[Special Report ] Mine Workers in the face of Contract Mining in Ghana

On the occasion of a glamorous reopening of the Obuasi mine by AngloGold Ashanti Ghana (AGAG) on Tuesday 22nd January 2019, the President of Ghana, Nana Addo Dankwa Akufo-Addo, in his speech was noticeably silent about one critical issue that lies at the heart of recent redundancy programmes in the mining sector. In recounting the fact that there was a sequence of events that led to the closure of the mine in 2014, the President missed the opportunity to mention about the changing landscape of employment model in the mining sector which is triggering a trend of labour dispute over negotiated agreements between workers in mining companies and their management.

Labour disputes are becoming popular in Ghana’s mining sector because mining companies have chosen to adopt a policy change in their employment model. As a result most employees who exited standard employment through redundancy, retirement, ill-health, termination or dismissal, are largely being replaced with non-standard (fixed-term contract) workers.

CONTRACT MINING

One can argue that contract mining in Ghana is gradually shaping employment trends in an unfavourable manner in the mining sector. From the 2016 Employment Data of the Minerals Commission of Ghana, standard workers have seen a decline from 5469 to 5056, a reduction by 7.5% between 2014 and 2016 whiles non-standard workers, otherwise referred to as contract workers, have increased from 246 to 1056, an increase of 429%. These variations have generated some level of concern among key stakeholders especially union leaders. Because what this means is that while non-standard employment is growing at “colossal proportions”, standard employment is steadily declining with a standard to non-standard employment ratio of 5:1. We can therefore also say that all things being equal, for every six (6) new jobs that are created, five (5) are employed on a permanent bases while one (1) is engaged on a fixed-term contract bases. There is therefore an inverse relationship between standard employment and non-standard employment trends in Ghana’s mining sector and further can be said that it gives a clear indication of a gradual shift from standard to contract employment in the sector.

The frightening emerging trend of a changing landscape of the employment model associated with companies in the mining sector is worthy of scrutiny. In a document submitted to the Parliament of Ghana by the National Coalition on Mining (NCOM) detailing strongly their opposition to the basis of the Development Agreement (DA) and Tax Concession Agreement (TCA) between the Government of Ghana and AGAG, the pressure group highlighted the quality of work that may be affected by laying off permanent workers and introducing casual or contract workers. The group drew the attention of Parliament to attempts by mining companies to introduce sub-contracting employment model. They regarded the model as a non-panacea to addressing the labour challenges in the mining sector and will likely worsen the situation of workers.

With hindsight to a Government Memo on the two AGAG Agreements, Government projected that the number of persons to be employed directly at Obuasi during operations by AGAG and its sub-contractors will be between 2000 and 2500, with an additional 1500 being employed during the construction phase’.  Government claims also that “the economic contribution to the economy of Ghana through employment and other community investments represents just about 7% of GDP of the total revenue pie over the life of the mine.” NCOM questioned the basis of such figure by emphasizing that “there is no indication of how the 7% figure was arrived at, what proportion represents the cost of labour, how many of these workers will be permanent workers, directly employed by AGAG and how many will be sub-contracted labour, without job and income security.” Amongst these concerns were also the issue of whether the new employment model has an affirmative action and a policy of recruiting from the mining town.

They further argued that “the casualization of work through sub-contracting allows the mining firm to drive down the cost of labour. This not only reduces what comes back into the local economy but could sow the seeds of social conflict and labour unrest, something which found extreme and tragic expression in the police killing of protesting miners at Marikana in South Africa.”

“The accelerating race among the mining companies to reduce the numbers of permanent employees to the barest minimum is not simply a matter of business costs but a socio-economic issue of public interest. Employment remains a key indicator of the economic performance of every nation and indeed has become one of the major preoccupations of every government. Whilst government may be concerned about creating and maintaining decent jobs generally, employers on the other hand may resort to ‘needless’ redundancies in order to cut costs and maximize their returns”,  the Coalition stated. The strength of the position taken by NCOM is in the fact that protection of labour is not guaranteed as a condition set out in Government’s Stability and Development Agreements with mining Companies.

