A lecture delivered by the minister for lands and natural resources, Hon. Samuel A. Jinapor
It is great to be back here at the famous Kwame Nkrumah University of Science and Technology (KNUST), and at this Great Hall, where about a decade and half years ago, I had the privilege of being honoured with a Bachelor of Science Degree in Physics.
I am also pleased to be hosted by the Vice-Chancellor of this noble University, Professor (Mrs.) Rita Akosua Dickson, who doubles as a member of the Ministerial Advisory Board, of the Ministry of Lands and Natural Resources.
Let me express my sincerest gratitude to the leadership of the Students’ Representative Council (SRC) of the Ghana School of Law, led by its president, Mr. Wonder Victor Kutor, for settling on me to deliver the First SRC Public Lecture on the topic “The Legal Regime of the Mining Sector in Ghana: History, Challenges and the Way Forward.”
Some few years ago, as a student of this noble University, and in the early days of my political career, I had the rare privilege of being at the forefront of the organisation of a public lecture, delivered by, as the lawyers will say, the Foreign Minister (as he then was), and now the distinguished President of the Republic, H.E. Nana Addo Dankwa Akufo-Addo, from this same podium. Little did I know, at the time, that my modest self will also be standing here, performing a similar task, years down the lane.
Mr. Chairman, to attempt to meet the standards set at this podium by President Akufo-Addo, will either be an exercise in futility, or the beginning of a joke.
Mr. Chairman, the story of mining in Africa, and its contribution to our socio-economic development, has been somewhat awful, to say the least. Our continent is blessed with large deposits of minerals. But the continent appears to suffer so much from the “Dutch Disease” that one begins to wonder why it is called Dutch Disease and not “African Disease.”
For example, using the World Bank’s GDP per capita for the year 2020, thirty-seven (37) out of the first fifty (50) poorest countries by GDP per capita, are from Africa. These include countries like, Sierra Leone, rich in iron ore, diamonds, bauxite and the largest rutile reserves in the world; Democratic Republic of Congo, which, in the 1980s, was the largest producer of cobalt, second largest producer of industrial diamonds, and fifth largest producer of copper; and Guinea which hosts the world’s largest reserves of bauxite.
Indeed, available data shows that, even within the continent, non-monetary welfare indicators are weaker in resource-rich countries than countries without mineral resources. It is almost becoming like a punishment to live in a resource-rich country.
A 2017 report co-published by the French Development Agency and the World Bank shows that, in resource-rich countries, as compared to non-resource-rich countries, literacy rates are 3.1 percentage points lower, life expectancy is 4.5 years shorter, malnutrition among women is 3.7 percentage points higher, and malnutrition among children is 2.1 percentage points higher. In plain language therefore, if you live in a resource-rich country in Africa, you are more likely, to be malnourish, illiterate, poor and eventually die earlier than others in non-resource-rich countries on the continent.
These grim statistics make the call for an examination of the legal regime of our mining industry more imperative, and there could not have been any better time to do this, than when the Government is pursuing measures to sanitise the mining industry, and make Ghana the mining hub of Africa.
Let me, however, admit at the outset, that it is impossible to exhaust this subject in a single lecture. Access to land for mining alone, can be the subject of an entire Ph.D. thesis. I do not, therefore, seek, within this hour or so, to exhaust the subject for today. What I seek to do, is to draw inspiration from the history of mining and its regulations, and how that should inspire policy consideration for the development of our mining industry, for the benefit of the country and its people.
HISTORY OF THE LEGAL REGIME OF THE MINING INDUSTRY
- The Precolonial Era
There is still some dispute among scholars about the exact origin of mining, not only in Ghana, but across the West African region.This, perhaps, is due to the oral tradition that has characterised African history. While some scholars argue that gold mining has been carried on in Ghana since time immemorial, others trace the history to sometime around the sixth century B.C., before the Phoenician sailors sailed around Africa. What is, however, not in doubt, is that gold mining, begun in Ghana, long before the arrival of the first Europeans, the Portuguese, on the shores of our country sometime in 1471 History has it that, gold trading from Akan areas, was one of the major commodities for the Trans-Saharan caravan trade, with the gold sold through Morocco and Egypt, to medieval and renaissance Europe.
