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South Africa: The Price of Platinum

AfricaFocus Bulletin
Sep 6, 2012 (120906)
(Reposted from sources cited below)

Editor's Note

"The recent study of the Bench Marks Foundation has predicted the problems now seen at Marikana. If all the mining houses had addressed the underlying causes of unrest and provided both workers and local communities with the opportunity to live a decent life, the killings could have been avoided." - Reverend Jo Seoka

Less publicized than diamonds or gold, platinum mining is also still one of the mainstays of the South African economy. As other mining sectors, historically dependent on cheap black labor and featuring a partnership of international and South African big business interests, it is under pressure to maintain profit levels for its investors in the face of fluctuating international prices.

London-based Lonmin, the company owning the mines where striking miners were killed last month, and the third-lagest platinum producer worldwide, was even before the strike of the most vulnerable to market pressures, one of the factors leading to its intransigence in the face of worker demands (see http://tinyurl.com/bpqbqa for a recent update, and http://en.wikipedia.org/wiki/Lonmin for a brief company history and description). But the issues at stake affect the entire industry.

This AfricaFocus Bulletin, not sent out by e-mail but available on the web at http://www.africafocus.org/docs12/saf1209b.php, contains a statement on recent events on the mine by Reverend Jo Seoka, as well as excerpts from a background report on the platinum mining industry just published by the Bench Marks Foundation, a church-related social responsibility organization that has been investigating the impact of the industry for several years.

Another AfricaFocus Bulletin, sent out by e-mail and available on the web at http://www.africafocus.org/docs12/saf1209a.php, contains two among the many insightful commentaries that have appeared since the police shot the striking miners at Marikana on August 16, 2012, namely an open letter to COSATU by Jay Naidoo, and a background analysis by Martin Legassick.

Additional articles worth noting include:

"Marikana: The miners were hunted like beasts" by Greg Marinovich
Mail & Guardian, 31 Aug 2012
http://tinyurl.com/94fyqdl
Also http://www.gregmarinovich.com/BLOG/2012/08/murder-at-marikana /
Most miners shot out of view of cameras at close range, not while attacking police [for additional reports see http://allafrica.com/stories/201209050888.html on possible charges against police. Also search Google on Marikana + Marinovich]

"Marikana: No common purpose to commit suicide," by Pierre de Vos
Constitutionally Speaking, Aug 30, 2012
http://tinyurl.com/8etakhn
On the murder charges initially lodged against the miners

"Marikana eyewitness: 'He raised his hands, they shoot him in the head'" by Mandy de Waal
Daily Maverick, September 6, 2012
http://allafrica.com/stories/201209060906.html

"Marikana is South Africa's turning point" by William Gumede Guardian, Aug. 29, 2012
http://tinyurl.com/9ncx4ds
"The brutal exposure of South Africa's inequality may at last shock the governing elite out of its complacency"

"What Went Wrong At Marikana?" by Alex Lichtenstein
Los Angeles Review of Books, September 1st, 2012 http://lareviewofbooks.org/article.php?id=902 Background analysis on platinum industry

"Mass Murder of Miners and Neo-Liberalism in South Africa" Video interview with Vishwas Satga and transcript
Real News Network, September 2, 2012
http://tinyurl.com/8r8vszy
Very useful background analysis by one of leaders of movement for solidarity with the miners

"Charges against miners raise questions" by By Jo Seoka
Business Report, September 5 2012
http://tinyurl.com/8f97qny
Rt Reverend Dr Jo Seoka is an Anglican bishop, the president of the SA Council of Churches and chairman of the Bench Marks Foundation.

"The rise and rise of Amcu" by Jan de Lange
City Press, 2012-08-19
http://tinyurl.com/8o6pqxx
Background on the independent union involved in the strike

For previous AfricaFocus Bulletins on South Africa, visit http://www.africafocus.org/country/southafrica.php

++++++++++++++++++++++end editor's note+++++++++++++++++

Opinion - Lonmin should have listened- Business Report

August 29 2012

By Rev Jo Seoka

Bench Marks Foundation
http://bench-marks.org.za/

-Right Reverend Doctor Jo Seoka, an Anglican bishop, is the chairman of Bench Marks Foundation and the president of the SA Council of Churches

The killings at Marikana could have been avoided if Lonmin's management had listened to the workers' concerns. There was no need for the strike – let alone the violence that led to the loss of 44 lives.