In that same period in April 2018, the Ghana Mine Workers Union (GMWU) submitted a Memo to Ghana’s Parliament for the review of AngloGold DA and TCA with Government of Ghana. The group pointed out the unclear definition of “permanent employee” under the terms upon which AngloGold is to operate under contract mining. They raised the concern that lack of clear definition may raise the possibility for exploitation.

On the stabilisation clause in the DA, the Union requested for the inclusion that “during the initial stability period (10years) from the Effective Date, AngloGold shall not and shall cause not to implement any retrenchment programme in Ghana (it’s being understood that individual dismissals made from time to time do not constitute a retrenchment programme).”   What this reveals is that the Union at least knows beforehand what is likely to happen with redundancy given recent experience in the sector, hence its strong prohibition to retrenchment tactics by such companies.

However, to ensure collective governance in the new employment regime, the strength of the Union’s proposal to Parliament was a demand for its “inclusion as a party” to determine from time to time AngloGold and Government’s determination over how to accomplish the objective of free, dignified and unrestricted employment. Their rationale for this amendment to the Agreement was that the Union, against the backdrop of ensuring that matters bordering on the future of work, the nature and form of employment and the ramifications thereof, are viewed from a tripartite (consultations between; Government, Employers and Organized Labour) perspective. This, they believe, will among other reasons, guarantee not only policy coherence between mining and labour, but also ensures compliance with all relevant labour legislation.

Speaking to some Union members in Kumasi during the 2018 May Day, Prince William Ankrah – the General Secretary of GMWU, expressed the fear of the Union to Mining companies’ policy of contract mining model. He felt that mining companies want to short-change Ghanaian mine workers to undermine the Union’s effort over the years in improving upon the remuneration package of mine workers.  “We will be tough on companies that want to toy with the plight of mine workers. We are not here to bust any company, neither are we going to sit down and allow any company to toy with the future of mine workers through exploitative tendencies for their corporate greed,” he specified.

At the moment, the Union leaders observe that Government isn’t appreciating the dangers of contract mining and the effect it would have on tax revenue from income of workers and their future pension. He cited an example that a permanent worker who earned about the cedi equivalence of 900 dollars a month was likely to receive half of that amount under contract mining when engaged on a fixed term.

Prince William Ankrah regards contract employment in the mining sector as a growing phenomenon that cuts across national borders. “The labour relations landscape in Ghana has over the years permitted contract employment and that has penetrated into the mining sector” he raised the worry. What this new phenomenon seeks to do is to shift employment from regulated conditions of service to a more loose-end conditions of service and to that extent workers’ purchasing power may reduce by 30-40 percent. Operating companies will therefore want to cut cost on labour which is sustainable to their gold curve logic and which could make the company afloat and attractive on the market. “The best approach is that unions that are confronted with similar hurdles must really put the synergy and launch a campaign advocacy so that in terms of our labour law review we can seriously visit such clauses of that nature that looks inimical to the plight of working people in this country ” he reiterated.

CONTACT MINING AND WAGES

In a research study by Abdul Moomin Gbana of the Ghana Mine Workers Union, it was revealed “that while standard workers in the mining sector receive salaries appropriate to their grades or within ranges to their job classification on established pay structures and also benefit from either a service or merit increase every year depending on a worker’s performance, non-standard workers have an imposed arrangement where the employer unilaterally decides the worth of a job and assigns a salary without recourse to the concerns and interest of the individual worker.”

Again, his study established that while standard workers have their salaries reviewed annually through collective bargaining, non-standard workers barely get any increase on their salaries except out of the magnanimity of the employer. In such magnanimous situations, it is unilaterally determined and often times unfavourable to the non-standard worker. In a 2016 Salary Data of both standard and contract workers in Ghana’s mining sector, as analysed by the Ghana Mine Workers Union, it was revealed that contract workers earn averagely 17% less than their permanent counterparts.

