Mining_Community_Benefits_in_Ghana_A_Cas.pdf - Mining Community Benefits in Ghana A Case of Unrealized Potential Andy Hira and James Busumtwi-Sam Simon

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Unformatted text preview: Mining Community Benefits in Ghana: A Case of Unrealized Potential Andy Hira and James Busumtwi-Sam, Simon Fraser University [email protected], [email protected], A project funded by the Canadian International Resources and Development Institute1 December 18, 2018 1 All opinions are those of the authors alone TABLE OF CONTENTS Acknowledgements List of Abbreviations Map of Ghana showing location of Mining Communities Map of Ghana showing major Gold Belts Executive Summary ……………………………………………………………………. 1 Chapter 1 1.1 1.2 Introduction ……………………………………………………………….... 4 Overview of the Study………………………………………………………… 4 Research Methods and Data Collection Activities …………………………… 5 Part 1 Political Economy of Mining in Ghana …………………………... 7 Chapter 2 Ghana’s Political Economy………………………………………………... 7 2.1 2.2 2.3 Chapter 3 3.1 3.2 3.3 3.4 Society & Economy …………………………………………………………… 7 Modern History & Governance ……………………………………………….. 8 Governance in the Fourth Republic (1993-2018) ……………………………... 9 Mining in Ghana ……………………………………………………………12 Overview of Mining in Ghana ……………………….……………………...... 13 Mining Governance…………………………………………………………… 13 The Mining Fiscal Regime …………………………………………………… 17 Distribution of Mining Revenues …………………………………………….. 18 Part 2 Literature Review: Issues in Mining Governance ……………... 21 Chapter 4 Monitoring and Evaluation of Community Benefit Agreements …… 21 4.1 4.2 Chapter 5 5.1 5.2 5.3 5.4 5.5 Community Benefit Agreements (CBA) ……………………………………… 20 How Monitoring and Evaluation (M&E) Can Help to Improve CBAs ……….. 29 Key Governance Issues in Ghana’s Mining Sector ……………………. 34 Coherence in Mining Policies & Laws/Regulations …………………………... 34 Mining Revenue Collection …………………………………………………… 35 Distribution & Use of Mining Revenues ………………………………………. 36 Mining Governance Capacity ………………………………………………….. 37 Mining and Human Rights ……………………………………………………... 38 5.6 5.7 Artisanal & Small Scale Mining and Youth Employment ……………………...39 Other Key Issues: Women in Mining, Privatization of Public Services, Land Resettlement, Environmental Degradation …………………………………….. 41 Part 3 Case Studies ………………………………………………………………... 44 Chapter 6 Case Study 1: Newmont Gold Ghana Ltd ………………………………. 44 6.1 6.2 6.3 6.4 Chapter 7 7.1 7.2 7.3 7.4 Chapter 8 8.1 8.2 8.3 8.4 Chapter 9 9.1 9.2 Overview of Newmont ………………………………………………………… 44 Interviews in Kenyasi Community …………………………………………….. 46 Survey Results for Kenyasi Community ………………………………………. 48 Studies and Reports on Newmont ………………………………………………54 Case Study 2: Golden Star Resources Ltd………………………………..56 Overview of Golden Star Resources ……………………………………………56 Interviews in Bogoso/Prestea Community ……………………………………...59 Survey Results for Bogoso/Prestea Community ………………………………..61 Studies and Reports on Golden Star …………………………………………….67 Case Study 3: AngloGold Ashanti Ltd ……………………………………69 Overview of AngloGold Ashanti ………………………………………………..69 Interviews in Iduapriem/Tarkwa Community …………………………………..70 Survey Results for Iduapriem/Tarkwa Community …………………………….72 Studies and Reports on AngloGold ……………………………………………. 78 M&E Practices of the Three Companies Compared …………………...80 Newmont ………………………………………………………………………..80 Golden Star & AngloGold ………………………………………………………81 Chapter 10 Interviews in Accra …………………………………………………………. 83 10.1 10.2 10.3 Part 4 Interviews with Government Agencies …………………………………………83 Interviews with Ghana Chamber of Mines and Mineworkers Union …………..85 Interviews with NGOs/CSOs …………………………………………………...86 Findings and Recommendations ……………………………………...88 Chapter 11 Conclusion & Recommendations …………………………………………. 88 11.1 11.2 11.3 Summary of Research Findings ………………………………………………... 88 Broad Recommendations on Mining Governance ……………………………... 95 Specific Recommendations on CBAs and Principles for sound Monitoring and Evaluation Systems ……………………………………………………………..97 Appendices 1. Interview Questions ………………………………………………………………………. 100 2. Survey Questionnaire …………………………………………………………………….. 103 3. Ethics Protocols ………………………………………………………………………….... 107 4. Principles of the Minerals and Mining Policy of Ghana, 2014 …………………………. 111 References ……………………………………………………………………………………. 