A democracy should provide for the human rights of all citizens, including the right to decent work, a living wage and collective bargaining. South Africa won its democratic character through negotiations, where people came together to discuss their way towards a solution for the common good of all. For this reason, the nation and the world was shocked at the news of the brutal killings of the people who dig up the wealth of this country.

Platinum is one of the most precious resources the country has to use for its development. Our constitution is said to be one of the best in the world, but the majority of citizens are yet to enjoy the freedom provided by the constitution.

On our visit to the Marikana mines on August 16 we first made contact with the strikers on the koppie. Having introduced ourselves, we asked how we could help to resolve the conflict that at that point had already cost 10 lives.

The spokesperson for the workers asked that we convey their desire for the employer to come and address them. The workers asked specifically for Mr Ian Farmer, the chief executive, whom they called "umqashi" (boss). Without promising them anything we left to ask Mr Farmer to come with us to talk to the strikers.

At the mine offices we met three managers who told us that workers could not see Farmer as he was not in the country, but sick in London. We asked if someone could address the strikers in his place, but (we) were told the management would not talk to criminals because they had killed security staff.

We pleaded with them, ultimately (a) meeting with Lieutenant-General Zukiswa Mbombo who told us that security was a concern, and this was not negotiable. She left us with the management who told us to inform the strikers that management would only talk to them if they:
* Surrendered their weapons;
* Elected between five and eight people to represent them; and
* Dispersed from the koppie.

As we left, one manager told us that we could not go back to the koppie as it was now a security-risk area under the police. We headed for the road back to Gauteng and fifteen minutes later my cellphone rang. A voice on the other side said: “The police are killing us.” We heard bullets but (we) were helpless. The following day we saw on the pictures of one of the leaders we spoke with lying dead – the man in the green blanket.

Here's a country that claims to promote dialogue, while being at war with itself.

How can we forget so soon how we have arrived at where we are today? There is an African proverb that says things are corrected through talking. People are encouraged to talk about their differences instead of resorting to fighting. It is for this reason that we believe the mine management could have done things differently.

It is not a matter of who shot at whom first – important as this question is – but rather finding a solution to save more lives from violence and to address the flaws in our democratic society.

On Monday, August 20, we went back to Marikana to consult with the local clergy on how best we could be of help to those who had died in the violence. About four church leaders resolved that we must go and talk with the workers.

After addressing them we asked the management if they could talk to the strikers. Ultimately, executive vice-president Bernard Mokwena agreed to meet the strikers' delegation. We left to convince the strikers to meet with the executives.

It took about five hours to negotiate a safe place where the talks could take place. Late in the afternoon we brought the two parties under one roof and talks started.

On Tuesday we reconvened. The strikers' delegates put their demands before the management team who received them and asked that they be given a chance to study and discuss them before giving answers the following day. It was not an easy meeting but there was understanding and willingness to engage each other.

On Wednesday we met again to get the management's response. The management tried to give answers and the delegation received them and promised to give them to their members. Notwithstanding, on Wednesday the two parties agreed on the need for mourning and that talks be postponed until after the memorial service and funeral, but that talks would resume on Monday, August 27. Talks were mutual and cordial all along, which proves that talking can bring about understanding and resolution to a very difficult issue.

The judicial commission, established by President Jacob Zuma, is welcomed. We hope it will be able to consult widely to reveal the truth about the Marikana killings. This has to be done in the context of widespread poverty, exclusion and profiteering at any cost.

The management and church leaders have talked and agreed on building peace during the talks. However, we are now taken aback to learn that the Minister of Labour, Lonmin management and trade unions have made different arrangements to address the issue. This disrupts the talks and trust already established. We do not believe that leaving the workers outside this peace process will yield any lasting fruits, but rather more problems.

As church leaders we are careful not to be used for personal ends, but to help bring about a sustainable solution and peace at the workplace.

The workers have repeatedly asked to be taken seriously and for access to engage constructively with the management. Short cut solutions are not likely to last, but to cause more trouble. The solution lies in bosses engaging in collective bargaining with the striking workers. If a solution is not found that includes the striking workers, workers will maintain their suspicion that management is not interested in them – only committed to pleasing shareholders through resuming production.

