Oil spill fund proposed

 

By Basiru ADAM

The Executive Director of the Africa Centre for Energy Policy (ACEP) Mohammed Amin Adam has called for the establishment of a fund which the country could fall on to clean up the mess in the event of an oil spillage.

The country, he told the B&FT, does not currently have the capacity to respond adequately to oil spillages should they occur, hence the need for an Oil Spill Fund.

Until the newly crafted Petroleum Exploration and Production Bill is passed into law, PNDC Law 84, which is largely deemed to be limited in scope, governs the industry. Although the existing law upholds the Polluter Pays Principle, which means that the party that spills pays, the payment is not effected until it is proven that the said party acted in a grossly negligent manner.

Thus, if an oil company is alleged to have caused a spillage, the country’s authorities would have to establish beyond doubt that indeed, the spillage happened as a result of gross negligence by the company before any charges against the company would hold. If the authorities are unable to establish this, then the nation would have to bear the cost of the clean-up.

In the first place, the country does not have the capacity to determine whether an oil spillage occurred as a result of gross negligence on the part of a company and so will have difficulties in charging companies, Mohammed Amin said.

“Our law says that when you spill you have a responsibility to clean. But it also says that if you don’t clean up to the standard the state can do the remedial works and surcharge you; and I am saying that involves some negotiation. When there is a problem and you are now going to negotiate it is costly. So if you have a spill fund when there is any spillage you just fall on the money and then do the cleaning,” he said.

Oil spillages may not have become a major issue in Ghana, but the country, even in its relatively short period of oil exploration, has had some issues.

In the latter part of 2009, even before the country poured first oil, Kosmos Energy, one of the development partners in the Jubilee Fields, spilled over 700 barrels of a substance suspected to be a mixture of oil and mud.

This later resulted in a protracted banter when government asked the company to pay a fine of US35 million.

Tullow oil, another of the partners, also spilled some 37 litres of oil in January 2010, as a result of a breakage in their link pipes, which was reported to the Environmental Protection Agency (EPA).

Kosmos refused to pay up, saying the fine was “totally unlawful, unconstitutional, ultra vires and without basis.”

Clause 38 of the Petroleum Revenue Management Bill under consideration deals with health, safety and environment and makes a contractor or subcontractor responsible for any pollution or damage caused by an oil spill.

The Minister or the Authority will recover costs and expenses for cleanup from the contractor or subcontractor. 

 

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