Beneficial Ownership (GH0022)

What is the public problem that the commitment will address?: The identity of the real owners – the ‘beneficial owners’ – of the companies that have obtained rights to extract oil, gas and minerals is often unknown, hidden by a chain of unaccountable corporate entities. This problem also affects other sectors and often helps feed corruption and tax evasion.Publishing information on the beneficial owners of entities winning public contracts as part of EITI requirements.This commitment builds on the OGP second action plan’s commitment on Open Contracting.; What is the commitment?: The commitment is to provide information on the beneficial owners winning public contracts.; How will the commitment contribute to solve the public problem?: The commitment will make public all information on the beneficial owners of public contracts to enable citizens support government to fight corruption as well as minimize tax evasion.It will also help Ghana meet other international requirements.; Why is this commitment relevant to OGP values?: The commitment is relevant to increasing the level of transparency by improving accessibility of information on the beneficial owners of entities winning public contracts. It will also help to improve rules, regulations, and mechanisms ensure full disclosure of beneficial owners of public contracts.

3. Beneficial Ownership

Language of the commitment as it appears in the action plan:

‘To minimize corruption and tax evasion, the Government of Ghana commits to ensure the publication of information on the beneficial owners of entities winning public contracts. The government commits within the next two years to open up its contracting processes, publish contracts and provide information on the beneficial owners of the contracts. The government identifies the need to build on the Registrar-General’s existing infrastructure to comply with the requirements for the development and maintenance of Beneficial Ownership database’.

Milestones/Activities:

• Registrar General’s Department and Attorney General’s Department to develop regulations for the implementation of the amended Companies Act (Act 920, 2016) by September 2018;
• Registrar General’s Department to improve infrastructure to ensure compliance with Beneficial Ownership disclosure by September 2018; and,
• Attorney General’s Department and Parliament to ensure the passage of the substantive bill to replace the Amended Companies Act, (Act 1963) as amended (Act 920, 2016) by August 2019.’

Start Date: November 2018

End Date: December 2019

Action plan is available in this link

Context and Objectives

This commitment aims to enhance transparency and accountability in the disclosure of owners of public contracts to reduce public corruption and tax evasion, both of which have significant effects on the national economy and, by extension, the welfare of Ghanaians. As stated earlier, among the factors feeding corruption in Ghana is the absence of comprehensive, publicly accessible information on the beneficial ownership of government contracts in Ghana. For instance, according to a study by the Ghana Integrity Initiative (GII), beneficial information is available only to government agencies as entitled by the law, [25] and specific provisions for disclosing information within a specific time frame is unclear as stated by the law. [26] As stated in the NAP 2017–2019 narrative, the identities of the real owners of companies and contracts, especially those relating to extractives, are hidden by chains of unaccountable corporate entities.

To reduce corruption and tax evasion, two of three activities under this commitment seek to update the country’s regulatory framework(s): Milestones I and III, regulations for implementation of and replacement of the Amended Companies Act to facilitate information on beneficial ownership contracts. This way, the proposed activities seek to provide firm legal backing to compel the registrar general and attorney general to publish beneficial ownership data in line with proposed amendments.

This commitment is relevant to the OGP values of access to information in that Milestones I and III aim at setting up the legal framework through which contracts on beneficial ownership will be made available to the public. The commitment’s milestones aim at disclosing information, but no specific milestone seeks to hold individuals accountable before the law.

As written, this commitment is for the most part verifiable. Verifiability can be assessed by checking whether regulations for the Amended Companies Act were passed and if a bill to replace such act was approved. It is worth noting that verifiability of Milestone II (infrastructure) as written is a bit difficult due to the lack of specific details about how this commitment intends to measure improvement of infrastructure as a whole.

If implemented as written, this commitment would contribute to some extent to solving the problem of corruption and tax evasion. On July 2017, deputy minister of Energy, Mr. Mohammed Amin Adam, stressed that the draft bill to amend the Companies Act did not allow the beneficial ownership register to be available to the public. [27] In that sense, the stated laws would primarily provide a more robust legal framework to administer beneficial ownership in Ghana. Unless the question of a publicly accessible beneficial ownership register is resolved—a question raised in the 2015–2017 End-of-Term implementation report, these milestones are likely to have minimal overall impact. Therefore, the potential impact of this commitment is “minor.”

