PRESENTATION ON THE DRAFT FRAMEWORK FOR THE EXTENSION OF GHANA EITI TO THE OIL AND GAS SECTOR BY FRANKLIN ASHIADEY NATIONAL COORDINATOR-GHANA EITI GREENLAND HOTEL-27TH NOVEMBER , 2009
WHY THE EXTENSION OF GHANA EITI TO THE OIL AND GAS SECTOR • Significant expected oil revenues in 2011 • Extension of the EITI into oil and gas sector will help ensure transparency and accountability in the management revenues from oil, gas and mining. • General agreement on the need for the extension. • Team consisting of officers from MOFEP and MoEn was put together to develop the framework for the extension
MANDATE OF THE GHANA EITI • Undertake aggregation/ audit of the extractive sector benefits • Monitor and ensure that all payments due to the GoG from all oil/gas companies including taxes, royalties, dividend, bonus, penalties, levies and such likes are duly made. • Identify lapses and undertake measures to enhance the capacity of any relevant organ of t government having statutory responsibility to monitor revenue payments by the oil/gas companies to the Government. • Disseminate by way of publication of records, reports or otherwise any information concerning the revenues received by the Government from the oil/gas sector as it may consider necessary.
PROPOSED EITI IMPLEMENTATION STRUCTURE • The Secretariat is hosted at MoFEP • The Secretariat will coordinate all activities in the area of mining and oil and gas issues. • Oversight responsibility of EITI will be handled by the National Steering Committee (NSC). • Members of the NSC includes Government officials, CS members and the companies. • Chairmanship of the NSC will be provided by a senior Government official from the participating institutions
MULTI STAKEHOLDER NATIONAL STEERING COMMITTEE MEMBERSHIP Current Membership • The Ministry of Finance and Economic Planning (2) • Office of the Vice President (1) • The Ministry of Lands and Natural Resources (1) (Technical Director for Mines) • Office of the Administrator of Stool Lands (1) • The Ghana Chamber of Mines (1) • Civil Society Groups, represented by ISODEC/ Publish What you pay Ghana (1) • Internal Revenue Service (IRS) (1) • The Minerals Commission (1) • Representative of District/Municipal Assemblies (1) now dormant • Mining Companies (1) on a rotational basis with a mandate of 2 years per company (this decision is yet to be made effective)
Continued With the coming on board of Oil/Gas the following addition to the NSC has been recommended • Ministry of Energy (2) • GNPC (1) • Oil/Gas Companies (2) to participate on a rotational basis • CSO relevant to the Oil/Gas (2) • Parliamentary Select Committee Member on Mines and Energy (1) • Internal Revenue Service if a dedicated unit for Oil/Gas exist (1) • Representative of the District Assembly (1) to be rotated among districts affected
FUNCTIONS OF THE NATIONAL STEERING COMMITTEE • Responsible for formulation of policies, programmes and strategies for the effective implementation of the objectives of the EITI. • Monitor and ensure that key findings/recommendations from annual aggregation exercise are implemented within one year after issuance of the reports; • To request as may be deemed necessary, from any company in the extractive industry any financial data or otherwise related to the implementation of the EITI. • In conjunction with the EITI Secretariat , disseminate by way of publication of records, reports or otherwise, any information concerning the revenue of Government and payments made by mining companies as it may consider necessary; • Recommend the annual budget of GHEITI and ensure the periodic review of targets set in their annual work programme. • Constitute such special Committee as it considers fit to deal with different aspects of its responsibilities. • Recommend to the Deputy Minister of Finance for appointment, qualified validator in line with prior determined ToRs.
continued • Ensure due process and transparency in the payments made by all extractive industry companies to the Government of Ghana and statutory recipient • To monitor and ensure accountability in the revenue receipts of the Government of Ghana from extractive industry companies • Ensure conformity with the principles of the global initiative • Develop a reporting template in consultation with all critical stakeholders for capturing in a transparent and accountable manner all extractive industry companies revenues due to or paid to the GoG • Evaluate without prejudice to any relevant contractual and sovereign obligations the practices of all extractive industry companies and government respectively regarding acquisition of acreages, budgeting, contracting, materials procurement and production cost profile in order to ensure due process, transparency and accountability. • Ensure transparency and accountability in the management of the investment of the GoG in all extractive industry companies. • Obtain as may be deemed necessary from any extractive industry company an accurate record of the cost of production and volume of sale of oil, gas and other minerals extracted by the company at any period provided that such information shall not be used in any manner prejudicial to the contractual obligation or proprietary interest of the extractive industry company. • Request from any company in the extractive industry or from any relevant organ of the Government the accurate amount of money paid by and received from the company at any period as revenue accruing to the GoG from such company for that period, provided that such information shall not be used in a manner prejudicial to contractual obligations or proprietary interest of the extractive industry company or sovereign obligation of Government.
APPOINTMENT OF AN INDEPENDENT AGGREGATOR • The Ghana EITI National Steering Committee shall appoint an independent Aggregator to undertake aggregations and reconciliation of revenues which accrue to the government for that year from companies in the oil/gas sector in order to determine the accuracy of payments and receipts. • The Independent Aggregator appointed shall undertake a fiscal, process and financial audit on such terms and conditions as may be approved by the Multi-Stakeholder group. • Upon the completion of an aggregation the independent aggregator shall submit the report together with comments from the exercise to the GHEITI Secretariat which will ensure dissemination among all the relevant stakeholders and their publication.
BENEFIT STREAMS The following benefit streams will be captured in oil GHEITI Report. Government • Application fee • Royalty • Taxes • Additional oil entitlement • Surface rentals GNPC • Training allowance (petroleum cost) • Data licence fee • Technology support (petroleum cost) • Carried interest (this eventually goes to government
NEXT STEPS • Finalisation of the draft framework • Joint Cabinet Memorandum signed by Ministers of Finance , Energy and Natural Resources • Inauguration of an extended Multistakeholder Group THANK YOU