Question
In this chapter, we explored answers to the research question: how and why does the structural environment influence collective action for the provision of resource transparency? In the foregoing, sections we have examined the aspects of the Nigerian structural environment that have key implications for the implementation and effectiveness of NEITI.. This section summarises these findings with emphasis on how and why these factors manifest on the NEITI outcome. The overall argument in this chapter so far seems to be captured in the statement below that the objectives of NEITI:
“while going a long way in establishing transparency and accountability may in itself be a d ead end when the chain of values expected to bring about genuine national development is circumscribed by structural deficiencies” (CISLAC, 2008).
Specifically, evidence analysed in this chapter suggests that there are key interconnected factors within the structural environment that have implications for the effectiveness of collective action for resource transparency. These factors include the
135 prevailing political economy, the structure of the industry and the strength of complementary institutions. In the NEITI example, these factors present challenges to achieving the two key objectives of collective action and resource transparency. The findings in this chapter seem to be consistent with many studies conducted on t he Nigerian structural context. For example, Idemudia (2009:18) argues that “it is the governance-failure complex that informs the lack of an enabling environment for the emergence of a d evelopmental state that can equitably redistribute and efficiently utilize natural resources revenue”. The Nigerian structural environment overall seems to evoke a feeling of pessimism about the ability of NEITI to achieve the objectives of resource transparency and accountability. NEITI, as a result of the inherent structural problems in the Nigerian environment, is often viewed as a “little drop in an ocean” (Interview no. 17). This feeling of pessimism in itself also constitutes a challenge for the implementation of NEITI as the current NEITI Chairman acknowledges in the following statement during the inauguration of the current governing board of the initiative:
“Our leadership shall be transformational, rather than transactional. We shall work to effect a fundamental shift in the deep orientation of all stakeholders in the extractive industries, in the way they see the world and the way they define the future and what is possible” (Asobie, 2008:2).
At the same time the expectations from NEITI seem to be too high. The effect is that the NEITI implementation is therefore unable to stick to the narrow focus of the global EITI strictly as an initiative for information disclosure on r esource revenue only. The expectations of many interviewees and observers is that the NEITI implementation should reflect the complexities and realities of the Nigerian structural environment by including such areas as contract and expenditure transparency, solid minerals, and expansion to sub-national levels. In trying to cope with these expectations, the resources available for the NEITI implementation appears
136 apparently stretched. The initiative tends to lack focus hence weakening its effectiveness.
However, even though it seems apparent, the significance of some of the contextual factors highlighted above seem not to have attracted due considerations in the NEITI implementation. For instance, the fact that the complementary institutions necessary for NEITI effectiveness are lacking seems to be taken for granted. There are strong suggestions from the foregoing that government’s level of commitment towards overall governance institutions building seems to be key to the effectiveness of NEITI. Hence, NEITI can hardly achieve higher than the ambitions of the government of the day. And the ambitions of the government agents in Nigeria are strongly shaped by the structure of incentives occasioned by the factors within the structural context. In fact, the NEITI objectives seem to be a threat to vested interests in the existing incentives structure. Overallthe evidence discussed in this chapter strongly supports the argument that the local context is crucial in determining the effectiveness of collective action for resource transparency.
4.6 Conclusion
The key aspects of the Nigerian structural environment that have significant implications for the implementation and effectiveness of NEITI have been discussed in this chapter. The main argument is that the Nigerian political economy, the structure of the Nigerian extractives industry, and the nature of existing complementary institutions to NEITI are among the significant determinants of the effectiveness of NEITI in achieving the objectives of resource transparency and accountability. These factors combine to engender an incentives structure that runs
137 contrary to the objectives of NEITI. Therefore, any chance of NEITI making any meaningful impact depends on the ability of the initiative to alter the existing incentives structure.
