Job losses: Department of Mineral Resources briefing; Committee Reports

Meeting report

The Chairperson requested the Committee and all present observe a moment of silence for workers that had died at the Kusasalethu mine as a result of the rock fall.

The Chairperson stated research data showed an index of growth in the economy and this was expected to be reflected in all spheres including the mineral resources sector. However, job loses led to crises in the sector.

Briefing by the Department of Mineral Resources on Job Losses in the mineral resources sector

Adv Thabo Mokoena, DG, DMR, stated the Mineral and Petroleum Resources Development Act (MRPDA), 28 of 2002, made provision to establish the Mineral and Petroleum Board which had powers to perform various functions in terms of the Act. A stakeholder declaration was signed with ten interventions and a task team was established under MIDDETT in August 2015. The Board assumed responsibility for overseeing implementation of the declaration in terms of legislation and managing retrenchments in terms of section 52 of the MPRDA.

Ms Rebone Nkanbule, Chief Director: Western Region, DMR, highlighted the impact of Section 189/189A of the Labour Act on Section 52 of the MPRDA, status of the mining industry, impact of mining on employment between 1996 and 2014 and generic causes of job losses. Generic causes included the tendency of multinational companies to focus on declaring dividends to shareholders rather than retaining employees. She gave examples of such companies. Other causes were bloated structures at head office rather than at operational mines and allocation of funds to senior executives’ training rather than specialist trainings for workers. Suppressed demand due to slow global economic recovery, supply dynamics and price dynamics were other factors that led to job losses and crises in the mineral resources sector.

Interventions to manage job losses included ascertaining the mining rights holder informed the Minister and consulted with trade unions before carrying out retrenchments. Other interventions were keeping the overall objective of curbing retrenchments in focus and establishment of future forums - not all future forums were functional because companies did not want to disclose financials to workers even in instances where employees were shareholders. The stakeholder declaration on job losses, which identified interventions, was signed on 31 August 2015 and the application of the declaration by the Board led to a reduction in job losses, as alluded to by the DG. Specific activities and challenges of interventions and impact of the Board in ameliorating job losses in some companies were highlighted. DMR enforced Section 102 and 11 because multinational companies retrenched in numbers less than 500 to ensure they did not have to notify the Minister before carrying out retrenchments.

Data on the total number of jobs saved from 2012-2015 was then outlined along with reported retrenchments, in terms of Section 52 (A), and impact of Board interventions on saving jobs. The Committee was informed the Minister involved the Board in the case of Anglo Ashanti Gold and it agreed to measures to save jobs although this was still in progress. Sibanye Gold had just informed the Minister and the Board about its retrenchment and engagements would start on 7 September in terms of measures to save jobs. DMR also wanted to facilitate greater participation by Black people and new entrants to the mining industry by means of the Mining Charter and other interventions such as the junior miners’ strategy. DMR also wanted to ensure mining companies adhered to requirements of section 52 of the MPRDA on how retrenchments should be managed. DMR aimed to explore alternatives to retrenchment in an attempt to save jobs and where this was not possible, assist retrenched workers to access support mechanisms.

Adv Mokoena stated DMR sought to ensure vibrant and functional future forums were in place with organised labour. It ensured companies adhered to Section 52(A) prior to announcing retrenchment. The Board ensured companies adhered to the stakeholder declaration of 2015. It also used technical expertise from State Owned Enterprises to access technical reasons for retrenchments. In addition, DMR would facilitate greater participation by Black people through the Mining Charter and junior miners’ strategy.

Discussion

The Chairperson informed the Committee the DG requested permission to leave the meeting at this point to attend the Select Committee meeting on the MPRDA.

Mr H Schmidt (DA) observed the presentation was one-sided as it considered only industry without considering the role government and labour unions in job losses - the presentation did not reflect the true situation in the mining industry. He suggested DMR read and consider the 26 recommendations listed in the Minerals and Petroleum Board reports that was presented to the Minister – these reports highlighted it was vital to clamp down on illegal mining because some mining companies closed down due to illegal mining. In addition, trade union rivalry resulted in loss of man hours, productivity, lack of modernised partnerships between government and the private sector and a political agenda which allowed corruption. These were serious issues that affected the mineral resources sector but despite all these issues, DMR had not intervened with any legislation to improve the situation in the sector.

Mr J Lorimer (DA) found the presentation to be avoiding important issues such as the 23 000 mining jobs lost since the new Mining Charter was announced in June 2017. The only interventions given were palliative and had not affected job losses. He observed there were no job losses in the mining sector in Australia. The presentation also did not mention court cases. Private companies focused more on dividend payouts to shareholders rather than employees because businesses were set-up to make money. Bloated structures were put in place as a result of regulatory challenges faced by companies. He indicated that private companies did not want to invest in mining because of uncertainty in government regulations. Hence, if the root causes of jobs losses were not addressed the situation of the mining sector would not change.

