By Reuben Chaku

Large scale mining generally leads to a variety of outcomes. While the proponents of mining argue that it unearths benefits like job creation and revenue generation, critics of mining on the other hand cite adverse social, economic and environmental impacts of mining activities, as well as ethical concerns associated with mining operations. Community-based concerns about mining operations have raised ethical and social justice considerations relating to human rights and consent, which generates conflict between project proponents, government, and local (host) communities.[1] It is in addressing the concerns of these critics of mining that the use of Community Development Agreement (CDA) has become a common tool. The mining industry has adopted the use of Community Development Agreement to facilitate the delivery of tangible benefits from mining operations to the host community.

In Nigeria, Community Development Agreement (CDA) is not just a moral obligation on mineral title holders, but it is a creation of law. The Minerals and Mining Act 2007 (hereinafter referred to as “the Act”) is the principal legislation regulating mining operations, administration, management, and all other related matters.

In administering the Act, the Minister overseeing mining operations, which is now the Minister of Solid Minerals Development, is empowered by Section 21 of the Act to make regulations in respect of any matter required to be prescribed by Regulations under the Act and generally for giving full effect to the provisions of the Act, including prescribing, amending or withdrawing any form that may be required under the Act.[2] Pursuant to the said Section 21, the then Minister of Mines and Steel Development, Musa Mohammed Sada under the Goodluck Jonathan administration made the Minerals and Mining Regulations 2011 (hereinafter referred to as “the Regulation”), which is the substantive Regulation in force in the mining industry. Hence, the legal and regulatory frameworks regulating mining operation in Nigeria are the Act and the Regulation.

In Nigeria, Community Development Agreements are the legal documents that properly state and define the relationships and obligations between a mining lease holder and a host community. They play the valuable role of managing the expectations of all the stakeholders like the Mineral title holder, the host community, the various tiers of government and non-governmental organizations.

Section 4 (C) of the Act epitomizes the importance of Community Development Agreements by providing that one of the key functions of the Minister is to monitor compliance with Community Development Agreements by industry operators.[3]

Section 71(1)(C) of the Act and Regulation 193 (1) of the Regulation provide that one of the pre-conditions a mineral title holder must meet before commencing mining operations is to conclude with the host community an agreement to be known as a Community Development Agreement.[4] The Agreement must be sent to the Mines Environmental Compliance Department (MECD) of the Ministry of Mines and Steel Development, and the same department must approve before it becomes effective.[5]

The Act in an attempt to buttress the regime of the CDA provides in Section 116 (1) that a mineral title holder shall prior to the commencement of any development activity within the lease area, must conclude with the host community where the operations are to be conducted an agreement referred to as a Community Development Agreement or other such agreement that will ensure the transfer of social and economic benefits to the community.

The content of CDA under the Act is so detailed that the Act expressly provides the particular issues a Community Development Agreement should address. These issues include educational scholarship, apprenticeship, technical training and employment opportunities for indigenes of the communities. Other issues are financial or other forms of contributory support for the development and maintenance of infrastructures such as education, health or other community services, roads, water and power, assistance with the creation, development and support to small scale and micro enterprises, agricultural product marketing, and methods and procedures of environment and socio-economic management and local governance enhancement.[6]

The Regulation went further to state additional issues a Community Development Agreement must address. These issues include the modalities for the monitoring and implementation of the programmes contained in the Agreement, environmental protection & compensation, conflict management or resolution, and rights of the holder in relation to the mining area.[7]

Also, the Regulation provides that the mineral title holder shall submit to the Mines Environmental Compliance Department (MECD) the implementation plan of the contents of the Community Development Agreement.[8] The mineral title holder should submit an action strategy to show the step by step implementation plan for all the projects contained in the Community Development Agreement.

The Regulations then makes provision on dispute resolution. It provides that any dispute or complaint arising from the Community Development Agreement implementation shall be referred to the Minister for amicable settlement.[9] The Minister referred to is the Minister of Solid Minerals Development.

Section 116(5) of the Act and Regulation 193 (14) of the Regulation provide duration for a Community Development Agreement. They provide that the Community Development Agreement shall be subject to review every 5 years.[10]

In relation to mineral title, Regulation 193(5) describes a Host Community as the community where the mineral title area is located or the community closest to it. Where for any reason the host community is not easily ascertainable, the Minister shall consult some certain stakeholders to determine which community is the host community.[11]

The Regulation also provides for those qualified to sign a Community Development Agreement. It provides that the signatories to the Community Development Agreement shall be persons freely chosen by the generality of the Host Community to represent them.[12] The Regulation then places a burden on the Head of the Host Community, which is that the head of the Community shall, prior to the signing of the agreement, submit to the Ministry the full names and addresses of the representatives of the Community who shall not be less than 3 or more than 7.[13]

Where in negotiating a Community Development Agreement between the Host Community and the Mineral Title Holder, the parties are unable to agree on any aspect of the Community Development Agreement, the Regulation provides that such matter shall be referred to the Minister for resolution. This is as provided for by Regulation 193 (11) of the Regulation.[14]

The major essence of Community Development Agreement is to ensure the transfer of social and economic benefits to the host community. It is provided for by the legal frameworks in the mining sector to regulate the way mineral title holders engage with communities that are likely impacted by their operations.

The above shows that Community Development Agreements are not inconsequential agreements to be entered by a mining lease holder and a host community where the former decides to execute some insignificant projects in a host community or dole out meagre sums to individuals of a host community and then expects to be appreciated for “being magnanimous” to the host community.

It is time for mining lease holders to abide by the law through properly negotiating with the host community and then agreeing on proper terms before coming up with a Community Development Agreement (CDA). The mining lease holder is also obligated to execute all the projects contained in the Agreement within the duration contained in the Agreement.

The intendment of the draftsmen of the Nigerian Minerals and Mining Act 2007 was to place a statutory burden on mineral title holders to transfer social and economic benefits to the host community in the course of carrying out mining activities.

Written By Reuben Chaku, [email protected], 08065595629

[1] Petrusevski, Luka G., “Community Development Agreements: The Hardening and Evaluation of a Norm”

(2022). Electronic Thesis and Dissertation Repository. 8879. https://ir.lib.uwo.ca/etd/8879

[2] Section 21, Minerals and Mining Act 2007.

[3] Section 4 (C), Minerals and Mining Act 2007

[4] Section 71 (c), Minerals and Mining Act 2007; Regulation 193 (1) Nigerian Minerals and Mining Regulations, 2011

[5] Section 118 (a) (iii), Nigerian Minerals and Mining Regulations, 2011; Section 193 (12), Nigerian Minerals and Mining Regulations, 2011

[6] Section 116 (3), Minerals and Mining Act 2007

[7] Section 193 (9), Nigerian Minerals and Mining Regulations, 2011

[8] Section 193 (3)(b), Nigerian Minerals and Mining Regulations, 2011

[9] Section 193 (4), Nigerian Minerals and Mining Regulations, 2011

[10] Section 193 (14), Nigerian Minerals and Mining Regulations, 2011

[11] Section 193 (5), Nigerian Minerals and Mining Regulations, 2011

[12] Section 193 (6), Nigerian Minerals and Mining Regulations, 2011

[13] Section 193 (7), Nigerian Minerals and Mining Regulations, 2011

[14] Section 193 (11), Nigerian Minerals and Mining Regulations, 2011