A seven-member Supreme Court panel presided over by Chief Justice, Anin Yeboah will on Wednesday 9 November 2022, deliver its judgement in the case challenging the constitutionality of Section 10 subsection 15 of the Petroleum (Exploration and Production) Act, 2016 (Act 919).
On 21 July 2016 at the 39th sitting of its second meeting of the fourth session of the sixth parliament of the fourth republic, parliament considered the Petroleum (Exploration and Production) Bill, 2016 for passage into law.
Dr. Kwabena Donkor, the then Minister for Energy (Power), amongst the many amendments proposed to the Bill, proposed to parliament the insertion of a clause 10 (15) which read as follows:
“The Corporation (GNPC) may leverage its reserves in raising capital for exploration, development and production activities as authorized under its parent Act. This and any other borrowing for the purpose of exploration, development and production shall be approved by Parliament”.
Parliament eventually passed the Bill into law titled the Petroleum (Exploration and Development) Act, 2016 (Act 919) on Thursday August 4, 2016, adopting the amendment proposed by Dr. Kwabena Donkor for the insertion of a section 10 (15).
The text eventually passed as Section 10 (15) of the Petroleum (Exploration and Production) Act, 2016 (Act 919) reads as follows;
“Any borrowing exceeding the Cedi equivalent of thirty million United States Dollars for the purpose of exploration, development and production shall be shall be approved by parliament and shall be in consonance with the Petroleum Revenue Management Act, 2011 (Act 815)”.
However, private legal practitioner, Elikplim Agbemava, instituted an action at the Supreme Court, contending that section 10 (15) of the Petroleum (Exploration and Production) Act, 2016 (Act 919), is inconsistent with Article 181 of the 1992 Constitution which provides that;
One, “Parliament, may by a resolution supported by the votes of a majority of all the members of parliament, authorize the government to enter into an agreement for the granting of a loan out of any public fund or public account”.
Two, “an agreement entered into under clause (1) of this Article shall be laid before parliament and shall not come into operation unless it is approved by a resolution of parliament”.
Three, “no loan shall be raised by the government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an act of parliament”.
Four, “an Act of parliament enacted in accordance with Clause (3) of this Article shall provide-
(a) that the terms and conditions of a loan shall be laid before parliament and shall not come into operation unless they have been approved by a resolution of parliament; and
(b) that any monies received in respect of that loan shall be paid into the consolidated fund and form part of that fund or into some other public fund of Ghana either existing or created for the purposes of the loan.
Five, “this article shall, with the necessary modifications by parliament apply to an international business or economic transaction to which the government is a party as it applies to a loan”.
Six, “for the purposes of this article, “the word” loan includes any monies lent or given to or by the government on condition of return or repayment, and any other form of borrowing or lending in respect of which-
(a) monies from the consolidated fund or any other public fund may be used for payment or repayment; or
(b) monies from any fund by whatever name called established for the purposes of payment or repayment whether directly or indirectly, may be used for payment or repayment.
It is the contention of Elikplim Agbemava, that “the true meaning derived from an interpretation of section 10 (15) of Act 919 is that all loans or borrowing by the Ghana National Petroleum Corporation (GNPC), the Ministry of Finance, Petroleum Commission or any other organ of state for the exploration, development and production of petroleum and associated resources which range from the cedi equivalent of $1.00 to $30,000,000.00 need not and will not be submitted to Parliament for approval”.
“Conversely only borrowings or loan agreements for loans above $30,000,000.00 shall be submitted to parliament for approval”.
The Plaintiff, Elikplim Agbemava, to this end, is seeking four reliefs from the apex Court of the land.
First, “a declaration that on a true and proper interpretation of Article 181 of the 1992 Constitution of the Republic of Ghana, Parliament lacks the power to whittle down the effect of the mandatory constitutional injunction that all loans (without any distinction) must be laid before Parliament for approval before they can come into force or become operational”.
Secondly, “a declaration that on a true and proper interpretation of Article 181 of the Constitution, Section 10 subsection 15 of the Petroleum (Exploration and Production) Act, 2016 (Act 919) in so far as it purports to exclude or exempt loan agreements of certain financial values entered into by the state, for the purpose of exploration, development and production of crude oil and natural gas, from parliamentary approval and scrutiny is contrary to Article 181 of the Constitution and therefore unconstitutional”.
Thirdly, “a declaration that any loan agreement entered into by the State or any public entity without Parliamentary approval by virtue of Section 10 subsection 15 of the Petroleum (Exploration and Production) Act, 2016 (Act 919) for the purpose of exploration, development and production of crude oil and natural gas is unconstitutional, void and of no legal effect”. Lastly, “any other order or orders as [the] Honourable Court may deem fit”.