Strategic Environmental Assessment and the Sustainable Development of a Ghanaian Integrated Aluminum Industry


By Terrence Neal*

In Ghana, President Nana Akufo-Addo’s Integrated Aluminum Industry Plan (the “Plan”) has sparked a contentious debate about how to exploit bauxite – the primary ore used to make aluminum – in a manner that will not jeopardize the country’s sustainable development. The Plan calls for the construction of mines to triple bauxite output, facilities, such as alumina refineries, to add value to the raw bauxite, and infrastructure to transport the bauxite.[1] On the one hand, its implementation could provide much-needed economic opportunities, such as jobs and fiscal revenues. On the other hand, however, mining and other activities could degrade soils, pollute drinking water sources, and displace communities from their ancestral lands.[2]

Due to the great environmental and social risks, the United State Forest Service, environmental organizations, and communities located near designated project sites have urged the Ghanaian Government to undertake a strategic environmental assessment (SEA) of the Plan.[3] A SEA would provide the best opportunity to understand the likely costs and benefits of the Plan before projects are built on the ground. This, in turn, would permit decision-makers to revise it to avoid unsustainable development scenarios.

Nonetheless, the Government, attracted by the potential for economic reward, has ignored the calls for a SEA, and taken no concrete steps to create a plan to mitigate or manage environmental impacts. Instead, government officials, including the president, are courting investors so that mining and the construction of key infrastructure can commence as soon as possible.[4] In anticipation of activities commencing in the near term, the president has also committed to paying back a $2 billion USD Chinese infrastructure loan with revenue raised from the sale of refined bauxite.[5]

These actions are significant and concerning because the negative impacts of mining and other activities in the aluminum value-chain can be severe and last for many generations. This article argues that: (1) an SEA of the Integrated Aluminum Industry Plan is necessary to ensure that government decision-makers avoid unsustainable development outcomes; and (2) that the Ghanaian Environmental Protection Agency (EPA) should require a SEA of the Plan pursuant to its authority under national law.

Weighing the Costs and Benefits of The Integrated Aluminum Industry Plan

For President Nana Akufo-Addo, a key to advancing his country’s development is the exploitation of natural resources. Accordingly, since taking office in 2017, the he has been pursuing a plan to leverage Ghana’s largely untapped bauxite deposits.[6] The primary components of the Integrated Aluminum Industry Plan are: (1) the development of bauxite mines at three locations; (2) the construction of an alumina refinery, where bauxite will be turned into alumina; (3) the transformation of alumina to aluminum at a government-owned smelter; (4) the provision of reliable and affordable energy to the smelter; (5) the construction of railway infrastructure between the mines and the smelter; (6) and the establishment of an industrial park dedicated to manufacturing aluminium-related products.[7]

Since aluminum is a key material for meeting the manufacturing and energy needs of the future, there is money to be made from Ghana’s bauxite resources. The Government estimates that implementing the Plan will create hundreds of jobs, and generate fiscal revenues that can be used to meet the country’s multi-billion dollar USD infrastructure needs.[8] In fact, Ghana has already entered into a resource financed infrastructure deal with Sinohydro, a Chinese state-owned enterprise.[9] Pursuant to the agreement, Sinohydro will construct $2 billion USD worth of infrastructure projects.[10] In exchange, the Government intends to pay for the work with receipts from the sale of alumina, once a refinery is constructed in accordance with the Plan.[11]

While the economic outlook that the Government paints is positive, the Plan does not adequately take into account likely environmental impacts, or reflect how the impacts may be managed or avoided. Bauxite mines are generally large-scale operations that excavate the entire surface layer of the ground to reach the underlying bauxite.[12] Due to the nature of the operations, mining can cause contamination and overuse of water resources, impairment of soil quality, widespread deforestation, and respiratory issues due to the spread of bauxite dust.[13] According to environmental groups and nearby residents, Ghana’s existing colonial-era mine at Awaso has already made it difficult for local communities to access clean water and razed a once lush forest.[14] In 2018, fearing that their communities may one day face the same fate, a coalition of Ghanaian citizens walked for six days from the Eastern Region of Ghana to Accra to protest the Government’s intentions to mine bauxite in Atewa Forest Reserve.[15]

For alumina refineries, the most significant risk is the highly corrosive and saline red mud that the refineries produce as waste.[16] The mud is typically held in lake-sized holding ponds that can leak, overflow or totally collapse when there are heavy rains.[17] When such accidents materialize, the impacts can include contamination of water sources used for drinking and irrigation, soil salinisation, which renders soil unusable for agricultural activities, and the destruction of aquatic environments.[18] Moreover, aluminum smelters emit potent greenhouse gases that contribute to global warming and other pollutants that can lead to a range of human health issues.[19]

