Maxam pays $1m of Appiatse fine : $5m remainder payable within 18 months

Maxam Ghana Limited, the company at the centre of the explosion that occurred at Appiatse in the Prestea-Huni Valley municipality, has paid $1 million into government coffers as a fine.
The company has also agreed to pay $5 million or its cedi equivalent to the government in 18 equal installments of $277,777.78 from the first day of next month to August 1, next year.

The Minister of Lands and Natural Resources, Mr Samuel Abu Jinapor, imposed the administrative fine after Maxam had been found culpable of regulatory breaches.

Mr Jinapor directed the company to pay $1 million before the restoration of its licence, with the remaining $5 million to be paid in equal instalments between March 1, this year and August next year.

The minister said the report of the three-member committee constituted to undertake independent investigations into the matter affirmed some regulatory breaches on the part of the company in the manufacture, storage and transportation of explosives for mining and other civil works.

While the fine will be part of the operational funds of the Minerals Commission, the regulator, the government may use part to finance the reconstruction of the Appiatse community, which was flattened when 10 tonnes of dynamite exploded after the truck carrying it got entangled with a motorcycle.

Prudent fine

Mr Jinapor said although the penalties for the said breaches, pursuant to the Minerals and Mining (Explosives) Regulations, 2012 (L.I. 2177), ranged between GH¢600 and $10,000, the hefty fine had been imposed on the company because of “the nature and the totality of the circumstance leading to this tragic incident”.

“Given the demonstrable cash inflows of Maxam and its current circumstances, the remaining $5 million shall be paid in 18 months in equal monthly instalments, beginning March 1, 2022 to August 1, 2023.

“Maxam shall, therefore, pay to the government on March 1, 2022, and on every first day of each month until the final payment, an amount of $277,777.78 or its cedi equivalent at the prevailing commercial rate,” he said.

Context

Although Regulation 2177 spells out a low fine, the minister is clothed with the power to impose an administrative fine, in line with domestic laws and international best practice.

In March 2019, Shaanxi Mining Company Ghana Limited, located at Talensi in the Upper East Region, was fined $40,000 after it was found culpable in an explosion that claimed 16 lives near its concession two months earlier.

On August 5, 2010, the US Department of Labor’s Occupational Safety and Health Administration fined three construction companies and 14 site contractors $16.6 million in penalties, following a deadly natural gas explosion at the Kleen Energy Systems LLC power plant construction site in Middletown, Connecticut in February 2010.

The explosion took the lives of six workers and injured 50 others.

In 2015, BP agreed to pay a record environmental fine of $18.7 billion to settle legal actions brought by the US and several states over the fatal 2010 Gulf of Mexico oil spill.

This was after the US Justice Department, along with the states of Louisiana, Mississippi, Alabama, Texas and Florida, sued BP for damages not covered by the company’s earlier settlements with businesses and individuals harmed by the worst offshore spill in US history.

The settlement allowed the company to pay over 18 years.

BP was found to have been “grossly negligent” in its handling of the well. The company was fined $5.5 billion under the Clean Water Act.

The settlement included $7.1 billion in “natural resource damage assessment”, to be divided among the states and earmarked for environmental clean-up projects related to the spill.

Maxam accepts fine

Meanwhile, Maxam Ghana Limited, a Ghanaian-Spanish joint registered company, has agreed to pay the $6 million fine imposed on it.

In a statement issued yesterday shortly after the imposition of the fine, the company said although the breaches found by the minister did not cause the explosion, it had decided to pay the fine and comply with the other conditions spelt out by the minister.

It explained that based on a different interpretation of the law, it did not believe that it committed any regulatory breaches.

It, however, said it had agreed to the minister’s sanction to ensure the continuity of its business.

Maxam also pledged to ensure full compliance with the new regulatory regime announced by the minister to ensure that its operations were in accordance with the laws of Ghana.

Condition precedent

In addition, Mr Jinapor has set out 14 conditions for the company to comply with as a condition precedent for the restoration of the permit to manufacture, store, transport and/or supply explosives.

Key among the measures, many of them already in L.I. 217, is a ban on the transportation of Ammonium Nitrate and Fuel Oil (ANFO) on a public road to a mine or civil work site unless expressly permitted by the Chief Inspector of Mines.

The other measures are that explosives must be guarded by two escort vehicles, one in front and the other at the back, with both vehicles having sirens to warn people about the explosives.

The company is also required to notify the Chief Inspector of Mines of its intention to transport explosives 48 hours before the scheduled transportation.

Also, mine inspectors are to inspect every transportation schedule to ensure that all regulations and protocols are complied with.

The minister said the 14 measures were to apply fully to companies involved in the manufacture, supply, transportation and use of explosives.

Sub-contractor

The statement also said the sanctions against Jocyderk Logistics Limited and Arthanns Enterprise and Transport Services, two entities involved in the Appiatse tragic incident, were being reviewed and would be applied and communicated in due course.

Among other things, Mr Jinapor directed that all trucks used by the company to cart explosives must have red flashing lights visible 100 metres away, sirens or automatically operated bells, automatic fire suppression systems and fire extinguishers, an integrated monitoring system to check fatigue and a megaphone to warn people in case of danger.

“For the avoidance of doubt, the above set out measures will apply fully to all other companies operating in Ghana in the manufacture, supply, transportation and use of explosives,” the minister stressed.

Justification

In an interview with the Daily Graphic on why the minister went beyond the regulatory fines of between GH¢600 and $10,000, the Deputy Minister of Lands and Natural Resources in charge of Mines, Mr George Mireku Duker, said the administrative decision was an appropriate global practice.

Mr Duker said given the gravity of the accident, it was in the national interest to take actions that were administratively prudent.

He cited similar penal measures, such as those imposed on the Xhianxi Mine in the Upper East Region, which paid fines when some illegal miners died in its pit.

On what the money would be used for, Mr Duker said it would form part of the operational inflow of the regulator, but to all intents and purposes, since the government had decided to reconstruct the victim community, part of the money could be used in so doing.

He said by the consequential directives given, no explosives were to be ever carried by road in the country.

Mr Duker said companies that wanted to deal in ANFO must henceforth have the capacity to manufacture the products on site.

Background

On January 20, this year, a truck, with registration number WR 2252-18, said to be driven by Mr Alfred Pappoe, en route to the Chirano Gold Mines in the Western North Region, exploded.

The explosion occurred at Appiatse, which is between Bogoso and Bawdie in the Western Region, killing 13 people and completely destroying the entire community.

Following that explosion, the government has taken a number of measures to unravel the cause of the explosion, restore life to the residents and reconstruct the Appiatse community.

The Appiatse Support Fund has been set up to mobilise funds for the rebuilding of the community, while the Appiatse Reconstruction Committee is to oversee the reconstruction of the community.