Feature Article of Friday, 10 October 2014
Columnist: Kwawukume, Solomon
The Petroleum Exploration And Production Bill 2013:
“Imagine what Africa will look like when it has fully tapped into its potential,” he said, citing opportunities in agriculture, manufacturing and intra-African trade. “But Africa and its partners will miss the opportunity to transform the lives of future as well as present generation if they carry on with business as usual,” he added. “Tax avoidance and opaque business practices block Africa’s extractives sector, too,” said Mr. Kofi Annan. He was upbeat about prospects for Africa’s resource rich countries.
‘’Africa’s natural resources wealth rights belongs to the continent’s citizens, but these citizens are being robbed of its benefits by revenue diversion, corruption, jobless growth and rising inequality,‘’ Kofi Annan, Geneva, September 26, 2013.
Dr. Peter Eigen, the Founder of Transparency International observed that the World Bank and Western Governments do not see anything wrong with the multinational companies engaged in extractive industries paying tens of millions of dollars into private accounts overseas to secure bad agreements, and contracts and laws in their favor. DW TV Journal Interview, 31st December, 2013.
Without mincing words, the World Bank and Oxfam America are actively involved in pushing for the passage of the current Bill in Ghana into Law to rob us of our oil wealth in favor of Western (British and American) vested interests and their local accomplices in the name of investment.
You may ask: how are the World Bank and Oxfam America involved in getting this obnoxious Bill pass into law to regulate the Upstream Oil Industry in the country?
Before production began in December 2010, they supported the establishment of 135 branches of CSO Platform on Oil and Gas in 2008 throughout the country except the Volta Region. This was resourced and financed by Revenue Watch Institute and Star Ghana. Revenue Watch Institute and Star Ghana were set up in the year the announcement of discovery of oil in Ghana was made, as financial conduits to these 135 CSO Platform on Oil and Gas branches and other Think Tank groups in the country. Their hidden objective was to execute the diabolical plan and agenda of the World Bank and Oxfam America, through a system of confidence mechanisms or distracting gimmicks, to deny Ghanaians a fair and equitable share of their Oil Wealth in the name of investment purportedly in the interest of Ghanaians.
These CSO and their leaders are projected by the World Bank, Oxfam America and Revenue Watch Institute as the only knowledgeable people in Ghana to speak and be listened to on Oil and Gas matters. They are influencing and shaping what Ghana should do, doing the bidding of these transnational organizations, not mindful of the harm they are doing to their country, in exchange for whatever scrubs fall their way. Scrubs from the oil and gas table, mind you, translate into mega dollars and can make you rich beyond your wildest dreams.
Membership of these CSO are also made up of young men and women journalists positioned in various private and public Radio Stations and Press Houses, individuals whose consciences have been bought and/or brainwashed to believe that what the powers-that-be are doing is the best that can be achieved, and to make sure nothing contrary is published. This was achieved through juicy allowances and scholarships abroad to study what is being called Masters in Oil and Gas Reporting. These scholarships and allowances were channeled through Revenue Watch Institute and Star Ghana.
As is well known, before the discovery of oil and gas in Ghana, the nation had been blessed with a number of other extractive natural resources in the form of gold, diamond, bauxite, manganese and others. In respect of gold for example, it has been mined and left the shores of Ghana for over 500 years. However, in terms of visible, concrete returns to the nation’s development as well as its socio-economic wellbeing no one can dispute the fact that not much has been achieved. The evidence is visible for all to see.
The providence sent discovery of Oil and Gas has come at an opportune time when Ghana most needed an injection and, indeed a booster, into the nation’s general welfare and socio-economic development. The announcement of the discovery in 2007 sent expectations of Ghanaians high through the roofs all over Ghana. However, the general consensus of public opinion on the operations of the Oil and Gas Industry in Ghana after 3 years had so far been negative, because the euphoria and expectation of the whole nation which accompanied and greeted the announcement of the discovery has flattened to the grounds. Only few have taken issues with the conditionalities under which the Oil Companies are operating, because the expected revenue inflows are not forthcoming as Ghanaians were made to believe.
For example, before production begun regional workshops were held in the 10 regional capitals soliciting views from Ghanaians as to how the first US$5 billion for the first 5 years would be spent. Three years down the line not even half of the amount has been realized but total silence surrounds this fiasco.
We at GIGS believe the current prevailing system [the Modern Concession which the Draft Bill seeks to consolidate into law] under which the Oil Companies are currently operating in Ghana is the cause of this, and on careful analysis, as we have done repeatedly, could not be in the best interest of the people of Ghana.