Despite the many risks, the Plan conveys a disregard for or an underestimation of the environmental and social consequences of exploiting bauxite. For instance, it sites bauxite mines and an alumina refinery[20] in or around the Atewa Forest Reserve, which is a unique ecosystem of international importance.[21] The forest contains over 2,365 plant and animal species,[22] is the headwaters for rivers and streams that supply drinking water to over five million Ghanaians,[23] and provides resources, such as firewood, herbal medicines, and food, for bordering communities.[24] If mines and a refinery are placed there, the forest and the benefits it provides could be lost forever.

SEA as a Tool to Promote Sustainable Outcomes

To revise the Integrated Aluminum Industry Plan so that it reflects a sustainable balance between environmental, social, and economic considerations, it will be necessary for government decision-makers to evaluate the long-term costs and benefits of developing an integrated aluminum industry. At this stage, the best tools at their disposal to accomplish such an assessment are Ghana’s environmental laws and regulations. Pursuant to the Environmental Protection Act and the Environmental Assessment Regulations, EPA may require a SEA for government plans or programs that are likely to adversely affect the environment.[26]

SEA is a formalized process “for evaluating the effects of proposed policies, plans and program[s] on natural resources, social, cultural and economic conditions. . . .”[27]  In terms of substance, the process includes a comprehensive study of costs and benefits, comparative analysis of a range of development scenarios, including scenarios where no projects are undertaken, and identification of measures to mitigate and manage adverse impacts.[28] Public participation throughout the process is also fundamental.[29]

Although, by law, it will be mandatory to conduct project-specific environmental impact assessments (EIAs) for many of the components of the Plan, these types of assessments do not negate the need for or usefulness of a SEA. In comparison to SEAs, which are broad, high-level assessments, EIAs take place in an environment where “the at policy or planning level, that could influence the type and amount of projects that are actually built on the ground, have already been taken.”[30]

Equally important, project EIAs, unlike SEAs, are ineffective for addressing the cumulative impacts of projects.[31] They are concerned with one specific project (i.e. assessment of one particular mine or refinery), and under Ghanaian law, EIA is not required for certain projects that do not meet a certain size threshold.[32] SEA would make up for these shortcomings by “provid[ing] early warning of large-scale and cumulative effects, including those resulting from a number of smaller-scale projects that individually would fall under thresholds for triggering a project EIA.”[33]

Applying Ghana’s Environmental Assessment Laws to the Plan

In the case of the Integrated Aluminum Industry Plan, the SEA laws should apply. Similar to the oil and gas sector, for which the Government has conducted a SEA,[34] the aluminum sector presents major environmental risks at every stage of production.[35] Additionally, development is planned to take place in and around sensitive sites, like Atewa.

Additionally, the timing is appropriate to conduct a SEA. The purpose of SEA is to inform and “improve, rather than just analyse, the policy, plan or program[],” once it is set in stone.[36] It is best practice to begin assessments “as early as practicable in the process of policy or plan formulation.”[37] Internalizing this principle, Ghana’s previous government initiated a SEA of the oil and gas sector “to have a clear understanding of the opportunities and risk involved in opening up the Voltaian for future oil and gas development activities,” before any exploration activities began.[38]

Accordingly, the Plan is more than ripe for assessment. The Government has set out its primary components, and a number of actions have already been taken to advance the plan. For example, in 2019, the Ghana Integrated Aluminum Industry Development Corporation (GIADEC) was established by legislative act with a mandate to “focus on the rapid, but controlled and responsible development of the integrated aluminium industry. . . .”[39] GIADEC is in the process of soliciting bids for investment in mining, refining and smelting,[40] and intends to issue all of the necessary permits to begin mining at Atewa by the end of January 2020.[41] The Government has also hired SRK Consulting to develop a mining plan for the Atewa area.[42] As a result of these and other actions, a senior government official expressed that he imagined that a SEA would have been initiated by now, and doesn’t know what the government is waiting on.[43]

By undertaking a SEA, the Government could prevent costly mistakes by eliminating unsustainable options before the plan is fully executed,[44] and identify an optimal mix of aluminum industry projects.[45] In light of their findings, decision-makers could revise the plan to forego development in priceless areas, such as Atewa Forest Reserve. They could also develop appropriate mitigation and environmental management standards to maximize returns from bauxite and job creation, while minimizing the impacts of projects on communities and ecosystems.

