Social and Labour Plans: Centre for Applied Legal Studies briefing

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Mineral Resources and Energy

30 November 2016
Chairperson: Mr S Luzipho (ANC)
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Meeting Summary

The Portfolio Committee was briefed by the Centre for Applied Legal Studies (CALS), based at the University of the Witwatersrand, which introduced itself as a civil society organisation and a registered law clinic. Its vision was for a socially, economically and politically just society. It practiced human rights and social justice work with a specific focus on five intersecting programmatic areas: basic services, business and human rights, environmental justice, gender and the rule of law. CALS had become involved in social and labour plans (SLPs) because Marikana was a reminder of the persisting systemic inequalities in the mining sector. The Commission of Enquiry had found that one of the root causes of the massacre was the failure of Lonmin to comply with the housing programme in its SLP, building only three of the required 5 500 houses.

CALS had made eight findings in respect of SLPs. These were:

  • The lack of transparency in the SLP system.

  • The lack of participation throughout the lifespan of the SLP.

  • Communities felt abandoned.

  • There was rather a ‘tick-box’ than a substantive approach to implementing SLPs.

  • Traditional leaders and customary land rights impacted on SLPs.

  • A lack of alignment between the efforts of critical role players.

  • The low priority accorded to SLPs by mining companies.

  • The lack of co-ordination between different companies’ SLPs.

There was evidence of mistrust between the mine-affected communities, mining companies and government. There also seemed to be evidence of relevant parties not knowing their roles and obligations, hence the lack of non-compliance. The people in mine-affected communities needed to be empowered and feel they were part of the process in order to alleviate the frustration they felt. They should be consulted instead of feeling like they were merely being told what would happen.

CALS said it would officially release its second report, based upon the field research it conducted, in March 2017.

During discussion, it was suggested that the SLPs were failing because the country’s land and mineral resources were not being transferred to the people, in accordance with the Freedom Charter, but to capital. The surest way to empower people in the community was to give them mining rights. The system had to change. A Member questioned why there was a lack of transparency about SLPs, and whether the mining houses’ claim that confidential information was involved, was justified. Who in the community should the mining companies consult with when developing SLPs? Did local government not have the responsibility for coordinating any infrastructural development, and for providing services?

Meeting report

Mr Louis Snyman, Attorney: Centre for Applied Legal Studies (CALS), University of the Witwatersrand, said CALS was a civil society organisation and a registered law clinic. Its vision was for a socially, economically and politically just society. It practiced human rights and social justice work, with a specific focus on five intersecting programmatic areas: basic services, business and human rights, environmental justice, gender and the rule of law.

CALS had become involved in social and labour plans (SLPs) because Marikana was a reminder of the persisting systemic inequalities in the mining sector. The Marikana Commission of Enquiry, which CALS had participated in as lawyers for the SA Human Rights Commission, had found that one of the root causes of the massacre was the failure of Lonmin to comply with the housing programme in its SLP, building only three out of the required 5 500 houses.

The first finding had been the lack of transparency in the SLP system. The significance of this was because SLPs were designed to ensure that the benefits from mining were shared with communities and workers. This meant that beneficiaries should be able to easily access information on what was due to them in SLPs and what companies had done to meet their commitments. The broader public also had a right to know what was in SLPs and whether companies were complying with them as mineral wealth, under the Mineral and Petroleum Resources Development Act (MPRDA), belonged to the people. The main findings had been that the majority of communities had not seen the SLPs which CALS presented to them, not a single SLP analysed provided a comprehensive plan for dissemination, and only one of the SLPs CALS sought was available on a company website. CALS’ main findings on requesting SLPs from the Department of Mineral Resources (DMR) were that access was granted to all SLPs, but CALS did not obtain annual compliance reports, the Promotion of Access to Information Act (PAIA) process proved to be a resource intensive and protracted one, and there were significant differences in the approaches of regions.

There were gaps that were identified that the MPRDA did not cover. For instance, it did not state which documents -- including SLPs, and companies’ annual reports on compliance with the SLP -- were public documents. The MPRDA regulations did not create a mechanism for the dissemination of SLPs.

The second finding was the lack of participation throughout the lifespan of the SLP. This was significant, because the importance of community participation in SLPs could not be overestimated. Communities and workers were the best placed to identify their needs and had the greatest interest in seeing the programmes meant to benefit them being fulfilled. They therefore should have a central role in the design, implementation and monitoring of the SLPs. Only two of 50 SLPs linked projects to the expressed needs identified by communities, and not a single SLP provided a plan for community participation throughout the SLP life cycle. Communities’ main point of contact tended to be consultants rather than the mining company or government. These were some of the main findings by CALS.

