Ghanaian Environmental And Social Laws

Ghana’s economy is highly reliant on climate sensitive sectors such as agriculture, and thus, preservation of the environment, and awareness of social risks is important for a resilient economy.  From a regulatory perspective, there are a myriad of regulations in Ghana addressing protection of the environment, and society.  It is important for financial institutions to be aware of the pertinent legislation which is applicable to their clients’ businesses, as well as their own operations.

This section presents an overview of key environmental and social legislation, and the coordinating bodies pertinent for financial institutions.

Overview of E&S Regulations in Ghana

In 2001, the Ghana Environmental Assessment Capacity Development Programme (GEACaP) was launched with support from the Netherlands government. Primarily, the mandate of the program was to help all relevant institutions in achieving their respective obligations, and to promote sustainable economic development in Ghana. An important aspect of the programme was the development of Environmental Assessment Sector Specific Guidelines for eight main sectors of the economy. These included Health, Manufacturing, Transportation, Mining, Tourism, General Construction and Services, Agriculture and Energy. Consequently, representatives from these eight stakeholder sectors came together with the EPA to develop the sector specific obligations towards the environment.  Similar environmentally enhancing activities in the past culminated in the establishment of the Environmental Protection Agency with powers to regulate the use of the environment and ensure the implementation of policies on the environment by the government. As a result, various interventions and policy instruments such as environmental impact assessments, Parliamentary Acts and legislation, environmental guidelines, environmental taxes such as reclamation bonds, and environmental permitting standards i.e. emission permits have been promulgated to address environmental problems. These laws, together with other legislations and regulations, primarily seek to operationalise the broad environmental policy directives in the 1992 Constitution of Ghana. It is therefore crucial that financial institutions are abreast with these rules and regulations while carrying out financial intermediation activities.

On the social regulations side, there exists many laws and regulations which cover the rights and safety of workers, the vulnerable in society and the social issues confronting communities. The fundamental human rights of every Ghanaian are enshrined in the 1992 Constitution. Other social and labour laws include the Labour Act, 2003, Act 651, the Children’s Act, 1998, Act 560 and the Commission on Human Rights and Administrative Act, 1993, Act 456. Ghana has also ratified other International Labour Organization (ILO) Conventions to guide the country in its labour and social issues. Some of these conventions guarantee workers the right and freedom to join or form worker unions (Convention No.87), the right to equal treatment (Conventions Nos. 100 and 111), the right to collective bargaining (Convention No. 98) as well as conventions to promote industrial harmony and welfare of workers. Among the institutions responsible for implementing these rules and regulations include the Commission on Human Rights and Administrative Justice (CHRAJ) and the National Labour Commission (NLC), the Ministry of Employment and Labour Relations, the National Tripartite Committee (NTC) etc.

Guidance on legislation:

The constitutional basis for E&S protections for Ghana which stipulates that the public lands in Ghana are vested in the president on behalf of the people of Ghana.

The 1992 Constitution provides a broad policy basis for the protection of the environment in Ghana. Article 257 stipulate that all public lands in Ghana are vested in the President on behalf of, and in trust for, the people of Ghana; with the President’s pledge to protect the Constitution. Specifically, the basis of Environmental Policy in Ghana is grounded in Article 36(9) of the 1992 Constitution. The Direct Principles of State Policy places a responsibility on every Ghanaian and the government to protect and safeguard the environment for posterity. It explicitly requires the government to take relevant steps aimed at the protection and defence of the national environment for future generations. The government is expected to do this in collaboration with appropriate agencies.

The Constitution also guarantees the fundamental human rights of every person found within Ghana. Chapter 5 of the Constitution, section 12(2) says that “Every person in Ghana, whatever their race, place of origin, political opinion, colour, religion, creed or gender shall be entitled to the fundamental human rights and freedoms of the individual contained in this chapter but subject to respect for the rights and freedoms of others and for the public interest”. These rights include right to life, right to a decent job, economic rights and women (gender) rights. It is worthy of note, that the entire Chapter 5 of the constitution, on human rights, is an entrenched clause, meaning it may only be amended by the people of Ghana through a referendum. 

