SML responds to corruption allegations

Strategic Mobilisation Ghana Limited (SML) – the company at the centre of a recent investigative documentary by The Fourth Estate – has come out guns blazing, accusing the media team of painting a distorted picture of its work and contractual obligations.

The company faulted the documentary as riddled with misrepresentations, fabricated claims, and a fundamental misunderstanding of their role in Ghana’s petroleum and minerals sectors.

“The documentary represents a set of misrepresentations, false claims and a general lack of understanding of the entire operations of the company,” a communiqué by the company opined.

Central to the rebuttal of the company which provides revenue assurance and audit services to the Ghana Revenue Authority (GRA) is the rejection of the documentary’s portrayal of a ten-year US$100million per annum windfall for SML.

The company stated that the approved contract is a five-year agreement, devoid of any upfront payments due to the non-commencement of upstream operations and consequently, a non-existent revenue stream. The US$100million figure, according to SML, was a conjecture on the part of the documentary makers.

“We challenge the Fourth Estate to produce any contract anywhere that is for a 10-year period. The 5th PPA Board, at its 46th Board Meeting, in a letter referenced PPA/CEO/09/2286/23, approved a contract duration of five years. Again, it is not true that SML takes US$100million annually from its contract. The upstream operations of the company have not yet begun and no revenue has been realised. No monies have been paid to SML; the US$100million per year payment to SML that has been alleged is purely a figment of the author’s imagination and not factual,” part of the statement read.

“SML’s engagement with GRA is solely a risk-reward contract. GRA invests nothing in the entire investment chain. There is no cost commitment from the GRA. SML is not exempted from the payment of duties and taxes,” it added.

Dispelling allegations of undue privilege, SML pointed out its full tax liability within the framework of its risk-reward agreement with the GRA. Contrary to the documentary’s claims, the statement added, 31 percent of its future earnings will flow directly into the coffers of the tax collector.

SML maintained that its model aligns with industry standards and reflects the value it brings as a provider of crucial base data for revenue assurance and audits. The company claims that its work has led to a more than thirty-three percent rise in volumes reported in the downstream petroleum sector, a rise from an average of 350 million litres per month between 2018 and 2019 to 450 million litres by June 2020, translating into additional revenue.

This, SML stated, was very significant as the marked jump cannot be explained away solely by a supposed increase in demand for petroleum products, as it occurred at the height of the pandemic; a period of lowered demand.

On the front of revenue assurance, SML proudly championed its efforts in bolstering the GRA’s capabilities. In particular, the company detailed the installation of cutting-edge technologies like ultrasonic flow metres and automatic tank gauging systems, addressing critical shortcomings in the previous system employed by the National Petroleum Authority (NPA).

“SML installed ultrasonic flow metres to check the volumes of petroleum products loaded at the gantries from the depots to reconcile in real time with the volumes recorded in ICUMS. This system additionally assures Customs that no loading activities occur in the depot in their absence. The installed metring system is designed to detect and record the movement of petroleum products at the depots,” it explained.

SML also suggested that the recent scrutiny may be linked to the efforts of an oil cartel attempting to undermine the government’s fight against illegalities in the petroleum sector.

“We are open to scrutiny and welcome any investigations to verify the facts. We remain committed to working with the government to ensure transparency and efficiency in the petroleum sector,” the company added.

The statement comes following a documentary by the Fourth Estate, which set tongues wagging over the past weekend when a snippet was released online. This was further exacerbated when the full-length feature was ready for access on Monday, December 18, 2023.

Portions of the documentary suggested that the services of SML in the downstream sector were duplicitous – questioning the value of savings accrued – and were not providing value for money to the state and as such, there was no warrant for an extended contract which would include the upstream sector and minerals monitoring.

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