Month: June 2025

Living in the digital age has seen a surge in the monetisation of data, especially in the platform economy, where personal data relating to human behaviour is especially valuable. Personal data now forms an integral part of business models particularly for businesses in zero price markets. As such, businesses compete to acquire and access as much personal data as possible so as to gain a competitive advantage over their rivals. The increased use of personal data brings the intersection of the laws relating to data protection and competition into sharper focus.

Regulatory Framework

Data Protection is regulated by the Data Protection Act, 2019 (the DPA). Sections 25, 26 and 32 of the DPA provide for the principles of data protection, the rights of a data subject as well as the conditions of consent for processing data. These sections mirror articles 5, 7 and 13 to 23 of the European Union General Data Protection Regulation (EU GDPR). These provisions work towards ensuring, inter alia, that personal data is “collected for explicit, specified and legitimate purposes and not further processed in a manner incompatible with those purposes”. They also accord a data subject the right “to object to the processing of all or part of their personal data and withdraw their consent at any time”. Notably, when assessing whether consent is given freely, the Office of the Data Protection Commissioner (the ODPC) takes into consideration, among other things, whether “provision of a service is conditional to consent being given”.

On the other hand, the Competition Act, 2010 (the Competition Act) regulates competition in the market, with the Competition Authority of Kenya (CAK) established as the regulator. Focal to this article are the restrictive trade practices prohibited by sections 21 to 24 of the Competition Act. Sections 23 and 24, in particular regulate dominant undertakings and prohibit conduct which amounts to an abuse of their dominance. These sections adopt the interpretation of Article 102 of the European Union Treaty on the Functioning of the European Union (TFEU).

Abuse of Dominance

In Hoffmann-La Roche & Co. AG v Commission of the European Communities (1979) I-00461, abuse of dominance was defined as the practice of an undertaking in a dominant position to influence the structure of the market, whose result is that of hindering com- petition, through methods that depart from those which condition normal competition.

The Competition Act and the TFEU have consolidated the fol- lowing trade practices that are deemed an abuse of dominance:

i) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

ii) limiting or restricting production, market outlets or market access, investment, distribution, technical development or technological progress through predatory or other practices;

iii) applying dissimilar conditions to equivalent transactions with other trading parties;

iv) making the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject-matter of the contracts; and

v) abuse of an intellectual property right.

In Lietuvos geležinkeliai AB v Commission (2020) EU:C: 2023:12 the Court opined that “the list of abusive practices contained in Article 102 does not exhaust the methods of abusing a dominant position prohibited by EU law”. However, the abuses are largely classified as either exclusionary or exploitative in nature. Examples of exclusionary abuses are those in which a dominant undertaking enters into exclusive dealing agreements or offers conditional rebates, whereas examples of exploitative abuses include excessive pricing, price discrimination or unfair trading practices.

The Intersection

As mentioned above, the platform economy commercialises the use of personal data which brings about the interplay between data protection law and competition law. Data subjects who consent to the use of their data, are also consumers in the same respect. Whereas the ODPC is concerned with harmful privacy practices by platforms, the CAK looks out for restricted trade practices that harm the consumer or distort competition. Recently, these regulatory obligations have overlapped one another, as can be seen in the following cases:

Amazon Marketplace

Amazon plays dual roles on its platform: being a marketplace as well as an online retailer. Amazon provides a space for online retailers to sell their products while also selling its own-branded products, in competition with those online retailers. By virtue of its role as a marketplace, naturally, Amazon has access to the data of the retailers. Such data includes statistics on order and shipment numbers, the retailers’ turnover as well as their growth over the years. This data can show different strategies employed by sellers to achieve financial growth or otherwise.

Amazon is said to have used this data without the retailers’ (freely given) consent to gain a competitive advantage over the retailers as the data formed a basis for Amazon’s own business strategies. As such, in July 2019, the European Union Commission (EU Commission) launched investigations into Amazon’s conduct of using retailers’ non-public seller data. In 2022, the EU Commission is- sued a Statement of Objection. It held a preliminary view that Amazon abused its dominant position and circumvented the usual risks of competition exclusively as a result of its access to its competitors’ non-public data.