Asante, Denkyira, Akyem, Wassa, Ahanta, Aowin, Nzema, Assin, Sefwi, and Twifo are some of the areas early tradition mention as being rich in gold. Among the Akans, generally, gold dust or sika futuro was the main currency for trading Indeed, the motivation for the Portuguese sailing to West Africa, was to shore up depleting gold reserves in Lisbon. It is also said, that the name Elmina, derived from the Portuguese word “el mina” meaning “the mine”, was given by Portuguese who were astounded by the large quantities of gold mined at that part of the coast. Of course, the name Gold Coast, also resulted from the abundance of gold in the region, which later became the attraction for European commerce, with the Dutch and the English joining the Portuguese.
Among the Akans, gold was regarded as sacred, to be mined only for the good of the community. Thus, when the two mines the Portuguese built in Abrobi and Aboasi in the seventeenth century collapsed, it was attributed to supernatural vengeance on the Portuguese, for attempting to extract gold for their benefit, rather than the good of the community.
Although later literature attributes the collapse of the mines to an earthquake and badly-shored tunnels, for the next two centuries, the Europeans stayed off mining, and only resorted to barter trading in gold. As a result, gold mining remained the preserve of the local people.
The method of mining at this time was largely about panning gold along the banks of streams, rivers, coastal gravels and sand, usually after rainstorm. Ankobra, Offin, Tano and Birim were the major sources of gold. This method of mining continued to somewhere the middle of the eighteenth century, when surface gold became almost depleted, then people resorted to other methods like dredging of river beds and pit mining, with simple tools like hammers, chisels, digging hoes, and obviously, lamps lighted by palm oil to give them visibility in the pit. There was also deep-shaft mining, usually done during the dry seasons. Between 1493 and 1600 alone, there were an estimated thirty gold mines in the country, contributing about thirty-six percent (36%) of the total world gold output. And between 1471 and 1750, it is estimated that some forty thousand ounces (40,000 ounces) of gold was exported from Ghana every year, with the quantities decreasing to an average of Ten Thousand ounces (10,000 ounces) between 1751 and 1800,due to the depletion of surface gold.
All this time, there was no statutory regulation for mining. Indeed, the only law at the time was customary law. Land was owned by the stools, skins and families, and the owner of the land owned every mineral on the land. The Latin maxim, Quicquid plantatur solo solo cedit (whatever is affixed to land belongs to the land) applied fully to minerals.
Accordingly, the stools and traditional leaders had a major stake in mining. Individuals and families could mine on any part of their stool or family land, subject, in most cases, to the pouring of libation to seek the blessings of God, and other members of the community always respected the exclusive rights of the first individuals or families to mine on that part of their land. For strangers, however, an intended miner had to bring gifts to the stool, in return for the right to commence mining.
The stools were entitled to one-third (and in some communities, half), of the proceeds of the mine, and all gold nuggets collected from the mine.
In places like Tarkwa, all the proceeds from Saturday’s mining went to the stool, while the miner retained proceeds from other days. Some communities imposed taxes that miners had to pay from their gold produce annually, or for specific purposes like war. Apart from these fiscal customary rules, most communities had other customary laws that regulated mining and related activities generally. In some parts of Wassa, for example, panning for gold was allowed only on Tuesdays, Thursdays and Sundays. Among the Asantes, sex was prohibited on the night before mining; and among the Akyems, a miner had to appease the gods with the blood of a fowl anytime a rich gold nugget was found; with the size of the fowl corresponding to the richness of the nugget.
