Without Monitoring and Evaluation Local Content Will be a Joke -Oil and Gas Insurance Pool Manager

The Manager of the Oil and Gas Insurance Pool in Ghana has stressed that without a proper monitoring and evaluation mechanism being put in place to ensure that the local content policy framework is being implemented as it should, the country’s local content aspirations will be a big joke and a fiasco. According to him, “A greater portion of the local content policy being touted by government will remain a text book material until we take monitoring and evaluation seriously”. To the Manager of the Oil and Gas Insurance Pool, Mr Farris Attrickie, his lack of faith in the local content police framework stem from the fact that there are already a lot of policies in place in the country that are not being enforced. “We are a very funny people. We know that there are laws made even in the cocoa sector and the mining sector that are not enforced but rather flouted with impudence. Yet we keep on adding to them. I don’t believe in policies. Though policies are good but they are just the first step towards finding solutions. The critical part of policy making is its implementation, monitoring and evaluation, and that is what we lack as a nation. Before we even dream about local content for the oil and gas sector to protect us all, we have the Insurance Law, Act 724 of 2006, which provides that all assets, properties or interest emanating from Ghana has to be insured through a Ghanaian insurance company. And where the business is big that there is the need to insure and reinsure abroad you needs to ensure that you have satisfied the local insurance market first before the excess can go outside Ghana. But this is the theory, and to all theories it might not be applied the way it should be as in the case of Ghana. We have to see practical steps being taken. Now, if you tell me you are doing ABCD to solve this issue I will be confident in your policy. The sweetness of the pudding is in the eating. For example, if the policy says that when you import anything to be used in the oil and gas sector in Ghana you have to insure it in Ghana, those at the port should ensure that before they clear your goods you show an evidence that you have insured the product in Ghana.” He indicated that the challenge here is that some of the international oil companies are not insuring locally and some of those who do also do not insure everything locally, adding that, “Some of the IOCs even import machineries to be used in the oil and gas sector and brings them into the country Cost Insurance and Freight (CIF) instead of Cost and Freight (CF) for the insurance to be done locally. Our marine insurance companies here are also seldom used by these companies.” Mr Attrickie however refused to divulge the names of these defaulting international oil companies. He advocated for measures to be put in place that will ensure that anyone who flout the policy ends up rather in a hotter situation. “So I can tell you that with the issue of local content we are just doing the right thing the wrong way. We need to be touting the sanctions for breaches, what is the penalty, what is the fine, what do we do to discourage people from going round the local content law,” he added. Background of the Oil and Gas Insurance Pool Ghana’s oil and gas insurance pool was established in August 2010 by a resolution from the General Council of the Ghana Insurance Association. It started with a membership of 25 insurance companies in Ghana but two of its members were recently withdrawn from the pool by the Insurance Commissioner for their inability to pay their outstanding debt to the pool. The share contribution and distribution of the members of the oil and gas insurance pool is based on 10perecnt of their net asset, using the companies totaled 2009 net assets profit. The pool has a well laid out structure and constitution. The CEOs of member companies are the shareholders, which is called the General Assembly. It has a management board made up of the top seven members. There is a secretary to the pool. The secretary has to be a lawyer of good standing and an employee of any of the members of the pool. The manager of the pool is appointed by the management board. The position of a pool manager is a 2 years renewable, but 3 years for the secretary and members of the management board. The pool currently has a capital mobilization of about $22million and this is the amount pledged by members. In 2011 and 2012 the pool made $535.000 and $1.4million gains respectively for insuring oil and gas businesses.