Conclusion

Before the Government takes any more steps to implement the Integrated Aluminum Industry Plan, EPA should require a SEA. In carrying out the SEA, the Government should strive to adhere to international standards and best practices. In particular, the SEA process should provide civil society organizations and communities that are likely to be impacted by projects an opportunity to share their perspectives and help shape the scope of the assessment. Additionally, the Government should consider development scenarios that do not include the siting of mines or a refinery in the vicinity of the Atewa Forest Reserve; undertake a thorough cost-benefit analysis that takes into account the benefits provided by ecosystem services; and seek to identify how government and industry can mitigate and manage environmental risks.

It is essential that the Government appreciates that a SEA is not simply a “box-checking exercise,” but rather an opportunity to improve the Plan to achieve the best possible outcomes for the environment and the Ghanaian people.

 

* Terrence Neal (J.D., Harvard Law School ’19) was a Publications Editor of the Harvard Africa Policy Journal for the 2018-19 edition. This research was made possible with the support of the Orrick Fellows Program.

[1] Ken Ofori-Atta, Ghanaian Minister for Finance, The Budget Statement and Economic Policy of Ghana for the 2017 Financial Year at 151-52, https://www.mofep.gov.gh/sites/default/files/budget-statements/2017-Budget-Statement.pdf; see also Moses M. Dzawu, Ghana Seeks Investors to Mine Untapped Bauxite Sources, Bloomberg (22 May 2019), https://www.bloomberg.com/news/articles/2019-05-22/ghana-seeks-investors-to-mine-bauxite-to-fund-infrastructure.

[2] See generally World Wildlife Fund (WWF), Boom in Raw Materials: Between Profits and Losses (Oct. 2018); see also JP Casey, US urges caution in plan to mine bauxite in Ghana’s Atewa Forest, Mining Technology (30 May 2019), https://www.mining-technology.com/.

[3] See Casey, supra note 2; Ghana A Rocha, Press Statement: Environmental NGOs Comes Strongly On Gov’t For ‘illegal’ Activities in the Atewa Forest (4 Jun. 2019), https://ghana.arocha.org/news/environmental-ngos-comes-strongly-on-govt-for-illegal-activities-in-the-atewa-forest/.

[4] See Dzawu, supra note 1; Ghana is ready for business’ – Akufo-Addo to Maltese companies,

Graphic (26 Mar. 2019), https://www.graphic.com.gh/news/general-news/ghana-news-ghana-is-ready-for-business-akufo-addo-to-maltese-companies.html.

[5] See Master Project Support Agreement Between Ghana and Sinohydro Corporation for Construction of Priority Infrastructure Projects (May 2018); Mid-Year Fiscal Policy Review of the 2018 Budget Statement and Economic Policy at 40, 51.

[6] See Akufo-Addo’s 2019 State of the Nation Address (Full Statement), Graphic Online (Feb. 2019), https://www.graphic.com.gh/news/politics/ghana-news-akufo-addo-s-2019-state-of-the-nation-address-full-statement.html.

[7] The Budget Statement and Economic Policy of Ghana for the 2017 Financial Year, supra note 1, at 151-52.

[8] See The Budget Statement and Economic Policy of Ghana for the 2019 Financial Year at 194.

[9] See supra note 5.

[10] Id.

[11] Id.

[12] International Aluminum Institute (IAI), Sustainable Bauxite Mining Guidelines (SBMG) at 6 (May 2018), http://www.world-aluminium.org/media/filer_public/2018/05/18/170518_sbmg_final.pdf.

[13] See WWF, supra note 2, at 34-50.

[14] A Rocha Ghana, Video: Don’t Mine Bauxite Inside Atewa Forest, https://ghana.arocha.org/resources/video-dont-mine-bauxite-inside-atewa-forest/; Shola Lawal, Is endangering Ghana’s most important ecosystem a price worth paying for a multi-billion-dollar loan ?, Equal Times (Feb. 2019), https://www.equaltimes.org/is-endangering-ghana-s-most#.XLoWU9VKGu4.

[15] See Concerned Citizens of Atewa, Petition: Do Not Mine Bauxite in Atewa. (22 Mar. 2018), https://ghana.arocha.org/wp-content/uploads/sites/15/2018/03/Nana-Addo-Petition.pdf.

[16] See WWF, supra note 2, at 50; Ken Stanfrod, Red Mud – Addressing the Problem, Aluminum Insider (Nov. 2016), https://aluminiuminsider.com/red-mud-addressing-the-problem/.

