C
Comment
Pressuring the platinum
producers:
Making South African mining companies
take social responsibility seriously
By Claude Kabemba and Masego Madzwamuse
Mining companies in southern Africa are so used to operating
in secret and keeping local communities in the dark about their
activities that it comes as a rude shock when someone manages
to shine a spotlight – however weakly – on their behaviour. Usually,
their initial response is a mixture of bullying and bluster but
sometimes they see the advantage in cooperating with their civil
society accusers and working to improve their social performance
– and that is exactly what happened with two platinum miners
in Zimbabwe after the publication of a damning report into their
relationship with the surrounding communities.
Masego Madzwamuse
is the OSISA Programme
Manager for the Economic
Justice Programme. Prior
to joining OSISA, she was a
freelance consultant working
in the area of environment
and development. Previously,
she was a Programme
Manager for the UNDP
TerrAfrica initiative, which
aimed to mobilise civil society
engagement in processes to
up-scale sustainable land
management in sub-Saharan
Africa, and also Regional
Programmes Development
Officer for southern Africa
for the International Union
for the Conservation of
Nature. She holds an MA in
Environmental Sciences from
Rhodes University and a BA in
Sociology and Environmental
Science from the University
of Botswana.
Claude Kabemba is the Director of the Southern Africa
Resource Watch (SARW). Before joining SARW, he worked as
the Chief Research Manager of the Human Sciences Research
Council and the Research Manager at the Electoral Institute
of Southern Africa. He has also worked at the Development
Bank of Southern Africa as trade policy analyst. Claude holds
an MA in International Relations (Political Economy) from the
University of the Witwatersrand.
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In August 2010, the Southern Africa Resource Watch
(SARW) and a group of Zimbabwean civil society organisations were invited to visit two platinum mines
– Ngezi and Mimosa, which are owned or part-owned
by South African companies – to see for themselves
whether the mines were living up to their corporate
social responsibilities. The unprecedented visit followed
a report that SARW had issued in April, which highlighted serious problems with the way South African
mining companies were operating in the rest of southern
Africa 1. The report was commissioned because of
the increasing number of South African companies
investing in the region’s mining sector and because
of growing concerns about the extent to which the
companies were contributing to the development of
local communities, particularly in countries with weak
regulatory frameworks and enforcement capacities.
The broad thrust of the report – drawing on case
studies from Zimbabwe, the Democratic Republic of
Congo, Mozambique, Namibia and Zambia – was that
South African companies were falling short in terms
of their commitments to the surrounding communities
and their implementation of corporate social responsibility (CSR) programmes. Illustrating their lack of
interest in these issues, the companies made no effort
to participate in the research process. During the field
studies, the companies refused to be interviewed,
forcing researchers to rely on the broad outlines of the
companies’ CSR programmes that were available on
their websites and in their promotional material and
annual reports. However, SARW researchers were able
to speak to local communities, workers and trade unions,
which provided them with the material to produce a
general picture of the companies’ activities and their
apparent disregard for many of the commitments that
they would necessarily abide by back in South Africa.
The media’s coverage of the report and condemnation by
South Africa’s powerful National Union of Mineworkers finally prodded the companies into action. Both
Zimplats and Mimosa criticised the report and asked
SARW to undertake a second round of research, which
the companies would participate in. SARW agreed since
its aim is not just to criticise companies from afar but
to work with them and civil society organisations to
ensure that southern Africa benefits from more transparent, accountable and pro-poor mining operations.
Unprecedented Visit to Platinum Mines
Zimbabwe has the world’s second largest platinum
reserves and both the Ngezi mine (operated by Zimplats
– a subsidiary of South Africa’s Impala Platinum) and
the Mimosa mine (owned by Mimosa Investments
Limited – a Mauritius-based company that is a 50:50
joint venture between Impala Platinum and Aquarius
Platinum) sit on the Great Dyke, the remarkably rich
seam of ore-bearing rock running up the centre of
the country. Ngezi is located southwest of the capital,
Harare, while Mimosa is situated just to the east of
the country’s second city, Bulawayo. Despite political
turmoil and economic uncertainties, particularly the
controversy surrounding the indigenisation law, the two
mines have continued to operate at full capacity and
Zimplats remains the biggest investor in the country.
When SARW and its Zimbabwean civil society partners
visited the mines, they participated in lengthy and
detailed debates on the key points and recommendations in the initial report with the enthusiastic
and well-prepared management teams. Indeed, it is
striking to note that these mines are managed – in
their entirety – by Zimbabwean citizens. This is
a progressive strategic decision considering that
the majority of mines in most African countries
are run by expatriates. However, despite being in
charge of day-to-day management, the reality is that
major decisions are still made in South Africa.
