NUM statement on the gazetted draft Mining Charter

The National Union Mineworkers (NUM) earlier welcomed the gazette by the Minister of Mineral Resources of the draft Mining Charter; we are puzzled by rumblings from some sectors of the industry and the so called “analyst”. Our understanding is the draft is released for comments and consultations are on-going, we are also clear on the fact that this does not take away the Ministers obligations in terms of Section 100 of the MPRDA that states:-

“(1) The Minister must, within five years from the date on which this Act took effect— (a) and after consultation with the Minister for Housing, develop a housing and living conditions standard for the minerals industry; and (b) develop a code of good practice for the minerals industry in the Republic.

(2) (a) To ensure the attainment of Government’s objectives of redressing historical, social and economic inequalities as stated in the Constitution, the Minister must within six months from the date on which this Act takes effect develop a broad-based socio-economic empowerment Charter that will set the framework, targets and timetable for effecting the entry into and active participation of historically disadvantaged South Africans into the mining industry, and allow such South Africans to benefit from the exploitation of mining and mineral resources and the beneficiation of such mineral resources.”

The NUM welcomes all efforts by stakeholders in all sectors we are organising in for the alignment of those sector codes with the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003) as amended by Act No. 46 of 2013, this is to avoid similar actions as that of the Construction Sector Charter that was recently repealed by the Minister of Trade and Industry for non-alignment. 

We would like to also remind those that are questioning the timing of the draft that the mining industry’s exemption was gazetted on the 30th October 2015 and gave the industry 12 months to align. Thus making it an opportune time to start discussions and finalise this matter before the end of 12 months, as unfortunately it is second nature in this industry to do things in the last minute.

After carefully studying the draft, the NUM noted the following: 

On the Ownership element, the Department has maintained 26% ownership and appreciates the focus of “black people“ instead of the previous Historical Disadvantaged South Africans.  It then goes an extra mile to put a minimum ownership thresholds for the meaningful economic participation of black people by stating “ The 26% stake shall be allocated in not less than a minimum of 5% shares equitably distributed amongst workers (in the form of ESOPS) black entrepreneurs and community respectively”.

This is welcomed from our side, as currently we see in the majority of transactions where more than 5000 workers owning a lousy 3% and two BEE partners owning more than 20% of the company. While we as workers are risking our lives on a daily basis underground, while receiving a minimal or no share in the profits we make.

Of course, the NUM is on record as pushing for a minimum 10% ownership and the implementation of its NEC approved ESOP guidelines. We also note the draft gives a three-year transitional period for those that entered into transactions before the Act was promulgated, we will be submitting that this be reduced and 2014 targets should be complied with nonetheless.

On the procurement element, the targets have increased, with capital goods placing emphasis 60% locally manufactured goods from BEE compliant manufacturing companies. This should boost the growth of locally manufactured capital goods and also ensure we align our National Skills objectives to that need.

We believe the industry should welcome the introduction of the Social Development Trust, which the current charter is not reflecting on for the 0,5% spent collected from the multi-national supplier of goods. This will bring to the end years of NUM protests during DMR compliance audits, as this money has been spent on wrong programmes by some mining companies.   

On Employment Equity, the additional 10% on the target is noted, which increases the target to a minimum of 50%. Most importantly of this target, 15% should be black females in line with employment active population at Board Level. The other progressive addition is the inclusion of the 2% black employees with disabilities.

The last issue we would like to highlight for now is the significant shift in the Housing and living conditions, which changed the current wording in the charter that states “Facilitate home ownership options for all mine workers in consultation with organised labour by 2014” to “Contribute towards home ownership options for interested mine employees in consultation with organised labour”. This removes the bearer thrown in our faces time and again by non-transformed companies who are hell bent on ensuring a black mine worker never own property and provide dignity to his/her family.

These are just a few things we have noted and will be embarking on a consultation process with the Department of Mineral Resources, which will be followed by our internal consultation with various structures before submitting our inputs to the Department before the 31st May 2016. As we have noted with concern on the removal of the Sustainable Development and Growth of the industry element in the draft charter.  We will always remind the regulator and industry that non-compliance should not be tolerated, thus, corrective measures must be implemented as soon as possible.

Statement issued by Luthando Brukwe: NUM Head of Transformation, 21 April 2016