Parliamentary Oversight, Key to Getting It Right in Oil Sector

By: Basiru Adam

Participants in a meeting with representatives of ONE International, a campaign and advocacy organization founded by Bono of U2 fame, have observed that it will take a well resourced and a motivated parliament to ensure that Ghana does not go the way of countries for whom the discovery of oil and gas have been a curse rather than a blessing.

They claim that Parliament can through the exercise of its democratic oversight over the executive circumvent any potential abuse of future oil and gas revenues, and ensure that adequate laws are passed to protect the collective national interest in the emerging oil and gas industry.

Briefing the visitors the Ghanaian civil society activists, drawn from the Integrated Social Development Centre (ISODEC), Friends of the Earth Ghana, WACAM, PWYP-Ghana, the Regional Extractive Industries Knowledge Hub, and Revenue Watch Institute (RWI), noted that parliamentary due diligence on contracts and agreements that come before the House are often hampered by a lack of access to cutting edge research and analysis.

"Unlike most democratic jurisdictions, the Ghanaian MP has no personal assistant, research staff or secretariat from where to operate" said Emmanuel Kuyole, Africa Regional Coordinator for RWI. He informed the group that RWI in helping to address the capacity challenge that faces the parliament of Ghana, is working with the Parliamentary Centre and GTZ to and Indications are to build parliament’s capacity to deliberate on oil and gas related issues that may come before them. "Parliament as an institution requires support, and One can certainly be of help in this area" Kuyole added.

Concerns were also expressed in respect of the delay in putting in place the necessary policy, legal and regulatory frameworks in the run up to oil and gas production in the last quarter of 2010. The delay, the Ghanaian civil society activists noted, is the result of partisan exclusivity in the initial processes that led to the previous governments draft policy and legal frameworks.

"Because the party that is currently in power, and many other Ghanaians were excluded from the initial processes, the output was not nationally owned, hence the need to review all that had been done by the previous government" noted a participant at the meeting, adding that it is important that the current government does not repeat this mistake, but took steps to be as inclusive as possible in its policy formulation.

Bills that remain outstanding and which must be passed into law before Ghana’s first oil are: the Petroleum Authority Regulatory bill, the Oil Revenue Management Bill, the Local Content Bill and the Right to Information Bill. Experts believe that only broad and deep consultations will yield laws that will stand the test of time and ensure that Ghana maximizes benefit from its oil and gas sector.

It is estimated that the country stands to gain, in the next 15 to 20 years, about US$1 billion annually from the production of some 120,000 barrels of oil daily from the ‘Jubilee Field’ which was the first discovered well in 2007. Several other wells have since been discovered including a recent one that has sparked off a boundary problem with Ghana’s western neigbour Ivory Coast.

Ghana’s annual development assistance is said to be in the region of $1billion, and questions have been raised about what the impact will be on donor inflows in the light of the country’s potential oil revenue.

ISODEC has cautioned against over dependence on oil revenue, saying it could erode the "social contract" that exists between government and the people. Thus once government is not run on taxes from the people, it is likely to renege on its responsibility to account to the people.

Other concerns expressed at the meeting were: the fact that the country does not seem to have learnt its lessons from the abysmal way in which it has handled the mining sector. The fact that a mining law has been passed, when a mining policy is yet to be finalized was described as an anomaly.

Again, acting in outright contravention of the country’s obligations under international biodiversity conservation treaties, and convention on combating desertification have compromised the sustainable exploitation of minerals in Ghana placed the lives of mining communities who depend on the forest for their food and sustenance into jeopardy. The Ghanaian CSO representatives challenge the Government of Ghana to view its natural resource as an opportunity to transform the resource as an asset in the ground into an investible asset whose dividends will benefit the present and future generation.

Representatives of ONE International say it appears to them there is an urgent need for somebody "with real influence" to stand up and say "time out, we need to know what is going on."

Indeed, according to Co-founder and Executive Director of ONE International, Jamie Drummond, their travels around Africa have shown a new wave of interest among "the cheated generation" to demand of their governments to be transparent and accountable.

He and his group understand the call by some Ghanaian civil society activists for a moratorium on further licenses; but could Ghana, if it wished, have delayed oil production in favour of its institutional arrangements? Especially as much of the financial resources for the exploration of oil came from multinationals, who would certainly want to make their returns in as little a time as they can garner.