Furthermore, these contextual factors also inhibit NEITI’s ability to successfully restructure the incentives structure. T he evidence analysed in this chapter strongly supports the view that NEITI’s effectiveness is strongly tied to complementary efforts at improving other requisite governance institutions, such as the electoral system and the Freedom of Information Law. However, because improving these complementary institutions and removing the obstacles to NEITI implementation present some level of threats to some key stakeholders, a lot would depend on t he perceptions and commitment of these key stakeholders. This highlights the strength of the incentives structure in the domestic environment towards determining the outcome of a MSI aimed at strengthening institutions at the domestic level. The overall design of the EITI gives little consideration to these domestic and structural factors yet the effectiveness of the country implementation is essentially determined by the structural factors. What this demonstrates is that resource transparency as desired by the proponents of the EITI will hardly be achieved, and even if it is, its impact would be limited by the structure of the local context. However, the local context also includes the stakeholders who also shape the process and outcome of the MSI. The next chapter explores the nature and characteristics of the stakeholders to NEITI and how they also influence the effectiveness of the initiative.
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CHAPTER FIVE
NEITI AND THE STAKEHOLDERS
Our operational philosophy shall be informed by the assumption that the “answer lies within”, that each one of us is the decisive element in whether we succeed or fail. It is our personal approaches that will create the climate and shape the environment within which we will operate. I believe that, individually and c ollectively, we possess the tremendous power to make life joyous or miserable for our people. We have a choice to be a tool of torture or an instrument of inspiration for Nigerian people. - Prof. Assisi Asobie, NEITI Chairman, during the inauguration of the second National Stakeholders Working Group (NSWG) on the 29th of January, 2008.
5.1 Introduction
This chapter deals with the second research question of this study which explores how and why the characteristics of the component agents to collective action, and the relationship between and amongst them, influence the effectiveness of collective action for resource transparency. Particularly, this chapter examines the character of the stakeholders to NEITI, their interrelationships and how and why these influence the implementation and effectiveness of NEITI. It is strongly believed that the effectiveness of collective action for resource transparency would be influenced by both the character of the component agents, and the nature of the relationship between and amongst them (Hemmati, 2002). This is mainly because while the characters of the stakeholders define their disposition and commitment to collective action, the nature of their interrelationships prior and during collective action also reflects in the balance necessary for the success and effectiveness of collective action. Thus, the EITI draws its strength from the multi-stakeholder framework which has the potential of bringing all stakeholders to a common platform for a ch ance to harmonize their
139 diverse interests (Hemmati, 2002). However, achieving a truly multi-stakeholder platform remains a challenge to the implementation of EITI in Nigeria.
The key argument is that the diverse and sometimes competing interests of agents together with the disparity in their relative capacity of influence on o ne another, would constitute challenges to collective action (Bandiera et al, 2005; Shapiro, 2005:267). Stakeholders’ commitment and contribution to the provision of resource transparency tend to be influenced by their perception of the benefits and costs that resource transparency presents (Kolstad and Soreide, 2009). Kolstad and Soreide particularly believe that “an analysis of agents and their incentives in the natural resource sectors are [sic] important to understand how rules and institutions should be designed to reduce the risk of corruption” (2009:223).
The greatest strength of the EITI may well lie in its multi-stakeholder framework, but what conditions are necessary for its effectiveness? While a balanced composition of all key stakeholders is considered a critical success factor for MSIs (Hematti, 2002, Biermann et al 2007), identifying and engaging the right stakeholders could constitute challenges (Wood and Gray, 1991). This chapter therefore explores the character of the NEITI stakeholders and the relationship amongst the identified stakeholders. However, evidence also suggests that there are challenges also emanating from the identification of stakeholders to the NEITI. Therefore, how are the NEITI stakeholders identified and are there challenges posed by any gaps in identification?
The rest of this chapter is arranged as follows: In section 5.2, we discuss the three broad categories of stakeholders who constitute the NEITI ‘key’ stakeholders. Section
140 5.3 examines the nature of the relationships between the ‘key’ stakeholder categories and the implications for the implementation of NEITI while section 5.4 considers the possible gaps in the identification of ‘key’ stakeholders to the NEITI and the implications for the implementation and effectiveness of the initiative. Section 5.5 concludes the chapter.