Newcomers to Accra may be surprised to see evidence of corporate social responsibility strewn around Ghana’s capital city. Billboards and posters remind passers-by of the constant stream of summits, workshops and initiatives taking place to address the challenges posed by managing the country’s newfound oil reserves.
For those familiar with Ghanaian politics, however, the 2007 discovery of significant offshore oil reserves has already brought the petroleum industry to the centre of heated national policy debates.
Two recently publicized oil industry events illustrate the wide scope of actors and vested interests at the table within these emerging debates.
Last month there was second edition of the “Ghana Oil and Gas Summit,” which caters to a corporate audience with a networking platform for potential foreign investors in Ghana’s oil and gas sector. Previously, there was also the Regional Extractive Industries Knowledge Hub’s (REIKH) fourth annual ‘summer school’ on the governance of oil, gas and mining activities, targeting extraction industry professionals from across Africa.
While there is no doubt these developments are promising for the future management of Ghanaian oil reserves, the checks being placed on governments and corporations have not been formulated with realities facing local communities in mind.
The fact that REIKH emerged alongside the discovery of petroleum reserves in Ghana underscores how policy debates have revolved around oil revenue management. The Hub has focused on capacity building among government professionals, civil society organizations (CSOs) and news media, with the aim of building virtuous cycles of accountability with local communities affected by oil extraction.
Despite the diversity of actors in Ghana’s oil industry, however, one buzzword is common to all stakeholders — transparency. Understood as an essential component of accountability in revenue management, the advent of transparency has led to growing debate over the relevance of the Extractive Industries Transparency Initiative (EITI), an international program that promotes global standards of oil and mining sector accountability at the local level.
With Ghana’s mining industries already EITI-compliant, multiple stakeholders — CSOs, government and corporate actors — are now working to extend the standard to the country’s oil and gas extraction. In this effort, Ghana has even gone beyond global EITI guidelines that focus on revenue management, and pushed for earlier onset transparency in contract negotiations and agreements.
But while there is no doubt these developments are promising for the future management of Ghanaian oil reserves, the checks being placed on governments and corporations have not been formulated with realities facing local communities in mind. While information on revenue flows to local chiefs and other traditional authorities may be known, for example, “there are no requirements regarding how the chiefs utilize the royalties that they receive,” says Dominic Ayine, a legal practitioner and consultant who has been involved in drafting the bill to extend Ghana’s EITI compliance.
Viewed by some as an unfortunate status quo, the practices of traditional authorities have the potential to undermine the achievements of higher-level programs such as EITI. With the importance of national government revenue and expenditure acknowledged, however, it will be equally important for policy makers to ensure that resources reaching local communities is being distributed with the same degree of scrutiny. With the culture of nation-wide transparency that Ghana is trying to foster, no wallet is too small for inspection.
W. R. Nadège Compaoré is a Ph.D. candidate in the Department of Political Studies at Queen’s University. Her research interests include international political economy, international security, corporate social responsibility and global governance, while her doctoral research investigates the political economy of extractive energy in Gabon and Ghana.