corporate responsibility and compliance with the law: a case study of land, dispossession, and...

Corporate Responsibility andCompliance with the Law:A Case Study of Land,

Dispossession, and Aftermathat Newmonts Ahafo Project

in Ghana1

RADU MARES

ABSTRACT

An important part of responsible business practices iscompliance with the law. This article details what actu-ally happens when the laws of the host country fail toensure adequate protection. The focus here is on landdispossession and loss of livelihood in relation to a goldmine project in central Ghana. How is it that a well-known international companyNewmontwith its owncorporate social responsibility (CSR) statements sets upa project in the year 2003 that displaces subsistencefarmers from their land without compensating in cash orwith replacement land? The analysis identifies thefactors that lead the company to not compensate farmersfor their lost land: cost-cutting, strict adherence to thelaw, CSR commitment that was new and not internal-ized, complexities of the Ghanaian land tenure system,peer pressure to preserve the status quo, selection of an

Radu Mares is a Senior Researcher at the Raoul Wallenberg Institute of Human Rights andHumanitarian Law, Lund, Sweden. E-mail: [email protected].

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Business and Society Review 117:2 233280

2012 Center for Business Ethics at Bentley University. Published by Blackwell Publishing,350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

old-school CSR manager, and the inadequacy of Gha-naian mining law to account for relatively novel, open-pit mining techniques. However, the specter of famineraised by civil society activism, the involvement of theInternational Financial Corporation, and a better quali-fied CSR team constitute another set of factors that leadto a comprehensive package of livelihood improvementmeasures. There is a contrast between the complexity,long-term, and advanced type of assistance Newmontcurrently envisages and the backward, short-term, for-malism, and brutality of denying compensation forland back in 2003. This research is based on the exten-sive documentation Newmont makes available on its website, interviews conducted in Ghana, and literatureresearch.

INTRODUCTION

Gold is by far the most important mineral in Ghana, whichis Africas second biggest producer of gold after SouthAfrica.2 The Ahafo gold mine, a 100 percent Newmont-owned project, is located in a densely populated, rural area in theBrong-Ahafo region, the Asutifi district, in central Ghana. New-monts exploitation is a large one and because of using surfacemining technology it displaced a considerable number of people.

This article discusses a choice made by the company in 2003as the project crystallized and got the go-ahead from regulators:to pay no compensation to the farmers for their land. The purposeis to explain how that was possible and see what has been doneabout it since then. This inquiry is guided by a few questions:what were the legal obligations in Ghana at the time (20032004)?What international standards existed at the time? What CSRcommitments did the company make at the time? What was theindustry custom on this issue in Ghana? How did Newmont seemto reason at the time, meaning what were the key factors leadingto the companys original stance on land issue and later itschange of course in dealing with displaced farmers? What correc-tive measures has Newmont taken since? This research is basedon the extensive documentation Newmont makes available on the

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Internet, interviews the author conducted at the mining site atAhafo and in the capital, Accra, in November 2008, and literatureresearch.3

The purpose of this article is twofold: first, to set the recordstraight on the land dispossession issue. Much has happenedaround the Ahafo project since 20032004, and in the last fewyears, Newmont has received accolades for its CSR efforts.4 It isunusual to find a mining company employing 130 staff only in itsEnvironmental and Social Relations (ESR) department, setting up10 multistakeholder committees covering areas such as compen-sation, gender, agricultural inputs, social development, etc.,5 andpublicly releasing documentation that takes one more than aweek full-time to read.6 However, these commendable initiativesdid not exist when the mine started; people were dispossessed oftheir land without compensation and it was not at all clear what,if anything, would be done to restore their livelihood. These factshave not been properly documented in the CSR literature andthus leave a gap in anyones attempts to understand NewmontsCSR operations at Ahafo. Second, exposing wrongdoing at acertain point in time is important; equally important is to graspthe process of change through which the people living in vicinitystruggle to improve their lives.

Only the issue of compensation for land will be detailed in thisarticle; this is not a comprehensive treatment of the variousimpacts of mining and of CSR initiatives undertaken at Ahafo.Indeed, a multitude of impacts and flash points exist: localemployment (especially of the youth), compensation, access towater, access to land, inward migration, rising prices, artisanalminers, security issues, tax exemptions, procurement and award-ing of contracts, resettlement facilities, effectiveness of varioussocial programs undertaken by the company, cultural changefollowing arrival of a large industrial complex, etc.7

THE AHAFO CONTEXT

The Ahafo project, on which exploration began in late 1990s,delivered its first gold in 2006 and is expected to last for 20years.8 As this is an open-pit mining project, it automaticallymakes use of much more land than underground mining9; the

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mining facilities cover 2,426 ha of farmland. As a result, a largenumber of people have been impacted. At Ahafo, the companydisplaced around 10,000 people and classified 10 communities inthe vicinity of the mining installations as directly impacted bythe project. The current project at Ahafo (Ahafo SouthStage I) isset to expand in coming years (Ahafo NorthStage II) withroughly 10,000 people more expected to be displaced. Newmont10

is the largest employer in the region directly employing 2,000people, while its contractors employ another 2,000 people. Itproduces half a million ounces of gold a year.11 Newmonts Ahafomine is the second-largest gold producer in Ghana after Gold-fields Tarkwa mine.12

The impacts of such a large mine in a heavily populated areaare correspondingly significant and varied. The local economy ispredominantly agrarian with 77 percent of the employed workingage population in agriculture and 96 percent of those employed inother sectors identifying agriculture as their secondary occupa-tion.13 The Opportunities Industrialization Centers International(OICI), a U.S.-based nongovernmental organization (NGO) activeat Ahafo, articulated a profile of the affected people:

The populations residing in this concession area are ingeneral poor subsistence farmers, with low incomes due tolow production on small family farms, limited non-farmincome generating opportunities, and low educational status.The welfare profile (quality of life indices) of the local villagesis extremely low and some basic facilities such as potablewater supply, sanitation and health facilities are not avail-able. The communities, in general, are highly dependent onsubsistence-farming, and exploitation of forestry productsand only a few community members are directly employed oreven employable by any industry and the mine due to thelow level of skills available in the communities.14

The most detailed source on who lost what due to the Ahafoproject is the Resettlement Action Plan (RAP)a voluminousdocument prepared by the Canadian consultancy planningAlli-ance for Newmont.15 Impacted people are classified as physicallydisplaced or economically displaced. The figures show that thenumber of impacted households is 1,701 households (9,575people), of which 823 households (5,185 people) were physically


displaced as they lost both residential buildings and croppedfields in the mine area, and 878 households (4,390 people)became economically displaced through the loss of croppedfields.16 Of the physically displaced, a majority have been providedwith new houses in the two main resettlement sites at Ntotorosoand Kenyase with the rest choosing to relocate on their own andget compensation in cash. Both the resettled and the economicallydisplaced can become vulnerable; the World Bank recognizedalready in 1990 the dangers of involuntary resettlement:

Development projects that displace people involuntarily gen-erally give rise to severe economic, social, and environmentalproblems: production systems are dismantled; productiveassets and income sources are lost; people are relocated toenvironments where their productive skills may be less appli-cable and the competition for resources greater; communitystructures and social networks are weakened; kin groups aredispersed; and cultural identity, traditional authority, andthe potential for mutual help are diminished. Involuntaryresettlement may cause severe long-term hardship, impover-ishment, and environmental damage unless appropriatemeasures are carefully planned and carried out.17

A dislocation of this magnitude can impose serious hardship onthe local population so appropriate compensation is a crucialissue. For the sake of clarity, a few more distinctions must bemade as compensation can be due for residential buildings andother structures on the land, for crops, and for land itself. Itshould be noted that residential land on which the house is builthas not been an issue.18 Furthermore, compensation for destroyedstructures has been only relatively a contentious issue. On theone hand, Newmont provided replacement houses in line withGhanaian regulations19 and World Bank standards on an area forarea basis designed in such a way to allow further extensions.The housing details have been negotiated in the ResettlementNegotiation Committee.20 On the other hand, only speculativestructures, that is, those that people build for the sole purpose ofgetting compensation rather than inhabitancy and normal use,continue to raise tensions; this raises only logistical challenges tothe company as they are built by the hundreds in a short periodof time, but the principle is clear: speculative structures do not

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give rights to compensation after the cutoff date. Finally, the lackof compensation paid to households for agricultural land has beenhighly contentious. This has been possible due to inadequacies inGhanaian laws, some of them being changed with the arrival ofthe new Mining Law in 2006.

Another distinction worth making regarding the contentiousissue of compensation for land at Ahafo refers to the type ofagricultural land: land that is actually used to grow crops andunder the rotational crops of agriculture, land that is left unusedfor several years to regain fertility. The latter is referred to asuncropped land or fallow land. Numerous writings on the Ahafoproject discuss in detail whether and how to compensate forfallow land21 and this could create the impression that croppedland has been compensated. This is not the case: both types ofland were not compensated.

