Mining BEE tensions

2010-07-03 12:32

Deliberations about the “once-empowered, always-empowered”

principle delayed the signing this week of the mining declaration document,

which re-commits the mining industry to ­accelerating implementation of black

economic empowerment (BEE).

The “once-empowered, always-empowered” principle provides that even

if black ­investors sell their shares in a white-owned company, the company does

not lose its BEE status. The principle is not included in the new mining

declaration document.

South African Mining ­Development Association (Samda) chairperson

Nchaka Moloi said: “The principle was a bone of contention prior to the meeting

in which we signed the ­declaration.”

Samda represents junior ­miners and black-owned ­mining firms, and

was a ­signatory to the 13-point ­declaration.

Other signatories were the ­Department of Mineral ­Resources (DMR),

the ­Chamber of Mines, the National ­Union of Mine Workers (NUM), Solida­rity

and the United ­Association of SA (Uasa).

The ­chamber’s spokesperson, Jabu Maphalala, said his ­organisation

had not tried to push the “once-empowered, always-empowered” principle ­into the

declaration document. He said the chamber – the mouthpiece for the R2 trillion

mining industry – wanted ­clarity on some of the wording in the document, but

declined to elaborate.

DMR spokesperson Jeremy Michaels refused to be drawn into the

matter, saying: “What is important to us is that the agreement has been signed

and we want to implement it now.”

The declaration was signed after the DMR conducted an ­extensive

review of transformation in the mining industry.

The review, which is yet to be published, shows that 9% of the

sector’s equity was black-owned last year, some distance from the 15% target set

by the BEE charter.

The “once-empowered, ­always empowered” principle made headlines in

2007 when the Department of Trade and Industry was finalising its BEE codes of

good practice, the ­blueprint legislation for ­crafting empowerment deals.

The idea was shot down by black business bodies, who feared that

the principle could lead to whites further entrenching their grip on the

economy.

A watered-down version of the principle, dubbed the ­“continuing

consequences” principle, was eventually ­adopted when the codes came into effect

in 2008. This ­principle makes provision for companies to claim up to 40% of the

20 points available for ownership in the BEE scorecard even if empowerment

­partners have exited.

Uasa’s chief ­operating officer Leon Grobler said government should

not get in the way of black investors if they wished to sell their stakes in

white-owned firms.

However, his trade union counterpart, National Union of Mineworkers

president Senzeni Zokwana, said he ­supported Mineral Resources Minister ­Susan

Shabangu’s stance that mining firms must endeavour to retain their BEE status at

all times.



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