113 Dedication Dedicated to the hard working men and women in Ghanaian mining communities, may they find a better day. Acknowledgements We would like to thank Jordon Kuschminder of Independent Social Performance. He was instrumental in helping to guide the field research to a successful conclusion. We gratefully acknowledge the financial backing of the Canadian International Resources Development Institute (CIRDI) and Simon Fraser University (SFU) to complete the project. We acknowledge the research assistance of Denis Dogah and Raphael Ochil at SFU. We also acknowledge the logistical support and research facilitation provided by our consultant in Ghana and his team of field research assistants. This project is part of a larger project on community benefits agreements led by Dr. Eric Werker of the SFU Business School. We thank Dr. Werker for his support of the project, including comments on earlier drafts. We also thank all of the participants and facilitators in Ghana from the private, public, and non-profit sectors, and the citizens who took time to answer our interview questions and fill out our surveys. In particular, we thank several participants, whom we shall not name to protect their anonymity, for detailed feedback on the draft report. The analysis, conclusions, and recommendations contained in this study are those of the authors alone. List of Abbreviations AGA AMV ASM AU CBA CDS CHRAJ CIRDI CPP CSO CSR DA DCE ECOWAS EITI EMDP EPA AngloGold Ashanti African Mining Vision Artisanal and Small Scale Mining African Union Community Benefit Agreement Community Development Scheme Commission on Human Rights & Administrative Justice Canadian International Resources Development Institute Convention Peoples Party Civil Society Organization Corporate Social Responsibility District Assembly District Chief Executive Economic Community of West African States Extractive Industries Transparency International ECOWAS Mineral Development Policy Environmental Protection Agency ERP GHEITI GRI GSD GSR ICMM MDF M&E MMDAs MMSD MNC MSG NDC NERG NGO NPP OASL PM&E PMMC PNDC PNP PP RCC Economic Recovery Program Ghana Extractive Industries Transparency International Global Reporting Initiative Geological Survey Department Golden Star Resources International Council for Mining and Metals Minerals Development Fund Monitoring and Evaluation Metropolitan, Municipal & District Assemblies Mining, Minerals & Sustainable Development Multinational Corporation Multi-Stakeholder Group National Democratic Congress National Environmental and Resource Governance Program Non-Governmental Agency New Patriotic Party Office of the Administrator of Stool Lands Participatory Monitoring & Evaluation Precious Minerals Marketing Corporation Provisional National Defence Council Peoples National Party Progress Party Regional Coordinating Councils Source: J. Busumtwi-Sam Map of Ghana showing major Gold Belts Executive Summary This project is designed to examine the overall benefits of mining to local communities in Ghana through the lens of community benefits agreements (CBAs) in order to make policy recommendations to the Government of Ghana. CBAs are an increasingly common approach by mining companies to gain a “social license to operate” in local communities, upon whom they depend for property rights, workers, contractors, and a stable environment in which to operate. CBAs are well-intentioned vehicles to lay down in formal detail the benefits that the company agrees to provide to the community, both in regard to financial amounts pledged and in the delivery of certain types of employment, procurement, and projects. They are promises by mining companies to go beyond the usual arrangements with national and regional governments for the payment of leases, royalties, and taxes to operate mines. In some countries, such as Canada, they are required, but in Ghana they are voluntary. As will be discussed in a forthcoming study by the authors notes, CBAs generally lack any clear monitoring and evaluation system. Monitoring and evaluation (M&E) are well-accepted parts of development project practice, yet they have not yet been incorporated to any discernible degree into CBA design and practice. Such systems would be vital to provide evidence that mining companies are fulfilling their promises to the communities in which they operate. In order to better understand the benefits of CBAs to mining communities, we situate our study within the broader context of the political economy of mining and mining governance in Ghana. Within this context, we visited three mining sites in Ghana in April 2018, Newmont Ahafo, Golden Star in Bogoso, and AngloGoldAshanti in Tarkwa. All three sites are enormously important for mining in Ghana, particularly in terms of employment and revenue generation, and thus provide a potentially important vehicle for local development. Moreover, all three companies have won corporate social responsibility awards. The most prominent of these is Newmont, whose efforts at transparency and community benefits have garnered many international accolades.2 Unlike other studies of mining in Ghana, our approach was not site specific, but comparative, to see if there were patterns across sites in terms of community perceptions about benefits. To this end, we conducted interviews in and commissioned a survey of residents in three communities hosting mining operations, Kenyasi (Newmont), Prestea/Bogoso (GoldenStar Resources), and Tarkwa (AngloGold Ashanti). Our interviews and survey data revealed surprising consonance across all three communities. The perception towards mining, even with the arrival of CBAs, remains predominantly negative and frustrated. Regarding CBA priorities, generating employment and education/training