Political parties promise to reform mining sector

Over the past few years, some reforms have been set in motion to change the approach in which mineral resources are exploited across the continent. Ekow Essabra-Mensah looks at perspectives of the political parties contesting in this year’s election.

 A new African Mining Vision adopted in February, 2009 by the African Union has provided a framework for industry‐wide changes that could ensure that benefits from mineral resources (both financial and developmental) are optimised and shared equitably among stakeholders.

These reforms have been occasioned by substantial negative impacts from mining, widespread abuse of human rights in mining areas, inadequate financial and developmental benefits from mining to host countries -- especially when mining companies have been reporting rising profits on the back of soaring prices.

Ghana has also initiated certain steps in this direction, some of them including establishment of different committees -- two of them being the Government Renegotiation Team and Law Review Committee -- to review and introduce certain changes to aspects of mining in the country so as to enhance mining benefits and improve on benefit sharing between stakeholders.

Some fiscal initiatives have been announced over the past few years, some of which are yet to be implemented. Mining companies have also been working very hard, especially through the chamber of mines, to forestall the smooth implementation of these reforms.

It is against this background that the National Coalition on Mining (NCOM), a mining advocacy group in the country, invited representatives of political parties contesting in the 2012 general elections to discuss these developments and learn about perspectives of the parties on those issues.

The meeting was aimed at identifying common understanding and analysis of the challenges affecting the mining sector, and to discuss ways of working together to transform the mineral resources into broad‐based sustainable development in the greater interests of the country.

The meeting as well sought support from the parties to ensure that ongoing processes in the mining sector that accrue to the benefit of the country are maintained and possibly scaled‐up.

NCOM’s membership spans the country, especially where there are substantial mining activities, and is made up of non‐governmental organisations, human rights organisations, community‐based organisations focused on addressing mining impacts, researchers, and ordinary Ghanaians.

The New Patriotic Party (NPP) was  represented by Kwabena Agyei Agyepong; Kweku Dadzie, the Convention People’s Party (CPP); Kodzo Gavua, the National Democratic Congress (NDC); Victoria Armah, the Progressive People’s Party (PPP); and Samuel Kofi Ampah, also from PPP.

Representatives, among other key issues and concerns, discussed the relevance of quality leadership -- and that the inadequacy of it is partly contributing to the current challenges affecting mining in the country.

This was not limited to only political leadership (though critical), but also civil servants who are responsible for implementing decisions about mining taken by political leadership.

Participants indicated their support for ensuring quality leadership at various levels of governance.

Laws and regulations

The current laws and regulations governing mineral resource exploitation were also viewed to be largely inadequate, particularly in ensuring that the sector is well-linked to other parts of the country’s economy.

Segments of the laws and regulations affecting environmental protection and mitigation of mining impacts -- such as cyanide spillage, air-pollution and blasting -- need strengthening.

Again, the laws largely favour mining companies when it comes to revenue-sharing, as most of the wealth created does not return to the country.

There were indications that mining laws and regulations need reviews to be consistent with changes that have taken place (especially regarding mineral prices) since current laws were enacted.

Enforcement

The lack of enforcement of existing laws and regulations which affect mineral resource exploitation was identified to be partly responsible for the current state of affairs.

Participants underscored the need to enhance enforcement of various laws and regulations, particularly those that concern environmental management and mitigation of negative mining impacts.

Existing mining contracts and agreements

Participants agreed to improve the country’s share of benefits; this, they said, will require a revisiting of the agreements.

Ghana’s inability to maximise mining benefits and ensure retention of adequate share was associated with existing mining contracts and agreements.

Current mining agreements, most of them signed when mineral prices were very low and the country badly needed mining investments, provided overly-generous incentives which have generated substantial disquiet among Ghanaians in the past few years due to disappointing benefits the country has been receiving from those agreements.

Linkages and value‐addition

The low level of linkages (upstream, downstream and side‐stream) within the mining sector was of great concern to participants.

Ghana largely relies on foreign inputs in the mining sector (including catering services) and output of the mineral sector -- exported in raw form to other nations to serve as strategic raw materials for their industries.

This therefore denies the country the opportunity to transform its mineral resources into sustainable development through linkages.

Local capacity: UMAT, College of Jewellery

 The low level of local capacity in the mining sector was largely discussed and identified as an area that needs urgent attention to enable Ghana improve its benefits from mining.

The University of Mines and Technology (UMaT) and College of Jewellery were identified as local capacity building institutions that need support and strengthening.

 Participants agreed that increasing local capacity is one of the ways of ensuring that Ghanaians play major roles in the mining sector. The relevance of enhancing local capacity was not limited to only the large‐scale mines but also small‐scale ones noted recently for substantial negative impacts.

Small‐scale mining

 The current challenges affecting small‐scale mining in the country was discussed with concern. Despite its long history -- predating colonialism -- the sector is currently largely unregulated with substantial adverse impacts.

Participants agreed on the need to formalise the sector and provide support to Ghanaians operating in it.

Local Participation and Ownership

 The current ownership structure of the mining sector, largely owned by foreign companies, was identified as a major concern and partly responsible for Ghana not getting adequate benefits from the sector.

The state is required by law to hold 10 percent equity stake in mining companies, yet these stakes are either diluted or not held at all by the state.

There was a broad agreement that Ghana needs to rethink its participation in the mining sector, with possible improvements to enhance mining benefits.

Communities’ concern

 The current state of affairs wherein negative mining impacts are so visible in mining communities was discussed at length.

There was broad consensus on the need for the state to ensure that communities do not necessarily become worse off as a result of mining activity.

This is in spite of the obvious mining impact on nearby communities, such as deprivation of farm lands and involuntary resettlement. There were, however, some differences on how communities must be treated.

Nonetheless, participants agreed that the sovereignty of the state and its ownership of certain resources are non‐negotiable; and the manner in which communities are treated should be well thought-out.

The strength and recent activities by mining companies that have the potential to forestall ongoing initiatives was also identified as a reason why political parties and civil society organisations must be united on the issue of mining.

This is to ensure that there is maximum public support for mining reforms that are necessary for the country to realise financial and developmental benefits from its non‐renewable mineral resources.

Dr. Yao Graham, a member of the NCOM, requested party representatives to brief appropriate sections of their parties on the discussions and also to inform party leadership of the coalition’s readiness to provide further information and briefing on developments in the mining sector.

The National Coalition on Mining, established in 2001, has been conducting advocacy on mining in the country to ensure optimisation of mining benefits and equitable distribution of these benefits among stakeholders.