Lack of funds undermines operations of oversight committee and regulator

The lack of governmental support and funds for many of the institutions set up to police the oil and gas industry has been the centre of debates in Ghana since the commercialization of oil started. This situation continues to attract public concerns with many calling on government to show the political will and address the deficiencies in these institutions. Latest to add his voice to this debate in an interview with Orient Energy Review is the Chairman of the Parliamentary Committee on Mines and Energy, Hon Kwabena Donkor. According to him, a critical institution like the Petroleum Commission, which was established by article 821 in 2011 and is currently the regulator and manager of Ghana’s petroleum resources, a role they took from the Minister of Energy who hitherto regulates the sector with the assistance of the GNPC, is under resourced. He disclosed that “no budgetary allocation has been made for the Petroleum Commission in the current Government of Ghana budget”. Since its creation, the Commission has had to operate from temporary locations. “Funds were recently sourced from government and other sources to get the Commission a permanent office for the secretariat operations. The place is being readied for them to move in soon,” he added. Another institution that has suffered the blunt of government’s indecisiveness is the Public Interest Accountability Committee, established by the Petroleum Revenue Management Act, Act 815, which was heralded worldwide for its creation and in depth reports on the oil and gas industry in Ghana. More than two years in its existence, the Committee still remains under resourced. The Committee that was inaugurated on September 15 2011 and began meeting the following month continues to be housed by the Revenue Watch Institute of Africa Regional Office in Accra till last week in June. It was just recently that some funds were made available to the Committee by government. “We have received correspondence to the effect that funds have been allocated to us but we are yet to actually receive the money,” confirmed Major Daniel Sowa Ablorh Quarcoo to the Orient Energy Review. The amount allocated to the Committee’s operations, which also includes arrears owed them by government is 856,000.00. Compared to the budget the Committee sent to government, this amount is inadequate. “We cannot make the point louder enough but what we have received to the budget we presented, then it would not be enough to fund our operations,” he added. So far the PIAC has had to rely on some of the staff of their benefactors to help in their day to day operations. All the other members of the Committee operate from their respective offices. Major Ablorh-Quarcoo disclosed that a new place has been secured with the help of government and other development partners for their operations and they will be moving in soon. Weakness In Legal Framework The challenges faced by these institutions are not limited to the lack of support and funding but also the legal framework establishing them. According to a study undertaken for and in collaboration with the Civil Society Platform on Oil and Gas with funding from STAR-Ghana, there appear to be some serious weaknesses in Act 815 provisions related to PIAC that undermine its ability to monitor and serve as an independent watchdog over the Petroleum Funds. The study says ideally, this Committee should serve as an important link between Petroleum Fund Managers and the public, providing independent assurance that the funds are being managed properly. However, as the Act is currently written, the Committee could be subjected to undue influence by the very people or officials it is supposed to monitor. “Although the objectives of the Committee are laudable, it is unclear whether the Committee is empowered to investigate issues on its own initiative or whether it may only act at the behest of Parliament or the Executive. Furthermore, the Act states that the Committee must publish two reports a year and hold public meetings, but there is no guidance or minimum requirement specifying the topics the Committee should report on. The most significant threat to the integrity of the Committee is the fact that members are appointed by the Minister. The Minister is responsible for overseeing and administering the Petroleum Fund and, yet is permitted to appoint the “independent” Committee that is charged with the responsibility for ensuring that the Funds are being managed prudently and in accordance with the Act,” the study stressed. For the Petroleum Commission, the study reveals that the primary implementation issue arising out of the Act 821, the law setting up the Commission, is the clearly conflicting objectives of the Commission. It said the most blatant conflict is seen in Section 2 Clause 2e and f which states that the Commission is responsible for ensuring “optimal exploitation of petroleum resources” while at the same time ensuring “compliance with health, safety and environmental standards,” as well as compliance with fiscal metering requirement. The study pointed out that both the laws establishing PIAC and the Petroleum Commission share identical conflict of interest issues. Like Act 815, Act 821’s conflict of interest provisions are incomplete and inadequate.