Article 7.1 of MCC II is litigious to Ghana

The Public Utilities Workers Union (PUWU) of the Ghana Trades Union Congress (TUC) has observed that Article 7.1 of the Millennium Challenge Compact (MCC) II conflicts with the laws.

The union said the Article, which indicates that the provisions of the compact shall supersede the domestic laws of Ghana, could create chaos in the power sector if not addressed before the compact II takes off.

Article 7.1 of the compact states: “The government will proceed in a timely manner to complete all of its domestic requirements for this compact to enter into force. The parties understand that this compact, upon entry into force, will prevail over the domestic laws of Ghana.”

By extension, the union said the private sector would not be bound by the tariff guidelines set by the Public Utilities Regulatory Commission (PURC). 

At a press conference in Accra on April 6, 2017, the PUWU General Secretary, Mr Michael Adumatta Nyantakyi, said the above and the privatisation of the Electricity Company of Ghana (ECG) and other aspects of the compact had informed the union’s position on the compact. 

“The question is, will the PURC have sufficient authority to compel this investor to submit to tariff regime? Ghanaians should not lose sight of the dangerous potential of Article 7.1,” he noted. 

The union called on government to, as a matter of urgency, expedite the proposed dialogue with key stakeholders as it had promised. 

“If PURC operates under an Act of Parliament, which is also a domestic law, and comes with its tariffs as it’s been authorised by the law and then the private operator who has taken over ECG says that ‘well, as far as we are concerned we don’t think that these guidelines that you have put in place will meet our expectations and, therefore, we think some other methodology should be applied’, then we will have a conflict of law,” he stated.  

He added that with such express provisions that the compact supersedes the local law, then there was the danger that the country may end up in some international arbitration with the private operator. 

No time to wait 

The PUWU said the press conference was to remind President Nana Addo Dankwa Akufo-Addo to honour his word and initiate the process to dialogue with key stakeholders, namely labour, the ECG and the Millennium Development Authority (MiDA) to iron out bottlenecks hampering the implementation of the Compact II. 

“We think it’s appropriate that we give him a reminder of what he has said. Once the MIDA Board has been inaugurated, government may not be sitting idle and we suspect some discussions may be going on. We cannot continue to wait to be called; and key decisions would have been taken without labour input,” he said.

Social impact

Mr Nyantakyi said the PUWU was not against the Compact in principle, but opposed the handing over of ECG to a private entity for 25 years. 

It is also against the single concession which is tantamount to creating a virtual private monopoly in the electricity distribution. 

“The concessionaire would not have any commitment to the social dimension of the ECG’s operation, which will adversely affect rural electrification and undermine government’s one district, one factory agenda,” he observed. 

Going forward 

The union said since the government had not come out with anything yet, it was only issuing a reminder while engaging in advocacy. 

“If we hear of any specific action that will inform us of our next action to take. Government has a choice between an option that will lead to repatriation of profits from Ghana as against an option that the profits will be retained in the country,” he stated.