In this case however, the EU Commission did not make a final de- termination on whether the conduct was anti-competitive. Amazon offered commitments to stop using the retailers’ data prior to the completion of investigations, which the EU Commission accepted. Nevertheless, it is evident that the EU Commission is likely to deem the data breaches by Amazon as anti-competitive upon conclusion of the investigations.

Meta: Facebook Social Network

Meta Platforms, the company that houses social networks: Face- book, WhatsApp, Instagram and more recently Threads, has come under fire for data privacy breaches which have been deemed anti-competitive. Following several years of investigations, the Federal Cartel Office (FCO) in Germany found that Meta had made the use of Facebook accounts by German citizens conditional on Meta’s processing of their third-party data (which they term “off-Face- book data”). Thereafter, the FCO prohibited Meta from doing so and further ordered Meta to make it clear that the said personal data would neither be collected nor used without the consent of a Facebook user, nor will the use of the network be made conditional on consent.

Dissatisfied with this decision, Meta filed a case against the decision to the Düsseldorf Higher Regional Court. The Regional Court in turn raised concerns and saw it fit to stay further proceedings and refer a number of questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling. The crux of the matter was whether a national competition authority could find that the EU GDPR had been infringed, whilst investigating an undertaking’s abuse of dominance.

On 4th July 2023, the CJEU delivered its Judgment in Meta Plat- forms and Others v Bundeskartellamt (2023) EU:C:2023:537 and held inter alia as follows:

“It follows that, in the context of the examination of an abuse of a dominant position by an undertaking on a particular market, it may be necessary for the competition authority of the Member State concerned also to examine whether that undertaking’s conduct complies with rules other than those relating to competition law, such as the rules on the protection of personal data laid down by the GDPR.

…access to personal data and the fact that it is possible to process such data have become a significant parameter of competition between undertakings in the digital economy. Therefore, excluding the rules on the protection of personal data from the legal framework to be taken into consideration by the competition authorities when examining an abuse of a dominant position would disregard the reality of this economic development and would be liable to undermine the effectiveness of competition law within the European Union.”

Meta: Threads Social Network

July 2023 proved a busy month for Meta. Notwithstanding the unfavourable Judgment received in Meta v Bundeskartellamt, on 6th July, Meta launched a new social media network, Threads (the App) which has already received widespread scrutiny and criticism and is potentially under investigation by the US Federal Trade Commission (FTC). It is reported that sources within Meta have disclosed that they are delaying the App’s launch within the European Union due to “legal uncertainty”. This can be attributed especially to the recently released EU Digital Markets Act, which has seen Meta classified as a “gatekeeper” giving the tech giant addition- al regulatory obligations.

The App’s criticism is attached to privacy as well as antitrust concerns. To begin with, the App mandates that new users ought to have an Instagram account and users who intend to delete the App, would have their associated Instagram account deleted as well. This is an overt attempt at tying the App to Instagram, an abuse of dominance contrary to the Competition Act, TFEU and Antitrust laws globally.

With respect to privacy breaches, it has been observed that the App fails to seek users’ consent to track, collect and process sensitive personal data such as the users’ health conditions. The purpose of these activities is to sell that personal data to vendors, who would then advertise to the users medication related to their health issues. Meta has relied on legitimate interest as a reason for collecting the said sensitive personal data. However, it can be contended that explicit consent is a requirement prior to the processing of sensitive personal data, especially when the purpose for collecting the data is targeted advertising. Anything contrary to the foregoing may be deemed to be a privacy breach as well as an abuse of dominance.

The App, having been launched recently, is still under scrutiny by the global antitrust watchdogs and if the recent trend is anything to go by, sanctions from the said watchdogs would not come as a surprise.

