We’ll Serve Adoke, Etete Through Their Lawyers –EFCC – TheNigerialawyer

Justice D. Z Senchi of the Federal Capital Territory High Court,
Abuja, on Friday ordered the Economic and Financial Crimes
Commission to serve charges of alleged abuse of office and money
laundering in respect of the granting of the Oil Prospecting
License, OPL 245, to Shell and ENI, brought against a former
Minister of Petroleum, Dan Etete, former Attorney-General and
Minister of Justice, Mohammed Adoke, and others by substituted
means.

Justice Senchi lifted the arrest warrant earlier issued against
the defendants and ruled that it would be reissued after the
prosecution had served them by substituted means due to their
unavailability.

The commission had on April 17, 2019, obtained a warrant of
arrest against Messrs Etete and Adoke, as well as four others over
the OPL 245 scandal.

The EFCC filed criminal charges against the defendants but the
commission said it had been difficult for it to serve them the
charges or produce them in court because they were all on
exile.

The situation forced the EFCC to apply for a warrant of arrest
against them, which was granted by the court, empowering the
Nigeria Police Force and Interpol to arrest them anywhere they are
seen.

The EFCC said it had also been difficult to execute the warrant
as the defendants remained in foreign locations, leaving the court
to contend with endless adjournments on the matter.

With the development, the defendants through their counsel went
to court, asking that the warrant be set aside based on the fact
that the EFCC had so far not served them any charges.

Justice Senchi obliged them, saying the application was
meritorious.

The trial judge stated that the EFCC ought to have served the
charges to the defendants before applying for their arrest warrant
that was granted.

The judge further ruled that the arrest warrant would be
reissued against the defendants if they refused to show up in court
after they had been served and upon a new application by the
EFCC.

Following Justice Senchi’s pronouncements, the prosecuting
counsel, Aliyu Yusuf, informed the court that the commission was
going to apply to serve the defendants through their legal
representatives.

He said, “As we cannot serve them because they are at large, we
will write an application for leave of court, permitting us to
serve the accused through their lawyers and if after adjournment
they did not show up, we will still ask the court for a warrant of
arrest.”

The government of former President Olusegun Obasanjo had revoked
the OPL 245, which the late General Sani Abacha granted Mr Etete,
who was his Petroleum Minister and reassigned it to Shell Nigeria
Exploration and Production Company.

Etete’s Malabu Oil and Gas, however, reclaimed the oil block in
2006 through the court.

While Shell challenged the decision, a settlement and resolution
agreement described as fraudulent by the EFCC came under President
Goodluck Jonathan’s government with Shell and ENI buying the oil
block from Malabu for $1.1bn.

The EFCC said its investigation into the deal revealed crimes
that border on conspiracy, forgery of bank documents, bribery,
corruption and money laundering to the tune of over $1.2bn.

Those the anti-graft agency consider culpable and have charged
are among others, Messrs Etete and Adoke, Malabu Oil and Gas Ltd,
Shell Nigeria Ultra Deep, Nigeria Agip Exploration and their
officials.

The charges are pending before the FCT High Court and the
Federal High Court.

How Solid Minerals Earned N52bn in 2017-
NEITI

The solid minerals sector contributed N52.75 billion to
federation revenue in 2017, a 21% increase on the N43.22 billion
contributed by the sector in 2016.

The information and data followed an independent reconciliation
of company payments and government receipts in the sector by the
Nigeria Extractive Industries Transparency Initiative (NEITI) in
its latest report released in Abuja.

From the sector’s total revenue contribution of N52.75billion,
payments to the Federal Inland Revenue Service (FIRS) accounted for
N49.162 billion which is about 93% of the total revenues realized
during the period under review. Payments to the Mines Inspectorate
Department (MID) and Mining Cadastre Office (MCO) amounted to
N1.59billion and N2.08billion or about 3% and 4% respectively of
the total revenue from the sector.

NEITI however noted, “Except for revenue from MID, there was
significant increase in revenue from all other streams” in
2017.

According to NEITI, “A trend analysis of the revenue flows
showed that there has been a very remarkable increase in revenue
accruing to the Federation from the solid minerals sector from 2013
to 2017, though 2016 witnessed a decrease of 31.02% compared to
2015.”

