Arctic Yearbook 2014 - Page 216

216 Arctic Yearbook 2014 are appointed by the Minister of Finance for two to three year terms. PIAC is mandated to monitor and evaluate compliance with Ghana’s Petroleum Revenue Management Act, to provide a platform for public debate on whether revenues are being used to advance development priorities and to provide an independent assessment of the management and use of the petroleum revenues. The PIAC has already demonstrated effectiveness towards good mineral management - in 2011, it found an unpaid surface rental bill from a major oil field, pressuring government to act (Bauer 2014a). A third pertinent example is Chad’s oil revenue oversight mechanism. The Collège de Contrôle et de Surveillance des Ressources Pétrolières (the Collège), is a multistakeholder oversight committee for Chad’s oil wealth (Gary & Reisch 2005). It approves disbursements from Chad’s fund and oversees the management and use of revenues from the Chad-Cameroon pipeline. The Collège is a nine person joint government-civil society body established to monitor the use of Chad’s oil revenues. Supported by four technical staff, it has the authority to exert its control by verifying the alignment between production volumes and deposits into the Chadian accounts, by ensuring that revenues are allocated according to the law, and by participating in the preparation of budgets for expenditures of petroleum revenues. The Collège has leveraged important pressure on government; for example, in 2005 its report highlighted wells and schools that were paid for but not completed. The Collège has successfully attracted attention to mismanagement of public funds, pressuring government to address these issues (Gary & Reisch 2005). Lessons from Other Oversight Bodies for the NWT Concerns have been expressed in the NWT that an oversight board would be expensive to operate, that it would be difficult to find qualified members to sit on the board, and that there is a risk of political patronage appointments from the Legislative Assembly. In this regard, Chad provides a strong model for the NWT, wherein for their Collège oversight committee, hiring technical staff helped to offset the knowledge losses that occurred as trained members rotated out, every two years. The NWT may want to consider hiring supervisory council support staff, such as an economist or a tax expert, similar to staff hired to support Chad’s Collège. Training by outside organizations provided for supervisory council members was important for both Chad and Ghana. Organizations such as the Natural Resource Governance Institute and the World Bank offer training to increase effectiveness for newly formed fund oversight groups in developing countries. Ghana’s fund provides a useful model to avoid political patronage appointments, whereby specific organizations and groups are identified for representation and selections must come from these designated groups. Independent oversight from government provides assurances of integrity that internal controls alone cannot provide. Nearly all of the world’s top rated natural resource wealth funds, including Alaska, Chile, Ghana, and Norway, have independent oversight. Funds that have been noted to not serve citizen interests as effectively, such as Libya, Equatorial Guinea, and Qatar, do not have independent oversight. To illustrate, the Libyan Investment Authority lost much of a $1.2 billion dollars investment in equity and currency derivatives following the 2008 financial crisis, partly the result of a lack of independent oversight (Bauer 2014a). In the NWT, the financial stakes are much smaller. However, for the government and citizens, it is an opportune time to carefully consider which A Question of Future Prosperity