Guidance on legislation:

This establishes the Environmental Protection Agency (EPA) with the authority to act on environmental protection in Ghana. The EPA therefore monitors and ensures compliance of businesses with Ghanaian E&S laws. The EPA issues fines and penalties for businesses that are not in compliance. 

Sequel to the 1992 national Constitution, the Environmental Protection Agency (EPA) Act, 1994 (Act 490) was passed. The Act subsequently established the Environmental Protection Agency (EPA). This Act, among other things, is “an Act to amend and consolidate the law relating to environmental protection, pesticides control and regulation and for related purposes.” It provides for the powers as well as the governing body of the Environmental Protection Agency. The Act among other things also establishes the Hazardous Chemicals Committee and empowers the Board to create such departments and divisions as and when necessary. It also repealed the Environmental Protection Council Decree, 1976. The EPA is the main body vested with the authority to administer environmental laws in Ghana. It is therefore important that financial institutions, in granting loans to business entities whose activities affect the environment, do so after having satisfied themselves with the environmental assessment reports from their clients.

Guidance on legislation:

Businesses with environmental activities are required to register with the EPA and duly receive permitting to operate.

Financial institutions must ensure that their clients have the proper permitting to operate as failure to do so will result in fines and other penalties.  Financial institutions may also require the permitting for their banking operations.

The Environmental Assessment Regulations (EAR) were made in 1999 pursuant to the EPA Act, 1994 (Act 490). Primarily, the EAR (amended in 2002) requires that before the commencement of any activity which relates to the environment, such an activity or undertaking be registered by the EPA and an environment permit issued in respect of the undertaking. As such, activities such as mining, construction, logging, oil marketing etc which have the potential of adversely affecting the environment must first go through an Environmental Impact Assessment, leading to the production of an Environmental Impact Statement (EIS). Thus, the objective is to guarantee that economic activities are carried out in a sustainable and environmentally and socially conducive manner.   These regulations are broad and require different kinds of stakeholders to shoulder different responsibilities. In the case of financial institutions for example, it is inherent on banks to confirm environmental impact assessment reports (statements) before approving credit requests for activities that potentially have an adverse impact on the environment. Banks themselves must also get permits for their branches.  According to the EPA, the EAR, LI 1652, gives a comprehensive legal cover to the Ghana Environmental Impact Assessment procedures.

Guidance on Legislation:

Businesses undertaking minerals and mining operations must receive a mining license before commencement of activities from the Forestry Commission and EPA.

Financial institutions must ensure that their clients can present this license

The Minerals and Mining Act requires that, among other things, a holder of a mining license, before commencing mining activities, must obtain the necessary environmental permits. The Act specifically states that;

“(1) Before undertaking an activity or operation under a mineral right, the holder of the mineral right shall obtain the necessary approvals and permits required from the Forestry Commission and the Environmental Protection Agency for the protection of natural resources, public health and the environment.

(2) Without limiting subsection (1), a holder of a mineral right shall comply with the applicable Regulations made under this Act and any other enactment for the protection of the environment in so far as relates to exploitation of minerals.”

Summary of legislation:

The labour act prohibits discrimination based on sex, ethnicity, race, colour, religion etc and provides protection for workers in Ghana.

Financial Institutions should ensure that both the human resource (HR) policies and terms of employment of the FI and the bank are in line with labour laws.

The Labour Act, 2003, repealed the Industrial Relations Act, 1960, Act 299 which hitherto governed labour relations in Ghana. Under this act, the Labour Department under the then Ministry of Labour Affairs was responsible for dealing with labour disputes. Many have described Act 651 as a consensus law because all the stakeholders, namely Organised Labour, Government and Ghana Employers Association had to lose in some respects and win in other aspects of the negotiation to arrive at Labour Act, 2003, Act 651.  

Guidance on Legislation:

The established implementing body is tasked with investigating human rights complaints. 

Financial institutions should ensure that they and their clients have grievance mechanisms in place for workers to raise reasonable workplace complaints.

