Government & international organizations

Abstract: Ghana is equipped with major mineral resources. Ghana’s well-established mining sector is very important for its government, as it contributed an average of 5.5% GDP from the year 2000 to 2008. On the one hand, the mining industry promotes exports and provides opportunities for international investors, and on the other hand it generates jobs and fosters local integration through governmental education programs in this field. Gold production is also a very important source of foreign exchange. The biggest challenge is to combine economic growth through the mining sector with the impacts that the sector has on social and environmental issues.

Key words: local government, international organizations, Ghanian mining industry, sustainable development

Government, Local Government and International Organizations

Government

Government means an entity that sets and manages public policy, performs executive, political and sovereign power through customs, institutions and laws within a state.

Local Government

Local government is an entity that sets and manages public policy in a relatively small area – typically a region or a municipality. It is a part of a decentralized public administration system and it has its own legislative and executive bodies. According to the European Charter of Local Self-Government, “local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.” . Local governments are the authorities closest to the citizens and therefore should be able to listen to their wishes and should act in their interests.

International Organizations

International organizations are defined as merges of states, which are funded under international laws. They have their own organs and scopes for which they are responsible. Their assignment is to accomplish the political, military, economic and social tasks, which were arranged beforehand. The most important and biggest one is the United Nations.

Support by International Organization

Ghana’s foreign policy objectives focus on the “establishment of a just and equitable international economic policy and social order”. Furthermore, Ghana is obliged to adhere to the principles and aims of different international organizations which Ghana is a member of, for example the United Nations.

Multilateral and bilateral support helps Ghana’s mining sector to sustain itself. Different international institutions have funded projects to reinvigorate mining industries. For example:

• the World Bank and Nordic Development Fund (Mining Sector Development and Environment Project 1995/ 1996)
• the French Government and UNIDO (Mercury Abatement Program 1999/2002)
• the European Union (Mining Sector Support Program 2002)
• Multi-donor agencies (Natural Resource and Environmental Governance Program 2008)

All these programs were implemented to provide institutional capacity building and to raise human resource capacity. Additionally, they supported further priorities in the mining sector:

• Revision of legal, fiscal and institutional frameworks
• Improvement of mineral rights processing and management systems
• Undertaking airborne geophysical as well as ground surveys to provide information for investment promotion
• Research to improve the ASM-sector (Artisanal and Small-Scale Miners)
• Provision of logistical support
• Studies into various aspects of the sector’s operations

Ghana’s government and the mining sector

The economy and its sustainable development

The mining industry is a very important sector for Ghana. Ghana has been a producer of gold since the 16th century and is today one of Africa’s leading gold producers. With the mining sector the Government wants to support growth in Ghana on an economically, socially, environmentally sustainable basis. The mining industry can contribute to sustainable economic development because it generates jobs and reduces poverty. Benefits from the mining industry should be shared between private (international) investors and Ghanaian stakeholders. There are special regulations to ensure transparency and a stable, competitive and fair policy. Economic growth is important for the international competitive power of Ghana in the globalization process. Therefore, the support of export and international cooperation has to improve. Through economic growth, environmental and social aspects can be neglected. It is a challenge to respect all three dimensions of sustainable development – economic, social and environmental.

Environmental issues

Deforestation, habitat loss, land degradation, water and air pollution from waste dumps and tailings disposal are among the environmental impacts of the mining activity. Mining is therewith the most dangerous environmental threat in Ghana. Damage to the environment is compounded by illegal mining.

Therefore, the government constituted a group of experts in late 1980’s who reviewed existing policies related to environmental protection and proposed a strategy to address the key issues. A National Environmental Policy (NEAP) was adopted to provide the broad framework for the implementation of the action plan and to ensure sound management of resources for the period 1991-2000. The achievements of NEAP are visible mainly in the following areas: pesticides control, legislation, environmental education and awareness and poverty.

The most important thing to do is to set standards which are binding for everyone and to prevent illegal mining. Mining companies need to be trained in social responsibility and environmentalism. For environmental protection, different institutions have been founded:

• The Environmental Protection Agency (EPA) is responsible to enforce environmental regulations.
• The Forestry Commission (FC) regulates the utilization of forest and wildlife resources.
• The Water Resources Commission (WRC) was established to regulate and manage the use of water resources and they co-ordinate any policy concerned with that.

Social conflicts

Besides the environmental damage that causes problems for the Ghanaian population, there are also social conflicts which should be mentioned. The main problem is that many farmers and indigenous people lose the base of their livelihood through the allocation of land to mining companies. Another issue is the conflict between large-scale and small-scale miners. Large-scale miners argue that they fulfill legal requirements and small-scale miners and indigenous people say that there have cultural ties to land. Also there are health issues for miners and communities in mining regions.

