TOR's prolonged crisis: who to be blamed; management or political interference?

 Adnan Adams Mohammed

The Tema Oil Refinery Limited (TOR) is experiencing uneasiness within its corporate governance structure as workers are accusing the board of directors for their poor performance resulting in the refinery’s increasing debt and operational inefficiencies. 

Last week, the unionized staff of the nation’s only refinery registered their dissatisfaction at the performance of the current Board through a picketing. In a statement co-signed by Mr Bright Adongo, Chairman of the Union of Industry, Commerce and Finance Workers (UNICOF) and Maame Serwa Duncan Williams, Chairperson of the General Transport, Petroleum and Chemical Workers' Union (GTPCWU), the unionized staff said the failure of the Board in directing proper management of the refinery has resulted in a lot of debt and inefficiency.

The statement pointed out that “for the first time, the Board and Management could not assure workers of future prospects of revenue inflows”, adding that: “Retirees’ end-of-service benefit payments continue to be in default”.

TOR is “owing everywhere and adding on to the debt”, the workers claimed, adding that, “Nothing has been done” about TOR’s “long-standing indebtedness” to the Ghana Revenue Authority (GRA), Social Security and National Insurance Trust (SSNIT), Electricity Company of Ghana (ECG), and the Ghana Water Company Limited.”

Some energy experts have blamed the over decade long inefficiency and debt-ridden TOR on the excessive political interference in its operations including the appointment of the Board members whom mostly assume duty just to serve the political interest of the politicians. 

Among the experts is Dr Steve Manteaw, who have consistently called for depoliticising of the affairs of TOR, "the nation will only want TOR to serve its intended purpose efficiently and professionally."  

But, management of TOR has described as unfortunate and unsubstantiated calls by workers’ Unions of the Refinery for the removal of its Board of Directors for making no significant contribution to the company.

 

In a press statement signed by Dr Kingsley Antwi-Bosiako, Corporate and Public Affairs Manager of TOR, said the agitation “was occasioned by Management’s request to defer the Collective Bargaining Agreement (CBA) negotiations to 2021, due to the harsh economic impact of COVID-19 on TOR‘s finances in 2020.

 

"The Union and Management of TOR meet every three years to negotiate a Collective Bargaining Agreement that sets out salary and benefits for the next three years”.

 

Clarifying some concerns raised by the unions, Management indicated that between 2013 and 2017, the financial accounts of TOR had not been audited, adding that the refinery had outstanding debts of around US$345 million, and also about GHS1.05 billion owed to third parties, traders, and financial institutions.

 

“Statutory liabilities owed GRA and SSNIT as well as Utility companies and others amounted to GHS84.4 Million. In addition, about GHS11.8 Million staff related liabilities were outstanding as at December 31, 2016”, it stated, adding, “It is not surprising that the TOR’s books had not been Audited since 2009”.

 

Management indicated that it was instructive to note that when the current Board was constituted in 2017, they discovered that TOR had missed three cycles of critical Turnaround Maintenance, which had not been carried out since 2009.

 

According to the statement, the neglect of critical maintenance prior to the constitution of the current Board had resulted in a deteriorated refinery plant which was characterized by frequent shutdowns, inefficient operations and an unsafe working environment for the cherished staff of TOR.

 

“It is therefore also unfortunate, that prior to the appointment of the current Board, one of the refinery’s two crude heaters (Furnace) exploded. This effectively reduced the refinery’s processing capacity from the nameplate capacity of 45,000 barrels Per Stream Day (BPSD) to about 25,000 BPSD.

 

The reduced processing capacity led to its attendant reduction in revenues since it rendered the refinery only capable of processing at half of its design capacity”.

 

On the progress made by the current Board, Management stated that the efforts by the Current Board had led to the payment of TOR’s outstanding GHS1 Billion debt accrued between 2009 and 2016.

 

“The payment was made by the current Nana Akufo-Addo Government as part of support to TOR. A further US$67million of the debt carried over from 2009 to 2016 has also been paid by the Government. The Board and Management of TOR continue their efforts to clear the debts that were left”.

 

Apparently, the workers bemoaned that “For the first time, Provident Fund payment is always in default.”

 

They listed a number more of concerns including the fact that, some state-owned institutions got some financial relief, as a result of the COVID-19 [pandemic], but the Board of TOR could not secure a similar deal for us. No new project or initiative has been undertaken since coming into office.

 

The unions said the Board, as eminent as its members are “failed to secure partnership from several investors who had expressed interest in expanding the refinery capacity between 100,000 to 150,000 BPSD. And also, have not been able to exert its influence on NPA, in order to collect already-received money paid by all Ghanaians to be used for recapitalizing aspects of TOR”.

 

“We are calling on government to dissolve the Board because, as far as we are concerned, the Board has failed us, as the co-chair said earlier. The Board has failed us from the beginning to an end. They have been here for four years and they cannot boast of anything, so, the government should dissolve the Board. That is what we are asking for, and when the management also misbehaves, they will follow them. No production is going on. Nothing is going on as we speak”, Duncan Williams said during the picketing.