Another important observation is that these two
companies now appear to be prepared to listen and to try
and deal with their shortcomings. While they disputed
some of the claims in the original SARW report, the
management of the two companies had obviously taken
time to study the document and had even embraced
some of its recommendations. Clearly they hoped
that the visits might make SARW rethink some of its
earlier conclusions. However, while some improvements were noted, the visits confirmed a number of
issues that had been raised in the first report. In particular, the visits highlighted the problem of double
standards – how South African mining companies
operate differently in foreign countries compared
to the way they conduct themselves on home soil.
It is true that the companies have signed mining agreements with the Zimbabwean government allowing them
to operate and that they comply with the country’s legal
regulations. But this is about as far as good practice
goes. SARW found that corporate social responsibility
is limited to the mineworkers. The communities surrounding the mines are largely ignored. The companies
have no clear strategy to engage with them and when
do they launch one of their sporadic interventions, they
do not take local people’s preferences into account.
Indeed, when the companies interact with the communities, the vast imbalance in knowledge, skills and
resources tips things firmly in favour of the mines. For
example, when the mining companies hold compulsory
environmental impact assessment meetings with local
Pressuring the platinum producers: Making South African mining companies take social responsibility seriously — 25
communities, the representatives of the mines boast a
far greater concentration of environmental, geological
and geographical knowledge than any of the communities – with their low levels of literacy and lack of understanding of the long-term impact of mining – could
hope to have. This power imbalance can only work
to the companies’ advantage. However, Zimplats has
taken this process a stage further. It does not bother
to hold compulsory environmental impact assessment
meetings with the Mhondoro Ngezi community – and
appears to have made no effort to even start the process.
The two companies also find it difficult to deal with
issues of transparency. While both companies pay
their taxes and are willing to provide civil society with
details of their royalty and corporate tax payments
to the government, they are not prepared to publish
this information so that it reaches the broader Zimbabwean public. Indeed, both companies claim that
these payments are published in their annual reports
but these remain largely inaccessible to the majority
of Zimbabweans. Nevertheless, what is encouraging is that there are indications that both companies
might be prepared to publish their payments to the
government. But they should consider going further
and making their contracts with the government
public as well. Since mining contracts are currently
confidential, Zimbabweans have no idea about the
exact terms and conditions under which these two
companies operate. However, around the world,
mining contracts are increasingly being disclosed and
subjected to public input and scrutiny. South African
companies operating mines in Zimbabwe and elsewhere
should follow this trend and make their deals public
for the sake of transparency and accountability.
As far as job creation is concerned, both companies
compare favourably to other employers. They rank
among the three most preferred employers in the
country. However, this ought not to be celebrated
without some qualifications. While the companies
claim to match their conditions of employment and
reward systems to those Impala Platinum uses in
its mining operations in South Africa, they actually
offer lower salaries and relatively poor conditions of
service – just like most employers do in the developing South compared to similar operations in more
developed countries. This is despite the fact that the
Zimbabwean mines are highly mechanised, use modern
technology, require skilled labour and rank among
the lowest-cost primary producers in the world.
And even though the companies ranked high on
the list of preferred employers, relations with their
employees leave a lot to be desired. While both management teams describe their relationships with their
26
employees as good and as a key factor in enhancing
productivity, the picture looks a little different when one
considers the workers’ commitment to the companies.
For example, during the visit to the Ngezi mine, the
SARW team accessed a survey conducted by Deloitte
and Touche, which revealed that only 40 percent of
Zimplats’ employees said that they would not steal from
the company, while 30 percent indicated that they might
consider stealing from the mining operation and another
30 percent admitted that they definitely would steal from
Zimplats – meaning that a large majority of the mine’s
workers exhibited little or no loyalty to the company or
respect for its property. Throughout the mine, there are
large notices urging workers not to intentionally damage
equipment, which suggests a persistent, and perhaps
pervasive, problem with Luddism. 2 The apparent Luddist
tendencies and alarming statistics relating to workers’
attitudes to stealing suggest a high level of frustration
that could be defused by better worker representation
and union membership. However, both companies seem
to be anti-union and it is not clear to what extent workers
are free to engage in union activities. It was certainly
illuminating that no union representatives were present
during the meetings with management. On the issue of
gender, the picture varies between the two companies
– with Mimosa adopting a much more progressive
approach to the employment of women than Zimplats.
