Cut Energy Minister’s powers in oil contracts – PIAC Chair

The powers of the Energy Minister in assigning oil contracts must be whittled down in order to curb the systemic corruption associated with oil contracts, Dr Steve Manteaw, Chairman of the Public Interest and Accountability Committee (PIAC) has said.

According to him, the discretion assigned the energy minister in determining the royalty rate for contracts poses corruption risks, hence the need to review the law.

Speaking at a public forum organised by the Caucus for Democratic Governance, Ghana (CDG-GH) on the theme: “On the $30 billion state capture in Ghana’s oil industry” on Tuesday, 7 May 2019, Dr Manteaw said: “To address the problem at the base will require legislative reform”.

“We will need to, as a national collective, push for a review of the sweeping discretion given one person to take major decisions on behalf of the state, in the oil and gas industry. This is important because of the nature of our political settlement, where Parliament’s potency to check the abuse of discretionary power is weakened by the hybrid system of the democratic governance we practice."

“For instance, a review of the E&P Act, 2016, Act 919, reveals what appears to be an inconsistency in the law, which, in itself, poses a serious corruption risk."

Whereas open tendering is the default option of the law, Section 10(9) assigns the minister responsible for petroleum a discretion to ignore the outcome of a bidding round, and to enter into direct negotiations with a company of his or her choice, where, in his or her estimation, such will generate an efficient and optimal benefit for Ghana."

"It is my considered view, that the assignment of such discretion without adequate safeguards exposes the Minister to all manner of influences, bribery, and other forms of illicit gain."

“The discretion assigned the minister in determining the royalty rate for contracts signed with partners also poses substantial risk of corruption.”