Mining in South Africa: Whose Benefit and Whose Burden?

Walking the Talk

The Social Audit Baseline Report (ActionAid, 2019), which was conducted in eight mining affected communities across South Africa, as part of the ActionAid South Africa’s Social Audit Project, was conceptualised as part of our ongoing work with MACUA and WAMUA.
Our research has found very little, if any evidence, that the development model of the South African Mining sector, which is underpinned by the Constitutional imperative to “redress inequalities” (Froneman J,et al., 2010, p. 3) has been able to do more than enrich a minority. Evidence instead points to a model of development that has neglected the human dimension in the development of society, in favour of a bricks and mortar model which quantifies development in terms of the wealth it creates for a few.

Our work with affected communities has highlighted how the rights of individuals and collectives within communities to decide their own futures have been eroded, in favour of the interests of wealth accumulation. The rights of communities to decide for themselves has been stripped away through a systemic promotion of laws which seeks to cast mining communities as subjects rather than as Constitutionally protected citizens. (Claasens, 2018)

The Social Audit methodology of holding power to account was particularly important for us, as it allowed communities to engage in the hard work of rebuilding activism and agency in ways that did not reduce communities to passive recipients of handouts.

What have the surveys found?

The findings from the report has broadly confirmed our initial fears that mining affected communities are disproportionately affected by mining, not only because of their proximity to the mines, but also because of the political, economic and social barriers they face in claiming their agency.

800px-South_Africa-Cullinan_Premier_Mine02.jpg

Among the political barriers faced by communities, is the lack of adequate legal protection and a distinct lack of policy and legislation which promotes and encourages active participation by communities in their own governance.
In this report we unpack how the outcomes produced by the mining regime of laws and policy often falls short of the constitutional imperative to ensure active citizen participation in affairs of governance. We also highlight the distinct difference between the rhetoric used by government and politicians about the constitutional and political rights of communities to participate in their own governance and the realised outcomes of exclusion.

At the very least, this report highlights the deep divide between the political, legislative and constitutional prescriptions and the reality of communities living in constant distress which they experience as a type of “structural violence” (Ho, 2007, pp. 1-17) against them.

The surveys derived from structured personal interviews conducted by community volunteers through door to door visits to 757 respondents in 8 mining affected communities located in 7 provinces. The key demographic statistics of the baseline survey are that:
1. 64% of the respondents surveyed were women and 36% men.
2. 62% indicated they were single and 26% married.
3. 64% had education up to a secondary level and 13% indicated a tertiary level or higher.
4. 46% of respondents indicated that their main source of income was from social grants.
5. 24% indicated they survived on petty trading or self-employment.
6. Only 30% indicated some type of formal or informal employment.
7. 73% of respondents indicated that no individuals in their households were either currently employed or previously employed by the mine.
8. Of the 27% who indicated that someone in their household was employed at a mine, 41% indicated that they were casual or manual jobs.

Data collected in the survey indicate high levels of unemployment with significant reliance on social grants to survive and very little opportunity to find employment at, or through, the mines.

With regard to the social responsibility of the mines and the Department of Mineral Resources, the following picture emerged:
1. 91% of respondents did not know what a Social Labour Plan (SLP) was.
2. 91% did not know of any structures in their community that engaged with the mine on SLPs.
3. 95% had never seen an SLP.

The almost total lack of knowledge and involvement in the SLP processes is significant, as it indicates the extent to which South African mining actors are directed towards or delivering on participatory processes of development and governance as mandated by the Constitution and confirmed by the Constitutional Court. (Friedman, 1989)
Social Labour Plans are meant to be the main drivers of developmental programmes yet the beneficiaries of the programmes – the communities – appear not to be aware of the programmes and how they are supposed to benefit from it.

Three clear core themes emerged from the surveys with regards to the challenges faced by communities affected by mines. These are:
1. Environmental issues such as air, land and water pollution which impacts on human and livestock health, soil and water quality.
2. Living in an unsafe environment, relating to blasting close to houses and the tremors experienced as a result of blasting, as well as concern about the rising crime levels within communities.
3. The constant threat to health ranging from TB and HIV to skin rashes and infections, asthma, silicosis and chest and lung problems.