Ms M Mafolo (ANC) supported the Minister and his initiatives to bring sanity to the sector. She disagreed with the DA’s stance and said the statements of Mr Lorimer were unfair because the last time the Committee wanted to invite the Minister, the DA refused. She said all comments of the DA were to promote the white majority. She then questioned timeframes to implement Future Forums and if DMR had any challenges with companies that had signed Future Forum agreements. She also asked DMR to state how many companies signed the agreements and which companies had not signed.

Mr I Pikinini (ANC) stated Members need to know how DMR worked with companies. Additionally, interventions outlined in the presentation were a work in progress. The DMR could not employ people - its role was to provide a conducive environment and maintain it. Implementing the Future Forum would lead to more benefits and changes not present 23 years ago, He encouraged the DMR to pursue Future Forum to ensure the country saw change.

Response

Ms Irene Singo, CFO, DMR, stated the creation of jobs by mining companies was vital however, when genuine challenges for job losses arose, mining companies needed to engage with stakeholders to find solutions to the challenges. The issue of illegal mining was discussed earlier and the recommendations to curb it were implemented. The DMR was working with the mining industry to ensure jobs were not lost in compliance with the Act.

Ms Nkanbule added that with declaration of dividends by multinational mining companies, DMR had not seen any value added to previously disadvantaged Black people. In various multinational mining companies there was duplication of roles with the Black Chief Operating Officer (COO) reporting to the White COO. She informed the Committee that DMR managed Future Forums through the issuing of statutory notices to mining companies although some companies believed they were not part of the declaration of stakeholders. However, since these companies were part of the mining chamber, they had to adhere to the declarations. There remained however companies where DMR had challenges with future forums. Rivalry in organised labour unions also caused challenges because unions did not to agree with each other.

The Chairperson noted the intention of the DMR briefing was to interact with stakeholders dealing with mining and the Committee had a role to play in this in terms of oversight. Losing a job was to die alive and lose dignity – Members were tasked to deal with the crisis of job losses. Even if parties had political differences, Members needed to address the issues to ensure citizens did not lose jobs. In terms of Section 189A, retrenchment was supposed to be the last resort but safety of jobs could only occur through interaction of stakeholders. DMR highlighted the model of future forums which assisted in curbing the trend. The Committee could not pick out the scientific measures that showed particular interventions resulted in saving jobs. The Chairperson mandated DMR to get the data to show evidence that specific interventions resulted in saving a specific number of jobs. This would ensure the Committee could make informed decisions to mitigate job losses through these interventions or through legislation. If the DMR did not have the data it could obtain it from the MRP Board. He appreciated Mr Schmidt sharing information from the Board report – DMR needed to circulate the document to the Committee.

Mr Schmidt remarked that the DMR was bound to fail in curbing job losses if it continued with the same approach. He referred the DMR to the Mining Phakisa document of 2015 which had recommendations on saving jobs but was not implemented. Issues that needed to be addressed were the status of mining regulations on trade union rivalry. He also asked DMR to address why it was antagonistic towards the industry because its regulations were anti-investment. In terms of Section 52 and 54 he asked DMR how it expected people to continue to be employed if it overreacted to mining incidents that happened.

Mr Lorimer echoed the sentiments of Mr Schmidt - if interventions proposed were the best DMR could muster, the Department was then bound to fail. He applauded the idea of the Chairperson for DMR to circulate the Board reports to all Members. He specifically asked the DMR to implement recommendations of the Mining Phakisa.

The Chairperson suggested Members deliberate on issues affecting the mining industry. These issues included sensitive issues like facilitating the progress of the mining industry in a country that was to move forward – Parliament also had an objective role to play in the process. He asked the DMR to assist the Committee with strategies to ensure progress in the industry. All these issues would be deliberated on before the Committee debated. He promised to deal with the issues in a fair manner. The Committee should not involve itself with technical issues but concentrate on political aspects. Processes related to the Phakisa’s were handled in the Presidency by the Department of Performance, Monitoring and Evaluation. He mandated DMR to get information on the interventions that could mitigate job losses. The Committee would consider the trade union rivalry. The Committee needed to have information as presented by organised business and labour to ensure there were serious deliberations on the issues. He asked if Members were in agreement with him.

Ms Mafolo moved in favour of the Chairperson’s recommendations and this was seconded by Ms H Nyambi (ANC).

Draft Committee Oversight Report to the North West Province (26 – 29 June 2017)

The Committee considered the Draft Report page by page including observations and recommendations.