“I am a Senior Geologist and I have never gotten the opportunity to negotiate my salary or been involved in the determination of my salary at any stage in the last five years. Any time my contract expires and it’s being renewed, I am placed on the minimum entry point of my job grade. In this era of unemployment, you complain at your own peril because there are others out there, ready to take even less and so you have no choice but to accept the offer as it is,”  a contract worker laments.

CONTRACT MINING AND UNIONISATION

But can workers be able to organise themselves as a union under contract mining? Prince William Ankrah strongly argues that the laws of Ghana do not say contract employees cannot organise themselves as a union. And so he believes that they can still organise contract employees under their union even though contract employment is not clearly defined under the laws of Ghana. But on the part of Labour Policy International, any attempt at introducing new employment model such as contract mining will be a violation of ILO Convention 87 which guarantees the protection of the right of workers to form association and organise. The basis of his claim is that under contract mining workers lose their collective bargaining power and are treated on individual basis with respect to service conditions.

MINE WORKERS IN DISPUTE AGAINST EMPLOYERS

Ex-workers of AGAG vrs Management

But then the emerging trend in the changing employment model in the Ghanaian mining sector is beginning to cause serious havoc and labour dispute with respect to redundancy is very obvious as such. In the case of AngloGold Ashanti, a group of 3900 ex-workers are intensely demanding a “special compensatory pay” that they allege was part of an “Unprecedented Negotiated Agreement” signed in June 18, 2013.  AGAG began a comprehensive and elaborate retrenchment programme that saw the laying off of about 4000 permanent workers spanning from 2013 to 2014. The programme was to obliterate all traces of permanent jobs, replace worker’s collective bargaining agreement and cruelly enforce a new employment model where workers will be subject to contract arrangement involving third party firms.

Besides the redundancy pay required of the company in accordance with section 65 (2) (b) of Ghana’s Labour Act (2003) Act 651, these group of aggrieved workers allege that the company further agreed to pay the “special compensatory package” as a “thank you” for their long immense contribution to the growth of profit of the company. According to the terms of this purported agreement, employees who have worked in the company for 1 year to 9 years shall be entitled to receive $60,000 US dollars as Special Compensatory Pay. Those who worked for 10 – 19 years were entitled to receive $100,000 US dollars and those with 20 years and above were to be paid $125,000 US dollars. Meanwhile senior officers like managers, senior managers, directors and vice presidents were not part of the compensation. Their compensation was to be fixed at the discretion of the Board of Directors (high echelons) of the company at the Headquarters in Johannesburg in South Africa. The aggrieved ex-workers have expressed their readiness to appear before the management of the Company or any investigative body to narrate some of their ordeals suffered at the hands of the company regarding their retrenchment.

But the management of the company in a responds letter to Labour Policy International (LPi) – representing these aggrieved workers dated January 2, 2019 and signed by its Head of Legal and Corporate Affairs, Juliet Manteaw-Kutin, denied of any retrenchment exercise in 2013 but could only confirm 2014. According to the company, it has fully discharged its duties with respect to the retrenchment. A Labour Policy Analyst observing the situation says AGAG may inadvertently omitted in paying the workers the legally agreed special compensation. In his view the company’s position in not recognising its own actions in 2013 raises serious credibility issues because for them not to be aware of any redundancy in 2013 raises questions about how redundancy letters were issued to some workers in 2013. Sources also reveal that the company may have not sought consent from the Chief Labour Officer of the Labour Department at the Ministry of Employment and Labour Relations, in accordance with the law, if indeed the redundancy only occurred in 2014.

