TUC commends Parliament for seeking views on Petroleum Act

The Ghana Trades Union Congress (GTUC) on Wednesday commended Parliament for the opportunity to comment on the Petroleum Exploration and Production Bill before its enactment.

However, it encouraged Parliament to offer interested stakeholders enough time to critically analyse and comment on the bill.

The commendation was contained in a release issued in Accra and signed by Mr. Kofi Asamoah, Secretary General of GTUC.

It recommended that Ghana’s participating interests should be increased to 20 per cent from the current 10 per cent.

The GTUC expressed concern about the continued reliance on the payment of royalties as a way of generating revenues and securing national interests from the hydrocarbon resources of the country.

“Our concern is based on the experiences in the solid minerals industry particularly in the gold mines where reliance on royalties has not generated enough revenues for the nation even though gold prices and production continue to increase on annual basis“, it added.

The GTUC therefore, recommended that Ghana explored the possibility of switching from the royalties-based agreement to Production Sharing Agreement (PSA).

The PSA emphasises State ownership of petroleum resources, and can also ensure greater national control over the operations of oil companies.

The statement said in some jurisdictions, the PSA would require contractors to submit work programme and budget for the Government and Parliamentary approval.

“Above all, the PSA would offer the nation the right to share directly with the contractors whatever profits they make from oil.  We find that very attractive and worth considering.  In our view, Ghana would be better-off if it had had the right to split profit with the gold mines “, it said.

The GTUC said specific indicators (timeframe and proportion of local content) should be set in the Act to allow for monitoring and compliance.

“Contractors or sub-contractors should within five years of operation achieve about 90 per cent local content.  The local content should include employment and procurement of goods and services.”

“Contractors and sub-contractors should be made or compelled to collaborate with Ghanaian education institutions to develop and implement skill training programmes for local people.  The programmes should be in the form of internships and scholarships to train local people in relevant petroleum courses.  This is the only way we can have Ghanaians prepared for the task of participating in the oil and gas industry”, the statement added.

The GTUC proposed that the decommission fund should be deposited in a Ghanaian owned bank, and should be made explicit in the Act that the funds for decommissioning be held in local banks; to allow for easy monitoring by the relevant authorities and also provide resources for financing of long-term development.

The policy of no gas flaring maintained by the Ghana National Petroleum Company (GNPC) should be captured in the law.  This should be explicit in the Act since gas flaring can have deleterious consequences for the environment and people living in the immediate environs of oil production.

The bill, in the view of the GTUC was not clear and strong on issues relating the impacts of oil exploration and production on the livelihoods of people living in the immediate environs and how these were protected.

“It is important that the interests of communities and their livelihoods are protected within the law “, it added.

The GTUC said it was important that the bill established all necessary legal, regulatory and institutional frameworks that were critical in ensuring that the hydro-carbon resources of the country benefited the people.

Source: GNA