Mining’s abnormal state preventing effective govt intervention

19 Jun 2013 | Mining Weekly | Original Publication:  BDlive

JOHANNESBURG (miningweekly.com) – The abnormal current state of the South African mining sector was preventing effective government intervention, former Opposition Leader and former South African Ambassador to Argentina Tony Leon said on Wednesday.

Leon, who addressed a Front Foot 'State of the Nation' breakfast, said in response to Mining Weekly Online that President Jacob Zuma’s recent intervention in bringing stakeholders together under Deputy President Kgalema Motlanthe and relevant Cabinet Ministers would have been fine in normal circumstances.

“But we know in our reality that the situation in mining is currently completely abnormal. We’ve got wage settlements that are completely out of kilter with what the sector can bear, both in terms of productivity yields and in terms of other benchmarks.

“We’ve bought peace where we have it, and only in certain areas, at a very high cost. We now have proven that our labour relations model in terms of the Labour Relations Act, does not work, because the whole form of centralised collective bargaining doesn’t work,” Leon said.

He added that key relevant Cabinet Ministers needed to be seen to be nonpartisan, and government needed to recognise that the law-and-order mechanism had to change.

He criticised the Farlam Commission of Inquiry into the Marikana killings for taking longer than it should.

“I don’t want to anticipate what’s going to come out of the Farlam Commission of Inquiry into what has happened at Marikana, but it has taken an unbelievably long time, given that we are about to approach the anniversary of Marikana and the commission is now only expected to end in October. That’s far too long.

“But we need to know that the interventions in the future will both be more effective and less deadly than we saw at Marikana," he said.

Leon would ideally like to see greater clarity between the unions and reconsideration of the majoritarian basis on which recognition worked, with more power returned to stakeholders other than unions.

“In other words, that you have the stakeholders who aren't actually in the labour unions also getting more recognition in terms of the wage negotiations,” he said.

He did not believe any of these steps were necessarily going to happen in the run-up to the 2014 general election, owing to the ruling African National Congress (ANC) not wanting to offend trade union federation, the Congress of South African Trade Unions (Cosatu).

The truth was that the National Union of Mineworkers, as one of the senior stakeholders in Cosatu, was instrumental in getting the ANC’s vote mobilised for next year’s election.

“So, a lot of what should happen won’t happen, at least until after the next election,” he added.

All that came on top of investor uncertainty created by the Mineral and Petroleum Resources Development Act (MPRDA) and the various ever-shifting codes promulgated under the MPRDA.

"Clearly, whatever its intentions, the entire paraphernalia of our mining legislation has achieved neither a conducive environment for the industry and all its stakeholders and has pushed us ever further back in the benchmarks of global mining.

"This is one element that is entirely in government's purview to rectify," he added in a note.