An Assessment of the Level of the Adequacy of Paid Compensation and Lost Livelihood in Mining Communities

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Compensation is very important to individuals and communities who through no fault of theirs are displaced to make way for development induced projects. It is the means by which the lost of assets and livelihoods may be replaced. Act 703 of the Mineral and Mining Act, 2006 of Ghana has provisions to guide the payment of compensation so as to ensure fair and adequate paid compensation. However, the provisions of Act 703 of the Mineral and Mining Act, 2006 has come under severe criticism due partly to shortfalls in the provisions of the Act. The affected persons of development induced displacements are no longer able to have access to their source of livelihoods and environmental services previously available to them such as farmlands, alluvial mine concessions and forest resources among others. This has resulted in agitation and protest from the affected persons. These protests often end up in violent demonstration and repression from government agencies that protect the richer claimants. In an attempt to address the problems of paid compensation, a number of principles and compensation models have evolved. Examples include the principle of Pareto improvement, the Asian Development Bank (ADB) model of compensation, the Land Acquisition Act, 1894 and Act 703 of Mineral and Mining Act, 2006. The ADB policy model for example, advocates the payment of compensation for both land title holders and tenants. Though these models are meant to restore lost assets and livelihoods, they do not critically alleviate the incidents of impoverishment which often results from lost assets and livelihoods. Land which is extremely important to rural communities is most often not catered for by some of these compensation models. The study was conducted at the catchments areas of four mining companies in the Tarkwa-Nsuaem Municipality and Prestea/Huni-Valley District namely: Abosso Goldfields, Golden Star Bogoso Mines, AngloGold (Iduapriem) Mines and Goldfields Ghana Mines. The study involved both the collection of primary and secondary sources of data. A case study approach was adopted to investigate the subject based on the set objectives. The findings of the study were that, there is no universally accepted model on what could be accepted as adequate paid compensation. It also came out that the economic well being of individual and communities such as employment opportunities, incomes and savings have suffered significant losses after the projects. However, there has been improvement in access to social and environmental services but an increased cost which threatens the coping mechanism of affected persons. Based on the findings, the study recommends the involvement of affected persons in all levels of compensation negotiations so as to address their concerns. Others include an overhaul of the existing methods of valuation of compensation to take care of changing market prices as well as payment of compensation for lost Common Property Resources (CPRs) to ensure that affected persons receive fair compensations.
A Thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology In Partial Fulfilment of the Requirements for the Degree of MASTER OF SCIENCE IN DEVELOPMENT POLICY AND PLANNING.