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Gov’t urged to increase stake in mining companies; support indigenous companies to thrive

By Eric Nana Yaw Kwafo
Social News GMWU General Secretary Abdul-Moomin Gbana
AUG 6, 2022 LISTEN
GMWU General Secretary Abdul-Moomin Gbana

The government has been charged to create an enabling environment for indigenous mining companies to thrive in the mining sector.

The General Secretary of the Ghana Mineworkers’ Union (GMWU) of TUCG, Cde. Abdul-Moomin Gbana has said.

Speaking at the Union’s National Executive Council Meeting held at the Obaa Plaza Hotel, New Abriem, from August 2-3, 2022, he implored the government to also increase its stake in mining companies in the country.

After over 100 years of mining, Ghana’s mining industry continues to be dominated and controlled by foreign interest with over 99% of mining companies being foreign, owning 90% of the shares with the Government left with a paltry 10% carrying interest.

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The Government of Ghana has since 80s shied away from the mining sector instead of confronting this sorry narrative of the over-dependence and reliance on a foreign-dominated sector.

The Ghana Mineworkers’ Union strongly believes that government can increase the country’s stake in the mining sector if more indigenous companies are supported to operate.

The GMWU also proposes that the government should forcefully renegotiate existing contracts as well as future contracts in order to create and retain greater value for the citizens of this country.

“Considering the generous fiscal giveaways (including excessive repatriation of mining revenues by multinational businesses, signing of stability and development agreements, etc.) which continuous to deny Ghana its fair share of revenue under this so-called tax-royalty fiscal regime, we believe that the time has come for this narrative to change and ought to change quite swiftly.

“To change however would require a change in the ownership structure of mineral assets thereby shifting from our aged-long comfort zone of over dependence and reliance on a tax-royalty regime to active participation and control of production by negotiating/renegotiating a much greater stake in these mining companies in order to create and retain the needed value for the people of Ghana,” GMWU General Secretary Cde. Abdul-Moomin Gbana said in his speech.

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Touching on several other things in his speech, Abdul-Moomin Gbana noted that the GMWU is determined to address the concerns of communities where mining takes place.

Over the years, various communities have protested against the lack of development.

According to him, the GMWU in the coming weeks will be working with a Coalition of identified groups, traditional leaders, and like-minded individuals to put forward a more forceful campaign aimed at changing the unfortunate narrative around mining community development.

Below is a copy of the speech read by Abdul-Moomin Gbana:

ADDRESS DELIVERED BY CDE ABDUL-MOOMIN GBANA, GENERAL SECRETARY, GHANA MINEWORKERS’ UNION OF TUCG, AT THE UNION’S NATIONAL EXECUTIVE COUNCIL MEETING HELD AT THE OBAA PLAZA HOTEL, NEW ABRIEM, FROM AUGUST 2-3, 2022

Comrade Chair, Secretary General of the TUC(Ghana), Vice President in charge of Human Resources, Newmont Ghana Gold Limited, Managing Director of Protea Coin Ghana Limited, Distinguished National Executive Council Members, Executives of our Business Wing, Colleagues from the Media Fraternity, Ladies and Gentlemen.

It is an honour and a privilege to address this august gathering again on the occasion of the first-half National Executive Council meeting for the year 2022.

On behalf of the Management Committee of our great Union and on my own behalf, let me take this opportunity to welcome Council members to the first-half meeting being held here in New Abriem. Let me also use this opportunity to say “AYEKOO” to all our gallant members across the industry and beyond through whose toils, sweat and ingenuity especially in these tough excruciating economic times the mining industry continues to thrive.

Comrades, as we are all aware, our meeting here in New Abriem for today and tomorrow is in fulfilment of Article 8.3 of the Constitution of the Ghana Mineworkers’ Union. These two days of deliberations would therefore focus on reviewing the activities of the Union for the first half of the year 2022 and also afford us the opportunity to discuss very critical emerging issues of both industry, national and global importance. My address would therefore touch on a number of these critical issues and how they impact on trade unions(s) and society in general.

  1. General Industry Outlook

Comrade Chair, unlike other sectors which have been heavily hit since the outbreak of the pandemic, the global gold industry and by extension the mining industry so far stands out as the utmost beneficiary of this global health crisis. Gold price since the beginning of this year has maintained relative stability at a little over $1800 per ounce. Indeed, the World Gold Council has posited that “Gold has been on a generally positive trend for the past few years”. However, the onset of the global COVID-19 pandemic has made gold’s relevance as a hedge even more apparent and accelerated its price performance.

