Experts speak on GNPC’s CSR activities…. Call for change in direction
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From right to left - Ishmael Agyekumhene, former PIAC member with Hon Armah Buah, former Energy Minister |
Adnan Adams Mohammed
A development communication expert and Chairman of CSOs
Budget Forum has called for the need for proper regulation of Corporate Social
Responsibility (CSR) activities of the government agencies.
Geoffrey Kabutey Ocansey, in an interview as part of Economy
Times and www.newsguideafrica.com
serial report on the Ghana National Petroleum Corporation CSR activities, said
most of their (government agencies) interventions [I am sure] are needed but
let’s ensure that they properly target, fairly select beneficiaries,
effectively distribute, monitor and account for these projects. He suggested
that, GNPC must focus on helping Tema Oil Refinery (TOR) to operate better.
“That will increase and possibly expand TOR operations and create employment
for citizens.”
GNPC has come under strict energy and development experts’
scrutiny and criticism for its investments in Corporate Social Responsibility
(CSR) activities over the years. This was heightened particularly in 2015 when
it announced a US$3 million-a-year sponsorship package for the as headline
sponsors for the national senior soccer team (Black Star) and in later part of
2019 when a board memo leaked which sought to give approval for release of over
GHC4 million to some state institutions and personalities.

“On the matter of GNPC, I will suggest they focus on helping
TOR to better operate. That will increase and possibly expand TOR operations
and create employment for citizens”, the development communication expert said.
Mr Ocansey, when asked why his suggestion of GNPC using its
CSRs to help TOR, he explained that TOR is in a better position technically to
refine crude and sell locally and possibly feed the West African sub-region to
start with. “The GNPC and TOR are both under the ministry of energy and that
should be easy to facilitate.”
In furtherance of his explanation, he noted that, the
Multi-National Enterprises (MNE, both local and international enterprises) as
part of their declaration of the International Labour Organisation (ILO) advice
enterprises to invest their CSR into job creation ventures. This is to better
help expand and create both direct and indirect employment for citizens.
“Just imagine when TOR begins refining oil in commercial
quantity. Many staff will be employed in TOR. Other job opportunities will be
created along the supply chain, my humble opinion.”
In other comments on the subject of discussion, PIAC’s statutory obligation under the Petroleum
Revenue Management Act, 2011 (Act 815), as amended by Act 893, to publish
Semi-Annual and Annual Reports has commended the GNPC on its CSR activities
describing it as in its right direction and ‘forwarding looking’.
PIAC, in its 2018 report remarked that, expenditure analysis
of the GNPC Foundation’s programmes reveals a carefully thought through
strategy, aimed at complementing government’s development efforts, and at
improving the socio-economic wellbeing of beneficiary communities.
“While most of the projects are concentrated in the
frontline oil and gas communities, the Foundation makes some attempt to spread
its activities to other parts of the country, especially in areas likely to be
impacted by its onshore exploration activities, This makes the Foundation’s CSI
strategy assume a forward-looking character”, it added.
The Committee was however worried about the political
interference in GNPC’s operations. “There is a consistent and disturbing
pattern of political interference in the affairs of GNPC, which has hindered
its ability to operate effectively in accordance with good corporate governance
practice.”
Ironically, the immediate passed Vice-Chairman of PIAC under
whose supervision the 2018 PIAC was compiled and published, Dr Thomas Kojo
Stephens has on recorded commented otherwise. He wants GNPC to cut the
questionable spending of its funds on CSR activities and rather focused on its
core mandate of oil exploration, development, and production.
Meanwhile, the General Manager of Sustainability Division at
GNPC, Dr Kwame Baah-Nuakoh, had defended this during a radio discussion on
Kasapa 102.5 FM some two months ago that, every penny distributed for CSR is
worth it.
But Dr. Thomas Kojo Stephens insists that, such huge
spending on CSR is not the way to go.
“It is difficult to justify these amounts which have been
given for these purposes. PIAC has consistently expressed concerns about the
use of money being given to GNPC that it is not being used in a judicious
manner. GNPC should focus on its core mandate of exploration, development, and
production that is why GNPC is given all these monies.”
He added: “We have situations where even in terms of its
core activities things like responding to cash calls when we talk about cash
calls we give GNPC money in terms of its operations if there’s a cash call
there’s money to be paid in terms of its activities in the field. We have
situations where GNPC has elected not to pay for its cash calls but have the other
partners to finance its cash calls so when it comes to the next lifting instead
of GNPC lifting, then the partners lift on behalf of GNPC. Why should we have
situations like this when we give GNPC all these monies to finance its
operations but it’s not financing its cash calls and is using about 43million
alone for CSR.”
Yet, Dr Baah-Nuakoh thinks otherwise. He noted in the
discussion that, “I’m [GNPC] a commercial organization and I need to buy my
social license to operate.”
To make the whole GNPC CSR activities look gloomy and
unsolicited, the Africa Centre for Energy Policy (ACEP), in a report it issued
in the early part of last year, February 2019, raised concerns about plans by
the GNPC to spend far more on Corporate Social Responsibility (CSR) than on its
core mandate in 2019
ACEP shared its worry that the Corporation has become more
popular in delivering development projects rather than its core mandate.
In a detailed report that analysed the GNPC’s work programme
for the 2019 financial year ACEP revealed that GNPC plans to spend US$43.05
million on CSR but only US$20.3 million on its operations in the Voltaian Basin
and its subsidiaries in the sector.
“This is less than 50% of what GNPC wants to spend on CSR.
In recent times, the Corporation has become more popular in delivering
development projects rather than its core mandate.
“While GNPC, like any corporate entity, has a responsibility
towards society, it is unusual for sound corporate organizations to spend more
than 10% of its cash flow (not profit) on corporate social responsibility,”
ACEP stated in its report.
The energy think tank then called on Parliament not to
approve any CSR budget for GNPC until the end of the fifteen-year financing
window provided in the Petroleum Revenue Management Act (PRMA) has elapsed.
“This should free up funds for the Corporation to deliver on
its core mandate as an upstream oil player,” ACEP said.
Nonetheless, Dr. Baah-Nuakoh argued that, “Management and
board of GNPC are not dumb. ACEP has a model that feels GNPC has to follow.
However, we can always engage but we can’t abandon the approach working for
us.”
He added: “forget about the social needs of the people and
see whether you can even drill a barrel of oil.”
Apparently, a former member of PIAC, Ishmael Agyekumhene
recently called for the intervention of Parliament to redefine clearly the
Corporate Social Responsibility (CSR) roles Ghana National Petroleum
Corporation (GNPC) can partake.
Mr Agyekumhene, in an interview related that, during his
tenure PIAC raised a lot of questions about the disbursement of monies to some
of these institutions but the claims, according to him, was ignored.
He insisted that it is about time Parliament redefines the
CSR areas to GNPC and set non-core mandate policies to GNPC to prevent over
spending.
“GNPC sponsoring activities and projects outside their
core-mandate is not new, it is very common and they have been doing this for
years. PIAC always talk about it but sometimes it is believed that the projects
are in the collective interest of the nation so it is brushed aside. When the
GNPC gave the black Stars GHS3 Million, who questioned them”, He added.
The congruence from the experts' opinion points to an inference that, GNPC needs to ensure a paradigm shift in its direction of
spending its portion of the oil revenue meant for the citizens that are
allocated to it to resource it and better position the Corporation to be a
lead national operator in the oil exploration and production business.
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