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Dynamics of Community Perceptions, Common Resources and Compensation Practices in Mining: The Case of Newmont Ghana Gold Ltd at Ahafo

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Type: Journal Article
Author: Bugri, John Tiah; Kumi, Samuel
Journal: International Journal of the Commons
Volume: 12
Page(s): 1-25
Date: 2018
URI: http://hdl.handle.net/10535/10729
Sector: General & Multiple Resources
Region: Africa
Subject(s): common pool resources
community perception
Abstract: "A critical issue confronting the mining industry and communities in Ghana is compensation for loss of land rights in mining activities. The 1992 Constitution and the Minerals and Mining Act, 2006 (Act 703) both require compensation for the expropriated to be fair, adequate and promptly paid. However, fairness, adequacy and promptness are normative value judgments predicated on stakeholders’ perceptions. This makes controversies over compensation issues inevitable and in mining communities these are rife because of increased competition between mines and communities for land and the legal provision that the payment of compensation rests with mining companies negotiating with the expropriated. Using Newmont Ghana Gold Ltd at Ahafo, we analyzed data from a sample of 120 stakeholders in four mining communities which revealed a wide divergence between communities’ perceptions and mining company compensation practices, and weak enforcement of mining legislation. Communities were also not well resourced to negotiate for compensation with the transnational corporation. Also, we argue that the principles applied in compensation assessment as provided by law, especially in the case of common resources, contribute to unfairness and inadequacy in compensation for the expropriated. We conclude that this imbalance has negative implications for community-mining company relations and threatens sustainable mining operations. We therefore recommend the rigorous enforcement of legislation, introduction of appropriate governmental and mining company initiatives in building capacities of communities for improved negotiations for compensation, legal recognition of common resources as valuable community assets for compensation, the application of the investment approach to compensation valuation and improved CSR packages by mines as means of bridging the gap between communities’ perceptions and compensation practices and ensuring improved company-community relations in the mining industry."

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