Dear Chairman Hu Huaibang,
Re: Social and environmental risks of the proposed bauxite development in Ghana’s forests to be funded by the China Development Bank
We, the undersigned, need to raise some urgent concerns with you regarding the agreement between Ghana and China for the Government of the People’s Republic of China to support bauxite development in Ghana that, as we understand, is to be potentially funded by the China Development Bank at USD 10 billion[i]. We also understand that the project’s key developer, the China Railway Engineering Corporation, has received funds for overseas projects in the past.
First, we applaud the China Development Bank’s signing of the UN Global Compact, and its membership of the United Nations Environment Programme’s (UNEP) Finance Initiative, both designed to ensure signatories take a precautionary approach to development projects so there are no negative impacts on the environment and people, especially affected communities. UNEP FI members also commit to best environmental management practices, risk assessments and management, and the integration of social and environmental considerations in all operations and decisions. The ‘great emphasis’ the Bank places on environmental protection in its core values[ii] is also highly commendable. Most specifically, the Bank guides the enterprises it works with to manage their overseas projects “according to international ecological principles and regulations”. We take this to mean agreements such as the UN Convention on Biological Diversity ratified by the Government of Ghana in 1992. The Bank’s 2015 Sustainability Report is also positive, including an objective to “Dedicate to green development and promote ecological civilization”, including environmental protection[iii].
We are also aware that the China Development Bank is regulated by the China Banking Regulatory Commission and its mandatory ‘Green Credit Directive’. This obligates all China’s banks to: ensure the projects they finance abide by applicable laws and regulations on environmental protection, land, health and safety of the country or jurisdiction where the project is located; be consistent with international best practices and standards; “undergo environmental and social risk assessments at all stages; and for credit to be suspended or terminated where major risks or hazards are identified”[iv]. The Bank’s Board of Directors is also obliged to promote environmental protection and sustainable development in the projects it chooses to fund. This Green Credit Directive has been commended as one of the most advanced and progressive banking regulations in the world, which is really something to be proud of[v].
We find it deeply worrying, after all these good intentions, that bauxite mining beneath the forests of Ghana agreed in a MoU between the Government of the People’s Republic of China and the Government of Ghana will potentially be financed by the China Development Bank[vi]. For this project, major risks and threats exist for both people and the environment[vii], which we would like to make you aware of.
The bauxite development MOU identifies the Kibi and Nyinahin bauxite deposits for mining under the Atewa and Tano Offin forest reserve. The Atewa Forest, one of Ghana’s last remaining intact forests, is an area of unique and very complex ecosystems with rich combinations of species found nowhere else on Earth[viii]. In recognition of this forest’s unique importance, it has various official designations including National Forest Reserve in 1926, Special Biological Protection Area in 1994, Hill Sanctuary in 1995, one of Ghana’s 30 Globally Significant Biodiversity Areas in 1999, and Important Bird Area in 2001. The Tano Offin Forest Reserve, Ghana’s fourth largest Globally Significant Biodiversity Area, contains similarly important biodiversity and species richness. Species listed as Critically Endangered on the International Union for the Conservation of Nature’s Red List of Threatened Species have been identified in the Atewa Forest and many in the Tano Offin, but exist in very few, if any, other places. These areas are thus extremely special. And, because of their rich biodiversity and high numbers of endemic species, West African forests including the Atewa and Tano Offin Forests have been designated as one of the world’s 34 Global Biodiversity Hotspots. Our concern is that bauxite development will decimate these forests, as well as the rich biodiversity and livelihoods they support. When these species are lost, they are gone forever. We shall never get them back again; pictures in books will be all that remain.
Besides the huge biodiversity value of these two forests, there is also their crucial role in water provision for Ghanaians. The headwaters of the River Offin, a protected area because of the ecosystem services it provides, are in the Tano Offin Forest Reserve and would be threatened as a source of clean water if bauxite mining were to take place there. The same is true of the Atewa Forest where the headwaters of the rivers Ayensu, Densu and Birim all rise. Over 5 million people, including much of Accra, rely on these rivers to meet their daily needs for clean water[ix]. Ghana’s Environmental Protection Agency has stated that Ghana will be a water-stressed country by 2025 if nothing is done to reduce water pollution. Bauxite development will make this pollution far worse.
