Dynamics of community perceptions, common resources and compensation practices in mining: the case of Newmont Ghana Gold Ltd at Ahafo

Abstract

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 2 John Tiah Bugri and Samuel Kumi 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.

Conflict Resolution in Mining Area: An Alternative Strategy of Community Empowerment

“…Based on the results of the different tests (Table 1), there is a very significant difference between the occupation of natural resources in the mainland area and the island area. The conflict that occurred due to the land occupation in Bombana Regency is in line with research by Bugri and Kumi (2018) that a critical problem faced by the mining industry and society in Ghana is compensation for the loss of land rights in mining activities. The company's dominance over natural resources as a whole is categorized as relatively high.…”

Valuation for compensation practices in Kenya: an evaluation

“…Babbie (2015) suggests that survey design is probably the best method available for studying social phenomena because it permits researchers to gather original data for describing a population too large to observe directly. The use of the questionnaires was justified because several researchers have used this tool to investigate valuation for compensation practices including Alemu (2013), Bello and Olanrele (2016), Bonaya (2018), Bugri and Kumi (2018), among others. In comparison to interviews, questionnaires are more objective, can gather both qualitative and quantitative data, economical, and effective in that a higher response rate is possible (Young, 2016).…”

“…The implications of the flawed valuation for compensation purposes have been noted to contribute to inadequate, unfair and unjust compensations thus promoting impoverishment of the project affected persons (World Bank, 2016). This outcome may consequently fuel bad blood between the locals or the project affected persons and the project implementers, costly litigations, project delays, among others (Alemu, 2013;Bugri and Kumi, 2018;Egbenta and Udoudoh, 2018;European Bank for Reconstruction and Development, 2017;Larbi, 2008;Larbi et al, 2004;Lekgori et al, 2020). In Kenya, for instance, the bone of contention has been on inadequate compensation amount, which have led to innumerable litigations (K'Akumu and Olima, 2018).…”

Understanding the nature, structure and relationships that make up the gold mining industry in Ghana: A multi-framing, multi-level exploration

“…There are several studies covering a wide range of topical issues that could be considered under this heading. However, studies such as Bugri and Kumi (2018); Garvin, McGee, Smoyer-Tomic, and Aubynn (2009); Hira and Busumtwi-Sam (2018); Taabazuing, Luginaah, Djietror, and Otiso (2012); Tuokuu (2019) are noteworthy. They offer complementary insights about the perception of stakeholders on issues ranging from economic, social and environmental impact at the community level, and share important views which could inform further analysis.…”

“…They also noted that members of the mining community feel that they lack the support of institutions such as the Land Valuation Board (LVB) as such bodies are perceived to align with the interest of mining companies. Using a similar approach, Bugri and Kumi (2018) noted a difference in perception between mining companies and their host communities about the effectiveness of compensation practices. They identified issues such as weak enforcement of mining policies, and the lack of or limited negotiation power on the part of mining communities that may need to be addressed in order to make progress towards improvement.…”