Home | Features | May 11 | Reclaiming its reputation: Relocation programs in African mining

Reclaiming its reputation: Relocation programs in African mining

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In the mining sector, displacement and the subsequent relocation of communities is an issue that has dominated headlines of major media sources, with many non-profit human rights organizations defaming mining companies for their lack of community and environmental care. This often one-sided issue when it comes to media coverage is a major concern for mining companies engaging in corporate social responsibility efforts, and is a critical issue for the indigenous communities who are affected by mine development.

Many companies have long rebutted accusations of a lack of corporate social responsibility, highlighting their ethical relocation and assistance programs for communities disrupted by mine sites. For mining companies, corporate social responsibility is an integral part of business. Throughout Africa, with mining being a major industry, groups affected by the development of mine sites cannot be overlooked and clearly must be assisted and compensated. With this ideology in mind, corporate social responsibility and the usage of Relocation Action Plans (RAP) has become a concept taken seriously by mining operations in Africa and beyond.

Working with communities

The mining industry in Ghana, a gold-rich country, is expanding and growing. Currently, Ghana has nine large-scale mining companies that produce gold, diamonds, bauxite and manganese. In addition to these nine large-scale mining companies there are also over 200 registered small-scale mining companies and 90 mine support service companies. Most of Ghana’s mining entities are owned by foreign companies, with Ghana’s government having no more than 10 per cent ownership.

Though there has been a general belief that mining projects displace communities and their people, the Ghana Chamber of Mines (GCM) contends this notion, and says mining companies increasingly recognize the importance of their impact on the environment and the people involved. The Ghana Chamber of Mines says, “In this regard, apart from the usual compensations paid directly to affected communities, the Chamber has a comprehensive policy on sustainable alternative livelihood projects which informs member companies in their decisions on corporate social responsibilities. We believe that CSR is not an option but a necessity that enables us to plough back some of our earnings to raise the quality of life of the displaced committees. This assertion is reflected in the various CSR projects embarked upon by our member companies.”

For example, Goldfields, a Ghana-based mining company has a key program that includes a number of initiatives for the betterment of the community. The company has programs that promote safety, learning opportunities, health and more, geared towards employees and members of local mining and labour communities. These programs include study grants, loans, learnerships and internships.

The company has key policies that are transparent and honest in regards to displacement, making it a model for mining companies. Sven Lunsche, Manager of Corporate Affairs for Goldfields, says, “In Ghana when we do expand there is quite an extensive policy in place where we obviously consult with the communities involved.” The company is up front with local leaders and the community in regards to the transaction and have an established policy in place that is completely in line with government regulations.

Goldfields understands that involving the community is a very important ingredient for its success, and the integrity of the company and the care of those involved in the relocation process is crucial. “We involve the community from the word ‘go’,” says Lunsche.

Unfortunately, Goldfields has seen an increase in attempted illegal invasions of property, meaning that people relocate with hopes of compensation, when word gets out that there may be mining expansion on that land. “This is an issue that we address by normally consulting the community up front. We have been very successful over the years in having a transparent approach that hasn’t led to illegal invasion of property,” says Lunsche.

Goldfield’s social development policy has strong ties to its resettlement programs and Lunsche notes the importance of having the community on its side. “Goldfield’s social development policy is integrated into the operation. If you don’t have community relations you can’t operate, so you have to be aware that unless you have the community on your side your mine is scheduled to fail in the long run.”
Lunsche states that if the company wants to expand to an area and the community doesn’t want to move—then that is the end of it. “If the community doesn’t want to expand then we have to stay within our boundaries. If you negotiate open, fairly and squarely, it is possible to expand your property and resettle the communities,” he says.

Rio Tinto

Rio Tinto, one of the world’s most prolific mining companies with operations around the world, is another example of a company that takes its corporate social responsibility very seriously and promotes its goals of sustainable activities even in lieu of resettlement.

Rio Tinto avoids the resettlement process unless completely necessary. “Our overall approach to resettlement is that we will only move people where our business requirements make it unavoidable. We seek to minimize the effects of such displacement by exploring all viable alternative project designs,” states Rio Tinto’s website.

