Ghana’s buoyant mining industry has attracted over 250 local and foreign companies into mining and mineral exploration. These include major multi-national companies such as AngloGold Ashanti, Gold Fields and Newmont amongst others including a number of Australian Companies.
In 2006, Ghana was rated 10th largest gold producing country in the world and the second largest producer in Africa, the 10th largest in bauxite and 9th both in diamonds and manganese production but the issue of payment of compensation to land owners and communities still remains an albatross to both exploration companies and stakeholders, Ekow Essabra-Mensah, mining correspondent takes a look at the problem.
Injustice against the mining communities and lack of proper compensation has become an everyday affair that usually passes unnoticed.
The Commission on Human Rights and Administrative Justice (CHRAJ) claims that Ghana’s mining laws are designed to attract foreign investors and not to protect the rights of local communities.
Indeed, according to the Ministry of Mines and Energy, approximately 30 percent of Ghana’s land is under concession to mining companies, and every year more farmland is converted for this use.
Western region, specifically the Tarkwa-Nsuaem Municipality and the Prestea-Huni Valley District, undisputedly have the highest concentration of minerals in the country.
The mining industry compounded with mirage of problems such as the environmental degradation and the pollution of water bodies in mining communities through cyanide spillage.
The payment of compensation to persons whose assets have been affected by mining has been described by human right activist as the most important problem associated with the mining industry and seems to have been relegated to the background by industry players and its stakeholders.
There have been records of instances in the Western Region where disagreements, misunderstanding and mistrust between the traditional authorities and mining communities on one side, and the mining companies on the other, as a result of inadequate payment of compensation to the beneficiaries.
Section 73 (l) of the Minerals and Mining Act, Act 703 (2006), states: “The owner or lawful occupier of any land subject to a mineral right is entitled to and may claim from the holder of the mineral right compensation for the disturbance of the right of the owner or occupier”
This new mining law prescribes compensation payments for lands, crops and buildings affected by mining.
Mining consultants and researchers says the new law leaves the determination of actual compensation payable to negotiations between the parties involved, resulting sometimes in lengthy litigation.
They noted that the issue of compensation had been one of the difficult subjects in the mining sector, spanning from exploration to decommissioning.
To help find a long-lasting solution to this problem, the Ghana Chamber of Mines and the Business Sector Advocacy Challenge (BUSAC) Fund have commissioned an advocacy and research project, titled ‘Advocacy for the Establishment of Standards of Compensation in the Mining.
Current development on payment of compensation by regulators
The Ghana Chamber of Mines has partnered BUSAC in a move initiated to end the bottleneck between land owners and mining companies over compensation on concessions.
The Parliamentary Select Committee on Mining and Civil Society Organisations and the Chamber has also began drafting the first National Compensation Policy to give specification on what should be accepted by property and land owners as fair and appropriate benefits deals.
It is aimed at protecting the future of people who lose their properties for mineral activities aside monetary compensation to sustain and improve their future livelihoods.
Joyce Aryee, Chief Executive of the Ghana Chamber of Mines at a presentation in Accra, on “Advocacy for the establishment of standards of compensation for mining concessions” described compensation as a burden.
She said the unformulated nature of compensation issues had always been a source of worry to the Chamber and its members, hence the need for an effective and reliable legislative instrument to regulate the delivery of fair compensation to beneficiaries.
“The need for a standardized and systematic compensation regime is long overdue. We believe the hassle that investors and mining communities go through over compensation can easily be avoided if there are proper guidelines on compensation ', she stated.
Land experts says litigations on compensation occur mostly as a result of the low knowledge of the linkages and benefits associated with the presence of a mine in a community.
They have therefore mentioned as essential, the need to finding a solution to issues of compensation since delays in project implementation due to compensation related litigations increase cost of doing business in the country.
Meanwhile, industry watchers have called on the Chamber and policy makers to consider developing a Corporate Social Investment Policy besides the compensation policy.
This, they believe will compel corporate institutions operating in Ghana to invest a percentage of their annual profit in some specific projects as experienced in countries like South Africa Zimbabwe to facilitate some community infrastructural projects and lessen the burden on government.
Lands and Natural Resources Ministry is proposing a national forum to seek appropriate compensation for farmers whose crops are destroyed by mining activities.
The sector Minister, Alhaji Collins Dauda, described the current payment of less than GH¢10 by the mines to cocoa farmers for each matured cocoa tree destroyed as unfair and expressed optimism that a review would create a congenial atmosphere for the benefactors and beneficiaries.
Current Mining laws on compensation
According to Sections 73 and 74 of the Minerals and Mining Act, 2006, the amount of compensation payable under subsection (1) shall be determined by agreement between the parties, but if the parties are unable to reach an agreement as to the amount of compensation, the matter shall be referred by either party to the Minister, who shall in consultation with the government agency responsible for land valuation, and subject to this act, determine the compensation payable by the holder of the mineral right.
Section74 (a) of the Act states that the compensation to which an owner or lawful occupier is entitled to, may include compensation for deprivation of the use or a particular use of the natural surface of the land, (b) loss of or damage to immovable properties, in the case of land under cultivation, (c) loss of earnings or sustenance suffered by the owner or lawful occupier, (d) having due to regard to the nature of their interest in the land, loss of expected income, depending on the nature of crops on the land and their life expectancy.
Recommendations of strategic direction on compensation
It is highly recommended that government and regulatory agencies, including mining companies and the mining communities need to have a national policy on compensation, which will involve beneficiaries to ensure ownership and buy-in, and also recognize the elements of sustainable livelihood framework.
Secondly, mining companies must endeavor to use collaboration, continuous dialogue and negotiation as a tool, and to ensure pre-disbursement and post-disbursement training for beneficiaries of compensation as well as commitment from mining companies, traditional authorities and opinion leaders to enforce standards.
Thirdly, stakeholders need to avoid or minimise involuntary resettlement that tend to dislodge project affected persons, mitigate negative social and economic impact on safety, health and the environment and also provide opportunities for displaced persons to improve on or restore their livelihood.
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