[17] See Amnesty International, Don’t Mine us out of Existence Bauzite Mine and Refinery Devastate Lives in India at 45-57, https://www.amnesty.org/download/Documents/36000/asa200012010en.pdf.

[18] Id.; WWF, supra note 2, at 50.

[19] See WWF, supra note 2, at 51.

[20] The Budget Statement and Economic Policy of Ghana for the 2018 Financial Year at 146.

[21] IUCN, A Rocha Ghana & IVM Institute for Environmental Studies, The Economics of the Atewa Forest Range Ghana (2016), https://ghana.arocha.org/wp-content/uploads/sites/15/2016/11/Atewa-brochure-compleet-compressed1.pdf.

[22] See A Rocha Ghana, The Biodiversity of Atewa Forest Research Report at 15 (Jan. 2019).

[23] IUCN, supra note 21, at 10.

[24] Id. at 162.

[25] Anonymous Ghanaian Government Official. Interview by Author, Accra, Ghana (Mar. 2019); Anonymous Ghanaian Government Attorney; Written Response Interview by Author (Mar. 2019).

[26] See Act 490, Environmental Protection Act (1994); L.I. 1652, Environmental Assessment Regulations (1999); Anonymous Ghanaian Government Official. Interview by Author, Accra, Ghana (Mar. 2019); Anonymous Ghanaian Government Attorney; Written Response Interview by Author (Mar. 2019).

[27] Int’l Ass’n for Impact Assess., Strategic Environmental Assessment, https://www.iaia.org/wiki-details.php?ID=24; see also Ghana EPA, Preparation of an Implementation Framework for Operationalizing SEA Practice in Ghana

at 13-14.

[28] UN Environment Programme (UNEP), EIA and SEA: Towards an Integrated Approach (2004), https://unep.ch/etu/publications/textONUBr.pdf.

[29] Id.

[30] Implementing SEA (eds. M. Schmidt & L. Knopp), in Environmental Protection in the European Union, vol. 2, at 6 (2004).

[31] Id.

[32] See L.I. 1652, Environmental Assessmet Regulations (1999).

[33] UNEP, EIA & SEA, supra note 28, at 86.

[34] See Netherland’s Commission for EA, SEA for Ghana’s Oil and Gas Sector (May 2012), https://www.eia.nl/docs/mer/diversen/case_sea_ghana_may2012.pdf; Government of Ghana, Report on the Launched SEA on the Voltaian Basin (Feb. 2016), http://www.ghana.gov.gh/index.php/media-center/115-mesti/2520-report-on-the-launched-of-strategic-environmental-assessment-on-the-voltaian-basin-february-29-2016.

[35] See generally WWF, supra note 2.

[36] Implementing SEA, supra note 30, at 7.

[37] UNEP, EIA & SEA, supra note 28, at 102.

[38] See Report on the Launched SEA on the Voltaian Basin, supra note 73; Residents Around Voltaian Basin Assured of Comprehensive Environmental Policies, Reporting Oil & Gas (June 2016), http://www.reportingoilandgas.org/residents-around-voltaian-basin-assured-of-comprehensive-environmental-policies/.

[39] The Budget Statement and Economic Policy of Ghana for the 2019 Financial Year at 119; see also Get Ghana a vibrant Aluminum industry – Akufo-Addo to GIAC Board, Ghana Web (Mar. 2019), https://www.ghanaweb.com/GhanaHomePage/business/Get-Ghana-a-vibrant-Aluminum-industry-Akufo-Addo-to-GIAC-Board-727437/

[40] Ghana Ministry of Finance, Mid-Year Fiscal Policy Review of the 2019 Budget Statement & Economic Policy (Jul. 2019), https://www.mofep.gov.gh/sites/default/files/budget-statements/2019-Mid-Year-Budget-Statement.pdf.

[41] U.S. Forest Service, Technical Consultation on Proposed Bauxite Mining in the Atewa Forest Reserve: 25-29 March 2019, at 2 (Summary Report, 1 May 2019), https://citinewsroom.com/wp-content/uploads/2019/05/Final-USFS-Atewa-technical-mission_summary-report-1.pdf

[42] Id.

[43]See Anon. Ghanaian Government Official, supra note 26.

[44] See OECD, Applying SEA: Good Practice Guidance for Development Co-operation at 45 (2006).

[45] See id. at 43-44.

Photo Credit: Atewa.org, https://atewa.org/index.php/afl/#biologicalassets.

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