Once the journey of life comes to its inevitable end, the task of laying one’s dearly departed to rest becomes an essential and sacred responsibility. The right to bury loved ones, grounded in a rich tapestry of cultural, religious, social and legal traditions, is a fundamental aspect of human dignity and compassion. It is a right that transcends borders, beliefs, and backgrounds, underscoring a shared value across humanity. In this article, we delve into the right to bury the deceased, exploring the legal dimensions through the precedent set by Courts in Kenya.

The Right to Bury

The right to bury is an inalienable right as human dignity demands as much – harking back to the great Greek playwright Sophocles’ play, Antigone, when in stark disobedience of Creon’s rules, Antigone insists on giving her brother, Polyneices, a decent burial, rather than have his corpse lie in the open, to be devoured by dogs and vultures. In Kenya, what has been the subject of numerous litigious proceedings is the priority given to the bearers of this inalienable right. At the heart of these type of proceedings has invariably been the spouses and kin of the deceased, each asserting their precedence over the other.

Most recently, the decision of the High Court at Nairobi (Ogola J) in Zipporah Masese Onderi v Joseph Ontweka & 3 Others (Civil Appeal No. E048 of 2023) reignited the controversy once more. Typically, the circumstances of the matter pitted the deceased’s widow, who was the Appellant, against the deceased’s brothers in a legal battle to determine the deceased’s final resting place.

In tipping the scales towards the widow, the Court held that the nuclear family of a deceased person has the priority right to bury their loved ones unless exceptional circumstances arise to render them undeserving of doing so.

Given that the likeness of the applicable customs, the Court’s decision in Zipporah Masese Onderi v Joseph Ontweka & 3 Others, was persuaded by an earlier decision rendered by the High Court in Nakuru (Maraga J – as he then was) in Oliver Bonareri Omoi & 5 Others v Joseph Baweti Orogo (2010) eKLR. The Court was once again forced to play umpire in a push-and-pull between the widower and children of the deceased and ultimately decided that the children had the priority right over the deceased’s estranged husband, who was the Respondent in the matter, to bury their late mother. In reaching its determination, the Court in Oliver Bonareri Omoi & 5 Others v Joseph Baweti Orogo was guided by the deceased’s final wishes and the nature of her relationship with her estranged husband, both of which extinguished his right as a widower to bury her.

Such has become the principle that has been pronounced by Kenyan Courts, thus putting to question the right of the kin to bury the deceased, who was also their loved one in equal measure. The precedent set by Kenyan Courts on this matter is that whereas the deceased’s

kin are indeed deserving of this right, it is however subject to an order of priority that was set out succinctly by the Court of Appeal in SAN v GW (2020) eKLR being: the spouse, children, parents and siblings of the deceased, in that order.

As demonstrated above it is pertinent to note, nonetheless, that the right to bury is not absolute. It may be extinguished by numerous factors among them being the deceased’s wishes which, though not legally binding, the Courts have refrained from overlooking, and a person’s conduct towards the deceased.

Generally, the Court has to consider all the circumstances of the case before rendering its decision on the right to bury. This was demonstrated in Samuel Onindo Wambi v COO & Another (2015) eKLR where the Court of Appeal found that although Luo customary law dictates that a wife should be buried in her husband’s home, the deceased was buried in Kakamega in line with her wishes given the ill treatment she had been subjected to by her husband’s family during and after the subsistence of their marriage.

Similarly, in SAN v GW while the Court of Appeal set out the order of priority with respect to the right to bury, it further clarified that this order of priority ought to be considered in light of the relationships maintained between the deceased and the persons claiming the right. In so doing, the Court held that while Luo customary law dictates that the first wife has the priority right to bury, the second wife’s right in this case superseded the first wife’s, given the strained relationship the first wife had with the deceased.

