MINING

Investing in people

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Over the past few years, mining communities have revealed their disgruntlement and dissatisfaction regarding the many issues they face. Today, mining companies are increasingly taking CSI initiatives to heart, but how much is really being done?

South Africa’s mining sector has faced its fair share of difficulties over the past few years. Events such as Marikana still haunt us today, and with the recent labour unrest in the sector, it becomes evident that miners and mining communities are asking for change.

Indeed, many would agree that a mine’s most precious resource is not its minerals but its people, the employees that keep the operation afloat. To this end, Corporate Social Investment/Responsibility (CSI/CSR) in the mining sector becomes a vital imperative aimed at empowering communities in and around mining areas.

In a scholarly article by Ralph Hamann and Paul Kapelus publishes by the Society for International Development in 2004, entitled Corporate Social Responsibility in Mining in Southern Africa: Fair accountability or just greenwash?, the authors highlight the need for mining companies to engage sincerely in CSI.  

“Corporate Social Responsibility (CSR) is playing an increasingly significant role in companies’ narratives and practices also in southern Africa, particularly in the case of mining. The international prominence of CSR in mining can be traced to mining’s potentially significant negative social and environmental impacts, and the related criticism levied at mining companies from governments, NGOs, and local community organizations (e.g. Banerjee, 2001; Third World Network Africa, 2001; MMSD (Mining, Minerals, and Sustainable Development), 2002). […] At a practical level, the key demand of critics of CSR is that for CSR to be anything other than greenwash, it has to guarantee that companies are accountable for the direct and indirect impacts of their activities,” Hamann & Kapelus says.

Insights from the experts

This of course begs the question, how much is really being done in terms of investing in our mining communities? Opportunity was given some insight from players on both sides of the field, as Anglo American, Palabora Mining and the Bench Marks Foundation tell us about their experiences and views on CSI and social investment in the mining sector.

As Anglo American’s Norman Mbazima, Chairperson of company's Chairman's Fund, says, “the NDP requires specific critical actions required by the country to form a social compact to reduce poverty and inequality. An increase in employment and investment can be directed by a strategy to address poverty and its impacts and to broaden access to employment and decent wages. As corporate South Africa we must support programmes that focus on alignment with national strategies. This includes a focus on empowering the people of South Africa through nurturing an entrepreneurial spirit and behaviour in the new generation that can allow them to create their own work.

“Anglo American takes this call to action very seriously, and despite the challenges faced by our industry in recent times, we believe mining remains a key player in South Africa’s economy as we continue to contribute to the country’s development. In terms of enterprise and community development, our industry still has significant developmental potential beyond only creating direct jobs. One of our entrepreneurship initiatives, the Enterprise Development Conference, was started to showcase best practice in enterprise development and to assist in raising standards in this sector. Annually the conference provides a platform to help small businesses develop and graduate from micro and survivalist entities to become sustainable, job-creating enterprises.”

Mbazima further indicated that globally, it has been proven that the best approach to alleviating poverty and reducing unemployment is through building and stimulating entrepreneurship and small business growth. According to them, small and medium enterprises have the ability to make a significant contribution to economic growth and sustainable job creation in South Africa. As a result, Mbazima says, the creation of these entities has long been a priority for Anglo American.

“We have been doing it for a quarter of a century and have seen great success with our enterprise development arm, Zimele. This home-grown model has not only been a great success and is widely regarded as best practice but it is now being adopted in other parts of the world, proudly flying the South African flag on Anglo American’s behalf. Such is the success of our Zimele strategy that the International Finance Corporation has prescribed our model as the best approach globally for companies seeking to integrate local SMEs into their supply chains.

“We are striving towards similar successes in our other areas of focus, such as the development of local communities. Backlogs in basic service delivery such as water and sanitation dominate within the rural municipal areas and the levels of impoverishment remain very high with many people living below the poverty line. As the majority of people employed by the mining industry traditionally reside and originate from surrounding communities which are predominantly rural settlements, this has long since been an area identified by Anglo American for improvement,” Mbazima says.

Mbazima further highlights that the private sector is uniquely placed to contribute to employment and sustainable community development by aligning their efforts with the critical milestones in the NDP. This is important in terms of the programmes that these companies support and how they work with their beneficiaries in order to achieve the milestones set out in the NDP, Mbazima says.

“Through all of our NDP-focused initiatives Anglo American’s vision is rooted in not only being a spectator and funder but being an active partner. Anglo American respects and upholds its South African roots and is playing an active role as a catalyst for growth and change. This begins with our investment in South Africans and expands into how we invest substantially in the communities within which we operate. We know that through a combination of these interventions, our partnership with government and our efforts to appropriately leverage our priority assets, together we can continue to deliver a sustainable viable mining business, with sustainable long-term returns for our investors and for the country in terms of job creation, tax and foreign direct investment,” Mbazima concludes.

Socio-economic development

On the topic of CSI in the mining sector, Palabora Mining’s Manager of Corporate Affairs, Hulisani Nemaxwi, says that the social-economic development of the labour sending community is well entwined with the sustainability of the mining industry.

