The Committee engaged with various trade unions in the Mineral Resource and Energy sectors. Each union told the Committee about the sector strengths, opportunities, and weaknesses and remedial measures to mitigate identified risks.
The unions noted that the Energy and Mining industries play a vital role in job creation and economic opportunities in the countries. The nation has vast reserves of mineral resources worth R20 trillion and about 9 billion barrels of oil and 11 billion barrel of natural gas in coastal waters. This presents it with vital opportunities to overcome its social and economic challenges. However, the sectors are plagued with numerous challenges including strike actions, illegal mining, uncertainty in regulatory and legislative environments, excesses of mine inspectors and business rescue practitioners, intolerance and violence, breakdown in collective bargaining structures, undemocratic majoritarian principle and disproportionate reduction of fatalities in relation to massive shifts in risk.
The unions commented that most of the problems in the sector could be solved through effective engagements with all stakeholders. No stakeholder should be left out in key decision making processes and role-players must ensure co-determination in all matters that relate to exploration of resources. More should be done to get buy-in from communities on mining activities. Proper consultation usually result in lack of confrontation. The legislative environment should the stable to attract and retain foreign investors. Mines must be well-rehabilitated to prevented illegal mining activities and reduce accidents and fatalities in mines. Mineworkers should be adequately empowered so they can engage in useful ventures after retrenchment or retirement from service. There should be active production sharing agreements and skills transfer between multinationals and state-owned companies. Government should hold majority of stakes in all resources to optimise benefits to South Africans and to guarantee security of supply. Government should make retrenchment very expensive to dissuade employers from sacking workers unnecessarily. Government should identify and train illegal miners in order to integrate them into the mining industries. Each entity in the mineral resources and energy space must have clearly defined mandates and they should avoid unhealthy competitions. The agreement between Eskom and Independent Power Producers should terminated. This will reduce Eskom's debt burden and create more job opportunities. The leaderships of Eskom and PetroSA should be strengthened to ensure their sustainability.
Members expressed concerns about gender and racial-related matters. All workers must be protected irrespective of cultural and racial backgrounds. There should be both long and short-term interventions to nationalise the natural resources of the country. The approval of the Mining Charter should be facilitated to protect interests of workers and local communities. There must be efforts to stop intolerance and violence in host communities and the health and safety of workers should be prioritised. Workers should maintain the right to withdraw from dangerous terrain. The Committee will visit certain mines to familiarise itself with challenges and opportunities. Technology could play an important role in modernisation of mines and enhance the health and safety as well as functionality of women.
The Chairperson said the Committee strives to protect the interests of South Africa. The Members should familiarise themselves with the Mining and Energy sectors to function appropriately in the Parliament. The Committee has invited the trade unions to get their inputs in various areas of concern. This will equip Members with knowledge needed to function optimally in the Sixth Parliament. He said there are other Committees that also deal with matters relating to the sectors, where broader public participation is facilitated. He urged individual groups to be concise in their presentations. Groups must identify themselves, areas of interest and the corresponding challenges. The Committee will endeavor to stick with its programmes as much as possible for the rest of the year.
United Association of South Africa (UASA)
Mr Shadrack Motloung, UASA Chief Operations Officer, requested Mr Franz Stehring, Divisional Manager: Minerals: UASA, to present on behalf of UASA. The organization achieves a 48% increase in safety year on year. This is not ideal situation. The organisation aims to achieve zero tolerance when it comes to safety and health in the mining sector. The organisation recorded 56 fatalities in 2018 but 29 in 2019 (48% reduction). The organisation is currently busy with the Health and Safety Strategic Plan, which will increase the chance of zero tolerance in the sector. He commended the Committee for inviting organised labour groups. This reveals Committee's intention to consider organised labour groups in its decision-making. He urged the Committee to consider the concerns of organised labour in its strategic plan for the next five years.
The challenges in the mining sector arise from different factors such as changes in economy, technology and energy; water usage and waste. The organisation seeks to stop the common notion that the nation is a waste ground for developed countries. Efforts are made to manage acid drainage water in the East and West Rand basins to provide clean and running water to the people. There are also social and environmental challenges. He noted that interventions are implemented to better the living conditions of miners following the celebration of the Marikana incident. The Minister assented to the plans and various role-players are expected to implement the plans at predetermined times to improve the living conditions of miners. Miners and their families should live and operate in environments that enhance growth and life aspirations. This will translate into enhanced productivity at work.
Citing President Cyril Ramaphosa, he emphasized the importance of a one-stop shop when in it comes to the licence to operate, including health and safety requirements. This creates a friendly environment to investors. The country should collaborate with international investors in manners that ensure mutual benefits. All relevant government departments must collaborate to create a friendly environment to investors.
Low commodity prices is another challenge in the sector. The prices of diamond and chrome have fallen. Increased Eskom tariff (39%) during the winter is a serious challenges for mines in the country, especially marginal mines. The Committee and other stakeholders should develop means to rescue marginal mines from closing down so that miners' jobs and the wealth of the country are protected. He cited an example of a mine in Kimberley, where organised labour and the National Union of Mineworkers (NUM) agreed to 5% cut in pay for every workers across all categories.
Uncertainty in legislative and regulatory environments also constitutes a challenge in the mining sector. Certain employers have taken the government to court based on the Mining Charter. He urged all stakeholders to resolve all cases internally to obtain amicable solutions without involving the courts. Court cases always result in a loser and a winner, which is dangerous for the industry.
The future of mining in the country lies in effective leadership. UASA commended the leadership prowess of the Chairperson, which has led to improvement in the working conditions and safety in various mines across the country. The effective leadership demonstrated by the Committee resulted in the signing of a Leadership Compact among various role-players. The Leadership Compact prioritises ethical and accountable leadership.
It is important that the licensing authority only gives licences to legitimate mining companies, who are interested in mutual benefits. The wealth belongs to South Africans and they must benefit from it. The industry must prioritise Enterprise Development. All stakeholders must work together to enhance beneficiation and strengthen economic linkages. Downstream beneficiation is important to the country's economy sustenance. The mining industry is the cornerstone of the economy and it needs to function optimally. Adverse impacts on the sector may cascade to other sectors of the economy. Licences for exploration should be given to qualified mining companies. Geological information plays key role in discovery of mineral resources. The licensing regime must be friendly to international investors, who have the capability to unlock the treasure in places like the Northern Cape.
It is important to prioritise investment and promotions. The infrastructure in most mines is old. The mining industry needs to embrace up-to-date infrastructure to cope with the current demands in the sector. He lamented the decision of Anglo-Ashanti Mining Company to sell its last mine in the country. The company decided to sell the Mponeng mine (that has a life of another 30 years) due to lack of funds to upgrade its infrastructure. Mponeng mine is the world's deepest, sitting at four km below the surface. All stakeholders should create a friendly environment for potential investors to operate. Anglo-America Platinum, a blue chip company, sold the Rustenburg mine (the only functional mechanical mine in the area) to Sibanye Rustenburg Platinum Mines (Sibanye). Contrary to expert opinion and expectation, the mine suddenly became profitable due to lower overhead costs and other factors. Anglo-Ashanti seeks investors with low overhead costs to keep the Mponeng mine afloat to achieve the same fit. The mine is the deepest in the world and it is still getting deeper.
The Committee and other role-players should ensure decent living conditions to mine workers and their families. The Committee should ensure that the Bill to this effect is implemented so that companies prioritise decent living conditions to mineworkers as part of their collective bargaining.
The mining sector must embrace research, development and innovations. Technology plays a vital role in transition from conventional to mechanical mining. Mechanical mining reduces risks and make women in the mining sector more functional, productive and dignified. He cited the case of a mining company that used to be mined by the JCI, the Kebble family. The mine has migrated from conventional to fully mechanical, allowing remote mining activities.
Community development and empowerment is vital to the success of the sector. More should be done to get buy-in from communities on mining activities. Proper consultation usually result in lack of confrontation. The Minister and relevant role-players have sought the inputs of communities into the proposed amended charter. Communities will not demonstrate if role-players consult with them. They should have a sense of belonging. Communities should be engaged in the same forum as the rest of the stakeholders. UASA prioritises consultation with local communities.
The isolation of the mining industry in the telecom value chain also has consequences for organised labour. Mining companies must provide training to mineworkers so they can engage in profitable ventures after closure of mines. Training only after retrenchment should be discouraged.