The Role of Customary Law

The loss of a loved one is an emotionally delicate matter that can easily lead to conflict among surviving family members. The catalyst in the ensuing conflict, at least as far as African societies are concerned, is usually the customs at play. More often than not, the surviving spouse tries to assert a position contrary to what the deceased’s customs provide for, leading to fierce opposition from the deceased’s kin.

Such was the case in the locus classicus case of Virginia Edith Wamboi Otieno v Joash Ochieng Ougo & Another (1987) eKLR, concerning a burial dispute over renown lawyer S. M. Otieno, and is thus commonly referred to as the “S. M. Otieno case”. Here, the kin’s reverence for Luo customary law was met on the battlefield by the widow’s complete disdain for it. In making arguments that Luo customary law did not apply and that the deceased should not be buried in Nyalgunga, his ancestral home, his widow, Wamboi Otieno, stated that; their marriage was governed by the Marriage Act, (Cap. 150) Laws of Kenya and not customary law, that no dowry was paid by the deceased, and that in fact, none was demanded by her parents, and that since marrying her, the deceased had practised Christianity and the Luo customs and traditions were therefore irrelevant. It was her case that the deceased had expressed the wish to be buried either in Nairobi or Matasia and that only she, and her sons, had any say in how to dispose of the remains of the deceased.

After careful consideration of the facts brought before him, Bosire J (as he then was) ordered that the deceased be buried in his ancestral home. In his disposition, Justice Bosire found that Luo customary law applied and dictates that the deceased’s final place of rest is determined by his or her family members and that this custom does not exclude women from being involved in the decision making. Accordingly, both the widow and the deceased’s kin in this case had equal right to make that call. However, because they could not reach a consensus, the Court was guided by the deceased’s wishes which stipulated that he desired to be buried next to his father in his ancestral home.

The facts of the S. M. Otieno case are strikingly similar to those in Zipporah Masese Onderi v Joseph Onwteka & 3 Others, save for the fact that Kisii customary law applied to the latter and the deceased therein had not made clear pronouncements on where he wished to be buried. In further developing the principles underpinning the right to bury, the Court found that Kisii customary law and Article 45 of the Constitution mirror each other, in the sense that they are highly protective of the basic unit of the family, which is the nuclear family.

In the same breath, Kisii customary law demands that the widow/ widower of the deceased has the priority right to bury their spouse. Given that the deceased in this case had not made his burial wishes known clearly, the Court was guided not only by Kisii customary law but also the Constitution in reaching the determination that the deceased would be buried in his matrimonial home.

It may therefore be said that the role of customary law is akin to that of a tiebreaker where the loved ones of the deceased are at loggerheads, and there being no clear line of priority being drawn. In this regard, customary law plays a persuasive role, to be weighed against other equally applicable factors such as the deceased’s final wishes and the relationship of the kin to the deceased during the deceased’s lifetime.

The Takeaway

Ironically, an individual’s right to bury their loved ones is one that has to be balanced with the very same right borne by other loved ones of the very same deceased person. It is not an absolute right as it may be overridden by other factors such as the deceased’s final wishes.

As death is sometimes sudden and untimely, it is not always possible for pertinent discussions on final wishes to be held. In such instances, the Court will, where family members are torn, decide the final resting place of the deceased under the guidance of the customary law applicable to them.

At the end of the day, the loss of a loved one remains an intensely painful experience, affecting all who are touched by its melancholic embrace. Amidst the disputes and conflicting emotions that arise, it becomes clear that the ultimate goal should transcend the battles and strife. The paramount objective lies in ensuring that our dearly departed find solace in their final resting place. In the depths of grief, it is crucial to find common ground, and embrace compassion and empathy for one another.

Nominated Senator, Crystal Asige, tabled the Persons with Disabilities Bill, 2023 (the Bill) before the Kenyan Senate on 22nd March 2023. The Bill seeks to replace the Persons with Disabilities Act (Cap. 133) Laws of Kenya (the Act), which has been in place since 16th June 2004. The Bill also intends to restructure the National Council for Persons with Disabilities (NCPWD) and provide an institutional framework for the protection, promotion and monitoring of the rights of persons with disabilities (PWDs).

