The Marikana Commission of Enquiry The Problems of the ... · Beneficiation Strategy for the...

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www.transformationsolutions.co.za │Reg No: (2009/009407/07) │ Directors: Sue Brandt, Maritha Marneweck, Phil Marneweck

The Marikana Commission of Enquiry

The Problems of the Social and Labour Plan (SLP)

‘System’ within the Mining Sector in South Africa

ANNEXURES

Marikana Commission of Enquiry – Problems in the SLP ‘System’ Affidavit 2

Annexure A

List of Prevailing Legislation and Guidelines Informing the SLP ‘System’ and Roles and

Responsibilities of Other Role-Players in the SLP ‘System’

Name of Legislation/ Guideline Leading Government

Department Impact/Reference on

SLP 'System'

Mineral and Petroleum Resources Development Act,2002 (No. 28 of 2002)

Department of Mineral Resources Compliance

Guideline for the Submission of a Social and Labour Plan (2007)

Department of Mineral Resources

SLP Design, Planning & Submission

Revised Guideline for the Submission of a Social and Labour Plan (2010)


SLP Design, Planning & Submission

Guideline for Consultation with Communities and Interested and Affected Parties


Local Economic Development, Communication and

Stakeholder Engagement Guideline for the Compilation of an Environmental Management Plan


Communication and Stakeholder Engagement

Beneficiation Strategy for the Minerals Industry of South Africa (June 2011)


Beneficiation & Mining Charter Scorecard

Labour Relations Act (No. 66 of 1995) Department of Labour Human Resources

Skills Development Act (No. 97 of 1998) Department of Labour Human Resource Development

Skills Development Levies Act (No. 97 of 1998)

Department of Labour Human Resource Development

Employment Equity Act, (No. 55 of 1998)

Department of Labour Labour Force

National Social Plan Guideline Department of Labour Closure and Retrenchment Management

Broad-Based Black Economic Empowerment Amendment Act, 2013 (Act No. 53 of 2003)

Department of Trade and Industry Mining Charter Scorecard

Preferential Procurement Framework Act (No. 5 of 2000)

Department of Trade and Industry Procurement

The Broad- Based Socio-Economic Empowerment Charter September 2010

Chamber of Mines B-BBEE Compliance

Municipal Systems Act, 2000 (No. 32 of 2000)

Local and District Municipalities Local Economic Development

Security of Tenure Act, (No. 62 of 1997) Department of Land Affairs Relocation Programmes

Traditional Leadership and Governance Framework Act (No. 41 of 2003)

Department of Corporate Governance and Traditional

Affairs Stakeholder Engagement

Constitution of the Republic of South Africa Amendment Act (No. 65 of 1998)

South African Government All areas within SLP Framework

Companies Act, 2008 (No. 71 of 2008) South African Government All Stakeholders

Housing Act of 1996 Department of Human

Settlement Housing and Living Conditions

The Competition Act (No. 89 of 1998) Competition Tribunal Tender Process in procurement strategies

Marikana Commission of Enquiry – Problems in the SLP ‘System’ Affidavit

Roles and responsibilities of other key governmental departments and industry structures that have a

role within the SLP ‘System’ include:

- Departments of Basic and Higher Education: The vision of these departments are for all to have

access to lifelong learning, education and training, which will contribute towards improving the

quality of life and to develop capable, well-educated and skilled citizens who are able to

compete in a sustainable, diversified and knowledge-intensive international economy, which

meets the development goals of South Africa

- Department of Housing and Human Settlement: Intends to provide the lower income earners

with adequate, affordable and sustainable accommodation, administered in a transparent

manner in ensuring an adequate supply of houses for sale to low income citizens. Providing six

(6) categories of housing: for the self-sufficient, elderly, high rise buildings, loose standing

houses, hostels, converted family unit, and homeless shelters and assuring a continuous,

affordable and adequate supply of bulk water in an economic, effective and efficient manner

with an acceptable quality as well as assuring that water distribution infrastructure delivers

potable water in a sustainable, effective and efficient manner and conveying waste water in a

sustainable, efficient and safe way.1

- Department of Rural Development and Land Reform: Aims to create vibrant, equitable and

sustainable rural communities. To initiate, facilitate, coordinate, catalyse and implement an

integrated rural development programme.2

- Department of Water Affairs: Is the custodian of South Africa's water resources. It is primarily

responsible for the formulation and implementation of policy governing this sector. It also has

an overriding responsibility for water services provided by local government. Whilst striving to

ensure that all South Africans gain access to clean water and safe sanitation, the water sector

also promotes effective and efficient water resources management to ensure sustainable

economic and social development.3

- Department of Environmental Affairs: Is mandated to ensure the protection of the

environment and conservation of natural resources, balanced with sustainable development

and the equitable distribution of the benefits derived from natural resources. In its quest for

better use and management of the natural environment, the Department of Environmental

Affairs is guided by its constitutional mandate, as contained in section 24 of the Constitution.4

- The Chamber of Mines of South Africa is a prominent industry employers' organisation which

exists to serve its members and promote their interests in the South African mining industry.