- The Colonial Era and the Advent of Statutory Regulations
The Colonial history of our country is usually traced to the Letters Patent of 1821, which annexed the Gold Coast to the Colony of Sierra Leone under the Governorship of Sir Charles McCarthy, and the British Settlement Act and Foreign Jurisdiction Act of 1843 which empowered the British administration to exercise their powers outside the forts and castles. But formal colonisation, followed the Bond of 1844, signed on 6th March 1844, to regularise the de facto powers the British had exercised outside the forts and castles. As the revered, astute lawyer and one of the founding fathers of our country, Joseph Boakye Danquah explains:
“By the Bond, a free people, who were not subjects of the British sovereign, voluntarily placed themselves under a binding agreement to the British Crown. In, thereby, diminishing and abrogating their ancient rights and liberties, they secured a better maintenance of their society which was growing more complex by reason of its contact with a society based on a differently organised system of values.”
It is important to also mention that the leader of the Chiefs, who signed the Bond of 1844, was the then Omanhene of Denkyira, King Cudjoe Chibboe, with the other chiefs coming from Fante and Assin towns, which were all rich in gold, with gold mining actively ongoing at the time.
Throughout this period, the precolonial methods of mining and accompanying customary rules, continued to apply, with new mining techniques for mining deep into the land, including the use of wood and rope to hold the top of the soil to prevent cave-ins, developing over time.
As more Europeans came in, some foreign tools for mining, like shovels, pick-axes and shafts, were introduced. In the 1840s, a group of Dutch engineers introduced a hand-powered machinery made up of pumps, crushers, and wooden rockets, for mining in the valley of River Butre. Local entrepreneurs also begun investing in foreign machinery, but not all chiefs were susceptible to this change. Thomas Francis Garrard, the renowned legal historian and draftsman, who dedicated many years to the study of the history of gold trade in Ghana, recounts how in 1861, one Thomas Hughes, a Fante entrepreneur, invested in European mining machinery only to be thwarted in its use by the chief of his village, on grounds of suspicion and superstition. The chief forbade him from mining, and destroyed all the machinery.
Meanwhile, soldiers and journalists returning to England from the War with the Asantes between 1873 and 1874, kept telling stories about how rich the Colony was in gold. This led to what Dumett describes as the “Wassa Gold Rush” by Europeans in the early 1870s and late 1880s. By 1875, a number of British had started trooping into the Gold Coast, purposely for gold mining. Most of these early entrepreneurs were not successful, as they did not get the support of the British government which was against British invasion of the coast. A few of them however persisted, and by 1877, the likes of J. A. Skertchly, M. J. Bonnat, E.T. McCarthy, C.J. Harvey, E. Ray, among others, had taken concessions in the colony.
European mining companies also begun moving into the Gold Coast. In January, 1878, the first European mining company in the colony, the African Gold Coast Company, was incorporated, and was followed quickly, in the next two years, by Effuenta Gold Mining Company, Messrs Swanzy and Company, Gold Coast Mining Company, Abontiakoon Mining Company, Aboso Mining Company Ltd and Wassa and Ahanta Gold Mines Syndicate.
These companies introduced crushing mills powered by steam engines, and other heavy equipment into the mining industry. By 1882, there were said to be “upwards of hundred tons of machinery and mining implements in use” in the Effuenta mine alone.
The likes of, F.C. Grant, John Sarbah, James Hutton Brew, and James Amissah, also came together to form the Gold Coast Native Concessions Purchasing Company, to participate in the mining industry, through the purchase and sale of mining lands. Several other companies emerged, both by Europeans and indigenous Africans. By 1895, there were thirty-seven (37) European mining companies registered to do business in the colony. Most of these companies, including those formed by indigenous Africans, though appeared to be interested in mining, were operating as real estate syndicates, buying supposed gold-rich lands and selling them off in portions. The practise was so widespread that the Commissioner for Tarkwa, Commissioner Higgins, warned the Government that:
“The indiscriminate granting of concessions would lead to serious complications in future unless rules and regulations are established for the guidance both of the European and native land owners.”
