E-LEEP in the Press

UG, Duquesne, Support Tongu c'inities
Ghanaian Times, July 28 2011 page 7

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Emerging Leaders Extraction and Environment Training Program Formally Ends

Ghanaian Reactor Online

by Michael F. Amedor
August 2, 2011

A training program organized by the Department of Oceanography and Fisheries of the University of Ghana in collaboration with students from Duquesne University in the United States of America on environmental and social issues of extractive industries in Ghana which started from 3rd -30th July 2011 has formally ended in Accra.

The E-LEEP program enabled the students to undertake various research works on the Ghanaian economy in areas such as Mining, forestry, Oil and Gas and Energy. The student at the end of the program presented their research findings to members of various Government Department Agencies who work in related fields of their findings, academicians and media.

Presenting their findings to close the training, Dr. Francis Nunoo, a senior lecturer at the Department of Oceanography and Fisheries of the University of Ghana and organizer of the event commended students for their speed work and presenting factual situations on ground.

He called on all Government agencies present to work with the findings of the student to help solve some of the problems faced in these sectors of the economy. “We will present each of you with a copy and we will be monitoring to know the state of work on the documents”. The Students were led by Stanley J. Kabala Associate Director at the Centre for Environmental Research and Education and Dorothy E. Bassett Dean of the School of Leadership and Professional Advancement. Below are all the findings on Mining and Energy of Ghana by the students. The other three sectors will be published soon. Mining Team Authors: Mr. Kiazi Malonga; Mr. Brian Gross; Mr. Rob Kinslow; Ms. Nastassja Noell Introduction Humans live by stories. It is our stories that define our cultures, frame our behaviors and influence our business practices. In 2010, a group of 20 Ghanaians selected for the Emerging Leaders Environment and Extraction Program (E-LEEP) traveled to the United States to immerse themselves in a cultural exchange in order to develop unique perspectives on the state of industrial extractive methods and practices in the United States. In July 2011, a group of Americans has been traveling around Ghana to field sites and receiving briefings on the state and practices of extractive industry’s in the areas of fisheries, mining, energy, oil/gas and forestry. From this group, teams were formed based in these five areas. This brief shall illustrate the mining team’s perspective gained from the following sources: 1. research by participants, 2. field observations or contacts, and 3. briefings from government ministries, resource extraction enterprises and nongovernmental organizations (NGOs) . II. Background and Problem Context The records of time indicate that artisanal mining activities in Ghana pre-date written history/by some two thousand years (McIntosh p. 27; Hilson p. 63). These small-scale indigenous practices have been, within the last 150 years, superseded in scale and scope by modern extraction methods. Modern extraction methods have been enhanced by the advent of mechanized methods of terra-forming within the 20th century, large increases in investor populations able to finance both the large scale and small scale operations, exponential growth of industrial economies in the “developing world”, and a human population hungry for commodities. Such activities have dramatically increased the scale of the problems associated with the mining industry. a. Social Issues The social issues associated with both small and large-scale mining are many and include health problems and community conflicts. Communities that rely on mining activity also tend to be associated with income inequality (World Rainforest Institute, p. 43-44). In Ghana, less than 1% of the profits after taxes are spent on CSR activities in the host community [Private Enterprise Foundation (PEF)]. Community unrest is also caused by forced resettlement that has been legalized by provisions of the MINERALS AND MINING ACT, 2006, Act 703 (The Mining Act). In an attempt to alleviate the anger of host-communities many large-scale mining corporations in Ghana create Corporate Social Responsibility (CSR) plans. While most companies evaluated under the AKOBEN system received high ratings in carrying out their CSRs (Col. 7 of Table 1), the ratings are lower across-the-board in the community complaints category (Col. 6 of Table 1). For example, according to a 2008 survey conducted by the Ghana Chamber of Mines and the Business Sector Advocacy Challenge Fund, 84% of respondents believed that “the compensation packages they had received were of less value than the losses they incurred as a result of land, structure, immovable asset and/or livelihood or incomes.” (Ghana Chamber of Mines, “Standardize” p.2) Given the total of the environmental, social and cultural richness that has been lost and the lifetime of profits that flow out of the country from a mine, naturally communities would be aware of the losses and lack of balance. This suggests a gap between the affected shareholders of the host community and the mining companies. This disconnect is anecdotally supported during our field trips by workers, community voices, District Assembly chiefs, and representatives of the Environmental Protection Agency (EPA), all of whom have stated that they wish to see more direct involvement between the residents of host communities and the mining companies. This issue is also highlighted in Appendix 2.3 B. of Ghana’s National Government Planning Commission (NGPC)’s mid-range plan, the Ghana Shared Growth and Development Agenda (GSGDA), which states the need for “[providing] a platform for transparent engagement of major stakeholders in the mining sector to increase harmony within the sector” (NGPC Sect. 9.4, pg.120) b. Environmental Issues The extent of the environmental problems is illustrated in the EPA’s AKOBEN rating