Review of the Revised Guidelines for the Production of Community Development Agreement (CDA) in Nigeria's Solid Mineral Sector

Introduction

In November 2023, Nigeria’s Minister for Solid Minerals Development, Dr. Dele Alake, unveiled the revised guidelines for the Community Development Agreement (CDA) 2023. This critical update aims to bolster the collaboration between mining companies and their host communities, ensuring sustainable development within mining host communities and addressing the challenges previously faced in the sector. Dr. Alake’s believe is that the New CDA Guidelines can help prevent a repeat of social crises experienced in the Niger/Delta by the Oil Sector, which may undermine the present efforts of the Federal Government aimed at diversifying our monolithic economy. In this article, I shall review the Guidelines for the Production of Community Development Agreement in the Solid Mineral Sector (2023)?

Legislative Background

Section 116 (1) of the Nigerian Minerals and Mining Act, 2007 (Mining Act) provides that “subject to the provisions of this section, the Holder of a Mining Lease, Small Scale Mining Lease or Quarry Lease shall prior to the commencement of any development activity within the lease area, 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.”

Section 116 (3) of the Mining Act further provides that “the Community Develoment Agreement shall address all or some of the following issues where relevant to the host community -

(a)?educational scholarship, apprenticeship, technical training and employment opportunities for indigenes of the communities;

(b)?financial or other forms of contributory support for infrastructural development and maintenance such as education, health or other community services, roads, water and power;

(c)?assistance with the creation, development and support to small scale and micro enterprises;

(d)?agricultural product marketing; and

(e)?methods and procedures of environment and socio-economic management and local governance enhancement.

These agreements are a means to protect mining communities and to help mining companies define their relationships and obligations with their host Communities as it readily provides a means of strengthening and advancing their relationship. The new guidelines are designed to promote harmony and mutually beneficial relationships, thereby avoiding the social crises that have plagued other sectors. It is the expectation of the government that with the new guidelines, mining host communities shall better benefit from the mining activities in their communities.

Objectives of the Revised Guidelines

The revised guidelines focuses on several key objectives:

1. To provide the key elements and general contents of the CDA.
2. To specify an acceptable structure of the CDA.
3. To specify the appropriate consultative and monitoring frameworks for its implementation; and
4. To specify the means by which the community may participate in the planning, implementation, management and monitoring of activities carried out under the CDA.

Key Elements and Development Processes of a CDA

The CDA should be structured in four parts: Title Page, Commencement, Body, and Execution. It should include clear definitions, a summary of how communities and representatives were determined, and the roles and obligations of all parties.?

The guidelines outlines several essential elements and processes for developing a successful CDA:

