By Seibik Bugri
Participants at a two-day- workshop on ?Fiscal Systems in the Petroleum Sector? for Anti- Corruption Agencies and other allied state agencies in the sector have agreed to share vital and critical information pertaining to criminal activities to enhance investigations into issues of underhand dealings, over and under invoicing and other malfeasance in Ghana?s extractive sector. This, they noted will lead to precision and pining down of criminals and culprits whose activities cause economic loss to the state and the public purse.
Drawn from officials in the Judiciary, the security services, and other state agencies, the top officials of Ghana Police, Economic and Organized Crime Office, Financial Intelligence Center and the Audit Service of Ghana among others were taken through ?Petroleum Fiscal System, Fiscal Regimes Sector, Petroleum Revenue Management and Petroleum Revenue Accountability?.
Educating them, Dr Mohammed Amin Adam, Executive Director of the Africa Centre for Energy Policy (ACEP) revealed that contracts are often not accessible but fiscals terms are available in the annual reports, websites and other sources of the companies and investors to enable investigators to come to a well-informed conclusion to warrant prosecution. The investigators were educated on what to look for in revenue data information in the sector.
Data Integrity & Accounting Standards
Touching on crude oil pricing and accounting, Dr Adam explained that there is a price difference between the price offered by Ghana for its share of the oil and that of the companies and the international market which is important for policy forecasting purposes. However, these have revenue implications for the country. Coming mainly from anti-corrupt agencies, they should not accept blanket figures from government and other investors because of tax purposes which tell the public which companies paid the various taxes and under what parameters.
He reminded them to focus on comparison of fiscal terms with revenue generated as reported, crude oil price accounting, crude oil (barrels) accounting ? volume and value of oil, oil revenue accounting, the actual inflows and outflows of the Petroleum Revenue Holding Account. Other sectors are amount transferred to the Consolidated Fund, amount transferred to the Petroleum Revenue Investment Reserve, Investment income from the Investment of the Reserve Fund, reconciliation of transfers between the Holding Funds and other Funds he revealed.
?The citizens of Ghana are the primary owners of the country?s oil and gas resources, which have been entrusted in the President to manage on their behalf. The trustee President or Government of Ghana should inform the citizens regularly about developments in the management of the resources. Failure to compile this mandatory requirement for the disclosure of oil contracts has therefore provided convenient room to hide badly negotiated oil contracts from citizens? scrutiny. ?The Government has published 7 out of 23 active oil contracts. However, the discretion to publish some contracts and leave others does not give good account of comprehensive disclosure regime and this is largely due to the fact that there is no framework?.
Also, the lack of a framework for the disclosure of beneficial ownership information of directors of companies holding oil contracts is not helping matters. ?The extent of vested interest sometimes leads individuals with political connections to submit companies for the award of oil contracts without disclosing the identity of the owners of the companies?. ?Local directors often represent the companies whilst the true owners are at large, often hidden in the books of secret jurisdictions such as Gibraltar or British Virgin Islands where the parent companies or their subsidiaries are incorporated. This increases vested interest, which has the potential to create an elite class dominating benefits from the oil and gas industry at the expense of the citizens, who are the primary owners of the resources,? the statement added.
What must be disclosed for Accountability?
The disclosure of revenue data is as important as the disclosure of the parameters used in arriving at the data reporting. Dr Adam explained that in some countries revenue data is accessible by law or by voluntary initiatives but the parameters are not indicated. Relevant data pointers for Accountability should look at the contents of contracts, revenues, and expenditures that anti- corrupt agencies should look at.
Dr. Adam added that there are also standards that facilitate access to extractive revenue and expenditure data, mandatory contract disclosure as in the Europe, mandatory and voluntary payments disclosure (EITI) process. The EITI process reconciles what government claims it has received from companies and what the companies say they have paid to government in terms of revenue.
In some countries companies listed on Security and Exchange Commission?s demand that those companies publish all documents and transactions. And these are areas they can get information to carry out investigations. Also companies have corporate governance principles that facilitate public reporting on its activities and finances, Accountability institutions such as theirs need a combination of these standards to facilitate access to extractive revenue and expenditure data to carry out informed decision and prosecutions.