1. 1 EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI) GHEITI SENSITIZATION PROGRAMME. 21 ST MAY,2009

2. 2 OVERVIEW OF GHEITI REPORTS;UPDATES ON RECOMMENDATIONS. Kwaku Boa-Amponsem Kwaku Boa-Amponsem Boas & Associates. Boas & Associates.

3. 3 OBJECTIVES OF EITI Improve Development Outcomes from payments made to Governments by the Extractive Industries Improve Development Outcomes from payments made to Governments by the Extractive Industries Reduce Potential for Corruption and large scale Embezzlement of these payments. Reduce Potential for Corruption and large scale Embezzlement of these payments.

4. 4 GHEITI AGGREGATED REPORTS Aggregated Report Jan-June 2004 (Feb 2007) Aggregated Report Jan-June 2004 (Feb 2007) Aggregated Report July-Dec 2004 (July 2007) Aggregated Report July-Dec 2004 (July 2007) Aggregated Report-2005.( April 2008 ) Aggregated Report-2005.( April 2008 )

5. 5 Objectives of Aggregated/Reconciled Reports. Objectives of Aggregated/Reconciled Reports. Collect, Analyze and Aggregate payments made by mining companies to Government of Ghana. Collect, Analyze and Aggregate payments made by mining companies to Government of Ghana. Reconcile mining companies’ submissions of mining benefits payments to those received by Government. Reconcile mining companies’ submissions of mining benefits payments to those received by Government. Check disbursements to/utilization of royalties by District Assemblies. Check disbursements to/utilization of royalties by District Assemblies. Utilize Lessons Learnt from the Reconciliation/Aggregation to enhance Transparency in Payments, Receipts, Disbursements and Utilization of these benefits. Utilize Lessons Learnt from the Reconciliation/Aggregation to enhance Transparency in Payments, Receipts, Disbursements and Utilization of these benefits.

6. 6 Scope of Work Mining Benefits : The mining benefits considered under the reports : Mining Benefits : The mining benefits considered under the reports :  Mineral right licences (reconnaissance, Prospecting, mining lease)  Ground rent  Property rates  Mineral royalties  Corporate taxes  Dividends  Voluntary contribution

7. 7 MINING COMPANIES. MINE/COMPANYLOCATION MINERAL MINED Anglogold Ashanti Obuasi, Ashanti Gold Anglogold Ashanti Bibiani,WesternGold Iduaprim, Western Gold GSR/BogosuBogosu,WesternGold GSR/Wexford Akyempim, Wester n Gold Goldfields(Ghana)Tarkwa,WesternGold Goldfields(Ghana)Darmang,WesternGold Ghana Manganese Nsuta,WesternManganese Ghana Bauxite Co. Awaso, Western Bauxite

8. 8 Significant Findings: Length of stay of CEPS officials at Mines Length of stay of CEPS officials at Mines Lack of independent check on the fineness. Lack of independent check on the fineness. No guidelines for establishing the prices of minerals won. No guidelines for establishing the prices of minerals won. Royalty payment at the minimum 3% threshold. Royalty payment at the minimum 3% threshold. Low Corporate Tax payment. Low Corporate Tax payment. Low ground rent. Low ground rent. Non payment of Capital Gains Tax. Non payment of Capital Gains Tax. Inter-sectoral collaboration. Inter-sectoral collaboration. Regional OASL offices do not provide adequate information on payments made to beneficiaries. Regional OASL offices do not provide adequate information on payments made to beneficiaries. Recommendations: Recommendations:  Commencing on pilot basis-random sampling to ascertain differences in fineness between companies’ and independent Assayers declared figures.  Value for money procedure as companies already declare figures ranging between 88- 95%

9. 9 S ignificant Findings cntd. Lack of guidelines for the utilization of royalty receipts at the District Assemblies. Lack of guidelines for the utilization of royalty receipts at the District Assemblies. Recommendations: Recommendations: On random sampling basis, the assay results of mining companies should be compared to that of independent assayers. On random sampling basis, the assay results of mining companies should be compared to that of independent assayers. Formula for computing the operational ratio should be amended with specific reference to capital allowances. Formula for computing the operational ratio should be amended with specific reference to capital allowances. Guidelines for pricing should be established. e.g Gold prices based on the price of day of shipment –AM/PM Guidelines for pricing should be established. e.g Gold prices based on the price of day of shipment –AM/PM The regional OASL offices should provide relevant information to the beneficiaries.eg companies /months for the disbursements. The regional OASL offices should provide relevant information to the beneficiaries.eg companies /months for the disbursements. Ground rent should be reviewed upwards. Ground rent should be reviewed upwards. Guidelines should be established for the utilisation of mineral royalty receipts by the District Assemblies. Guidelines should be established for the utilisation of mineral royalty receipts by the District Assemblies.

10. 10 IMPLEMENTATION OF RECOMMENDATIONS Independent check (assay) of fineness. Independent check (assay) of fineness. -Minerals Commission’s laboratory proposals. -Minerals Commission’s laboratory proposals. Mineral Royalty Mineral Royalty - Stakeholders meeting at Akosombo. - Stakeholders meeting at Akosombo. -capital allowance/operational cost brought forward excluded from formula in Draft regulations. -capital allowance/operational cost brought forward excluded from formula in Draft regulations. -Likely to ensure payment beyond 3%,if draft is adopted. -Likely to ensure payment beyond 3%,if draft is adopted. Guidelines for pricing of minerals Guidelines for pricing of minerals -Captured in draft regulations. Corporate Tax Corporate Tax -IRS rep/Tax Policy Unit on incentives including Capital allowance etc. Ground rent Ground rent -No clear agency responsible for increase -NTRU/Land Commission/Land Valuations Board/Min. Comm to discuss.

11. 11 Implementation contd. Information on disbursement Information on disbursement -OASL indicates regional officers educated. -subsequent aggregation to confirm Capital gains Tax Capital gains Tax - Mineral rights as depreciable asset. - Purchaser to indicate payment of c/gtax for change of ownership. Inter sectoral collaboration Inter sectoral collaboration -Min Comm/ IRS collaboration with special reference to capital gains. Guidelines for the utilization of Mineral Royalty receipts Guidelines for the utilization of Mineral Royalty receipts -Selection of consultant underway by NREG through Minerals Commission.

12. 12 CHALLENGES – REPORTING/IMPLEMENTATION OF RECOMMENDATIONS. Multi-stakeholder expectations Multi-stakeholder expectations Lack of Legal backing. Lack of Legal backing. Delays in gathering data. Delays in gathering data. Recommendations not restricted to one Agency. Recommendations not restricted to one Agency. Lengthy processes required in amending or enacting legislation. Lengthy processes required in amending or enacting legislation.