The Marikana incident is a reminder and an opportunity for the nation to take stock of the state of affairs in our democratic dispensation. What has gone wrong, we must ask ourselves. It is futile to talk about social cohesion and the need for dialogue when we are not communicating with each other.

Why did we vote and for whom did we cast our vote if those we put into power are not at the service of the people, but rather themselves? People should not be dying at the hands of the police who are employed to protect the nation.

The wealth of this nation must benefit all its citizens, not just few. Together we must work for equality and fair distribution of resources if we are to close the gap between rich and poor. Education, jobs and development are critical areas of focus if we are to provide decent lives for all people in South Africa.

We suggest that collective bargaining be used in line with labour laws so that negotiations create a peaceful work environment. This process must not be delayed but carefully crafted to find a lasting solution involving the strikers.

Management must continue to talk to workers while they seek trade union representation. Care must be taken that the social ills that result from unacceptable living and working conditions are addressed.

The recent study of the Bench Marks Foundation has predicted the problems now seen at Marikana. If all the mining houses had addressed the underlying causes of unrest and provided both workers and local communities with the opportunity to live a decent life, the killings could have been avoided.


Communities in the Platinum Minefields

Policy Gap 6

A Review of Platinum Mining in the Bojanala District of the North West Province: A Participatory Action Research Approach

The Bench Marks Foundation

The research was commissioned by the Bench Marks Foundation, and was conducted by: David van Wyk, Mudjadji Trading (Pty) Ltd in collaboration with the Bench Marks Centre for Corporate Social Responsibility at the North-West University, Potchefstroom Campus, and the Bench Marks Community Monitoring School.

The Bench Marks Foundation, PO Box 62538, Marshalltown 2107 Johannesburg, South Africa, Tel/Fax: +27 11 832-1750 Tel: +27 11 832-1743/2, http://www.bench-marks.org.za

[Brief excerpts from report below. Direct link to pdf of full report: http://tinyurl.com/98x6vyz]

Foreword

Once again I am pleased to release this research study on platinum mining in the North West Province in the Bojanala District. In 2007 the Bench Marks Foundation released a study on platinum mining in the North West Province (Rustenburg) called the Policy Gap, hereinafter referred to as Policy Gap 1, in which we made a number of recommendations to Anglo Platinum, Impala Platinum, Lonmin and Xstrata on how to improve their social, economic and environmental performance within the framework of corporate social responsibility.

In 2011, Policy Gap 1 was revisited to review whether there had been any changes in the behavior of these corporations with regards to communities, and whether the mining houses had taken up any of the recommendations from the Bench Marks Foundation. The recommendations were centered on reducing the negative impacts on the environment, air and water quality and dealt with land concerns, and creating sustainable economic practices. Recommendations were further made for the companies to deal with labour issues, the living-out allowance, subcontracting and HIV and Aids, both in the workplace and in the surrounding communities.

We start from the assumption that management and investors will not voluntarily act in the interest of society and the environment, and believe that this is a correct assumption. We believe that the starting point of economic life begins with communities, and so we want to know how those directly impacted upon, benefit from mining.

To do our studies we use as our basis, the Principles for Global Corporate Responsibility - Bench Marks for Measuring Business Performance. The global Bench Marks Principles have been formulated by a number of faith-based organisations and non-governmental organisations from around the globe on what civil society considers constitutes responsible business behaviour. It is a tool which different organisations can use to implement meaningful economic, social and environmental sustainability. It is designed to help groups to move from an articulation of values to a set of principles, to concrete points of dialogue and to action.

Overarching principles the Bench Marks research instrument calls for:

  • A sustainable system of production and distribution.
  • Preservation of the broader and social environment for present and future generations.
  • A more equitable system for the distribution of economic benefits.
  • Stakeholder participation, especially those most affected and exploited by companies? operations.
  • The promotion of life and freedom for all humanity.

This review was done with our Community Monitoring School, and six organised communities participating in the research process. The community monitors engaged with their communities and collected information on various issues affecting them. This was a pivotal part of the research, and was also put together in a separate community report.

This study also involved our Bench Marks Centre for Corporate Social Responsibility at the North-West University, and the outcome we hope will assist not only corporations to improve their social responsibility actions, but also empower communities to engage with the mining houses on a more level footing.