Next steps

Going forward, the government could:

• Build on the momentum and recommendations from the NAP 2015–2017 by putting a priority on the establishment and publication of the beneficial ownership register;
• The framing of these activities is devoid of language that explicitly targets the provision of beneficial ownership data and ensures its accessibility by the public—a key aspect of enabling public scrutiny of public contracts and reducing the risk of corruption. The OGP infrastructure could make public access to beneficial ownership data an unequivocal milestone in subsequent NAPs.

3. Beneficial Ownership

Commitment text: To minimize corruption and tax evasion, the Government of Ghana commits to ensure the publication of information on the beneficial owners of entities winning public contracts. The government commits within the next two years to open up its contracting processes, publish contracts and provide information on the beneficial owners of the contracts. The government identifies the need to build on the Registrar-General’s existing infrastructure to comply with the requirements for the development and maintenance of Beneficial Ownership database.

Milestones/Activities:

• Registrar General’s Department and Attorney General’s Department to develop regulations for the implementation of the amended Companies Act (Act 920, 2016) by September 2018;
• Registrar General’s Department to improve infrastructure to ensure compliance with Beneficial Ownership disclosure by September 2018; and,
• Attorney General’s Department and Parliament to ensure the passage of the substantive bill to replace the Amended Companies Act, (Act 1963) as amended (Act 920, 2016) by August 2019.

Editorial Note: For the full text of Ghana's 2017-2019 Action Plan please see: https://www.opengovpartnership.org/documents/ghana-action-plan-2017-2019/

This commitment aimed to enhance transparency and accountability in disclosing owners of public contracts. As stated in Ghana’s 2017−2019 action plan, difficulty accessing the identities of the real owners of companies and government contracts, especially within the extractives industry, have contributed to public corruption and tax evasion. ^[25] This has impeded growth in the national economy and, by extension, the welfare of Ghanaians.

This commitment was completed. The government did not pass regulations to implement the amended Companies Act, 2016 (Act 920) as foreseen in the commitment because the process to pass a substantive revised Companies Act 2019 (Act 992) was well underway. ^[26] The government passed a revised Companies Act in May 2019. This Act expands and improves the beneficial ownership framework by incorporating a requirement that all companies provide details of beneficial owners. Though the Ghana Integrity Initiative has acknowledged the expanded beneficial ownership provisions, ^[27] the Act 992 cannot be fully or effectively implemented without regulations, which have not yet been passed. ^[28]

The Registrar-General's Department (RGD) redesigned its company register to include beneficial ownership information. ^[29] Although the milestone has limited specificity as written, the RGD's actions appear to fulfill the criteria. The RGD also designed data collection forms, upgraded its electronic register, and supported the Ghana Extractives Industry Transparency Initiative in collecting beneficial ownership information for extractives. ^[30]

The government’s progress in beneficial ownership transparency benefited from several factors. According to Emmanuel K. Dogbevi, a business news analyst, Ghana faced “a lot of [international] pressure to have a beneficial ownership regime,” chiefly due to concerns about business owners hiding behind proxies and offshore accounts. ^[31] Further, Ghana performed poorly in an assessment of its beneficial ownership by the Inter-Governmental Action Group against Money Laundering in West Africa in 2012 ^[32] and 2018. ^[33] At the UK Anti-Corruption Summit in May 2016, then President of Ghana, John Mahama, committed to improving the beneficial ownership infrastructure, ^[34] giving fresh impetus to the process.

According to Dr. Steve Manteaw, Chairman of the Civil Society Platform for Oil and Gas and co-chair of the OGP Steering Committee, Ghana is required to set up a beneficial disclosure framework by the OGP, the Financial Action Task Force standards, and the Extractive Industry Transparency Initiative. ^[35] The latter issued a 1 January 2020 deadline for members to establish beneficial ownership registers for entities in the extractives industry. ^[36] Ghanaian CSOs have also exerted “enormous pressure” for transparency. ^[37] This advocacy from domestic and international actors, and Ghana's commitments under multiple open governance frameworks, explain the county’s adoption of new laws and changing practices.

This commitment marginally opened government. The passage of a substantive Companies Act with targeted provisions on beneficial ownership was a preliminary, yet significant, achievement. Further, the RGD held consultative meetings with stakeholders to discuss proposed methods for collecting beneficial ownership data and present a prototype digital register. Yet, the absence of regulations impeded implementation of the law and the RGD did not collect and publish beneficial ownership data for non-oil and gas companies within the reporting period. Full implementation of the law resulting in the collection and publication of beneficial ownership data would have resulted in a higher “DIOG” coding.