Beneficial Ownership Register in Ghana: the fight against corruption has just begun. Benjamin Boakye and Eva Kouka
Corruption is a global problem affecting economies around the word. The World Economic Forum (WEF) estimated money lost to corruption to be $2 trillion a year. This could contribute to the fight against inequality. As a response, many international initiatives were launched to fight corruption, this include the Organization for Economic Co-operation and Development (OECD) Anti-Bribery Convention adopted in 1999, the United Nations convention against Corruption (UNCAC), the U.S. Kleptocracy Asset Recovery Initiative and recently the adoption of the African Union Unified Position on the Recovery of Illicit Assets.
In 2014 the Financial Action Tax Force (FATF) set up guidelines on beneficial Ownership disclosure. This gained approval of other international bodies such as the European Union (EU), G8, and G20 who also begun modalities to establish registries for beneficial ownership. In 2016, after the leak of Panama papers, two important events further consolidated global demand for beneficial ownership disclosure. The UK government held an anticorruption summits which solicited commitment from many countries to develop beneficial ownership register. Countries such as Ghana, Nigeria, Kenya and Tanzania signed up to the commitments. In the same year the Extractive Industries Transparency Initiative (EITI) made it a requirement for its member countries to end company anonymity by ensuring that companies that apply for or hold a participating interest in an oil, gas or mining license or contract in their country disclose their beneficial owners by 2020.
Ghana deserves commendation
At the anticorruption summit the President of Ghana made specific commitment to ensure beneficial ownership disclosure as part of a 12-point commitment to the fight against corruption;
“Ghana is committed to preventing the misuse of companies and legal arrangements to hide the proceeds of corruption and commits to:
- strengthening further both the Companies Bill and the Petroleum (Exploration and Production) Bill that are currently before Parliament to ensure that we have public beneficial ownership information and central register for all sectors, including oil and gas sector, in line with UNCAC and FATF Recommendations as well as the Extractive Industries Transparency Initiative (EITI) standards that Ghana is implementing;
- ensuring that accurate and timely company beneficial ownership information, including in the extractives, is available and accessible to the public.”
Subsequently, swift progress was made to pass the Petroleum (Exploration and production) Act 2016, Act 919, which institutionalised competitive tendering for the award of petroleum contract and set the framework for beneficial ownership disclosure through regulations. This significantly shaped the contracting regime and marked a deviation from the allocation of oil block on “first come first serve basis”, a process which was highly susceptible to corruption. In the same year the companies Act 1963 was amended to require beneficial ownership disclosure by the parliament of Ghana. This was achieved through partnership of civil society, Development Partners, EITI, government and the Registrar General Department (RGD).
In 2019, the Companies Act 1963 was repealed through the passage of the new companies Act, Act 992. The new Act provided stronger regime on the disclosure modalities on beneficial ownership. The RGB progressed to set up implementation framework and subsequently started the implementation of the requirements in January 2020 through the development of electronic register of companies. This make Ghana one the countries to have complied with the EITI’s 2020 timeframe for member countries to institutionalise beneficial ownership disclosures.
Prior to the establishment of the beneficial ownership register the Ministry of Energy began the implementation of the Petroleum Act 919. For the first time in the country open and competitive bidding process was initiated in 2018 for the award of petroleum blocks. The Regulation11(1)(iv) of the regulations (L.I.2359) requires that a company submits information on the ownership structure and beneficial ownership to the Minister of Energy as part of its prequalification application. How civil society monitoring of the bid round process shows that the requirement for beneficial ownership was not disclosed to the public.
A lot of work remains
The establishment of legal frameworks for tracking ownership is a giant step in the fight against corruption. However, it is important to recognize that it is not an end in itself. Various stakeholders remain important in monitoring compliance. Civil society, the media, and development partners have critical roles still outstanding. There is a lot of sensitization to be done to ensure that the public understand the need to participate in the fight against corruptions. In other countries public knowledge of the corrupt practices has encourage protest as happened in the case of Senegal following BBC documentary. Protests were held inside and outside the country. The most prominent occurred near OECD Headquarters where the 2019 EITI Global Conference took place. Subsequently the Senegal case was discussed at the EITI board meeting.