Guest Column

Mining Charter reflects what ails SA

2017-06-18 05:53
A mine shaft near Carletonville, western Johannesburg. Picture: Reuters/Siphiwe Sibeko

A mine shaft near Carletonville, western Johannesburg. Picture: Reuters/Siphiwe Sibeko

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Christopher Rutledge

From a minister picked from obscurity to do the bidding of a powerful patronage network, to the entrenchment of elite capture of the mineral wealth of the country, the latest Mining Charter flatters to deceive and, like the story of post-1994 South Africa, leads only to deeper inequalities.

On the face of it, the charter speaks of increased black South African representation in the ownership structures of corporate mining, as well as greater economic opportunities for black South Africans in the hitherto white- and foreign-dominated value chain of the industry.

In the aftermath of an apartheid system that viciously excluded the majority of South Africans from the economic fruits of their labour, such grand rhetoric and policy may have been warmly welcomed in an atmosphere of hope and trust that the world-renowned and revered leaders of the liberation movement would be able to deliver a “better life for all”.

But today, 23 years after the first promise of a better life for all, with the liberation movement and its leaders having been exposed for charlatans and frauds, our faith and hope have been eroded to the point where we can longer accept that elite capture of the country’s wealth represents an advancement for all.

Instead, our experience of the past quarter century shows that the lived experiences of those directly and indirectly impacted by mining in this country have been increasing poverty and food insecurity, together with a steady and increasing erosion of our rich environmental heritage.

One of the major objections to the charter is the lack of consultation that the minister and the department of mining resources have facilitated. Where consultations did take place, they were merely tick-box exercises, with little to no real engagement and opportunity to influence the content.

This lack of broad-based input and consultation is the first real reflection of the deep-seated sense of superiority that has corrupted the very soul of the governing party. The party and its unaccountable deployed apparatchiks have convinced themselves that they, and only they, have the answers to our collective problems and that they, and only they, should be the ones to benefit from it. Consulting stakeholders and affected parties are consequently a minor inconvenience that can easily be remedied by ticking a box.

A need for a new social contract

The latest iteration of the Mining Charter belies the fact that it intends to explicitly benefit only a small elite, most likely those connected to patronage networks.

The narrow focus on the 30% shareholding that must be allocated to entrepreneurs (14%), employee share ownership schemes (8%) and community shareholding (8%) suggests – merely by ensuring that “black persons” are part of the shareholding structures – that this would miraculously transform the sector from one that violently exploits the earth and its people, and that has been the central pillar of the apartheid state, to a broad-based economic miracle.

With the benefit of hindsight, we can today clearly and categorically make the argument that this fallacious economic policy has failed spectacularly to free the majority of South Africans from the chains of poverty and instead has contributed to entrenching the deep economic divisions of the past. It has instead produced black economic empowerment (BEE) networks that have not only continued the economic trajectory that has resulted in South Africa acquiring the highly ignoble honour of being the most unequal society in the world, it has also shown us how these same BEE individuals would not hesitate to deploy the full might of the state to crush and kill anyone who dares to ask for a living wage.

What may seem at first like a welcome broadening of the BEE patronage networks to include community shareholding is soon exposed as yet another vehicle to enrich a few connected patronage clients. The community shareholding, instead of being controlled by the community through collective and democratic processes, will instead be controlled by a new vehicle of private enrichment called the Mining Transformation and Development Agency (MTDA).

As with previous such entities that purport to act in the interests of communities – such as the D Accounts of the Bapo Ba Mogale community that, according to the former public protector, saw R617 million go unaccounted for – this new agency has all the hallmarks of allowing patronage networks easy access to extensive public funds.

The MTDA – in true anti-spirit of meaningful broad-based participation – will not be open to public scrutiny and will only be required to report to the minister. Surprise, surprise.

The current charter also does not seek to change the structure of social labour plans. These have spectacularly failed to deliver on the developmental obligations to communities. Instead, the plans maintain the inefficient system that sees municipalities often absorbing most of the funds to maintain lavish lifestyles. This while communities impacted by mining and for whom the social labour plans are meant to benefit, continue to sink ever deeper into poverty and food insecurity.

In short, the charter represents the very worst of the South African political economy. It offers no solutions to the growing inequality and increased poverty generated by the current economics of the sector.

The need for a new social contract in the mining sector is urgent. The post-1994 contract was essentially an elite arrangement in which the governing party was promised that its cadres would be greatly rewarded for their support of the mineral complex. Many ANC leaders have indeed benefited well from this elite pact. It is now time for the majority to be allowed to renegotiate that contract.

After 23 years of failed policies and increasingly autocratic management of the sector, and growing inequality, poverty and discontent, it is time to take a serious look at what has worked and what has not. That exercise must be opened for public scrutiny and engagement. The time for tinpot despots is over.

Rutledge is a manager with ActionAid SA

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