Addressing Human Rights Violations under International Norms: Ghana's Experience with Multinational Corporations in the Mining Sector

Rich in natural resources, Ghana is known for its diamonds, bauxite, manganese, limestone, silica, salt, and even more importantly, gold, a resource to which Ghana's former name, the Gold Coast,¹ is ostensibly attributed. More recently, large commercial quantities of oil, gas, and lithium² have been found. Thus, mining naturally constitutes an important industrial sector in Ghana, with its rich and varied underground.

The mining industry contributes significantly to the national economy, at least, in terms of domestic revenue, foreign exchange, and employment. The data shows that mining in Ghana has generally been an unwavering contributor to the Gross Domestic Product (GDP). Between 2013 and 2019, the contribution of mining and quarrying to the GDP was about 8 per cent, with gold accounting for about 7 per cent.³ This is unsurprising, seeing that in 2021, 96 per cent of gross mineral revenue came from gold mining.⁴ These contributions were mainly from direct and indirect taxes and royalties. In 2020 and 2021, the industry's earnings from exports were about $6.998 billion and $5.241 billion, respectively.⁵

However, communities where multinational corporations (MNCs) operate routinely complain of human rights abuses ranging from forced evictions and resettlements to environmental pollution. These complaints are corroborated by Ghana's human rights state agency, the Commission on Human Rights and Administrative Justice, and several non-governmental organisations (NGOs) such as the Wassa Association of Communities Affected by Mining (WACAM) and the Third World Network. The culmination of multinational corporate unaccountability and state inertia is the underdevelopment of mining communities.

That the operations of MNCs have caused significant harm to their employees and local communities through human rights abuses is a well-documented fact. While many international initiatives have been developed to address the human rights excesses of MNCs, the United Nations Guiding Principles on Human Rights and Business (UNGPs) have achieved widespread support. Ghana's primary legislation on mining is a neo-liberal statute titled the Minerals and Mining Act 2006, developed years before the UNGPs were developed. This Act is supported by a fringe of mining regulations, some passed before and others after the United Nations (UN) endorsed the UNGPs. Over the years, very little scholarship has been conducted to assess the extent to which Ghana's legal mining regime has adopted the ethos of these guiding principles, which, if taken seriously, can reduce corporate human rights abuses in the mining industry. This article fills this gap by assessing the human rights consequences of MNCs' mining operations in Ghana and proposing solutions that reconcile respect for fundamental human rights with the business objectives of MNCs.

The article is divided into parts. Part II describes Ghana's mining regime. It briefly recounts the history of gold mining in Ghana, describes the industry participants, and explains the issue of mineral ownership. Part III highlights the human rights abuses perpetrated by MNCs, primarily in Ghana, and concludes that these abuses are part of a wider pattern of irresponsible MNC conduct in developing countries. Part IV summarises some of the major human rights norms and principles on business and human rights and explains why most have failed to address MNC human rights violations. Part IV also explores the UNGPs and justifies why they are the best candidate to promote corporate human rights accountability in Ghana. Part V takes a critical look at Ghana's mining regulatory regime and argues that it does not in any way integrate core human rights concerns. Solutions, which are essentially a mix of legal and policy measures, are suggested. Part VI concludes the paper.

MNCs dominated Ghana's mining industry at the time of independence, and this has remained true to this day, despite the State's efforts in the past to change it. As one of the first countries in Sub-Saharan Africa to gain independence, Ghana was instrumental in articulating, defining, and developing the principle of permanent sovereignty over resources within its sphere of influence. Within a year after independence, a diagnostic study was commissioned to review the regime for granting mineral and timber rights.⁶ The study made several recommendations that cumulatively sought to significantly scale up the State's participation in the mining industry. In addition to taking over all mineral rights from communities and developing strict rules regarding the duration and areal extent of mining companies, it was recommended that the State acquire 51 per cent of all shares in mining companies, effectively making the State the majority shareholder.⁷ These recommendations were incrementally taken into consideration in succeeding years.