The Bill is premised on Article 54 of the Constitution, which imposes an obligation on the State to ensure that the rights of PWDs are respected and upheld. The Bill also addresses the evolving needs of PWDs, ensuring that they are fully integrated in society. The Bill demonstrates Kenya’s commitment to complying with the Convention on the Rights of Persons with Disabilities by improving the standards of living and day to day activities of PWDs residing in Kenya.

The Bill was passed by the Senate on 21st February 2024 and is currently before the National Assembly for consideration. This article seeks to highlight some salient provisions of the Bill.

Greater Appreciation of PWDs’ Rights

PWDs will have the right to employment and will not be disqualified or terminated based on their disability. The Bill supports this by mandating employers to reserve at least five percent (5%) of employment opportunities for PWDs. The Bill additionally proposes that employees with disabilities serve an additional five (5) years, beyond the normal retirement age prescribed by the government. This translates to a retirement age of sixty-five (65) years for such employees with disability, as opposed to the current sixty (60) years stipulated in the Act.

The issue of termination of employment was addressed in the case Lucy Chepkemoi v Sotik Tea Company Limited (2022) eKLR where the Court noted that disability is not inability. Therefore, disability alone does not in itself amount to lack of capacity to discharge one’s professional duties, to warrant termination of employment.

Secondly, PWDs have the right to protection in all risky situations including armed conflicts, humanitarian emergencies and natural disasters. All institutions are required to obtain data relating to PWDs and share the same with agencies responsible for disaster management. In risky situations, PWDs are to be prioritised by the responding agencies, in the appropriate intervention mechanisms e.g., evacuation etc.

Thirdly, all PWDs have the right to effective access to justice on an equal basis with others. This will be done by exempting them from paying Court fees and providing them with braille services and sign language interpreters when they attend Court. The Attorney General, in consultation with the Law Society of Kenya, will also be required to develop regulations that provide free legal services to PWDs in certain situations, including matters involving infringement of their rights and fundamental freedoms.

Lastly, every PWD has the right to obtain registration documents e.g., a disability card, national identity card, birth certificate, passport etc. These documents will serve as proof of identity when a PWD seeks education, health care services and employment opportunities.

Incentives for PWDs

The Bill provides various incentives to PWDs. Firstly, an employee with a disability can be wholly or partially exempted from paying income tax on employment income. This is after an application for exemption is approved by the Cabinet Secretary responsible for matters relating to finance (the Cabinet Secretary) . Previously, a PWD could only apply for a tax exemption after undergoing a vetting process to determine if the applicant had a disability. In Issue 18 of Legal & Kenyan published in October 2023, we featured an article in which we discussed whether the tax exemption process for PWDs was superfluous. The article concluded that the vetting process was indeed superfluous as it was an unnecessary obstacle to PWDs who are seeking tax exemptions, since PWDs in seeking the exemption, would have already undergone a mandatory medical examination in advance.

The issue of vetting for purposes of exemption was addressed in HKK v National Council for Persons with Disability & Another (2023) KEHC 2418 (KLR) where the NCPWD had declined to renew the exempt status of the petitioner, under the Persons with Disabilities (Income Tax Deductions and Exemptions) Order 2010 despite having furnished the NCPWD with the required documents including a medical report certifying her disability. Consequently, the Court observed among others, that the failure by the NCPWD to renew her exemption deprived her of equal protection under the law, dignity and respect contrary to Articles 27, 28 and 54 of the Constitution.

Secondly, the Bill exempts tools and equipment used by PWDs from import duty and value added tax. This is a good addition as it makes these accessories more affordable and accessible to PWDs.

Finally, PWDs will be afforded an equal opportunity to access financial credit, for example bank loans, mortgages etc. Access to financial credit reduces dependance on others as it allows PWDs to fund their education or business ventures thereby sustaining themselves.