In terms of community benefit from having Mines close to or around the community the following emerged:
1. 79% indicated that there was no benefit from the mines at all.
2. 8% felt that the mine only brought negative benefits such as sickness, dispossessions and damages.
3. 13% felt there were positive benefits such as clinics, roads and employment.
When the respondents were asked about what they would want to change in the relationship between the mine and the community, four clear themes were highlighted:
1. 39% wanted more employment, skills development and livelihood options.
2. 35% wanted more accountability, consultation and communication by the mine.
3. 20% wanted more basic services and infrastructure.
4. 6% wanted some form of compensation.

The outcomes of this part of the survey suggests that the communities surveyed have consistently preferred outcomes that allow them to develop and act on their own agency through either gainful employment or through access to other livelihood options. In other words, respondents indicated a preference to do things for themselves rather than to be treated as social grant recipients.

A significant number of respondents indicated that they wanted more participatory processes such as consultation and communication rather than be seen as recipients of charity. The survey found that the women not only have to bear the severe impacts on health and social and personal violence against their bodies, they also have to contend with structural barriers to their well-being. Among the key findings in this regard are that:
1. 40% of women indicated that jobs are only accessible through sexual favours.
2. 14% of women indicated that some sort of payment, fee or bribe was needed in order to secure a job.
3. 73% of women indicated that they have received no benefit from the mine.
4. All of the women indicated that their community experiences substantial amounts of violence such as rape, murder, abuse and protests.
5. 85% of women linked the increase in violence to the development of the mine.

The Political Economy of Mining

The approach to mining in South Africa has historically and we argue, consistently, been a violent, masculine and exploitative project to concentrate benefits for a few at the expense of the majority.

The accumulation of wealth derived from mining has had a significant influence over the political arrangements of South Africa and has historically been the main driver of the Apartheid economic model of wealth accumulation. This model saw the development and rise of a Minerals-Energy-Complex (MEC) (Fine, B. & Rustomjee, Z., 1996) that brought together key players in the extractive, electricity and downstream industries to systematically exploit the mineral wealth and make it the platform for the development of the rest of the South African economy for the benefit of a minority.

According to Price Waterhouse Coopers (PWC), reports have been compiled for the Johannesburg Stock Exchange listed corporate entities in the South African Mining Industry since 2008 and incorporating financial results from 2007 to June 2018. The reports reveal that the South African Mining Industry has, despite a consistent media narrative in which its corporates are cast as victims struggling to make a profit, earned net profits of R221 Billion over this period (PWC, 2018).

The declared profits do not include the undeclared illicit financial flows which the African Monitor claims peaked at R237 Billion per annum in 2011. According to the African Monitor, South Africa has lost a cumulative R1,007 billion to illicit outflows between 2002 and 2011 (Monitor, 2017).

Another report, South Africa: Potential Revenue Losses Associated with Trade Misinvoicing, which analyses South Africa’s bilateral trade statistics for 2010–2014 (the most recent years for which sufficient data are available) published by the United Nations (Comtrade), found that “Analysis of trade misinvoicing in South Africa from 2010—2014 shows that the potential loss of revenue to the government is $7.4 billion annually or, a total of $37 billion during the period”. (Integrity, 2018)

These are significant amounts that have a direct impact on whether communities are able to escape their poverty traps or not.
A

submission to the Marikana Commission by the Centre for Applied Legal Studies (CALS – the legal researchers who had studied the LONMIN case specifically) – reported that:
“A number of programmes suffered from poor planning with resulting problems of implementation. These programmes include a brick-making factory, the agricultural farm project and most importantly, the construction of 5,500 houses as committed in the 2006 SLPs. The failure of these projects points to non-compliance that requires further investigation.”

The report further states that:
“The lack of delivery under these projects and the resultant lack of impact on the lived reality of the mine-affected communities, including workers and their families, could constitute a significant factor precipitating the events in Marikana of 09 to 16 August 2012.” (CALS, 2013)

The state on the other hand, remains a significant beneficiary of the mining industry as it is currently configured and the same PWC reports from 2009 to June 2018, calculates that the state has received R160 billion in direct tax revenues during this period. An additional amount of approximately R45 billion is estimated to have been paid to government as Royalties. (PWC, 2018)

In all, the PWC reports (which do not factor in any potential mis-invoicing and/or illicit financial flows) estimate that government takes approximately 24% of value reported among the listed JSE mining companies, with employees taking 47% of and shareholders 29% of value reported. (PWC, 2018).

