Although the mining industry has been around for over a century, it has yet to see much progress in areas of transparency and open contracting compared to the relatively new petroleum upstream sector.
Unlike the petroleum industry wherein contracts are openly and competitively contested, and information made readily available to the public in tandem with global best practices, the mining sector has yet to embrace such greater levels of transparency.
“The petroleum sector came to meet the mining sector, but a lot of changes have happened in the petroleum sector based on learning and lessons from the mining sector. Meanwhile, the mining sector has not seen much progress as far as simple things like contracting are concerned,” said Pauline Anaman-Head of Policy Unit, Africa Centre for Energy Policy (ACEP).
Ghana is currently Africa’s leading producer of gold with production of 4 million ounces last year, but ACEP believes reforms – particularly in relation to transparency and open contracting – will consolidate gains and sustain the country’s leadership position on the continent for years to come.
In today’s era of information, she said, it is disturbing that a key sector of national development like mining remains closed to the public. “It is not easy to see a mining contract; it is not publicly available as it is in the petroleum sector.”
Ms. Anaman’s outfit recently launched the Ghana Contract Monitor platform, an online tool that provides updates on work-progress of non-producing extractive sector companies which have valid agreements with the government of Ghana to explore, develop, and exploit petroleum and mineral resources in the country.
She pointed out that obtaining information regarding mining sector contracts and their requirements remains a huge challenge, a situation that she said makes tracking very difficult.
The Extractive Industries Transparency Initiative (EITI), of which Ghana is a member, requires that information along the extractive industry value chain – from the point of extraction to how the revenue makes its way through the government, to how it benefits the public as well as how licences and contracts are allocated and registered – is made public. Doing so is crucial to preventing fraud, corruption and waste of resources.
“If we are to strengthen and increase transparency in the mining sector, then the industry’s regulator and players must be willing to adopt best governance practices such contract transparency and open contracting,” Ms. Anaman advocated.
What the law says
Section 103 (1) of the Minerals and Mining law, Act 703, states that the Minerals Commission shall, in accordance with regulations, maintain a register of mineral rights in which shall promptly be recorded applications, grants, variations and dealings in assignments, transfers, suspensions and cancellations of the rights.
But to access the records, one needs to pay a mandatory fee as prescribed by the same law: “The register shall be open to public inspection on payment of a prescribed fee; and members of the public shall upon request to the Commission and on payment of the prescribed fee, be given a copy of the records,” section 103 (2) reads.
“If you look at our mining law, it does not allow for an open and competitive bidding process; it is direct negotiation, and this does not allow for the transparency we need in order to know who is involved, their role and contractual requirements to enable us to track,” Ms. Anaman said.
“We call on the regulators of Ghana’s over a century-old mining industry to legalise and implement international best practices on open contracting that achieves good accountability results at every stage of the mining value chain for meaningful development outcomes,” she advocated.
Meanwhile, Public Relations Officer at the Minerals Commission, Isaac Abraham who acknowledged the need for contract transparency and open contracting, revealed that the Commission has already taken steps to amend the law.
The proposed amendment, which is said to be at the consultation stage he told the B&FT, will allow the Commission to publish information about contracts on its website. It will also bring about greater transparency in dealings within the sector than the law currently permits.