Enhanced Penal Consequences for Offences

Notably, the Bill has significantly enhanced protection for PWDs by augmenting the penal framework relating to offences against them, both in terms of increasing the punishment of existing offences under the Act and introducing new offences which presently do not feature under the Act. An example is the offence of concealment of PWDs. Under the Act, the penalty is only a fine not exceeding KES. 20,000. However, the Bill has increased the fine tenfold to KES. 200,000 or up to one (1) year imprisonment, or both.

There are also new offences proposed under the Bill, such as performance of a procedure by a medical practitioner, resulting in the infertility of a PWD. This offence will attract a hefty fine of up to KES. 3,000,000 or up to four (4) years imprisonment, or both. Another example is the intentional denial of food or fluids to a PWD by a person exercising care or responsibility over the PWD, which will attract a fine of up to KES. 200,00 or up to one (1) year imprisonment, or both.

Further Accommodation of PWDs

The Bill also proposes a raft of measures to further accommodate PWDs in their day-to-day life.

First, owners of public service vehicles (PSVs) would be required to modify their vehicles to suit PWDs. Once the modification is made, they may apply to the Cabinet Secretary for Finance for twenty-five percent (25%) of the modification cost. This would cushion the owners of PSVs from having to bear such costs. The proposed modifications would promote inclusion of PWDs in the transport sector and eliminate barriers that currently impede PWDs from fully enjoying public transport services.

Secondly, commercial and residential houses built by government agencies will reserve at least five percent (5%) of the units to PWDs, with favorable payment conditions like longer repayment periods.

This will address the barriers that PWDs face in the real estate market. Similarly, five percent (5%) of market stalls would be reserved for PWDs. This would foster economic independence as it would allow PWDs to engage in commercial activities.

Thirdly, all government departments would be required to have a disability mainstreaming unit headed by a member of the department. The disability mainstreaming unit would be responsible for ensuring compliance with the Bill’s provisions and discussing disability matters with the NCPWD. This would significantly contribute to the development of inclusive policies for PWDs.

Lastly, all media stations with television and radio broadcasts would, on a monthly basis, be required to allocate an hour of free airtime to discuss disability issues. This would help sensitize members of the public on disability issues and the importance of integrating PWDs in society. The NCPWD would also coordinate the publication of at least a column every month in print media on PWD issues.

Conclusion and Recommendations

Whereas the Bill marks a tremendous step in the right direction as far as enhancing PWD interests is concerned, the following proposals should be considered as the Bill undergoes scrutiny within the National Assembly.

i) The issue of vetting for purposes of registration as a PWD under the 2010 Regulations has not been addressed by the Bill. Therefore, there may be need to introduce an amendment to the Bill, to the effect that once a person has undergone a medical examination to ascertain his or her disability, there should be no further vetting undertaken by the vetting committee of the NCPWD.

ii) The Bill does not specify what the owner of a PSV who modifies his or her vehicle to accommodate PWDs should do, as far as the modification costs are concerned. It only provides that such owner shall apply to the Cabinet Secretary for twenty-five percent (25%) of the direct cost of modification. The drafters should clearly specify the nature of accommodation sought by the PSV’s owner from the Cabinet Secretary, whether a cash refund or a tax deduction etc.

iii) Whereas the Bill requires media houses to accord at least one (1) hour of free radio or television coverage on disability related issues per month, it doesn’t specify the place of streaming platforms in such coverage, noting that these platforms are increasingly becoming a source of information and interaction with the general public. Therefore, the role and place of social media should be provided for.

iv) Much as the NCPWD is obligated to ensure that at least a column is published per month on print media addressing disability matters, the Bill should consider whether social media posts fit within the scope of print media. It is noteworthy that social media is gaining traction as the new source of written information, which has, to some extent, impacted the business of traditional print media.

The mining industry continually reshapes itself in the face of market demands, technological innovations and societal expectations. The industry continues to thrive due to its ability to adapt to changing demands in environmental, social and governance (ESG) issues. ESG is therefore not new to the mining sector.

