Revenue Management (GH0018)

Ghana intends to continue to ensure transparency and accountability in the management of her natural resources, particularly mining, oil and gas. Pursuant to this commitment, the country has amended its Petroleum Revenue Management Act of 2011 (Act 815) to address some major challenges identified in the course of its implementation in the last four years.
To effectively operationalize the amended law, there will be the need to develop regulations (Legislative Instruments) that will detail out how the various clauses are to be interpreted and applied. The Ghana OGP’s interest in ensuring the quick passage of the regulations arises out of the tendency for regulations to primary laws to be unduly delayed, thereby impeding their smooth implementation.
The commitment to strengthen transparency and accountability in the management of the country’s oil and gas revenues is to be pursued additionally through the effective oversight of the Public Interest and Accountability Committee (PIAC), a citizens’ oversight body established by the Petroleum Revenue Management Act (PRMA). PIAC has had challenges with funding, and the necessary institutional support for its work. These are issues that are currently being addressed following the amendment of the PRMA and with support from some of the country’s development partners.
In the wake of the relatively impressive achievements made by Ghana in managing its petroleum revenues judiciously and in accordance with the law, calls are being made on the government to replicate this arrangement in the mining sector too. In partial response to the suggestion, the government is inclined to expedite action in passing a Minerals Development Fund Bill which has been in the works for a decade and more. The bill, when passed will stipulate how 20 percent of mineral royalty set aside is distributed and spent. It will further provide legislative backing for the practice of disbursing 10 percent of mineral royalty to mining host districts.

✪ 5. Oil Revenue Management and Mineral Development Fund

Commitment Text:

Ghana intends to continue to ensure transparency and accountability in the management of her natural resources, particularly mining, oil and gas. Pursuant to this commitment, the country has amended its Petroleum Revenue Management Act of 2011 (Act 815) to address some major challenges identified in the course of its implementation in the last four years.

To effectively operationalize the amended law, there will be the need to develop regulations (Legislative Instruments) that will detail out how the various clauses are to be interpreted and applied. The Ghana OGP’s interest in ensuring the quick passage of the regulations arises out of the tendency for regulations to primary laws to be unduly delayed, thereby impeding their smooth implementation.

The commitment to strengthen transparency and accountability in the management of the country’s oil and gas revenues is to be pursued additionally through the effective oversight of the Public Interest and Accountability Committee (PIAC), a citizens’ oversight body established by the Petroleum Revenue Management Act (PRMA). PIAC has had challenges with funding, and the necessary institutional support for its work. These are issues that are currently being addressed following the amendment of the PRMA and with support from some of the country’s development partners.

In the wake of the relatively impressive achievements made by Ghana in managing its petroleum revenues judiciously and in accordance with the law, calls are being made on the government to replicate this arrangement in the mining sector too. In partial response to the suggestion, the government is inclined to expedite action in passing a Minerals Development Fund Bill which has been in the works for a decade and more. The bill, when passed will stipulate how 20 percent of mineral royalty set aside is distributed and spent. It will further provide legislative backing for the practice of disbursing 10 percent of mineral royalty to mining host districts.

Actions:

·  Organize quarterly sensitization fora on the content, government’s and citizens’ obligations under the Petroleum Management Act by December, 2017

·  GHEITI and Ministry of Lands and Natural Resources should hold at least 4 consultative meetings with the Finance Committee of Parliament and the Parliamentary Select Committee on Legal and Subsidiary Legislation on the passage of the Mineral Development Fund Bill by December, 2016

·  GHEITI should organize 2 public fora on the contents of the Mineral Development Fund Bill by June, 2016

·  PIAC to organize dissemination fora on its M & E reports on oil revenue management 2017

·  PIAC and the Ministry of Finance should work together to organize two public consultation on the draft Legislative Instrument of the Petroleum Revenue Management Act by September, 2016

·  Ministry of Finance should work with Parliament to develop a Legislative Instrument of the Petroleum Revenue Management Act by 2017

Editorial note: Milestone 5.4 was added to the table below to capture the commitment language that “the government is inclined to expedite action in passing a Minerals Development Fund Bill which has been in the works for a decade and more.”

 
Lead Institutions: Ministry of Finance, GHEITI, Ministry of Petroleum, Ministry of Lands and Natural Resources

Supporting Institutions: National Commission on Civic Education, Public Interest and Accountability Committee (PIAC), Oil and Gas Platform

Start date:  Not specified                                      End date: December 2017

Context and objectives

This commitment aims to ensure transparency and accountability in the management of extractives, particularly mining, oil, and gas. The commitment has two main areas: Minerals Development Fund (MDF) and oil revenue management.

