Sunday, March 15, 2009

Oil: Ghana commended for keeping contracts in the oil industry transparent

An international governance watchdog group says Ghana is to be commended for keeping contracts in the oil industry transparent to the public. Observers hope the move will help spread the wealth from an anticipated oil boom.

Revenue Watch Institute, a non-profit institute that promotes responsible resource management, says Ghana is keeping its promise to make public current and future contracts in the oil industry.

Industry analysts in Africa say the promise will go a long way in helping the public understand what can be expected of the oil companies and their own government.

"We thought that that was a very important step, and if we live by that promise, it will not only ensure that the citizens will not only have detailed information about what is contained in these contracts, but it will also enable the citizens to be able to hold the government accountable for its promise," said Emmanuel Kuyole, Africa regional coordinator for New York-based Revenue Watch.

Kuyole says the disclosure will also allow institutions like Parliament to play a supervisory role, ensuring revenues are properly utilized.

Ghana is poising itself for an oil boom after British and American companies discovered offshore deposits in 2007. The companies say the Jubilee field, named for its discovery during the celebration of Ghana's 50th year of independence, may contain as many as one billion barrels of crude oil.

Kuyole says Ghana hopes to avoid the experiences of neighboring countries including Nigeria, Cameroon, and Equatorial Guinea, which he says have suffered from rampant corruption since their own oil finds.

"None of these countries have the contracts available to the public. The indication that contracts are going to be made to the public is in itself a bold step," he said.

Kuyole hopes civil society group and local communities in Ghana will now be motivated to push an agenda of environmental and social responsibility from both government and oil companies.

"If the communities are not involved, or even if they are and do not have detailed information regarding what commitments have been made, especially in issues regarding compensation but also around respect for environment, around livelihood and so on, we know that part of the challenge, apart from management of the revenues, are issues regarding development and issues regarding environmental and social impact," said Kuyole.

Ghana, which is a leading producer of cocoa, hopes a profitable oil sector will add to its relatively strong export sector. Ghana's mining industry has also historically been among the most important in Africa.

In January, Ghana celebrated democratic elections in which the opposition candidate, John Atta-Mills, won the presidency by a narrow margin.

Published with the permission of Voice of America
Published by Mike Hitchen, Mike Hitchen Consulting
Putting principles before profits