Speaking from the perspective of President Ramaphosa, South Africa needs to attract foreign investors to invest in and further develop the mining industry. This will contribute to the nation's and global economies. The country cannot afford to live in isolation as this will lead to economic meltdown in the long run.
There must be a sustainable centralised bargaining arrangement to manage the depleting mineral resources. This will turn the mining sector from a sunset to a sunrise sector. Committee should facilitate centralised bargaining in the sector as this will enhance the ability of regulatory bodies to have effective control. Centralised bargaining will solve a lot of challenges like strike action and monopoly by employers. Employers should not take advantage of mineworkers. There should be a centralised bargaining forum, where all parties table their inputs and a common ground is reached.
Mr K Mileham (DA) sought explanation on safety in mines. Is the 48% increase in safety a true reflection of the safety conditions in mines on a year-on-year basis? Landfalls and other accidents occur without prior knowledge. Is there a sustainable trend in improved safety conditions at mines? The one-stop shop initiative has been achieved by the Department of Mineral Resources (DMR) through approval of licences and related matters. Obviously, environmental matters are handled by the Department of Environmental Affairs. Does UASA intend a more streamlined approach to the one-stop shop initiative?
The mining industry has declined significantly over the past 20 years. It has gone from 14% to around 7% of Gross Domestic Product (GDP). Job losses have been reported and the industry lost 51 000 jobs in 2018 alone. Is the problem a function of government policy or risk aversion on the part of investors. Some investors are skeptical about South Africa due to uncertainty in business, social and regulatory environments. In addition, some mines may no longer be profitable.
Mr M Mahlaule (ANC) said that the environmental problems constitute significant risk to the mining sector. Lack of transformation in the sector remains a major concern. The industry should ensure radical transformation by empowering blacks including Indians, Coloured and Africans in general. Transformation should also apply to youths and women. Young women, in particular, must be prioritised. It is important to note that diamond sector remains the most untransformed. What transformation agenda does UASA have for the diamond industry?
The debate about coal versus renewable energy sources should be avoided at the moment if the mining sector must remain a sunrise venture. The coal industry in the country still has about 200 years life span. Why do banks and other lenders refuse to fund coal businesses? What is the attitude of UASA towards unwilling lenders? Are there challenges between land use and the mining sector? Departments in the country and all stakeholders must work together to make the mining sector a sunrise industry.
Ms V Malinga (ANC) asked UASA about its plans to provide decent housing to mineworkers. Mining companies should provide decent housing for workers, who make them billions. What is UASA's plan to improve the situation in Marikana and similar places. The struggle in Marikana existed long before 2012. The social and environmental challenges around mines are lamentable. Most Acid Mine Drainage (AMD) water contaminates water supplies in municipalities. Is UASA assisting municipal authorities to provide clean and purified water to their constituencies?
It was offensive to say that women are only effective at technological aspects of mining. Women should welcome physical challenges experienced by men. They should be able to function along with men under any circumstances. However, technology is vital to the optimization of most mining processes. Compared to men, women are better miners because they are more careful in safety matters, being mothers.
The mining industry should embrace collective bargaining so that all people receive fair and equal treatment. People doing the same type of job within the industry should receive the same pay without exception. The industry must be transformed, especially in terms of women involvement. Women should be actively involved in every aspect, especially advocacy for mineworkers' rights.
Mr D Mthenjane (EFF) commended the presentation. He, however, noted that people do not 'celebrate' the Marikana incident, rather they commemorate it. The people were massacred because they demanded a wage increase. How would people live in decent houses if they do not receive good pay? What is UASA's plan to improve salaries of mineworkers? Are companies implementing the plan? It is important that mineworkers partake of the benefits of the mining sector. What is UASA's plan to ensure mineworkers share from the benefits? How will mineworkers share from the benefits if mines are not nationalised? Mines are under the monopoly of capitalists, who amass all benefits to themselves at the expense of mineworkers. UASA and other role-players must ensure that women, especially young black Africans, are empowered in the mining sector. Most of the mining companies currently undermine most young black South African women.
Companies should train all mineworkers. This empowers them to gain useful skills they can apply after retrenchment or retirement from mining activities. Companies must have transparency policies about empowerment of mineworkers and there should be mechanisms to track the implementation of policies. UASA and other role-players must find means to address the Zama-Zama menace. Zama-Zamas are ex-mineworkers, who currently partake in illegal mining. Arresting them will not solve the problem. The problem can only get solved by addressing the root cause. All UASA's plans and measures must come with time-frame to ensure accountability.
The Chairperson urged Committee Members to address only matters raised in presentation to stick with time. Additional matters of concern can be raised at an appropriate forum. Also, presenters should focus on the current presentation and avoid being driven into matters they are not familiar with.
Mr Stehring apologised for associating women to technologically-linked tasks at mines. Safety is sometimes compromised due to complacency on miners' part. The culture of safety must be cultivated and enhanced in the mining sector. Safety conditions have generally improved in mines and UASA does not foresee a repeat of major accidents in the sector because mines are more cautious about safety. The mining industry is in a decline. Gold deposits are rapidly depleting but there are still vast reserves of other metals underneath the Northern Cape. Companies and workers can transfer acquired skills to the Northern Cape.
Anglo-Ashanti stopped operations at the Mponeng mine due to some regulatory constraints. The company currently seeks investors that could help with infrastructure upgrade. The Company's CEO, Kelvin Dushnisky, revealed that the company will rather invests its billions in ventures outside of South Africa instead of upgrading infrastructure at the mine.
In response to Members' concern on women empowerment, Mr Stehring said that UASA does all it can to empower women in the mining sector. Women working in UASA would host a Conference for Women in Mining on the next day, 21 August 2019, and the Conference had attracted women from across the country. One of the vice-presidents of UASA is a woman.
The Committee provided the mining industry with a framework document called Mining Charter 3 to drive the transformation agenda within the sector. All stakeholders should ensure the implementation of the provisions of the Mining Charter 3 once it comes into force. Unfortunately, the Mining Charter 3 still awaits adjudication in court. Key role-players must endeavour to know the expectations and aspirations of the employers. What do they see as solution to the "once-empowered, always-empowered" principle?
Mining Charter 3 needs to come into effect and be implemented to drive transformation agenda in the mining sector. 50% of the beneficiaries of the BBB-EE are black women. UASA also strives to provide solutions to various challenges confronting the renewable sector. The Minerals Act and relevant legislation make provision for land reclamation. Every legitimate mining company must reclaim 25% of its land. Reclamation and rehabilitation are important to restore former mining sites. The government, companies and other authorities can assign certain groups of people to reclaim land for farming or build houses. This prevents the mines from being waste dumps. Anglo-Ashanti and other companies rehabilitate land as part of their operational procedure. UASA seeks to facilitate formal housing for mineworkers. Once the framework is formalised, mineworkers should be moved from informal to formal settlements. UASA discovered that the West Rand Basin was decaying in 1998. Organised labour, government and employers met to devise means to purify AMD water and pump the water back into the system. Unfortunately, none of the role-players was committed to the implementation of the plan. The Committee should urge employers, government and organised labour to revisit the plans and ensure implementation so that contaminated water is purified and pumped back into the system and people can enjoy clean water. This also creates job opportunities and decent living conditions for mineworkers. Relevant authorities need to subsidise the cost of pumping water by marginal mines. Government intervention is vital to purify contaminated water in West Rand, Roodepoort and other places.
UASA and other role-players prioritise women empowerment in mining sector. UASA understands the importance of Collective Bargaining (CB) in the mining sector. However, there is opposition to CB from certain employers. Certain employers within the coal industry have decided to stop CB by 2020. This means the individual employer might handle its own negotiations. UASA does not know the reason behind such decisions and the Committee should help investigate the matter. Individual bargaining appears to manipulate workers using "divide and conquer" tactics. They tend to decentralise and talk to whoever they wish, which tends to undermine CB. This attitude must be discouraged. CB helps to ensure uniform salary and benefits. Workers can migrate between mining companies and still get decent salaries through the influence of CB. CB will ensure that mineworkers get the minimum R12 500 per month. R17 000 is even a possibility. The R12 500 has been achieved in the platinum industry.
