Lack of transparency about complex, often secretive structures.
Clandestine, opaque relationships with government officials.
These factors exacerbate the risks that beneficial owners of some extractive companies could easily engage in tax evasion, transfer pricing, trade mispricing, bribery, contract fraud and money laundering.
Last month, we at NRGI suggested an explicit provision on beneficial ownership disclosure in our comments on Ghana’s Petroleum (Exploration and Production) Bill (2014) to a parliamentary subcommittee. Then, at a workshop hosted by NRGI and the Ghana Extractive Industries Transparency Initiative (EITI) secretariat in Akosombo, EITI multi-stakeholder group (MSG) members decided to review their reporting template to consider options for identifying the beneficial owners of companies, including politically exposed persons (PEPs). Franklin Ashiadey, coordinator of the Ghana EITI, has reiterated support for beneficial ownership disclosure in subsequent reports.
International interest in disclosure has also intensified. The UK has committed to a beneficial ownership register; the US and France have each declared their intentions to push for legislation; and the EITI has been undertaking a pilot program . Ghana is not in the EITI beneficial pilot, but its latest EITI reports sought to disclose beneficial ownership information, though they had some flaws. Nonetheless, the Ghana EITI MSG’s engagement in ratcheting up data collection and publication should not go unnoticed or unpraised.
At the Akosombo workshop, NRGI staff facilitated group sessions, discussions and presentations on the importance of beneficial ownership disclosure; data collection and publication options; and the benefits of maintaining a registry. Some key takeaways:
Defining “beneficial owners”
The beneficial ownership concept is not new to Ghana. The Bank of Ghana anti-money laundering/combating the financing of terrorism (BOG AML/CFT) guidelines provide a clear definition for a beneficial owner as “the natural person(s) who ultimately owns or controls a customer and/or the person on whose behalf a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement”. Politically exposed persons – individuals who are, or have been, entrusted with prominent public functions, and their family members and close associates – are considered high-risk by those guidelines.
MSG members at the workshop agreed that the Ghana EITI should adopt a definition with a lower ownership percentage threshold. The definition should also include the concept of control. Failing to adopt such a definition would make it difficult to assess natural owners and may result in the release of only legal owners instead of beneficial owners.
Deciding on which companies to include in reporting
Suggestions were made by some members to decouple beneficial ownership reporting from the Ghana EITI process, but no consensus was reached. As it stands, given that Ghana does not have an open bidding system in mining or in the petroleum sector, beneficial ownership information will be collected only from companies participating in the EITI process.
Targeting the best beneficial ownership data
The EITI beneficial ownership pilot revealed that none of the participating countries had an existing public beneficial owners’ registry. In addition, their national company registries did not have complete data on beneficial owners. Ghana also has neither; the MSG decided not to rely on the Ghana registrar and to seek company information for itself. Additionally, beneficial ownership workshops for participating companies were recommended in order to facilitate the provision of accurate information on the names of actual people and not just “the next step up” in the ownership chain (which often will be the name of just another company).
Publication of data
Amponsah Tawiah, the minerals commission’s representative on the MSG, said his group is developing a mining cadaster and online repository for all licenses and mineral reserves. The MSG should begin discussions with the commission to incorporate beneficial ownership data into the repository. The MSG should look out for other similar platforms to publish its beneficial ownership information to make it more useful to CSOs and citizens at large.
Samuel Bekoe is NRGI’s Africa regional associate.