Overall, we have seen very little improvement in the performance of the companies surveyed on corporate social responsibility. What we have seen, is a large increase in corporate advertising, large spreads in newspapers and billboards stating how responsible mining is, in particular by Anglo Platinum. Instead, all the companies reviewed here should respond to community concerns over jobs, health care and a safe and healthy environment.

Once again we have to report that all the companies surveyed, although participating in the research, have failed on a whole to meet the Principles for Global Corporate Responsibility - Bench Marks for Measuring Business Performance.

Rt Rev Dr. Jo Seoka- Chairperson, the Bench Marks Foundation

++++++++++++++++++++++++++++++

Preface

The Bench Marks Foundation's aim is to change corporate behaviour towards responsible business conduct – conduct that benefits communities and enhances the overall wellbeing of those most negatively impacted upon. We have a particular concern with how women are impacted upon and how mining contributes to the spread of HIV and AIDS. Women suffer livelihood losses, marginalisation and loss of identity and both directly and indirectly bear the consequences of mining operations.

We still cannot see how mining communities benefit. Yet we read these mining houses' sustainability reports and see they talk of building clinics and schools, but these projects seem to make little difference to the impacts on communities' wellbeing. Mines seem not to care about water impacts that cause health and livelihood problems, air quality issues that lead to respiratory problems or the overall development of communities on whose land they operate.

We note all the talk in company sustainability reports to society that project these companies as being exemplary in their operations. What we realise is that for the mining companies surveyed their Corporate Social Responsibility is more strategic interventions to look good. This is based on how they want the public and investors to perceive them. But behind this is their private image, one of pursuing profits more often than not at a cost to other people, mainly communities nearby or downstream. We focus on the experienced reality of communities and find that what the mining houses in Bojanala District in the North West Province say on paper does not really translate into meaningful practices by the said corporations.

We hope that the mining corporations under review will dissect this study to improve how they conduct their business operations and engage with the Bench Marks Foundation and communities on the research findings. We also hope that decision makers, the South African government, ethical investors and think-tank organisations will use the findings to ensure mining is done more responsibly.

We need to be aware of the win-win solution propagated by many, when in fact we have winners and losers, and the losers, communities and specifically women tend to carry the costs of mining that are externalised onto them.

I can only hope that this report will shake up the mining industry and that the issues raised will be on every mining company's agenda.

John Capel - Executive Director
Bench Marks Foundation

++++++++++++++++++++++++++++++++++

Executive summary

In 2007 the Bench Marks Foundation published Policy Gap 1, looking at the impacts on local communities from platinum mining in the North West province. The findings showed that despite the great value extracted from platinum mining, there are harmful social, economic and environmental impacts on local communities, and the mining companies have yet to assume their responsibility for the negative consequences of their mining activities. This report revisits the initial one to look at what changes have taken place, and further aims to investigate the perceptions that local communities have of mining companies to evaluate the corporate personalities of these companies. In order to increase the participation of local communities, participatory action research was chosen as a methodology.

The corporations surveyed in Policy Gap 6 include Anglo Platinum, Impala Platinum, Lonmin, Xstrata, Aquarius and Royal Bafokeng Platinum Limited. Although they all have corporate social responsibility programmes in place, the overall findings of this study show that they all fail to meet the standards of the Principles for Global Corporate Responsibility - Bench Marks for Measuring Business Performance.

For Anglo Platinum, the study finds that despite making headways in achieving the goals set by the MPRDA related to the employment of historically disadvantaged South Africans (HDSAs), the employment of women and increasing HDSA procurement, significant challenges remain. While it is positive that Anglo Platinum has improved the number of HSDAs in management positions, the company still needs to do a lot more for its employment profile to be reflective of South African demographics. The increase in the number of employed women is also positive, but must be accompanied by a transformation of the workplace culture to accommodate female workers and provide them with a safe working environment. The study also expresses concerns around Anglo Platinum?s two CSR-projects to provide employees with houses and for communities to buy shares in Anglo Platinum.

When it comes to environmental impacts, Anglo Platinum itself admits to exceeding permitted emission levels of sulphur dioxide (SO2) and harmful impacts on water resources in the area. The Bench Marks Foundation is concerned that the corporation reports only a 63% compliance with 688 conditions requiring legal compliance. Anglo Platinum must take immediate steps to comply with legal requirements and set emission limits.