system of mining companies for their environmental performance. The AKOBEN ratings shown in Table 1 illustrates the large gap between plans, programs and implementation of laws and guidelines. All mining companies evaluated received either an “Orange” (unsatisfactory) or “Red” (poor) final rating (see Table 1). Additionally, deforestation and pollution of waterways are two national environmental issues that are exacerbated by the mining industry. The shrinking habit of threatened and endangered species is another concern that needs attention by many sectors of the government. Although the laws regulating the mining industry have had beneficial impacts, the above-noted environmental and social problems persist despite efforts by industry and government ministries to create programs that mitigate these issues and encourage best practices that benefit the people and landscapes most affected. These problems are problems at all mining sites but are especially stark at illegal small-scale mines (galamsay), which are mostly going unreported, uninspected and untaxed. The government is also unable to institute rehabilitation requirements, so the mine site is left to continue to pollute streams and groundwater. c. Economic issues Despite the myriad of issues associated with mining, the industry has clear benefits to Ghana. Approximately 15,000 Ghanaians are employed at large-scale mines, and over 130,000 at small-scale mines (Hilson, p. 64). The mining industry contributed GH¢319 million ($224 million U.S.) to the Ghanaian Internal Revenue Service in 2009, which represented 18% of the IRS’s total take. (Ghana Chamber of Mines, “2009”; p. 2). Furthermore, while government is receiving some monies from royalties and taxes, Ghana currently has no physical mineral reserves. This is most clearly seen in the case of gold (PMMC briefing, 19 July 2011). For example, gold producing countries have a gold reserve program to which a percentage of annual production is continuously supplied. III. Recommendations With the foregoing in mind we have crafted a set of policy recommendations that we hope can help the Mining Industry as a whole become recognized as a socially and environmentally sustainable participant in Ghanaian society. One of our primary recommendations is to suggest a framework of science-based sustainability for future mining activities in Ghana. Future extractive activities could gain from a deeper practice of the principles of Sustainable Development. Sustainable Development draws upon a multidisciplinary cross-sectored approach to decision-making that is rarely practiced by political figures. It draws deeply upon holism and an overarching satisfaction of the needs of all stakeholders. A visual model of the multi-disciplinary relationships between the functions and the practice of Sustainable Development can be seen in Figure 1. According to the final report of the International Commission on Education for Sustainable Development Practice, “In practical terms, sustainable development entails increasing the material well-being of the poor while narrowing the proportionate gap with the rich; continuing the scope for improved material well-being of the rich; and ensuring the sustainable functioning of the Earth’s ecosystems, including conservation of the Earth’s biodiversity. Sustainable development is achieved through economic and social development that reflects the physical and environmental, as well as the political and cultural conditions in which human society operates.” Using the Sustainable Development Framework, we have crafted the following recommendations. Please See Appendix A for further discussion of Sustainable Development framework. 1. Community Benefit Agreements (CBA): Given there is a sharp disconnection between mining companies and their host communities, a strong need exists for a pro-active method of bringing the parties together. Mining companies, community representatives, chiefs (traditional), and regulators have all expressed to us that they would like to see more direct communication between mining companies and their respective host communities. Therefore, a contractual relationship in the form of a community benefit agreement (CBA) should be built into the mining permit application process under paragraph 11 of The Mining Act, prior to Mining Commission review. Although the Mining Act includes provisions for after-the-fact dispute resolution, it would be in everyone’s interests to open dialogue earlier in the process. CBA’s could include but notbe limited to the following provisions:  Relocation Plan Agreement Clause: A signed agreement by the displaced community and mining company should be submitted with the application. This relocation plan could include diagrams, maps, costs, timeline and any other necessary details of the new community development. The observed mineral deposit and its value should logically influence the scale and implementation of a community development plans.  Community Development Fund Clause: The mining company should provide in a segregated allocated escrow account a percentage of total profit and a stakeholder dividend distribution into a Community Development Fund, where community members decide how funds should be disbursed.  Job Creation Clause: Based on the size of the mining operation, a certain number of internship positions should be made available to community youth and Ghanaians at large (if community members can’t fill vacant positions). A certain percentage of the workforce, including senior management positions, could be occupied by Ghanaians. Actual number of created positions and timelines to train and fill them will be site specific and must be worked out with the Ghanaian government prior to mining concession being granted.  