[ 2012-02-26 ]

Room For More Transparency In Oil Industry - IEA Survey
Transparency in Ghana’s oil and gas industry is
not the best, a report measuring the level of
transparency in the industry in 2011 has
indicated.

The overall score for transparency in the industry
in the country was measured at 59.7 per cent, with
transparency in oil and gas funds recording even a
lower average score of 44 per cent, according to
the Institute of Economic Affairs (IEA) Petroleum
Transparency and Accountability Index (IEA P-TRACK
INDEX).

The IEA P-TRACK INDEX is an initiative of the IEA
to promote transparency and accountability in the
management of the country’s oil and gas resources,
apart from enhancing the level of responsibility
by policy makers.

Data for constructing the IEA P-TRACK INDEX, which
was launched in Accra on Wednesday, were collected
with the aid of a detailed questionnaire on four
key components of governance of the oil and gas
resource.

These are revenue transparency, expenditure
transparency, contract transparency and oil and
gas funds transparency.

The oil and gas funds transparency, according to
the IEA P-TRACK INDEX, recorded the lowest score
among all the four components, suggesting that a
lot needs to be done to increase transparency in
reporting on the management of oil and gas funds.

The average score for revenue transparency was
64.3 per cent, which suggests that there is
considerable room for improvement in relation to
achieving transparency and accountability in
managing oil and gas revenue.

The average score for expenditure transparency was
63.9 per cent, while the average score for
contract transparency was 66.7 per cent.

In order to ensure improvement in the identified
shortfalls in transparency, the IEA P-TRACK INDEX
recommends the frequent publication of information
by all oil related institutions to enhance
transparency and accountability.

This is notwithstanding the fact that there is no
constitutional mandate for institutions such as
the Ministry of Energy, the Ghana National
Petroleum Corporation (GNPC) and the Ghana Revenue
Authority (GRA) to publish information on the
industry, including prices, volumes, production
costs and taxes, on their websites.

The report also recommends the need to build the
capacity of and provide adequate resources for key
public institutions that have oversight
responsibility for the oil industry, such as the
Petroleum Commission, the Public Interest
Accountability Committee (PIAC) and the Public
Accounts Committee (PAC) of Parliament.

It further recommends the speedy passage of key
legislation, including the Budget Act to promote a
more comprehensive scrutiny of the budget, the
Petroleum Exploration and Production Bill, the
Local Content and Local Participation Policy
Framework, the Right to Information Bill, the
Marine Pollution Bill and the Ghana Extractive
Industries Transparency Initiative (EITI)
Framework.

The report calls for an improvement in public
disclosure of information on oil and gas contracts
and licensing process to avoid the abuse of
discretionary powers by the licensing authority.

The Bank of Ghana should also publish timely
reports on the Ghana Heritage and Stabilisation
funds, while the Auditor-General publishes the
audited reports on the two funds.

The IEA P-TRACK INDEX urges the Minister of
Finance and Economic Planning to publish timely
reports on petroleum receipts and calls on the
PIAC and civil society organisations (CSOs) to
regularly use the index as a tool to assess
transparency and accountability in the management
of the country’s oil and gas resources.

A Senior Economist at the IEA, Prof John
Asafu-Adjaye, who launched the index, said
increased transparency was associated with lower
corruption levels and improved levels of
socio-economic and human development indicators.

A Deputy Minister of Finance and Economic
Planning, Mr Seth Tekper, said the IEA P-TRACK
INDEX was very important because it contributed to
the debate on the oil and gas industry.

He expressed concern over the high expectations of
Ghanaians from the benefits of the oil resource
and pledged the government’s commitment to manage
them.

The Chairman of the PAC of Parliament, Mr Albert
Kan-Dapaah, said a lot of effort had been made to
ensure the proper management of petroleum
revenue.

He urged the media, CSOs and non-governmental
organisations (NGOs) to take a keen interest in
petroleum revenue management.

Source - Ghana FA

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