The Commission on Human Rights and Administrative Justice (CHRAJ) Act, is an act that empowers the implementing body, CHRAJ, with the mandate to look into “complaints of violations of fundamental human rights and freedoms, injustice and corruption; abuse of power and unfair treatment of persons by public officers in the exercise of their duties, with power to seek remedy in respect of such acts or emissions and to provide for other related purposes”. Section 7 (1) (a) (c) and (g) of the CHRAJ Act specifically mandates the body to ensure the fundamental human rights and freedoms of persons in Ghana are protected irrespective of colour, tribe, nationality etc.

International Environmental and Social Conventions Signed and Ratified by Ghana

Ghana has remained a signatory to many international conventions and treaties that address Climate Change, the Environment and its Sustainability. In 2005 a body was set up at the Ministry of Environment, Science and Technology (MEST) called the Ghana Environmental Convention Co-ordinating Authority (GECCA) to co-ordinate the ratification (in some cases) and implementation of these international conventions and treaties on the environment. Some of these Conventions and Treaties include Cartagena Protocol on Biosafety, Stockholm Convention on Persistent Organic Pollutants, Kyoto Protocol to the United Nations Conventions on Climate Change, Paris Agreement on Climate Change etc

There are many other laws which regulate environmental use in Ghana. Some of these laws and regulations include the Hazardous and Electronic Waste and Management Act, 2016 (Act 917) which prohibits the importation, exportation, transportation, selling, purchasing or dealing in or depositing of hazardous waste or any other waste within Ghana or her territorial waters and the Petroleum Exploration and Production Act, 2016, Act 919, an act which provides the enabling requirement for participation in Ghana’s petroleum industry by the private sector.

International Labour Organizations Conventions ratified by Ghana

In 1957, Ghana became a member of the ILO and has since ratified many of the Organization’s Conventions aimed at socially and economically enhancing Ghanaian labour force. Some of the ratified Conventions include Equal Remuneration Convention (#100), Discrimination (Employment and Occupation) Convention (#111), Freedom of Association and Protection of the Rights to Organise Convention (#87), Right to Organise and Collective Bargaining Convention (#98), Forced Labour Convention (#29), Abolition of Forced Labour Convention (#105), Working Environment (Air Pollution, Noise and Vibration) Convention (#148), Labour Relations (Public Service) Convention(#151) etc.  In total, Ghana has ratified 51 Conventions, of which 37 are in full force, 10 of them have been denounced and 4 abrogated.

Ghanaian E&S Regulatory Agencies

Regulatory institutions are the conduit through which environmental and social legislation is implemented in Ghana. Any project or activity which has the potential of adversely affecting the environment will require regulation.

Financial institutions should be aware of the implementing regulatory agencies for E&S legislations.

The mandate of the Ministry is to promote sustainable development through relevant and thought-provoking research and development in its four main areas, sound environmental governance, technology, science and innovation. Created in 1993 and having undergone name changes along the way, the Ministry’s main functions in relation to the environment among others include the following;

  • To provide leadership and guidance in its main area through the formulation and implementation of sound policies within the broad sector of the economy.
  • In charge of establishing standards and the regulatory framework for the Environment, Science and Technology within which sustainable development can be achieved.
  • Initiates and co-ordinates research aimed at improving the laws, rules, policies and regulations that govern the environment.  
  • Ensures effective environmental management and governance
  • Determines the requirements for any programme on the environment, science, technology and human settlement.  This it does in consultation with the National Development Planning Commission (NDPC).

There are many agencies under the Ministry which execute some of these functions. These agencies include;

  1. Council for Scientific and Industrial Research
  2. Atomic Energy Commission of Ghana
  3. Environmental Protection Agency
  4. Land Use and Spatial Planning Authority  
  5. National Biosafety Authority

Established in 1994, the Environmental Protection Agency (EPA), is the main body responsible for regulating or administering environmental laws in Ghana and falls under the Ministry of Environment, Science, Technology and Innovation (MESTI). The Agency was established consequent to the Environmental Protection Agency Act, 1994 (Act 490). In 2001, the Ghana Environmental Assessment Programme (GEcAP) helped the EPA streamline the various sector specific environmental requirements and policies. Among the many functions as spelt out in the Act, its main functions include the following;

  1. Advises the (Sector) Minister on the formulation of policies and recommendations for the protection of the environment;
  2. Acts as a co-ordinating body for technical or practical entities whose activities affect the environment and serves as a channel of communication between those bodies and the Ministry;
  3.  Issues environmental permits and pollution abatement notices for activities which are potentially dangerous to the quality of the environment or parts of it;
  4.  Issues directives, procedures or warnings to any other person or body for controlling the volume, intensity and quality of noise in the environment;
  5. Ensures compliance with the laid down environmental impact assessment procedures in the planning and execution of development projects and/or existing projects.