The main issues concerning Impala Platinum (Implat) include high levels of fatalities at its operations, extensive use of sub-contracted labour, and damaging environmental impacts. The levels of fatalities are unacceptably high, and must be seen in connection with the push for cost containment, the use of subcontracting and the low levels of worker literacy. Impala Platinum has increased the number of sub-contractors it employs, and subcontracted labour is often poorly paid and poorly accommodated. Further, the lack of employment opportunities given to local youth is creating tension with the surrounding communities. Impala Platinum should further show greater concern for public safety in the communities surrounding the mine, by immediately setting up proper booms and bridges at the rail crossings that are now unguarded.

In terms of environmental impacts, emission levels of SO2 and CO2 are too high at Impala Platinum's Rustenburg operations. For CO2 emissions, the Rustenburg operations account for over 70% of all of Implat's CO2 emissions. This means that the communities of the Bojanala District are bearing the heaviest burden of air pollution of all of Implat?s operations in Southern Africa.

Regarding Lonmin's operations some of the key problems highlighted by the report include a high level of fatalities, very poor living conditions for workers, community demands for employment opportunities and the impacts of mining on commercial farming in the area. Almost a third of Lonmin?s workforce is contracted labour, and community demands for employment have lead to protests and unrest. The company was also in a union dispute, after which Lonmin dismissed 9 000 workers at the Marikana operations.

Commercial farming in the Marikana area has been negatively impacted upon by the mining activities here. As the mines buy more land, the farms that remain become isolated, and suffer under the environmental impacts of mining on the quality of the water sources in the area. One of the key challenges when assessing Xstrata's CSRprogrammes is that the company?s sustainable development report covers all its operations across the world, without breaking down the report to specific country levels. This makes it very difficult to obtain a clear picture of Xstrata?s CSR programme in the Bojanala District of the North West Province specifically.

However, some major concerns were raised by local communities regarding how Xstrata deals with HIV/AIDS and local employment. In February 2011 the National Union of Mineworkers (NUM) alleged that Xstrata was firing workers on the grounds of their HIV/AIDS status from one of its South African collieries. This is despite Xstrata's claims of providing extensive HIV/AIDS programmes for its workers. This incident led to Xstrata employees fearing to be tested and treated at the mine's health facilities, and instead going to government facilities. These government facilities have then become overstrained, leading to tensions with local residents over access to health facilities.

Another source of tension between the local community and Xstrata is the perception among local residents that Xstrata is heavily reliant on contract workers from outside the local communities. This is despite Xstrata?s claim to employ most of its workforce locally.

Policy Gap 1 in 2007 found poor environmental management of water and waste behind Xstrata's operations, but the current report shows a significant improvement on this point.

For Aquarius the issue of local employment is also a source of tension with the local communities. Aquarius claims to have a minimum of 51% employed from the local communities, defined as people living within 50km radius of the mine?s operations. However, such a definition includes migrant labourers who are living in local communities, and so continues to be a source of tension. Further, Aquarius has a very heavy reliance on sub-contracting, employing 9 434 workers as subcontracted labour out of a total of 11 072 employees. The living-out allowance given to workers is linked to increases in informal settlements, a problem raised in the report in relation to most of the companies surveyed. Finally, the report highlighted some of the problematic issues relating to Savannah Resources Consortium?s shares in Aquarius, given the links of this BEE consortium to people with high-level political connections.

Royal Bafokeng Platinum Limited is the final company surveyed in Policy Gap 6. One of the key issues raised, especially in Luka and Chaneng, is the contested ownership of land. The Bafokeng Land Buyers Association was established to contest the claim of the Royal Bafokeng Authority that all the land was purchased by it as a single entity. Not only are the people of Chaneng contesting the land question, but they are also demanding a 30% ownership state in the Styldrift mine as compensation for having given up their land for its development. More tension is created by the lack of employment opportunities for local youth, as workers are sourced from outside of the local communities. Another issue that can lead to increased tension with the surrounding communities is the illegal desecration of graves in the prospecting for the new Styldrift mine.

In conclusion, the companies surveyed in Policy Gap 6 have a long way to go to deal with the negative impacts of their operations on local communities in the Bojanala District and to meet the standards of the Principles for Global Corporate Responsibility - Bench Marks for Measuring Business Performance.


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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