CORPORATE REASONING FOR NOT COMPENSATING

How can it be that a well-known international company22 with itsown CSR statements23 sets up a project that displaces subsis-tence farmers from their land without compensating or providingthem with replacement land? The key factors are discussed later.

Keeping the Costs Down

During an interview in Accra, a high-level manager who was notat the site during the compensation negotiations in 20032004answered the question of whether there was an internal divisionbetween the ESR staff and the rest of the management over theissue of land compensation as following: I dont think it was anydivision, it was just a matter of we had to keep our costs down tomake the project economic and we had to follow the law. Thosewere the two drivers that were framing what we were trying todo . . .24

Following the Law

Without having a chance to analyze the legal instrument thattransferred land to the mining project,25 it is difficult to clarify in


detail legal aspects of the land transfer.26 This notwithstanding,the possible legal grounds can be identified, and the inadequacyand complexity of the Ghanaian land tenure system can be high-lighted. This will suffice for the purposes of the present analysisthat aims to establish who was legally required to pay compen-sation and the foreseeability in 20032004 of the damageincurred by uncompensated households. This issue of legalentitlements is key for understanding the true extent of vulner-ability of the local population and some difficulties the companyconfronted. Deficiencies of local laws and uncertainty on legalentitlements are often encountered in less developed countries sothis discussion carries insights to CSR evaluations in other indus-tries and countries.

Legal Framework for Expropriation of LandThe Constitution of Ghana (1992) lays down the right to privateproperty (Art. 18) and the principle of prompt, fair, and adequatecompensation.27 Despite seemingly clear constitutional safe-guards, farmers at Ahafo actually received no compensation forland. That was due to legal loopholes and the complexities of theGhanaian land system.28

Under the 1986 Mining Law, it is the government that takesover the land.29 The law provided for the compensation of variouslosses but deliberately omitted land per se from the list.30 As theRAP notes, No Act provides for compensation for the landitself.31

To properly understand expropriation in Ghana, the mining lawis read in conjunction with the State Lands Act, 1962 (Act 125),32

and the Administration of Lands Act, 1962 (Act 123).33 There is asignificant difference between Act 123 and Act 125 in terms ofcompensation: while the latter provides for lump sum compensa-tion,34 the former provides only for annual payments (e.g., royal-ties) to land owners, which, importantly, are not individualfarmers or families but the traditional authorities.

All indications point to the government using Act 123 toacquire land, which, to some, it appears as expropriation indisguise and without proper compensation. Act 123, according toKwame Gyan, a Ghanaian expert, is an ingenious devise forappropriating the use of land to the Government without theradical step of divesting titleholders of their titles.35 A Ghanaian

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legal expert commented on this law and a related litigation36 bysaying that section 10 (1) of Act 123 is grossly inconsistent withthe constitutional regime on the protection of property rights.37

To whom is compensation payable and in what form? Theoverlapping rights over land under Ghanaian customary law needto be discussed.

There is no lump compensation but compensation in the formof land rents and royalties. They are payable to the traditionalauthorities, not to individual farmers or households; farmerslosing access to their land receive a one-time compensation fortheir lost crops. The rents are derisory.38 However, royalties aremore significant and are split according to a formula amongtraditional authorities and district assemblies.39 Still, the amountresulting from royalties is small compared with the local needs.40

Furthermore, because the law delivers little accountability of howrecipientswhether traditional or public authoritiesuse theserevenues, there is no guarantee that people will actually seedevelopment benefit from this collective compensation.41

The issue of legal entitlements over land is important whendiscussing compensation. What rights do the farmers who lostaccess to land have? Customary law is very important in the landtenure system in Ghana.42 The complexities and uncertaintiesassociated with customary law43 are only exacerbated when amassive expropriation takes place displacing hundreds of house-holds. Usually, it is traditional authorities (stools and clans) whohave the title on land (allodial title),44 and they pass lesser rightsfurther down to individuals. Once allocated to a member of theland-holding community or even a stranger who has obtained anexpress grant from the land-holding community, the beneficiary(the user of the land) acquires very broad and virtually perpetualrights (usufruct) over the land45:

The Ghanaian usufruct is inheritable, alienable and poten-tially perpetual. The usufruct is described as a burden on theallodial title. According to this view, the usufruct is notanother specie of ownership in itself but consists of perpetualrights of beneficial user of land, which now co-exist with theallodial title . . . Indeed so extensive are the rights of theusufructuary that it has been contended that where there isa usufruct over stool or family land, there is only a remote


possibility of the reversionary interest of the stool or familyresurrecting, save where the usufruct is extinguished. Inthis regard, the usufruct reduces the allodial title to a nominalvalue. This is critical in determining entitlement to compen-sation and quantum for lands affected by mining activities.46

Expropriation of Land at AhafoFurther complicating the picture at Ahafo is the preexisting legalstatus of stool lands. For various reasons, customary land can bevested in the president and correspondingly moved in a differentlegal regime.47 It is unclear whether the land at Ahafo was underthe direct administration of the traditional authorities or has been,by executive order, vested in the President with the latter havingadministration rights over lands.48 As the RAP explained,

Vested Lands are lands owned by a stool, but managed bythe state on behalf of the land owning stool. The legal rightsto sell, lease, manage, collect rent have been taken from thecustomary landowners by the application of specific laws onthat land and vested in the state. The landowners retain anequitable interest in the land (i.e., the right to benefit fromthe land). This category of land is managed in the same wayas State Lands.49

This seems important because if the land at Ahafo was vestedin the president, that appears to provide yet another legal groundfacilitating the conversion of land from agriculture to miningpurposes without proper compensation or consultation of affectedcommunities.50

In fact, the legal status of land came up in discussions betweenthe mine and local population as early as 1998.51 There, the chiefsand farmers asked questions about compensation for land andwere explained that the land is vested in the government. Anofficial from the regional Land Valuation Board (LVB) explainedthe legal situation.52 Compensation would come to traditionalauthorities in the form of royalties, rents, and drinks. He furtherrecognized that chiefs hold allodial title on land, but the farmershave usufructuary rights; it is normally this later right that is lostduring acquisition. The official reckoned that it would be prudentfor chiefs not to collect compensation for land to the detriment of

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these right holders but allow the usufructuaries to claim compen-sation for land they have been occupying over the years.53

In another meeting, an assemblyman explained that under themining law and the State Lands Act of 1962, every (minerals-rich)land is vested in the government and can be acquired for devel-opment. Mining companies therefore do not pay compensation onland per se but pay compensation for affected crops and also payroyalties to the central government.54 Finally, a company repre-sentative is quoted as saying that it is the government that makesthe acquisition, and mining companies pay royalties to the gov-ernment and do not know anything about the executive instru-ment that the government uses to acquire land for miningoperations. This is purely a governmental affair.55

However, this adherence to law did not legitimize Newmontsoperations and did not make the problem of dispossessionwithout compensation go away. It was clear that the legal schemeof compensation was contested, unfair, and about to change soon.One of the leaders of the farmers at Ahafo, when asked during aninterview about the companys position on land compensationduring the 20032004 negotiations, said: Whenever you go andtalk to them, they will show you the law. THE LAW. So it got to apoint that we even wrote letters to the minister on the compen-sation because we thought the farmers have been cheat-ed . . . They quoted the law and told us your own law says thatland should not be paid. Therefore I say we decided to also attackthe law . . .56 Actually, as early as the late 1990s, minutes ofstakeholder meetings at Ahafo recorded that assemblymen werewriting petitions to the Parliament on land compensation andownership aspects.57 By the time Newmont decided in 2003 to goahead with the minimalist requirements of the law on compensa-tion issues, the compensation logic was already questioned in thecapital, Accra. Thus, the RAP notes: In 2003, the national gov-ernment drafted amendments to the Minerals and Mining Law onvarious issues, including compensation. The proposed amend-ments are with the Attorney General awaiting submission toParliament.58 Subsequently, the mining law was modified in 2006to include compensation for lost land.59

There is a complex legal picture that emerges at Ahafo. Farmershad rights they could rely upon under customary law. However,the land might have been vested, and thus, administered by the


government, in law if not in practice.60 Furthermore, the 1986Mining Law was silent on compensation for land per se andenvisages compensation only to traditional authorities in forms ofroyalties and rents with people benefiting from developmentprojects thus funded. The constitutional principle of prompt, fair,and adequate compensation was questionably applied in thiscontext,61 and more broadly, the government seems to have a poorrecord on compensating for land.62 The complexities and contra-dictions of the land tenure regime63 apparently discouragedNewmont from seeking an equitable solution at the time64 andadded one more reason to go with the minimalist requirements ofthe law and pay no compensation for land.