The framework for managing the Upstream Petroleum Industry in Ghana before the discovery of oil was established and given legal backing by two main statutes, PNDC Law 64 and the Petroleum Exploration and the Production Law 84.
Law 64 established GNPC and gave it the sole rights to engage in Petroleum Operations alone or in association with others in the country.
Law 64 also gives GNPC the power to enter into Petroleum Exploration and Production agreements and other Petroleum Contracts providing for the assistance, participation or co-operation of contractors in connection with Petroleum Operations if it cannot do it alone.
Law 84 vests all petroleum existing in its natural state within the jurisdiction of Ghana in the Republic of Ghana.
Law 84 also conferred on GNPC the sole rights of exploration, development and production of petroleum.
Law 84 also gave GNPC rights over all Oil blocks in Ghana except those granted before the coming into force of the Law 84.
Law 84 also gave GNPC the power to enter into Petroleum agreement with a Contractor to carry out its Petroleum operations, if it cannot do it alone.
The Law also spells out the duties and obligations of the Contractor or Sub-Contractors.
Section 30 (b) of the Law limits the management control of the Contractor or Sub-Contractor in the Petroleum operations with GNPC. They are only assisting.
These two Laws were crafted and modeled to suit the most progressive, equitable and fairer fiscal regime or arrangements in sharing Petroleum revenue in the world currently – The Production Sharing Agreement. Records available at Oxford Institute of Energy Studies indicated, earlier agreements entered into by Ghana in the 1990’s based on these Laws were Production Sharing Agreements.
But all agreements and contracts entered into from the NPP administration to the current NDC administration and approved by Parliament - our Lawmakers, are modeled to suit Modern Concession Laws which were not in existence in our statute books at the time of signing these agreements and contracts.
These agreements and contracts are therefore not compatible and in conformity with the tenets of the existing two Laws. In our layman, legal opinion, these agreements and contracts are illegal and ultra vires because they are at variance with the existing PNDC Laws.
What is happening now is an attempt to give retrospective legal backing to these agreements and contracts by introducing into this Petroleum Exploration and Production Bill, Modern Concession fiscal provisions to consolidate and give legal effects to these obnoxious and exploitative agreements and contracts signed up to date.
The implication of passing this Bill into Law will mean taking away all the sole rights and controls granted GNPC under Law 64 and 84 and place the ownership of all the Oil blocks in private hands contrary to Sec 1 (1) of Law 84, Article 257, Section 6 of the Constitution of the Republic of Ghana and 1962 General Assembly Resolution on Permanent Sovereignty over Natural Resources (GRA 1803).
In a Paper titled From Concession to Service Contracts by Ernest E. Smith in Tulsa, Law Review Vol. 27, Issue 4 International Energy Law Symposium 1992, Modern Concessions are alleged to be subject to undue influences and corruption, and that is exactly what is happening in Ghana.
Ghana’s adoption of exploitative Modern Concession Laws to replace a progressive, equitable and fairer Production Sharing Agreement (PSA) Law was due to a political decision to reverse anything to do with the PNDC regime, without properly thinking through the dire economic consequences it will have. Secondly, the desire and propensity by the political class and elite technocrats to amass wealth by placing the control of our rich oil and gas resources wealth in private hands contrary to what is happening in countries of lesser stature than Ghana, e.g., South Sudan, Chad, Niger, Togo and Republic of Benin. Private greed is therefore the major motivating factor behind this obnoxious Bill.
Ghana’s Oil and Gas Technical Committee headed by a Professor who claimed the responsibility for the introduction of the hybrid system – the Modern Concession upon which the fiscal provisions has been drawn and incorporated into the Petroleum Exploration and Production Bill now under discussion - has dealt the greatest collateral damages to Ghana’s economic independence and emancipation since our flag independence.
At this juncture, we want to tell the people of Ghana and the whole world and to put it on record that, if the President and his Cabinet understood the dire economic consequences and ramifications of this Draft Bill becoming a Law to regulate our Upstream Oil Industry, he and his Cabinet would not have approved of it. The Government has been deceived to believe it is a good Bill in the interest of the mass of Ghanaians instead of a few.
“When the Truth appears every form of error or discord must necessarily disappear,” Charles Haanel. Unfortunately, this does not happen in Ghana’s case.
Mr. Solomon Kwawukume
(Senior Research Officer)
Oil & Gas, GIGS