Comrade Chair, given the unprecedented surge in gold price and the colossal gains most mining companies made last year, and what they are projecting to make this year, we expect that mining companies would take strategic advantage of the price boom and by extension increased margins from last year and this year, to invest in modern infrastructure and expand existing ones, increase production, intensify exploration activities, among others. This, we believe is a substantial step towards the creation of decent and sustainable jobs and a strategic approach to sustaining the industry in the long run.

  • Increasing Spate of Insecurity in the Mining Industry of Ghana

Comrade Chairperson, the security situation within mining communities and mining companies in particular continuous to be a major worry for the Union and many of our constituents as the race for the sanitization of the illegal mining space under the “Government Operation Halt Programme” rages on. This programme has however forced many of these displaced illegal miners into invading legally acquired mining concessions which often times, results in serious clashes with our valued members, thus, putting them in harm’s way.

As you may recall, in my address to Council during the first-half NEC meeting last year, I chronicled very bitter and gory experiences some of our members have had to suffer in the hands of some criminal elements in the line of their duties as security personnel working on mining concessions. For the avoidance doubt, permit me to touch on a number of them to further highlight the state of insecurity in the mining sector in Ghana.

Indeed, quite recently, two of our valued members in Protea Coin; Robert Coffie and Joshua Oppong were attacked and shot which led to Joshua losing one eye whilst Robert sustained multiple injuries on the Newmont Ahafo site. Similarly on the same Newmont Ahafo site, Daniel Owusu Sekyere and Mathew Nsoah both members of the Union, were attacked with guns and cutlasses which led to Daniel sustaining multiple fractures on one leg whilst Mathew sustained several cutlass wounds on the head. Sadly, Daniel for now has metals planted in his leg. 4Indeed, the list goes on and on…

Comrade Chair, rather shockingly, a few days ago specifically on July 27, 2022, we witnessed yet another horrendous incident on the concession of Newmont Ahafo Mine where two of our comrades from Protea Coin were picked up at gunpoint, manhandled and molested and abandoned somewhere in the bush with their hands tied to their backs. Fortunately, they were found alive without any major injuries. On the same, rather regrettably another comrade, who apparently left his duty post to attend to “nature’s call” in a bush nearby did not return until after 4 good days. The mystery behind his sudden disappearance and appearance is yet to be established. Similarly, Anglogold Ashanti Obuasi and other mining companies continue to come under constant attacks by criminal elements with our members not spared in most of these attacks.

Comrade Chair, these sad developments have become a growing feature of the mining industry and therefore brings into sharp focus the state of insecurity and what our members go through on a daily basis. It is therefore urgently imperative that companies/employers in the sector review their security operations and invest in modern security infrastructure that responds to the increasing sophistication of these criminal elements in order to curb this menace and protect life and property. The Union also urges Government through the Ministry of Lands and Natural Resources to take immediate steps to provide complementary security to these mining companies particularly Newmont Ahafo considering the rampant incidence of attacks on the Ahafo concession.

Let me state for emphasis that, it is the responsibility of the state to ensure that all its citizens are safe whether at home or engaged in any lawful economic activity. Again, it is the responsibility of the employer in the employment relationship to ensure that employees are safe at the workplace at all times. We would therefore not countenance these preventable incidences anymore and would not hesitate to withdraw our services en bloc if these developments persist in the sector.

  • Declining Decent Work Gains in the Mining Industry

Comrade Chair, another issue of grave concern is the gradual decline in the decent work gains achieved over the years, in pursuit of super normal profit strategies or measures that continue to undermine our efforts. As have been established from a recent study conducted by the Ghana Mineworkers’ Union, it was revealed that for every increase in non-standard forms of employment, there is a corresponding decrease in standard employment or permanent employment in the sector. In fact, this phenomenon as at December 2021 when we reviewed the situation, has currently reached parity levels with standard employment apar with non-standard employment.

The study further revealed that for every standard worker who exited the company from 2016, the same role is replaced with a non-standard worker. Sadly, workers in these non-standard forms of employment are required to perform the same task and in some cases additional task but are put on relatively inferior employment conditions including but not limited to reduced wages/salaries, reduced pensions.

Without a doubt, this trend is fast undermining the decent work agenda and slipping our members into working poverty and ought to be checked without any further delay.