This warning set the tone for attempts to regulate the mining sectors. First, it was a proposal by Ferdinand Fitzgerald, described by some of the literature as an African promoter, who proposed, that the colonial government set aside all “unoccupied” Akan mineral lands for efficient mining companies operating in the territory. According to him, this was necessary for the development of the colony. Although his proposal was supported by the European mining companies, it was rejected on the ground that the Crown did not have sovereign control over lands in protectorates.
A mining dispute in 1889 revived the discussions about taking over unoccupied mineral lands. Governor William Brandford Griffiths, who was Governor of the Gold Coast between 1885 and 1895, proposed to the Colonial office in London, that the Crown declares the whole of the colony as a crown land, so as to give the colonial government control over the territory and supervision over concessions.
Although the Colonial Office was convinced about the administrative and financial advantages of the policy, they were concerned that such action may lead to a revolution. They explored other proposals, including the vesting of the lands in the crown as trustee, and the appropriation of all minerals in the Crown, leaving the land to the chiefs.
The persistent push by Governor Griffiths, coupled with the indiscriminate felling of timber, and the uncontrolled acquisition of land by mineral speculators, resulted in the Colonial Office agreeing to take over unoccupied lands. This resulted in the Crown Lands Bill of 1894. Under this Bill, all “Waste Lands, Forest Lands and Minerals” were to vest in the Queen for the use of the Government of the Colony,”and all future concessions were to be made subject to the approval of the Governor, who was also entitled to receive all royalties from the concessions. “Waste lands”, were defined as unoccupied lands.
Opposition to the Bill begun the very day it was introduced into the Legislative Assembly in November, 1894, on the ground, among others, that there was no such thing as “waste land”within the colony. Indeed, the nationalist and patriot, John Mensah Sarbah, recounts that Justice Smith, in his report on land tenure in the Gold Coast in 1891, had advised the colonial Government that:
“all the land in the colony, save what the Government have from time to time taken for public purposes, has, according to native law, an owner.”
It,therefore, appeared surprising to the people, that three years later, the Crown will seek to vest ownerless lands in itself. They argued that the Bill was, in essence, an expropriation Bill, designed to illegally seize lands belonging to the people.
Several petitions were written against the Bill, but Governor Griffiths, hid all these petitions from the Colonial Office in London, until Governor William Edward Maxwell took over as Governor on 7th April, 1895. The new Governor forwarded all the petitions to London, and called for a withdrawal of the Bill for a more comprehensive legislation.
While he opposed the Bill in principle, Governor Maxwell expressed his full support for the validation of concessions by the colonial government, a system which was practised in the Malay States (now Malaysia), where he served as Governor prior to his appointment to the Gold Coast. Through his instrumentality, a new Bill, the Lands Bill of 1897, was introduced into the Legislative Assembly on 10th March, 1897. This new Bill, no longer sought to vest the lands in the Crown, but sought to vest administration of the lands in the Crown. Under this Bill, chiefs had no power to grant concessions to foreigners without the consent of the colonial government, and the government could declare any land as unoccupied and authorise its occupation. In practice, concessions were to be granted by the government using its powers of administration.Assessing the impact of the Bill, Omosini opined that:
Although this proposal was designed to ensure that European concessionaires got firm titles, in practice it would have enabled the administration to grant concessions to whomever it pleased for the exploitation of mineral, forest, or agricultural resources. This would in course of time have threatened the traditional African system of small-scale peasant production if it became necessary to grant concessions to, foreign capitalists to, develop plantation agriculture.
Again, this Bill was strongly opposed, both by the natives, and by the Europeans.The Aborigines’ Rights Protection Society was formed to fight the Bill. They argued that the Bill leaves African land rights at the mercy of the colonial government. John Mensah Sarbah, for example, described the Bill as “an elaborate and expanded form of the Crown Land Bill of 1894,” and called for its total rejection.
