Amended companies’ law not enforced, 2 years after revision

FPSO Kwame Nkrumah

In spite of the amendment of the companies’ law in 2016 to include the beneficial ownership (BO) provisions, its implementation has seen less progress been made after two years of the passage of the law.

The amended law is expected to require all companies incorporated and operating within Ghana to disclose their beneficial owners.

According to the Ghana Commodity Trading Pilot Report which was launched in Accra on Tuesday, there are several inhibiting factors that remain unaddressed.

Inhibiting Factors

Some factors noted in the report include the lack of regulations to operationalize the amended provisions yet to be drawn, as well as the required infrastructure to collect and hold BO data, which is yet to be drawn.

It further notes that the law does not provide opportunity for public accessibility to BO data, however, it recommended a new draft bill to address the challenge.

The amendments to the companies’ law forms part of Ghana’s commitment on BO disclosure under the Financial Action Task Force (FATF), the Inter-governmental Action Group Against Money Laundering in West Africa (GIABA) requirements, EITI standard and the Open Government Partnership.

GNPC

Currently, the Ghana National Petroleum Corporation (GNPC) does not require approved buyers to provide information on their beneficial ownership disclosure process. However, the report noted a likely change in Ghana’s significant progress on the BO disclosure process.

The Ghana Commodity Trading Pilot report provides information on the ‘first trades’ of Ghana’s crude oil by GNPC. This project is in line with the EITI’s standard requirement 4.2 and will address one of Ghana’s validation corrective actions regarding disclosure of sales of State share of oil and in-kind revenues in the oil/gas sector.

Under the requirement, implementing countries, including Ghana are required to disclose the sale of states’ share of oil and gas production and other ‘in-kind’ revenue.

Oil Sales

During the period January 2015 to December 2017, GNPC made 22 sales of oil to five different buyers. The majority of the sales were to Unipec, a Chinese based firm.

In 2015 GNPC only made one sale to a party other than Unipec, and that was to the international trading company Trafigura. Similarly, in 2016 there was only one sale other than Unipec. This time it was to the Ghanaian owned Springfield.

This pattern changed in 2017, with less than 50 percent of oil being sold to Unipec, and sales being made to Glencore, Litasco and Springfield. This in part reflects an expansion in production, with the TEN field starting to produce oil.

It is expected that with the increases in Ghana’s oil production in the future, there will be further diversification in buyers.

By Joshua W. Amlanu