Again, respect for fundamental principles and rights at work remains a key pillar and indeed, the fulcrum around which all the other pillars revolve. Whilst this pillar remains extremely crucial, the respect for workers’ rights especially the right to freedom of association and collective bargaining continues to come under serious attack by multinational conglomerates such as Gold Fields Ghana Limited who for the past five years have erected a Chinese wall around itself purposefully to deny workers the free expression of their rights; Asanko Gold’s recent unilateral decision to jettison agreements entered into with the Ghana Mineworkers’ Union by blatantly refusing to pay severance packages due redundant workers, among others.

Comrade Chair, quite recently and rather astonishingly, companies like Newmont after embarking on a rather controversial labour restructuring exercise, is resorting to the promotion and in fact, the sponsorship of yellow dog unions at the workplace in total disrespect and disregard for workers’ rights especially the right to freedom of association and collective bargaining. These are actions that the law frowns on and in fact, are considered unfair labour practices.

Paradoxically, these same multinational conglomerates have signed onto one international convention or protocol pledging to respect and promote workers’ rights. Furthermore, these multinational companies would dare not contemplate disrespecting the rights of workers in their home countries, not in South Africa or the USA. Rather shamelessly, we allow these multinationals to do what they would not even contemplate in their home countries, to violate and disrespect workers’ rights with impunity in Ghana.

We find these developments extremely worrying and therefore call on the Ministry of Employment and Labour Relations as well as the Ministry in charge of Lands and Natural Resources and their relevant departments and agencies to take keen interest by investigating these matters in order to ensure that the rights of Ghanaian workers are fully protected. Meanwhile, the Ghana Mineworkers’ Union and its members shall not hesitate to respond appropriately if these developments are left to fester on.

Comrade Chair, two loopholes exist in Act 651 and Regulation 1833 that are immensely contributing to the precarious work not only in the mines but other industries mostly in the private sector and inhibiting our progress towards the attainment of the decent work agenda. The first is found in Section 66 (a) which grants exemptions to employers from paying redundancy/severance to workers engaged in contracts of a specified duration or for specific work. Given this lacuna, and in our view the greatest injustice ever perpetuated against workers, employers have capitalized on this and are engaging workers on all kinds of jobs under cutting throat precarious arrangement all in the bid to escape severance payment.

Comrade Chair, the second is the interpretation Regulation 1833 has given to Private Employment Agency to include “Services consisting of employing workers with a view to making them available to a third party who may be a natural or legal person referred to as a “user enterprise” which assigns their tasks and supervises the execution of these task” without any authority regulating the contractual interlinkages between the agency and the user enterprise and its ramifications on the “disguised employees” most of whom are suffering a great deal of injustice that defeats every pillar of the decent work agenda. Today, the practice is widespread across the private sector including the dangerous mining work and coupled with lack of supervision and monitoring by non-existent Labour Inspectors, high rate of unemployment, employers are milking workers dry through wage theft, denial of workers’ rights and other forms of abuses most of which are often not reported.

Comrade Chair, the foregoing therefore makes the review of the Labour Act 2003 (Act 651) critically imperative to fix the implementational gaps identified over the years and make it responsive to the changing needs of the actors in the industrial relations space. Consequently, we call on the National Tripartite Committee through Organized Labour led by TUC (Ghana) to prioritize the labour law review without further delay. We also call on the Minister of Employment and Labour Relations to cause the full enforcement of Part 16 (Labour Inspection) of the Labour Act 2003 (Act 651) so that the actors within the industrial relations space can realize the full benefit of labour inspection in this country.

  • Cut-throat Mining Contracts and Implications for Decent Work

Comrade Chair, the mining job is hazardous and very energy sapping. Indeed, the ILO describes mining as “the most hazardous occupation when the number of people exposed to risk is considered with the rates of death, injury and disease among the world’s mineworkers’ very high”. Therefore, by the very nature of mining, workers are generally predisposed or susceptible to accidents/incidents. However, there are certain unhealthy arrangements that fuel and aggravate accidents/incidents and undermine the decent work agenda and one of them is the current cut-throat mining contracts multinational companies have virtually imposed on local entities in order to offload their inefficiencies and further their profiteering agenda under the guise of local content.

Comrade Chair, the current phenomenon where aspects of the mining business/jobs are farmed out at the least opportunity under cut-throat contract prices simply on the back of profit maximization must stop since this arrangement continuous to threaten and undermine the decent work agenda and impoverish our members. Astonishingly, this continuous to happen at a time when the prevailing business environment is super favourable and should have reflected in the total wellbeing of the enterprise. Unfortunately, this is not the case because some of these business leaders running these multinational conglomerates would rather squeeze everybody especially the local entities and line their pockets with hefty bonuses rather than seek the total interest of all stakeholders.