However, in recent years, there is an emphasis on sustainable and responsible mining practices due to the heightened expectations and greater involvement of investors. Investors now require key positive indicators on ESG factors. This has pushed mining companies to have bolder commitments with measurable targets in reporting progress on ESG compliance factors.

In this context, mining companies are prioritizing ESG considerations such as reducing carbon emissions, conserving water and implementing community engagement initiatives. Additionally, mining companies are demonstrating commitment to ethical practices and sustainability in order to maintain their social license to operate.

This article discusses the significant role ESG plays in the development of sustainable mining which ultimately benefit the performance of mining companies and the development of local communities.

 

Scope of ESG

ESG, as relates to business, refers to environmental, social and governance factors that companies aim to comply with, and investors consider in their investment decisions. The scope of each of the elements are:

Environmental- focuses on lowering carbon footprints, safeguarding biodiversity and optimizing the use of resources with a strong interest from investors in reducing carbon outputs and environmental conservation.

The social dimension involves engaging stakeholders and contributing to the well-being of local communities, highlighting the importance of human rights and interactions with residents as well as promotion of employee wellbeing and good labour practices.

Governance pertains to the sustainable management of resources, transparent disclosure practices and adherence to legal frameworks and good governance practices.

Consequently, mining companies must adopt operational methods that are environmentally friendly and promote sustainability. Additionally, they must cater for social needs, promote human rights and adhere to good corporate governance practices. Mining companies that effectively incorporate ESG factors into their operations are in a stronger position to attract investors.

 

Causes for Heightened Focus on ESG

Investors and lenders are increasingly focused on ESG factors when making investment decisions. Thus, to access capital, mining companies must demonstrate commitment to ESG concerns. The following are some of the general factors that have given rise to ESG compliance in the industry:

Investor attraction– Mining is a capital-intensive venture. To access funding, mining companies must demonstrate a robust commitment to addressing ESG concerns and a strong track record of ESG compliance. This is because, institutional investors consider ESG factors when making investment decisions. For example, the International Financial Corporation’s (IFC) Environmental and Social Performance Standards define standards that apply to investment decisions and are considered during credit review processes. Similarly, in certain markets, the influence of ESG rating agencies has resulted in ESG becoming a major focus in relation to IPOs for large mining companies.

Regulatory requirement– ESG requirements are finding expressions in domestic regulatory frameworks. Mining companies have no option than to comply with such regulations. Non-compliance results in heavy sanctions imposed on defaulters. For example, mining companies who unlawfully pollute a water resource beyond the level prescribed by EPA commit an offence. Social factors are covered in employment legislations while governance frameworks are dictated by corporate law and governance codes.

Marketing tool– ESG compliance is now a marketing tool to attract clients and investors. Investors are increasingly focused on ESG factors when making investment decisions, thus companies with strong ESG performance are more attractive to investors seeking sustainable and responsible investment opportunities.

Self-interest– ESG leads to long term sustainability of businesses. It is, therefore, in the interest of mining companies to adopt ESG measures to ensure sustainability of their business over a long term.

 

Ghana’s Regulatory Framework on ESG Factors & its Implementation in the Mining Industry

There is currently no composite law or regulation that governs ESG in Ghana. Nevertheless, ESG requirements in mining are supported by the existing legal framework for the mining industry including the Minerals and Mining Act and its regulations. Under the current regime, the grant of any mineral right is dependent on obtaining an environmental permit from the Environmental Protection Agency (EPA).

The grant of the EPA permit requires the submission of an environmental impact assessment and periodic reports in respect of economic activities that have an adverse effect on the environment. The EPA may also require a mining company to post a reclamation bond to secure implementation of reclamation.

To ensure standards are met and there is no threat to human life and/or the environment, there are strict requirements regarding mining activities. Additionally, relevant permits are required in respect of mining activities in a forest reserve. Regarding the social aspect, fundamental human rights are enshrined in the 1992 Constitution and enforced through various legislations. Employees have protections from unfair labour practices, and unhealthy and unsafe environments under the Labour Act.