Some of the legislative gaps CALS identified under this finding were the failure of legislation to specify a robust and participation process for SLPs that included all community interests and not just traditional leaders, no nuclear framework for aligning the SLP and municipal integrated development plans (IDPs), and for ensuring communities were a part of this process of alignment. At a deeper level, communities’ leverage was limited as the MPRDA did not give effect to the principle of Free Prior and Informed Consent (FPIC) that was part of international human rights law and African Customary Law. The MPRDA did not provide circumstances in which communities could say ‘no’ to mining.

The third finding was that communities felt abandoned. This was significant, because in accordance with the requirements of SA’s constitutional order, the MPRDA proclaimed transformative objectives and created mechanisms like SLPs for this purpose. The state was tasked with administering South Africa’s mineral wealth for the benefit of all, and given the transformative imperative, this especially meant poor and working class historically disadvantages persons. Therefore, if mining communities felt that the state, companies and other repositories of power were disregarding their fundamental interests and their voices, this called the MPRDA, and its mechanisms for transformation (such as SLPs), into question.

CALS found that the mine-affected communities perceived government to be working for mining companies and not for their interests. They felt that government did not listen to and address their grievances. The DMR, in particular, was experienced as an absent actor as across the five communities interviewed, they reported that they had never seen a DMR official in their communities.

The fourth finding was that there was rather a ‘tick-box,’ rather than substantive, approach to implementing SLPs. This was significant because the elevation of form over substance and compliance with the letter rather than spirit of the law, whether in the design of SLP programmes or in implementation, would mean that resources were not being channelled into ensuring actual impact. Some of the main findings were that implementing the SLPs aimed at achieving formal indicators rather than substantive and sustainable socio-economic development. DMR measured and enforced compliance based on criteria that elevated form over substance, thus creating an incentive for companies to do the same.

The fifth finding was that traditional leaders’ and customary land rights impacted on SLPs. CALS found that consultation more frequently occurred with traditional leaders than with other community interests, and community members often alleged that benefits intended for members of the community who were most in need were being improperly used for the benefit of traditional leaders and their associates.

Lack of alignment between efforts of critical role players was the sixth finding. Given the multitude of local issues that SLPs covered, the co-operation of a large range of role-players from the state, communities and mining sector was critical. The main role player would vary with the type of project. For example, a project involving the construction of a school would not be viable in the absence of agreement with the local municipality on the site of the project, and without water, sanitation and electricity being provided by the municipality. There was a lack of alignment between critical role players. Some of CALS findings were that at the Marikana Commission, it had emerged that some of Lonmin’s reasons cited for lack of compliance was failure to finalise agreements with local government. The SLP’s texts do not clearly delineate which role player was responsible for what task, and therefore it affects the efficacy of the project.

The relationship between the IDP and SLP initiatives remained contentious, and there was little consensus about what this meant and how it was achieved. There was significant distrust between role players, with the mining companies not trusting the local government in many projects they applied. The identified legislative gaps were that legislation did not indicate the process by which SLPs and IDPs were to be aligned. The legislation and policy did not provide guidance on what the respective roles and responsibilities of central role players should be.

The seventh finding was the low priority accorded to SLPs by mining companies. This was significant because of the high levels of non-compliance with SLP obligations that were already known. The mining companies saw SLPs as a corporate social obligation instead of a legal compliance. Some of the key findings by CALS were the admissions that SLP spending was often the first to be cut when financial difficulties were experienced, and that the sizes of teams working on SLPs had been downsized during the slump. There was inconsistency between companies, both regarding whether specific structures were set up for SLPs and the extent to which significant resources were devoted to SLPs. Some important content of SLPs was located in guidelines rather than binding legislation or regulations, and this had been identified by CALS to be a legislative gap.

The last finding was the lack of co-ordination between different companies’ SLPs. This was significant because there were many communities who lived in areas where more than one mine was operating. Co-ordination of different companies’ SLPs was important as collectively, companies contributed in a manner commensurate with overall negative impacts and avoided duplication of projects. CALS found that it was apparent that co-ordination between companies’ SLPs was not the norm. Possible contributing factors included the duplication of local economic development (LED) initiatives in SLPs which CALS had viewed. Factors precluding effective co-operation included suspicion and competitiveness between mining companies and a sense of a divide between different sections in the mining capital. The DMR was suspicious of co-operation between mining companies, and had not often encouraged it. Companies were not required to co-ordinate SLP planning. The legislation and regulations did not identify a mechanism for ensuring mines’ SLP in a municipality were part of a comprehensive plan that added to the municipality’s existing budget for realising the IDP.

CALS made the following recommendations: that the MPRDA should give effect to the regional and customary law principle of free, prior and informed consent (FPIC), compliance monitoring based on tangible impact criteria, training/ qualifications for officials assessing SLPs, and that the worker or community should be included.



