Oil and Gas in Ghana : Citizens’ concerns about Ghana’s petroleum governance framework

Between 29^th and 22^nd August, 2012 the Civil Society Platform on Oil and Gas undertook a nation-wide consultations on the governance regime for the country’s oil and gas industry, with a view to collating citizen’s feedback on the policies and laws so far passed and also facilitating their input unto understanding bills and draft regulations. The consultations were informed by the reports of three separate but related studies commissioned by the platform. These were: Analysis of the potential implementation challenges of the petroleum revenue management and petroleum commission laws; policy-legislation consistency; and challenges to achieving Ghana’s local content objectives.

The country was divided into three zones- northern, middle and southern belts for the purpose of the consultations, with each zone drawing participation from diverse sections of civil society, including NGO’s, community-based groups, trade and professional associations, representatives of organized labour, faith-based groups, traditional and local authorities.

The following are the key issues, challenges, gaps, and recommendations gathered from the consultations:

1. Participants across the country recognized that natural resource extraction need not be a distinct and separate sector but an integral part of virtually all facets of Ghana’s economic sphere;
2. They acknowledged the fact that transparent and accountable petroleum resource management is a necessary pre-condition for ensuring the maximization of benefits for both current and future generations;
3. It was a view shared by many, that unless we, ordinary citizens, take proactive steps, capitalizing on our democratic rights conferred on us by the constitution of the Republic, to participate in the formulation of policies and laws for this country our hope of seeing petroleum extraction contribute positively to national development and poverty reduction would be lost on us;
4. Most participants wanted the state to re-assert itself as the resource owner, look beyond the collection of royalties and taxes and pursue increased benefits for its people, through value addition across the entire value-chain of the industry, including crude oil refining; They called for the abolition of fees being considered by the Petroleum Commission for local entrepreneurs seeking opportunities in the oil and gas sector, as in their view, such fees will constitute a barrier to the achievement of the policy objective of putting Ghanaians in the driver’s seat by 2020;
5. Furthermore, they wanted the Petroleum Commission, which is the primary agency for the promotion of local content in Ghana’s petroleum industry, to proactively provide information on what opportunities exist for Ghanaians in the industry and how they can take advantage of them;
6. They also called on the Ministry of Energy to work with the Ministry of Finance and other stakeholders to develop programmes to enhance both the technical and financial capacity of Ghanaian actors in the oil and gas industry to seize the opportunities available to them;
7. Participants suggested that, the Ministry of Energy working in concert with the relevant technical and skills training institutions should take immediate steps towards supporting Ghanaian technicians to be certified according to industry standards as the absence of such standard certification constitute a major hindrance to the employment of Ghanaians in the industry;
8. They demanded that, where the required technical competence is lacking, the law places the burden of technological, technical, and skills transfer on the foreign companies through mechanisms such as joint-venture ship;
9. They again, demand that in so far as revenues that accrue to the state are a function of the fiscal terms contained in the contracts that are signed by government and companies, all contracts, primary and subsidiary should be publicly disclosed. Such disclosure, they believe will not only remove the incentive for negotiating bad contracts in the name of the people, but also inform citizens of what to expect in terms of revenues from particular projects, and in the process, help manage expectations;

10.  They called on the Ministry of Finance to ensure that , the impending regulations to the Petroleum Revenue Management Act, 815, considered imposing a time frame for developing a long term National Development Plan against which petroleum revenue spending are to be aligned. Such long term Development Plan must prioritize the deployment of hydrocarbons as a catalyst for transforming and diversifying the national economy away from the country’s dependence on primary commodities;

11.  The people demanded that the government took steps to incorporate the guiding principles enshrined in the ECOWAS directives on mining policy, and the African Mining Vision to which Ghana is a signatory into our national laws. Particularly, they demanded the strict observance of the principle of ‘Free, Prior, and Informed Consent’ of communities likely to be affected by actors in the petroleum sector;

12.  Participants from the Western Region in particular wanted clarity on how frontline and adjoining oil districts and fisher folks would be compensated for the direct and indirect negative impacts of oil exploration and production, including pressures that are brought to bear on existing social infrastructure for the delivery of social services, as a result of increasing numbers of migrant workers into these Metropolitan, Municipal, and District Assembly (MMDAs) areas;

13.  Participants from the Western Region, again wanted the frontline oil districts to be supported to develop or revise their medium term development plans, incorporating into them an expectation and plans to seize opportunities that oil and gas exploration and production provide;

14.  In the northern belt, participants wanted to be updated on the status of exploratory activities in the voltaic basin and the extent to which such activities are likely to impact on life and the environment.

In fulfillment of the longstanding commitment of the Civil Society Platform on Oil and Gas to take initiatives in our own spheres of operation, and in conjunction with all statutory bodies involved in the management of the country’s hydrocarbons towards forging a convergence of all divergent view points on how the industry is to be managed, we will welcome the opportunity to discuss these concerns with all the relevant Ministries, Departments, and Agencies.

The consultations were made possible with the kind support of the World Bank