“At Palabora Copper, a subsidiary of Palabora Mining Company, we consider CSI and LED a strategic part of our business. During the years 2012-2014, we have spent over R100 million in social labour projects, enterprise development, bursaries, skills development and the Social and Labour Plan. Among these projects was a newly built clinic in Namakgale, called Phelang Wellness and Disease Management Centre for about R7 million. At Palabora Copper, we understand that the growth of SMME’s is critical to the economic boom of our communities and creation of the much needed jobs. For that reason we also implemented an enterprise development programme called 30-TEN+FIVE. The programme was aimed at supporting local entrepreneurs and ensuring that our community is not entirely dependent on the mining as an industry, but creates various sub-industries,” he says.

In terms of Palabora’s CSI achievements, Nemaxwi says that Palabora Copper strategically leapfrogs from their own initiatives. According to him, their 30-Ten+Fibe projects have produced entrepreneurs who have now become part of their mining supply chain. In order to augment the former programme, Nemaxwi says that in 2014 they started with the supplier development programme (SDP) aimed at getting some thirty suppliers from local community. He says this was preceded by a rigorous process that ensured that of the 417 business applicants, the thirty that are engaged as part of the initiative are ready to do business with the mining sector; providing quality, are timely and adhere to high safety standards.

Nemaxwi says that more interestingly, some of these suppliers are actually graduates from the 30-Ten+Five initiatives, an indication of their strategic planning for the development of their employees and the community. “To date, these companies have already received work worth over R50 million. The SDP programme is still continuing.

“Most recently, we have partnered with the Roads Agency Limpopo, a state-owned entity to rehabilitate the dilapidated R40 road stretching 40 kilometers from Phalaborwa to Mica. In a project that will cost about R80 million, we have committed R40 million. The R40 is a strategic main road for the entire Ba-Phalaborwa community and we are part of it. This public-private-partnership project is scheduled to start during the start of the second quarter of 2015. And here too, we aim to create local jobs and business opportunities for the local people,” he says.

 

Looking at the possible economic, trade and investment benefits CSR in mining could have for South Africa, Nemaxwi says that in the many mining communities where very little is done for the local people, it is mostly tense and often hostile, something that he says, they do not have in Phalaborwa. “These investment are ideal not only because we are a good corporate citizen, but because we value people and their wellbeing. Many of our graduates today works for Palabora Copper. The infrastructure we have built is also used by our employees and their children. Investment in CSR should not be viewed from a monetary term view-point, but from the value added to human lives – something we are more proud of,” he says.

Nemaxwi further hightlights that CSR is part of good corporate governance and a doctrine that has no international boundaries according to him. He says that many mining sectors that have seen upheaval from the communities recently is because of the discord between profitability and poor development in the community. International trade, he says, is very much influenced by the stability projection in the area where investment is to be made. He points out that the more toxic the community environment, the more so the international trade and investment environment.

He also says that “development of people needs to be driven by the very people needing the quality of life improvement. It is crucial for Palabora Copper to know and understand challenges of the communities before implementing our initiatives. This ensures a well-integrated planning between the municipality, the five traditional authorities and various role players such as the Palabora Foundation. Essentially, mines need to view themselves as part of the community they operate in. Only in that way, can the CSR initiatives truly improve the quality of lives.

“Integrated planning which include all stakeholders, business and governments, is possibly the better route to long-term sustainability. Projects need to be able to support one another. At Palabora Copper, this has been the catalyst of our success story. When building the Phelang Wellness and Disease Management Centre, which is used mostly by people leaving with HIV/AIDS, the contractors were local companies. Our enterprise development initiatives led to graduating of these businesses into becoming suppliers to the mine itself. That is the integration that should encompass the planning.”

As Nemaxwi points out, they understand the importance of establishing partnerships that will lead to effective implementation of some of municipalities’ socio-economic issues such as the unemployment, youth up-skilling, health care and inadequate infrastructures. He says that partnership with the Roads Agency Limpopo is one of the PPP models that is crucial for the development of the area.

He says they are also in pursuit of a partnership with Limpopo Economic Development and Tourism (LEDET) as well as the Department of Trade and Industry, with the sole aim of brining integrated development to their people and businesses. He says that in the Bushbuckridge area, another partnership worth mentioning is between Palabora Copper, SANCO and Bushbuckridge Local Municipality to build five houses for families who have previously been living in dilapidated mud structure and shacks.

Looking at who the various stakeholders are that can take hands to ensure better, more sustainable CSI in the mining sector, Nemaxwi says that “the projects that Palabora Copper undertakes in order to empower and improve the lives of its host communities are done through an integrated consultation process with the Ba-Phalaborwa municipality, the Local Authorities, Palabora Foundation, as well recognised community representative forums. This ensures that our concerted efforts are directed at the projects that will not only bring relief in the most poverty stricken areas in the community, but that will also empower the communities with skills that will promote the sustainability of these projects for the benefit of all community members,” hy says.

