Theme: Optimising benefit sharing in South Africa’s mining industry

Published: 11 July 2017

Due: 17:00, 31 July 2017

In Good Company? is OSF-SA’s annual publication on extractive sector transparency and accountability in South Africa. The publication seeks to provide a platform for knowledge generation and sharing around key issues in the mining industry. The 3rd edition of In Good Company? looks at ‘Optimising benefit sharing in South Africa’s mining industry’.

Background and Context

South Africa’s mining and minerals industry is on the decline, but continues to contribute significantly to the gross domestic product (GDP) through tax revenues, export earnings and employment. In 1980, the industry contributed 21% to the GDP, but by 2016 this had shrunk to under 8%.[1] South Africa still has decades-worth of mineral reserves, suggesting that mining will continue to be an important economic driver for years to come. Several legal instruments provide for some or other form of benefit sharing in the mining industry. The Minerals and Petroleum Resources Development Act 28 of 2002 (the MPRDA, as amended) is the primary law governing minerals and petroleum. It recognises ‘the need to promote local and rural development and the social upliftment of communities affected by mining’, and seeks to ‘advance the social and economic welfare of all South Africans’. To give effect to this objective, the MPRDA provides for Social and Labour Plans (SLPs) and the Mining Charter[2], which are both legally binding provisions. These two instruments compel mining companies to take certain steps to promote meaningful and active participation of historically disadvantaged South Africans in the mining industry and to ensure implementation of local procurement, employment equity, improved housing and living conditions, and sustainable development.

Despite what appears to be a sound legal framework, there are persistent claims by mine-affected communities and citizens in general, that mining has not resulted in improved livelihoods or widespread benefit. A 10-year assessment of the Mining Charter by the Department of Mineral Resources showed that transformation of the sector remains a challenge especially regarding ownership, housing and living conditions and mine community development.[3] This finding is perhaps supported by research conducted over three years by the Centre for Applied Legal Studies, which shows that the legally-binding SLP system is not working in the way that it was intended.[4] Furthermore, communities are increasingly sceptical of corporate social investment initiatives that do not alleviate dire social and living conditions. It has become common for mine-affected communities to conflict with mining companies blaming the mines for loss of access to agricultural land, sustainable livelihoods, cultural sites and for dislocation. Communities also accuse the companies of failing to share benefits derived from their activities. These tensions are aggravated by poor consultation mechanisms which often manifests in communities opposing mining and revoking the mine’s social licence to operate.

Many reasons have been cited for poor performance around redistribution and benefit sharing in the mining industry. The experiences of some communities suggest that the problems may relate to systemic policy or administration issues, poor implementation, unmet expectations, lack of will from the side of mining companies, ineffective communication, poor compliance monitoring by the government, a failure to sanction companies that do not abide by licensing conditions and the role of traditional authorities. While there is some evidence to support the arguments that benefit sharing in the mining industry is problematic, there is a need to understand other contexts and experiences that reveal the underlying causes for poor performance.

Call for Abstracts

The 3rd edition of In Good Company? will focus on Optimising benefit in South Africa’s mining industry. The publication seeks contributions that go beyond diagnosing the problems. Attention must be given to proposing workable, implementable recommendations for government, companies, and/or mine-affected communities.

The following sub-themes can be used as guidance:

  1. Designing a benefit sharing system – where is the voice of communities?
  2. Allocation and management of mineral royalties and other mining-related revenue streams for community benefit;
  3. The role of municipalities and/or trustees in managing local level mineral benefits;
  4. Employee share ownership plans;
  5. Social licence to operate;
  6. Reimagining broad-based participation in the mining industry;
  7. Community participation models for decision-making that enhance social and economic benefit;
  8. The role of the state mining company in capturing and redistributing mineral rents;
  9. Legalising zama-zamas;
  10. Mining Charter and Social and Labour Plan performance;
  11. Do labour-sending areas benefit from the system?
  12. Corporate Social Investment; and
  13. Corporate Accountability.

 

Within this context, OSF-SA invites interested individuals or organisations to submit abstracts. OSF-SA welcomes submissions from across civil society, communities, government, academia, and the private sector, and strongly encourages submissions from women and young people working in and/or affected by mining.

Due Date for Abstracts: 31 July 2017

Abstract Length: 500 words

Process: Abstracts will be reviewed by 15 August 2017 and invited authors will be asked to submit full articles to OSF-SA by 2 October 2017. Authors will be paid an honorarium.

Contact Person: Ichumile@osfsa.org.za

[1] Statistics South Africa, 2017, ‘Mining: A brief History’, http://www.statssa.gov.za/?p=9720.

[2] Full title: Broad-based Socio-economic Empowerment Charter for the South African Mining and Minerals Industry.

[3] Department of Mineral Resources (DMR), May 2015, Assessment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (Mining Charter).

[4] See: Centre for Applied Legal Studies, May 2017, The Social and Labour Plan Series Phase 2: Implementation Operation Analysis Report.