Legal and Practical Effects of Campaign Promises on Oil, Gas and Energy

Legal and Practical Effects of Campaign Promises on Oil, Gas and Energy

by Fafa Fianu

In their bid to capture political power, the political parties contesting in this year’s elections have made several promises to endear themselves to the people of Ghana and to facilitate their rise to political power. And in their eagerness to wield political power, they have been trying to outdo one another with the veracity and intensity of the promises almost to the utter neglect of how feasible these promises are, what their legal implications maybe and the cost that the good people of Ghana may have to bear in order to see some of these promises into fruition.

With regards to the exploitation of our newly found oil resources, several promises have been made and it is our duty as Ghanaians to critically analyze and scrutinize these promises so that we do not allow people without concrete plans to ride on our very tired backs to claim the ultimate prize of our sovereignty. The Convention People’s Party promise to review and/or repeal/ renegade all contracts which are not in the best interest of the country.

A contract is by its very nature binding on all parties and enforceable by a court of competent jurisdiction and not subject to review and that any sort of breach will result in damages which will cost us a lot as a country in judgment debts. And from our experience as a country with that particular phenomenon one will wonder whether CPP considered the feasibility of this promise and its effect on us. Again these oil contracts are to a large extent international contracts and bilateral and multilateral agreements, promising to renegade or repeal makes the foreign policy agenda of the CPP very questionable. The idea itself violates the principles of pacta sunt servanda, an international law principle that is as old as international law itself stating that every country is to honour its agreements with other countries in good faith and not arbitrarily refuse to abandon its obligations under an agreement. Policing and scrutinizing the documents and creating a public awareness about it before it was signed would have been of more benefit to Ghanaians than repealing it after the harm has been done with its resulting consequences already in motion.

They also promised in their manifesto that they will review and/or repeal the petroleum bill that adopts the royalty tax system. It is not within the power of a political party albeit one in government to repeal laws, especially tax laws. The parliament which will be made up of members of several political parties representing the interests of the people of Ghana has the power to do so. Article 93 clause 2 says that subject to the provisions of this constitution, legislative power shall be vested in the parliament and shall be exercised in accordance with this constitution. Article 174  clause 1 says that  no taxation shall be imposed otherwise than by or under the authority of an Act of Parliament.

The New Patriotic Party promise in their manifesto that they will provide investment tax credits to owners of commercial, industrial, and utility scale solar photovoltaic (PV) systems to take one-time tax credit of qualified installed costs to build solar parks in the northern part of the country. Again article 174 clause one applies here and more importantly clause 2 which states that where an Act, enacted in accordance with clause (1) of this article confers power on any authority to waive or vary a tax imposed by that Act. The exercise of such variation in favour of any person or authority shall be subject to the prior approval of Parliament by a resolution and clause 3 goes on to say that such a resolution must be supported by votes of not less than two thirds of all the members of parliament. The political party has no power to promise waivers of tax when such is strictly within the purview of parliament which is a separate entity from the executive and since there is no guarantee that they may form two thirds of the majority in parliament such a promise is a bit far-fetched and sensational.

They again committed to passing the Right to Information Bill in order to further enhance transparency in the oil and gas sector. It might be a bit delusional and over ambitious for a political party to promise things like tax variation when they don’t have any assurances or means of approving them but to commit to passing a bill is downright absurd and vexatious. The improbability and the fact that it is too far reaching to be feasible is almost insulting to the Ghanaian voter. They also promised to review and further amend the Petroleum Revenue Management Act 2011 (Act 815) to support investment of revenue from oil in high-impact strategic social and economic infrastructure. The arguments above indicate why such a thing is not within the power of a political party to do let alone promise. If the jargon maybe permitted these promises are ‘ultra vires’ and of no effect.

The National Democratic Congress made no references to passing bills or amendments or anything that will raise a legal eyebrow but the content of their promises are with no information on how they are going to implement them and very general in such a way that they manage to promise everything without promising anything at all that the people can hold them accountable to. These kind of slippery, two-dimensional promises are the stuff of nightmares as they provide no concrete basis for accountability almost no effort on their part will seem like a fulfillment of their promises which are gaping, wide and listless.

The manifesto of Progressive People’s Party does not contain any better. With regards to the oil resources their promises were too scanty to even make a dent in the minds of the reasonable Ghanaian voter. They were vague and just made wide, sweeping promises that literally say nothing.

In the love letter to win our inalienable sovereignty these are the best efforts put forward by our major political parties to win our thumbprints.

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