There are also the many other benefits of these forests that would be lost if they are exploited. A cost-benefit analysis of alternative uses of the Atewa Forest found that conserving the forest intact and creating a National Park at Atewa with a supporting buffer zone would result in a cumulative value of US$ 1,157 million over 30 years compared to the US$ 1017 million brought by mining and logging (of which 32% would be from illegal and unregulated activities, compared to 7% illegal/unregulated in the National Park scenario)[x]. Furthermore, only the National Park scenario with the supporting buffer zone will, in both economic and conservation terms, provide a long term value increase, benefiting both upstream and downstream stakeholders. Complete degradation by mining and logging will have an initial value increase followed by a constant downward trend[xi]. The bauxite in Atewa is also low grade anyway and therefore of much less value. There are also the unvalued medicinal possibilities of the forest that may contain undiscovered cures for human illnesses; the forests’ huge contribution to climate change mitigation; and the resources they provide for food security, livelihoods and other household needs for very deprived forest fringe communities.
There is also this to consider: the China Bank Regulatory Commission obligates China’s banks to abide by laws and regulations on environmental protection, land, health and safety of the country or jurisdiction where the project is located. Mining in Ghana’s Forest reserves is illegal, but companies are mining there because a verbal directive from the Ghana government in 1996 allowed mining in 2% of Ghana’s forest reserves[xii]. This 2% may have already been breached. As there is no legal instrument backing this, it is essentially illegal (see Appendix 1 for details on how this precedent came about). In Protected Forest Reserves, which include the whole of the Atewa Forest and parts of the Tano Offin Forest, mining is illegal throughout 100%. Even now, 35% of the mining in the off-reserve areas of the Atewa Range is illegal[xiii]. Furthermore, Ghana’s Constitution stipulates compliance with international laws and treaty obligations such as the UN Convention on Biological Diversity ratified by Ghana in 1992. Mining bauxite within the Protected Forest Reserves of Atewa and Tano Offin would break not only Ghana’s laws but also the Constitution, UN conventions, and the obligations under the Green Credit Directive of the China Bank Regulatory Commission.
Forest communities also do not want bauxite development in their forests. They are well aware of the devastating impacts mining has, including water and air pollution, serious health problems, and destruction of the forests they rely on for food security, subsistence and livelihood needs. They hear the empty promises the mining companies make to gain access to forest lands: promises of jobs and local development that are so rarely fulfilled. The Okyehene is the King (traditional ruler) of Akyem Abuakwa, a state that includes the Atewa Forest and has existed since 1500, long before the nation of Ghana was established. Given its preexistence, the traditional system of rule exists alongside Ghana’s democratic system of governance. Ghana’s traditional rulers are deeply revered; even politicians seek their advice because of the respect they have among their people. The Okyehene has stated categorically that he is against any form of mining in the Atewa Forest[xiv]. He is deeply concerned about forest destruction caused by mining and the resulting water and air pollution. Because of this, he formed the Okyeman Environmental Foundation and the Okyeman Brigade to help protect the forest against destruction from illegal mining and logging, and to reforest damaged areas. His wish is for Atewa Forest to become a National Park, a site for ecotourism, and a centre for education and research. As custodian, the person responsible for protecting the forestlands including Atewa Forest on behalf of his people, the wishes of the Okyehene deserve respect and fulfillment from anyone planning to develop those lands.
There are many alternatives for Ghana’s rich and biodiverse forests that, besides protecting the forests and the wildlife species, will also bring new benefits to Ghana as a nation and maintain existing benefits to the world. These include centres for ecotourism, research, education, spiritual renewal, and new medicines, while communities can benefit from forest related green development investments and diversification into traditional alternative livelihoods such as beekeeping, snail farming and organic fruit and vegetable production, sales of wood carvings, kente cloth and other traditional items to tourists, and employment in the ecotourism and research centres.