Comrade Chair, it is trite knowledge that there are certain aspects of the mining business that are considered ancillary or non-core and can generally be farmed out but certainly not the core business for which a company is registered to perform. Unfortunately, under the guise of local content, these exploitative strategies continuous to be pursued with impunity. As a trade union, we take an uncompromising opposition to the current arrangement of “monkey dey work baboon dey chop” and therefore reinforce our position that mining companies must be strictly responsible for the core business of mining including associated employees’ cost, and therefore should not be allowed to farm out the core business that they have a responsibility and obligation under the law to perform.

Whilst we generally disagree with this emerging arrangement in the name of local content, it is important to highlight the ills perpetrated by this emerging arrangement and to call the attention of all actors within the mining space particularly Government to take a special interest as this has serious ramifications for the stability of the mining industry going forward. It is therefore not enough for Government to just intervene in the mining space by encouraging that mining and hauling be left for local entities as part of local content within the sector. In fact, it is equally important that Government takes keen interest in ensuring that the contracts these local entities enter with these large-scale multinational companies are not, exploitative, cut-throat and suffocating since that is the current situation on the ground. It is particularly important for Government to pay attention because of the capital-intensive nature of mining (i.e., acquisition of mining fleet, maintenance, labour, etc.) and challenges associated with access to, and the high cost of credit in Ghana for most of these local entities.

The consequences of these cut-throat and suffocating contract rates are dire, as workers welfare in these local entities are relegated to the background and this is manifested in the excessive delays in payment of wages/salaries, non-payment of employees’ Provident Fund contributions and terminal gratuities, non-payment of statutory benefits such as pension contributions (1st and 2nd tiers), taxes and protracted negotiation of wages/salaries as well as conditions of service for our members. In fact, the current situation for most local entities operating within the mining space is very awful, to say the least, and ought to change without any further delay.

We are therefore calling on all multinational mining companies engaged in this act and by extension the Chamber of Mines, to pay attention to this growing concern as this has the potential to threaten the stability of the industry in the not-too-distant future if nothing urgent and concrete is done about it. We also urge the Ministry of Lands and Natural Resources to take keen interest by intervening with favourable policies and programmes that would provide some respite to these local entities.

  • Government Must Increase its stake in Mining Companies/Create Enabling Environment for the Active Participation of Indigenous Companies in the Mining Space

Comrade Chair, as you are all aware, the current President, then Candidate Nana Addo have held the strong view that “ye ti sika su nansu ekom diye”. Indeed, he was right, he is right and will be right on any day. What the President however did not avert his mind to, and still doesn’t appear to, is the obvious fact that almost all the productive sectors including the extractive industry of our economy are under the control of foreign interests operating under extremely charitable fiscal regimes.

After over 100 years of mining, Ghana’s mining industry continuous to be dominated and controlled by foreign interest with over 99% of mining companies being foreign, owning 90% of the shares with Government left with a paltry 10% carrying interest. Without a doubt, the Government of Ghana has since the 80s shied away from the mining sector instead of confronting this sorry narrative of our over dependence and reliance on a foreign dominated sector. This, we believe we can do, by running our own mines and/or increasing our stake in these mining companies by forcefully renegotiating existing contracts as well as future contracts in order to create and retain greater value for the citizens of this country.

Sadly, we have for many years chosen the laziest man approach of over relying on a “tax-royalty” fiscal regime, where our only source of revenue depends on revenue generated from mining companies/activities in the country through taxes and royalties levied on revenue generated from production. In fact, on dividend payment, the least said about it the better as the so-called 10% Government carrying interests only exists on the books as many of these companies scarcely declared any dividends and in a few instances where some do, Government’s share has been a minute fraction.

Comrade Chair, considering the generous fiscal giveaways (including excessive repatriation of mining revenues by multinational businesses, signing of stability and development agreements, etc.) which continuous to deny Ghana its fair share of revenue under this so-called tax-royalty fiscal regime, we believe that the time has come for this narrative to change and ought to change quite swiftly. To change however would require a change in the ownership structure of mineral assets thereby shifting from our aged-long comfort zone of over dependence and reliance on a tax-royalty regime to active participation and control of production by negotiating/renegotiating a much greater stake in these mining companies in order to create and retain the needed value for the people of Ghana.