The mineral resources of the Republic truly belong to the people of South Africa. However, the key to unlock the treasure lies with the government. The Committee can help unlock the treasure. There are different schemes and plans but they cannot be initiated at the moment because Mining Charter 3 still awaits adjudication in court. Committee should urge employers to have right attitude towards Mining Charter 3 and its provisions. Also, employers should discard the "once-empowered, always-empowered" notion. The implementation of MC 3 will ensure that workers and communities benefit from mining activities. There is a distinct part of MC 3 that deals with beneficiation to host communities. The Chairperson of the Committee and the Minister held extensive consultations with communities to obtain valuable inputs into MC 3.
Organised labour will support legislation on living conditions. UASA will partake in the negotiation, consultation and ultimate implementation of the legislation. Employers should not negotiate the living conditions of mineworkers. Relevant authorities should work together to withdraw the licences of employers that do not prioritise the living conditions of their workers. The Committee should not allow the 'cost-to-company' principle to prevail in this matter. The Department of Labour and other role-players have developed a framework for layoffs and retrenchment. The provisions of Section 52 must be declared way before Section 199 of the Labour Relations Act kicks in. This will prevent needless retrenchment of mineworkers. The Committee should help UASA to protect jobs. Mines in West and East Rand are prone to illegal mining activities because former mines are not well rehabilitated. Illegal mining can be stopped by giving licences to qualify companies to clean up the dumps. Some companies currently make huge profits doing this. This helps to stabilise the land, which can subsequently be used as farms or settlements. UASA, the Committee and other stakeholders must contribute towards the success of the mining sector. This makes the industry a sunrise sector that provides benefits to the citizens of the Republic.
Mr Mahlaule expressed concern about the Zama-Zamas. This set of people mine illegally and sometimes target pillars meant to support the mines, causing mines to fall ultimately. There should be measure to arrest offenders and punish them accordingly. He lamented the current attitude of the judiciary to the Zama-Zamas. Illegal mining will continue as long as offenders do not get appropriate penalties. The intelligence of the Republic is also compromised. We do not know where the commodities eventually end up and little is done even when information is available.
The Chairperson acknowledged the multi-faceted nature of the challenges confronting the mining sector. All stakeholders must work together to get to the root of the problems and develop measures to resolve them. Committee will aim to visit mechanical mines to see the improvements achieved through technological innovations. Women empowerment should be prioritised in the mining sector and technology will play a crucial role to reduce health and safety hazards that confront women. The nationalisation of mines should be debated and superior argument and socio-economic environments should be considered during decision-making.
Chemical, Energy, Paper, Printing, Wood and Allied Workers' Union (CEPPWAWU)
CEPPWAWU General-Secretary, Mr Welile Nolingo, appreciated the invitation to present the views of its members within the mining and energy sectors. The Union has members in certain parts of Sasol. CEPPWAWU believes that South Africa needs to grow the energy sector to meet with growing demands. This helps to create much needed jobs, while protecting the environment at the same time. The Union researched vital documents to make informed decisions such as the MPRDA, National Development Plan, Phakisa, Integrated Energy Plan, energy polices and international practice. Engen, a leading global supplier of petroleum products, was started by former employees of Petronas, a national oil company.
Mr Phumlani Manikivana, CEPPWAWU secretary, said the Union is concerned by the 29% unemployment rate in the country, which increased by 1.4% in the second quarter of 2019. It should be decreasing. The coal sector plays an important role in energy generation (90%) but it does not have the necessary support to thrive. Adverse effects on the coal sector may cascade into other sectors of the economy. Diesel, an expensive alternative to coal, might be difficult to meet Eskom's demand. South African government does not have any control in the entire value chain of the energy sector. The nation has less than 4% stake in the mid-stream and downstream sectors and the upstream sector is dominated by multinationals. Total, located 85 km from the PetroSA Block, found vast gas reserves. This presents a challenge to PetroSA, which has the passion for the upstream sector. Operation Phakisa indicated there are about 9 billion barrels of oil and 11 billion of natural gas in the deep waters. The country will be a dominant player in the energy space if it can harness the vast reserves. Currently, PetroSA is the only government-owned company in the down- and mid-stream sectors but it is not a nationally designated oil and gas company. The country must have full control of the entire value chain in the sector to ensure security of supply. This is in agreement with the submission of the Moerane Commission convened by former President Thabo Mbeki in 2005. Supplies in the energy space cannot be left at the mercy of multinationals. There must be a designated national oil and gas company that can protect the nation's interest in the energy space just as it is the case with Petronas in Malaysia. The national oil and gas company must have appropriate leverage at the negotiation table to thrive. Also, there must be an Act of the Parliament that protects the interest of the people of South Africa in relation to resources embedded in coastal waters. CEPPWAWU support the Upstream Training Fund, which attempts to provide girls and young women with skills (Science and Mathematics) needed in the upstream sector. The funds should be effectively utilised so that skills are available to manage the potential opportunities in the sector. All companies should participate in the training process. All role-players must ensure implementation of social and labour plans. This cannot be left to the discretion of multinationals, whose main motivation is profit. The relevant authority must ensure that companies comply with regulations that deals with mentoring, succession planning, training and development as well as improvement of economies of host communities.
There was a contraction of 3.2% in the nation's economy in the first quarter of 2019. The macro-environment and the challenges in the oil and gas sector play a vital role in the economic decline. Government must find means to collaborate optimally with multinationals, bearing in mind the interest of the Republic. For instance, Petronas in Malaysia takes ownership of the reserves by right and it uses this as leverage during negotiation. A competent team should be put together to manage the process. The Committee should maintain oversight of such a body so that the national government company can negotiate effectively and deliver the benefits of the resources to the people of South Africa. Importation of petroleum products indicates that the nation's economy is declining, especially when there is fluctuation in the exchange rate. South Africa imports 45% from Saudi Arabia, 23% from Nigeria, 18% from Angola, 4% from Ghana and the balance comes from other sources. The country should get to a point where it exports petroleum products.
CEPPWAWU has a bias in favour of coal due to its contribution to job creation and economic development. The Union is aware of the debate between coal and renewables but the nation cannot drastically switch from coal to renewables. The renewables are expensive and this is unsustainable. CEPPWAWU is deeply concerned about the contracts for renewables. Those contracts need careful considerations to protect jobs in the energy sector. The coal industry accounts for 86 919 jobs in the country which must be guarded diligently.
PetroSA has experienced decline in upstream activities. Efforts should be in place to ensure a quantum leap in the upstream space. PetroSA needs to increase the number of wells it drills. It can take a cue from the discoveries of Total, which sits 85 kilometres away from its block. Training can enhance the quantum leaps in discoveries. PetroSA also needs money and collaborative partners to optimise the exploration process.
Government should take control of shale gas deposit in places like Karoo. The Committee, in its wisdom, should devise a means to resolve the various challenges that may jeopardise the nation's opportunity to explore the resources in that region. Like the United States of America, shale gas can provide solutions to most of the energy challenges the country faces. Currently, Shell is the only entity that has right to the resources. This weakens government's control over the security of supply.
Government also needs to play an active role in the downstream sector. The sector needs upgrade but there is a debate on who should be responsible for the cost. The upgrade of facilities will cost about R40 billion. Government needs to control the space through enactment and designation of an integrated national oil and gas company. It is lamentable that no government entity falls within the first six in the South Africa fuel market. PetroSA has less than 4% stake in the refining and production of fuel due to depletion of natural gas in the sea, which means the refineries are not operating at full capacity.
It is commendable that PetroSA is the second largest producer of synthetic oil in the world. This is possible through skills and improvement in research and development. Government needs to protect this space. The Total gas find in Block 9 poses an opportunity for a gas discovery that can last PetroSA G-T-L for the next 25 years. Weaknesses encountered in the sector include inefficient downstream, instability of regulatory framework and misalignment between the MPRDA and NDP on policy priorities. The Committee should help to resolve the conflicting interests of the Central Energy Fund (CEF), PetroSA and Transnet. The Committee should ensure consistency in the leadership of the companies for sustainability, accountability and continuity.
