The manner, in which the parliament of Ghana has carried out its oversight role, has come under sharp criticism from the Chairman of the Public Accounts Committee, Mr. Albert Kan Dapaah, regretting how the majority, over time, had endorsed in an omnibus manner whatever was presented by the executive.
“While we hail the victory of democracy in our country, Parliament which is the central institution of democracy and the key institution in oversight suffers from crisis of credibility,” Mr. Kan Dapaah, who was speaking on the topic, Parliament’s Role In Ensuring Transparency In The Oil & Gas Sector, stated, calling on the media and civil society to be vigilant in their watchdog roles in holding both government and parliament accountable.
Mr. Dapaah, a Chartered Accountant, who is also Member of Parliament (MP) for Afigya-Sekyere West Constituency, said politicians were more amenable to serious issues raised by the media and civil society organisations than their political opponents and therefore called on editors to recognize this strength in holding public officials accountable to ensure transparency and accountability in the administration of the country’s resources.
“Transparency, Participation and Accountability that come from an empowered citizenry are the strongest antidotes to corruption,” he stressed.
Mr. Dapaah called for a more serious oversight role of Parliament, to end the perennial situation such as where the House is given just a week to read and approve an important document like a Budget statement and the majority would always endorse government budgets.
With reference to many provisions of the Petroleum Revenue Management Act, 2011 Mr. Dapaah highlighted transparency, accountability and public oversight role of Parliament in the management of the country’s oil revenue.
He said even though accountability mechanisms are embedded in the four phases of the Budget Cycle, namely: the preparation phase, approval phase, implementation phase and assurance phase, “the accountability mechanisms are not allowed to work.”
“You can only control expenditure when you know how much you are expected to spend and how much you actually spent,” he lamented, adding that in many instances, there were no accounts for the Auditor-General to audit and therefore it was only transaction audits that took place, a situation which undermined the assurance work of Parliament.
He called for a change in the manner of appointing the Auditor-General, to make that office more independent, recalling how two previous occupants of that position under two different political regimes left office, stressing; “let us end this cycle.”
The event, which was a retreat for editors on; Strengthening Media Oversight of the Extractive Sectors in Ghana, was organized by Revenue Watch Institute, with Pen Plus Bytes as co-ordinators, and had also presentations from Tullow Ghana Limited, the Ministry of Energy, Ghana National Gas Company (Ghana Gas) and the Oil and Gas Capacity Building Project, which is under the Ministry of Energy.
‘Public Accountability means the obligation of authorities to explain publicly, fully and fairly, before and after the fact, how they are carrying out responsibilities that effect the public in important ways,’ Mr. Dapaah emphasized, quoting Henry McCandless.
On the role given the Public Interest and Accountability Committee (PIAC) Mr. Dapaah wondered whether it would have substantial investigative powers with ability to refer matters to law enforcement agencies as appropriate.
“Will committee members exercise independent judgment and responsibilities?
“Will members be removed only for good cause shown, where good cause is defined as legal cause not political cause, and “In the absence of Right to info Act will Government provide information?”
With a brief background to Ghana’s search for oil, Mr.. Dapaah, who was Minister of Energy from 2001 to 2003, under the New Patriotic Party (NPP) administration, explained to participants why it became necessary to review the fiscal regime in the petroleum agreement, stressing that it became necessary to do so, relying on the legal directorate of the Commonwealth Secretariat, which had contributed to the formulation of the existing fiscal regime.
The TSIKATA Era
Without referring to him by name, Mr. Dapaah stated how Tsatsu Tsikata, as Chief Executive of GNPC, with considerable knowledge in Oil and Gas, “Was convinced that geologically, there had to be crude Oil and Gas somewhere in Ghana” and was “determined to find hydrocarbons using our own resources so that we will own any discovery.”
He touched on Tsikata’s efforts at building GNPC, training a number of Ghanaians, acquiring considerable seismic data and putting in place the legal framework, with reference to the Petroleum Exploration and Production Law 1984 (PNDCL. 84), Petroleum Income Tax Law of 1987 (PNDCL188) and a Model petroleum Agreement.
According to Mr. Dapaah, following extensive Road Shows to sell Ghana’s Hydrocarbon prospects, which attracted some oil companies to come and explore, Tsikata’s opinion that Ghana should find money to explore and thus own the fields when discovered, resulted in diversifying into telecom, gold mining, salt, crude oil imports for Tema Oil Refinery (TOR) and cocoa. He said he eventually incurred the anger of the Ministry of Finance and Bank of Ghana at the time, which eventually led to his removal from steering the affairs of the national oil company.
THE NEW ERA
Mr. Dapaah said the NPP’s assumption of power in 2001, and change in the management of GNPC, under Dr. Donkor Fodjour and later Sekyere Abankwa of Prudential Bank, with a determined MD, Moses Boateng, led to a new strategy, which involved downsizing and focus on deepwater exploration, followed by a conference held with industry experts at M-Plaza.
He said major observations at the conference included confirmation of Ghana’s good geology but the “Fiscal Regime which sought to obtain NET OIL for Ghana of 65-55% was too harsh to attract investors into a country not known for its oil.”
He disclosed that the COMMONWEALTH SECRETARIAT, then headed by Justice DATE BAH of the ECONOMIC/LEGAL SERVICES SECTION and three other experts, recommended changes in the fiscal regime to 45% to 55%.
According to him, the original terms of the Devon petroleum agreement were reviewed after the M-PLAZA Conference to terms more favourable than Kosmos & Tullow at about the same time that Kosmos and Tullow contracts were signed
KOSMOS – EO GROUP DEAL
He disagreed with suggestions in some circles that the 3.5% stake that Kosmos allocated to the EO Group in the West Cape Three Points (WCTP) block should raise eyebrows, wondering why the Tullow Ghana Limited allocation of 4.5% of its stake in the Deepwater Tano block to Sabre Oil and Gas Holdings Limited never attracted the same concerns.
He argued that what an investor does with its shares after it has conceded to Ghana the negotiated 10% is up to the company,
“Kosmos chose to partner the EO Group and allocated 3.5% out of its shares to them. This is a private arrangement by a Private Investor; Similarly, TULLOW gave 4.5% of its 90% shares to SABRE ENERGY 40% of which is owned by an equally illustrious son of Ghana, Kofi Esson; and
AFREN has ceded 25 of its 70% to Joe Ofori and his Gulf Energy,” he stressed
Mr. Dapaah said the slight differences in the terms are because ALL BLOCKS are not the same, explaining that a particular Fiscal Regime will depend on: “Risk of returns, Geological Challenges, Prospectivity of Block and Availability of Existing Data”
“The terms of Kosmos and Tullow are the same except for additional interest of 2.5%,” adding that that was because “TULLOW Block had been surrendered by DANA PETROLEUM who had left behind 3D Data whereas Kosmos had only 2D Data from GNPC.”
By J. Ato Kobbie, Managing Editor [The Business Analyst]