Tuesday, 27 July 2021

MDAs must enforce stricter disclosure of beneficial ownership in resources governance

 

Zaratu Yussif


The Natural Resource Governance Institute (NRGI) has urged the sector Ministries, Department And Agencies (MDAs) in collaboration with the Registrar-General’s department to act on the 2019 Companies Act and ensure enforcement of the relevant disclosures by all entities in the petroleum and mining sectors. 


 

The Institute notes that, although the oil and gas sector improved by 11 points in the 2021 Resource Governance Index, disclosures around licensing, beneficial ownership of companies, environmental and social impact assessments, as well as asset declaration by public officials remain inadequate.

 

The Resource Governance Index (RGI), which was virtually launched last week, serves as key point indicators in the extractive sector governance in resource producing countries around the world. It also serves as a global benchmark, country and sector diagnostic tool, and a roadmap for policy and practice reform. The 2021 RGI assesses how 18 resource-rich countries are managing their oil, gas and mineral wealth. 


“The Ministry of Energy and the Petroleum Commission in collaboration with the Registrar-General’s department must act on the 2019 Companies Act and ensure enforcement of the relevant disclosures by all entities under the Petroleum Commission’s regulatory ambit,” said Nafi Chinery, NRGI’s Anglophone West Africa regional manager. “Both institutions must also ensure that industry players adhere to established laws by improving monitoring and compliance.”

 

However, while the overall governance of Ghana’s mining sector remains “satisfactory,” NRGI has classified the country’s ability to realize value from its minerals as a level higher, with a “good” score, due to improved governance of taxation and local impacts. 


The Researchers suggested that, the Ministry of Lands and Natural Resources and the Mineral Commission should accelerate and leverage the ongoing review of the Minerals and Mining Act 2006 to strengthen the legal framework governing the mining sector.

 

“The government should improve legislation in the mining sector to enhance disclosures in licensing and beneficial ownership information as well as asset declaration by public officials,” Chinery said. “The lack of a centralized online data portal with key information on gold reserves, production statistics and annual exports prevents citizens from holding the government fully accountable on its management of gold mining.”

 

NRGI also recommended that relevant government agencies and ministries should adhere to open data principles in line with commitments made through Ghana’s Open Government Partnership National Action Plan to continue improving the governance of Ghana’s extractive sector.

 


Highlights of 2021 RGI report points out that, governance of Ghana’s oil and gas sector has been classified as “good” in a new assessment as it rates oil and gas as better governed than the mining sector, which it classifies as “satisfactory.” 


The RGI team of Researchers scored both sectors higher than in the last edition of the index in 2017.  

 

Also, NRGI experts found that, for the second time, governance of Ghana’s mining sector, with an overall score of 69 points out of a possible 100, lags behind the country’s oil and gas sector, with a score of 78 points.

 

The difference in scores is due in part to the more robust legal framework of Ghana’s oil and gas sector, especially in terms of licensing, where mandatory contract disclosures are required by law. Oil and gas taxation governance also surpasses that of mining. Researchers cited the Petroleum Revenue Management Act, which requires the full public disclosure on all payments and receipts from oil and gas producers to the government. Such good governance stipulations are missing from mining sector legislation.

 

They again found evidence of significant differences between the management of state-owned companies. NRGI found that GNPC, the country’s national oil company, is better governed than state-owned mining enterprise Prestea Sankofa Gold Limited. Researchers noted that GNPC has bolstered its governance both in terms of legal and regulatory frameworks and their implementation. However, GNPC can still make improvements in terms of data disclosure, they said.

 


 The composite index has three components. Two measure essential characteristics of the extractive sector, namely value realization and revenue management, and the third analyses the overall governance framework. These three overall dimensions of governance comprise 14 subcomponents with 51 indicators, which are calculated using 136 questions.

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