The charter hurts communities too

Even those it’s meant to help come off second best

Bench Marks Foundation executive director John Capel has described the new mining charter as being as lethal as an abandoned, unsafe mine shaft. It’s been dressed up as a masterstroke of empowerment, says Capel, but it’s a weak piece of legislation that provides little benefit for mining-affected communities and will result in more, not less, protest action. It’s a thinly veiled attempt to promote the Guptarisation of the mining industry, he says.

It’s not often that Capel finds himself on the same side as the mine bosses. But so grim are the consequences of this appalling piece of legislation that this is where he stands.

Bench Marks, which has been working with communities for years, says the charter will aggravate tense relationships between stakeholders.

Capel is particularly irritated by the department of mineral resources’ claim that it consulted communities before drawing up the charter. “It boggles the mind that the department believes that speaking to a small number of chiefs in one mining area is adequate representation of the views of mining-affected communities.”

The sad reality for communities is that despite grand promises for years, their situation has been made worse, not better, by government intervention. True, health and safety standards have improved, but the benefits from environmental regulations and social and labour plans have been negligible due to government’s incompetence (or indifference). Of course, requiring those seeking a mining licence to have a solid social and labour plan is a good idea. But the flaw is that implementation depends on government and companies doing the right thing.

While it’s true that mining companies have ploughed millions into housing developments, most of it goes through local authorities, where it often gets lost. And, while companies claim the number of workers without housing has dropped, it’s true — but only because there are fewer workers.

There may be some excitement about the prospect of communities receiving 8% of the company — until you read, later in the charter, that this will be held in a trust managed by the Mining Transformation & Development Agency set up by the minister.

This is most remarkable given the charter’s preamble, which says that one of the problems with transformation has been that the BEE interests of workers and communities was held in trusts “which constrain the flow of benefits to intended beneficiaries”.

Capel reckons the new trusts will only result in the enrichment of individual chiefs “or the looting of funds in the way that the trust of the Bapo Ba Mogale community was stripped”.

The good news is that, in the absence of an urgent amendment to the Companies Act, the charter is likely to collapse around the hair-raising requirement that 1% of annual revenue must be paid to black shareholders. Section 46 of that act prohibits a company from distributing funds unless it can satisfy certain solvency and liquidity requirements. In this test, a couple of reasonable assumptions on the volatile prices of commodities would surely kill that plan from the outset.

It’s a thinly veiled attempt to promote the Guptarisation of the mining industry