Deference to the Customary Land Tenure System

Why was land-for-land compensation not an option for Newmont?The World Bank recommends land-for-land for displacementtaking place in farming areas. A high-level manager at Newmontargued: We were very concerned that we would not be as inter-ventionist as we could be basically destroying the traditionalsystem and land tenure rights. It sounds like an excuse but itreally was one of the guiding principles: look, the system is goingto work, there is land, people are going to have cash, theyll getland and get farming again.65 To be precise, the availability ofcash refers to compensation Newmont paid for crops and struc-tures as there was no cash paid for land. Along similar lines, theRAP notes:

Like the Company, these traditional authorities recognize thefact that, if the Company were to attempt to replace land forland for all households with farm holdings in the Mine Area,it would create additional problems that could effectivelydestroy the established mechanisms for land allocation andpotentially cause serious inflation in the price of land in thearea. Therefore, the Company will not purchase replacementfarmland for economically displaced households. Instead, thetraditional authorities have publicly stated and made itknown to Project-affected persons/households that they, thetraditional authorities, have land available for allocation forthose that need it . . . [and] have encouraged farmers seekingland for agriculture to come forward for consideration.66

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Reliance on Coping Strategies for Dispossessed Farmers

A consultancy document dated mid-2004 could be read asshowing that the company considered cash-for-land compensa-tion rather than land-for-land due to land shortage.

The Ahafo Project Area is heavily populated . . . To maintainthe livelihood of those affected farm settlers it is necessaryto provide them with alternative lands of equal quality andproductivity. With the exception of the surrounding forestreserves, virtually all lands suitable for farming in thevicinity of the proposed Ahafo Mine have owners and arebeing farmed presently or fallowed for future farming. Inrecognition of this land shortage, NGGL proposes to compen-sate affected owners of land with cash, calibrated to reflectdisplaced productivity. In recognition that the mine mustprovide alternative sites for settlement of displaced home-steads, and anticipating that some affected owners maydesire to continue farming in the area, NGGL wants tolearn the location, size, and relevant characteristics ofpresently unused land, which might be used for landcompensation.67

Later on, the RAP made in 2005 an opposite assessment writingthat The Companys own investigations have confirmed the exist-ence of uncultivated land . . . [L]and cover in Project area includessome 13,460.6 hectares of fallows and natural areas, equivalentto 80% of the area covered by the satellite image.68

Whatever the availability of land there was, the winning argu-ment seems to have been why bother?, and the company wascontent to rely on a number of coping strategies for disposedfarmers. It was about individual and collective self-help, of makinguse of uncultivated land and of traditional institutions.

According to the company, dispossessed farmers were expectedto group themselves, approach their traditional authority, andtogether allocate new landsthis is only one of several copingmechanisms available to farmers, but it is the only mechanismwith which the Company can assist.69 Thus, Newmont envisagesthat groups of farmers, together with their village traditional leader,would approach their chiefs and present their needs for land; thecompany would facilitate the grouping of farmers and assist inland allocation performed by traditional authorities. As the RAP


recounted, the company expected traditional leaders to make landavailable; the company would then play a facilitating role.70

Furthermore, the company expected that impacted farmersmay be coping with cultivated land losses by clearing their ownfallow lands or by clearing fallow land held by members of theirextended family.71 Candidly acknowledged is that The Companyhas not inventoried the total landholdings of resident and non-resident households, and as a result is not in a position to assesshow significant a loss the Mine Area is to these households (i.e.,how much of their total landholdings are lost), and therefore howeasy it will be for them to cope.72 Such were the gaps inNewmonts knowledge: The extent of exterior fallows, as well asfarm fields located outside the Mine Area, held by households isunknown.73 Furthermore, Newmont acknowledged: The impactson communities, families, and individuals from a loss of fallow arenot known. The fallow land use system in the Mine Area will notbe fully understood without further monitoring and study.74

Besides facilitation, the company considered monitoring of self-relying strategies as critical: The monitoring dimensions of theabove strategy are critical. Through the monitoring program, theCompany will track those households for which alternate landdoes not become available.75 Through twice yearly land acquisi-tion surveys to assess overall landholdings76 to be undertaken bythe OICI as well as communicating with local NGOs such asActionAid and Guards of the Earth and the Vulnerables, thecompany intended to monitor how farmers coped with disposses-sion. The results of the monitoring program will allow theCompany to identify and track those that do not appear to becoping well.77

In sum, Newmont counted heavily on self-help and copingstrategies: farmers were to clear fallow land on own family landand use it for agricultural production, to contact chiefs to get newland from stool land, and to enter tenancy agreements withowners of their choice.

Aligned with the Industry Custom

One of the early measures Newmont undertook in Ghana was toassess how its peers in the mining industry handled compensa-tion. Company employees went on information tours at other

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mines and a Ghanaian industry insider was hired as the topnegotiating manager at Ahafo. As a Newmont employee com-mented on the situation, Newmont is not the only miningcompany in Ghana. There are others that have worked in thiscountry for 100 yearsno one has ever compensated anybody forland. Everyone pays crop compensation.78

A farmer representative gave his account on the compensationnegotiations that took place in 20032004. Specifically, on thecompensation for land issue, he highlighted the twin obstacles oflaw and industry custom:

At that time wed sit down and wed talk but the problem wasthat it did not exist in the laws of Ghana. At the end of theday we did not have any basis to tell the company thatpeople lost land because all they were saying this is the law,you have it in your own country, no compensation for landand they were saying that Obuasi [a large mine of Anglo GoldAshanti] is not doing it . . . they dont want to change thestatus quo. Newmont does not want to change and affectother mining companies . . . The laws of Ghana say youshould not pay for land; other companies dont do it, whyshould Newmont go ahead and pay? That was the negotia-tion, the main argument.79

An employee at Newmont who was not part of the 20032004events commented:

It was difficult under the circumstances for Newmont tojump in and say we are going to pay for land. What does itmean for the other companies? This is my own guess aboutthe situation: under the circumstances, if I were incharge . . . Id play it safe and say lets not muddy thewaters. Thats what the law says.

You mean Newmont stirred some kind of opposition from othercompanies in Ghana?

Not exactly. Its natural when you go into any area youdwant to know what rules and regulations pertain and youdwant to be seen as someone who respects the way thatpeople do their things in that area. If you want to get intosomething new you ask how do I do this? and they putbefore you the law and thats what you follow. If I were doingit, thats what Id do: Id ask what does the law say on this?


Even if you know that following the law will destroy thelivelihood of people around the mine?

Exactly. So now you started by the law and you sit back andsay I satisfied the law what else can I do to help the peopleso thats what the CSR means . . . Im saying this is probablywhat happened.80

A study of mining in Ghana hinted at these dynamics in thedifferent context of compensation for crops. There, the govern-ment through the LVB applies its own method of valuing crops,which is widely criticized in Ghana as grossly inadequate.

Mining companies in Ghana face a difficult choice. Shouldthey view the LVB compensation levels as a fixed require-ment or merely a minimum level of acceptable compensa-tion? Opinion within the Ghanaian mining community isdivided. Both Newmont and AngloGold Ashanti stated duringinterviews that they adhere to GCG (Ghanaian Central Gov-ernment) compensation policies and do not provide more.Newmont, in particular, indicated that it feels uncomfortableproviding compensation in excess of the amount prescribedby law. It fears that doing so would set a negative precedentand create problems with the GCG and the communities inwhich it operates.81

A manager at Newmont commented on the more recent expe-rience of Newmont with its peers. Thus, commenting on stateowned enterprises, he said:

we organise occasionally workshops on land resettlementand compensation and entities like DRA (the governmentalelectricity authority), the highway authority . . . you know,they have to put up their way of operating against miningcompanies, like us and Gold Fields, and not necessarilyliking it because they have to go through much more troublethan they used to before: oh bring the police in and movethem out.82

The Cultural Broker

In 2009, documents commissioned by Newmont state unequivo-cally: A common finding at many sites is the power of a singleindividual to positively or negatively impact Newmonts relations

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with communities. The importance of approachable, concerned,responsive individuals cannot be overemphasised.83 Back in2003, Newmonts negotiating team at Ahafo was lead by a Gha-naian, Mr. Akwasi Gyima-Bota, with wide experience in themining industry. A Newmont manager explained that Bota

was here with previous companiesNormandi, Terce-nary . . . He was involved in the Ahafo project since 1996 andI think the expats around just saw him as the source of allthings Ghanaian. He is actually a sub-chief in his own areaand he is very knowledgeable about traditional protocols andhe was the only senior Ghanaian manager we had at thattime coming from the previous company. So if Akawsisaid its ok, if there is a problem he can go and sort itout . . . Remember, we are an American company, new toAfrica . . . Ive seen it before where such an entity wouldcome in and almost get charmed by the first person thatcomes along and think thats the way it has to be in Ghana.So people in that role become cultural brokers and becomefocal points for better or worse.84

However, both company employees and a farmer representativeresisted the notion that Newmonts minimalist approach to com-pensation could be laid at Botas doorstep. A corporate managerin the ESR department explained that the decision-making poweron these land compensation issues back in 2004 was indeedplaced in Ghana, not at the headquarters in Denver, and thewhole team rather than a single person reached decisions: Inthat time everybody was involved in those decisions . . . We neverreally had a structure where one person makes these decisions,its more of a consensus-based thing . . . I would be hesitant toput all the blame on one person . . . It was the companys deci-sion. It took advice . . . It was not just him . . . I see him more asa broker that we relied on too much.85