Comrade Chair, furthermore, it is again common knowledge that today’s mining industry is run predominantly by Ghanaian nationals. Without a shrewd of doubt, more than 95% of the mining industry workforce are Ghanaians. The question then is, why are we just focused on working for others and for how long are we going to do that?? In fact, as a Union we have advocated over the years for the full and active participation of indigenous Ghanaian businesses within the mining space with a clear plan to grow their capacities so that they can compete. We believe the intervening role of Government whether through its own direct participation in the sector or through the use of Ghanaian local businesses is a critical step towards changing this narrative from a tax-royalty regime to creating and retaining additional value through active participation and control of production within the sector.

Comrades, as you may recall, in my address to this august Council in December last year, we lauded Government about its plans in its 2022 budget to increase the presence of wholly owned Ghanaian companies in the large-scale to mid-tier areas of the mining subsector. The Union did also commend Government’s plan to introduce what it termed the “Minerals Income Investment Fund Small Scale Mining Incubation Programme” with an allocated budget of GH₵354 million to help transform wholly owned Ghanaian Small Scale Mining companies into mid-tier to large-scale companies over a period of 24 months beginning 1st February 2022, with up to 30% of the allocation earmarked for provision of equity capital to selected small scale mining companies.

The question we ask is, where are we now and what have we done about these lofty ideas? Interestingly, our checks reveal that no such step has been taken. As usual, great plans, no action. As a key stakeholder in the mining industry, we want to call on Government to see to the realization of these lofty plans as we believe that is the way to go if we are indeed committed to seeing this nation transform.

Comrade Chair, whilst advocating for greater participation for local entities operating in the mining space, it must be underscored that most local entities particularly in the industry are not attentive to the interest and wellbeing of workers as compared to their foreign counterparts. This is because, time and time again, these multinational businesses have shown more empathy and concern to people management issues. Aside their attentiveness to people management issues, they have a relatively robust system with well-established structures/standards (including corporate governance standards) that they rarely compromise and often would not hesitate to subject themselves freely to peer review and compliance with International Standards.

The Union would therefore urge these local entities to be more attentive to workers’ wellbeing and welfare, and also institute high standards of accountability, comply with corporate governance rules and regulations, and respective international standards/best practices, in order to avert the unfortunate but avoidable situation we witnessed in the financial sector that almost led to its collapse.

  • Increase the Share of Mineral Development Fund & Exempt it from the Earmarked Funds Capping and Realignment Act 2017 (Act 947)

Comrade Chair, our campaigns continue to see results as many of the critical issues we have raised and campaigned about, continue to take centre stage in our public discourse. In fact, our vigorous campaigns on mining roads and improvement in general infrastructure in mining communities have begun to see some facelift across a few of our mining communities. I am also aware that our campaign on the need for the exemption of the MDF from Act 947 (Earmarked Funds Capping and Realignment Act 2017) was also expected to have gone before Cabinet for a review and decision albeit that no feedback has come yet. Let us therefore renew our spirit of advocacy and campaign noting that nothing will work when a key voice such as ours decide to be silent and be determined to do even more.

Comrade Chair, it is against this backdrop that the Union renews its call for the effective implementation of the Mineral Development Fund to respond to the age-long concerns of deprivation and underdevelopment in mining communities. The Union believes that the full realization of the MDF would be felt when the current lopsided sharing model of the MDF is changed, right amounts are disbursed at the right time to beneficiaries, and the capping of the Fund is exempted from the scope of the Earmarked Funds Capping and Realignment Act 2017 (Act 947).

Furthermore, given the lopsided sharing model of the country’s mineral royalties, there is no gainsaying that the infrastructural development efforts of mining communities can never be achieved if nothing drastic is done about the current arrangement. Consequently, we renew our call for the current 20 percent share of annual mineral royalties allocated to the Mineral Development Fund to be increased to atleast 50%. Additionally, we expect that at least 50% of the revised 50% allocation to the MDF would be directed into mining community development.

In the coming weeks therefore, we will be working with a Coalition of identified groups, traditional leaders, and like-minded individuals to put forward a more forceful campaign aimed at changing this unfortunate narrative around mining community development.

As I bring my address to an end, let me on behalf of the Management Committee thank all of you for your continuous support and cooperation. To our social partners present here, let me specially thank you for making the time to be here – we are most grateful.

Comrades, thanks for your audience and may God bless us all.

Long Live the GMWU, Long Live the TUC, Long Live Ghana!

Eric Nana Yaw Kwafo
Eric Nana Yaw Kwafo

Journalist

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