In February, the Ghana Extractive Industries Transparency Initiative (GHEITI) received a 2016 EITI Chair’s Award for helping turn policy recommendations into actionable reforms at EITI’s global conference.
GHEITI’s accomplishments include influencing the country’s mining fiscal regime and leading on the institutionalization of suabnational royalty utilization guidelines. Ultimately, the initiative increased the amount of extractive revenues data available to Ghanaians and contributed to and inspired national policy and legislative reforms.
GHEITI was established to improve transparency and accountability and to bring coordination to an extractive sector perceived as secretive, corrupt and damaging to the environment, despite its significant economic contribution. Involving civil society organizations (CSOs), high-level government representatives and companies provided the opportunity to address real challenges.
Real impacts are a focus of the EITI Standard (7.4), which means countries should strategically develop an implementation approach with long-term objectives to improve natural resource governance transparency and accountability.
Ghana joined EITI in 2003, produced its first report to become a candidate in 2007 and became a compliant country after completing validation in 2010. But the GHEITI process wasn’t seamless over its 10-year implementation. Here we aim to highlight best practices other countries can learn from.
- Take ownership of EITI
Despite being a global initiative, EITI was seen in Ghana as a vehicle to address policy challenges and gaps in its extractive sector, and not just a reporting mechanism; this was highlighted by Deputy Minister for Finance Mona Quartey during her speech in Lima. Ghana crafted a multi-stakeholder group (MSG) that had high-level representation from relevant government agencies delegated to lead national policy and regulatory reforms. Aside from civil society and company constituents, Ghana’s MSG includes representatives of:
- The Ghana National Petroleum Corporation, which promotes and manages Ghana’s broader interest in the oil and gas sector
- The Petroleum Commission, mandated to regulate the upstream oil and gas sector
- The Ministry of Petroleum, mandated to implement the government’s policies and oil and gas sector legislation
- The Minerals Commission, delegated to regulate the minerals sector
- The Ministry of Lands and Natural Resources, mandated to implement the government’s policies and legislations in the lands and natural resources sector, excluding oil and gas
- The Ministry of Finance, delegated to manage Ghana’s budget and implement economic and financial policies
- The Ghana Revenue Authority, authorized to collect taxes, fees and fines
- The Office of the Administrator of Stool Lands, responsible for the management of royalty collection and disbursement to the subnational governments, stool lands and traditional authorities
- Subnational governments that host extractive companies in their territories
Better coordination and improved information sharing between government agencies has resulted from the MSG. For instance, the Minerals Commission shared critical information on the changes in ownership of minerals rights licenses with the Ghana Revenue Authority in order to retrieve all capital gains taxes that had initially been evaded. Other critical policy and regulatory change success stories can be partly attributed to the institutional structures of the MSG.
- Implement policy recommendations made by EITI reports
The EITI Standard requires implementing country MSGs to take steps to act on lessons learned and review implementation outcomes and impacts. GHEITI has been outstanding in this regard.
The MSG ensures whomever is selected to collect, collate, reconcile and draft the report better understands the sector and has the ability to identify important policy and regulatory challenges and gaps. GHEITI’s MSG selected a consultant who understood the Ghanaian context, had experience with the industry and possessed adequate technical knowledge in extractives. The government of Ghana financed the process and GHEITI published reports that made important policy recommendations on top of its consistency with the standard.
Ghana has also adopted a framework that ensures policy recommendations requiring that actionable efforts are well coordinated and duly implemented by relevant agencies. GHEITI establishes an MSG implementation subcommittee based on the agencies that are directly concerned with issues or gaps identified in the report in a particular year. The subcommittee then writes formally to these agencies through MSG delegates. A follow-up mechanism tracks the status of implementation, and updates of implementation are provided in subsequent reconciliation reports. When report recommendations require major legislative reforms, the MSG identifies advocacy groups (such as NGOs or CSOs with similar interests) and lobbies the government or parliament to address these gaps. For instance, GHETI MSG actively lobbied parliament on Ghana’s Petroleum Revenue Management Act (2011) and the Minerals Development Fund Act (2014). It has also lobbied for the pending Petroleum (Production and Exploration) Bill.
- Actively involve CSOs in the EITI process
Civil society’s role has become crucial to natural resources management. The EITI Standard requires a full, independent, active and effective participation of civil society. The active participation of civil society in Ghana’s MSG has partly contributed to its success. For instance, CSO representatives with the MSG challenged and changed a draft GHEITI work plan on the basis of its potential inability to impact national reforms.
Civil society in Ghana has representatives with adequate knowledge, experience and awareness of the local context. This allows them to engage meaningfully in debates that are likely to lead to reforms at both MSG and national levels.
Original source: The Natural Resource Governance Institute (NRGI) 8th April, 2016