Gold Exploration in West Africa

[FL]

Newmont mining in Ghana: Collaboration needed on human rights
(from Ethical Corporation, http://www.ethicalcorp.com/content.asp?ContentID=4245)

Events around a Newmont mining site in the west African nation of Ghana demonstrate the pressing need for multi-party action on conflict management

At the end of January, the board of the International Finance Corporation (IFC), the World Bank’s private sector arm, approved loans of $125 million for Newmont Mining’s Afaho gold mining project in Ghana.

The IFC investment includes $75 million of IFC’s own resources, with the remainder raised through a syndicate of commercial banks.

To say that this project has been controversial would be no overstatement, and Ghanaian and international human rights and environmental NGOs had previously called on the IFC board to postpone consideration of the loan until IFC and Newmont had fully addressed the project’s human rights and environmental problems.

An IFC board official said after the decision: “The board recognised that it is a risky venture, but agreed that it is good to have the IFC around pushing for higher standards and social and environmental compliance.

“All precautions and safeguards have been put in place and that everything will be done in accordance with World Bank principles. It was also clear that many of the fears expressed by people related to previous experiences and not necessarily this project.”

Background to the controversy

For those unfamiliar with Newmont Mining, it is a Denver-based gold-producer, with 28,000 employees across five continents. Founded in 1925, Newmont claims to be “committed to high standards and leadership in the areas of environmental management and health and safety for its employees and neighbouring communities”.

Newmont acquired the Ahafo project in southern Ghana in February 2002, from Australia’s Normandy Mining. Since then, the company has expanded its concession to cover an area of some 621 square miles and has identified gold deposits estimated to be capable of producing 500,000 ounces of gold a year.

The IFC loan will help to develop a processing plant and related infrastructure that is expected to begin production in the second half of this year.

Campaigners are concerned about two issues related to the Ahafo project: the environmental impacts and the treatment of local people whose land has been expropriated by the project.

In a letter to the IFC board, a group of leading NGOs, including Oxfam America and Earthworks, identified five environmental impacts of the Ahafo project.

These include depletion of water supply for drinking and irrigation; groundwater contamination because of use of cyanide and sulphuric acid at the site; and pollution from tailings. They alleged: “Newmont has not provided sufficient information to assess these risks, and the proposed remediation measures are inadequate.”

Human rights issues

It is, however, the impact of the project on local communities that has attracted most attention. Campaigners argue that 9,500 people have lost their land and livelihood, and have not been adequately compensated by Newmont.

“It is irresponsible of the IFC board to grant a loan without any binding commitment by Newmont to resolve the issues around land and resettlement,” argued Ute Hausmann, of FoodFirst Information & Action Network. “Already, affected people are experiencing economic hardship and food security has become a pressing issue.”

November incident

Disquiet over compensation payments came to a head in November last year, when a local farmer was shot, and three others injured during a demonstration near the Newmont site.

There is some debate about exactly what happened. However, it appears that the shootings resulted from tension at a town meeting held to discuss the compensation process to local people.

When the local member of parliament who had been due to speak failed to appear, youths at the meeting blockaded the local road and began to attack vehicles. The police were called and a scuffle ensued. One of the youths, allegedly under the influence of drugs and alcohol, tried to take a rifle from a police officer. Shots were fired into the ground, the ricochets hitting four people, of whom one died.

Unsurprisingly, Newmont was heavily criticised for the incident, especially as the company is a signatory to the Voluntary Principles on the Use of Security Forces.

John O’Reilly, a member of the Amnesty International Business Group, criticised Newmont for having “apparently done little ... to follow through on what was clearly a very serious human rights incident … the company should request an independent investigation of the attack”.

Newmont’s response

However, Newmont actually does appear to have responded thoroughly to this incident.

In a response to O’Reilly’s criticisms, lodged on the Business and Human Rights website, Chris Anderson, external affairs director for Newmont in Europe and Asia, set out a detailed list of actions that the company had taken after the shooting.

The company says it had sought mediation around local tensions; had urged restraint on police before the incident; supported the bereaved families; and has met with the police and the Ghanaian Chamber of Mines to encourage them to sign up to the Voluntary Principles.

Lessons to learn

Assuming that Newmont is telling the truth, then this whole episode begins to shed light onto issues broader than just events in Ghana. Specifically, how it is possible to work with global standards such as the Voluntary Principles on Use of Security Forces.

Newmont does seem to have tried hard to translate its global commitment to the Voluntary Principles into concrete actions in-country.

A report by the indepdent NGO Collaborative for Development Action (CDA) into the Ahafo project last September said: “Local stakeholders displayed a positive perspective about the Newmont activities.” However, the November shooting shows that it has not been entirely successful in this endeavour.

Equally, however, Newmont does not appear to have had very much support from campaign groups that might have helped them. The NGOs who wrote to the IFC to protest at the proposed loan do not seem to have engaged with Newmont in the difficult and messy business of making the Voluntary Principles work.

Interestingly, Newmont does seem to be in the unenviable position of being the lightning conductor for the sins, past and present, of others in Ghana. The CDA report says: “Newmont operates in a context where practices [both past and present] of the mining industry have established a widely known and negative legacy.”

In his recent report on the subject, John Ruggie, professor of international affairs at Harvard and adviser on human rights and business to the UN secretary-general, wrote at length of the importance of “collaborative arrangements” for addressing human rights issues. The evidence in the case of the Ahafo project suggests that little collaboration has been forthcoming.

It may well be true that Newmont needs to try harder, as its critics demand. However, those critics also need to look hard at their own behaviour. Global standards are no use unless they are operationalised in countries such as Ghana.

To drive sustainable change, NGOs may now need to collaborate with companies on finding the solutions, often messy and dirty, that make this happen.


www.business-humanrights.org
www.miningnews.net
www.newmont.com/en/social/policy/social/index.asp


Participants in the Voluntary Principles on Security and Human Rights

Companies: Amerada Hess Corporation, Anglo American, BG Group, BHP Billiton, BP, ChevronTexaco, ConocoPhillips, ExxonMobil, Freeport McMoRan Copper and Gold, Marathon Oil, Newmont Mining Corporation, Norsk Hydro, Occidental Petroleum Corporation, Rio Tinto, Shell, Statoil

Governments: Netherlands, Norway, United Kingdom, United States

NGOs: Amnesty International, The Fund for Peace, Human Rights Watch, Human Rights First, International Alert, Pax Christi

Observers: International Committee of the Red Cross

www.voluntaryprinciples.org