Community investments, by contrast, has only amounted to 0.9% over the same period (PWC, 2018). But, as has been shown in this report, none of the value from these community investments are appears to have flowed to the communities who participated in this survey. Up to 79% of respondents, 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 R5.92 billion of the estimated R7.5 billion earmarked for community development did not reach its intended beneficiaries during this period.

The extent of the unaccounted-for expenditure on community development can be associated with the lack of community participation in these projects as well as the lack of development in the study areas and can potentially further be linked to the way cycles of poverty continue to manifest in mining affected communities.

The extent and scale of the potential misappropriation of funds meant for community development suggests both that high levels of corruption exist in the way that funds are allocated to community development. It also says that besides the potential corruption inherent in the way funds are distributed, that the projects meant to advance community development are not trickling down to communities in the way envisaged by the corporations and the DMR.

Inclusion or Protest

The ineffectual outcomes of the current mining regime and its main instrument for development, the SLP`s, are intimately linked to the paternalistic nature and logic of the existing legal and governmental framework.

The Constitution, the MPRDA and the Mining Charter propose a transformed country through broad-based trickle-down beneficiation. Ironically, the well-entrenched paternalistic approach to the idea of development (which on the face of it runs contrary to the vision set out in the Constitution), has reinforced the very inequalities that a new mining regime was aimed at overcoming.

On the one hand, government is keenly aware of the systemic nature of the ongoing inequalities and resultant public discontent. On the other hand, being fully aware of the democratic, social and economic deficit at the local level, the government remains committed to policies that place corporate interests above those of the citizens on the assumption that value will eventually trickle down to communities. (GCIS, 2018)
The two conflicting responses by Government suggests a deep conflict within the corridors of government and the talk of inclusivity and consultation is not supported by the evidence of systematic and deliberate exclusion built into mining legislation and regulation.

The upshot of paternalistic top-down development is that the developmental outcomes are, more often than not, deepen inequality.

When examining the results of the baseline studies, the promise of progress and development driven by SLP`s and the Mining Charter are not evident, and the analysis points instead to a far more systemic process of exclusion of the voices of affected communities.

The Social Audit Baselines surveys, indicate a strong connection between mining and excessive or severe environmental impacts on communities living around mines.
The extensive nature and types of negative impacts experienced, and the apparent intuitive sense of damage expressed by communities living close to mines, suggests some connection with the findings of scholars, such as those of Carin Runciman, Senior Researcher at the Centre for Social Change at the University of Johannesburg, who has studied the rising tide of protests in South Africa.

In a 2017 article in The Conversation, Carin Runciman draws a comparison between the lack of democratic practice at local level with protests on the national level;
“As part of research by the Centre for Social Change we spoke to protesters all over the country. A new book from the centre highlights the extent to which protesters are raising not just concerns about the quality of service delivery but also about the quality of post-apartheid democracy. As Shirley Zwane, from Khayelitsha, near Cape Town, explains:
“We don’t have democracy!… We [are] still struggling… you see if we are in democracy there’s no more shacks here… No more bucket system… we supposed to have roads, everything! A better education… There is a democracy?…. No, this is not a democracy! They have, these people in Constantia, Tableview, Parklands, they have a democracy, not for us!” (Runciman, 2018)

The Baseline Report section compiled by Robert Krause of the Centre for Applied Legal Studies explains in detail how technically available company information is tied up in extensive bureaucratic hoops, making it difficult for interested parties to access relevant information.

Any attempt to advance social cohesion, as is the stated constitutional objective of the mining regime, and any efforts to undercut the rising tide of protests will have to grapple with a mining policy that does not address the fundamental weakness of excluding people from participating in their own governance.

Whose Benefit and Whose Gain?

On the question of the severe health impacts experienced by communities, there is enough evidence to suggest that poverty and poor health are inextricably linked. (John E Ataguba, James Akazili, Di McIntyre, 2011). In a briefing note prepared by Dr Caradee Wright for the Council for Scientific and Industrial Research (CSIR) states that;
“There is a clear link between the state of the environment and human health and well-being. According to the World Health Organization (WHO) an estimated 23% of all deaths in Africa are the result of avoidable environmental hazards such as contaminated water, poor hygiene, inadequate sanitation, poor water resource management, use of unsafe fuels, atmospheric pollution and poor infrastructure. According to the same WHO report South Africa is “strongly underestimating” its own environmental burden of disease: currently 16% of all deaths in the country are related to the state of the environment.” (Wright, 2010)

The causes of poor health are rooted in political, social and economic decisions that seldom take adequate account of the interests, needs and realities of those most directly impacted. Poverty is both a cause and a consequence of poor health. Poverty increases the chances of poor health. Poor health in turn traps communities in poverty.
This baseline survey outcomes correspond with this view. There appears to be a deep gap of understanding about the benefit of mining between government and the people, whose interest’s government is supposed to represent.

