Maintaining Mutual Benefits between Investor and Local Community: Mechanisms to Reopen Lega Dambi Gold Mining, Ethiopia

Abstract

Mining, specifically, large-scale gold mining has become one of the primary economic activities that play a pivotal role in the socio-economic development of one country. But there is no consensus among scholars whether gold mining companies maintain mutual benefits with local communities. The main objective of this research is to scrutinize the mechanism to be employed in reopening Lega Dambi large-scale gold mining by maintaining mutual benefits between the company and the local community. The researcher employed a qualitative method and a case study research design. Focus group discussions and semi-structured interviews were used to collect data from the local community, elders, religious leaders, Abbaa Gadaas, Guji Zone, and Odo Shakiso Woreda investment office, land management office, social and labor affair, mineral, and energy office administrators, and Odo Shakiso Woreda health station and Adola hospital. Secondary sources and regulatory frameworks such as FDRE Constitution and Mining Operations Proclamation No. 678/2010 were used to triangulate with primary data. The finding shows that Lega Dambi's large-scale gold mining company failed to maintain mutual benefits between itself and the local community. Basic tenets such as national and regional corporate social responsibility, community development agreement, impact and benefit agreements, social and labor plan, and social license were not implemented properly to balance the mutual benefit between the company and the local community. The researcher concluded that Lega Dambi large-scale gold mining company disregarded the role of the local community during commencement time albeit it had a strong relationship with the central government. Consequently, the company was terminated because of a bad relationship it had with the local community. It is recommended that national and regional corporate social responsibility that shows the company’s specific joint administration of the central and Oromia region governments should be designed and implemented fully. It is also recommended that discussions should be held with local communities and arrived at a consensus concerning the reopening of the company.