As a result, the ex-workers dragged the company to the National Labour Commission for failing to fully satisfy them according to the terms of their negotiated Collective Agreement (CA).  On Wednesday 24th October 2018 the Commission had a sitting to hear the complaint. According to the ruling of the Commission dated 28th January 2019, submitted in writing to parties, the Ghana Mine Workers Union (GMWU) is the appropriate body to file the complaint in particular instance on behalf of the workers, if there is a case of under payment, because the negotiated agreement was signed between AGAG and GMWU (representing the workers). It therefore dismissed the case on grounds of “wrongful procedure” because the workers did not bring GMWU to represent them at the hearing. But at the moment what this ruling does is to raise two preliminary interrogative issues. Firstly are the workers not having the right to represent themselves in the hearing at the Commission though their Union leaders represented them in the negotiations? Secondly a purported circular by AGAG on 26th October 2018 announcing to its employees that the complaint by the ex-workers have been dismissed by the Commission “without any merit” unusually preceded by 3 months before the announcement of the Commission’s ruling. How did AGAG come to the notion in advance, preceding the Commission’s own ruling, that the complaint have been dismissed without merit, especially when the merit of the case was not heard at sitting?

Moreover on the matter of whether a redundancy was carried in 2013 or not, there are proof of documents circulating that AGAG declared some of the workers redundant in the year 2013. Mr John Appiah-Ntim (Agt No. 6114) formerly of the Finance Department of the Company was declared redundant on 30th September 2013 with his redundant letter not stipulating any package of special compensation. The question therefore to be raised is if the redundancy programme was carried in 2014 only what formed the legal basis for the redundancy in 2013 amongst which several workers were affected?

As an umbrella organisation for all mine workers in Ghana, Ghana Mine Workers Union, holds an undismayed position that there was nothing like special compensatory pay in any of the negotiations with AGAG. According to them four separate MOUs were signed on 18th January 2013, 28th August 2013, 25th October 2013 and 15th September 2014 of which never stipulated any sort of special compensation. They allege that documents being circulated by the ex-workers as “Unprecedented Negotiated Agreement” is a complete forgery that needs criminal investigations. As it stands now, the workers have filed a complaint to its Head Office based in South Africa, raising issues of human right violations as a result of the redundancy exercise.

Workers of Goldfields vrs Management

Apart from AngloGold Ashanti’s redundancy debacle, a group of workers in Goldfields Ghana Ltd also suffered a similar situation at the hands of their management. On March 2nd 2018, an Accra High Court dismissed an injunction application filed by Ghana Mine Workers Union representing workers of Goldfields Ghana Ltd. The workers demanded a declaration that the redundancy programme instituted by the Chief Labour Officer was null and void. The workers’ grief had to do with a decision by their management to shift from owner mining to contract mining which had partly led to the decision of the lay-off.

Despite the ruling of the court the workers embarked on a protest in Tarkwa to express their displeasure against the decision of their management. As a result seven (7) workers were picked up by a combined team of Police and Military personnel numbering about 200. Local news reported that some of the workers claimed the management of Goldfields has been coercing them with the military to sign the severance agreement. The demonstrating workers blocked all access to the Tarkwa mine thereby preventing other staff from going to work. The joint Police and Military personnel had to fire tear gas to disperse the crowd. Leaders of GMWU registered their displeasure about the actions of the security personnel who not only arrested workers and fired tear gas but physically assaulted some workers with four of them sustaining injuries. The crises in Tarkwa did not leave out the participation of residents who also in January 19, 2018 embarked on a protest against Goldfields Ghana Limited for shifting from ownership mining to contract mining.

Occupational Risk awaiting contract Workers

With the sense of insecurity and obscure nature of the terms in contract employment, many mining companies are most likely to get away with the occupational risks associated with contract mining. For instance, on Saturday April 2, 2018, a fatal accident claimed the lives of six (6) workers of Newmont Ghana Gold Limited (NGGL) in the Ahafo mines at Kenyasi No.2. These workers together with four (4) others who suffered injuries were contract workers of Consar Company Limited, a sub-contracting firm under DRA Ghana Limited (agent of NGGL) which had been contracted to construct a reclaim tunnel roof at the Ahafo Mill Expansion Project. The structure collapsed and fell on the workers whilst they were on site.