Government must take full control of the entire value chain of the petroleum industry to optimise the benefits. Sound legislation will allow government entities to take full ownership of the petroleum sector. CEPPWAWU shares the sentiments of UASA on rehabilitation of mines, safety of mineworkers and building of technical skills. The sector needs strong artisans to guarantee sustainable development. Multinational are not committed to capacity building. Therefore, government-owned companies must be at the forefront of skills development. Coal remains the most viable resource to Eskom, as a switch to natural gas might be expensive and result in massive job losses. LPG should be considered as it could be used to power residential and commercial entities. The energy sector, through petroleum resources, can contribute significantly to the nation's economy. Government-owned companies should develop the capacity to harness the opportunities in the energy sector. This puts government in control of the entire value chain in the sector.
Mr Nolingo maintained that government needs to take ownership of the energy space to safeguard the sector from decline. The decline in Eskom should not be reproduced in the energy industry. The energy sector must contribute meaningfully to the socio-economic development of South Africans. Ownership of the sector can only be achieved through the enactment and designation of a national oil and gas company. The Committee and other role-players must be ready for opposition as is the case with the efforts for land reform. The opposition will come from groups that prioritise personal interests at the expense of the citizens of South Africa. The Union seeks to protect the rights and interests of workers in the energy sector.
Mr M Wolmarans (ANC) asked about the effect of the SWOT analysis and research on the working conditions of workers. What is CEPPWAWU views on the proposal to make the energy sector an Essential Service? What measure does CEPPWAWU have to ensure supply of clean water to communities?
Ms Malinga commended CEPPWAWU. She, however, expressed concern with the lack of women representation in the Union's delegation to the meeting. It is important to engage the Minister on the diverse initiatives. To what extent has CEPPWAWU engaged the Minister? What is CEPPWAWU's plan to tackle the leadership challenges in the companies that employ its members? What is the Union's plan to explore the energy resources embedded in the sea? The Union should leave monitoring to relevant authorities and focus on plans to explore and process the resources.
Mr V Zungula (ATM) commended the presentation and acknowledged that there will be opposition if Parliament enacts an Act that gives full ownership of resources to government-owned companies. The government can implement existing legislation, in the interim, to force the multinationals to drive the transformation agenda so that citizens of South Africa can benefit. The multinationals will not ordinarily prioritise the interest of South Africans but legislation can force them to do that.
Mr Mileham commended the effort put into the presentation. However, he fundamentally disagreed with CEPPWAWU's view on upgrade of refineries to produce low-sulfur and low-salt bunker fuels for maritime trade. The International Maritime Organisation (IMO) regulations must be considered. There is obviously motivation to upgrade refineries to deal with the demand of bunker fuels due to prospect for profits. Only one refinery, in South Africa, is capacitated to produce low-sulfur fuel. It is concerning that the Union cited Mr Matshela Koko's opinion piece. Mr Koko is allegedly linked to state capture and he ran to Mozambique to run a renewable energy business. He is a discredited fellow and should not be cited. The 214 cent per kilowatt hour Eskom pays to Independent Power Producers (IPPs) comprises the cost of both diesel and renewables. The nation uses diesel to power lights during load shedding and it is one of the most expensive sources of energy. So, the 214 cents should not be solely attributed to renewables. CEPPWAWU research must be based on facts, not emotions and speculation. The Union should not mislead the Committee. PetroSA may not be a solution to South Africa energy challenge. Minister Mantashe attested that PetroSA is dysfunctional and has not had a CEO since 2014. The entity has been failing for at least three of the last five years. Why should the government place petroleum resources under PetroSA, which is a dysfunctional entity? This will be equal to putting the Police into the care of a mass murderer. The assumed billions of barrels of oil reserves in the West Coast is mere speculation and it is not confirmed yet. Malaysia's Petronas has a right to petroleum resources but the reserves only have a lifespan of 10 years and the nation needs to find new reserves. Total has invested hundreds of millions of rand to find the reserves in some of the most hostile environments known to man. Should Total not be allowed to recoup its investment and possibly generate some profit from its investments? Why should the country take the discovered reserves from them? Total did what PetroSA could not achieve and it should be compensated. CEPPWAWU should not attempt to expand the scope specified by Recommendation 220.127.116.11 of the Moerane Commission. The Commission recommended that a state-owned entity should expand storage capacity and nothing else. Does CEPPWAWU agree that PetroSA should be responsible for all exploration, exploitation and drilling licences?
Mr S Kula (ANC) commended the presentation. There should be an interim plan to resolve the challenges in the energy sector because the enactment and designation of a national integrated Oil and Gas Company is a long term solution. The reported market share by government-owned companies is totally unacceptable. How does the challenges in PetroSA affect the workers? Government must strongly drive the transformation agenda in the energy sector and the workers must play a key role in the ownership of strategic resources. Steps must be taken to forestall re-occurrence of problems in the near future. Ownership by multinationals is a threat to the sovereignty and independence of the nation.
Mr Mthenjane asked how CEPPWAWU activities benefit workers. Workers, especially black South Africans, must be considered in the strategic plans. The problems with PetroSA lies with leadership. The people that attribute all problems in energy sector to PetroSA have imperialist and capitalistic mindsets. Sasol used to be a government-owned entity prior 1994. The entity became dysfunctional post 1994 when it was privatised. Labour brokers are serious problems at Eskom and Sasol and they must be eliminated. The judicial system does not favour workers, as employers usually win in court. Workers have suffered for too long and they should earn a living wage. People with the same job description should earn the same salary, irrespective of racial or cultural background.
Mr Mahlaule commended the presentation as a balanced research. The document empowers Members to engage with relevant stakeholders. What are the impacts of the misalignment of the Central Energy Fund (CEF) and PetroSA? How does CEPPWAWU intend to deal with unhealthy competition between CEF and PetroSA? The problem with the energy sector transcends the enactment and designation of PetroSA as the national integrated oil and gas company. The Board might require a complete overhaul. PetroSA must demonstrate the required capacity before it can assume the role CEPPWAWU envisages. The document CEPPWAWU presented cannot be discredited simply because it quoted Mr Koko. The document is balanced research that records the challenges the sector faces and suggestions on how to improve the sector.
Mr Nolingo said the Union met with the Minister on 18 July 2019 to discuss the various challenges confronting PetroSA. The Union also met with the Boards of CEF and PetroSA and other stakeholders on 22 July 2019. All stakeholders agreed that the problem with PetroSA was ineffective leadership. PetroSA is jointly managed by its Board and the CEF Board. The PetroSA Board is delinquent because it does not have the authority to appoint its CEO. The CEO is appointed by the CEF Board. CEPPWAWU expressed concern about the dysfunctional PetroSA Board because the board holds numerous meetings that cost over R10 million to the company. Government must intervene in the matter because it appoints the Board. The Board and other top management must take responsibility for what goes on within the company. It is important to ensure stable leadership to achieve transformation within PetroSA. The Union does not want to be accused in the future as is the case with the Union at the South African Broadcasting Corporation (SABC). The Union intends to engage the Committee and the Minister to discuss the challenges in the energy sector and devise measures to mitigate them. Those that blame PetroSA for the ills in the energy sector are imperialists, who aim to privatise the company and leave the country empty-handed.
An CEPPWAWU official expressed concern about the debate to make the petroleum industry an Essential Service. The Union opposes this proposal as it takes away the rights of workers. An industry becomes an essential service if it has to do with life and death. The petroleum industry is a national key point and has well-defined guidelines and regulations regarding industrial action. No science or history substantiates the need to make the petroleum industry an essential service. CEPPWAWU embarked on a nation-wide strike in 2007 but the petroleum industry was protected from the effect of the strike. Therefore, workers' decision to pursue their rights does not have any adverse effect on the petroleum industry, which is a national key point.
The problems in PetroSA is not in the system, but they are a function of dysfunctional individuals with ulterior motives. It is lamentable that the PetroSA Board is dysfunctional and takes directives from the CEF Board. All stakeholders must work together to ensure that competent and trusted individuals are placed in positions of authority at PetroSA. All stakeholders must come together to rescue PetroSA from those who plan to privatise it. CEPPWAWU collaborates with other role-players to protect workers' rights and rescue PetroSA from collapse. CEPPWAWU, through active engagements with employers, has managed to stop retrenchment of workers in the past. This successful outcome of the negotiation is not permanent and all role-players must ensure that the energy sector operates optimally to prevent retrenchment attempts in the future.