received the greatest priority across all three cases. Data across the three cases revealed strong perceptions that mining had brought little to no benefit to the communities. Also consistent across the three cases were strong perceptions of poor relations between communities and mining companies. The data revealed several ‘deficits’ in the governance of For an in depth study of the Newmont CBA, see the 2018 CIRDI Report, “Implementing the Ahafo Benefit Agreements” by Boayake et al, found at: 2 1 CBAs, manifest in perceptions of inadequate representation and accountability between the community and company and the community and the government, and perceptions of a cozy relationship between the government and mining companies. Each community expressed a strong preference for third-party M&E of CBAs and greater community participation in M&E, indicating a lack of trust in mining companies, which in turn reflects perceptions of the lack of transparency in the implementation of CBAs by mining companies. We also found the existence of a ‘governance paradox’ wherein communities look to mining companies as a primary source of public services and public goods, which creates unrealistic community expectations, undermines the building of local government capacity, and erodes the systems of accountability necessary for democratic decision-making. While we would not wish to dismiss the very important contributions of mining to the national economy, and particularly to revenues, we believe that public policy, and legalregulatory measures can ameliorate the situation by better channeling those revenues at the local level towards more sustainable and diversified employment creation, which is the overriding source of frustration for locals. We also believe that better communication among the national, regional, and local levels is vital, and that the governance systems for benefits allocation and monitoring and evaluation needs to be far more transparent. We offer a set of broad policy and legal-regulatory recommendations and a set of recommendations specific to CBAs, directed at the appropriate national, regional, and local government authorities in Ghana. Broad Recommendations: • • • • • Implement fully the 2014 Minerals and Mining Policy of Ghana, and the 2016 Minerals Development Fund Act (MDF); develop a long-term plan integrating mining into a wider vision of a diversified high income, high wage economy. Make CBAs a mandatory, legally binding obligation for all large-scale mining operations; reorient CBAs towards building local governance capacity rather than provision of public infrastructure and public services. Strengthen the mining fiscal regime (higher royalties and taxes). Strengthen environmental regulations; ensure that the EPA is well resourced; adopt a continual monitoring system for environmental indicators at all mine sites. Engage in a pro-active campaign to engage artisanal and small-scale mining (ASM) in meaningful dialogue; integrate ASM into national mining policy; develop a national policy and strategy to ensure that women participate in and benefit from mining. Specific Recommendations on M&E of CBAs: • Address CBA governance deficits – enhance the responsibility, accountability and transparency of CBAs, and enhance community representation and participation in CBA decision-making. 2 • • • • • • Adopt international best practices by providing guidelines for mandatory benefits agreements, Free and Prior Informed Consent by communities for projects, and participantoriented, truly independent monitoring and evaluation. Create a socioeconomic baseline for each community and monitoring should take place to see how mining is affecting the general welfare. Clear and publicly available indicators and targets are a must to assess and demonstrate progress. M&E frameworks for CBAs should include both quantitative data and qualitative data, incorporate participatory methods, and enhance downward as well as upward accountability. All projects should undergo due diligence in regard to both procurement and hiring. Direct efforts to build local capacity for monitoring and evaluation by neutral experts who are trusted by the community and paid out of general funds, rather than the mining company, to avoid the appearance of a conflict of interest. Give mining communities better access to legal representation to defend their rights. We therefore strongly recommend rethinking the relationships among the mining companies and national, regional, and local governments to create more government-directed and accountable long-term development plans to better utilize and invest mining proceeds. We believe that with a basic policy reorientation along these lines, the situation for local development and political support for mining can dramatically improve. 