Stakeholders in the mining sector have been calling for a bill to help track revenues from the sector and enable Ghanaians to appreciate its contribution to the economy. ^{“Minerals Development Fund to be developed to track mining benefits to the economy,” ( accessed 21 Sept. 2016), http://en.africatime.com/ghana/articles/minerals-development-fund-be-developed-track-mining-benefits-economy.}  The MDF Bill has been pending for over a decade. Ghana's MDF was established in 1991 to earmark a portion of mineral royalties for the direct benefit of mining communities, such as conducting research. ^{“Chamber of Mines proposes 30 percent royalties for communities,” GNA (accessed 21 Sept. 2016),}

http://www.mofep.gov.gh/?q=news/060511.  However, the MDF lacked sufficient guidelines and as a result, its funds were used primarily for recurrent expenses by the district assemblies who are tasked with the responsibility to ensure social, economic, and environmental development at the local level. ^{http://ghanachamberofmines.org/wp-content/uploads/2016/11/Frequently_Asked_Questions_-__August_2014.pdf}   

Public Awareness Raising on Petroleum Management Act (PMA): The government did not assign an agency to organize quarterly sensitization events on the PMA. The extent of the sensitization activities is not clear nor whether they are to be conducted at the national, regional, district or community level. The sensitization public awareness campaign could help give information to communities about what benefits the community should receive from extractive revenue. This could ultimately build citizens’ capacity to demand accountability on the use of revenue from petroleum. However, given the lack of information about this activity, the potential impact is coded as minor. 

Consultations with Parliament on the Passage of the MDF: This milestone did not specify whether the meetings were to discuss the bill’s expedited adoption, legal provisions or both. Since the bill has been pending for over a decade, thorough consultations could consolidate support to ensure prompt passage.

Public Consultations on Contents of MDF Bill: This milestone intends to organize two public forums to solicit views on the content of the MDF bill. GHEITI and the relevant ministry were to engage Parliament on the bill after having held the public consultation. Gathering public feedback, including views of the relevant CSOs and practitioners could help strengthen the draft. 

Pass MDF Bill: The commitment mentions that the government will ensure the passage of the MDF bill. The bill could have a transformative impact considering its potential of promoting transparency in the mining sector. The bill will help mitigate abuse of mining funds, as it will stipulate how mining revenue should be spent.

Public Consultations on PIAC M&E Reports: This milestone concerns the monitoring and evaluation (M&E) of oil revenue management. PIAC is a citizens-led statutory body established under Section 51 of the Petroleum Revenue Management Act (PRMA- Act 815) established in 2011. Its functions include monitoring and evaluating compliance with the PRMA by government and relevant institutions in the management and use of petroleum revenues and investments, among others. Since its establishment, PIAC has been publishing reports on petroleum revenue management (often referred to as M&E reports). While PIAC has been publishing M&E results before the preparation of the second action plan, these reports were disseminated only at the regional level (mainly two regions) without any feedback. However, this milestone extends the M&E report to the district level.

PIAC solicits views from citizens and sends these views to the national level as inputs into the national budget. At the district level, PIAC also obtains information from citizens about projects implemented with petroleum revenue. Information obtained on these projects can help minimize misappropriation of funds. It also brings about transparency in the use of oil revenue. A member of a CSO working on oil and gas issues expressed his delight about the new locations in which PIAC will hold forums. ^{The IRM Researcher talked to a key staff at CSO Platform on Oil and Gas on September 13, 2016}  This milestone could have a moderate potential impact in bringing transparency to the usage of petroleum revenue funds. However, given the uncertainty resulting from the lack of reference to the expanded scope of the consultation in the commitment language, the commitment received minor potential impact.

Developing a Legislative Instrument of the PRMA: This milestone seeks to develop a Legislative Instrument (LI) to clarify the interpretation and application of clauses in the PRMA. This milestone came about as a result of some inconsistencies and operational challenges in the implementation of the PRMA. ^{Ghana’s Petroleum Revenue Management Act amended Bill (access 21 September, 2016) available from: https://www.newsghana.com.gh/ghanas-petroleum-revenue-management-act-amended/}  A 2015 amendment sought to address these challenges and provide a legal framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner for the benefit of Ghanaians in accordance with Article 36 of the 1992 Constitution. ^{Parliament Passes Petroleum Revenue Management (Amendment) Bill into Law}

Bill (access 21 September, 2016) available from: http://www.ghana.gov.gh/index.php/media-center/news/1595-parliament-passes-petroleum-revenue-management-amendment-bill-into-la  This milestone was coded moderate because the LI will lead to the full realization of the broad aim of the MDF law. Milestone 5.6 commits MOF to hold public consultations on the Legislative Instrument (LI). This process captures input from other stakeholders who were not part of the drafting phase.