Mr Manikava said the Union has submitted a list of recommendations to top management to address the interest of workers in the interim and the Committee can be given the recommendations. It is left to management to make decisions because workers and CEPPWAWU cannot write strategies. Approval of requests is vital to secure workers. Section 54 of the PFMA states that the Minister must approve all requests through the National Treasury for the establishment or participation in the establishment of a company. The approvals must be done speedily. Production sharing between government-owned companies and multinationals is also crucial. There should be collaboration that facilitate skills transfer from multinationals to government-owned companies. Government can constitute a Ministerial task team to facilitate the process. PetroSA has a strong skills base in the Gas-to-Liquid space.
Government should have control of the majority of energy resources, at least 30%. This will ensure security of supply. Production sharing agreements, between state-owned entities and multinationals, should be in place pending the time the nation reaches maturity. This will guarantee mutual benefit. The Moerane Commission addressed the need for storage infrastructure, which is now with the Strategic Fuel Fund (SFF). It used to be stronger when PetroSA controlled it. The Moerane Commission addressed storage of certain petroleum products. SFF was enacted to secure the storage but not to commercialise it. CEPPWAWU envisages scenarios, where government-owned entities and labour have strong leverage during negotiations with employers. Most multinationals are reluctant to upgrade refineries due to the high cost involvement. Various stakeholders have proposed that the government should upgrade at a cost of R40 billion.
Government-owned entities currently has less 3% stake in the industry. This weakens government's ability to control the entire value chain in the sector. There is no functional government-owned refinery, other than the one Aramco intends to build in Richards Bay. Women are adequately represented in PetroSA. CEPPWAWU and other stakeholders ensure employment equity and appropriate women representation at management level and other operations. Women are trained in various aspects of PetroSA operations. The Centre of Excellence, in PetroSA, plays an important role in women empowerment. CEPPWAWU is concerned about the misalignment between the PetroSA Board turnaround strategy and the Vision that Minister Mantashe presented on 11 July 2019. The misalignment negatively affects the entire value chain in the sector. The challenge lies with lack of leadership capacity in PetroSA. PetroSA's Corporate plan was rejected more than twice by the former Minister. Minister Mantashe has asked PetroSA to submit its corporate plan but CEPPWAWU is concerned that the Board does not have a plan despite several meetings that cost close to R11 million. This attitude causes instability in organizations. It reduces the opportunities for training and development and the rights of workers to peaceful demonstrations.
CEPPWAWU aims to amend the current management structure in PetroSA. Those in management positions must be substantiated to have effective control of their offices. It is disturbing that the Board and CEO of PetroSA have been acting since 2017 and 2014, respectively. CEPPWAWU also opposes the reporting structure of PetroSA. There is a shareholder agreement between CEF and PetroSA which outlines the rules of engagement between the two institutions. CEF has the mandate to appoint the CEO and CFO of PetroSA. This arrangement is wrong as it hampers accountability within PetroSA, because the Executive Directors are not appointed by the PetroSA Board. All stakeholders must work together to resolve the conflict of interest and complications around the operations of the South-South Aramco planned refinery in Richard's Bay. The refinery is currently under the control of CEF, which lacks the financial and human resources to run it. PetroSA's workers are often redeployed to work in the refinery. The refinery should be under the auspices of PetroSA. Government also needs to address the misalignment and ambiguity that exist between PetroSA and SFF. SFF's mandate involves storage and security of supply but the entity got involved in exploration, which is the mandate of PetroSA. The absence of a designated national oil and gas company is due to lack of capacity on the part of leadership. The leadership must demonstrate acceptable capacity to have a vibrant national company that controls the entire value chain in the industry. The multinationals must seek authorisation from government-owned entities before exploration.
Mr Nolingo noted that Sasol used to be under government's control but it is currently privatised. The entity was built with taxpayers' money. Stakeholders must ensure that Sasol is nationalised so that citizens of South Africa derive the benefits they deserve. CEPPWAWU members in Sasol support the nationalisation agenda. Labour brokers should be opposed. The Congress of South African Trade Unions (COSATU) succeeded in its drive to regulate labour brokers but this is not enough. They should be banned. The regulatory framework leaves workers at the mercy of employers, who often maltreat them. Most contracts last for two months, after which workers can renew for another two months or they are sacked. The practice should stop.
The Chairperson noted that corruption thrives in a weakened system. Political instability represents a major problem for PetroSA. Therefore, the Department must have a strong vision that supersedes that of the Minister and other officials in positions of leadership. Ministers are politicians and may decide not to consolidate the vision of previous Ministers. Executive Directors in Acting capacity is another challenge as this affects continuity in an organisation. Some Ministers and executives may not know the needs of the society. Therefore, the Department must establish a system that drives the interests of the society. The government should attempt to restructure the Board system within the energy sector. Diverse boards will lead to misalignment of interests. Trade unions should be bold to make recommendations to the Committee. Employers are usually bold to table their requests regardless of how difficult they might be. The regulatory environment needs stabilisation. A number of regulations must be streamlined to take the sector forward. The challenges in energy sector are massive and Committee Members need empowerment to effectively perform their oversight function.
Mr Gideon Du Plessis, General-Secretary: Solidarity, said that his organization takes race and gender-related matters seriously. He promised the Committee to have a wider, not a white, approach to his presentation. The organisation intends to maintain 50/50 balance in gender representation and the current Head of Health and Safety is a woman. The presentation looked at the state of labour relations, the Mining Charter, health and safety, and gave a SWOT analysis.
The mining industry is a microcosm of South African society. The mining industry has various stakeholders across all races, ideologies, political parties, gender and union affiliations. All stakeholders are social partners and the challenges in the sector reflect the challenges in South Africa. The mining industry is at crossroads. Ghana overtook South Africa as Africa's largest producer of gold despite South Africa having six times more gold reserves and South Africa has dropped in gold ranking. There is need for balance between various interests to move the industry forward. Labour relations in the industry need improvement and aspects of the Constitution that deal with this matter need to be strengthened. Violent strikes pose enormous challenge in the industry. The Union and other stakeholders aim to address the challenge of the undemocratic majoritarian principle that seems to advance interests of the majority at expense of minority. The rights of minority unions and their members should be respected. The majoritarian principle must be brought into alignment with our political democracy. Labour relations is at low ebb and this has adverse impacts on the industry and general society. There is no longer a sense of oneness in the industry. All unions currently seek measures to bring labour relations under control. This will ease a lot of tension in the industry. The coalition of unions would appreciate the opportunity to present lessons learnt and challenges associated with the formation of the coalition to the Committee. Mineworkers are sometimes hesitant to embark on strikes due to financial implications.
The Mining Charter is very important as it deals with industry's past, current and future states. Every employer should consider the Mining Charter an investment because it facilitates a peaceful and safe environment. This is why the Union considers the Mantashe version of the Charter better than the previous version. The industry needs to balance interests across various categories like race and gender. The Charter ensures that workers are treated fairly regardless of racial and cultural backgrounds. Everyone doing similar tasks should receive equal treatment. This helps to resolve the injustice of the past. Employee share ownership model proposed in the Mining Charter is crucial to the sustainability of the industry. The Mining Charter also incentivises employers to pay dividends to employees. Solidarity takes keen interest in current litigation that challenges the "once-empowered, always-empowered" principle. The Union mainly represents white employees and it is critical of the litigation. Co-determination, in terms of representivity on the company board, is important. Solidarity recommends amendments to the Charter to facilitate co-determination in representivity on a company board. It is important that the Department has active engagements with mining communities. Pseudo-participation will not address the matter. The Department should rather consult with communities rather than chiefs. This helps to diffuse the tension between the Department and the communities. There is lack of education about the Charter during community road shows. The proposed new Charter should address the unhappiness that exists among various stakeholders in the mining industry. Unions, mineworkers, communities, senior employers and legal experts are dissatisfied with the high allocation of share ownership to black entrepreneurs at the expense of communities and mineworkers.