Mr Schmidt asked the Committee to reconsider the use of the phrase ‘Black mine developers’ and suggested the phrase ‘small scale mine developers’ or ‘junior mine developers’ be used instead. This was because the country already had concentration of wealth in the hands of a few people.

Mr Lorimer stated the recommendations were not specific because he observed communities were blocked from investing in mining activity that happened on their own land. Hence the issue of community involvement in mines should be examined. He asked for proposals on the way forward in allowing communities and land owners to dictate what happened on their land.

The Chairperson said the first issue addressed Black emerging mine developers. The second issue dealt with what presently existed and he suggested that when the Committee dealt with the Charter later it would talk about investments. Proposals for involving communities might come in the future when the Mining Charter was developed. The Committee Report was simply highlighting what the DMR could do to serve as custodian of the land and what could accrue to the community from mining operations. The Report dealt with the common framework which could constitute elements of fairness. The Report should concentrate on what happened presently then the DMR would develop proposals on the way forward

Mr M Matlala (ANC) supported the Chairperson’s view because the two DA Members were absent during the Oversight Visit and recommendations were based on what happened during the Visit. The Report also dealt with issues raised by communities during the Oversight Visit. He advised that only Members present at the Oversight Visit could engage the Report. He suggested the Committee adopt the Report.

The Chairperson corrected the perception that Members who were absent during the Visit could not engage the Report - Members from other Committees could also engage the Report.

Ms Mafolo felt the Report was a true reflection of what the Committee observed during the Oversight Visit. He moved for the adoption of the Draft Committee Report.

Mr S Jafta (AIC) seconded the motion.

Mr Lorimer indicated that Mr Matlala could not override his rights to make comments on issues that concerned the Committee.

The Chairperson stated he had already defended the rights of Mr Lorimer in this regard – Mr Lorimer need not make any further comments on the matter.

Mr Lorimer did not support the Reports and proposed one of the recommendation be re-drafted. He suggested that DMR needed to be more accessible and organised. The DMR needed to treat license applications fairly to ensure its processes were honest and transparent.

The Chairperson asked DMR to note these observations. When the DMR appeared before the Committee on the strategy it would then consider if the strategy was transparent.

The Draft Committee Report on the Oversight Visit to the North West Province (26 – 29 June 2017) was adopted with amendments.

Draft Committee Report on a Study Tour to Australia

The Chairperson asked for guidance on how the Report would be considered - it could be examined page by page or considered based on findings and recommendations alone.

Mr Matlala proposed the Committee consider findings and recommendations as these were the key aspects of the Report.

Mr Schmidt felt the Report was a fair representation of findings and recommendations.

The Chairperson stated it was important to capture findings and recommendations properly.

Mr Jafta (AIC) highlighted errors related to spelling.

The Chairperson stated that a part of the recommendations in the Report should address cooperation between government and the private sector. He observed the Committee only addressed research institutions and suggested a portion on shared service responsibility between research institutions, in institutions of higher learning, and private institutions be added.

Members agreed with the submission and the Chairperson asked the Committee Secretary to have this reflected in the Report.

Mr Schmidt moved for adoption of the Draft Report.

Ms Nyambi seconded the motion.

The Draft Committee Report on a Study Tour to Australia was adopted with amendments.

Draft Committee Minutes dated 23 August 2017

Mr Matlala (ANC) moved for adoption of the draft minutes as it was a true reflection of matters discussed at the meeting of that date.

Mr Jafta seconded the motion.  

Draft Committee Minutes dated 23 August 2017 was adopted with no amendments.

Other Committee Business

Mr Schmidt asked if there was any progress on the matter concerning the Minister of Mineral Resources.

The Chairperson indicated the Minister was presently in Australia and by the time the Minister returned the Committee would be on an oversight visit. He outlined the programme of the Committee included its sonstituency program after which the Committee would be busy on its Budget Review and Recommendations Reports (BRRR). The Committee would need to find a way to accommodate the Minister during the BRRR process.

Mr Lorimer proposed the Committee consider adding Fridays to its meeting days to accommodate opportunities during the next term.

The Chairperson said it depended on the Friday scheduled. He outlined the programme of the Committee and stated the Committee could consider a date after 3 October 2017 when Parliament would have resumed business after the upcoming recess. The Chairperson would check availability of the Minister and brief Members of the possible date. He noted the Committee would be on oversight from 11 to 15 September 2017 – the visit would involve health and safety talks and a visit to the Kusasalethu mine in Carletonville where five mine workers were alleged to have died due to seismic activity. The visit would also seek to visit mines that had improved on health and safety in its workplace.

The meeting was adjourned.