The Environmental Justice Foundation (EJF) has asked authorities in the fishing sector in Ghana to enforce the country’s new Companies Act (2019).
According to the Foundation, Ghana’s 2019 Companies Act, if enforced properly, will make it much more difficult for Chinese fishing corporations to illegally use Ghanaian ‘front’ companies to obtain local licences to illegally fish.
A legal analysis, commissioned by the EJF, said the law which was designed to improve transparency in company ownership and reveal any vested interests, requires clear identification of ‘beneficial owners.’
“This new law offers a great opportunity to realise legal and sustainable fisheries,” said the EJF, but cautioned that the law must be fully enforced to generate these benefits.
It said the confusion that ‘front’ companies create around ownership means that these corporations often go unpunished for serious illegal fishing crimes which are threatening Ghanaian livelihoods and food security.
Investigations by EJF show that around 90% of Ghana’s industrial trawl fleet is linked to Chinese ownership, which operates through Ghanaian ‘front’ companies, using opaque corporate structures to import their vessels and register and obtain a licence.
But, the Ghanaian law expressly forbids foreign ownership of industrial trawl vessels operating under the Ghanaian flag both in terms of ownership on paper, and, crucially, in terms of those who profit from the vessel – known as the ‘beneficial owners’.
Section 47 of the 2002 Fisheries Act (Act 625) states that industrial vessels – with the sole exception of tuna vessels – should be wholly owned by Ghanaians.
Information on beneficial ownership must be provided to the Fisheries Commission as part of an application to register a vessel as a Ghanaian fishing vessel, as laid out in the 2015 Fisheries (Amendment) Regulations.
The new 2019 Companies Act (Act 992) however, clarifies the definition of a beneficial owner, showing clearly that the way Chinese fishing corporations are using Ghanaian front companies is illegal.
The act also requires that companies identify beneficial owners and disclose information on them. This includes ‘politically exposed persons’– anyone who has been entrusted with a prominent public function, and therefore may be at higher risk of involvement in bribery and corruption because of the influence they wield.
EJF’s Executive Director, Steve Trent, said, “Ghana’s fishing sector is lagging behind others in terms of transparency of operations, resulting in widespread illegal fishing and loss of revenue for the Ghanaian people.
The Fisheries Commission must work with the Ghana Revenue Authority, Ghana Investment Promotion Centre and Registrar General’s Department to fully investigate beneficial ownership and ensure that the fishing sector complies with all relevant laws.
This is the only way that the government can ensure that the Ghanaian people receive a fair return on their own resources and that the fishery can be sustainably managed.”
By Jamila Akweley Okertchiri