Graphic Online: Ghana: Saturday, February 03, 2018.
The Institute
of Economic Affairs (IEA), has called for the speedy passage of the Right to
Information (RTI) Bill to improve the transparency and accountability not only
in the petroleum industry but the entire extractive sector.
It also urged
Parliament to fast-track work on the Ghana Extractive Industries Transparency
Initiative (GHEITI) Bill, the Local Content and Local Participation Bill as
well as the Marine Pollution Bill to ensure frequent reporting on oil revenues
and expenditure, as well as make oil firms environmentally responsible.
“The GHEITI
Bill will enhance governance in the petroleum and other resource industries by
placing a legal requirement on them to report revenues, expenditure and other
key production data, while the Marine Pollution Bill will ensure that oil
companies meet their environmental responsibilities,” the institute said.
Accountability,
transparency
Presenting
the IEA Petroleum Transparency and Accountability (IEA- P-TRAC) index report
2014 in Accra last Wednesday, a Senior Research Fellow of the IEA, Professor
John Asafu-Adjaye, said: “We also advocate a speedy passage of the Budget Act
to enhance Parliament’s ability to conduct a comprehensive analysis of the
budget.
“The passage
of these bills will greatly enhance the level of transparency and
accountability not only in the oil and gas sector but also in the other
resource industries,” he stated.
The P-TRAC
index project was initiated by the IEA in 2011 to monitor transparency and
accountability in the management of Ghana’s petroleum resources from 2011 to
2014.
The overall
aim of the project is to promote transparency and accountability in the
management of the country’s petroleum resources and to enhance the levels of
responsibility on the part of policy makers and implementers.
The index
focused on four major areas of the oil and gas value chain -- revenue
transparency, expenditure transparency, contract transparency and transparency
in the management of the Ghana Petroleum Funds.
Revenue
transparency
Prof. Asafu-Adjaye
noted that since the beginning of oil production in the country in 2011, having
access to information pertaining to oil production from the Ghana National
Petroleum Corporation, Ministry of Energy, Bank of Ghana and the Ministry of
Finance had often been difficult.
To address
that challenge, he said there should be more frequent reports by such
stakeholders in a form that would be understood by the average citizen to
appreciate what is happening.
“In spite of
all the information available, if one wants to know how much it costs to
produce oil and how much reserves oil companies have, you will never find such
information on the website of these state bodies,” he lamented.
He indicated
that although rapid progress was made in revenue transparency in the first
three years of petroleum production, the rate of progress had slowed over the
past three years, especially in the area of institutional environment.
He said while
the Petroleum Exploration and Production Bill had been passed into law, the RTI
Bill still awaited passage by Parliament, together with other important bills
that were currently in draft forms, such as the Ghana Extractive Industries
Transparency Initiative Bill and the Marine Pollution Bill.
Expenditure
transparency
Prof.
Asafu-Adjaye said the IEA had observed no improvement in the frequency and
quality of reporting on oil revenue since the IEA’s last report in 2011.
“We find the
current practice of providing information on petroleum expenditure in the
budget to be inadequate and we strongly advocate the publication of a separate
report in a simple language,” he stated.
The IEA
senior fellow pointed out that the institution had observed a marginal
improvement in the project’s sub-index and that concern had been raised in past
P-TRAC reports about the lack of developmental impact of expenditure out of the
Annual Budget Funding Amount (ABFA).
“In 2017, the
current government decided to concentrate the expenditure on its flagship Free Senior
High School (SHS) Policy, with smaller amounts going into agriculture, health
and railway infrastructure. There is a need to closely monitor these
expenditures to ensure that they are delivering the expected outcomes,” he
said.
Contract
expenditures
Prof.
Asafu-Adjaye noted that of the four components of the P-TRAC index, contract
transparency was the only that had seen the least improvement over the past
seven years due to the enactment of the Exploration and Petroleum Act (E &
P).
“Going
forward, the IEA will like to see more public disclosure of contracts and the
licensing process. The E & P Act calls for an open and competitive
licensing process.
“We note that
in the recent contract signed by ExxonMobil, the government made use of a
clause in the act that allows it to enter into private negotiations with an
international oil company if it is in the public interest,” he said and hoped
that such an option would not be the default choice in future contracts.
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