MAC: Mines and Communities

Ending the Race to the Bottom

Published by MAC on 2009-03-16


Terna Gyuse interviews ABDULAI DARAMANI, Environment Programme Officer, Third World Network Africa

ACCRA - Resource extraction in West Africa has often coincided with environmental degradation and brutal conflict. Activists further charge that the agreements between governments and transnational mining companies do little to benefit local communities.

Yet in 2008, an attempt by the Economic Community of West African States (ECOWAS) to change this by developing a common mining code for the region was unexpectedly challenged by civil society groups.

Third World Network Africa (TWN) was among those opposed, and Abdulai Daramani, told IPS that TWN - part of an international coalition engaged in research and advocacy on environment and development issues - supported creating a common code. However, he felt the ECOWAS initiative was premature. In his view, the process blocked citizen involvement - he says development of an inclusive code will only be possible after regional and local consultation and input.

The criticisms had their effect: what is now in place is a convention, a set of broad principles of intent that may form the basis of a future common code. IPS asked Daramani about the challenges of ensuring environmental justice for resource-rich communities in West Africa.

IPS: What are some of the worst examples in the region?

AD: We have numerous human rights violations which are well-documented. The Ghana Commission for Human Rights and Administrative Justice itself affirmed quite a number of violations in a report which it presented in 2008.

In addition to that we have so many scars of environmental degradation. If you go to Mali, you have the Sadiola mine, which has taken over thousands of hectares of land and deprived communities of access.

You have water problems caused by mining across the entire region. When we come to Guinea, there are also problems with the bauxite industry there where communities' environments have been degraded. In Nigeria, where apart from oil you also have mining of gold and other minerals taking place, you have severe problems of emission of carbon dioxide into the atmosphere.

So there are environmental, social and economic problems.

IPS: Who is worst affected by mining?

AD: Obviously once the community's rights are violated in terms of access to livelihoods, in terms of access to their dignity, in terms of access to housing, it affects the totality of the nation. But the ones who are exposed to all of these three impacts - social, economic and environmental - are local communities. They are usually located directly by the mines and they receive the day-to-day impact of whatever problems mining generates.

But it is not just the totality of the community, because within the community there are different clusters of social groups. If you take, for example, women, they are the hardest hit because they depend on land. But in terms of compensation, women receive a very, very insignificant portion of the compensation because even though they occupy the land, they don't own the land.

Then you have traditional authorities, who are a separate interest group when it comes to mining. They are direct beneficiaries of mining in local communities.

IPS: What are some problems with the agreements signed by governments with the transnational companies that dominate mining in Africa?

AD: The main problem is that first of all the agreements tend to lock national governments in, in terms of their capacity to reverse those agreements when they feel cheated. The agreements also tend to block the space for citizens' engagement in policy or to address some of the problems arising from mining, whether it's economic or environmental.

Most of these agreements tend to diminish the national standard. For example, you have a situation where Newmont Mining entered an agreement with the government of Ghana, and set the royalty they will pay every year to the minimum. It's the same thing with AngloGoldAshanti: they all tend to pay the minimum allowable royalty.

Ghanaian law says you can pay a royalty of between three and six percent, but in those agreements these companies have agreed to pay three percent through a period of 15 years. Now this is a case where the agreement tends to lower the national standard. The Ghanaian government may come out with a regulation which says royalties of five percent should be paid, but in light of these agreements they cannot raise payments from AngloGold and Newmont beyond three percent.

IPS: What changes would you like to see to the way mining is regulated?

AD: During the years when economic reforms were launched in the 1980s through the early 1990s, we saw a complete lowering of standards in all aspects of mining. Talk about environment, talk about human rights, talk about economy. We see that the role of the state, which is central in catalysing mining for development has also been diminished very seriously. So its power to regulate, its power to enforce - these have all been diminished.

What we want to see in the coming years is - and processes of reform have already begun at the African Union level - we want to see the state again become very strong in the development process. In fact, the current crisis of the credit crunch, where even Europe and America are calling for the intervention of the state, testifies to the argument we are putting forward, that the role of the state is central.

Secondly, we also want a strong focus on the diversification from the traditionally-exploited minerals like gold and diamonds to other minerals which are very critical, but which we have tended to overlook.

Third, we want to see strong value addition. That value addition must come through a strategy for processing our various minerals so we don't just remain exporters of primary commodities, but move towards a point where we begin to export finished products.

IPS: One of the new efforts to improve things in the mining sector is the Extractive Industries Transparency Initiative (EITI), which works to strengthen accountability by making clear what companies pay and what governments receive.

AD: I think that to a very limited extent, the EITI can contribute to some level of transparency, to the public knowing what companies are paying and what governments are receiving from companies.

The challenge of this initiative contributing to the developmental aspirations of individual African countries is this: one, the process seeks to subvert the argument for a re-organisation of the levels of payment that companies make to governments. At the moment the levels of payment, whether it's taxes, import duties or royalties is terribly low. And the EITI seeks to subvert attempts to raise the level of taxation, so that is a major challenge.

The second challenge, even though some countries like Nigeria have moved one step from voluntary codes to a state law, is that the totality of the EITI is moving away from mandatory codes to more voluntary codes. And these are ultimately not enforceable. They depend on the gestures of the companies. And we cannot rely on the companies who are mainly seeking profits to contribute to development.

Finally, the scope of the EITI is limited, because it is focused on the revenue aspect without questioning the larger environmental or human rights standards and this is very problematic when it comes to mining.

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