Another manager was asked about the role of Bota and thefailure of judgment in Newmont back in 2003 as the decision todisplace without compensation for land was taken. Without beinga direct participant in the negotiations, he said:

I dont think it was a failure. I think it was a corporatedecision that has now come back to bite us. Bota was theman who executed it, but it was at the highest levelthe


priority was just get the people off the land. . . . Im sure hedid not do it alone, he advised and was given the go ahead.He would not have done anything without authorisa-tion . . . Yeah, they [Newmont] chose him . . . But thats thesensitive part. Sometimes people do what they are toldinstead of telling people the right thing that has to bedone . . . He should have known better. But you need somekind of resilience and grace to be able to do that.86

Bota has left the Ahafo site in 2004 and the company in 2007.The same interviewee commented: You think he was sacrificed?He was put on woodpile, they burned the guys ass . . . Becauseof . . . Image. Was he a liability . . . ? Big liability. You think hewas more or less innocent responding to the pressures of thecompany? He has also his own personal style, but very strongcharacter, extremely articulate individual . . . But the decisions hemade . . . Fundamental to how the company was viewed. So Icant blame the company for this. They [Newmont] selected him,the buck stops with them.87

CSR Commitments Neither Internalized nor Fulfilled

In October 2003, the company released its CSR policy andcommits, among others, to respect the Universal Declaration ofHuman Rights [UDHR] in its business operations, to whereverappropriate and feasible, set operating standards that exceed therequirements of the local law, to assess our performance againstour policies and standards and to demand leadership in socialresponsibility from all our people.88

Newmonts guidelines accompanying its CSR policy resemblethe first two principles of the Global Compact: We will worktoward achieving the ability to assure that we do not breach theprinciples underlying the UDHR and are not otherwise complicitin human rights abuses.89 Newmont was to accede to the GlobalCompact only later, in June 2004, though it seemed to be alreadywell anchored in the international CSR discourse. Thus, theguidelines explicitly reference a number of well-known interna-tional CSR initiatives such as the Extractive Industries Transpar-ency Initiative, the Publish What You Pay campaign, the VoluntaryPrinciples on Security and Human Rights, the Global ReportingInitiative, and the AA 1000 standard on stakeholder engagement.

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Any farmer at Ahafo would be hard-pressed to see howNewmont worked in the spirit of the Universal Declaration, whichreads: No one shall be arbitrarily deprived of his property.90

Conspicuously absent from the list earlier91 is the World BanksOperational Directive 4.30 (OD 4.30) on involuntary resettlement,from 1990, which was widely acknowledged as international goodpractice and which clearly states that Displaced persons shouldbe compensated for their losses at full replacement cost prior tothe actual move.92 The RAP would in 2005 recognize the inter-national best practice status of the OD 4.30 but would curiouslycontinue that The Companys demonstrated commitment tomeeting Ghanaian legislation and international best practice, asdefined by Operational Directive 4.30, contributes to maintaininga Social License to Operate.93

Actually, this statement is partial with the truth: when it cameto housing and residential land, Newmont complied with the OD4.30, but regarding compensation for farming land it convenientlydisregarded the Banks standard.94 The latter envisages providingrural, farming communities either replacement land (land-for-land) or cash (cash-for-land); as will be shown later, Newmontcreated a third category in the form of facilitating access-to-landseen as necessary for improving or restoring livelihoods.

Not Contemplating Consequences: Specter of Famine

By 2005, newspapers reported that food production in the areawent down drastically, the population doubled, and the cost ofliving raisedall due to the Ahafo project. People around the minewere interviewed, and most were concerned about the affordabilityand availability of food in the area.95 Nevertheless, by the sametime the RAP wrote reassuringly that Food security is not acritical issue in the area. Most farmers in the Mine Area are ableto meet food consumption needs with their own agricultural pro-duction. Twelve percent of homesteads experienced food shortagesin the past year.96

The company eventually acknowledged the threat of famine,and its response was mainly the Agriculture Improvement andLand Access Programme (AILAP)a program that facilitatesaccess to land. In the words of a Newmont executive, AILAP wasdone after the fact when we realised there were issues. [. . .]


Originally the guidance for the ship was pay for crops and struc-tures . . . The word that we had was that there was plenty of landaround that people would get through traditional means with thecompensation. I think youre seeing a paradigm shift at that point,in the middle of the project we realised there was a problem.97

REACTIONS TO DISPOSSESSION

Farmers

An OICI report noted that displaced farmers expected compensa-tion for land itself, including in the form of cash-for-land, andmanifested their disposition to continue farming elsewhere:

The farmers concept of adequate compensation includescompensation for land and not only payments for crops andlanded property destroyed . . . A lot of anxiety is expressedabout being provided alternative land for farming activities.They even express anxiety about having to buy food if relo-cated as they currently feed from their farms. Most of thesefarmers have indicated that they cannot undertake any othereconomic venture. Consequently they anticipate compensa-tion for their land in order to migrate to areas where theycould obtain new land for farming. Residents are of theopinion that there is an abundant supply of land and thatthey are capable of securing alternative land to continuetheir farm business as long as they are adequately compen-sated for their crops and current land. This may abate theland use conflict envisaged. Consequently inhabitants of theproject area suggest that if they are adequately compensatedthey should be able to migrate to continue their farm busi-ness elsewhere in the region if not in the same district.98

Civil Society

A farmer representative at Ahafo recounted the support from civilsociety groups in 20032004. Apparently, it came in severalflavors. One was support for regulatory change in Accra:

We could see that the land issue created all sorts of problems.Mining law says that all land belongs to government . . . that

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land could be taken for goodit was a very bad law. So someof us decided that we had to fight to have this law changed. Sowe took some of our men to Accra, we collaborated with TWN[Third World Network] and we had a press conference, we gotthe ministers, all those big menthe Minister of Mines,Chamber of Mines and other peoplearound and had a pressconference to send the message to them that Newmont ispaying only crops, they are not paying for land and that thelaw was very bad . . . there was a whole lot of problemsbecause they were not paying for land, they were taking theland for free and for good.

Another aspect relates to the information that NGOs couldprovide to farmers at Ahafo who, it should be remembered, hadno previous experience with mining and its impacts. The samefarmer representative recalled that as for the land compensationthey [NGOs] did not talk much about it because it was in the law.They advised us on resettlement, on crop compensation, hownegotiation is going to be, they took us to Tarkwa [largest mine inGhana] and showed us some people . . . suffering . . . But the landissue was a very sensitive issue because the law in Ghana was nottalking about land . . .99

More of the NGOs position on the Ahafo project can be gleanedfrom the impressive mobilization of NGOs in 2005 as the Inter-national Finance Corporation (IFC) was considering granting aloan to Newmont.100 From the exchanges of civil society groupswith the IFC, it is clear that the issue of replacement land figuredprominently in NGOs concerns. They wrote in a letter that Over95% of the families displaced by the Ahafo South mine depend onrotational crop, subsistence farming for their livelihoods. There isno question that replacement of land is essential to restoration,let alone improvement, of the livelihoods of the affected popula-tions.101 Another report cautioned that Land replacement mea-sures critical to restoring the livelihoods of the displaced farmersremain incomplete or uncertain, posing an immediate threat tofood security in the region.102 FoodFirst Information and ActionNetwork (FIAN) drew attention to the projects noncompliance withOD 4.30 on involuntary resettlement:

Access to land is a major issue for both physically andeconomically displaced persons. According to OD 4.30, theliving conditions of displaced persons have to be at least


restored and land for land approaches are the preferredoption. In the case of the Ahafo project, land for land is theonly feasible option to restore livelihoods. Without majormodifications regarding access to land, compensation, anddevelopment projects, this project will not be in compliancewith OD 4.30.103

Furthermore, Newmont

insists that there is no legal obligation for the company toprovide land and that it is not prepared to purchase land foreconomically displaced persons. It will rather facilitate accessto arable land through the traditional system. This process offacilitation will be monitored. This approach ignores the factthat gaining access to land through the traditional systementails costs for the households . . . Any costs related to thathave to be born either by the state or the company.104

Detailed comments were made about a suitable land replace-ment plan; among them is also the issue of rights over land: Wewant to emphasize that to be effective in restoring long-term liveli-hoods, any land replacement strategy must provide security of landtenure or transferable usufruct rights to those people whose livesand livelihoods were irreversibly altered when Newmont Ghanatook over the land they occupied to extract a profit from it.105

IFC

The IFC got involved at Ahafo well before granting the $125million loan to Newmont in January 2006. It seems to have beenas early as May 2004.106 Newmont was not in compliance with theWorld Banks standard on compensation for land. Apparently, theIFC raised concerns but they were rebuffed.