Other topics that communities might want to consider in a CBA include: protection of culturally significant sites, rehabilitation of abandoned small-scale and/or galamsay sites, and input into mining companies CSRs, which are not legally required. Ghana has used a similar approach in projects before; for example, the Community Liaison Agreement for the Takoradi Thermal power plant included a community impact agreement. Our recommendation for a CBA could be demonstrated and evaluated on a pilot project basis at one or more future mine sites, after which the AKOBEN rating system can be used to compare community satisfaction between those that utilized a CBA and those that have not. 2. Ecosystem Valuation The costs of social, environmental and economic problems associated with mining activities have not been cumulatively assessed. Current assessments do not take into account the value of ecosystem services or the bio-diversity loss of species important to human survival. Destruction of ecosystem services have broad spectrum costs that are externalized by all parties, e.g., industry, finance and government. These costs are paid for by people, whether today or tomorrow. A broad-based assessment of ecosystem services and a region-by-region carrying capacity determination prior to granting future mining concessions should be conducted in order to benchmark the ecological value before destruction of these resources occurs. Increased mining activity has led to “gross abuse of the forest by the miners, increasing the threat to forests and the rich ecological biodiversity” (Awudi, p. 8). More research needs to be conducted on quantifying the value of undisturbed ecosystem services and the aggregate ecological and economic costs of the disruption of those ecosystems by mining operations and integrating this into mining operations. Ecosystem valuations would be useful for many reasons, including determining the compound costs of past extractive activities on the future viability of the ecosystems of Ghana, rehabilitation of areas after cessation of mining, evaluating the net impact of mining on host communities, and standardizing the compensation paid to those displaced by mining operations. Evaluating the actual economic value of displaced animal species, and health effects of air and water pollution would also help in realistically costing pollution and losses due to destruction events when they happen to occur. Research into comprehensive ecosystem valuations could be harmonized with policy as discussed in the GSDGA, section 4.2.3.2. 3. Mining Concession Stipulations In order to mine in the country, companies seeking a concession could be required to make acommitment to both the country and the host community where the mine will be located.This recommendation pertains to such a commitment. a. Ghana Mineral Reserve Generation Clause: Mining companies could be required (if a government minerals reserve is created) to sell a certain percentage of the mineral deposit to the government of Ghana at a below-market price for a reserve. b. Land Restoration Clause: As a condition of approval of concession, a mining company could be required to restore previously abandoned small-scale mining sites. Land restoration plans could be consistent with EPA standards and could be required at the time of application submission. A list of eligible restoration options could be provided to mining companies seeking a mining concession. Energy Team Authors Christa Davis Samantha Malone Amelie Quellette Adam Wylie PROBLEM STATEMENT Increasing energy availability is crucial to the further development of Ghana, but must be implemented in a sustainable way to reduce negative impacts to society and the environment. BACKGROUND Sixty to seventy percent of the population receives their electricity from hydro-power, however approximately sixty percent of Ghanaians rely upon charcoal and wood burning as their main source of energyii. This reliance on hydroelectric power threatens energy independence, making diversification of sustainable sources a necessary goal for the country. Further, a lack of infrastructure for the maintenance and enforcement of energy policies requires more sustainable protocols. POLICY RECOMMENDATIONS Hydroelectric The present and proposed hydroelectric projects pose several environmental, social, and public health concerns that should be addressed. These include, but are not limited to: increases in vector-borne infectious disease (e.g. Onchocerciasis or "River Blindness," Schistosomaisis, Bilharzia, and Dracunculiasis or "Guinea Worm Disease"), invasive plant species infestation, population resettlement, and salt water intrusion. The Akosombo Dam project's health impacts are being addressed in several ways and should be assessed for their effectiveness in current and proposed hydro-projects; recommendations include expanding the funding for medical boats and clinics, incorporating infectious disease prevention education throughout the health and environmental system, and evaluating the potential for Community-based Health Planning and Services.iii Other methods for preventing diseases include improved extraction methods that do not require individuals to wade into the shallows to fetch water and more expansive borehole drilling. Additionally, Health Impact Assessments should be an integral part of any industrial project's development plans. Invasive plant species, such as hyacinth, are becoming more pervasive due to the slower moving water resulting from the dam. Manual and biological removal of these pests should continue, providing significant sources of fertilizer and stock feed. Pesticide use to control these plants should cease; this is especially important since the rivers and streams also serve as sources of drinking water. Biological removal of hyacinth using certain species of beetles and moths has been shown to be effective in Benin, and therefore may be an effective and affordable option for Ghana. Population resettlement should be avoided. When resettlement is absolutely necessary, the affected communities should have a significant influence in deciding where, when, and how they will be resettled. In areas downstream of hydroelectric projects, such as in the Volta River tributaries, saltwater intrusion has been difficult to address. Several ways to maintain equilibrium along those areas include recharge wells, recharge basins, and barrier wellsv. Wind Energy We recommend the use of wind turbines for various locations in Ghana. According to the Energy