Corporate Responsibility and Compliance with the Law: Land, Dispossession and Aftermath at Newmont's Ahafo Project in Ghana

Abstract

An important part of responsible business practices is compliance with the law. This article details what actually happens when the laws of the host country fail to ensure adequate protection. The focus here is on land dispossession and loss of livelihood in relation to a gold mine project in central Ghana. How come that a well-known international company – Newmont – with its own CSR statements sets up a project in the year 2003 that displaces subsistence farmers from their land without compensating in cash or with replacement land? The analysis identifies the factors that lead the company to not compensate farmers for their lost land: cost-cutting, strict adherence to the law, CSR commitment that was new and not internalised, complexities of the Ghanaian land tenure system, peer pressure to preserve the status quo, selection of an ‘old school’ CSR manager, and the inadequacy of Ghanaian mining law to account for relatively novel, ‘open pit’ mining techniques. However, the specter of famine raised by civil society activism, the involvement of the International Financial Corporation, and a better qualified CSR team constitute another set of factors that lead to a comprehensive package of livelihood improvement measures. There is a contrast between the complexity, long-term and advanced type of assistance Newmont currently envisages and the backward, short-term, formalism and brutality of denying compensation for land back in 2003. This research is based on the extensive documentation Newmont makes available on its website, interviews conducted in Ghana, and literature research.