A cursory examination of various South African news outlets reveals a troubling surge in unlawful protests and acts of vandalism within mining communities and their vicinity. It is imperative to delve into the root causes of this phenomenon before embarking on the quest for potential solutions.
South Africa presently grapples with one of its most formidable economic challenges since the dawn of democracy in 1994. The conundrum encompasses a dearth of employment opportunities, an education system that yields qualifications ill-suited to the demands of the future, and a glaring absence of essential services within mining communities, including healthcare and education. This gloomy scenario unfolds against a backdrop of surging inflation and escalating interest rates, despite the Reserve Bank’s efforts to rein them in.
The prevailing sense of despair, particularly pronounced within mining communities, has transformed into a repetitive trend in which mining activities are seen as the solution to the social problems eroding the community’s cohesion. Mining companies have endeavoured to address these issues through Social and Labour Plans (SLPs), Corporate Social Investment (CSI) programs, and Enterprise Development initiatives for small to medium-sized businesses. In the past, these efforts were met with appreciation and fostered amicable relationships between the mining enterprises and their host communities. However, in recent times, these actions are perceived as falling short of what is needed.
Mining companies face an intricate balancing act. They must ensure the smooth operation of their enterprises, compliance with South African laws, payment of corporate taxes, job creation, provision of decent salaries to employees, and delivery of value to investors and shareholders. Mines are, above all, businesses and must function within this framework. The bedrock of these multifaceted endeavours is good corporate governance, which ensures that programs like SLPs, CSI, Enterprise Development, etc., are executed with unwavering transparency, especially for publicly listed mining companies.
As the saying goes, “It takes two to tango.” Establishing a sustainable and mutually beneficial relationship between a corporation and its stakeholders requires mutual understanding. In the case of corporations, stakeholders in the communities where they operate must comprehend their corporate culture, organisational structure, engagement policies, and their stance on corporate social responsibility, Environmental, Social, and Governance (ESG) practices, and related policies.
Similarly, communities hosting these corporations should ensure that these companies appreciate their way of life, cultural nuances, and expectations concerning basic services like education, healthcare, and sanitation. Acquiring licenses to mine, water use permits, and environmental approvals is important, but without obtaining the often-called “social license to operate,” corporations may find themselves expending significant resources to mend fractured and strained relationships with their host communities.
The social license to operate is underpinned by robust and mutually beneficial partnerships between corporations and their host communities. South Africa is endowed with abundant mineral wealth, and mining dumps of varying ages and mineral compositions dot both urban and rural mining communities in the country. These mining dumps can serve as a foundation for mining companies to establish mutually beneficial alliances with community-based Artisanal Mining Groups. Such alliances empower these groups and provide financial, technical, and other forms of support for the legal and professional beneficiation of these mining dumps. This, in turn, generates profits reinvested in the communities, curbs illegal mining activities, fosters technical skill development, and generates employment for community members.
These partnerships should extend to subcontracting local businesses, thereby fostering economic growth within the community. This creates an environment where both mining companies and their host communities reap the benefits of enduring, sustainable social partnerships, preventing a mere “greenwashed ‘S'” in ESG. It is essential to consistently emphasize the “S” in ESG for the mutual benefit of mining companies and their stakeholder communities.
Reflecting on my university days, I recall an amusing nickname we bestowed upon our late professor – “Mr. Professor of Useless Information.” Nearly a decade after graduating, I assumed the role of corporate legal counsel at a government entity, and I came to regret this light-hearted nickname. I was tasked with repairing and rebuilding the fractured relationship between the entity and a traditional community in the Eastern Cape. Our entity had erected a multi-million-rand scientific instrument in a village near Umtata without properly and culturally informing the chief, counsellors, and the community at large. My university coursework, despite not encompassing the language spoken by that community, equipped me with the knowledge of the processes that needed to be followed. With correct procedures in place, we encountered no further issues operating within that community.
Education about how to engage with communities effectively is of paramount importance. Just as early education shapes a child, it shapes a nation. Educating mining communities about corporate culture and governance should extend beyond “pre-meeting safety drills” to include crucial governance processes related to the topics at hand. This approach can pave the way for a sustainable and harmonious mining ecosystem.
Disclaimer: This article is provided for informational purposes only and is not intended to serve as legal advice. Readers should consult one of our legal professionals for advice tailored to their specific circumstances.