Similarly to Goldfields, Rio Tinto carries out early and ongoing consultation with the people that are affected and giving them opportunities to participate in the implementation and planning of resettlement programs. “At a minimum, we conform with the World Bank’s Safeguard Policy on Involuntary Settlement (OP 4.12). Where property has to be left, we assess its value and come to an agreement over appropriate compensation,” says Rio Tinto’s website.

The resettlement process works through programs that are created using baseline studies, which establish and understand the individuals and the communities that are affected. By working with community representatives, Rio Tinto is able to establish a format for consultation and communication.

The Key steps of Rio Tinto’s RAP plan includes:

-“A statement of policy principles.

-A matrix indicating eligibility for compensation and other entitlements or forms of assistance.

-A review of the extent and scope of resettlement, based upon a census/survey of those affected by the project.

-An implementation plan establishing responsibility for delivery of all forms of assistance.

-A resettlement timetable coordinated with the project timetable.

-Discussion of opportunities for those affected to participate in design and implementation of resettlement, including grievance procedures.”

Ethical resettlement

Rio Tinto’s Murowa diamond mine in Zimbabwe is an example of appropriate and ethical resettlement. The mine won the Zimbabwe National Chamber of Commerce (ZNCC) Best Social Responsibility Programs Award for 2009 for its community programs focusing on employee welfare and HIV and AIDS interventions in the local community.

In 2005, the Murowa operation relocated 142 families into the Shashe farming block in the Masvingo Province. As part of this project, The Department of Agriculture created a layout which included 365 plots for settlers and land allocation to other settlers from Masvingo and Murowa. In 2006, Rio Tinto’s QMM project in Madagascar successfully resettled 80 households into new homes 500 metres from their original homes as well as provided eight new wells with hand pumps. With these various initiatives, Rio Tinto’s resettlement programs are a shining example to other companies.

Goldfield’s relocation programs in 2010 included a small number of community resettlements in Ghana including the relocation of one household as part of the Volta Region Authority Relocation Project. Within this project a new power substation was built. The company also resettled 50 people from the Kofi Sah village at the Damang mine due to expansion of the mine areas and 90 people from the Rex pit area at the Damang mine. For these projects, each resettlement was remunerated with adequate compensation and housing when relevant.

One of the most noteworthy parts of Goldfield’s resettlement has been its Livelihood Restoration Program in Ghana. This program provides those that have relocated the opportunity to purchase agricultural land with the compensation money that was provided to them, and Goldfields helps them with the means to cultivate that land including providing agriculture necessities. “We provide them with the means to successfully cultivate the land including distributing palm seedlings and banana seedlings,” says Lunsche.

In the headlines

Mining companies are familiar with the ideology of relocating communities, and Randgold Resources is one such company that has been in headlines because of the displacement of thousands due to its gold mine development in the Democratic Republic of Congo. One of Randgold’s mines will require that 15,000 people re-locate, but the company assures that the project has the support of the government and the local community.

Bill Houston, General Manager of Human Capital and Social Responsibility at Randgold says, “We put in our own public participation program and consultation where we talk to people and tell them what the project is and give them general details as well as have question and answer sessions. After that we then set up an elective committee called Resettlement Working Group that is voted in by local villages.”

Each village that is affected by the company’s mine project has a representative devoted to it.  Under International Finance Corporation (IFC) guidelines the requirements are such that displaced individuals should be better off after relocation, not worse off, and Randgold takes this aspect very seriously.

Similar to Goldfields, communicating with the local people who reside in mine areas is the key to Randgold’s success. Houston says, “At every stage we consult with villagers where they want to move and where they want to live.” Those that are being displaced at Randgold’s Kibali mine are typically small-scale miners and people who own small businesses. Most residents live in grass roofed houses with no toilet facilities. Houston notes the benefits of the move for these individuals. “Before, they had no security or tenure and now everyone will have a deed on their house. We have set up show houses so that people can see beforehand the types of housing they will be living in.”

