Trust issues must be urgently resolved

NEWS that Richards Bay Minerals has had to seek intervention from the High Court over the distribution of the millions of rands it has bestowed on local communities, is disturbing indeed.

It is a complex matter: one that needs to be resolved as swiftly as possible.

The RBM situation is not unique, as relationships between mining groups and their host communities throughout the country are often precariously balanced.

It is, quite literally, a minefield, with both potential mineral wealth and landmines.

The mining company has one main objective: to run a financially successful operation that will satisfy the investment of its shareholders.

To do so, it must use the land in which the minerals lie buried – and which the community itself is not able to extract for profit.

So it should be a win-win for both parties.

In addition, and to show its goodwill, transparency and commitment, the mine invests a portion of its profits in the local communities at many levels, such as education, health and sport.

It is right that they should do this; but this also raises expectations that the company is a ‘cash cow’, which could lead to unreasonable demands and even being held to ransom.

And so agreements are reached through the legal local leadership. This also poses potential problems, as splinter groups could make their own separate demands and even denounce the authorised ruling structures and leaders.

With millions of rands at stake, the company must decide where and how to ‘invest’ its largesse, so that the maximum advantage can be gained for the people who live in their host communities.

Of course, the leaders with whom they negotiate are also part of their own ‘shareholder’ structures, so that Cogta and even the royal household, as the actual land custodians, have a vested interest.

The idea of placing the liberal ‘community shares’ in a trust fund is a sound one – as long as the monies are dispersed in a fair and transparent manner, and can be accounted for.

Herein lies the predicament, as the desired benefits and spread of wealth at the level of people’s lives and livelihoods cannot be proven or ascertained.

And if the trust fund model is not working, for whatever reason, the signed agreement must be set aside – should the High Court so order – and an alternate mechanism of wealth dispersion be sought.

Failure to find a lasting solution creates concerns over a return to the violence and disruptions that plagued the company and almost led to its closure.

And that is something nobody would want to happen.