CHRISTOPHER RUTLEDGE: Time to tackle structural corruption of the mining sector

“My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!’ Nothing beside remains. Round the decay Of that colossal wreck, boundless and bare The lone and level sands stretch far away.” Percy Bysshe Shelley (1818).

Just like King Ozymandias, who Shelley speaks of, the ANC came into political power with great hopes that it would construct a legacy through undoing the harsh and exclusionary laws of the colonial-apartheid regime.

One of the central pillars of such a legacy was to be the transformation of the mining sector, which was the central pillar upon which the colonial and apartheid states had built their own legacies of inequality, exclusion and oppression.

In contrast, the ANC legacy was to be one of transformation to a mining regime of equitable access for the historically excluded and economic and social development for all in a sustainable manner. 

But just like King Ozymandias, the ANC stands over a legacy that will leave only “the lone and level sands [which] stretch far away.”

By 1998, the ANC had started the groundwork for transforming the mining laws and had firmly set its sights on claiming all mineral wealth to the state ... on behalf of the people.

While in theory (specifically left-leaning national liberation theories), the idea of nationalising the nation’s wealth is a necessary part of ensuring a more equal society, the difficulties of governing such a vast resource of wealth were not fully appreciated or considered at the time. 

By the time the Mineral & Petroleum Resources Development Act (MPRDA) was passed by parliament in 2002, there was great hope that the mining sector would be the “rising tide that would lift all boats”.

But this never materialised, and instead over the next two decades the MPRDA would be the incubator for a growing rot that would not only threaten the idea of a more equal society but be the arena from which the practice of state capture would find succour and take root. 

At the heart of the MPRDA sits a fundamental threat to good governance, and consequently a threat to a more just and equitable society.

Embedded in the MPRDA and supporting legislative structures is the idea that the state can be both a referee and a player. Over the years, and in its current plans, the SA government has pushed for amendments to the MPRDA to enhance state control over mineral resources.

One of the key goals of these amendments has been to create legal frameworks that facilitate greater state participation in mining operations, particularly through state-owned enterprises (SOEs). These amendments also seek to empower the state to take a more active role in strategic mineral extraction projects, which could eventually result in more state-owned mining companies. 

When the government is both the regulator and an active participant in an industry it creates an inherent conflict of interest. In the SA mining sector, where government controls licensing, environmental oversight and regulatory enforcement, as well as holding stakes in certain mining operations, there is a pronounced risk that decisions will favour state-owned or government-aligned entities at the expense of the public interest. 

When the government regulates its own operations it may be reluctant to enforce rules or apply sanctions to its own agencies. This lack of separation creates a system where accountability is diluted, making it easier for state actors to ignore or downplay violations. 

When government interests as a player conflict with its role in safeguarding the public good, marginalised communities, especially those affected by mining activities, suffer the most. For instance, in SA mining-affected communities rely on the government to enforce environmental and social obligations on mining companies to ensure that water resources, air quality and land rights are protected.

If the government is also seeking revenue and profits from mining, there is a risk that these protections will be weakened, and indeed there are ample examples where Eskom, Sasol, Alexkor, PetroSA, Richards Bay Minerals and others have been provided with special dispensations. 

Mining-affected communities have for years pointed out that not only has the government not heard their plea for justice in the sector, but political leaders such as mineral & petroleum resources minister Gwede Mantashe and President Cyril Ramaphosa, who himself has private mining interests, have been at the forefront of closing out and oppressing community voices who have been calling for greater protections as mining companies continue to operate with near impunity. 

One of the first matters Mantashe dealt with in the seventh parliament was to amend the MPRDA to make it easier for business (including government-owned companies) to operate, and for the minister (Mantashe/ANC) to have greater powers to unilaterally make decisions within the sector.

At the same time, the department of mineral & petroleum resources has done everything in its power to exclude community voices from participating in the preparation of amendments to the MPRDA. The message from the minister and the department has been clear about not including any proposals that would derail the master plan of enriching the inner circle. 

When the government is both a player and a referee it can and does open doors to corruption, as officials may have incentives to favour projects that personally benefit them or their allies.

In the SA context, the mining industry is already subject to allegations of rent-seeking and political favouritism, which can be worsened by direct government involvement in the industry. A 2022 report by the Global Initiative Against Transnational Organised Crime has ranked mining as one of the key areas of corruption in SA. 

Many successful economies separate government’s role as a regulator from its involvement in industry. For example, in Norway the government owns a significant portion of its oil resources but leaves regulation to independent agencies such as the Norwegian Petroleum Directorate.

This ensures that the government can pursue its commercial interests while strict regulatory oversight is maintained to ensure environmental protection and long-term economic sustainability. 

Given the great lengths Mantashe, his department and the ANC caucus in parliament have gone to, to exclude the voices and concerns of mining affected communities, perhaps it is time that we open a debate over the structural drivers of corruption and whether we should not be dismantling them given that they have brought us to the edge of the abyss. 

• Rutledge is executive director of the MACUA & WAMUA Advice Office.