Other revenue flows from the solid minerals according to the
NEITI report, include sub-national payments. These are direct
payments to states and local governments as a result of national
laws, contractual obligations or local regulations which are
disclosed as unilateral disclosures by the extractive companies.
“The total payment was ₦2.877 billion representing about 5.45% of
total government revenue from the sector”, NEITI stated.

On production, the NEITI Solid Minerals Report disclosed that
35.33 million metric tons of minerals valued at N32.78 billion was
produced in Nigeria during the same period. “The production data
was based on minerals either used or sold during the year”.

A breakdown of the production showed that Limestone, Granite and
Laterite accounted for 85.72% of the total minerals produced with
Limestone alone contributing about 55% of the production volumes.
However, in value terms, Granite and Limestone contributed 37.28%
and 35.57% respectively.

On state-by-state contribution, the report highlighted that Ogun
State produced the highest quantity of minerals in terms of both
volume and value. “The state accounted for over one-third of total
production quantity and 23% of the total minerals production value.
The contributions by Ogun and Kogi states put together accounted
for over half of the total production quantity”. A further analysis
showed that the two states led in Limestone as major minerals
produced in the states. However, in terms of production value,
Ogun, FCT and Kogi states accounted for 23%, 20% and 18%
respectively.

A review of minerals production by states also shows that with
the exception of the Federal Capital Territory, there was a
material decline in states production in terms of both quantity and
value. Total production quantity decreased from 41.87million metric
tons valued at N34.09billion in 2016 to 35.33 million metric tons
valued at N32.78billion in 2017. The figure represented a decline
of 15.64% in production volumes and 3.83% in production value in
2017.

The NEITI 2017 Solid Minerals report also revealed that Dangote
Cement dominated activities in minerals production in 2017. The
company alone was responsible for about 46% of the total minerals
production that year. Other big players in the sector included
Lafarge Cement Plc., CGC Nigeria Limited and Julius Berger Plc.
“The four companies produced over 27 million tons of minerals,
representing 77.31% of the total minerals production quantity and
over 60% of the production value”, the report remarked.

The sector’s contribution to employment in 2017 was about 0.3%
of Nigeria’s total employment, same as the figure recorded in 2016.
The report also affirmed that artisanal and small-scale miners
currently dominate the sector.

On the solid mineral sector’s contribution to exports, the NEITI
report stated that about 16.34million metric tons of minerals
valued at $29.90million was exported in 2017. According to the
report, “Nigeria’s total export was about ₦13.60trillion with solid
minerals contributing N77.23billion or 0.57% of total export in
2017”.

The trend analysis shows that in 2015, solid minerals export was
N1.94 billion. This witnessed a geometric leap to N11.16 billion in
2016 and an equally impressive figure of N77.23 billion in 2017.
This is an indication that the solid minerals sector is steadily
contributing to the Federation’s export earnings but requires
greater government attention.

The report also disclosed, “The major destination of Nigeria’s
export during the year under review is China. The country accounted
for 68% of the total export value during the year”. Other
destinations are Malaysia, Vietnam and India. The report however
observed that export data received from the Nigerian Customs
Service (NCS) include minerals that were not captured in the
production data provided by the MID as well as inconsistency in FOB
value of minerals.

The report also contains comprehensive information and data on
how many licenses were issued as well as gross revenues that
accrued to the federation account from both oil and non-oil sources
for the year 2017. It asserted that while Nigeria’s gross revenues
stood at ₦7.35 trillion, revenues specifically from the solid
minerals sector represented only about 0.05%.

The report explained that the absence of an industry-specific
fiscal regime made it difficult to tie revenue flows from the solid
minerals industry to the federation account. According to the
report, the development equally affected efforts at quantifying the
contribution of the solid minerals sector to Nigeria’s GDP, which
presently stands at current basic price of ₦113.72 trillion. The
report however highlighted that the sector’s contribution to GDP
was an abysmal 0.11%, which showed a decline of 0.01% and 0.02%
from the data of 0.12% in 2015, and 0.13% in 2016.

