Corruption Vulnerabilities in Local Content Policies in the Extractive Sector: An Examination of the Nigerian Oil and Gas Industry Content Development Act, 2010

Abstract

There is hitherto limited scholarship on the risks of corruption in local content policies in the extractive sector throughout the world. Yet, the concern that corruption might rear its head in local content policies in the extractive sector, particularly in developing countries where regulatory mechanisms are weak, has been raised. This paper seeks to contribute to the scholarship by examining the Nigerian Oil and Gas Industry Content Development Act (2010) with a view to identifying the points of corruption vulnerability in the Act. The paper argues that the Act contains four points of corruption vulnerability related to the following: conflict of interest, broad discretionary power and the likelihood of political influence as well as influence by oil and gas companies, the murkiness of the oil and gas contract system in Nigeria, and the potential of the Act to serve as an engine of facilitation payments.