As the specter of famine was rising, the role of IFC becamecritical. Newmont acknowledged the instrumental role played bythe IFC in helping them put together a package to first avoidimpending famine and second to restore and improve livelihood ofdisplaced populations. Newmont sought the IFCs involvementless for the loan but for its expertise and stamp of approval.107

After proper compensation according to World Banks standardsbecame a forgone issue, the IFC worked with Newmont on theencompassing issue of livelihood improvement.

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I think they [IFC] recognised that at that point we decided wewill not compensate for fallow land but they said ok, werecognise that its going to be a problem so you guys youneed to do a study of alternative ways of dealing with fallowland . . . We, I think some of us accepted a long ago that wewill have to compensate for fallow land but you know therewere some harder hands (heads?) who said its not requiredby law and nobody has ever done it in Ghana. No miningcompany or anybody else for that matter.108

A farmer representative recounts how farmers expectationsaligned with the IFCs expertise and suasion. Deprived of legalbacking to claim compensation for the land itself, farmersstruggled for better compensation for crops during negotiationswith the company,109 within the framework provided by Ghanaianlaw; in addition, they expected some development assistance fromthe company to get back to farming:

At that time we were not hinting that we want compensationfor land. We knew the law was bad so we thought that evenif Newmont was not going to pay for land, we had to fight forbetter compensation for crops on the land . . . and suggestother programs that would help people to develop . . . Whenwe even started fighting on this land issue, they said theypaid for what the law demands they should pay. They werealways quoting the law this is the law and we are safe. AndI also said: as a social and corporate citizen, lets also lookat how best we can develop the people. If Im a farmer and Ilose my land for good even if the law says . . . for conveniencesake and good relations it costs me to get another land tofarm.110

At the time IFC undertook its own inquiries and interviewedaffected farmers. The farmers representative commented:

We told them [IFC] that even though Newmont has paid forcrops, Newmont did not pay for land. People have lost theirland for good and we think, as social workers, that Newmontcould do something to help the farmers to re-engage infarming because if Im a farmer and want to change myprofession it will be difficult. I dont know anything apartfrom farming from my childhood . . . IFC went backtheycame in 2005and when they came back, it was Newmontwho called us again and said they would implement


programs; IFC also advised then that it would be in the bestinterests of the company to give people land to work on.111

Besides its expertise, IFC also instituted a twice per year inde-pendent review at Ahafo.112 As a result, starting with 2005, allprograms the company undertakes at Ahafo are assessed byindependent consultants, and reports are publicly released on thecorporate web site.113

THE AFTERMATH: TOWARD THE LIVELIHOODRESTORATION PACKAGE

Newmont evolved its strategy in face of the hardship that landdispossession has caused. When NGOs and the press warned thatthe area faces a risk of famine and the IFC confirmed the seri-ousness of the situation, the company changed gears and put inplace a more comprehensive approach.

The Land Access Package

Land is the centerpiece of any package aimed at restoring andenhancing livelihood of affected farmers. Newmont explains:

Under Ghanaian law and practice, the Company is notrequired to purchase required land, or to compensate forrequired land per se. Instead, the Company is requiredto compensate for assets affixed to the land: i.e., cropsand structures. Notwithstanding its legal obligations, theCompany recognizes that loss of land is of critical importancefor impacted persons/households, particularly those withland-based livelihoods, and has devised a strategy to ensurethe provision of replacement land in kind.114

Newmont gradually developed its Farmland Access Strategy,which eventually came to contain three main land access assis-tance options: (1) private access to land by using the customarysharecropping system; (2) traditional authority land bank withtemporary and free access to community land for two years; and(3) mining area land bank with temporary and free access tocompany land for two years.

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First seems to have been a land bank made available bytraditional authorities. Newmont signed a memorandum of under-standing with the traditional authorities of Ntotoroso and Kenyaseno. 2 that provides access to land in designated royal lands toall compensated farmers that Newmont identified as having noland. Farmers would be allowed on two acres of stool land for twoyears after which the farmer could negotiate with the TraditionalAuthority a long-term sharecropping agreement. This land bankcovered 677 acres.115

Second, Newmont outlined the concept of land bank oncompany land, that is, in the mine take area. This measure,explained in the RAP in August 2005, was another temporarymeasure offering land for two years. It referred to land unused inthe mine take area (land not critical to operations over the nexttwo to five years) and allowed farmers who received compensa-tion for crops to continue farming their lands if they could notsecure access to land outside the Mine Take Area. Newmontidentified some 800 acres of such land.116

Third, in May 2006, Newmont began the AILAP, describedlater.117 This program proved the only viable component of thethree-pronged strategy. It created a set of incentives that provedcompelling enough for farmers to not pursue the other two tem-porary options.

The Comprehensive Development Package

By early 2006, Newmont had implemented a new comprehensiveapproach well-captured in this statement: The Company hasdefined a number of livelihood enhancement initiatives to helpProject-affected persons/households re-establish their livelihoodsor create new ones, and long-term community development ini-tiatives to assist communities, local and regional government, andtraditional council in the Project Area establish social programsand infrastructure.118 Most attention and top priority was givento project-affected people (PAP), that is, people who lost land, bethey physically or economically displaced. These programs will beintroduced later to explain when they started, what they provide,and who is covered; a detailed presentation and a critical assess-ment are beyond the scope of this article.119


The Agricultural Improvement and Land Access Programme(AILAP)120 began in May 2006 and is implemented by the U.S.-based NGO OICI. When a farmer has obtained access to at leasttwo acres of landfrom a landowner of choice, traditional authori-ties or the company in the mine take areahe or she can apply toAILAP for an agricultural assistance package. This package con-tains cash,121 various agricultural inputs, and training. It should beemphasized that AILAP does not own itself any land and farmers donot become owners of land by joining AILAP; also, this assistance isa one-time payment. Newmont reports that by 2009, 96 percent offarmers who were displaced and compensated (3,295 farmers) haveparticipated in the program and are now back on the land farm-ing.122 A farmers leader acknowledged the program during aninterview, least the small size of land being facilitated:

At the end of the day you are planting a permanent cropcocoa, citrusthey are giving you to plant. You pay for thedrinks, AILAP gives you the money to go and pay. So thatswhy Im saying it is a very good program but the land inquestion is too small . . . So Newmont has done well inimplementing the program but you look at it critically andthink that 2 acres to plant is too small . . .123

The Livelihood Enhancement and Community EmpowermentProgram (LEEP)124 commenced on February 15, 2005 and isimplemented by the OICI. It targets both physically displaced andeconomically displaced households. The four objectives are thefollowing: to enhance livelihood capacities through small andmedium enterprise (SME) development (including vocational andtechnical skills training) and increased agriculture production(more intensive farming); to enhance human capabilities throughinterventions to improve health, nutrition, and education; toenhance community resiliency and participation by building thecapacity of communities (the social/organization capacity andattitudinal/motivational capacity of community members) to dealwith the change and shocks associated with mining projects, andalso provide training to ensure sustainability of the program itself;and to stimulate community development by preparing a largersustainable community development plan to maintain andenhance the quality of life for those residing outside of the imme-diate project area.125

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The Vulnerable Program was established in January 2006 andis implemented by the Ahafo-based Guards of the Earth andVulnerable. It is focused on directly impacted households experi-encing severe hardship and living within the mine area, particu-larly in the resettled communities. The program provides a safetynet until identified transitionally vulnerable households canbecome self-sufficient and resilient to economic stresses. Eachhousehold should have a place to live, means of income, access tomedical care, and ability to feed itself.126 Concretely, the companyprovides a food basket, health insurance, and medical treatment,payment of school fees, vocational training, micro-credit, etc.127

Ahafo Agribusiness Growth Initiative (AAGI) began in March2006 and is implemented by the NGO African Connections GhanaLtd.128 AAGI aims to develop the commercial agriculture skill ofthese institutions [farmer-based organizations and SMEs] and tolink them to financing sources and market. This is with theintention of creating a vibrant local economy that will ultimatelycreate job and income opportunities independent of the mine.129

In the first phase, it delivered high impact training coveringagricultural productivity, farmer business skills, and businessmanagement skills; subsequently, it also aimed to strengthengroups and farmer associations in the production of five crops(chili pepper, soybean, ginger, maize, and plantain) that have highproductivity potentials and ready markets. Training is mainly forfarming (productivity training and business skills training) butalso for small and micro enterprises (business skills training). TheAAGI project was targeted not narrowly on PAP but on directedaffected communities (eight communities in South Ahafo). By2009, Newmont reported that 2,600 farmers have taken advan-tage of this program.130

The Ahafo SME Linkages Program (ALP) began in February2007 as a thee-year program funded by Newmont and IFC.131 Itaims to support local SMEs. The main components are localprocurement (Newmont adopted a standard operation procedureto increase its buying from local businesses), local supplier devel-opment, and strengthening of business associations.132 Theprogram identified some SMEs that would benefit most from thisinitiative in the following sectors: agribusinesses, hospitality(inns, hotels, and catering services), fisheries, and masonry andconstruction.133


Finally, the Ahafo Social Responsibility Agreement (ASRA)134

has its origins in Newmonts decision in late 2005 to set up aSustainable Development Foundation; the company promised 1percent of gross operational profit plus $1 per ounce produced tofund development initiatives beginning in 2006. It was estimatedthat $650,000 yearly will go into the fund.135 In January 2006,Newmont set up the Ahafo Social Responsibility Forum (ASRF),a 56-member organization composed of representatives fromNewmont, government, traditional leaders, and the community,to provide the Community with the opportunity to participate inthe Companys decisions and plans, deliberate on issues ofmutual interest, help build strong communication and decide onhow the Community Development Fund is to be allocated.136

After time-consuming work to set up a complex governance struc-ture, three agreements have been signed in May 2008: a founda-tion agreement setting the terms of using the $650,000 per yearaccumulating in the Community Development Fund,137 anemployment agreement on how Newmont should increase localrecruitment, and an encompassing relationship agreement onhow stakeholders at Ahafo should interact.138 In terms of benefi-ciaries covered, the ASRA agreements go beyond PAP but remainlimited to the directly affected communities. These agreementsaim to comprehensively regulate corporatecommunity relations,and therefore, they cover stakeholders in both the district ofAsutifi where mining commenced in 2006 and the district of TanoNorth where Ahafo Stage 2 project is yet to begin production.

