Stakeholder Consensus paves way for EITI legislation
Stakeholders at a roundtable meeting to deliberate on whether or not there is the need for Ghana to legislate the Extractive Industries Transparency Initiative have agreed that legislation is a must for the purpose of sustaining the initiative, and giving true expression to government's commitment to transparency and accountability in natural resource governance.
The meeting, organized on Tuesday by the Ghana EITI Multi-Stakeholder Committee with support from GTZ drew participation from among civil society organizations, the Ministries of Finance and Economic Planning; Energy; Lands, Forestry and Natural Resources; the Chamber of Mines; the Ghana National Petroleum Company; and academia.
Discussions focused on a report of a study into the legal framework for extractive sector revenue transparency and accountability in Ghana, conducted by Mr. Fui Tsikata, an associate of Reindolph Chambers and a former law lecturer at the University of Ghana.
The report clearly identified gaps in the legal frame work for transparency and accountability in the generation and use of extractive sector revenue in Ghana. These include the fact that, even though "the receipt and handling of payments due to Government are regulated by provisions of the Constitution, the Financial Administration Act, 2003 (Act 654) and the Financial Administration Regulations, 2004 (LI 1802) there are no legal provisions which require any Government institution to publish information specifically about the revenues generated or collected from mineral operations". Others are: the absence of obligation to publish annual accounts in the Gazette; difficulty in accessing information on annual returns filed with the Registry; the fact that payment to local government institutions is not required by law and therefore weakens their capacity to assert and enforce a right to receive them; absence of legal backing for the operation of the Mineral Development Fund, the limited participation in decision-making as to the use of the funds by members of the local communities.
The report also recognizes the difficulty in accessing contract documents, including stability agreements between companies and government, and highlights the need to ensure that the register of mineral rights which Minerals Commission is required to maintain (pursuant to section 106 of Act 703) include references to stability, mineral development and other similar agreements, and made available for inspection at the Commission and at the District Assembly in the area in which the particular rights holder operates. It also expresses the hope that the Freedom of Information Bill if passed into law will ease access to these documents.
The report tables two options in terms of the available legislative interventions to deal with the inadequacies in the existing frame work. These are: gap-filling, which implies amendments to the relevant laws and regulations; and the enactment of a stand alone law on the Extractive Industries Transparency Initiative.
Globally, only Nigeria and Liberia have passed such law. Azerbaijan, the first country to have passed EITI validation test and to be declared EITI compliant is contemplating such a move. Ghana will therefore not be the first country to pass a EITI law, and could be guided by the two precedents. The Fui Tsikata report however advises against the enactment of a stand alone law as Nigeria and Liberia have done in their quest to strengthen their legal arrangements for exacting transparency and accountability from extractive sector companies and the government on the grounds that the Nigerian model creates "an automous self-accounting body" with its own legal personality board of directors, Executive Secretary and employees" and run the risk of duplicating the functions of other statutory bodies.
The strength of the work undertaken by the Aggregator is in being able to take a fresh look at a variety of issues in¬volving mining revenue - including those relating to the adequacy of the fiscal regime, limitations of implementing institutions and the use to which District Assemblies are putting the portion of royalties paid to them. It seems to us that turning it into a routine exercise will make it less effective and yield fewer insights over time. We would recommend that independent aggregation be available as a mechanism for occasional and major reviews of issues regarding revenue transparency rather than become routine" the report argues.
"The main burden of this report is that a basic framework exists in Ghana, though there are areas in which it ought to be improved. There is therefore no reason to create a new bureaucracy to implement the principles of EITI," it concludes.
The conclusion was hotly contested by civil society groups at the meeting. "It is for me commonsensical to argue that if the existing legislations and regulations are adequate in dealing with the transparency and accountability concerns which are primary subjects of EITI implementation, then Ghana has no business implementing the initiative in the first place. I believe it is precisely because they do not appear adequate that Ghana has found the need to sign on to the EITI" Dr. Steve Manteaw of ISODEC argued rather forcefully. He explained that legislation is required to ensure the sustainability of the initiative. Currently, he said, EITl implementation is voluntary. "No one can compel any of the key stakeholders to make the kind of public disclosures they are making, once they have fulfilled their statutory requirements of filing their returns with the auditor general". Sustainability, he stressed cannot be guaranteed for an initiative that relies solely on the goodwill of stakeholders "Legislation and that is, if we have found the initiative a useful exercise, again will commit government to allocate resources within the national budget for its continued implementation, and in this way bolster its sustainability." He argued further.
A consensus however emerged rather quickly as none of the stakeholder camps entrenched their positions. The way it appears has been paved for Ghana to consider a stand alone EITI law, complimented by amendments to existing legislations. A future EITI law, according to the consensus reached will not impose a new bureaucracy as has happened in Nigeria, in order to avoid the risk of functional overlaps and duplication.
Source: Public Agenda
