BUSINESS DAY TV: ‘I feel we must consult to death in a democracy’
ANC veteran Mathews Phosa says he would toss out the redraft of the mining sector’s empowerment charter and launch a more consultative process
BUSINESS DAY TV: The Department of Mineral Resources needs an urgent change in leadership and the third empowerment charter for the industry, due to be gazetted next week, should be started afresh.
That’s the message from Mathews Phosa, who is an ANC veteran and former treasurer-general of the party, [and] also a businessman. He was at the Junior Indaba this morning, giving the opening address for mining companies. He joins us in studio this evening.
Mathews, so you’ve made a statement that you would stop the current charter re-draft in its tracks in favour of launching a more consultative process. Talk us through why, because we’ve had the mines minister certainly insisting that the process has been very consultative. He insists that his department holds an open-door policy.
MATHEWS PHOSA: I like the last part of it, that his department holds an open-door policy, because that’s exactly what I’m referring to.
There is a lot of uncertainty in the mining sector, especially with the junior miners feeling that whatever they regard as being in the charter is more for the Guptas and the big boys; that they’re excluded. And we should be promoting junior miners and finding them space to make an input into the economy.
As they are now, they’re very uncertain. You had them during the day, from the opening lines, being very sarcastic about everything. They have no confidence in policy formulation in the country, they feel that they’ve not been sufficiently consulted. So it’s not only my view, but the view of the sector, and the government is not taking it seriously. I feel we must consult to death in a democracy, we must not shut the doors in the face of views with dissent from what we want to put on the table.
I met the minister and I’ve got a view that he is prepared to listen. But listening is one thing; do what you’ve been told and, on the base of consulting, is another matter. I talk about broad consultation where all stakeholders will raise all their views and they will process all those views and say what will be in the interests of the country, not the big boys.
BDTV: The mining sector has been operating in limbo for the past number of years, so apart from perhaps poor policies, there has been policy uncertainty, policies sitting in limbo, waiting to be passed and they haven’t been passed. What has that cost investment do you think, in the sector and in SA?
MP: No investor wants to invest in an uncertain environment where policy changes every day and we’re never able to predict what the policy will be tomorrow. Policy instability is one of the factors being mentioned by the ratings agencies as a negative for SA. We need to settle down and say, what is the policy for the mining sector, not to change it every time there is a new minister. But it doesn’t work like that. Even in other sectors, we need to have that policy certainty and predictability and reliability. That allows investors to know what to do about our situation.
BDTV: We’ve got uncertainty on the one hand making investors nervous about putting more capital into the country. Another thing is the onerous policies that we do come forward with, so looking at the Mining Charter, for example, we’re looking at black economic empowerment, ownership targets increasing from 25% to 30%, and many being hesitant about how this is actually going to be achieved. Where do you think … how do we get BEE right within the resources space?
MP: That BEE policy at the moment is like a zip. One morning it’s at 26%, the next morning its 30%, and then you go to Eskom and they say its 51%. What is the policy? And you ask Eskom why its 51%, where is it written … that’s what they think. So it does create huge uncertainty in the various sectors.
We need to harmonise the charters. We are one country, one flag, one nation. There must be a determined policy about BEE and we know what it is. At the moment, companies have been getting points at certain levels which they have achieved, and now in the middle of the game, we change the rules. People are now saying — what will the rule be tomorrow? That’s the issue and we cannot say, because you’ve got power you can do as you will. That’s arbitrary and dictatorial and we should discourage that.
BDTV: You pointed out ministers changing, policies changing as the ministers change. We’ve got the ANC having an economic conference next month: does that policy need to come from the top and the ministers just implement the policies, so it doesn’t change every time the minister changes?
MP: The policy conference, not the economic … it’s about all policies for the country. The ANC is doing an "oil-check" on policies in the country and it’s an opportunity to debate, but that forum doesn’t take decisions. It’s like a laundry, it makes proposals which must be debated and considered and not only by the ANC. The ANC’s position will be that people must be consulted, and all ministers must comply with those policies of the ANC, to consult stakeholders, and then formulate a policy which is informed.
The Freedom Charter itself was the product of grassroots consultation in which people made inputs and produced that very historic document and all policies must follow the same process. And let’s not dictate in a democracy, lets consult to death if necessary.
BDTV: Do you think that, if we’re looking at more engagement within the sector, more consultation and policy certainty, that immediately flicks the switch on investor sentiment into SA?
MP: Yes. Investors want to know, do I put my money into a fire or in a growing economy and is SA the investment destination in Africa? I don’t think so. We’ve been overtaken by other countries on this continent because of these instabilities which you’re talking about. And it is time we wake up and just decide what policies are on mining, on this and that. Then stick by that and move on.
BDTV: Do we need a change in leadership at ministerial level, but also at head of state level to actually get the policies, right? Do we need to make a fresh start with a fresh Cabinet?
MP: I think SA is facing a political crisis of leadership, an economic crisis of leadership. We definitely need to overhaul firstly, the ANC itself, and change the leadership there radically, with people who respect the Constitution, because that’s what the world is looking at, and who continue to understand that we come from a difficult past. We need to build this nation and reconcile our people and we need to grow the economy so that as it grows it creates jobs.
How do you expect to have more jobs with a shrinking economy? You saw what has happened, the unemployment figures are rocketing to 27%, there is nothing positive about what’s going on now. But it’s all about leadership, both political and economic and you must be frank…
BDTV: That’s exactly what I was going to ask: are planning to run for presidency of the ruling party later this year?
MP: If I’m nominated, there is no reason why I should not stand because it will mean the party has confidence and I must therefore respect them and stand. That will probably be nice, it’s a democracy, and if they nominate you, you are likely to stand.