There is a mixed feeling among stakeholders in Ghana’s oil and gas industry as to the essence of passing an extractive industries transparency initiative law.
While the Ministry for Finance and Economic Planning and some Civil Society groups are strongly backing the proposed Ghana Extractive Industries Transparency Initiative Bill, 2012, that is yet to be place before Cabinet for approval and subsequent submission to Parliament for passage into law, a source close to the Petroleum Commission have questioned the need for such a law when the Petroleum Management Act is serving the same purposes.
The Petroleum Revenue Management Act 2011, Act 815, provides the framework for the collection and management of petroleum revenue in a responsible, accountable and sustainable manner for the benefit of Ghana in accordance with article 36 of the Constitution and related matters.
The GEITI legislation is to ensure the sustainability of the Ghana EITI and ease the challenges of accessing receipts and payments data and other critical information from extractive companies and Government Agencies.
Ghana signed on to this EITI Initiative in 2003 and has since applied it to the mining sector. Upon the discovery of oil in commercial quantities in 2007, the EITI was extended to cover the oil and gas sector in September, 2010.
According to the source, the GEITI Bill is just a duplication of the role of the Petroleum Revenue Management Act, and therefore not necessary.
However, Franklin Ferdinand Ashiadey, National Coordinator of the Ghana Extractive Industries Initiative has dispelled this notion indicating that “the propose GEITI legislation and the Petroleum Revenue Management Act complement each other. The principles of EITI have no doubt informed the drafting of the Petroleum Revenue Management Act, 2011 (Act 815) which has transparency very entrenched in it.
He said moreover, in consonance with developing trends on the issues of extractive industry transparency, the draft bill seeks to expand the scope of the current EITI to cover the entire natural resources sector (minerals, petroleum, forestry and fisheries).
The bill is also intended to ensure increased transparency in the distribution of payments made to, and received by District Assemblies and traditional authorities.
The EITI Board designated Ghana as EITI Compliant on October 19, 2010. Ghana must be revalidated in October 18, 2015. Stakeholders in the process may request that the EITI Board requires a new validation at any time within that period if they think the process needs reviewing.
In February 2007 the Ghana EITI process produced it first report covering payments and revenues for the first half of 2004. The second report was produced August 2007, covering payments and receipts for the second half of 2004.
Ghana was accepted as an EITI candidate on September 27, 2007. The third report, covering payments and receipts for 2005, was released in August 2008. On September 30, 2010, Ghana published three reports covering extensive data on government revenues and disbursements at a central as well as the local level for the year 2006, 2007 and 2008. In September 2011 Ghana published the report covering year 2009.
A scoping mission on how to extend the GHEITI to the oil and gas sectors was undertaken in July 2009. Following its recommendations, the National Steering Committee was restructured representing oil, gas and mining stakeholders in August 2010.
According to the EITI official website, 3.5 billion people live in countries rich in oil, gas and minerals. With good governance, the exploitation of these resources can generate large revenues to foster economic growth and reduce poverty. However, when governance is weak, such resource revenues may result in poverty, corruption and conflict.
It said the EITI aims to strengthen governance by improving transparency and accountability in the extractives sector. The EITI is a global standard that promotes revenue transparency. It has a robust yet flexible methodology for monitoring and reconciling company payments and government revenues at the country level. Each implementing country creates its own EITI process which is overseen by participants from the government, companies and national civil society. The international EITI Board and the International Secretariat are the guardians of the EITI methodology internationally.
Governments benefit from following an internationally recognised transparency standard that demonstrates commitment to reform and anti-corruption, leading to improvements to the tax collection process and enhanced trust and stability in a volatile sector.
Companies benefit from a level playing field in which all companies are required to disclose the same information. They also benefit from an improved and more stable investment climate in which they can better engage with citizens and civil society.
Citizens and civil society benefit from receiving reliable information about the sector and a multi-stakeholder platform where they can better hold the government and companies to account.
Energy security is enhanced by a more transparent and level playing field. This increased stability encourages long-term investment in production – and thus improves the reliability of supply.
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