Business News of Saturday, 7 October 2017
23rd September, 2017 will forever be one of the memorable days in the history of Ghana.
The flag of the Nation soared high. Ghana was victorious in the landmark Maritime Boundary dispute case involving its Western neighbor La Cote d’Ivoire at the International Tribunal for the Law of the Sea, ITLOS in Germany. It was a “sweet victory” for Ghana.
The triumph came at a price. The Ghana National Petroleum Corporation, GNPC financed Ghana’s defense team and other activities relating to the case from 2014 to this year when the ruling was delivered.
In 2014 the GNPC expended US$782,406.83 even though US$1,630,000.00 million was budgeted for as contained in the Public Interest and Accountability Committee’s 2014 annual report. It was indicated that the reason for non-utilization of the entire allocated amount was that momentum was shifted to 2015.
The Corporation in 2015 reported in the Annual Petroleum Funds Report submitted to Parliament by Seth Terkper, the then Finance Minister that US$2,121,221.65 million from the total Annual Budget Funding Amount, ABFA from the Petroleum revenue allocation to the GNPC was spent on the maritime boundary dispute as against US$782,406.83 spent in 2014.
Significantly, the US$2,121,221.65 million expended on the case that year was almost equal to the amount the GNPC spent on North & South Tano Petroleum and the Hess projects.
The exploration and development projects at the North and South Tano for the year cost US$1.8 million whereas the same activity at the Hess project was a US$1.9 million. The petroleum industry in the country had a setback during the period because of an interim ruling of the ITLOS which placed a moratorium on exploration and drilling of new wells in the disputed area. The pronouncement affected the drilling of fresh wells in the TEN Project and other blocks that fall within the disputed zone but it did not disturbed work required to complete on-going wells.
There was an increase in the money spent contesting the Maritime Boundary dispute with expenditure rising from US$2,12 million in 2015 to US$2,818,913.14 million in 2016. This was contained in the 2016 Annual report on Petroleum Funds submitted to the Lawmakers by the current Minister of Finance Ken Ofori Atta.
In the 2017 Work Programme of the GNPC approved by Parliament, US$4.00 Million was earmarked to support the Maritime Boundary Secretariat under the Attorney General and Minister of Justice.
“The GNPC considers successful determination of the Maritime Boundary Dispute between Ghana and Cote d’Ivore as critical to increasing average oil production in the TEN Field. As a result, the Corporation plans to provide adequate support to the Attorney General’s Department’s preparations towards the final determination of the case. An amount of US$4.00 million has therefore been earmarked to support AG in this regard.” the report represented by the Chairman of the Mines and Energy Committee, Emmanuel Kwasi Gyamfi, stated. (page 11 0f 20 of the report) August 2017. The actual budget was US$3.00 million with additional US$1.00 million for Contingency.
With the above, my digging reveals that GNPC has from 2014 to this year spent in excess of US$9,722,541.62 Million on the Maritime Boundary Dispute case. This is far in excess of what was reported a few days after the ruling by a local TV station.
It must however be pointed out that the GNPC’s expenditure does not include other expenses incurred by some other state agencies.
Utilization of the money
As captured on the Case Number 23 Judgement at the ITLOS, about 27 people (local and international) were directly involved in defending Ghana at the Tribunal as agents, counsels and advisors. Checks have shown that the number is higher than 27 as others also contributed in different capacities.
Their bills were borne by the State. GNPC’s budget made the lawyers both international and local “comfortable” to undertake the task. Their flight tickets, accommodation and other expenses more importantly their legal fees featured on the cost of the victory.
The kind of payment arrangement one makes with a lawyer will determine how much one pays for legal services.
According to the National Public Relations Officer of the Ghana Bar Association, Yaa Gyakobo, legal fees depend on several factors, including the amount of time spent on the case; the lawyer’s experience or seniority. In some cases the novelty and difficulty of the case; the results obtained and costs involved come to play in charging the fees. “The scale of fees differs from jurisdiction to jurisdictions” she explained.
There will be other factors such as the lawyer’s overhead expenses like rent, transportation, utilities, filing of documents, communications, photocopies etc. that may affect the fee charged. A case that is time consuming, involves extensive research and special skills such as the Maritime Boundary case attracts higher cost.
On the eve of the judgement an energy and natural resource expert was asked what would the possible outcome of the case be and the response was that just like in a football match, Ghana would either win or lose or draw. Any of the outcomes has a cost tag to it. It would have cost Ghana even more if the ruling had gone in other directions rather than the victory.
The Ranking Member on the Mines and Energy Committee of Parliament, Adam Mutawakilu said Parliament will be demanding detailed answers from GNPC on how the allocations have been spent in fighting the case.
This notwithstanding, the lawmaker stated that; “at the end of the day what is the cost-benefit analysis? I think the benefit far, far outweighs the cost and I want to thank the previous government for taking the decision to go to ITLOS and the current government for making good use of the former Attorney General and Minister of Justice to achieve this milestone. It is a big achievement”.
Responding to my question on whether he considers the about US$10.00 million to be high an expenditure on the case, Mr. Mutawakilu pointed that “it is very, very insignificant as compared to the benefits, just getting the TEN Block to our side alone is in billions.” The expenditure is worthwhile, he seems to posit.
Benjamin Boakye, acting Executive Director of the Africa Centre for Energy Policy said “in the interest of transparency we shouldn’t just sit back because we have won. We will need the figures. We have heard some US$3 Million thrown out there. I will be pleasantly surprised to hear that we only spent only US$3 Million because the figures I have seen from GNPC’s end are far in excess of that amount.”
Mr. Boakye observed that the Ministry of Finance and the Attorney General Department have also spent money and so it is important for Ghanaians to know how much it cost Ghana, adding that knowing the figure will help the Nation reflect on what it needs to do in negotiating with Togo to ensure that the Ghana does not wait until it discovers oil near the Ghana-Togo boundary for it to also spend so much money litigating. “Government has to put up the facts and the figures for citizens to know how much it actually cost us to win the case.” Mr. Boakye demanded.
Ghana dragged Cote d’Ivoire to the ITLOS in September 2014 after several failed negotiations from 2007 when Ghana discovered crude oil in commercial quantities.