Commission, the total exploitable potential for wind energy is well over 1,500GWh/per year. vi Wind energy is a way to add additional energy to the national grid with very little environmental pollution. The Volta River Authority has current plans to generate 100 Megawatts of energy from solar and wind energy sources.vii Wind energy is a feasible alternative in the coastal areas with steady winds. Governmental infrastructure and incentive programs would help encourage participation in wind energy programs from private sectorenergy producers. Solar Energy Access to solar energy technologies is improving in Africa. A Ghana-based company, Atlas Business and Energy Systems (ABES), began producing solar energy panels in March of 2010. Because the solar panels are built domestically, the high costs of importing the technology are avoided. The solar panels are produced, installed, and maintained by local engineers. With current energy demand increasing at an average of 5% per year over the past ten years, solar energy can be used to supplement current energy sources. Ghana generally gets ten hours of free sunlight a day. As more homes install this technology, the cost of production should decrease. The managing director of ABES, Nathaniel Gyibah, hopes to offer the technology to homes at a cost of less than GH¢ 2,000.ix Although this cost may seem high to many households, the government should consider subsidies and supporting micro financing to make solar energy panels more affordable. The government should offer tax credits to homes and communities that install technologies to help decrease pollution and dependence on traditional energy sources, and should create a policy and regulatory framework to increase and expand solar energy use in Ghana. Jatropha Oil Jatropha oil, from a native tree species, is currently being propagated and exported from plantations in Ghana for biofuel production. Due to its use in other countries, Jatropha may be a feasible and reliable alternative source of fuel. Ghana should devote the resources necessary to conduct additional research and determine possible local applications. Cooking Fuels Despite previous issues with Liquid Petroleum Gas (LPG) supply and pricing, the increasing petroleum supply from the Jubilee Field and the West African Gas Pipeline should spur another investigation into efforts to expand the use of LPG as a cleaner alternative cooking fuel. Ghana should also promote the use of more efficient cookstoves as a short to medium term solution to help alleviate environmental and health issues related to wood and charcoal use. International efforts, such as the Global Alliance for Clean Cook stoves (a U.N. program), provide the technological capacity for such an endeavor. Renewable Energy Bill Ghana’s Renewable Energy Act, 2011 (currently in parliamentary debate), will provide an important baseline framework to encourage and develop a diversified and reliable energy supply in the country. The Act will promote Ghana’s energy-related labor and knowledge base,as well as provide some means for improved quality of life for many Ghanaians while reducing negative environmental, health, and social impacts. The institutions responsible for promulgating regulations, standards, and policies based upon the Act should work expeditiously to ensure sensible, practical, and enforceable implementation. Renewable energy licensing should not hinder entrepreneurial spirit or add significantly to the time or costs required to enter the industry. To promote rural and small scale energy projects, the licensing process must be efficient, clear, and transparent. As a practical option, the renewable energy licensing could be added to an existing licensing or permitting process. The ministries should consult academia and industry during the development of standards and policies to ensure the provisions are appropriate, applicable, and implementable in actual conditions. These efforts should include industry safety and environmental standards for equipment and processes to ensure level competition and responsible production. Feed-in-Tariff schemes should include regulatory constructs for the consideration of short- and long-term changes. These schemes should not only address the production costs of renewable energy, but the relative costs of other energy sources, such as oil and gas, and their potential for price fluctuation. Tariff premiums should be adequate to guarantee conformance with the standard, and passing premiums through to consumers should be prohibited. The Renewable Energy Fund should be established based on sound research and data that considers the actual needs of Ghanaians and the life-cycle costs of the technologies being promoted. Annual reports and the supporting data must be transparent to ensure proper oversight. Further, periodic reviews of the effectiveness of the efforts and adequacy of the funding must be performed, with robust corrective measures available, if needed. While it is clear that the regulation is intended to prevent further unsustainable exploitation of wood and certain biomass fuels, the nation’s ministries should focus sharply on the resources available and work to provide short- and long-term comprehensive strategies to reduce Ghana’s significant dependence on wood fuels. Efforts already underway to educate about and deliver more efficient fuels, ovens, and equipment should be compiled and evaluated for effectiveness and applicability in the various regions of the country. Enforcement authority should be robust, clear, and effective. Weak enforcement leads to inequitable and irresponsible business practices, including sacrifices in environmental protection, worker health and safety, labor relations, and social engagement. CONCLUSION Ghana has the potential to utilize a variety of domestically available renewable energy sources to achieve sustainable energy independence. Being on the forefront of African development, Ghana can serve as an example to developing countries around the world. If actualized and implemented appropriately, the policy suggestions above may help set the path toward this goal.

Date: August 2, 2011