In environmental terms, both Zimplats and Mimosa
cited their good environmental practices. Their annual
reports highlight the fact they have retained their ISO
14001 certificates, which they use to inform various
aspects of their environmental management strategy
and environmental policy, and which enable the mines
to identify and control their environmental impacts,
continuously improve their environmental performance
and implement a systematic approach to setting environmental objectives and targets. However, the SARW and
civil society team could not verify these claims due to a
lack of access to the companies’ environmental policies,
environmental management systems, environmental
impact assessments and other relevant reports. Since
information about the companies’ environmental management, assesments and policies is not readily available
in the public domain, it makes it difficult for local communities and other stakeholders to hold the mines accountable and monitor their activities. One can safely
argue that these policies and strategies exist purely to
satisfy the most minimal compliance standards, as they
are only made available to government institutions.
Best practice worldwide indicates the need for companies
to go beyond these conventional analyses, particularly
where national legislation is found to be weak. Zimbabwe
has not updated the regulations and procedures that
govern environmental accountability in the mining sector
“Corporate social responsibility projects involve no input from
the major target groups, such as women, youth and the poor.”
for a long time. The Environmental Management Bill
was drafted back in 2003, while the Environmental
Impact Assessment Regulations – although adopted in
2007 – were largely based on guidelines that were originally developed in 1997. These guidelines are outdated
since they do not take into account critical developments in areas such as strategic environmental assessments; integrated biodiversity assessment tools; the
International Council of Mining and Metals’ sustainable
development framework; the work of the Convention on
Biological Diversity on business and biodiversity; and,
the World Bank’s environment, social and gender policy.
Another area of real concern is the lack of effective and
fair engagement of all stakeholders. The mines currently
confine their communication and consultation processes
to formal government institutions at central and local
level. Local communities and the broader citizenry have
been deliberately marginalised and are not involved
in either consultations or decision-making processes
linked to the mines’ corporate social responsibility
strategies – or indeed to other development issues that
directly affect their lives and livelihoods. For most
of the Zimbabwean-based civil society organisations
that participated in the mine visits, this was the first
time that they had been provided with a platform to
engage with the mines and mining companies directly.
Although the mines have Stakeholders Liaison Committees, there does not seem to be any genuine effort to
reach out to the general public. As a result, the mines
engage in a suite of paternalistic, corporate social responsibility projects that involve no input from major
target groups, such as women, youth and the poor.
The initial SARW report highlighted a number of
concerns raised by communities living in the vicinity
of these mines, including the loss of grazing lands
due to mine developments; the potential for soil and
water contamination from mine dumps; and, surface
and underground water contamination due to poor
sewage management. It is not possible to comment
on the extent of these problems in the absence of an
extensive study focusing on environmental issues –
except to stress that such a study should be conducted.
However, it is worth noting that Zimbabwe is vulnerable to industrial bad practices due to the state’s weak
capacity to monitor mining operations, the limited
participation of civil society, and the outdated and
insufficient legal and institutional frameworks.
These issues relate to the entire mining sector – not just
Zimplats and Mimosa – and it might well be that other
players, such as state owned companies, are even worse
performers as far as corporate social responsibility is
concerned. However, South African companies – such as
Impala Platinum, the parent company of both Zimplats
and Mimosa – have a duty to ensure that they and their
subsidiaries abide by similar operating standards in
countries across the region as they do in South Africa.
Weaker regulations and enforcement in countries like
Zimbabwe should not encourage them to lower their
operating standards. Instead they should exceed the
limited rules and regulations in other countries and
abide by the more rigorous commitments they make
to communities, workers and the broader society in
South Africa. The South African government should
also take steps to ensure that South African companies
act more responsibly in the region – and abide by South
African regulations even though they are far more
stringent than the ones in other mineral-rich countries.
But the issues highlighted by the Zimplats and Mimosa
case studies have broader implications for the policy and
development environment in Zimbabwe and other parts
of the region. It is clear that mining needs to be more
transparent and accountable – and that government and
civil society organisations must keep a closer eye on
mining companies. However, it is also clear that some
mining companies are open to working with civil society
to improve their social and environmental performance –
and that these opportunities must be grasped. Mining has
a critical role to play in Zimbabwe’s economic growth and
social development. But Zimbabwe – like everywhere else
– needs a mining industry that is open and accountable so
that it can benefit not just a small elite but also the poor
majority. The SARW report illustrated how much needs to
be done to ensure that companies take their social responsibilities seriously but it also opened a critical dialogue
between civil society and the private sector – and showed
that by working together, positive change is possible.
E
Endnotes
1. South African Mining Companies in southern Africa: Corporate Governance and Social Responsibility (SARW). www.sarwatch.org
2. Luddism is the phrase used to describe workers who intentionally
sabotage equipment and machinery.
Pressuring the platinum producers: Making South African mining companies take social responsibility seriously — 27