Completion

The commitment has demonstrated limited implementation progress.  While the MDF bill was passed and the Legislative Instrument was substantially completed, a number of milestones were not started after the first year of implementation.

Public Awareness Raising on Petroleum Management Act: The government did not organize quarterly sensitization forums on the content or government and citizen obligations under the Petroleum Management Act. The researcher contacted both CSOs and public institutions in the extractive sector but found no evidence of any public awareness activities. According to a GHEITI respondent, his outfit, Ghana Chamber of Mines, Ministry of Lands and Natural Resources, and the Minerals Commission are planning a forum on the Act which will bring together all the stakeholders, including citizens, in November 2016. ^{The IRM Researcher talked to a key staff at the Ghana Extractive Industry Transparency Initiative (GHEITI) at Ministry of Finance on 29 August, 2016}

Consultations with Parliament on the Passage of MDF: There is no publicly available information on the consultative meetings on the passage of the MDF bill. The researcher contacted Parliament to inquire about consultative meetings with the two parliamentary committees. The Parliament respondent stated that common practice is to carry out consultations before a bill is passed into law. ^{The researcher contacted a team at the Research Department of Parliament on 26 September, 2016 and had an interview with them}  

Public Consultation on Contents of MDF Bill: GHEITI provided some of their reports on their dissemination activities to the researcher but there was no evidence that this milestone has been carried out.

Pass MDF Bill: In February 2016, Parliament passed the Mineral Development Fund Bill into law. ^{Government of Ghana. “Parliament Passes Mineral Development Fund Bill.” Nd. Web. http://www.ghana.gov.gh/index.php/media-center/news/2445-parliament-passes-mineral-development-fund-bill}

Public Consultations on PIAC M&E Reports:  PIAC’s M&E dissemination activities were limited to only two regions. In 2016, PIAC extended their forums to 60 districts. At one of the district forums, a media report quoted the PIAC Coordinator saying that PIAC was “organizing “Districts Dissemination” fora on its report and to solicit public inputs on the next selection of priority areas for the 2017/2019 annual budget in accordance with the National Petroleum Management Act (Act 815) 2011.” ^{Half-Assini, "Jomoro indigens unhappy with oil fund disbursement,' GNA (25 Aug. 2016), http://www.ghananewsagency.org/social/jomoro-indigenes-unhappy-with-oil-fund-disbursement-107185.}  These forums were ongoing at the time of preparing this report. PIAC is also inspecting projects funded with the oil revenue to ascertain whether the money was used for the purpose for which it was disbursed.

Public Consultation on the Draft Legislative Instrument: Regarding the preparation of the LI for PRMA, both CSOs working on oil and gas and officials at MOF indicated that MOF is in the process of developing the LI. ^{The meeting with the CSOs on oil and gas platform occurred on September 13, 2016 while the meeting with MOF (oil and gas unit) was on September 22, 2016.}  The process involved elaborate consultation with key stakeholders.  MOF established three technical committees to consider the regulations and provide their recommendation to Attorney General’s Department. One of the CSO respondents belonged to one of these technical committees.

Developing a LI of the PRMA: According to MOF, the LI was placed before Attorney General’s Department (AGD) in March 2016. In July 2016, the AGD came back to MOF for some clarification which MOF has provided. According to the respondents working on the LI, it will be sent to Parliament after the AGD has finished working on it.

Early Results (if any)

Regarding consultations on PIAC reports, the researcher has not found evidence of CSOs working on the M&E report or using the reports to ask questions.

Given the lack of progress on the other milestones, there are no early results available yet.

Next Steps

If the government is to include this commitment in its next action plan, it should consider structures to ensure that royalties transferred to the mining communities are effectively monitored. This could be accomplished by establishing a mechanism where the amount transferred to the communities is communicated to those citizens so they might hold authorities responsible. In addition, government could consider capping district assemblies in the use of mining royalties for recurrent expenses. As is being done for the district assembly common fund (DACF), there could be a policy for the assemblies to use mining royalties mainly for development projects in consultation with the community members.

✪5. Oil Revenue Management and Mineral Development Fund

Commitment Text:

Ghana intends to continue to ensure transparency and accountability in the management of her natural resources, particularly mining, oil and gas. Pursuant to this commitment, the country has amended its Petroleum Revenue Management Act of 2011 (Act 815) to address some major challenges identified in the course of its implementation in the last four years.