In 1961, Ghana Mining Corporation, later known as the State Gold Mining Corporation, acquired the assets of five mines in Prestea, Tarkwa, Dunkwa, Bibiani, and Konongo.⁸ The Minerals Act 1962 (Act 126) was later passed in 1962 to vest all minerals in the President on behalf of the Republic and in trust for the people of Ghana. Then in 1972, the military regime of Colonel Acheampong acquired majority shares in the following companies: Ghana Bauxite Company, a mining company owned by a British company; the Ashanti Goldfields Corporations, which had the largest gold mine in the country; and the Diamond mines in Akwatia run by the Consolidated African Selection Trust (CAST).⁹ Unfortunately, these mines and the acquisitions made in them were not profitable. The sector was mismanaged and undercapitalised, causing infrastructure to deteriorate, rendering equipment obsolete and compelling skilled personnel to try their luck elsewhere.¹⁰ High taxes and inflationary pressures caused the government to impose strict foreign exchange controls, making it impossible for mining companies to repatriate profits or import new equipment.¹¹

By the 1980s, many African countries were drowning in debt worth millions of dollars. Agricultural prices on the world market were low, and the oil crises of the 1970s made matters worse.¹² Like many other African countries, Ghana approached the International Monetary Fund and the World Bank for help. Structural Adjustment Programs (SAPs) were introduced with tough conditionalities, one of them being the liberalisation of these troubled economies.

Ghana's economy was liberalised, and ‘state-owned mineral assets and certain geological terrain suddenly became actionable assets; most would be awarded to opportunistic foreign multinationals.’¹³ In 1986, several laws were passed to fully privatise the mining industry. These include the Minerals and Mining Law (PNDCL 153), the Small-Scale Mining Law (PNDCL 217), the Mercury Law (PNDCL 217), and the Precious Mineral Marketing Corporation Law (PNDCL 219). The optimism of the 1960s had all but fizzled out.

In 1992, the World Bank released a publication titled ‘Strategy for African Mining,’ which hoped to convince African countries to embrace the liberalism of the mining industry with open arms.¹⁴ According to the World Bank, state-owned mining companies had failed, and private corporations were the way to go. The mineral resources of Africans were not for the benefit of only Africans but the entire world. By liberalising and reforming their mining industries, African countries were more likely to revamp their mining industry, attract foreign direct investment and reap the revenue accompanying increased production. Many countries would embrace this position and liberalise. Ghana had begun to tread this road long before the Strategy for African Mining. It has been suggested that liberalisation of the mining industry has produced dire socio-economic conditions, including unemployment and environmental degradation.¹⁵

Ghana's existing legal framework is cast in the mould of this neo-liberal framework championed by the World Bank. The Minerals and Mining Law 1986 (PNDCL 153) has been repealed and replaced by the Minerals and Mining Act 2006 (Act 703). The Minerals and Mining Act continues the process of privatising the industry while making the State a regulator instead of a player. Presently, the vesting of mineral resources in the President of the Republic in trust for the people of Ghana, first enunciated in the 1960s, has found its way into the 1992 Constitution of Ghana.¹⁶ This ‘ownership’ is all but in name. The kind of trust envisaged by the law is a nominal trust that is not enforceable, and inevitably, private companies work the mines; the State only obtains a fraction of the profits from working the mines.¹⁷ Now, a host of regulators govern the mining industry.

The Ministry of State responsible for managing mineral resources is the only institution authorised to accept applications and grant mineral rights. However, the Ministry relies extensively on the advice of the Minerals Commission.¹⁸ An applicant for a mineral right requires the necessary permits from other related institutions. These include the Environmental Protection Agency and the Forestry Commission.¹⁹ Other relevant institutions in granting mining licenses are the Regional Lands Commissions²⁰ and the Parliament of Ghana.²¹ The Constitution of Ghana states that:

[t]here shall be no disposition or development of any stool land unless the Regional Lands Commission of the region in which the land is situated has certified that the disposition or development is consistent with the development plan drawn up or approved by the planning authority for the area concerned.²²

While Ghana's mining industry is broadly divided into small-scale and large-scale mining, the large-scale mining...