The report further explained that out of 1,072 entities covered
by the exercise, only transactions by 59 companies were reconciled.
These 59 companies accounted for over 86% of the total royalty
payments made by the sector in 2017. Royalties paid by fifty-nine
(59) companies in 2017 was N1.3billion as against the N1.4billion
paid by fifty-six (56) companies in 2016 resulting in a decrease of
about 7.7% in revenue. This may be an indication of lower
investment in mining activities in 2017.

On payouts to the federating units from solid minerals revenue,
NEITI stated that the last distribution of solid minerals
accumulated royalties occurred in July 2016, when the sum of ₦9.92
billion was distributed by FAAC. “The accumulated balance in the
account as at December 31, 2017, was ₦8.54 billion. However, as of
April 30, 2019, the accumulated balance in the account increased by
66.4% to ₦14.21 billion,” NEITI explained.

Amedu Onekpe & Co, an indigenous accounting and auditing
firm, conducted the 2017 solid minerals audit for NEITI. While
underlining the importance of a comprehensive action plan to shift
attention from oil to the development of the solid minerals sector
in the face of dwindling oil revenue, the report noted the
significant reforms and development in the sector. Some of them
include:

Increased funding to the sector from various sources from
N1billion in 2015 to N7billion in 2017;

Approval of ₦30 billion ($100 million) as intervention fund to
facilitate exploration projects towards the much-needed geosciences
data and other regulatory framework;
N5billion support fund launched by the Bank of Industry for
small-scale miners at 5% interest rate;

A $150 million loan secured from the World Bank for the Mineral
Sector Support for Economic Diversification Project (MinDiver)
which became operational in 2017;
Inauguration of a project delivery team (PDT) to invigorate the
coal sub-sector and concession of coal blocks of the Nigerian Coal
Corporation as part of MMSD’s contribution to the energy policy in
other to increase the contribution of coal power plants to 30% of
the nation’s electricity by 2020;

Discoveries of some mineral deposits in 14 states have led to an
appreciation in Nigeria’s limestone resource base from 2.3 billion
tonnes to 10.6 billion tonnes making Nigeria sufficient in cement
production;

An estimated 4.8 billion tonnes of Marble was found in the FCT,
Nasarawa, Ondo, Edo, Oyo, Kogi, Kwara, Niger and Kebbi states;

Engagement of M/S Fugro by MMSD to carry out aeromagnetic survey
covering various mineral deposits across the country with
discoveries made on the existence of base metals in Ebonyi State,
gold in Osun and Kaduna states;

· Acquisition of diamond core drilling rigs and assaying
equipment by MMSD for the National Steel Raw Materials Exploration
Agency and the Nigeria Geological Survey Agency (NGSA), which would
aid gathering of more credible geosciences data;

· The MCO has been decentralized, upgraded and six zonal offices
established;

· The MCO has introduced online mineral title administration to
ensure transparency and improved turn-around time in mineral title
processing from 45 days to 15 days;

· The strict implementation of the “use it or lose it” provision
of the Minerals and Mining Act, 2007 that stipulates the revocation
of non-performing or defaulting mineral titles to curtail the
activities of speculators;

· The MMSD continues in its drive to encourage state
governments’ participation in the sector and promote partnerships
with the Federal Government;

· National Council of Mining and Mineral Resources constituted
to serve as an administrative mechanism to douse tension between
federal and state authorities on issues of natural resource
governance.

The NEITI report among its many recommendations called for
closer inter-agency collaboration specifically between Nigeria
Customs Service and the Mines Inspectorate Department in revenue
collection and management in efforts to develop the industry. The
transparency agency reminded companies to provide their annual
financial statements as failure to do so would attract sanctions
based on the NEITI Act of 2007.

The independent audit of the solid minerals sector is consistent
with NEITI’s mandate under the NEITI Act 2007 and in fulfillment of
Nigeria’s obligation to the global Extractive Industries
Transparency Initiative (EITI) as an implementing country. Data for
the report was obtained from extractive industries companies and
seven government agencies: the Central Bank of Nigeria, Bureau for
Public Enterprises, Mining Cadastral Office, Mines Inspectorate
Department, Federal Inland Revenue Service, Nigeria Customs Service
and Federation Account Allocation Committee.

Dr Orji Ogbonnaya Orji
Director, Communications & Advocacy.