as ours.

A report that will be frequently cited in this gathering is the one by the One Campaign, titled the One Trillion Dollar Scandal. The 2014 report claims that developing countries lose $1 trillion annually to corporate transgressions, most of it traceable to the activities of companies with secret ownership.

Another report that may enjoy mention here is the 2015 report of the High Level Panel on Illicit Financial Flows from Africa chaired by former South African President Thabo Mbeki. The panel stated in its report that Africa had lost over $1 trillion over a 50-year period and that Africa loses more than $50 billion annually to illicit financial flows. Most of these illicit flows are perpetrated in the extractive sector and through companies with hidden ownerships.

So for us in the developing world and especially in Africa, breaking the wall of secret corporate ownership is an existential matter. It is, for us, literarily a matter of life and death. Masked or Hidden corporate ownership is deeply implicated in the sad story of our underdevelopment.

Yes, we know that anonymous companies are not always illegal or are not always designed to harm. But we also know that secrecy provides a convenient cover for the criminal and the corrupt. And we are not just operating from the theoretical or hypothetical standpoint.

Our lived experience has shown clearly that anonymous corporate ownership could serve as vehicles for masking conflicts of interest, corruption, tax evasion, money laundering, and even terrorism financing.

But this is not just a developing world’s problem. We live in a more inter-connected world, and anonymous companies have footprints and tentacles that do not respect the developed/developing divide.

Even when the degree of exposure may differ, everyone in today’ world is at risk of the dangers posed by anonymous corporate ownership. If nothing else, the Panama Papers clearly illustrated the global scale and spread of this problem. So this is a global challenge and nothing less than a truly global approach will be needed to tackle it.

We salute the United Kingdom, Norway, Netherlands and Denmark for leading the way in establishing public registers of the real, human owners of companies in their countries and call on other G8 and G20 countries not only to follow suit by initiating actions to end corporate secrecy at home and their dependencies. Open Ownership and its partners must also be commended for establishing a global register of beneficial ownership, with entries on about two million companies.

However, we must note that current legislative measures in the mentioned countries may need to go farther to effectively discourage or totally prohibit non-disclosure agreements by governments with big corporates, and to re-evaluate the use of secret trusts to hide beneficial ownership from the prying eyes of the law.

Nigeria is still grappling with the negative consequences of the use of opacity by senior members of government and their cronies between 1993 and 1998, awarding themselves juicy contracts in the extractive industry. One of such incidents involving a company called Malabu Oil and Gas has been and is still subject of criminal and civil proceedings in many parts of the world…


It is important to underscore the fact that opacity in one section of the globe undermines openness in the other. We need to break down this wall together as we are all at risk of the evil effects of opacity in business ownership.

Nigeria is still grappling with the negative consequences of the use of opacity by senior members of government and their cronies between 1993 and 1998, awarding themselves juicy contracts in the extractive industry. One of such incidents involving a company called Malabu Oil and Gas has been and is still subject of criminal and civil proceedings in many parts of the world, involving huge legal costs, while the full benefit of the natural resource remains unexploited for the benefit of the people of Nigeria to which it belongs.

We must be careful not to frame this campaign as a zero-sum between society and business. While governments and citizens stand to benefit from increased revenues, better law enforcement in this area should improve citizens’ welfare as a result of more ownership transparency. Many big businesses are equally concerned because most are legitimate and many have signed on to business integrity protocols such as EITI and the UN Global Compact.

Legitimate businesses benefit not only from the better business climate that results when governments serve their citizens better but also from knowing who they are doing businesses with or competing against, they benefit from a level playing field, lower costs of doing business, and from reduced reputational risks.

A paper by Stefan Zeume of the University of Michigan and two others showed that 1,105 publicly listed companies mentioned in the Panama Papers lost market capitalisation of $230 billion to the leaks, a loss of $200 million on the average per company.

On many occasions, companies have incurred hefty fines in their home countries for engaging in bribery and other unethical conducts. Hidden ownership and other underhand business practices could thus erode profitability and shareholder value. This is why ownership transparency is a potential win-win for all, businesses inclusive.

So we need everyone on board: governments, businesses, development partners, international organisations, civil society groups, media, and citizens.

For us in Nigeria, we will remain on board the EITI and the ownership transparency train because they align with our national priorities and will help to advance the electoral mandate of our administration, which is to fight corruption, combat insecurity and grow the economy.