Mining companies follow Corporate Social Responsibility (CSR) Strategies to resolve the aforementioned problems. For example, they provide free medical care for workers and their dependents; they provide medical care to members in host communities and some have HIV counseling and testing centers. Furthermore, they support the fight against malaria. International organizations pursue the idea of CSR in Ghana to ensure international standards are met.

Public Private Partnership (PPP) could be an option, as it is risky for an individual to venture alone. Through PPP the government has the opportunity to work together with mining companies. An example is where the government has representation on a board of directors in order to achieve mutual interests rather than compete against each other, to get involved and to get to know investors' intentions.

Role and Interests of the Local Government

The roles and interests of local government will be shown in the example of the Wassa West district. There are several foreign companies operating surface gold mines there .

The main interest of any local government should include sustainable local economic development on one hand, and good and healthy living conditions for its citizens (service delivery) on other hand.

The environmental problems described above, which are connected with mining in Ghana in general, also apply to the West Wassa District. The local assembly is aware of the problems and it has set several goals in its district development strategy, e.g. improve farmer income level, promote trade and small scale industries, ensure sustainable alternative livelihood, provide for and improve school infrastructure, improve health care delivery, encourage proper housing layout, etc. Some projects within the above mentioned fields are nowadays financed by mining companies operating in the area:

• Goldfields Ghana Limited (GFGL), has devoted $2.2 million for community development programs in 2011: among the areas to benefit are agriculture, education, health, water and sanitation and micro enterprise
• Anglogold Ashanti Iduapriem Limited (AAIL), a mining company which has supported 240 farmers in the Adieyie area to engage in maize and vegetable cultivation and fish farming.
• Gold Fields Ghana Limited inaugurated a number of projects totaling US$467,000 at a ceremony at Brahabebom near Tarkwa (e.g. construction of a three classroom block, Junior High School block).

The amounts invested by mining companies in local development are minimal in comparison with their total revenues. Since the local government in the Wassa West District guarantees both development and quality of life they should make use of this financing and build/ repair the necessary infrastructure (roads, schools, hospitals) and try to improve the life of its citizens (medical care, education, etc.). They also should negotiate with the mining companies about the future of the region when the mines close down – e.g. complete revitalization of the area.

The municipalities in the region have already joined in Wassa Association of Communities affected by mining. Its mission is the protection of the environment, natural resources and the rights of marginalized mining communities through advocacy, campaigning and representation within a legal framework that is sensitive to the concerns of mining communities. The local government also should cooperate in its effort with other stakeholders such as: Ministry of Local Government and Rural Development, the National Association of Local Authorities Ghana (NALAG), the Environmental Protection Agency and the Ministry of Environment, Science and Technology.

Conclusion

The mining industry contributes to a large extent to Ghana’s economy. Through this sector there is an important investment flow from countries around the world to Ghana and many opportunities to foster exports. That helps the population to enhance their living standards and has positive impacts on Ghana’s employment market. Therefore, every input into this sector is necessary, but the negative impacts resulting from mining (environmental degradation, water pollution, deforestation, social conflicts, health problems etc.) need to be recognized and prevented by the government and international organizations. On that account, universal social, environmental, health and economical standards have to be defined and maintained.

Some key challenges could be better linkages between the mining sector and the rest of the economy; a focus on minerals other than gold; the management of artisanal and small-scale mining; auditing of financial flows within the mining sector to secure transparency; provision of geo-scientific information to attract investment.

A transparent and predictable legislative and fiscal framework can be a major source of prosperity for the whole country. Mining companies and overall business can also make essential contributions towards sustainable development. Therefore, there is a great need for an effective governance environment that would allow the business sector to be able to raise general welfare and living standards. The way in which business can contribute this plan is to follow its corporate responsibility. OECD defines corporate responsibility as “the actions taken by businesses to nurture and enhance their relationship with the societies in which they operate” . Corporate responsibility contains principles and management techniques used to audit environmental, health and safety outcomes and are also used in labour relations. Societies provide the relationship between governance and corporate responsibility services as law enforcement, regulation, and investment in public goods used by business, by financing activities, and by a well designed and disciplined tax system. Getting the balance right between economic and social goals and between individual and communal goals is a big task for any society. Labour, civil and political rights are essential. Government must be efficient and effective so it can deliver the services that support business activity - prudent supervision, infrastructure investment, protection of property, contract enforcement, investment in public goods, and provision of public services.