The assertion by the Minister of Minerals that mining will bring development, employment and other benefits to communities is not supported by the findings from this report and points instead to burden rather than benefit for communities. (Mantashe, 2018)

The DMR`s main focus has been on speeding up the process of investment with the Minister declaring in his Budget Speech that; “to unleash our economy, we must overcome this to ensure that prospectors can prospect and those with the legal permits and the means to mine can do so.” (Mantashe, 2018)

In line with this commitment to speeding up the rate of exploitation of mineral reserves, the DMR has increased the budget to be spent on the Mineral Promotion and International Coordination sub programme, within the Mineral Policy and Promotion programme, to R239.1m in the medium term.

By the same token, the number of SLP verification inspections (those inspections which are supposed to ensure that the intended beneficiaries of the SLP`s are benefiting), has decreased from a high of 285 per year in 2013/14 to 212 for 2018 while the number of environmental verification inspections per year has decreased from a high of 1889 in 2015/16 to 1275 at present.

MINTEK and the Council for Geosciences account for 50.1% of the DMR’s annual budget and salaries at these institutions account for 33% “due to the labour-intensive nature of the department’s work, particularly with regards to enforcement, compliance monitoring, and the inspections of mines across the country.”) Personnel numbers are expected to decrease though, from 1122 in 2016/17 to 1040 in 2019/20 indicating reduced capacity to monitor compliance and enforcement.

The gap between communities who are reporting that their experience is one of burden, not benefit and that of the government who seems intent on continuing to pursue a strategy which preferences investors over social and environmental impacts, suggests that the sector is on a course for deepening poverty and increased conflict.

Women

The Minerals Petroleum Resources Development Act (MPRDA) mentions women as a specific category only once. This is surprising considering that the South African Constitution sets out in its founding provisions, the two social contradictions which have historically been at the centre of our Apartheid past, namely anti-racism and anti-sexism. (Parliament of South Africa, 1996)

While much attention is paid in the act to the broader category of “historically disadvantaged persons”, women are broadly omitted from special consideration in the main act.

This is astonishing given the empirical evidence and general agreement in government and within civil society that women are generally and specifically oppressed and discriminated against, and specifically in legislation dealing with this sector.
Issues of Gender have been largely ignored in Mining Charter 3 (Parliament of South Africa, 2018). Where women are included, they are interchangeably mentioned with youth. Instead of a mining company having to ensure that they procure from women – owned companies for example, they could instead procure from youth owned companies. This interchangeability occurs throughout the Mining Charter, leaving specific targets for women and girls unquantifiable and unenforceable.

Targets for women’s empowerment need to be significantly increased in all areas of the Charter. Without specifying interventions to benefit local women, the Charter’s minimal provisions serves only to benefit women who are already economically empowered.
As a general rule, communities who participated in this research indicated that community consultations were often not public knowledge and, where consultations did take place, they were often with traditionally dominant men or politically connected men in the community. Women are generally excluded as a rule and often were the least impacted of any potential beneficiaries. As a result, women are stripped of the means of acquiring status and wealth.

Research indicates that men and women often prioritize community investments differently, and frequently more sustainable development outcomes are planned where women have an equal engagement with men in setting priorities.
As we have suggested in this report, any kind of exclusion of vulnerable groups within society, especially with regard to decision making that impacts on the livelihoods of those groups produces and exacerbates the inequalities already prevalent within that society or community. The exclusion of women in an already patriarchal society, and communities in an already unequal society, can never lead to a more just outcome for those women and communities.

As long as women and communities remain on the margins of consultation and decision-making processes, the gender bias and pro-elite bias in extractive projects will not be adequately addressed and will continue to negatively affect women and vulnerable communities.

By Christopher Rutledge

This article first appeared in New Agenda 71. 

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