You will recollect that Nigeria was one of the first set of countries to join the EITI, one of the 12 EITI-implementing countries that piloted beneficial ownership disclosure, and one of the few countries that have disclosed beneficial ownership details in three audit reports. Through our national EITI agency (NEITI), we also published a comprehensive roadmap that will culminate in the establishment of the register of beneficial owners of companies operating in our extractive sector.

But we are taking this beyond the extractive sector. At the May 2016 London Anti-Corruption Summit, President Muhammadu Buhari made a commitment to establish a public register of the beneficial owners of all companies operating in Nigeria.

In December 2016, Nigeria joined the Open Government Partnership (OGP) and submitted a National Action Plan that prioritises the establishment of this all-encompassing and publicly accessible register. These are commitments that we made with all sense of seriousness. They are commitments that we made not because we are seeking applause or commendation, but because we are convinced they are in our best interests.

We also need to move away from the illusion of a magic bullet. In fact, there are no magic bullets in the quest for openness and governance reforms. Those who profit from opaqueness will not roll over. They do not have the incentives to do so.


To further reinforce our determination by our course of actions, we presented a draft Money Laundering Prevention and Prohibition Bill to the National Assembly in 2016. The 2016 draft Money Laundering (Prohibition) (Amendment) Act attempts to cure the deficiency of the Money Laundering (Prohibition) (Amendment) Act No. 11 of 2011, to bring it in line with the FATF standards, and it contains robust provisions on removing the barriers to full beneficial ownership disclosure in our laws.

We are however mindful of challenges that will dog this initiative, not just in our country but globally. Already, we have noted that the laws passed in some very developed countries do not go far enough to set the examples we really need, as they do not cover territories and dependencies where most of the stolen asset from developed countries end up.

Furthermore, we should expect the following reactions or problems:

1. Resistance in many countries by vested interests to the passage of a comprehensive legal framework for the implementation of an effective beneficial ownership disclosure regime;

2. The huge budgetary implications for developing countries, of establishing, verifying and ensuring compliance;

3. Balancing conflicting interests and the right to personal data protection/safeguards from political witch-hunting;

4. Resolution of grey areas on the materiality threshold and the scope of beneficial ownership.

These are, of course, all surmountable with the required political will and sustained pressure from the global community.

Let me conclude by sharing a message that we constantly deliver to ourselves. As difficult as it may seem, establishing a publicly accessible register of beneficial owners of companies may the easiest part. Making the register count will take a lot of work. It will be important to develop mechanisms to verify the data disclosed and to build the capacities of tax authorities, law enforcement agencies, media and civic groups and even citizens to wade through, interrogate, make sense of and use the data in the registers.

We also need to move away from the illusion of a magic bullet. In fact, there are no magic bullets in the quest for openness and governance reforms. Those who profit from opaqueness will not roll over. They do not have the incentives to do so.

So, it is not inconceivable that as we are busy trying to break down the walls of corporate secrecy, they are also busy erecting new ones. As such, have no illusions that they will not devise grand schemes to game the system. In fact, they will try. Our task is to make it more difficult for them to hide or disguise the identities of real owners of companies to the detriment of the larger society. As with freedom, the price of openness will always be eternal vigilance.

In a related vein, we should not look at EITI as the one-stop-shop for reversing the resource curse. It is a wonderful tool, which must be mainstreamed and combined with other tools to ensure that natural resources are more prudently managed and better deployed towards both economic growth and sustainable human development. While uniform standards are necessary, we should not make a fetish of them.

It is important to take adequate account of national realities, to iterate, to be ever vigilant of and adapt to new arenas of work such as ownership transparency, and to focus more on impact than on just activities or box-ticking exercises. This is a powerful initiative. It can be even more potent by the collective commitment that we share.

Yemi Osinbajo is vice president of Nigeria.

This is the text of the address read at the EITI Beneficial Ownership Conference in Jakarta, Indonesia on October 23, 2017.

Share this:

  • Tweet
  • Email
  • Print
  • More
  • Pocket
  • Share on Tumblr

Related

Previous Post

Governor Abdulfatah Ahmed: Creating a Financially Sustainable Kwara, By Hammed Opeyemi

Next Post

Fit to Fight, Misfits In Government, By Owei Lakemfa

Related Posts

Zamfara Gold As Commonwealth, By Zailani Bappa
Opinion

Sheikh Gumi, Governor Matawalle and the Sands of Time, By Zailani Bappa

February 2, 2021
June 12 As Democracy Day Needs To Be Reconsidered, By Bashir Tofa
Opinion