IMPLICATIONS FOR THE RESPONSIBILITY TO RESPECTHUMAN RIGHTS

How did Newmonts decision to not compensate for land and itssubsequent change of course fare with the corporate responsibil-ity to respect human rights? The responsibility to respect humanrights has featured in CSR instruments such as the revised OECDGuidelines (originally published in 1976) and the 1999 GlobalCompact, but achieved prominence in the 2008 framework of theUN Special Representative of the Secretary General (SRSG) onbusiness and human rights, John Ruggie. He writes that torespect rights essentially means not to infringe on the rights of

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othersput simply, to do no harm . . . To discharge the respon-sibility to respect requires due diligence. This concept describesthe steps a company must take to become aware of, prevent andaddress adverse human rights impacts.139 This concept presentedin 2008 cannot be applied retroactively to Newmonts decisions in2003, but one can take this case study as an opportunity tomeditate about the application and implications of this responsi-bility in a surface-mining mining context. Several observationscan be made.

First, on the relationship between corporate and state respon-sibilities, the SRSG explains that the corporate responsibility torespect exists independently of States duties,140 such as thestates own responsibility to regulate on proper compensation forland. Following the law offers no defense to a company supposedto respect human rights; this is particularly the case when thelaw is dispositive rather than imperative. Indeed, Ghanaian lawdid not prohibit the payment of compensation, but it was merelysilent on the issue; were the law imperative, issues of nationalsovereignty would arise.141

That the law did neither compel nor prohibit Newmont to com-pensate for land is clear enough. The law was flawed in the 20032004 period, and it was revised in 2006; it is now explicit oncompensating for land not only for crops and for both cropped anduncultivated land. Newmonts employees now openly admit thathow the land issue was dealt with in 20032004 was improper butstress that the company aimed to comply with the law. Whathappened is that Newmont followed the law of the land, that is,public regulation and industry custom. It is the local custom thatactually prohibited compensation for land. Newmonts falling inline with Ghanaian custom was not about satisfying the law, butthe rest of the industry who was enjoying the status quo. It wasrespect for the status quo. Not only private industries might have astake in the status quo but also the government itself, in its role ofeconomic actor rather than lawmaker:

The land compensation system in Ghana is broken . . . Thecentral problem is that the levels of compensation are toolow. Yet the state has an interest in artificially keeping theserates low, because it is the largest entity required to paycompensation. By requiring high levels of monetary compen-sation, the state would circumscribe its own ability to engage


in public works projects . . . For some issues, such as landcompensation valuations and revenue management, it isclear why the central government would not wish to changethe status quo.142

A second observation has to do with what respecting humanrights might mean in the context of displacement. The land takenby Newmont without compensation appears as an infringement ofthe right to property, or in the Ghanaian context, perpetual usu-fruct rights over land under customary law. Such rights are alsoenabling rights in the meaning that the livelihoods of families inthat rural setting depend on the farming land. Dispossession isbound to have ripple effects on a number of economic and socialhuman rights in the period following dispossession.143 So theissue of compensation for lost assets is relevant from a humanrights perspective in two ways: first, strictly from a right to prop-erty angle, deprivation of land without compensation is a humanrights violation, and second, the losing of these assets (neitherreplaced nor compensated) result in a multitude of human rights(e.g., access to food, to education, to health, generally the right toa decent standard of living) being undermined.

In the case of enabling rights such as the right to property, theresponsibility to respect operates at different stages: once earlyon, at the time of displacement, when the enabling right has to berespected and then later on, at the time when life postdisplace-ment has stabilized but when another set of economic and socialhuman rights are endangered by abusive displacement and mustbe respected. While it is impossible for Newmont to argue that theAhafo project complied with the responsibility to respect at theinitial stage, the company has a continuing responsibility torespect the other economic and social rights undermined bydispossession. At this later stage, the equivalent of respectinghuman rights of the displaced people is taking due diligencemeasures aimed at livelihood restoration. Newmonts compre-hensive development package described in a previous sectionrepresents arguably a promising, possibly a successful, model ofdue diligence, of fulfilling the corporate responsibility to respecthuman rights in the postdisplacement period in the miningcontext.

Finally, it is interesting that Newmont seems now to be at thecutting edge of what due diligence actually means when it comes

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to livelihood restoration. CSR managers often state that theircompany has learned from mistakes, but in Newmonts case, itseems that the initial misguided choices did set up a context thatmagnified the already challenging tasks facing Newmonts ESRteam and bred, almost forced, innovations in CSR practice andstrategic thinking. So while the company maintained a strictposition on the land compensation issue144 and to definitions ofvulnerability, it appeared more flexible and open to laying thebuilding blocks of sustainable farming communities, especiallythe 10 directly affected by the mine. The company appears nowable to pursue a more encompassing strategy to economic empow-erment, development of social services, and institutional strength-ening (through partnerships with communities and publicauthorities). The ESR team at Ahafo has no less complex taskthan laying the building blocks for an improved livelihood throughparticipatory and capacity-building measures necessary for afunctioning, sustainable community that was deeply shaken whenthe mine construction began.

Newmont had a choice between following the inadequate Gha-naian law and the international standards of the World Bank/IFC.It chose the least demanding and showed lack of leadershipinternationally145 and nationally146 that made a mockery of its ownCSR policy. This hard, minimalist position in 20032004 wassoftened in 2005 when the surrounding communities came on thebrink of famine, and the company, guided by the IFC, began acomplex process of livelihood restoration. This complex packagedelivered at Ahafo now positions Newmont in a genuine leadershipposition given the commitment in manpower of the ESR team atAhafo, the breadth of the projects, the multistakeholder consul-tative and decision-making structures used,147 and the advancedreasoning exposed by interviewed employees of Newmont.

CONCLUSIONS

In 2003, Newmont took the decision to not compensate farmersfor their lost land. This decision was affected by a combination offactors: cost-cutting and a strict adherence to the law were themain drivers for Newmont. The commitment to CSR was new andclearly not internalized in the company, a disconnect further


aggravated by a number of compounding factors: complexities ofthe land tenure system, peer pressure to preserve the status quo,selection of an old-school CSR manager at Ahafo standing forGhanaian tradition and industry custom and acting as culturalbroker, and a recent switch in mining techniques from under-ground to open pit that left the Ghanaian law lagging behind untilits revision in 2006.

In 20042005, a set of new factorsthe specter of famineraised by civil society activism, the involvement and advice of theIFC, and a new, larger, and better qualified CSR teambegan toemerge. The result was a package of livelihood improvement mea-sures. At these later stages, the company seems to have deliber-ately avoided a compensation mindset: it took a minimalistapproach to access to land148 and generally avoided being boggeddown in every-single-thing-you-lost will be replaced or otherwisecompensated individually. Newmont appeared to acknowledgethat it irrevocably breached the responsibility to respect the rightto property and consequently looked to the future to ensure itfulfilled its responsibility to respect livelihood rights, that is, thoseeconomic and social rights undermined by dispossession. To thatend, it pursued a systematic approach to development centeredon economic empowerment measures, social services through theASRA fund, and on strong relationships with all stakeholdershaving a role in the directly affected communities. There is acontrast between the complexity, long-term, and rather advancedtype of assistance Newmont currently envisages and the back-ward, short-term, formalism, and brutality of denying compensa-tion for land back in 2003.

NOTES

1. My thanks to those I had the privilege to interview in Accraand Kenyase, Ghana, in November 2008, and to Chris Anderson andNick Flanders for kindly supplying documents useful to this research.The support provided by the Justa Gardi Foundation is gratefullyacknowledged.