In a Government’s report issued after instituting an enquiry, under the auspices of the Inspectorate Division of the Minerals Commission, into the multiple fatal accidents that took away the lives of the 6 workers at the Ahafo Mine, it came up with several findings which bordered on design, operational and “managerial failures” leading to the fatalities and casualties. A statement on the report from the Ministry of Lands and Natural Resources could have elaborated on those managerial failures on the part of the contracting firm, DRA Ghana Limited, but it did not because the terms of contract employment upon which these workers were employed were not of intensive scrutiny. Despite this missing link the investigative team recommended heavily that NGGL Ahafo Mine should suspend DRA Ghana Limited from all their activities at NGGL Ahafo Mine for failure to ensure the absolute health, safety and security of their contractor employees and therefore in breach of Regulation 553, LI 2182 of 2012.

Amongst other penalties DRA Ghana Limited was dismissed from undertaking any construction project management on any mining site in Ghana for their blunt disregard for safety. DRA Ghana Limited was also fined US$10,000 for operating at the Ahafo site without Mining Services Operation Permit (breach of Regulation 8(4 and 5) LI 2182 of 2012) and for each day that the Company had operated without the Mining Services Operating Permit, an additional fine of US$200 was imposed. They were to pay an additional fine of US$2 million.

In the case of Newmont Ghana Gold Limited it was fined US$10,000 for failure to ensure that DRA Ghana Limited obtains a Mining Services Operating Permit prior to commencing operations at the Ahafo Site (breach of Regulation 8(4 and 5) LI 2182 of 2012) and for each day that the Company had operated without the Mine Support Operating Permit, an additional fine of US$200 shall be imposed. They were to pay an additional fine of US$500,000 whilst Consar was asked to pay US$200,000.

What comes out apparently from these corporate lapses is the failure of these mining companies to ensure conformity to regulatory laws especially with regards to the protection, safety and health of contract employees. The role of Labour Unions and the power of a collective bargaining agreement could have salvaged the situation by ensuring strict operational enforcement of workers’ protection by sub-contracting firms.

Conclusion

In light of all these events, Ghanaian mine workers are being denied of certain protection as a result of the interest of powerful corporate players and from a Government that is almost weak in ensuring their protection. The denial of protection is embedded in the shift to contract mining. One undeniable fact is that wages of workers are seeing a decline under contract mining. Unionisation is uncertain under contract mining. The future of work of contract workers is at serious risk since there is no guarantee of tenure, dignity and reasonable income under the new model. Mining Companies want to push their burden of cost labour efficiency to contractors and these contractors are desperately in need of jobs and so that allows some opportunity of short-changing workers’ pay.

However, with the rising labour dispute emerging from shift to contract mining, union leaders are unable to mount coherent resistance against this emerging employment system and are therefore losing the battle. No matter how fast-driven it may seem, signs of the dangers of contract mining should have prompted the Ghana Government and Union leaders especially when local workers began to raise hell from the effect of redundancy package in negotiated agreements with mining companies.

From interviewed perspectives, there is an urgent need for some labour reforms to deal with casualization in a more focused manner. For instance, the law needs to deal with the problem of insecurity in this short-term employment model. Regulatory gaps should be plugged in order to restrict the use of contract employment considering its increasing trend in Ghana’s mining sector. Moreover, Government must negotiate well with mining companies to guarantee workers’ security in investment packages offered by mining companies. It is important to also ensure that all workers (standard and contract) have access to freedom of association and the right to collective bargaining. Similarly, it is also significant to promote inclusive forms of collective bargaining that promote equality of treatment for all workers regardless of status.

 

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