In respect of the governance pillar, the Companies Act prescribes the structure for corporate governance, which is centred mainly on the shareholders, the board and management of the company. It allocates the role, powers and duties of each stakeholder, thereby imposing checks and balances on the exercise of power. The Act also covers the fundamental role governance plays in corporate business strategy and decision-making processes leading to profitability and growth.

The various legislations cover different aspects of ESG factors and have minimal reporting requirements. Secondly, the legislations do not provide the details required and leave out many ESG requirements to the discretion of mining companies. This has led to some mining companies resorting to box-checking of the general legislative framework rather than adopting innovative measures to achieve compliance.

Voluntary Codes/Frameworks

The major gap in ESG compliance is lack of a binding and enforceable legal framework. To fill this gap and to achieve ESG compliance, various voluntary codes are being adopted by mining companies to ensure adherence to standards in their reporting and compliance levels. The voluntary codes also help investors to measure the ESG credentials of mining companies.  The following ESG-related guidelines seek to encourage voluntary ESG-related compliance and disclosures:

Sustainable Development Goals and the Global Reporting Initiative (GRI) are the most used standards in the mining sector. The GRI is a sustainability reporting standard which mining companies in Ghana have subscribed to and covers sector-specific sustainability reporting requirements by companies across all the ESG factors.

Mining companies also observe International Council on Mining and Metals standards which provides standardized frameworks dedicated to ensuring a safe, fair and sustainable mining and metals industry.

Additionally, the standards of the Extractive Industry Transparency Initiative (EITI) 2023 has been endorsed by Ghana. It requires compliance with ESG requirements for managing mineral resources at the national level. The reporting obligations on companies is mainly on their environmental and social impacts.

The International Council on Mining & Metals (ICCM) 10 Sustainable Development Principles act as a best-practice framework for sustainable development within the mining and metals industry.

The Minerals and Mining Policy of Ghana also emphasises environmental regulation of mining activities, employment creation, and local economic development (social) which are aspects of ESG.

Though, these are voluntary codes, mining companies are taking active steps to comply with these requirements and reporting on compliance to attract investment.

Challenges of Implementation of ESG Factors

Adoption of ESG and complying with ESG factors are sustainability issues. However, there are challenges particularly in the Ghanaian context, in adopting and seeking to comply with ESG requirements especially in our competitive business environment. These challenges include:

Lack of codified enforceable rules– the regulatory environment for ESG compliance is complex and ever-changing. More importantly, there is no composite enforceable legal framework that comprehensively deal with ESG. It is therefore difficult for companies to stay current with changing requirements and fully understand what is required. This can be challenging to navigate.

Cost– implementing effective ESG practices can be expensive, and many companies may need more resources to invest in ESG initiatives.

Varied Voluntary Codes– there are overlapping voluntary codes/standards existing which can make it difficult for mining companies to determine which code to adopt for their ESG strategy.

Despite the challenges, the truth remains that, investors care about ESG and would only conclude transactions upon an assessment of ESG factors and ascertainment that a company has a track record of good ESG performance. For mining companies to be well positioned for investments, it is prudent for mining companies to develop a clear and robust ESG policy that assuages investor concerns regarding their business and promotes continued investment. Such policies must consider both the mandatory legal requirements, voluntary codes and the company’s specific corporate values and overall strategic priorities. Once an ESG policy is adopted, the next stage is the implementation with measurable goals for reporting.

Conclusion

To conclude, ESG compliance is becoming increasingly important for businesses as investors and other stakeholders demand greater accountability around ESG issues. In like manner, it provides a significant opportunity for mining companies to differentiate themselves by improving their sustainability by reducing the risks associated with ESG issues. By prioritizing ESG practices, mining companies can identify and mitigate risks and build a more resilient business.