2. See the governmental site of the Mining Authorities of Ghana,http://www.ghana-mining.org. For a concise historical analysis of mining

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in Ghana, see Barning, K., Case Study on Foreign Investment in Mining:The Case of Ghana, UNCTAD, 2001, http://www.unctad.org/infocomm/Diversification/cape/pdf/barning.pdf

3. A good, brief overview of land compensation issues is available inM. Carson, S. Cottrell, J. Dickman, E. Gummerson, T. Lee, Y. Miao, N.Teranishi, C. Tully, and C. Uregian, Managing Mineral Resources throughPublicPrivate PartnershipsMitigating Conflict in Ghanaian Gold Mining,accessed January 10, 2012 at http://wws.princeton.edu/research/final_reports/f05wws591c.pdf.

4. A Business Reference Guide, Castan Centre for Human RightsLaw, IBLF, OHCHR, UN Global Compact, 2008, p. 32, http://www.unglobalcompact.org/docs/news_events/8.1/human_rights_translated.pdf; Zandvliet, L., and Owiredu, E. N., Ahafo ProjectBrong Ahafo Region& Akyem ProjectEastern Region, Field Visit: September 926, 2005,CDA, Corporate Engagement Project, 2005, http://www.cdainc.com/publications/cep/fieldvisits/cepVisit18Ghana.pdf

5. See section 5.2.6. See section Ahafo: Public Disclosure Documents under rubric

Ahafo Plans & Results: Stage 1 at http://newmontghana.com/index.php?option=com_content&task=view&id=49&Itemid=43

7. For more comprehensive assessments, see the IndependentReviews by Tasneem Salam and Frdric Giovannetti prepared forthe International Finance Corporation (IFC), available at http://www.newmontghana.com; The State of Human Rights in Mining Commu-nities in Ghana, Commission on Human Rights and AdministrativeJustice (CHRAJ), 2008; Letter of NGOs to IFC, February 17, 2006;Zandvliet and Owiredu, supra note 4; Roe, A., and Samuel, J., GhanaCountry case study, The challenge of mineral wealth: Using resourceendowments to foster sustainable development, ICMM, 2007, http://www.icmm.com/document/301

8. PlanningAlliance, Resettlement Action Plan, Ahafo South Project,Summary, accessed January 10, 2012 at http://www.newmont.com/sites/default/files/Ahafo_Project_RAP_Rev_1_Ch_1-4.pdf. This documentcontains very detailed information related to the project.

9. Some estimates indicate that surface mining requires six times moreland than underground mining to exploit comparable resources. Botchie,G., et al., Land tenure, land use and environment in Ghana, TechnicalPublication no. 72, Institute Of Statistical, Social & Economic Research,University Of Ghana, Legon, 2007, http://www.isser.org/images/stories/dec2008pubs/botchie.pdf. See also Acquah, P. C., Natural resources


management and sustainable developmentThe case of the gold sector inGhana, UNCTAD/COM/41, 1995 http://www.natural-resources.org/minerals/CD/docs/unctad/claveracquah.pdf

10. Newmont refers herein to Newmont Gold Ghana Limited, thesubsidiary of US-based Newmont, if context does not indicate otherwise.

11. IFC grants 125 million dollars loan to Newmonts Ahafo Mine,GNA Business/Finance, July 19, 2006, http://www.modernghana.com/news/101448/1/ifc-grants-125-million-dollars-loan-to-newmonts-ah.html

12. Overall, U.S.-based Newmont is one of the three main playersbesides South African-based Anglo Gold Ashanti and Gold Fields. In2007, Gold Fields accounted for 33 percent of Ghanas gold production,AngloGold Ashanti 21 percent, and Newmont 18 percent. GhanaChamber of Mines, The Performance of the Mining Industry in 2007, p. 7,www.ghanachamberofmines.org

13. For a very detailed, clear image of the people living in the projectarea, see RAP, supra note 8.

14. Denizard, C., Livelihood Study of Resident Farmers in the NewmontGhana Gold Limited (NGGL) Brong Ahafo Concession (OICI, 2004). In RAP,Annex I, p. 2, supra note 8 (hereinafter OICI Livelihood Study).

15. RAP, supra note 8.16. Id., Summary, p. 1.17. World Banks Operational Directive on Involuntary Resettlement

(Operational Directive [OD] 4.30), 1990, paragraph 2.18. When physically displaced people opted for a new house in the

resettlement villages, they obtained a title to their individual resettlementplot in the form of a Certificate of Occupation. This is granted by the LandsCommission and is basically a 99-year lease for a small annual groundrent of between $1.41 and $ 2.17. Such practice is in line with WorldBank/IFC standards that emphasize security of tenure. World Bank OD4.30, ibid.

19. The Mining and Environmental Guidelines of 1994: Any pre-existing settlement located close to mining operations where the pre-existing inhabitants public safety is at risk, or where the inhabitantsare subjected to unreasonable nuisance, shall be resettled at a moredistant site with at least an equal standard of accommodation andservices at the cost of the company, quoted in RAP, summary, p. 3,supra note 8.

20. For a flavor of negotiations, see minutes of Resettlement Negotia-tion Committee discussions in RAP, Annex E, supra note 8.

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21. See, for example, Kwame Gyan & Associates, Land Use andCompensationStudy of Ghanaian Law and Implementation, Final Reportto Newmont Ghana Gold Limited, May 2008; RAP, supra note 8.

22. By acquiring Normandy in February 2002, the holder of explora-tion rights at Ahafo, Newmont became the worlds largest gold producer.Mas, R. F., Newmont nears last formalities of Normandy buy, AmericanMetal Market 110, 39(2002): 4.

23. See section 3.7.24. Interview no. 1.25. Resolution of the Ghanaian Parliament of Dec 18, 2003, referred

to in Parliament approves investment agreement with three mining com-panies, GNA, December 18, 2003, http://www.modernghana.com/news/46245/4/parliament-approves-investment-agreement-with-thre.html

26. It proved impossible to obtain the aforementioned resolution andthe accompanying Report of the Committee on Mines and Energy thatprobably show what legal instrument was used to compulsory acquirefarming land. This is so despite putting significant effort with governmententities, academics, civil society groups, and the company. Consequently,the exact legal status of the land before acquisition and the precisemodality of transfer remain unclear to this author. Therefore, all possiblelaws are analyzed.

27. Compulsory acquisition of property by the state shall only bemade under a law which makes provision for (1) the prompt payment offair and adequate compensation; and (2) a right of access to the HighCourt by any person who has an interest in or right over the propertywhether direct or on appeal from other authority, for the determination ofhis interest or right and the amount of compensation to which he isentitled. Art 20. (2), Constitution of the Republic of Ghana, http://www.ghanareview.com/parlia/Gconst21.html

28. The main laws applicable at the time for land acquisitionwere, besides the Constitution, the 1986 Minerals and Mining Law(amended by the Minerals and Mining Amendment Act of 1992), the1962 State Lands Act (Act 123), and the 1962 State Lands Act (Act125).

29. Land is usually acquired compulsorily by the government(through the use of legislative instruments) from traditionallandownersusually communal lands or stool lands [and] mining leaseholders are usually given a minimum lease period of 30 years and havecomplete surface rights. Botchie, G., et al., Land tenure, land use andenvironment in Ghana, Technical Publication no. 72, Institute of


Statistical, Social & Economic Research, University of Ghana, Legon,2007, p. 14, http://www.isser.org/images/stories/dec2008pubs/botchie.pdf

30. A mineral right holder must compensate for any disturbance tothe rights of owners or occupiers and for damage done to the surface ofthe land, buildings, works or improvements, or to livestock, crops or treesin the area of mineral operations. Art 71 (1) of Minerals and Mining Law,1986 (PNDC Law 153) as amended by the Minerals and Mining Amend-ment Act of 1992.

31. Act 125 deals with the classical expropriation of property for apublic purpose under the eminent domain doctrine. RAP, Summary,p. 3, supra note 8.

32. Kwame Gyan & Associates, p. 48, supra note 21.33. Section 10 of Act 123 reads: 1. The President may authorize the

occupation and use of any land to which this Act applies for any purposewhich in his opinion, is conducive to the public welfare or the interestsof the state.

34. Once the land is expropriated, the previous owner of the landapplies for compensation to the Land Valuation Board. Kotey, N. A.,Dowuona-Hammond, C., and Atuguba, R. A., Ghana Land AdministrationProject Legislative and Judicial Review (Accra: Kotey & Associates, 2004);see also Kwame Gyan & Associates, p. 48, supra note 21.

35. Kwame Gyan & Associates, p. 52, supra note 21.36. In 1999, a plaintiff sued a mining company and claimed depriva-

tion of title for his land (Asare v Ashanti Goldfields [19992000] 1 GLR474). He was paid compensation for crops but sued for additional com-pensation for the taking of the land itself. The court relied on the 1962Administration of Lands Act (123) and found that no compensation ispayable for deprivation of title in such cases. As described in interviewno. 2.

