FULL TEXT: GNPC responds to Auditor-General's report of breaching procurement laws

GNPC Breached Public Procurement Law – Auditor General

A REJOINDER

In paragraphs 683 to 691 of his report, the Auditor General makes a finding that the Ghana National Petroleum Corporation (GNPC) entered into five significant international business contracts totalling US$34,165,235.15 and £464,963.13 without parliamentary approval, contrary to the provisions of Article 181 of the 1992 Constitution. These findings are entirely

Read full article.wrong as it has no factual or legal basis.

The Auditor-General made these flawed findings because his officers failed to apprise themselves accurately with the legal framework governing GNPC’s affairs.

Article 181 (5) of the 1992 Constitution pertaining to Parliamentary approvals for international business transactions strictly relates to “Government” business and not generally to statutory corporations set up for commercial purposes.

The Ghana National Petroleum Corporation Act (PNDCL 64) establishes GNPC as a distinct legal entity and, as such, it is not legally considered to be part of Government. The meaning of “Government” under Article 181(5) was settled in the case of Klomega (No.2) versus 1. The Attorney General 2. Ghana Ports and Harbour Authority & 2 Others [2013-2014] SCGLR 581. In that case, the Supreme Court of Ghana stated as follows:

“...in our view, “Government” in the context of Article 181(5) should mean, ordinarily, the central government and not operationally autonomous agencies of government. Where an agency has a separate legal personality distinct from central government, it usually comes under sectoral ministerial supervision. The Board of the corporation and the appropriate Ministry should then exercise oversight over its international business or economic agreements. That oversight should be exercised within the context of the procurement laws of this country.” (See, p. 13)

The Supreme Court thus interpreted Article 181(5) of the 1992 Constitution as meaning that generally, the contracts of statutory corporations were not within the ambit of the provisions. However, in exceptional circumstances, the contracts of Ghanaian statutory corporations could be brought within the ambit of Article 181(5) through the alter ego doctrine. (See, p. 17)

In 2016, the principles enunciated in the Klomega decision were affirmed by the Supreme Court in the case of Dr. Mark Assibey Yeboah versus 1. The Attorney General 2. The Electricity Company of Ghana 3. Ghana National Petroleum Corporation [2016] DLSC3187.

It is important to point out that the said paragraphs 683-691 do not suggest that GNPC acted as the alter ego of Government. Indeed, the description of the contracts captured in the Table in paragraph 686 of the Auditor General’s report shows that these contracts involve GNPC’s commercial activities and could not have been entered into as alter ego for central Government.

The requirement to seek parliamentary approval for the five transactions referred to in the report does not apply to GNPC and we request that the Auditor General corrects his findings and conclusions as soon as possible. We urge the Auditor General and his staff to cultivate extreme diligence in their duties to avoid embarrassing themselves and the state entities they audit.

Chief Executive

Ghana National Petroleum Corporation

Petroleum House, Tema