Abstract
A critical issue confronting the mining industry and communities in Ghana is compensation for loss of land rights in mining activities. The 1992 Constitution and the Minerals and Mining Act, 2006 (Act 703) both require compensation for the expropriated to be fair, adequate and promptly paid. However, fairness, adequacy and promptness are normative value judgments predicated on stakeholders’ perceptions. This makes controversies over compensation issues inevitable and in mining communities these are rife because of increased competition between mines and communities for land and the legal provision that the payment of compensation rests with mining companies negotiating with the expropriated. Using Newmont Ghana Gold Ltd at Ahafo, we analyzed data from a sample of 120 stakeholders in four mining communities which revealed a wide divergence between communities’ perceptions and mining company compensation practices, and weak enforcement of mining legislation. Communities were also not well resourced to negotiate for compensation with the transnational corporation. Also, we argue that the principles applied in compensation assessment as provided by law, especially in the case of common resources, contribute to unfairness and inadequacy in compensation for the expropriated. We conclude that this imbalance has negative implications for community-mining company relations and threatens sustainable mining operations. We therefore recommend the rigorous enforcement of legislation, introduction of appropriate governmental and mining company initiatives in building capacities of communities for improved negotiations for compensation, legal recognition of common resources as valuable community assets for compensation, the application of the investment approach to compensation valuation and improved CSR packages by mines as means of bridging the gap between communities’ perceptions and compensation practices and ensuring improved company-community relations in the mining industry.
Highlights
Mines demand significant areas to operate and the indigenous people of surrounding communities depend largely upon the land for their livelihoods
Using Newmont Ghana Gold Ltd (NGGL) at Ahafo as a case study, this paper explores the dynamics of community perceptions in mining industry compensation practices, highlighting the case of common resources
Communities impacted by mining were not well resourced to effectively negotiate for better compensation for the loss of their land rights, and current legislation fails to recognize and compensate for common resources use of those without property rights on the basis of legal principles of ownership or difficulties in ascertainment of the values of these resources
Summary
Mines demand significant areas to operate and the indigenous people of surrounding communities depend largely upon the land for their livelihoods. Earlier studies in relation to this “land rush” in Ghana have looked at the social and environmental consequences of largescale land acquisitions (Tsikata and Yaro 2011); the land governance challenges that these processes raise (German et al 2011) and the linkages between mining, sustainable development and health (Yelpaala 2004). A few studies such as Kidido et al (2015) focused on the rightful recipients of mining compensation for land use deprivation and Ayitey et al (2011) on the law and practice in compensation for land use deprivation in mining communities. There is, a paucity of information in the area of communities’ perceptions and compensation practices of mining companies to better understand the dynamics and how the associated consequences could be addressed
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