Considering the enormous importance and value of the forests both now and in the future, and the damaging impacts of mining for communities, forests, biodiversity, the climate and clean water, we find the China Development Bank’s financing of bauxite mining in Ghana’s forest reserves to be deeply concerning. We also suggest it is completely inconsistent with the Bank’s stated Green Growth core values, its claims of support for environmental protection, resource conservation and social responsibilities, its own guidance that projects benefiting from its loans should be managed according to international ecological protection principles and regulations, as well as the obligations of the Regulatory Commission’s Green Credit Directive, the principles of the UN Global Compact and its membership of the UNEP Finance Initiative. To properly fulfill these many and commendable commitments of the China Development Bank, we respectfully request that your bank officially commits to not fund any bauxite mining within Ghana’s precious forests, most especially the fully protected Atewa Forest and protected part of Tano Offin. We ask that you please urge the governments of Ghana and the People’s Republic of China that these forests be completely removed from the bauxite development MOU. We don’t want anyone looking back and saying: ‘We wish we had listened. We wish we hadn’t done that. Now the forest is gone forever’.
[i] Xinhua (2017) Ghana signs $10 bln with China for bauxite project. Xinhua News Agency, 30 June. Available online at: http://big5.xinhuanet.com/gate/big5/db.silkroad.news.cn/en/2017/0630/293212.shtml; Yieh Corp (2017) Ghana, China National Development Bank sign a MOU for $10 billion alumina project, Yieh Corp, Taiwan, 29 June. Available online at: https://www.yieh.com/news_detail.aspx?par=88183; 4-Traders (2017) CHIA BANK2 65B19: China Development Bank to Fund Bauxite Project in Ghana, 4-Traders, 29 June. Available online at: http://www.4-traders.com/CHIA-BANK2-65B19-31918684/news/CHIA-BANK2-65B19-China-Development-Bank-to-Fund-Bauxite-Project-in-Ghana-24672220/; GhanaWeb (2017) Government signs $10bn MOU with China for bauxite project – Senior Minister. GhanaWeb, 30 June. Available online at: https://www.ghanaweb.com/GhanaHomePage/business/Government-signs-10bn-MOU-with-China-for-bauxite-project-Senior-Minister-554218;
[ii] China Development Bank. Core Values. http://www.cdb.com.cn/English/qywh/khjzg/. CDB, People’s Republic of China.
[iii] China Development Bank (2015) China development Bank Sustainability Report 2015. Available online at: http://www.cdb.com.cn/English/gykh_512/ndbg_jx/ndbg2015/
[iv] China Banking Regulatory Commission (2012) Green Credit Guidelines. Available online at: http://www.cbrc.gov.cn/EngdocView.do?docID=3CE646AB629B46B9B533B1D8D9FF8C4A
[v] Hill, D. (2014) What good are China’s green policies if its banks don’t listen? The Guardian, 16 May 2014. Available online at: https://www.theguardian.com/environment/andes-to-the-amazon/2014/may/16/what-good-chinas-green-policies-banks-dont-listen
[vi] Strohecker, K. (2017) Ghana signs $10 billion MOU with China for bauxite project: Senior Minister. Reuters, 28 June. Available online at: https://www.reuters.com/article/us-ghana-china-mou/ghana-signs-10-billion-mou-with-china-for-bauxite-project-senior-minister-idUSKBN19J25V; Frimpong, D. (2017) China to fund Ghana’s bauxite project. Business Insider/Pulse.com.gh, 29 June. Available online at: http://www.pulse.com.gh/bi/strategy/mou-china-to-fund-ghanas-bauxite-project-id6918830.html. Kuma, J. (2017) Ghana Signs USD 10 Bil Bauxite Exploration Deal with China. INDVSTRVS, SOT Publications, Australia. Available online at: https://indvstrvs.com/ghana-bauxite-deal-china/
