GNPC’s CSR activities… is it worth it? (Part 1)

Over past few years, many energy and developmental experts, oversight institutions and citizens have voiced out their reservations on the Ghana National Petroleum Corporation’s (GNPC) expenditure on Corporate Social Responsibility (CSR).

These were much heightened when GNPC in 2015 decided to be headline sponsor of the senior national team (Black Stars) with an amount of US$3.0 million-a-year expected to last between three to five years but was terminated in 2017 after many public agitations and in November 2019, when a leaked memo permitting GNPC Foundation to release over GHC4 million to support some individuals and state institutions.

GNPC operates on behalf of the citizens of Ghana and for that matter, the citizens need to know how much the petroleum revenue allocated to GNPC is being used for unassociated or non-core activities. For this reason, Economy Times and www.newsguideafrica.comconsidered as part of their watchdog role to the citizens and the world at large decided to undertake monitoring of the Corporation’s Corporate Social Responsibility (CSR) projects spanning from 2015 to mid-2019 using available information and data from GNPC, Public Interest Accountability Committee (PIAC), Petroleum Commission (PC), Energy Ministry, Ministry of Finance, Civil Society Groups and expert opinions.

Somewhere July 2016, Mr Alexander Kofi-Mensah Mould, then Acting Chief Executive Officer (CEO) of Ghana National Petroleum Corporation (GNPC), called on businesses to move away from Corporate Social Responsibility (CSR) to pursuing Creating Shared Value (CSV), for mutual benefit as GNPC takes same direction.

“Yes, we can move from philanthropy – driven CSR to one that focuses on Creating Shared Value; that would better integrate social values, business values and environmental stewardship into a more cohesive and mutually beneficial relationship,” he said at a Accra Academy Founder’s Day event as a guest speaker.

However, PIAC, in its 2018 report remarked that, expenditure analysis of the GNPC Foundation’s programmes reveals a carefully thought through strategy, aimed at complementing government’s development efforts, and at improving the socio-economic wellbeing of beneficiary communities.

“While most of the projects are concentrated in the frontline oil and gas communities, the Foundation makes some attempt to spread its activities to other parts of the country, especially in areas likely to be impacted by its onshore exploration activities, This makes the Foundation’s CSI strategy assumes a forward-looking character”, it added.

The Committee was however worried about the political interference in GNPC’s operations. “There is a consistent and disturbing the pattern of political interference in the affairs of GNPC, which has hindered its ability to operate effectively in accordance with good corporate governance practice.”

PIAC is a statutory obligation under the Petroleum Revenue Management Act, 2011 (Act 815), as amended by Act 893, to publish Semi-Annual and Annual Reports. Its reports are reconciliation of data supplied by stakeholder institutions, and an independent assessment of the collection and management of the country’s petroleum revenues for each financial year for the period starting 2011 to mid-2019.

GNPC is Ghana’s national oil company established in 1983 to support the government’s objective of providing an adequate and reliable supply of petroleum products and reducing the country’s dependence on crude oil imports, through the development of the country’s own petroleum resources. GNPC is a partner in all petroleum agreements in Ghana and the national gas sector aggregator in Ghana.

The ‘GNPC Foundation’ has since 2017 replaced the ‘GNPC Oil and Gas Learning Foundation’ established in 2012. The new foundation is registered as a company limited by guarantee, with a sole purpose of administering the corporation’s social investment strategy and programmes. The new GNPC Foundation has a broader scope and mandate for Corporate Social Investments (CSI), based on three key thematic areas of support to stakeholder communities. These are:

1. Education and Training;
2. Economic Empowerment; and,

iii. Environment and Social Amenities.

The establishment of this singular vehicle for managing and implementing the Corporation’s social investment strategy, frees it to focus more on its core mandate of exploring and optimizing the value of the country’s investment in its hydrocarbon industry.

GNPC CSR budgetary allocation and projects:

For the periods of 2015, 2016 and 2017; data was not available on specific budgetary allocation and expenditure for the CSR projects. The reasons given by the GNPC Foundation media outfit was that, during those years, the Foundation was not in placed so there was no direct allocation for CSR activities in the Corporation’s work-plan submitted to parliament for debate and subsequent adjustments and approval.

However, the Corporation was undertaking CSR activities under the then GNPC Oil and Gas Learning Foundation, established in 2012.

But, according to the data available, investigations revealed that, most of the projects captured under 2018 and 2019 financial year were started as far as 2015 through the proceeding years till their completions. For the two periods, 2018 and 2019, the Foundation was allocated a total of over GHC88.75 million.

According to information from the GNPC and PIAC, the following data were obtained on CSR projects and budgetary allocations:

In 2018, the GNPC Foundation received a total amount of GH₵45,702,285 to cover its projects and operational expenses. The amount was derived from two funding streams, namely:

1. GNPC – GH₵39,309,825
2. Learning Foundation – GH₵6,392,460

Out of the total amount, GH₵39,458,515 was spent on projects, and another GH₵2,031,270.26 on operational expenses, bringing total expenditure to GH₵41,489,786.17.

In line with its CSI strategy, the Foundation spent its allocated budget on education, health, sanitation, water, and agriculture. Funds were also channeled in support of sports and a sanitation project being undertaken by a Past Students’ Association.

A total of US$43.05 million has been budgeted in 2019 to cater for the Corporation’s Corporate Social Responsibility (CSR) obligations under the GNPC Foundation. The Corporation undertook several initiatives as part of its CSR goals. The initiatives addressed two, out of four of the Foundation’s strategic goals.

These are:

(1) Education and social infrastructure

(2) Health, sanitary, and other facilities across the country

…………..To be continued in (part 2) with budgetary allocation and expenditure analysis as well as project monitoring

Source: Adnan Adams Mohammed