After apartheid, mining has left communities around mines even more destitute
A new social compact is needed to overcome the worst excesses of the elite capture of the sector
Mining is a useful microcosm of the political economy of SA and provides us with a fault line along which to explore what went wrong and how we could overcome the many challenges we face as a country.
Colonial and apartheid SA used the abundant mineral resources of the country to enrich a small elite and used the power of the state to legislate and enforce draconian laws to dispossess the majority. The end of apartheid was meant to usher in a new dispensation of equality and development. Sadly, the reality of the present has more continuity with the past than it does with the objectives set out in our constitution.
After the end of minority rule and its vicious apartheid system, the democratic state initiated efforts to redraft mining legislation in line with the constitutional imperative to deal with the injustices of the past. The final Mineral and Petroleum Resources Development Act, adopted by parliament in 2002, set out to “promote equitable access to the nation’s mineral and petroleum resources to all the people of SA” and to “substantially and meaningfully expand opportunities for historically disadvantaged persons, including women and communities”.
However, this imperative to advance the interest of the people was preceded by the objective to “recognise the internationally accepted right of the state to exercise sovereignty over all the mineral and petroleum resources within the republic” and to “give effect to the principle of the state’s custodianship of the nation’s mineral and petroleum resources”.
Over the last two decades during which the act was used to structure the mining sector, a clear divergence has emerged between the objectives and intended outcomes of the act and its actual outcomes.
The practical outcomes of mining in SA have left communities poorer, and our own research suggests that communities benefit from as little as 0.2% of value created in the mining sector, while they carry all the negative burdens of mining.
Close to R5.92bn of the estimated R7.5bn earmarked for community development did not reach its intended beneficiariesMining Affected Communities United in Action
The state remains a significant beneficiary of the mining regime as it is currently configured, according to the PwC report series from 2009 to June 2018, which suggests that the state has received R160bn in direct tax revenues during this period. An additional amount of about R45bn is estimated to have been paid to the government as royalties. In all, the PwC reports estimate that the government takes about 24% of value reported among the listed JSE mining corporates, employees 47% and shareholders 29%. Community “investments”, by contrast, has only amounted to 0.9% over the same period.
However as our research has shown, none of the value from these community “investments” is experienced in the lived realities of the affected communities. Up to 79% of community members we surveyed, those to whom these benefits are meant to accrue, have not participated in or benefited from the claimed investments. By our calculations, this implies that close to R5.92bn of the estimated R7.5bn earmarked for community development did not reach its intended beneficiaries.
In various social audits conducted by Mining Affected Communities United in Action (Macua) we found ample evidence of corruption and false reporting on community investment initiatives. One example is of a mining company that claimed to have invested millions in food gardens, only for our audit to find that it was a small garden in someone’s backyard.
While the department of mineral resources & energy has publicly argued that a community consent requirement will end mining in SA and undermine the custodianship of the state, Macua has noted that the current mining legislative framework, which was adopted without broad-based community involvement, only benefits shareholders, the state and to some extent organised labour. Custodianship does not grant absolute rights to the state, which must exercise its powers to the benefit of all South Africans. In the case of mining and the Mineral and Petroleum Resources Development Act, it is abundantly clear that this is not the case.
Consent for communities is simply not a radical proposition. Instead, it becomes an imperative if the intention is to overcome the injustices of the past and to ensure that all South Africans benefit equally and where the burden of carrying these activities are recognised and accounted for. A central reason for the poor outcomes in mining-affected communities and the intensive growth in inequality centres on community exclusion, which is grounded in the legislation of the Mineral and Petroleum Resources Development Act.
Most mining companies operating in SA already comply with consent requirements for indigenous people in Latin America, and thus the argument that this will scare off investors is a red herring at best and blatant lie at worst.
The current half-hearted attempts to consult with communities on the department’s proposed regulations once again highlight the disturbingly apartheid-like paternalism that underpins the government’s approach to communities.
Not only were the draft regulations released late in December when broad consultation could not take place, but it now has also proceeded with furtive and almost clandestine efforts to conduct sham consultations in selected communities across SA. The hasty consultations, which are far removed from the affected communities and where “rent-a-crowds” appeared to be used, came to the attention of Macua on March 5 via an unofficial internal source. This kind of ambush consultation sits at the heart of our demands for broad-based consultation to be embedded in legislation, so that we can end the marginalisation and exploitation of communities.
The current half-hearted attempts to consult highlight the disturbingly apartheid-like paternalism that underpins the government’s approach to communitiesMining Affected Communities United in Action
Any law and policy with such a profound effect on the self-determination of communities must be preceded by thorough engagement with the most affected communities and their partners in civil society. This sentiment is or has been echoed by, among others, the SA Human Rights Commission, the high-level panel chaired by former president Kgalema Mothlanthe and the courts.
The SA Human Rights Commission, in its 2016 report on the underlying socioeconomic challenges of mining-affected communities, found that there is a “pressing need for harmonisation of the framework and controls to ensure the principle of free, informed and prior consent is given sufficient regard”. The high-level panel in turn makes recommendations for amendments in relation to compensation for loss of land and livelihoods, for the transparent sharing of benefits accruing from mining, and for explicit compliance with the Interim Protection of Informal Land Rights Act (right to consent) before the granting of a mining-related right.
Both of the current amended regulations and guidelines represent a disregard for communities since neither recognises the right to free prior and informed consent, despite various institutional pronouncements and successive court victories won by communities (Maledu and Others vs Itereleng Bakgatla Mineral Resources and Another, Baleni and Others vs Minister of Mineral Resources and Others, as well as the Xolobeni judgment).
It is abundantly clear to those who choose to see that intensifying inequality, which leads to social decay, calls for urgent inclusive socioeconomic solutions to overcome the worst excesses of elite capture, and at the very least requires a new social compact for the mining sector.
The authors represent Macua.