To effectively operationalize the amended law, there will be the need to develop regulations (Legislative Instruments) that will detail how the various clauses are to be interpreted and applied. The Ghana OGP’s interest in ensuring the quick passage of the regulations arises out of the tendency for regulations to primary laws to be unduly delayed, thereby impeding their smooth implementation.

The commitment to strengthen transparency and accountability in the management of the country’s oil and gas revenues is to be pursued additionally through the effective oversight of the Public Interest and Accountability Committee (PIAC), a citizens’ oversight body established by the Petroleum Revenue Management Act (PRMA). PIAC has had challenges with funding, and the necessary institutional support for its work. These are issues that are currently being addressed following the amendment of the PRMA and with support from some of the country’s development partners.

In the wake of the relatively impressive achievements made by Ghana in managing its petroleum revenues judiciously and in accordance with the law, calls are being made on the government to replicate this arrangement in the mining sector too. In partial response to the suggestion, the government is inclined to expedite action in passing a Minerals Development Fund Bill which has been in the works for a decade and more. The bill, when passed will stipulate how 20 percent of mineral royalty set aside is distributed and spent. It will further provide legislative backing for the practice of disbursing 10 percent of mineral royalty to mining host districts.

Actions:

• Organize quarterly sensitization fora on the content, government’s and citizens’ obligations under the Petroleum Management Act by December 2017
• GHEITI and Ministry of Lands and Natural Resources should hold at least 4 consultative meetings with the Finance Committee of Parliament and the Parliamentary Select Committee on Legal and Subsidiary Legislation on the passage of the Mineral Development Fund Bill by December 2016
• GHEITI should organize 2 public fora on the contents of the Mineral Development Fund Bill by June 2016
• PIAC to organize dissemination fora on its M & E reports on oil revenue management 2017
• PIAC and the Ministry of Finance should work together to organize two public consultations on the draft Legislative Instrument of the Petroleum Revenue Management Act by September 2016
• Ministry of Finance should work with Parliament to develop a Legislative Instrument of the Petroleum Revenue Management Act by 2017

Editorial note: Milestone 5.4 was added to the table below to capture the commitment language that “the government is inclined to expedite action in passing a Minerals Development Fund Bill which has been in the works for a decade and more.” This commitment is a starred commitment because it is clearly relevant to OGP values as written, has transformative potential impact, and is substantially or completely implemented.

Responsible Institution(s): Ministry of Finance, GHEITI, Ministry of Petroleum, Ministry of Lands and Natural Resources

Supporting Institution(s): National Commission on Civic Education, Public Interest and Accountability Committee (PIAC), Oil and Gas Platform

Start Date: Not specified End Date: December 2017

Commitment Aim:

In response to calls for legislation by mining sector stakeholders to help track revenues and enhance its contribution to the economy,[1] this commitment aims to ensure transparency and accountability in the management of extractives, particularly mining, oil, and gas. The Minerals Development Fund (MDF) Bill had previously stalled due to a lack of sufficient guidelines. This gap led to mining funds being used primarily for recurrent expenses by district assemblies, which are mandated to ensure social, economic, and environmental development at the local level.3 Specific milestones, grouped under the rubrics of MDF and oil revenue management, are Public Awareness Raising on the Petroleum Management Act (PMA); consultations with Parliament on the Passage of the MDF; public consultations on contents of the MDF Bill; pass the MDF Bill; public consultations on the PIAC monitoring & evaluation (M&E) reports; and develop a legislative instrument (LI) of the Petroleum Revenue Management Act PRMA.

Status

Midterm: Substantial

Completion for this commitment was substantial at midterm. While the MDF bill (milestone 5.4) was passed in February 2016 and the Legislative Instrument was partially completed, a number of milestones were not started after the first year of implementation.

The IRM researcher found no evidence among civil society organizations (CSOs) and public institutions in the extractive sector of any public awareness activities. There was no publicly available information on the consultative meetings with Parliament on the passage of the MDF Bill. The Ghana Extractive Industry Transparency Initiative (GHEITI) provided some reports on their dissemination activities to the IRM researcher, but there was no evidence that public consultations on the contents of the MDF Bill took place.

The Public Interest and Accountability Committee (PIAC)’s M&E dissemination activities were limited to two out of Ghana’s ten regions. At midterm, PIAC’s report was being disseminated and circulated for public input on the next selection of priority areas for the 2017–19 annual budget, in accordance with the National Petroleum Management Act (Act 815) 2011. PIAC was also inspecting projects funded with oil revenues to ascertain whether the money was being used for the purpose for which it was dispersed.