These include but not limited to the Lands Commission, Minerals Commission Forestry Commission etc. The Minerals Commission is one of the agencies of the Ministry of Lands and Natural Resources. Established under the 1992 Constitution (Article 269) and the Minerals Commission Act 1993, Act 450, it is the main regulatory body in the minerals and mining sector. Pursuant to the above legislation, the Minerals Commission is responsible for “the regulation and management of the utilization of policies relating to mining.” In addition, the Minerals Commission also makes sure that Ghana’s Mining and Mineral Laws and Regulations are also complied with. This is done mainly through effective monitoring and evaluation of mining activities especially on the environment and natural resources.  In monitoring mining companies, the Minerals Commission liaises with other State agencies such as the EPA, Bank of Ghana and Geological Survey Department to help attain adherence of the requirements of a competitive fiscal regime as well as the mineral rights granted to these mining companies.

In regulating activities in Ghana’s upstream petroleum sector, the Petroleum Commission is the main body responsible for this activity. Its counterpart, the National Petroleum Authority regulates petroleum activities in the downstream sector. The Petroleum Commission was established by an act of Parliament, Act 821, in 2011. Together with other agencies such as the Energy Commission, Ghana National Petroleum Commission (GNPC), Ghana National Gas Company (Ghana Gas) and Environmental Protection Agency (EPA), the Petroleum Commission regulates and manages the utilization of the country’s oil and gas resources. It also co-ordinates any other activity to do with sustainability in the upstream sector.

Like the Petroleum and Minerals Commissions, the Energy Commission is also involved in the regulation of aspects of Ghana’s natural resources such as natural gas. The Commission is the technical regulator of the country’s renewable energy environment as well as its electricity landscape. Set up by the Energy Commission Act, 1997, Act 541, the Commission’s mandate also includes management, development and utilization of Ghana’s energy resources “in a reliable, efficient and secure manner in order to promote the social and economic well-being of the people of Ghana, enhance environmental quality and public safety.”

In 1996, the Water Resources Commission was established by a Parliamentary Act (522). Its mandate includes regulating and managing Ghana’s water resources as well as streamlining government policies in the water resources industry. In the same way that all land is vested in the President on behalf of the people, it is the same with country’s water resources. Ownership and management of Ghana’s water resources are vested in the President on behalf of the Ghanaian people.  The Commission comprises of 15 members, drawn from various sectors of the economy.

The National Labour Commission (NLC) was established as required by the Labour Act, 2003. Section 35 of the Labour Act stipulates that an NLC be established to among other things, mediate in settling industrial disputes via negotiations and other dispute resolution methods such as mediation and arbitration. The NLC also works towards promoting a sustainable and harmonious working environment through effective dispute resolution mechanisms and settlements. Under the Ghana Shared Growth and development Agenda, the NLC seeks to;

  • Promote a harmonious labour relations environment
  • Compliance with the laws regulating the employment relationship
  • Adherence to procedures for addressing industrial disputes/ disagreements

The Commission on Human Rights and Administrative Justice (CHRAJ) came into being under the 1992 Constitution. Broadly, the Commission is involved in three main areas; human rights, administrative justice and anti-corruption fight. It is the duty of the institution to promote and protect the fundamental human rights and freedoms of every citizen. These rights include civil, social, economic, political etc. The human rights function of the Commission is categorized into; promotion and prevention as well as protection and enforcement.

Under the 2003 Labour Act, one of the requirements of the act was the establishment of a National Tripartite Committee which will compose of the Government of Ghana, Organised Labour, and Ghana Employers Association. The Minister of Employment and Labour Relations is the chairman of the Committee. Primarily, the NTC is the body mandated to determine the National Daily Minimum Wage. It also gives advice to the ministry on labour and employment issues. This could include economic and social issues.