The Civil Society Platform on Oil and Gas has urged Parliament, the Minister for Energy, and President John Mahama to resist any attempt by the international oil companies to “kill” or “dilute” the country’s Local Content Legislative Instrument (LI).
In a press statement, the platform said that such attempts by the oil companies will roll back the progress Ghana has made toward ensuring that the nation is able to escape the resource-curse trap that has befallen many an oil-producing nation in the third world.
The society further called on all citizens, organised and unorganised, to take an interest in this matter and solidarise with members of parliament and the oil and gas platform as they work to protect the national interest.
“We take this stance actuated by our firm belief that following the government’s approval of the TEN Project, any delay or withdrawal of the bill from parliament will cost the country millions of dollars of potential revenues and employment opportunities to be accessed in contracts and procurements for the project.”
The society added that there is no doubt that the Local Content Policy and its associated Legislative Instrument represent the country’s best chance of not only ensuring increased Ghanaian participation in the oil and gas sector, but perhaps more importantly the best hope of effectively integrating the sector into the rest of the national economy.
“The fact is, all over the world countries that have been able to maximise benefits from their natural resources are those that are themselves active participants in the exploitation of the resources, and have created opportunities for the sector to be integrated into the rest of the national economy. Experience has shown that the best way to achieve this is through a good local content legislation,” the platform said.
Ghana’s local content policy objective includes a commitment to give first consideration to Ghanaian independent operators in the award of oil blocks, oil field licences, oil-lifting licences and in all projects for which a contract is to be awarded in the oil and gas industry.
Where bids are being evaluated and where bids are otherwise equal, the bid containing the highest level of Ghanaian content shall be selected.
“This is indeed what it will take to place Ghanaians at the forefront of the nation’s oil and gas business in a relatively short period,” said the platform.
“We are however alarmed by what appears to be subtle attempts by corporate lobbyists to undermine passage of the Local Content Legislative Instrument, which was laid before the last parliament but did not mature and so had to be re-laid before the current parliament.
“Our information is that it did 11 days out of the 21 days required for it to mature before parliament went on recess. It therefore has 10 more days to mature. Intelligence information gathered by the Oil and Gas Platform suggests that the international oil companies operating in Ghana are seeking to dilute the content of the bill in a way that will deprive Ghanaians of the opportunities it offers.
“The efforts of the companies are given further impetus by the US Ambassador to Ghana, who recently stated that ‘Ghana’s local content law in the oil and gas sector could make it difficult for the country to attract the needed foreign capital, technology and expertise’.
The statement by the ambassador reflects a certain agenda by powerful interests to dilute the provisions of the LI, and in the process water-down its effect.
“We do not believe that the concerns so far raised by the companies through their lobby platform, the E&P Forum, are strong enough to warrant a withdrawal of the oil and gas Local Content Legislative Instrument; and we are happy that the Select Committee on Subsidiary Legislation shares this view.
“The concerns are several and include Article 46 (1), which states that ‘a person who submits a plan, returns, report, or other document and knowingly makes a false statement, commits an offence and is liable on summary conviction to a fine of not less than one hundred thousand penalty units and not more than two hundred and fifty thousand penalty units, or to a term of imprisonment of not less than two years and not more than five years — or both.
“The companies also say the transition period for the law coming into effect is too short. We again reject this position because the earlier the law take.- effect the quicker Ghanaians are able to seize opportunities offered by the law.
“The platform again wants the discretion assigned to the Minister under clause 4(3), relating to the ‘interest of a citizen in petroleum operations’, transferred to the Petroleum Commission. The clause in question states that the Minister may vary the requirement in that sub-regulation in circumstances where an indigenous Ghanaian company is unable to satisfy the requirement of five percent equity participation. Clause 4(4) also states for the purposes of sub-regulation (2) that the Minister shall determine the persons qualified.
“Furthermore, the companies want amended the requirement under article 4(2), which states that there shall be at least five percent equity participation of an indigenous Ghanaian company other than the corporation.
“In the view of the platform, this requirement is less ambitious compared to the Nigerian bill, which mandates joint ventureship in addition to a minimum of 95% of managerial, professional and supervisory grades of oil and gas companies to be Nigerians; 100% of risk insurance to be taken out with insurers registered in Nigeria; and 100% of legal services to be secured from Nigerian legal practitioners.”
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