3 1. Introduction 1.1 Overview of the Study This study examines some of the most pressing issues around mining in Ghana from the perspective of community benefits agreements (CBAs). Our initial mandate was to focus was on the monitoring and evaluation (M&E) of CBAs globally, with selected cases studies, including Ghana. However, we found very few M&E systems are built into CBAs. This forced us to take a step back and ask how such a fundamental element of project management could be strengthened in a context where many livelihoods, the welfare of communities, and large sums of money are in play. This study, therefore, starts from the recognition that CBAs do not operate in a vacuum – the broader political-economic and governance arrangements of a country/community embed such agreements. A better understanding of the M&E of CBAs requires an approach that examines the political-economic context in which mining occurs, the public policy, legal-regulatory, and institutional framework for mining governance, as well as the priorities set for mining community projects and the implementation of those projects (whether efficiently, effectively and responsively). It also requires an examination of the indicators used to measure both the process and outcomes of delivering benefits to the community more generally, and the community’s expectations and perceptions of the processes and outcomes of benefit agreements. Our goal in this study, therefore, is not simply to review the mining regime in Ghana, but to examine it in such a way as to make recommendations regarding public policies, laws and regulations that will be more effective in harnessing mining benefits, which we provide in our conclusion. There are few guidelines in this area, and very limited coverage of mining benefits in Ghana. Not only did we find uneven coverage of mining companies in the academic literature and company reviews (with Newmont receiving the greatest attention) we also found that the literature in general is more technical, preferring to examine issues from a legal perspective, or focusing on specific topics such as water quality, rather than looking at broader governance issues and relationships among stakeholders, including power relations. In this sense, we believe that one of the major contributions of our report is to move beyond technical approaches to examine more closely community expectations and perceptions of the benefits of mining, as well as broader relations among key stakeholders in the governance and monitoring/evaluation of mining benefits in Ghana. The study is comprised of 11 chapters grouped into four parts. This introductory first chapter provides an overview of the study and outlines briefly our research methods and data collection activities. Part one, which includes chapter 2 and 3, establishes the context for our subsequent analysis of mining CBAs in Ghana. Chapter 2 highlights key aspects of Ghana’s political economy relevant to a better understanding of mining in the contemporary period. Chapter 3 examines mining’s role in Ghana’s political economy, identifies the public policy, legal, regulatory, and institutional framework governing mining, the key actors (public and private) involved in mining, the mining fiscal regime, and the distribution of mining revenues. 4 Part two, comprising chapters 4 and 5, further contextualizes our study by discussing contemporary issues in mining governance based on an extensive survey of the relevant literature. Chapter 4 discusses CBAs and the importance of integrating effective M&E systems into them. Chapter 5 discusses some key issues raised in the literature regarding mining governance in Ghana. Part three, comprising chapters 6-10, is the core of our study. Chapters 6, 7, and 8, examine each of our three case studies – Newmont Mining (Ahafo), Golden Star Resources (Bogoso/Prestea) and AngloGold Ashanti (Iduapriem/Tarkwa). Here, we provide brief historical information about each company’s operations in Ghana and their CBAs, and present our research findings in depth – the interviews and survey results – for each of the three cases. Chapter 9 compares the CBAs and M&E practices of the three companies, and chapter 10 presents observations from our interviews in Accra with government officials, associations representing mining companies and mineworkers, and NGOs. Part four, comprising chapter 11, summarizes our research findings and concludes our study with recommendations specific to improving the M&E of CBAs, and broader recommendations on improving mining governance in Ghana. We see this report as a starting rather than finishing point, and hope it can spark conversations for improved benefits management. 1.2 Research Methods and Data Collection Activities Our methodology consisted of a classic comparative case study of three well known mine sites in Ghana – Newmont (Brong-Ahafo), Golden Star (Bogoso-Prestea), and AngloGold Ashanti (Iduapriem-Tarkwa). Our main data sources included a survey and well-developed elite interview techniques (semi-structured and unstructured) by three veteran researchers. Other data sources included reports and studies on mining in Ghana by various public and private agencies, and available agreement...
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