BEE au­dit plunges min­ing sec­tor into un­cer­tainty

Finweek English Edition - - IN THE NEWS - BY DAVID MCKAY

In S e p t e mb e r 2 0 0 3 , the Com­pe­ti­tion Tri­bunal in­ter­vened i n a dis­pute bet ween Kumba Re­sources and t he Industrial Devel­op­ment Cor­po­ra­tion ( IDC), which had ob­jected to An­glo Amer­i­can rais­ing its stake in Kumba to 49%. The IDC ar­gued that such a move by An­glo would not serve em­pow­er­ment.

As it t urned out, t he t r i bunal sanc­tioned An­glo’s move in a rul­ing that was widely wel­comed be­cause it proved gov­ern­ment could lis­ten to busi­ness as well as reg­u­late the busi­ness en­vi­ron­ment; in this case, in mat­ters that had a bear­ing on black eco­nomic em­pow­er­ment (BEE).

To­day, how­ever, there’s con­cern that gov­ern­ment’s view on BEE is less friendly af­ter a tem­plate was is­sued to min­ing com­pa­nies guiding the sec­tor on how the depart­ment of min­eral re­sources ( DMR) in­tended to au­dit BEE com­pli­ance.

The t em­plate ap­pears to have adopted the some­what nar­row view that em­pow­er­ment could only have taken place once there was a law to pro­mul­gate it: that is, the Min­eral and Petroleum Re­sources Devel­op­ment Act (MPRDA) on 1 May 2004.

His­tory shows, how­ever, those seven months be­fore MPRDA pro­mul­ga­tion, gover nment was a l r e a dy t a c i t l y ac­knowl­edg­ing BEE by rul­ing against the IDC that it might be im­per­illed.

To date, the Cham­ber of Mines has stead­fastly re­fused to com­ment on the au­dit tem­plate, while the DMR is yet to re­spond to Finweek ques­tions about the ex­tent of pos­si­ble dis­agree­ment on what the tem­plate says. It would ap­pear, how­ever, that even if the min­ing sec­tor and gov­ern­ment reach an agree­ment on BEE – which they surely must – the road ahead in reg­u­la­tory mat­ters is likely to re­main un­pre­dictable.

All we have to go on, re­gard­ing the cur­rent in­dus­try re­ac­tion to the tem­plate, is An­glo Amer­i­can CEO Mark Cu­ti­fani’s forthright state­ments on 13 Fe­bru­ary t hat i n fai l i ng to recog­nise BEE be­fore a cer­tain date, the DMR was act­ing “crazily” and that it would ren­der the char­ter com­pli­ance process, the au­dit, “a ridicu­lous ex­er­cise”.

Much is at stake as there’s a num­ber

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