Health and Safety in Mining
Apart from the obvious decisions to protect people and save lives, health and safety is one of the most important relationship-building elements in the mining industry. Anglo-America, Minerals Council and Sibanye have put up a tripartite forum in collaboration with unions, employees and other stakeholders to deal with health and safety matters. The forum allows all stakeholders to sit together and reach consensus on health and safety matters. Anglo-American champions the initiative, which is supported by both the Minerals Council and Sibanye. It is a concern that decrease in mining fatalities is not proportionate to the significant decline in mining activities. This year's 29 fatalities, representing a 42% decrease compared to prior year, is still significant when one considers the massive risk shift in the industry. Most mining companies push workers to work harder due to high production targets and this has impacts on health and safety. Workers should not jeopardise their health and safety for extra pay. It is nearly impossible to achieve zero harm at the moment because retrenchments occur at alarming rates. This forces ex-miners to join the Zama-Zamas due to financial challenges. Most of them have 10-15 dependants. Mining companies consequently close mines for health and safety reasons. This makes more people join the Zama-Zamas, creating a vicious cycle. The Committee needs to refine the Health and Safety Act, particularly Section 23, so that workers can withdraw from dangerous operations without the fear of repercussions. Post-hazard inquiry is a blind culture and it should be discouraged because it does not address the root cause of fatalities.
SWOT Analysis: Strengths
Both President Cyril Ramaphosa and Minister Mantashe are ex-unionists who have excellent grasp of labour relations. The Union believes that this unique combination will advance the interests of the industry. There are mixed feelings about retrenched workers. There is vast availability of highly skilled workers, who were retrenched, and they should be readily available if new mining opportunities come up. This is why Anglo-American retained 500 South Africans at its Head Office as part of its global operations. Labour unions have managed to increase the retirement age of mineworkers from 60 to 63. There are collaborations among the mining houses and they can cross-subsidise because they have the best policies, procedures and best practices in the world. Another strength of the mining industry is adherence to the rule of law. The mining industry is the only economic sector that has a formal structure that comprises the employer, labour and government. No other economic sector has such a tripartite structure. The country sits on some of the world's highest reserves of mineral resources.
The weaknesses of the sector include the existence of marginal mines, which often have financial difficulties; high level of retrenchment and incapacitation to deal with consequences; increased health and safety-related matters and business rescue practitioners. Based on lessons learnt from past activities, authorities should amend the relevant section of the Mining Act to curb the activities of business rescuers, who make between R18 000 to R25 000 per day. They have negative effects on most of the mines, Lilly mine being a prime example. Another challenge is local government failure to ensure effective service delivery to communities. This often leads to demonstrations by communities. A particular company in Rustenburg recorded 37 marches in 2017. Only four of the marches were mine-related and the rest was due to failure on the part of local government. Protests usually end up in job losses. The Department still deals with some of the challenges inherited from the previous administration that had appointment and procurement-related issues and some workers work under those that did not have the required skills. Further, the Growth and Competitive Task Team constituted in 2008 and the Principals' Forum are in rapid decline. UASA, in collaboration with other stakeholders, has intervened to revive the entities. UASA will meet with stakeholders on 23 August to devise means to revive the Task Team and the Principals' Forum. Kelvin Dushnisky, CEO of Anglo-American, told Solidarity that the decision to leave the country is purely commercial. The company is unwilling to upgrade the mine due to cost factors and their capital could yield significantly high returns on investment in other places, especially Ghana.
The nation has good policies, procedures and documents. However, these are mere inputs. The outputs are the achieved targets. Job loss is a major problem and there are documents developed to address the matter. The Mining Phakisa was put together by various stakeholders in 2016 and it sought to address job losses. However, the provisions of the document are never implemented. The provisions of the Framework Agreement on Sustaining Mining Industry, signed in July 2013, never got implemented. It is important to implement the provisions to save jobs and make the mining industry a sunrise sector. The National Development Plan on mining addresses elements to grow the sector, job security, employment and promotional opportunity. The Committee should perform its oversight effectively to ensure the provisions of the documents are implemented. Technology plays important role in the fourth industrial revolution. Technology can enhance remote mining activities, which improves the health and safety of workers. Cooperatives in mining should be empowered and given necessary funding. Parliament should fast-track amendments to the MPRDA. This will address uncertainty in the regulatory and legislative environment because it is more difficult to amend an Act of the Parliament than a Charter. Parliament should seek the involvement of all stakeholders, especially the communities during the amendment process. Parliament will need to incorporate an element of community development into the "once-empowered, always-empowered" principle. The regulatory environment must be stable to attract foreign investors. Currently, investors from Canada prefer to invest in the Democratic Republic of Congo (DRC) because of the stable regulatory environment that limits their exposure to 51%. They prefer DRC despite the fact that they give away 51% of their investment because that is the only exposure they have. However, they are sceptical about investing in South Africa, despite low exposure (26-30%), due to uncertainty in the regulatory environment. Parliament needs to transfer some the Charter elements into the Act and legislate it. This creates regulatory certainty. Parliament needs to scrutinise the role and effectiveness of the mineral and petroleum boards. Local economy and climate justice must be prioritised.
The Eskom crisis must be considered seriously. Cost of electricity has soared and this could lead to massive retrenchments in the near term. For instance, a gold company recently confirmed to Solidarity that its electricity cost could increase from R0.5 billion to R1 billion within the next five years. Such increase could lead to loss of 90 000 jobs over the next few years. Parliament should, therefore, expedite the licensing of large solar projects to large industrial companies and put pressure on Eskom to restore coal contracts to accredited contractors. Solidarity, NUM and AMCU aim to achieve a comprehensive solution to the problems confronting Eskom to prevent further job losses and fatalities. Collective bargaining is no longer a subject of debate in the coal sector. The Union is concerned that employers might use labour costs as a strategic advantage during negotiation processes. Also, there might be disparity in wage and conditions of employment. Employers use the disparities as a strategic advantage during negotiations. Illegal mining is a serious problem in the sector. For example, Sibanye-Stillwater announced retrenchment of 2000 workers in 2017 due to illegal mining. There is continual desperation at mines and this has adverse effects on all aspects of operation. There are certain aspects of operation, like exchange rate and commodity prices, that are outside the reach of unions . Research should investigate the impact of stress on the functionality of mineworkers. Health and safety goes beyond fatalities and other aspects of well-being should be considered. Section 54 of the Mining Act should be thoroughly reviewed to regulate the powers of mine inspectors. It is dangerous to close mines arbitrarily. This might have geological and safety consequences. The majoritarian principle is a threat to the sector. The rights of each group must be respected and protected whether they are in majority or minority. Workers incur enormous debts, particularly after strikes. This prompts some of the workers to mine illegally. This imposes significant limitation on the Union during negotiations with employers.
The mining field is currently a battleground and all stakeholders must work together to restore normalcy to make the sector a sunrise industry. The success of the sector lies in strong leadership. The nation can take a cue from Singapore's mining sector, where all stakeholders abandoned individual interests to pursue collective objectives. There should be a mining Indaba, where all these interventions are discussed extensively.
Expectations for the Committee
The Committee should perform its oversight functions effectively and hold social partners accountable. The Committee should use lessons and experience from the past to resolve some of the challenges confronting the country. The Committee can adopt lessons from CODESA to reach common ground that suit the majority of stakeholders.
Mr Mthenjane asked the communities that should benefit from the mining sector? Is it the white communities? It is important to note that South Africa is a multi-racial nation and individual races and cultures must be respected. It is an insult to come to the Committee to represent white workers, knowing full well that majority of the Committee is black. It was also disturbing that the presenter mentioned CODESA, which operated around 1991 when the nation was negotiating transition from the Apartheid regime to a new South Africa. He accused the presenter of trying to remind the Committee of the Apartheid regime. Solidarity cannot impose the views of the minority on the majority of South Africans. Solidarity cannot come and represent the views of the minority in Parliament.
Mr Mileham noted that Members of the Committee represent the entirety of South Africa and no group should be discriminated. He strongly condemned the attitude of Mr Mthenjane towards equal representivity in Parliament. He proposed that the matter should be referred to the Rules Committee. It is unparliamentary to say that a minority group cannot be represented in Parliament.
The Chairperson urged Members to maintain an orderly atmosphere. The concern on equal representivity is better addressed by Solidarity, which is the presenter.
Mr Mthenjane said he did not mean to offend Mr Mileham. The question was directed at Solidarity because the group mainly identifies with the whites. The Committee needs to know where the group stands and all areas of concern should be clarified as the Committee will continue to engage the group for the next five years. CODESA is no longer needed in the current South Africa. Parliament represents the entirety of South Africa and no race should be prioritised.