[vii] These are just a few of the media pieces expressing concerns about the threats to bauxite mining: Nyabor, J. (2017) Bauxite ‘mortgaging’: 5m Ghanaians to lose access to potable water – NGO. Citifmonline, 29 June 2917. Available online at: http://citifmonline.com/2017/06/29/bauxite-mortaging-5m-ghanaians-to-lose-access-to-potable-water-ngo/; Darfour, F. (2017) Atewa Forest and its Bauxite deposit; what you didn’t know about the $15 billion Chinese loan. 2 July, 2017, Think Ghana. Available online at: https://think.com.gh/atewa-forest-what-you-didnt-know-about-the-15-billion-chinese-loan/; Radio One Ghana (2017) We stand against bauxite mining at Atewa Forest – Arocha Ghana. Radio One Ghana, 5 July 2017. Available online at: http://radiooneghana.com/we-stand-against-bauxite-mining-at-atewa-forest-arocha-ghana/; Debrah, E.K. (2017) Atewa Forest Reserve under threat from bauxite mining – scientists fear. MyJoyOnline, 31 July 2017. Available online at: http://www.myjoyonline.com/news/2017/July-31st/atewa-forest-reserve-under-threat-from-bauxite-mining-scientists-fear.php; Patricia, M. (2017) The government proposal of bauxite mining in Atewa Forest Reserve. GhanaLive, 6 July. Available online at: http://www.ghanalive.tv/2017/07/06/government-proposal-bauxite-mining-atewa-forest-reserve/
[viii] McCullough, J., L.E. Alonso, P. Naskrecki, H.E. Wright, and Y. Osei Owusu (eds) (2007). A rapid biological assessment of the Atewa Range Forest Reserve, Eastern Ghana. RAP Bulletin of Biological Assessment 47. Conservation International, Arlington, VA. Available online at: http://centrostudinatura.it/public2/documenti/708-49176.pdf; and Rapid Assessment Program (2007). Biodiversity in the Atewa Range Forest Reserve, Ghana. Conservation International, Arlington, VA, USA. Available online at: http://www.conservation.org/publications/Documents/CI_Atewa_Ghana_booklet.pdf
[ix] IVM Institute for Environmental Studies (2016) The Economics of the Atewa Forest Range, Ghana. IUCN NL, A Rocha Ghana and IVM Institute for Environmental Studies. Available online at: http://ghana.arocha.org/wp-content/uploads/sites/15/2016/11/Atewa-brochure-compleet-compressed1.pdf
[x] Ibid; and A Rocha Ghana and IVM Institute for Environmental Studies (2016) The Economics of the Atewa Forest Range Ghana (Infographic). Available at: https://www.iucn.nl/files/publicaties/hr_infograph_poster.pdf
[xii] Government of Ghana (2001) Environmental Guidelines for Mining in Production Forest Reserves in Ghana. Available at: https://www.documents.clientearth.org/wp-content/uploads/library/2001-05-01-environmental-guidelines-for-mining-in-production-forest-reserves-in-ghana-2001-ext-en.pdf
[xiii] A Rocha Ghana and IVM Institute for Environmental Studies (2016) The Economics of the Atewa Forest Range Ghana (Infographic). Available at: https://www.iucn.nl/files/publicaties/hr_infograph_poster.pdf; and A Rocha Ghana and International Union for the Conservation of Nature (IUCN) National Committee of the Netherlands (2016). Ghana Policy Brief: The Economics of the Atewa Forest Range. Available at: https://www.iucn.nl/files/publicaties/policy_brief_ghana_final.pdf
[xiv] A Rocha Ghana (2015) Okyehene Maintains Commitment to the Environment and Decries National Attempts at Short Term Gratification. Available online at: http://www.saveatiwa.com.gh/more.php?article=Okyehene%20Maintains%20Commitment%20to%20the%20Environment%20and%20Decries%20National%20Attempts%20at%20Short%20Term%20Gratification&nid=74