Mr L Mokoena (EFF) said the presentation was interesting. One of the most debilitating deviations that SA had had since 1994 was the deviation from the principles of the Freedom Charter, which said that the land and the mineral resources shall be transferred to the people. However, the land and the mineral resources had not been transferred to the people, but to capital. The presentation was speaking about disempowering people. It worried him because it began before one even got into the SLPs space. He referred to the Xolobeni ‘war’ on the Wild Coast between the state and mining companies, which centred on the mining company which had power, and the Department not being able to assess whether the mining company would do what it was supposed to do, and the community sitting without knowledge. Perhaps there was a need to look at finding ways of empowering communities. He was glad that Marikana was mentioned, as it was a classic case. He added that his worry was that even before the mining started, the community was disempowered. This was one of the crucial points for the state to look at in order to empower the people.


Mr H Schimdt (DA) said that presentations were always from a particular view, and there were always two sides to the coin -- and the other side’s view was unknown. Firstly, the mining sector was treated differently because it worked on non-renewable resources so there were all kinds of obligations placed on mining companies. He asked if it was not bottom-line, that whatever costs one had added to the costs, and the profitability of the mines just became less and less. CALS had said that the SLPs were not on the websites because the SLPs were said by the mining companies to contain confidential commercial information. He asked if in fact the SLPs did contain this kind of information from CALS point of view, and if it was a just argument? He knew of certain problems concerning community trusts, and mentioned the North West provincial government’s swindling of money from communities, and that being done by traditional or community leaders. He asked what CALS’ view was on provincial governments swindling communities out of money and the mining companies having no control over it? Local government should be the coordinator of any infrastructure within its local government, but services had not been delivered. He asked what one should do to resolve this situation, from CALS’ perspective, when local government was not doing it?

Mr Snyman responded that one could not understand the concept of an SLP if one did not understand the money made. He did not think that the information contained was confidential. SLPs were an agreement between the mining company and the government, which said that this was what it needed to do to redress after receiving a mining right. The worst regions were the North West and Mpumalanga. CALS recommended there should be a formal framework for consultation with regard to traditional leaders.

Mr J Lorimer (DA) said transparency was key, otherwise it would enable corruption. He thought there had been some welcome progress in this regard. He asked which of the five regions of DMR CALS had found the least transparent. He said the concept of SLPs was fundamentally problematic. Why should a mining engineer end up having to run a bakery in town? One needed to look at SLPs that had a limited scope, to ensure anyone affected by the presence of mines would be compensated. SLPs were often used as a sign of government’s failure. Of course, communities would feel abandoned, because there were only two players. The surest way of empowering people in the community was to give the people the mining rights. That was the surest way of ensuring mining companies were accountable and people were compensated. He said if there was going to be any mining, then it should be made profitable for the people. He referred to the problem with Xolobeni and the uncertainties around Xolobeni mining. How could one get SLPs right if the system was not fundamentally right? The system had to change. The fundamentals needed to be sorted out.

Mr I Pikinini (ANC) said the presentation was quite provoking. It would be good to find out what the DMR’s response to the findings was. One could not just talk like one was not coming from any imbalances of the past. These multinational mining companies had been given these rights on a platter, and that was where this game blaming was coming from. The government had a responsibility for balancing the imbalance. He asked who was supporting CALS with this particular work, so that he could see if the project was going to last long.

Mr Snyman responded that the CALS was housed within the Wits Law School, and had different donor funders. CALS saw itself as lawyers seeking clarity through the courts.

Mr Z Mandela (ANC referred to the presentation where it spoke of the SLPs not being totally reflective of communities, and asked in the view of CALS, what that community structure should be. Who should it consist of, taking into account the role played by traditional leaders? He asked what was being done in SLPs through the traditional leaders’ structure to ensure there was clear, transparent empowerment for people living in rural communities. In terms of the mining houses, he asked what the CALS thought was the cause that had resulted in failure? Was it fair to consider withdrawing mining rights it the mining houses were not able to deliver on SLPs?

Mr Snyman responded that the question was one of fundamentals -- the fact that one needed to change the fundamental structures in order to change the ownership of mining rights. In CALS’ view, SLPs were supposed to be the mechanism that ensured that even though there were two parties to the negotiation, the community was at the front. The SLPs ensured that the community could stand on its own once the mine closed. At the moment, one was seeing the economic heartbeat being pulled out when the mine company left, and that meant the SLPs were not working. One of the CALS’ fundamental findings was that it was an exclusionary process and that needed to change. All minerals in SA belonged to the people -- but did they? There needed to be some sort of contractual agreement to address how mining rights were conferred. The SLP system was salvageable only if there was a fundamental change in how the mining rights were conferred.

The meeting was adjourned.

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