The Social Labour Plans provide a framework for the socio-economic contribution of mines under the Minerals and Petroleum Development Act, 2002, with the objectives which include promoting employment and advancing the social and economic welfare of all South Africans; contributing to the transformation of the mining industry; and ensuring that holders of mining/production rights contribute towards the socio-economic development of the areas in which they are operating, as well as the areas from which the majority of the workforce is sourced.

“Promoting employment equity is an essential part of Palabora’s strategy and it further aims to attract, develop and retain talent and ensure equitable representation as per our country’s demographics. Palabora is committed to providing fair opportunity to all employees while continuing with our efforts to meet the employment equity plan requirements as detailed in our Social and Labour Plan. Our constant monitoring and evaluation has yielded positive results. Palabora has employed 81% of people from designated groups or previously Historically Disadvantage South African (HDSA) and 58.2% of these employees occupy management positions against the target of 40% set in the Mining Charter.

“Up-skilling of youths in our host communities forms integral part of our efforts hence Palabora continues to develop unemployed learners or graduate in and around Ba- Phalaborwa through recruitment into learnerships, internships, in service and vocational employment. Local community members are recruited and trained to operate mobile equipment which leads to permanent appointment into various positions when such job opportunities become available,” Nemaxwi says.

Lack of participation

Looking at some of the challenges faced in terms of CSI in the mining sector, he says that these include the discord between communities themselves, lack of visionary participation and most importantly the availability of funding for some of the initiatives. As he points out, the global market for commodities having shrunk significantly, and mining costs remaining very high, and an oversupplied market, the year 2015 for Palabora Copper will be a challenging one.

In terms of smaller mines’ CSI initiatives, Nemaxwi says that small-scale mining should always ensure open communication with the stakeholders within the areas they are mining in order to manage perceptions. He says that it will always be advisable to seek partnerships which will have value for both the mine and the community itself if sustainability is anything to go by. Moreover, CSI should not only be viewed from a capital injection point of view according to him.

Nemaxwi concludes that “Corporate Social Investment is a fundamental part of our strategy and can therefore never be viewed as an add-on. Palabora Foundation was established several years ago by PMC as an execution partner, or rather arm, that Palabora will use to ensure that the needs and socio-economic ills of our communities are address in a socially and sustainable manner.

“While almost the entire mining industry in South Africa has seen serious labour unrest between 2013 to 2014, South Africa’s largest producer of refined copper, Palabora Copper, has enjoyed sustainable labour stability. This is mainly because of the integration of the community development to that of our labour force, ensuring that our employees are not only enjoying decent salaries, but have better living conditions with their families.”

Investing and empowering

The Bench Mark Foundation, a church based group vouching for the rights and acting as voice to mining communities and their needs have a more outspoken stance when it comes to investing and empowering our mining communities. According to their research, observations and dealing with people at a grassroots level, a lot still needs to change in mining to create a more equitable, inclusive industry that caters for the needs of those in and around mining communities.

As Chairperson Bishop Jo Seoka said at a conference in November last year, “If we are going to change the extractive industry we must have a new mining path that situates communities and workers high up in the value chain where mining corporations share more equitably with workers and communities. It is therefore critical for us that communities and workers have real participation over the planning over mines and oversight during its phase of operation as well as its closure.”

According to Seoka, in the present arrangement communities and workers bear the brunt of mining negative impacts; workers sacrifice their health and safety and thus their lives while communities sacrifice their health, welfare and livelihoods. “This relentless attack on workers and communities is what motivates us to say ‘Enough is Enough: Change Now’, meaning that this practice must be stopped,” he says.

He further adds that, “we believe (Bench Marks Foundation) that the time to reinvent and share the cake equitably and operate ethically is now. Now is the time to redesign the relationship and proceeds of mining profits. The community, workers and the country should get an equal share. There is no doubt in our thinking that the growing inequalities, whether in wealth and income distribution or access to a better life has the potential to further compromise our fragile democracy.”

Seoka says not only do the poor lose financially, they lose any meaningful existence that is rightly theirs. “Life is about full human dignity, opportunity, self-discovery and realisation, all which bring human dignity. What example are a few billionaires who flash their ill-gotten gains, if we the majority citizens remain unemployed and trapped in poverty? This type of measuring success is a wrong yardstick, but tells us a story that we must think about in this conference and beyond. Rampant profiteering at the cost of the people, of human security is not helping us build Africa which benefits its people, something that must surely be our priority,” he says.

He also says  their work with the communities has taught them that people want a say as to whether or not mining can take place on their land; because they desire to benefit financially, economically, and be able to decide on their developmental agenda if they accept mining on their doorstep.

To then come to a conclusion on the matter at hand, it would be hard for anyone to accurately gage the extent to which mining CSI is currently being embraced in South Africa as a whole and that there is clearly a lot of ground to cover to bring empowerment to all stakeholders. It is however evident that to some of our mining companies, investing in their communities is becoming, and has been, an increasingly important goal.

Michael Meiring 

 

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