A senior lecturer at the Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, Dr. Frank Yao Gbadago, has asserted that with the appropriate legal and policy structures, Ghanaians can benefit from the natural resources of the country.
In an academic paper titled “Petroleum and Other Minerals Ownership, Legal Frameworks, and Trickling Down of Socio-Economic Benefits to Ghanaian Citizens”, Dr. Gbadago urged the development of a framework that balances out the conflicting interests of various parties in the natural resource ownership, production, and distribution chain, as well as a continuous adaptation to global situations.
He disclosed that the 1992 Constitution, Minerals and Mining Act, 2006, and Petroleum (Exploration and Production) Act, 2016, which establish a comprehensive regulatory framework for Ghana’s oil, gas, and mineral sectors, also mention the state, Petroleum Commission, Ghana National Petroleum Corporation, Minerals Commission, international oil companies, and citizens as key stakeholders in the management and use of natural resources.
Dr. Gbadago, who is also the Registrar of the Chartered Institute of Taxation Ghana, added that the various legislation authorises the President of the Republic to be custodian of natural resources for the ultimate benefit of the general populace, while it empowers Parliament to regulate and tax income from petroleum and mineral operations.
He observed, however, that considering the “strategic” importance of natural resources, particularly oil, to economies around the world, there always arises conflicts among the stakeholders.
“The upstream industry (the exploration, development, and production of oil) usually brings with it issues of conflicting interest among the major stakeholders in the industry, namely the government of the host nation (which has a commercial interest and at the same time has the responsibility of protecting its citizens from the hazards of petroleum production), the International Oil Company (IOC) (which has invested huge capital in petroleum production at risk and expects early returns on investment), and the communities hosting the project (whose health and vocation may be at risk as well as the environment at large, including the future generations that must be protected),” he posited.
According to him, in order to resolve the conflicting interests of the major players, host countries must formulate relevant legal frameworks that control the exploration, development, and production of oil and gas and guarantee the investments of the IOC while still protecting the interests of the local community.
“In order to balance conflicting interests among major stakeholders, ensure efficient exploration, development, and production of petroleum and other minerals, and protect the interests of the local community, most legal regimes fundamentally seek to address the procedures for licencing and granting permits to operate within the sectors. These legal frameworks cover exploration periods, efficient and sustainable development and production of resources in accordance with good international practices that support optimal rent to the state, job creation, and the socio-economic development of Ghana”, he explained.
He said the above frameworks facilitate economic participation and financial benefit sharing between host governments and IOCs.
He further said that the frameworks mandate national goods and services utilisation, royalty payments, income tax, asset transfer, and financial obligations, and also establish environmental protection standards, health and safety standards, sanctions, and dispute resolution mechanisms.
While highlighting the importance of the frameworks as central to “navigating the complexities” of resource ownership and utilisation, Dr. Gbadago also recommended constant policy adaptations in response to global and emerging trends and challenges.