Mr Bilankulu (ANC) expressed dissatisfaction with the comparison the presenter drew between the past and current administrations. The documents Solidarity presented appeared to polarise the Committee, which is an ugly development. Solidarity should be objective in its analysis and should focus on the interest of South Africans instead of targeting individuals. He urged Solidarity to withdraw most of its statements.
Mr Mileham expressed concern about the views of Mr Mthenjane on representivity in Parliament. Members should embrace the opportunity to engage with all stakeholders, who might have diverse cultural, social and racial backgrounds. Members should be free to express their views on matters of concern. He sought clarity about the status of Junior Miners in the industry. How does Solidarity classify Junior Miners? Is classification based on Department or international criteria? He urged Solidarity to explain the different classes of mining rights and the employers associated with each category of mining right. How does Solidarity regulate the activities of mine inspectors? Does the Union collaborate with relevant role-players to curb the excesses of mine inspectors? Solidarity and UASA's resolve to address the breakdown in collective bargaining structure is commendable. It is, however, important to address the root cause of the breakdown. Did the breakdown result from intransigent employer bodies, intransigent unions or unrealistic expectations?
Mr Mahlaule said the presentation style of Solidarity negates the principle of the Parliament, which prioritises the interest of South Africa as a whole. No group must assume dominance over other groups and emotional sentiments should not becloud the thought of people who represent certain interest groups. He asked Solidarity to explain how Black entrepreneurs benefit at the expense of workers and communities. Does Solidarity have anything bias against Black entrepreneurs? In response to the crisis in the energy sector, he asked the Union to explain why Eskom should award a coal contract to a particular cooperative. Does Solidarity have any interest in the mentioned cooperative?
Ms Malinga also condemned the comparison between previous and current administrations. What did Solidarity mean when it said the mining sector is at crossroads? Unions representing majority groups have rights to voice out the demands of their members. Health and safety of workers should be paramount. Why is the reduction in fatalities not proportional to increased risk shifts. Section 22 of the Mine Health and Safety Act empowers workers to withdraw from dangerous operations. Therefore, workers should not be threatened with job losses when they withdraw from dangerous areas. Members of Parliament should represent entirety of South Africa and should work amicably to take South Africa forward.
Mr Mileham said he did not intend to bully any Member of the Committee.
The Chairperson urged Members to respect the procedure of the Committee. Members should be objective. Personal matters among Members can be resolved internally after meetings. Vehement arguments among Members during meetings constitutes disrespect to invited people.
Solidarity represents majorly white workers. However, 33% of the members are black. The presentation attempted to voice out the views of the Union's members. The presentation did not intend to discredit any race or group. The Union supports the Mining Charter and proposed amendments to the Act. The Union fully understands history but its approach to transformation in the mining sector is totally contrary to the impression some Members have created. The Union fully appreciates its black members and the publication of Daily Maverick in the past week is a testament to this fact. All relevant unions work together amicably irrespective of racial, social and ideological differences. Solidarity does not attempt to compare the performance of previous and current administrations. It referred to the Mantashe version of the Charter due to the amendments it proposed. Most of the Junior Miners that operate marginal mines are set for failure due to high costs of running marginal mines. Solidarity seeks various interventions like the Sovereign Wealth Fund, to keep such miners afloat. The Union tries its level best to curb the excesses of mine inspectors by opposing unnecessary shutdown of mines. Section 55 is often used to counter the power conferred on the mine inspector by Section 54. Employers often resort to court and they prevail in most cases. Solidarity works with DMR to protect the interests of workers. The Union is very sensitive to the impact Section 54 is having on its members. The collective bargaining structures broke down because the individual mining companies seek to protect their interests, which are sometimes extremely diverse. The interests and concerns of big companies are obviously different from medium and small companies. Therefore, the union often proposes models that enables mining companies and other stakeholders to sit at the same forum to provide inputs that leads to sustainable growth of the sector. It is important to develop measures to empower black entrepreneurs, who were generally marginalised based on historical perspectives. Legislation that undermines black entrepreneurs must be reviewed so that every South African get the benefits they deserve from the mining sector. The cooperative, comprising ex-mineworkers, has the licence to explore coal but they do not have contracts. The Union seeks to get Eskom to renew the old contracts for the cooperative to assist their growth. The cooperative is a laudable initiative and they need to be supported.
The mining industry is at a crossroads because mining activities are declining despite vast reserves of minerals. While the country cannot totally reverse the decline, the rate at which the industry shrinks can be minimised. The excessive and dangerous tension in the industry needs to be diffused. Solidarity fights against scenarios where the rights of minority groups are violated. Majority groups should have higher benefits but the minority groups should have what they truly deserve. It is important to avoid tension in the sector. The tension in the platinum belt led to the unfortunate incident at Marikana.
In response to the question on fewer risk shifts, he said various mining operations are shutting down. This reduces the stake of investors in the sector. Unfortunately, the fatalities only decline slowly in relation to the rapid decline in mining activities. Workers' health and safety are sometimes compromised because of the autocratic perspective of some employers. Mineworkers are sometimes coerced to work in dangerous areas contrary to their wishes. Mineworkers that choose to withdraw tend to lose their pay or get fired. The Union and relevant role-players intend to address this issue and proffer appropriate solutions at various health and safety conferences.
In response to Mr Mileham asking about the classes of licence in the sector and to what extent the regulatory environment hinders the rollout of licences, Mr Du Plessis said the Minerals Council is in a better position to answer the question on mining rights. About 400 licences were issued for prospecting in the last 12 to 18 months. Licences are also issued for mining and the longer the duration of the licence, the better the labour relations. Employers adopt a more aggressive approach to production if licence duration is short.
The Chairperson urged Members to accommodate the views of various groups, who might represent diverse interests. The Constitution of the Republic allows plurality of ideas and the freedom of expression and association must be respected. Unions must avoid the temptation to compare different administrations. Union must address issues rather than specific individuals. Trade unions representing the majority should not attempt to increase thresholds unnecessarily. The rights of minority unions and their members should be respected. The Committee will schedule time to deal with the problem in Aurora to avoid future recurrence.
The Committee would meet with employers on 21 August 2019 to understand their perspectives. The Committee will seize the opportunity to engage the employers on the "Once-empowered, Always-empowered" principle. There is no time-frame for mining rights in South Africa. However, the renewal process can kick in. Employers should avoid strikes where necessary because workers tend to be worse off after strikes. Further, disputes should be resolved internally and litigation should be last resort. Litigation always ends with a winner and a loser. Losers always seek ways to retaliate, which is not good for the sector. Unions must prioritise organisational interests over personal interests. Personal opinions or affiliations must not cloud their judgement and positions on matters. The Committee is committed to work with Solidarity for the next five years.
National Union of Mineworkers (NUM)
Opportunities and challenges in the mining sector
Mr Joseph Montisetse, President of NUM, said that the energy and mining sectors have always being the backbone of the nation's economy, contributing enormously to GDP. Eskom employs about 46 700 employees as at 2019. Both sectors have potential for growth and the nation has vast reserves of mineral resources worth R20 trillion. Both sectors can potentially contribute towards poverty alleviation, job creation and closure of the inequality gap.
Opportunities in the mining industry include beneficiation, effective social and labour plans, women and youth empowerment and Broad-based Black Economic Empower (BBBEE), legalisation of illegal mining, improvement in health and safety of mineworkers, modernisation of mines, mining care and maintenance, among others. NUM accepts and welcomes the energy mix. Coals remains a vital resource for Eskom in energy generation. Clean coal technologies are now available that can reduce pollution associated with coal utilisation. India is a huge consumer of coal and Egypt recently built a massive coal power station.
The government must address the challenge of illegal mining. Research shows that globally there are 30 million additional small scale miners that extract about 80 minerals with non-conventional technologies with gold the dominant commodity. Illegal miners called Zama-Zamas are a threat to the mining sector. Zama-Zamas are ex-miners who participate in illegal mining activities. They are prevalent in Gauteng, Mpumalanga and North West provinces. Authorities must investigate this matter to uncover the illegal miners and their foreign syndicates. Violence has been on the rise in the industry since 2012, especially during strikes. Nine mineworkers were killed at Sibanye mine and two children suffered an attack in the Free State. The Committee should constitute a commission to investigate the violence in the industry. Certain syndicates may be responsible for the killings. NUM supports modernisation in the sector but this intervention must be for overall benefit of workers. The government must discourage the excesses of business rescue practitioners (BRPs) in the sector. Most BRPs benefit massively at the expense of workers and communities. Mine shutdowns are often intended to punish workers. The Labour Relations Act must be strengthened to deter employers from unnecessary retrenchments.