Ministry of Finance (MoF) officials and CSOs working on oil and gas indicated that the MoF was in the process of developing the LI for the PRMA at the time of reporting.11 According to the MoF, the LI was submitted to the Attorney-General’s Department (AGD) in March 2016, and returned to the MoF for clarification in July 2016 that the MoF had partially provided at midterm. The LI was due to be sent to Parliament once the AGD had finished working on it. For more information, please see the 2015–17 IRM Midterm Report.

End-of-Term: Substantial

Although the government did not complete all the elements leading to the passage of the bill, it did pass the bill and did substantial work on some other milestones resulting in substantial completion overall.

Reporting in this section is based mainly on interviews with some CSOs and media and other documentary reports given the challenges securing interviews with key implementing partners for this commitment. Specifically, efforts to reach the National Resource Governance Institute (NRGI) were unsuccessful, and scheduling conflicts did not permit a meeting with the Integrated Social Development Centre-Extractive Industries Transparency Initiative (ISODEC-EITI).

Milestones 5.1, 5.2, and 5.3 remain to be started, as the IRM researcher could find no further evidence of progress since the midterm.

Completion of milestone 5.5 remains substantial. In the reporting period, PIAC published regularly semi-annual and annual reports on the management of petroleum revenues in keeping with the PRMA.[2]

According to the researcher’s interview with PenPlusBytes, there was some progress with Milestone 5.6, whereas Milestone 5.7 saw no further progress, and completion remains limited. As of July 2017, Parliament had still not passed the LI/regulations for the MDF Act. According to PenPlusBytes, it was being discussed as recently as early December in meetings they attended, involving Parliament, CSOs, and other stakeholders.[3] In a public statement. Dr. Steve Manteaw criticized this ‘violation’ of the act, stating that by law, regulations should be ready within one year of the passage of substantive legislation.[4]

Did It Open Government?

Access to Information: Did not change

Civic Participation: Marginal

Public Accountability: Did not change

This commitment aimed to contribute toward better transparency in extractives management by helping to track revenues and enhance their contribution to the economy. Among the challenges identified in the 2015–17 national action plan was the need for a Minerals Development Fund law to inform the judicious use of mining revenues, especially in host mining communities. Also observed were funding and other resource constraints to the work of the PIAC, a citizens’ oversight body established by the Petroleum Revenue Management Act.

The commitment did not change government practice in access to information. The PIAC continued to publish its twice-yearly reports on petroleum revenue management. Yet restricted public access to a beneficial ownership registry combined with limited extractive contract procurement information served to narrow citizens’ access to information on petroleum revenues. PenPlusBytes project coordinator for extractives, Mr. Kwabena Tabiri stated in an interview with the IRM researcher on 17 January 2018 that there is a need for more transparency with regard to access to data on contracts with investors. Furthermore, Dr. Steve Manteaw, ISODEC-EITI vice-chair stated in Parliament on 14 November 2017, said that successive governments have breached the PRMA’s provisions concerning quarterly fora on government’s obligations in at least one way by not providing updates on all oil-funded projects in the year under review.[5] In December 2017, Parliament proposed that the PRMA be amended further to facilitate the completion and identification of oil-funded projects.[6] The PIAC 2017 report states that oil-funded projects are either incomplete due to insufficient funds or “cannot be found,” suggesting a lack of transparency in their management.[7]

Civic participation is coded as marginal because of insufficient information and evidence. Parliament invited CSOs to at least some of its deliberations on the LI for the PRMA. Second, the PIAC’s continued operation enabled some level of citizen engagement with the petroleum management process. Also, the PIAC created more opportunities for the public to inform the management of petroleum revenue through consulting the public on its semi-annual and annual reports. Stakeholders consulted include the MoF, the Petroleum Revenue Commission, the Ghana National Petroleum Corporation, and unspecified oil companies.[8] However, while the report was ‘validated by stakeholder institutions before publication,’ [9] it does not specify who they are nor give details of where, when, and how validation occurred.

Public accountability is coded as not having changed. A multi-agency petroleum revenue committee was set up in November 2017, but the IRM researcher could find no information on the work of the committee so far, neither in the media nor according to PenPlusBytes.

Carried Forward?

Carried forward into the 2017–19 NAP from this commitment are the development of regulations for the PRMA and the MDF Act. New but related milestones include setting up structures needed to implement the MDF Act and steps toward more frequent reporting on the use of petroleum revenues. The latter responds in part to civil society concerns about transparency in access to information on how petroleum resources are being used and whether they are used for targeted projects.