Parliament has been advised not to ratify the Development and Tax Concession Agreements between Government of Ghana and AngloGold Ashanti Ghana Limited as the deals violate the constitution and laws of the country.
The two Agreements, currently before the joint Committee on Mines Energy and finance are undergoing scrutiny before a possible ratification or otherwise by the House.
According to the Ghana Mine workers Union and the National Coalition on Mining (NCOM), their analysis of the two Agreements established that the deals in their current state are fraught with illegalities rendering them not fit for purpose and therefore should be rejected by Parliament.
They indicated that, the content of the Agreements reflects inadequate engagement by government with key domestic business and civic constituencies such as labour unions and affected communities during the negotiations of the Agreements.
Speaking on behalf of NCOM at a press conference held in Accra on Wednesday, Dr Yao Graham, Coordinator of Third World Network-Africa explained that the “principal grounds for recommending the rejection of the two agreement is the key elements, notably the fiscal concession in the Tax Concession Agreement which are stabilized under the Development Agreement are illegal on two main grounds.
According to Dr Graham, the legal authority to make fiscal concessions to a holder of a mining lease are those set out under section 48 of the Minerals and Mining Act, 2006(Act 703). He argued that the fiscal concessions that can be under that provision are to freeze current fiscal obligations. The law, he said, does not give the Minister the power to waive or reduce fiscal obligations.
He also pointed out that Parliament does not have the power on its own motion to waive taxes. According to him, Under Article 174(2) of the Constitution, Parliament can only do so by approving the exercise of a power to waive or vary taxes by a person or authority vested with legal power to do so.
Dr Graham said there are general policy issues arising from the two agreements including proposal for amending Section 48 and 49 of the Minerals and Mining Act, 2006 and the need to improve policy coherence and quality of stakeholder engagement in government decision making.
He mentioned that “the policy incoherence and inadequate stakeholder engagement around the agreements are merely instances of persistent systemic failures and weaknesses in development policy making which must be urgently addressed.
The main recommendation of the NCOM to the joint committee on Mines, Energy and Finance is that “the two Agreements in their current present form should be rejected and the executive invited to take steps to revise them,” Dr Graham suggested.
Mr Abdul Moomin Gbana, Deputy General Secretary, Ghana Mine Workers Union, pointed out that the agreements in their current form has the potential to adversely affect government, employers, workers and the overall citizenry who are without doubt, the ultimate custodians and beneficiaries of the development and Tax Concession Agreements.
According to Mr Gbana, whiles it may be permissible by law according the Minerals and Mining Act, for a holder of mining lease to enter into a stability or development agreement with the government of Ghana, the benefits thereof must not only be beneficial to one party but indeed to all stakeholders.
He said, it is striking to note that the net effect of import duties waived by the terms of the agreements is not only colossal, it is also has the potential to stifle Ghanaian businesses.
Hence on the principle of competitive cost advantage, “this initiative will render the cost of import substitution products expensive relative to the subsidized imports. This in essence will render the intent of local content provision counterproductive.”
He said a painstaking collation of goods and services readily available in Ghanaian market is a substantial step towards the actualization of the downstream potential of mining.
For his part, Mr Richard Elimah, The Executive President for Center for Social Impact Studies, indicated that if the Agreements not revised “we might find ourselves in a more serious situation following the low commitment of employment in the Agreement.”
He called for a comprehensive plan that can sustain Obuasi and its environs beyond the AngloGold Operations.
By Mohammed Suleman