1. Timeframe and Process: The preparation and engagement process should begin before mine development (commencement of mining activities) in respect of new projects or before the expiration of an existing CDA for ongoing projects. The duration of a CDA is set at five years.
2. Stakeholder Participation: Active involvement of stakeholders in identifying community is crucial for building effective CDA components. In practice, this may be achieved through town hall meetings, engagement with community leaders, market women and youth groups in the community.
3. Capacity Building: Building the capacity of all stakeholders is emphasized, ensuring they are well-prepared for negotiations and aware of their rights. The most successful CDAs are often developed where government, private sector and civil society? have invested significant time and effort into building the capacity of all stakeholders prior to the start of CDA negotiations.
4. Community Identification: Although CDA negotiations are to be carried out with the host communities who are directly impacted by the effects of the mining activities in their community, the interest of other interested stakeholders are to be considered when concluding a CDA. These interested stakeholders may include communities impacted by transportation routes, supply chains, etc.
5. Community Representation: Representatives should be chosen freely by the community and documented through a formal process submitted to the Ministry. The issue regarding the best representatives for a community may not always be easy to determine. However, it may be better to work through the Community Heads or established local structure (such as recognised Community Development Associations). The factor to consider is that the signatories to the Agreement shall be persons freely chosen by the generality of the Community to represent them. As soon as the representatives of the CDA have been chosen, the head of the Community shall, prior to signing the Agreement, submit to the Ministry, for verification, as a stand-alone document a letter of introduction from the Community Head on the palace letter headed paper, or any letter headed paper used by the recognised community leader, addressed to the Honourable Minister of Solid Minerals Development forwarding the names, address, title/position, phone numbers and signature/thumbprint specimen of the Signatories while also attaching the minutes of the meeting wherein these Signatories were freely selected or elected, who shall not be less than 3 or more than 7. It is required that minutes of meeting of the Community reflecting the deliberations and signed attendance sheets should be forwarded along with the signed list of selected signatories
6. Funding: Mineral Title Holders are responsible for funding the CDA process and projects as agreed in the CDA. It is expedient however for communities to bear the cost of engaging their legal counsel to ensure adequate representation.
7. Obligations and Responsibilities: Clearly defining the roles and responsibilities of all parties involved is essential for successful implementation.
8. Grievance and Dispute Resolution Mechanisms: Effective grievance mechanisms are critical, with disputes initially referred to the Minister and, if unresolved, to arbitration. Section 116 (4) of the Mining Act provides “in the event of the failure of the host community and the lessee, after several attempts to conclude the Community Development Agreement by the time the Title Holder is ready to commence development work on the lease area, the matter shall be referred to the Minister for resolution”. Paragraph 2.8 of the Guidelines for the Production of Community Development Agreement in the Solid Mineral Sector (CDA Guidelines 2023) stipulates that where a resolution is not reached after referral to the Minister, then the matter shall be referred to Arbitration under the Arbitration and Mediation Act.
9. Implementation and Monitoring: Regular monitoring and annual reporting to the Minstry of Solid Minerals Development is required by law. These reporting shall be submitted not later that the first quarter of the each year. Project monitoring shall involve all stakeholder groups to ensure transparency and accountability.

Development Process

The CDA development process includes several key meetings:

1. Commencement Meeting: The initial meeting between Mineral Title Holder and ?Host Community to discuss the CDA process and timeline.
2. Negotiation Meeting: Parties negotiate and agree on the CDA contents.
3. Completion Meeting: Final review of the draft CDA is concluded and submitted to the Ministry for a review.
4. Signing Ceremony: After review of the CDA by the Mines Environmental Compliance Department of the Ministry of Solid Minerals Development, parties to the CDA arrange for signing of the CDA, indicating that all obligations have been negotiated and agreed upon.

The participation of the Mines Environmental Compliance Department of the Ministry of Solid Minerals Development is advised throughout the development process of the CDA to reduce the failure of implementation.

?Prescribed Contents and Writing Format

The guidelines specify the contents and format for the CDA, ensuring all necessary elements are covered:

• Programmes for Community Development: Addressing various areas such as education, health, and social amenities.
• Environmental Protection and Compensation: Including mechanisms for environmental sustainability and fair compensation.
• Conflict Management: Clear procedures for managing conflicts.
• Employment Opportunities: Ensuring local employment and vocational training.
• Health and Social Amenities: Provision of health facilities and essential services.
• Financial Support: Contributions to community services.

?Conclusion

The revised guidelines for the Community Development Agreement represent a significant step by the Honourable Minister of Solid Minerals Development, Dr. Dele Alake towards fostering sustainable development and positive relationships between mining companies and host communities.

By delineating clear structures, roles, and responsibilities, the guidelines provide a robust mechanism for the effective implementation of CDAs. They emphasize the importance of stakeholder participation, capacity building, and transparent processes, thereby addressing historical challenges and promoting a more harmonious coexistence between mining companies and their host communities. This holistic approach not only aims to mitigate potential conflicts but also ensures that community development initiatives are aligned with the broader objectives of economic diversification and social stability.?

In essence, these revised guidelines are a testament to the Nigerian government's dedication to creating a balanced and sustainable mining industry. They lay a solid foundation for fostering trust, mutual respect, and long-term partnerships between mining companies and communities, ultimately contributing to the overall socio-economic development of the nation. With these guidelines in place, there is a renewed hope for a future where the benefits of mining are shared equitably, and the sector serves as a catalyst for national growth and prosperity.