News of the protests and opposition against the Bill quickly spread in the UK. Several meetings were held with the Colonial office and eventually this Bill was also withdrawn.
The colonial government, however, continued to explore means of regulating the mining industry. A new Bill, the Concessions Bill, was drafted,in consultation with the Aborigines Rights Protection Society. While the right to grant concessions remained with the chiefs, the Bill contained provisions for the validation and registration of concessions, and the payment of adequate consideration, which the High Court was empowered to supervise. Mining concessions were limited to five square miles, with no person to hold more than twenty-square miles (four concessions) in aggregate. The maximum period for a concession was pegged at ninety-nine years (a practice which will eventually become the de facto maximum lease period for almost all leases in the country), and a two percent tax on profits from the concession.
Because of the involvement of the Aborigines’ Society in the drafting of the Bill, it received massive support in the Legislative Assembly. And although the European mining companies protested against the imposition of taxes and the restrictions on the size and duration of concessions, the law was unanimously passed with few amendments, as Concessions Ordinance (No. 14 of 1900), and became the first statute to regulate mining and other natural resources. Later in 1903, the Ashanti Concessions Ordinance (No. 3 of 1903) was also enacted, to regulate concessions in Ashanti. These Ordinances underwent several amendments, until they were repealed and replaced with the Concessions Ordinance, 1939 (No. 19 of 1939), which is still in force as Concessions Act, 1939 (Cap. 136).
Apart from regulating how concessions are granted and validated, leading to the grant of a mining licence, the law did not regulate mining operations itself. It was not until 1905, that the Mining Rights Regulations Ordinance (No. 8 of 1905) was enacted to “regulate the exercise of mining and ancillary rights.”
Under this Ordinance, the Governor was empowered to appoint a Secretary for Mines, and Inspectors of Mines, who were responsible for the general supervision of mining and mining rights, and the inspection of mines to ensure health and safety standards. Concession holders were required to appoint competent managers for the mines, and to give notice of such appointment and the commencement of mining to the Secretary for Mines.
In the Northern Territories, a Mineral Rights Ordinance, similar in terms to what existed in the colony and Ashanti, was enacted in 1904, but a comprehensive Minerals Ordinance (No. 20 of 1936) was later enacted to deal with all mineral and mining issues, from surveying to the disposal of the minerals mined. Unlike its counterpart in the colony and Ashanti, the Minerals Ordinance vested all minerals within the Protectorate in the Crown, and no one could prospect, without a licence from the Chief Inspector of Mines, or mine without a mining lease from the Minister. Mr. Chairman, I will revisit this system, as it will later on become the legal regime for, not only the mining sector, but all natural resources in independent Ghana.
As new minerals, were discovered, specific laws were enacted to regulate their mining and trading. These include the Diamond Export Duty (No. 12 of 1919), the Diamond Mining Industry Protection Ordinance (No. 11 of 1926) and the Radioactive Minerals Ordinance (No. 4 of 1946).
Fui Tsikata, the respected lawyer and academic, sums up the policy behind all these legislation into five main themes:
- establishing a legal and administrative framework to facilitate mineral operations;
- ensuring security of tenure for grantees of mineral rights;
- managing the problems that arose between mining companies and representatives and members of the local communities;
- obtaining revenue for Government through the levying of duties or income taxes; and
- in the case of manganese and bauxite, to contribute to the self-sufficiency of the British Empire in war-times.
- The Post-Independence Era
Mr. Chairman, through the toil of our forebears, an independent nation called Ghana, was eventually born on 6th March, 1957, exactly one hundred and thirteen (113) years after signing the Bond of 1844. By this time, the Gold Coast Colony, Ashanti, the Northern Territories and the British Togo lands, had all been merged into one State.
Barely a year after independence, specifically in February, 1958, the Government set up a Commission of Inquiry into Concessions, (also known as the Boateng Commission), to enquire into:
“(a) the terms under which [mineral and timber rights] are at present held with a view to determining the consistency of… [the] agreements with equity and with the present profitability of these industries; and
(b)… the existence of all unexploited concessions and ascertain when the concessionaires propose to begin working therein.”