The Need To Act Now To Stop the Ethnic Conflagration!, By Bashir Othman Tofa

February 2, 2021
Kofi Annan: In Service of the World, By Ejeviome Eloho Otobo & Oseloka H. Obaze
Opinion

Biden’s Likely Policy Orientation Toward Africa, By Ejeviome E. Otobo and Oseloka H. Obaze

February 2, 2021
Agenda for ‘Born Again’ JAMB and TETFUND, By Tunde Musibau Akanni
Opinion

Oyeweso, A Celebrated Historian, Ascends the Sixth Floor, By Tunde Akanni

February 2, 2021
Before Nigeria Burns, By Akin Fadeyi
Opinion

Is President Buhari Presiding Over the Last United Nigeria?, By Akin Fadeyi

February 2, 2021
On A Soyinka Prize In ‘Illiteracy’, By Biko Agozino
Opinion

Obasanjo: Only Those Who Did Not Do Well Went Into the Military, By Biko Agozino

February 1, 2021
Next Post
People Deserve The Coach They Hire, By Owei Lakemfa

Fit to Fight, Misfits In Government, By Owei Lakemfa

Governor Fashola’s call for amendment of Judges appointment procedure, By Jiti Ogunye

Maina: Malami Did Not Act In the Public Interest, By Jiti Ogunye

Editorial

  • EDITORIAL: The Urgency of Tackling Nigeria’s Second Wave of COVID-19

    EDITORIAL: The Urgency of Tackling Nigeria’s Second Wave of COVID-19

  • EDITORIAL: Unearthing the Cogent Lessons In the NESG-CBN Economic Policy Imbroglio

    EDITORIAL: Unearthing the Cogent Lessons In the NESG-CBN Economic Policy Imbroglio

  • EDITORIAL: COVID-19: Calling On Nigeria’s Billionaires and Religious Leaders To Step Up

    EDITORIAL: COVID-19: Calling On Nigeria’s Billionaires and Religious Leaders To Step Up

  • EDITORIAL: Bichi Must Go; Buhari Must Halt Slide Into Despotism

    EDITORIAL: Bichi Must Go; Buhari Must Halt Slide Into Despotism

  • EDITORIAL: The Flaws In Governor Emefiele’s Five-Year Plan For Central Bank of Nigeria

    EDITORIAL: The Flaws In Governor Emefiele’s Five-Year Plan For Central Bank of Nigeria

Subscribe to our Opinion articles via email

Enter your email address to get notifications of new opinion articles as they are published.

Join 526,543 other subscribers

Most Popular

  • The Bad Consequences and Dangers of Adultery and Fornication (Zina) In Islam, By Murtadha Gusau
    The Bad Consequences and Dangers of Adultery and Fornication (Zina) In Islam, By Murtadha Gusau
  • The Qualities of a Good Leader In Islam, By Murtadha Gusau
    The Qualities of a Good Leader In Islam, By Murtadha Gusau
  • Islam and the Conditions For Marrying More Than One Wife, By Murtadha Gusau
    Islam and the Conditions For Marrying More Than One Wife, By Murtadha Gusau
  • The Women Prohibited For Men To Marry In Islam, By Murtadha Gusau
    The Women Prohibited For Men To Marry In Islam, By Murtadha Gusau
  • World Teachers Day and The Position of Teachers In Islam, By Murtadha Gusau
    World Teachers Day and The Position of Teachers In Islam, By Murtadha Gusau
  • You Will Be Held Responsible On What Happened To Your Children!, By Murtadha Gusau
    You Will Be Held Responsible On What Happened To Your Children!, By Murtadha Gusau
  • The Importance Of Keeping Secrets In Islam, By Murtadha Gusau
    The Importance Of Keeping Secrets In Islam, By Murtadha Gusau

Like us on Facebook

Like us on Facebook

Podcasts

Advertisement

Advertisement

Advertisement

  • Main News
  • About Us
  • Contact

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

No Result
View All Result
  • Home
  • Democracy and Governance
    • Bámidélé Upfront
    • Jibrin Ibrahim
    • Okey Ndibe
  • Economy
    • Ifeanyi Uddin
  • Issues of the Day
    • Adeolu Ademoyo
    • Aribisala on Tuesday
    • Dele Agekameh
    • Pius Adesanmi
  • Politics
    • Ebeneezer Obadare
    • Femi Fani-Kayode
    • Garba Shehu
    • Hannatu Musawa
    • Zainab Suleiman Okino
  • Guest Columns
  • Faith
    • Article of Faith
    • Sunday Ogidigbo
    • Friday Sermon
    • Elevated Sight

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
 

Loading Comments...