37. Interview no. 2. The issue was discussed in Asare v AshantiGoldfields. The court distinguished compulsory acquisition under Act125, which triggers art. 20 of Constitution, versus authorization of useunder Act 123, which allows for a mining lease of 30 years to com-mence. The interviewee considered this reasoning introduces a distinc-tion that is shallow and without merit. During this period, the ownercannot effectively deal with the land as he or she pleases (e.g., enterinto a tenancy agreement or exercise any right consistent with his orher title or interest in land); de facto, if not de jure, acquisitionhas taken place. The study by Kotey and colleagues, which contains a

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thorough review of the legislative framework and case law and findsthat Section 10 of Act 123, falls short of the stated objectives of theconstitution on the mode of compulsory acquisition, conditions for itsvalidity and the determination of the payment of compensation asstated in Article 20(1) of the constitution. N. A. Kotey et al., supranote 34.

38. Under PNDCL 153, annual rents were $0.30/km2 for reconnais-sance and prospecting lease holders and $0.65/km2 for mining leaseholders. George Botchie et al., supra note 29.

39. Under mining regulations applicable at the time (PNDCL 153 andits subsidiary legislative instrument, LI 1349 of 1987), royalties were setat between 3 percent and 12 percent of the mines gross mineral. GeorgeBotchie et al., supra note 29. Emmanuel Aubynn notes that royalties areset at 3 percent of the gross sales of companies. Of all royalties paid, 80percent go to the central governments consolidated fund and 10 percentis set aside for the development of governmental and academic institu-tions involved in mining sector support. Thus, only the remaining 10percent of royalties reach local populations where they are further splitaccording to the following formula: 6 percent to the district administra-tion that hosts the mining companies, 2 percent to the TraditionalCouncil (a body of traditional rulers in the district), and 2 percent to allthe local chiefs of communities whose lands fall within the spheres ofinfluence of the mines. Aubynn, E. A., Community perceptions ofmining: An experience from Western Ghana, Masters thesis, Depart-ment of Earth and Atmospheric Sciences, University of Alberta, 2003.

40. Communities share of royalties are not only insignificant tocarry out any meaningful development, but also misapplied by localcommunity leaders. E. A. Aubynn, supra note 39 (references omitted).See also Garvin, T., et al., Communitycompany relations in gold miningin Ghana, Journal of Environmental Management 90 (2009): 571586.

41. Botchie and colleagues summarize the situation by noting thatroyalties are largely used by individual chiefs for their personal benefit,without any consideration for the rest of the community. This has oftengenerated resentment among community members. These concerns havebeen demonstrated in various forms, ranging from complaints to districtpolitical authorities and traditional rulers, mining companies and thegovernment to violent confrontations with mining companies, and opendefiance against some traditional rulers, leading to their destoolment andto court actions. There is also widespread disaffection among chiefs andtraditional rulers about their share of royalty payments and land rents,


while mining companies have in turn expressed discontent over thedistribution and use of these funds. Some communities have also growncritical of their chiefs and the district assemblies over the use of theirshare of the royalties. Finally, there are also conflicts among traditionalauthorities as a result of jurisdictional problems discussed earlier overwho should be entitled to royalties. Royalties received by district assem-blies are usually paid into the general revenue pool and no specialattention is given to the development of local communities . . . The use ofroyalties returned to these districts is a source of worry not only to localcommunities directly affected by mining, but also to mining companies.Many companies blame what they perceive as excessive demands fromthese communities for development projects on the failure of districtassemblies to use the royalties for any meaningful investment in thesecommunities. George Botchie et al., supra note 29.

42. Ghanaian customary law begins from the basic tenet that all landhas an owner. In fact, nearly all land has multiple owners, with a chiefholding the highest title, and numerous other rights holders claiminglesser rights of possession, use, or transfer. This embedding of theindividuals land rights within certain group or secondary rights isperhaps the major difference between customary and Western propertylaw. Blocher, J., Building on custom: Land tenure policy and economicdevelopment in Ghana, Yale Human Rights and Development LawJournal 9 (2006): 177 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=985353 (references omitted).

43. It is not uncommon for the rights to land, which has alreadybeen leased or rented and compensation duly paid by an investor to oneallodial titleholder, to be challenged or disputed by another allodialtitleholder. Asumadu, K., Reform of Ghanas land tenure system,ModernGhana, May 11, 2003, http://www.modernghana.com/news/112044/1/reform-of-ghanas-land-tenure-system.html; The prevailingtenure involves considerable tension between legislation and traditionalpractice, and within traditional practice between: neighboring Stools; aStool and the extended families within that Stool; an extended family andindividuals within that family. rePlan with Opportunities Industrializa-tion Centers International (OICI) and Ministry of Food and Agriculture,Agricultural Improvement and Land Access Programme Ahafo SouthProject, Newmont Ghana Gold Limited, 2006, p. 2. (hereinafter AILAP).

44. Kwame Gyan noted: An allodial title is the highest proprietaryinterest known to customary schemes of interest in land. It is sometimesreferred to as the Paramount title, Absolute title, Ultimate or Radical title.

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The allodial title can be held primarily by customary communities,namely Stools and Families. K. Gyan, p. 23, supra note 21; See alsoJ. Blocher, supra note 42.

45. M. Carson and colleagues noted: While the allodial right to theland belongs to the community as a whole, individuals and familieswithin a Stool can acquire land rights that cannot be overruled by allodialrights . . . Usufruct title is of unlimited duration, as long as the individualor family bloodline does not expire. Thus, the chief, in whom the allodialrights are vested, in theory, cannot unilaterally displace a usufructholder. M. Carson, et al., p. 30, supra note 3.

46. K. Gyan et al., p. 25, supra note 21 (italics added).47. The reasons for vesting the land might have to do with uncer-

tainty and conflict over land within and between traditional authorities.Brong Ahafo House of Chiefs Want Right of Lands, ModernGhana, April29, 1997, http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=598

48. Apparently, this was the legal regime of lands acquired byNewmont: customarily owned but state-managed lands. According tothe RAP, land ownership in Asutifi District is legally vested in thegovernment as a result of Executive Instrument no. 46 of 1961. RAP,Summary, p. 4, supra note 8.

49. RAP, chapter 3, p. 14, supra note 8.50. Kwame Gyan explains the change in legal status once land is

vested: Vested Lands . . . are lands previously owned, controlled andmanaged by stools or families, which by an Executive Instrument, havebeen vested in the President. The term vesting ordinarily connotes thetransfer of the allodial ownership to the President as trustee, not simplythe management and control functions of land administration. It signifiesthe non-derivative title to the maximum range of liberties with respect toownership and use of land. Generally the vesting instrument confers onthe President the normal incidents of vesting, including the execution ofany deed, and authorizing the occupation and use of any affected land.The legal position appears to be that upon the publication of the execu-tive instrument, the lands cease to be stool lands or family lands asdefined above. It must be pointed out that the vesting of lands in oneauthority does not necessarily mean the absence of lesser proprietaryinterests in other parties in the same land. K. Gyan, et al., supra note21.

51. Newmont reports that public involvement with the Ahafo SouthProject began with community meetings in March 1998. For minutes of


various meetings, see Attachment OneSummary of previous publicoutreach efforts in Newmont Ghana Gold Ltd., Public consultation anddisclosure plan, Ahafo South Project, Prepared for International FinanceCorporation, August 2005 (hereinafter Public Consultation and DisclosurePlan).

52. According to him, the applicable laws were the mining law PNDC153/1986 read in conjunction with laws 123/1962 and 125/1962through which the state may acquire the land or authorize its occupationand use. Minutes at the information workshop between chiefs, assem-blymen and representative of the towns of Yamfo, Susuanso, and Techirewith Centenary Gold Mining Company, March 10, 1998, in Id.

53. Ibid.54. Report on the Mine Familiarisation Tour organized by the envi-

ronmental division of Centenary Gold Mining Company Ltd. For chiefs,assemblymen, and farmers representatives of Susuanso, April 2, 1998, inRAP, Annex E, supra note 8.

55. Id.56. Interview no. 3.57. Report on the Mine Familiarisation Tour, supra note 54; Report on

the Mine Familiarisation Tour organized by the environmental division ofCentenary Gold Mining Company Ltd. for teachers representatives of thetowns of Susuanso and Yamfo, May 14, 1998. RAP, Annex E, supranote 8.

58. RAP, chapter 3, p. 10, supra note 8.59. The following provision of the law is understood to provide com-

pensation for land: The compensation to which the owner or lawfuloccupier may be entitled to, may include compensation for (a) deprivationof the use or a particular use of the natural surface of the land or partof the land . . . art. 74. (1), Minerals and Mining Law, 2006 (Act 703).

60. According to the RAP, land ownership in Asutifi District is legallyvested in the government; nevertheless, in practice, customary ownershipdominates. RAP, chapter 3, p. 13, supra note 8.

61. N. A. Kotey et al., supra note 34.62. It was noted that The most serious problem associated with

compulsory acquisition is the failure of Government to make prompt andadequate payment of compensation and the crippling backlog in com-pensation claims. Institutional Arrangements, Land Sector, Ghana, LandAdministration Project Program, World Bank, 2004, p. 16. (r