One of the benefits for those being relocated at Kibali, according to Houston, is the opportunity for steady employment. Houston says, “Many of these miners were working in dreadful working conditions, however with this new project we will employ about 1,000 people on the construction of roads and when the mine starts in 2013, there will be about 900 more job opportunities for mine construction. The main benefit is employment opportunities.” The company tries to offer employment to the local people in the area first.  When various villages are involved there is a social committee that entails a community liaison for villages affected. Randgold discusses opportunities with each committee and comes up with a fair percentage of how many local employment opportunities each village will receive.

Governmental projects

Within Rio Tinto’s corporate social responsibility efforts, the company participates in the International Business Leaders forum which is a not-for-profit organisation that benefits businesses and societies that contribute to sustainable developments. Rio Tinto’s website states, “Rio Tinto supports a unique course in cross-sector partnership, developed and delivered by the University of Cambridge Program for Industry and the IBLF. The post-graduate certificate course attracts participants from a broad range of sectors from around the world.” The company also works with Transparency International (TI), a non-governmental organization with aims at combating corruption. Through the organization, it brings business, governments and civil society together in global coalition while raising awareness of the detrimental effects of corruption. Rio Tinto is a member of TI’s Steering Committee for the Business Principles for Countering Bribery.

The United Nations Global Compact is another program that Rio Tinto and other mining companies are involved in. The UN Secretary General launched the Global Compact in 2000 in order to bring companies together with UN agencies, civil society and labour organizations to support the principles of human rights, the environment, labour and anti-corruption. “Rio Tinto was an early endorser of the Global Compact and each year, it outlines the progress made against the Compact Principles. Additionally, Rio Tinto is a member of the U.K. Global Compact Forum,” states Rio Tinto’s website.

There are various projects through NGOs and organizations like the World Bank, that aid in the fair and ethical resettlement of people in Africa due to mining. The World Bank’s operational policy on involuntary resettlement works in situations that involve involuntary taking of land and involuntary restrictions. Mining companies work within these policies in order to create sustainable practices in regards to resettlement. The policy from the World Bank aims to avoid involuntary resettlement and to minimize adverse economic and social effects. The policy also promotes the participation of displaced individuals in the resettlement planning. The key objective is to assist displaced people and to help improve or restore their incomes and standards of living after displacement.

The World Bank was one of the first international development aid agencies that had a policy on involuntary resettlement. According to Asian Development Bank’s website, “The policy was first issued as an internal Operational Manual Statement (OMS 2.33) to staff in February 1980. Since then, it has been revised and reissued a number of times, most recently as an Operational Directive (OD 4.30) in June 1990, and it remains one of the most comprehensive resettlement policy statements.”

Policy statements describe the objectives of involuntary resettlement and the measures that World Bank borrowers are supposed to take in regards to resettlement. Through the policy, compensation and resettlement measures are outlined in order to achieve specific goals. The policy is triggered when a bank investment causes the following:

-Involuntary taking of land that results in direct social and economic impacts such as:

-Loss of shelter leading to relocation

-Loss of assets or access to assets

-Loss of income sources or means of livelihood (whether or not the affected persons must move to another location)

In regards to the plan, the mining company must inform the affected people about their rights and options pertaining to land resettlement and acquisition. The company must also provide appropriate compensation at full replacement costs and provide resettlement assistance to vulnerable people.

The displacement of communities in Africa is a major issue for mining companies and local communities. Mining companies have been studied under a microscope for the displacement of individuals in Africa and beyond. In this regard, the sensitivity of the subject and the reputation mining companies have for moving individuals from their native lands has been countered with the best possible social responsibility standards by companies and increased cooperation with NGOs and organizations that aid in displacement.

With media often accusing companies of corruption and human rights abuses, the sector is often painted with a broad brush with negative consequences. However, with socially responsible companies like Goldfields and Randgold in operation, the mining industry is reclaiming its reputation as one of integrity—with consideration for the people that it affects.

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