Kosmos Bullies Govt Over ¢400bn Fine

As Govt Goes Panicky

Kosmos Energy, one of the operators in Ghana’s Oil fields, after being slapped with a 400-billion-cedi fine for negligently spilling a total of 706 barrels of toxic substances into the country’s marine waters, has in a three-page audacious letter virtually told the government of Ghana, to ‘go to hell and roast’, because it is untouchable.

Indeed, Kosmos has branded the government of Ghana as lawless, even though the permit issued by government to Kosmos to work in the country’s oil fields indicates that fines will be imposed in the event of negligence and violation of the permit conditions.

Further, a six-member ministerial committee that investigated the negligent spillage and recommended the fine on the American oil company concluded that Kosmos’ handling of matters relating to the toxic spill amounted to a cover-up. Yet, Kosmos says the government’s decision to fine the company is baseless.
Kosmos stated in the letter addressed to the Attorney-General and Minister for Justice, Mrs. Betty Mould Iddrisu, that the 400-Billion-cedi fine imposed on the company by government is “totally, unlawful, unconstitutional, ultra vires and without basis”. The letter was copied to the President, John Evans Atta Mills and the Minister for Environment, Science and Technology, Sherry Ayittey.
A copy of the letter intercepted from the offices of the lawyers of Kosmos, Bentsi-Enchill, Letsa & Ankomah, asked the Attorney-General to use her “best offices and endeavours to halt a process that legally and procedurally is fatally flawed”.

Further, it stated that “We hope that upon all due consideration of these legal flaws, you will intervene decisively and bring this lawless procedure to an end”.

Virtually, Kosmos admits that it has negligently spilled toxic substances into Ghana’s marine waters but believes that the company should be allowed to go scot-free because the government has no such legal authority to impose a 400-billion-cedi fine on it.

Disappointingly, the government appears to be panicky over Kosmos’ daring response, and, already some government officials are arguing that government should deal leniently with Kosmos, adding that judging by the tone of the letter, it was obvious that officials of the company are unhappy and angry with the fine.
These coward government officials have taken this position, under the fear that if Kosmos was not leniently dealt with, the company might finance the opposition New Patriotic Party (NPP) for the 2012 general elections to oust the government from power.
However, encouragingly, other brave government officials are of the strong conviction that the authority of government and sovereignty of the country should never be compromised or undermined under any circumstances.
Kosmos’ impudent letter was in response to a letter written by the Minister for Environment, Science and Technology (MEST) dated August 3, 2010 to the company, imposing the 400-bilion-cedi fine on it for ‘negligently’ spilling toxic substances into the marine waters of the country.
But Kosmos has rubbished the authority of the minister and for that matter Government, for imposing such a fine on the company.
Kosmos stated in its letter that “The Minister has no power under the constitution or any other law of Ghana to impose a fine on any person in the event of an oil spillage. Under the constitution, Ministers of the Republic of Ghana are officers appointed by the President to exercise executive authority on his behalf. Penal measures are not within their province in the absence of express provisions of law.”
It added, “There is no Ghana law that confers powers of conviction and punishment for environmental offences upon the minister”
Kosmos argued further that even though the EPA was represented on the committee, the committee was not the EPA following the enforcement notice procedure outlined in the law. It said EPA may report to MEST but the Minister has no authority to fine any person in the name of the EPA, following her own ad hoc committee’s recommendations.
Within a period of five months (Between December 2009 and May 2010), the Kosmos on three different occasions, discharged Low Toxicity Oil Based Mud (LTOBM) into the marine waters of Ghana. The first incident occurred on the ABAN ABRAHAM Rig, the second and the third incident occurred on the ATWOOD HUNTER Rig.
On December 26th, 2010, the ABAN ABRAHAM drilling rig, working for Kosmos Energy HC spilled an estimated 698 barrels of the toxic during transfer of drilling fluid to a support vessel offshore in the Gulf of Guinea. A second discharge of drilling fluid involving seven 7 barrels occurred on the ATWOOD HUNTER on March 23rd, 2010.
The Minister for Environment, Science and Technology set up a Committee per letter No. MEST/GA/16, dated 30th March, 2010 to, inter alia, investigate the two incidents. While the committee’s work was in progress, a third spill occurred at the ATWOOD HUNTER on May 26th, 2010. According to Kosmos, the rig spilled an estimated one barrel of LTOBM fluid from the split joint packer at the moon pool area of the rig.
The Committee, chaired by the Deputy Minister for Environment, Science and Technology, Dr Edward Kofi Omane Boamah made findings that The ABAN ABRAHAM incident was attributable to negligence.
Also it noted that the first ATWOOD HUNTER incident was due to negligence because of Kosmos’ failure to adhere to planned preventive maintenance.
In conclusion, the committee cited management lapses, coupled with negligence on the part of Kosmos Energy as being responsible for the ABAN ABRAHAM incident, adding that the handling of matters related to the ABAN ABRAHAM incident by Company amounted to concealment.
The committee continued that Kosmos Energy was in breach of its obligation to ensure that the right procedure and necessary safeguards were in place to minimize any risk of accidental spillage of this magnitude.
It said Kosmos Energy was liable, as due care was not taken to avoid such a huge discharge at this early stage of commercial drilling in Ghana.
“The first ATWOOD HUNTER incident occurred as a result of Kosmos Energy deferring their preventive maintenance schedule”, the committee noted in its report, a copy of which is in the possession of The Enquirer.
Finally, the committee recommended that Kosmos Energy should pay a fine of GH¢40 million (¢400billion). It added that proceeds from the fine should be allocated as follows: Coastal Zone Development Programme - 50%; Environmental Protection Agency-20%; Ministry of Environment, Science and Technology - 10%; Ghana Maritime Authority -10%; and Research -10%.