Current contracts between Eskom and Independent Power Producers (IPPs) must be terminated. Eskom buys energy at 223 cents from IPPs and sells to customers at 89% of purchase price, which does not make business sense. IPPs should be empowered to generate power and sell directly to consumers. IPPs should not feast on Eskom. Termination of the contracts has the potential to massively reduce Eskom's debt burden. Various aspects of Eskom's operations must be audited and culpable individuals must be disciplined. Government should own at least 60% stake in the energy and mining sectors. This will enormously contribute to the Sovereign Wealth Fund, which can be used for infrastructure development. This allows for control, which guarantees security of supply. Government can facilitate skills and technology transfers between South Africa and other BRICS countries to drive development, growth and transformation in the energy and mining sectors.
The Chairperson said the challenges with Eskom will be addressed at the appropriate forum.
Mr M Nxumalo (IFP) asked how to legalise illegal mining. What is the motivation for this? Self help and reliance is vital to grow the South African economy. Exportation of raw materials and importation of finished products must be discouraged. Local manufacturing should be encouraged to create economic opportunities for South Africans.
Mr Mthenjane commended the presentation and sought explanation on why NUM loses its members to AMCU. NUM shares similar views with the Committee on measures that protect and advance the interests of the people of South Africa. He noted the union needs to respect the Committee on the matter of time. The Committee will not tolerate late coming in future meetings.
Mr Kula expressed concern about non-prioritisation of women empowerment in the mining sector. Women constitute the majority of the population but are not given the opportunities to empower themselves. The Committee should come up with recommendations that support women empowerment strategies within the mining industry. The Committee should also make recommendations on how to legalise illegal mining. The nation has vast reserves of minerals, worth R14.4 billion, which should be harnessed for the benefit of the citizens. The Committee should develop measures to curb violence and intolerance in the sector, especially in the platinum belt. The health and safety of mineworkers must be taken seriously. Employers must not be allowed to expose workers to situations that could endanger lives. The Committee should develop measures to mitigate risks in the mining sector.
Mr Mileham said it is more cost effective for employers to import their equipment and train staff to use them. This might save costs compared to when workers are sent to China for training. What is NUM's view of modernisation? Why does NUM think BRPs intend to punish workers? The BRPs are empowered by legislation to ensure sustainability of the mining industry. Who are the exact people that make money from business rescue activities? Does NUM believe that Eskom is overstaffed? Reports reveal that Eskom is overstaffed by a factor of three. Should IPPs sell directly to municipalities and large consumers? There is no need for new corporate taxes because corporate tax already exists. Did NUM report the project manager who bought transformers that were not suitable for the South African environment, to the law enforcement agency?
The Chairperson cautioned Members to focus on the business of the Committee. Eskom-related matters are better addressed by the Committee on Public Enterprises.
Mr Zungula commended the presentation as a true reflection of the challenges in the energy and mining sectors. He expressed concern that Chinese companies import machinery from China. Foreign companies sometimes bring foreign workers into South Africa. These practices must stop. South Africa must take ownership of its resources and ensure its citizens benefit from the mineral resources. Government must adopt both a long- and short-term approach to beneficiation. How does NUM intend to legalise illegal mining? How does it benefit the government and the people of South Africa. NUM should assist in identification and arrest of syndicates involved in illegal mining to have effective control over the sector.
Mr Mahlaule asked NUM to recommend measures to the Committee, that can be used to arrest illegal miners and international syndicates. This step is necessary before the legalisation of illegal mining.
NUM loses members because it is growing at a rapid pace. The Union needs to control the ratio of members to organisers to keep it decent. The Union does not know the international syndicates. However, it is clear to see that illegal mining, especially gold, cannot be divorced from international partners since gold is processed outside of South Africa. The government cannot arrest or arbitrarily expel illegal miners. They always find alternative tactics to undermine government's plans. It is prudent to transform and regulate them in a way that will eventually benefit South Africa. The country can take a cue from the strategies of the Nigerian and Ghanaian governments. IPPs' contract with Eskom should be terminated because the arrangement is not favourable to the economy. IPPs should be free to conduct their businesses independent of Eskom. The energy market is vast and the IPPs can explore local and foreign market opportunities. Another problem confronting Eskom is failure of municipalities to pay debts. Municipalities sell electricity from Eskom to constituencies but without revenues worth R18 billion. Use of prepaid metres should be encouraged so that people pay for the electricity they enjoy. However, guidelines specifying tariffs in various areas must be set to accommodate the financial realities of individual communities. The Union will meet with the Eskom Board on 23 August 2019 to discuss the matter of the dysfunctional transformers. Eskom must punish the culprits or NUM escalates the matter to relevant authorities.
Ms Nkosazana Mona, a NUM Researcher Officer, apologised for lateness to the meeting. The Union prioritises women empowerment. The challenges women face in the sector are similar to those of the construction sector, where it is difficult for women to climb the corporate ladder. The Committee and other role-players should review companies' strategies to empower women. The Committee can also influence top management during oversight visits. Government should increase corporate tax so that it becomes very expensive for companies to violate employees' rights. There are guidelines for companies in South Africa. A company does not reserve the exclusive right to import equipment without proper authorisation. Business must be done in the overall interest of South Africa. Mineworkers should not be exposed to dangerous terrains. There must be extensive conversation among all stakeholders to arrive at solutions that guarantee mutual benefits. NUM lamented the non-finalisation of the Amendments to the MPDRA Bill. The Bill was unnecessarily delayed and was later called off by the DMR. The Union felt the Committee failed to facilitate the finalisation of the Bill. The Bill contains vital elements that protect workers and community interests. The Bill addresses Section 52 of the MPRDA in alignment with Section 181 of the Labour Relations Act.
Mr Montisetse said that the Departments of Police, Labour, and Mineral Resources & Energy must establish a commission to investigate the violence and intolerance in mining areas. The sponsors of violence must be exposed and dealt with. The Union opposes aggression on workers and their relatives. The activities of business rescue practitioners must be closely regulated. The rescuers stay at mines for extended periods to maintain and sustain their gains. There should be a specified time-frame for their activities and they should be evaluated within the first six months to monitor progress. A particular mine in the East Rand was rendered useless because rescuers sold almost every asset including the shafts. This portends danger of unemployment in the long-term because potential investors are repelled from such mines. Lilly mine is such a mine that suffered from business rescuers. Potential investors opted to buy the mine but business rescuers made the whole process futile. Mine maintenance should be handled by the Department. Companies cannot abandon mines with hopes to renew operations after a spike in commodity prices. The welfare of the workers must be paramount. Eskom is short-staffed. Eskom needs to be revitalised through a complete overhaul of its top management. Operations that were closed can be resuscitated. This might play a vital role in job creation.
The Chairperson said the Union should clearly state what it expects from the Committee. The activities of business rescue practitioners must be monitored and regulated. It is worrisome that nearly all BRPs are liquidators. Government should take ownership of the resources to deliver value to the people of South Africa. The Committee addressed matters relating to international trade agreements, while the NCOP dealt with matters relating to the House of Traditional Leaders. The Committee does not know how far the NCOP went with the MPRD Amendment Bill. The Committee will consider measures to finalise the Bill. Illegal mining activities should be thoroughly investigated. It is not only an internally syndicated activity, it is highly criminalised. The international trade in platinum is regulated through the Kimberley Process. However, gold does not have any international regulations or prescriptions. Illegal mining is highly organised crime. He cited a case of a Mozambican caught with about R20 million. He never spent time in jail. The Committee will investigate processes that lead to mine closure and the effectiveness of the licensing regime.
The Committee will visit Gauteng in the last week of August. The Chairperson said he hopes to meet with the House Chairperson to seek an extension to have ample time to consider the Legacy Report of the Fifth Parliament's Committee on Mineral Resources and Energy. The Committee will meet with employers the following day, 21 August 2019.
The meeting was adjourned.
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