Professor Akilagpa Sawyerr, former Chairman, Volta Aluminium Company (VALCO) Agreement Negotiation Committee, has added his voice to calls on Parliament not to rush the passage of the Aluminium Authority and Integrated Aluminium Industry Bill.
In a Memorandum to Parliament, Prof. Sawyerr said he was concerned that Parliament might be rushing to a decision on matters of very grave consequence for Ghana’s industrial and energy future without adequate consideration of important technical, legal and economic factors.
The Bill seeks to establish an Aluminium Authority to deal with the regulatory aspect of alumina production in the country.
Under the proposed Bill, the Aluminium Authority would have the power to undertake the evaluation of applications and make grants in respect of bauxite rights.
Prof. Sawyerr said since the sale and purchase of 70 per cent shares of VALCO was at the centre of the integration project, the denial of commitment of the two companies, CVRD and Norsk Hydro, removed “the basis for any rush to restructure established arrangements for managing national mineral resources”.
“Related to this situation of uncertainty about the existence or otherwise of such an agreement, there are several aspects of the integration project itself, as announced by government, that require further due diligence and evaluation to establish its soundness and how far it would serve the national interest,” Prof. Sawyerr said in the memorandum.
The current regime for the grant of mineral rights assigns significant roles to the Minerals Commission, the Minister Responsible for Mines and to Parliament.
The Minerals Commission evaluates applications and makes recommendations, the minister makes a decision to grant rights based on the recommendation and Parliament decides whether or not to ratify the decision of the minister to make the grant of mining rights.
However, under the proposed bill, the Aluminium Authority will have the power to undertake the evaluation of applications and to make grants in respect of bauxite rights.
Further, the decision of the Authority may be exempted from the ratification power of Parliament.
This arrangement, Prof. Sawyerr said, “would create a monolith whose activities would lack the transparency and checks and balances necessary in an institution dealing with the management and allocation of critical national resources”.
“Considering, further, that the Authority is expected to hold ‘not less than 25 per cent equity’ in a joint venture company to mine bauxite, the proposed arrangement would concentrate in one body both final regulatory authority and commercial functions in relation to the same field.”
This, Prof. Sawyerr said, opened up possibilities for corrupt deal-making.
The Memorandum to the Bill states that the Minerals Commission has given authorisation to the Aluminium Authority to approve the grant of rights, concessions or contracts related to the exploitation of bauxite.
However, Prof. Sawyerr said, this was odd and wondered why the Minerals Commission would cede its power to a body which had yet to be set up, before anyone knew what competence and resources would be available to that body.
He urged Parliament to satisfy itself, by an investigation in open session of the nature of the supposed authorisation by the Minerals Commission, the circumstances in which it was given as well as its basis in policy and law.
Prof. Sawyerr also asked Parliament to be fully satisfied about who were behind the consortium of International Aluminium Companies since the credibility and standing of partners in the industry were crucial to the viability prospects of the project.
Equally important are technical works supporting the conception, costing and design of the project.
Dr Yao Graham, Coordinator of Third World Network (TWN), an advocacy group, said the memo accompanying the bill was silent on details of the aspects of the mining phase, which total cost was estimated to be US$500 million.
He said it was important to establish the identity of members of the consortium who were willing to invest over US$4 billion in the industry at the time aluminium prices had fallen steeply on the world market.