The Commission finished its work and presented its report in 1961. The findings of the Commission, though startling, were perhaps, something that was already known to many. It found that the method of granting leases was obsolescent, and grantors usually did not appreciate the economic value of lands they were demising, with the result that in some cases, no royalties or inadequate compensation were paid. Agreements were usually drafted by the concessionaires, who were educationally and financially better placed than the grantors, and explained to the grantors by agents of the concessionaires. In accordance with customary law, drinks were usually served before the interpretation and signing of the agreement, sometimes inducing agreements under the influence of alcohol. As a result, most of these agreements were oppressive to the grantors.
In respect of unexploited concessions, the Commission found that concessionaires secured large tracts of land not required for immediate purposes, in order to defeat any future claim of grantors to rents and royalties, and some laid idle for over thirty (30) years.
Based on the foregoing, the Commission recommended that, to protect landowners and concessionaires, the Government must vest all minerals in itself. They also proposed that royalties be made a percentage of profit, instead of a fixed amount; and part of it allocated to landowners.Other proposals of the Commission included restrictions on the size and duration of mining concessions; the power of the Government to terminate mineral rights for inactivity; the acquisition by Government of fifty-one percent (51%) shares in mining companies; and state monopoly over export of minerals.
The Government accepted most of these recommendations, leading to the enactment of a series of legislation to reform land administration and mineral rights. These legislation include the Land Registry Act, 1962 (Act 122), the Administration of Lands Act, 1962 (Act 123), the Concessions Act, 1962 (Act 124), the State Lands Act, 1962 (Act 125), the Minerals Act, 1962 (Act 126) and the Survey Act, 1962 (Act 127).
The Minerals Act, in particular, was modelled around the Minerals Ordinance which applied to the Northern Territories. The long title made its purpose very clear as:
AN ACT to provide for the vesting of the ownership and control of minerals throughout Ghana in the President on behalf of the Republic of Ghana in trust for the People of Ghana, to enable the President to issue prospecting, mining, dredging and water licence….
Section 1 vested all minerals in Ghana in the President, in trust for the People of Ghana, subject to existing mineral rights. The power to grant mineral licenses also rested with the President. The Act gave the President peremptory rights over minerals won in Ghana,and empowered the President to make regulations for limiting the area and term of mineral rights.
Writing in favour of this legal and policy direction, Prof. S.K.B. Asante, notes that:
“With the reduction of stools to the status of subjects in the larger framework of the Republic of Ghana, it became clearly desirable to proclaim Republic ownership of all minerals in Ghana. The charge of confiscation by an alien government had no application in an independent Ghana; and the irresponsibility which had characterised the grant of mineral concessions by the various stools called for a radical overhaul of the ownership patterns.”
This also found favour with the respected former Justice of the Supreme Court, Prof. Samuel Date-Bah, who observed that:
“A further reason for the intervention of the Ghanaian central government was the need to eliminate insecurity of title for investors in natural resource projects arising from conflicting or overlapping claims of Stools to title over land. By vesting all mineral rights in the state, foreign and local investors now needed only to deal with the central government in relation to the grant of rights over the subsoil, although surface rights remained vested in their usual owners.”
The Administration of Lands Act, and the State Lands Act, gave the President wide powers in respect of the acquisition, use and/or management of any land within the Republic. And the Concessions Act, 1962, which applied to concessions over stool lands, gave the President the power to cancel or modify the terms of existing concessions.
Prior to these enactments, in 1961, a State Mining Corporation, which had been established, acquired five (5) gold mines and a diamond mine from British companies. Despite several changes in government, the legal regime of the mining sector remained intact, subject to few amendments, until the National Redemption Council (NRC), which overthrew the Second Republic, introduced its policy of “taking over the commanding heights of the economy.”