Ghana’s New Petroleum (E& P) Act is Progressive
Panelists at a day’s forum to evaluate the just passed Ghana’s Petroleum (Exploration & Production) Act has largely described the law as Progressive that will maximize the needed fiscal dividends that will bring the desired benefits to the people.
But, were quick to add that there were still some few gaps that needed to be refined to make it perfect. Some mentioned were debt loading, mispricing, and valuation pricing.
The above, the experts agreed, will “support the development of the wellbeing of citizens through efficient and effective natural resources management”.
On the theme “Will Ghana’s Petroleum E&P Act secure optimal benefits for its citizens”, the experts pointed out that International best practices point to a strong legal framework such as the one passed by Ghana’s parliament that “secures fair share of resources benefits and ensures robust governance provisions.”
The workshop also looked at whether the new law was sufficient in key transparent and accountable initiatives and discussed them as against the expectations of civil society. It also looked at how the new law aligned with international practices and finally looked at the key differences between the old and the new E&P laws.
Organized by Natural Resource Governance Institute (NRGI) in collaboration with the African Centre for Energy Policy (ACEP) the workshop sought to discuss whether the new law addressed the concerns of “many Civil Society Organizations raised about the old law of 1984 which had “no clear roadmap to incorporate the oil and gas sector intolong term socio-economic planning and vision to maximize full employment, industrial and development on a transparent manner”. It also had a lot of weak governance structure that did not have a competitive license awarding process of oil blocs nor information of beneficial ownership disclosure. In addition, the 1984 law lacked safety, social and environmental impact provisions that will benefit the country they pointed out. Civil societies also complained about the type of production systems Ghana entered and whether Ghana should adopt the “a production sharing agreements or the Royalty/Tax systems.
Analyzing the topic “Analysis of Fiscal Provisions in the Petroleum Act 2016, the Executive Director of ACEP, Dr. Mohammed Amin did an extensive comparison of the fiscals as captured in the new law and their merits and demerits as against civil societal expectations and came to a conclusion that the new law was largely “progressive in his view”.
He said most E&P laws nowadays are hybrid in nature and provisions are captured to suite the peculiar situation of every geographical area or country. Citing Ghana taking its share in Kind if she wish, Dr Amin explained that in all cases there are risks involved. And the new law has taken on board several criticisms that has made it better and superior to the old laws.
He however pointed out that what matters in Ghana’s case is Ghana’s capacity to negotiate a better deal or terms with investors in the sector to maximise revenue. He explained that Ghana is still a convenient place for debt loading by exploration companies as well as mispricing when the companies import equipment for the exploration and it must be addressed. He said as far the new law is concerned enough has been done.
Contributing, Hon.Amadu B. Sorogho, Chairman of the Parliamentary Select Committee on Mines and Energy reminded the gathering if there were gaps as identified by the experts then all must share in the blame for as the Committee gave all the time needed by every Ghanaian to make their inputs in the bill before it was passed. He said what is on paper was very fine but when it comes to implementation, the ordinary Ghanaians should be. The bill which stayed in Parliament for almost seven years before it was passed is the most extensively consulted bill ever he told the gathering. He said hearing what the workshop discussed; the crux of the matter is at the negotiations.
Madam Nicola Woodroffe of NRGI earlier noted that the new law as it stands even though captured provisions of a competitive bidding process, the Sector Minister’s power to set aside all that at willneeded to be closed. The new law has not also shown under what circumstances will a competitive bidding process be side stepped by the Minister or if an award is not made after the bidding process what happens? It is not clear. She said civil society’s interests in these are to prevent people without good intensions to take advantage of the law or the process.
In his opening address, Emmanuel Kuyole, Deputy Director Africa of NRGI re-iterated the type of fiscal policies that gave a fair share of revenue to Ghana, thesafety and environmental issues which leaves much to be desired given that the industry is picking up.