1 http://www.dhs.gov.za/ 2 http://www.ruraldevelopment.gov.za/ 3 http://www.dwaf.gov.za/ 4 www.environment.gov.za


The Chamber exists as an important strategic partner to its member mines. In recent years the

Chamber's role and functions have undergone substantial change in view of developments

unfolding in the external environment. Consequently, the Chamber exists today primarily to

provide strategic support and advisory input to its members. It facilitates interaction among

mine employers to examine policy issues and other matters of mutual concern to define

required industry-level standpoints. Consultation and co-operation within the Chamber system

occur on a voluntary basis and do not encroach on the managerial powers or prerogatives of

individual member mines and mining groups.


Annexure B

Summary Comparison of Core Areas within Key Legislation and Guidelines in the SLP ‘System’5

(Refer to attachment to the document formatted for A3 reading)

5 Only sections within the legislation and guidelines where differences were identified have been included into this table.


Annexure C

Summary of Requirements of SLPs Aligned to SLP ‘System’ Provisions

SLP Section Requirement Legislated Reference Annual SLP Reporting

Requirement

Contractor Contribution

Required6

Preamble Regulation 46 (a)

Background Information Revised SLP Guidelines, Section 2.1 √ √

Five (5) Year Labour Projections (to cross-reference with MWP workforce projections)(Mine Permanent Staff) Revised SLP Guidelines, Section 2.1 √

Five (5) Year Labour Projections (to cross-reference with MWP workforce projections)(Contractor Placed Staff) Revised SLP Guidelines, Section 2.1 √

Geographic Origin of Employees Revised SLP Guidelines, Section 2.1 √ √

Human Resources Development (HRD) Plan Regulation 46 (b)

Compliance with Skills Development Legislation Revised SLP Guidelines, Section 3.1 √ √ Skills Development Plan Regulation 46 (b)(i)

Form Q: Number and Educational Levels of Employees. Regulation 46 (b)(i)(a); Revised SLP Guidelines; Section 3.2.1 √ √

Determine current illiteracy level and ABET needs. Revised SLP Guidelines; Section 3.2.2 √ √

Provide the targets to be trained, timeframe and budget. Revised SLP Guidelines; Section 3.2.3 √ √

Provide how ABET would be implemented. Revised SLP Guidelines; Section 3.2.4 √ √

Core Business Training: Types/Area of Training Revised SLP Guidelines; Section 3.2.5.1 (a)

Core Business Training: Targets, Timeframe and budget. Revised SLP Guidelines; Section 3.2.5.1 (b) √ √

Provide how Core Business Training would be implemented. Revised SLP Guidelines; Section 3.2.5 √ √

Learnerships (18.1)(Internal): Types/Area of Training Revised SLP Guidelines; Section 3.2.5.1 (a)

6 Note: These required contributions are not defined in the SLP ‘System’ legislation but have been inferred from engagements with the Regulator in the past decade.



Requirement


Required6

Learnerships (18.1) (Internal): Targets, Timeframe and budget. Revised SLP Guidelines; Section 3.2.5.1 (b) √ √

Provide how Learnerships (18.1) (Internal) would be implemented. Revised SLP Guidelines; Section 3.2.5 √ √

Learnerships (18.2)(External): Types/Area of Training Revised SLP Guidelines; Section 3.2.5.1 (a)

Learnerships (18.2)(External): Targets, Timeframe and budget Revised SLP Guidelines; Section 3.2.5.1 (b) √ √

Provide how Learnerships (18.2)(External) would be implemented Revised SLP Guidelines; Section 3.2.5 √ √

Artisan Training: Types/Area of Training Revised SLP Guidelines; Section 3.2.5.1 (a)

Artisan Training: Targets, Timeframe and budget. Revised SLP Guidelines; Section 3.2.5.1 (b) √ √

Provide how Artisan Training would be implemented. Revised SLP Guidelines; Section 3.2.5 √ √

Portable Skills Training: Types/Area of Training SLP Guidelines; Sections 2 and 2.1

Portable Skills Training: Targets, Timeframe and budget. SLP Guidelines; Sections 2 and 2.2 √ √

Provide how Portable Skills Training would be implemented. SLP Guidelines; Sections 2 and 2.3 √ √

Form R: Hard to Fill Vacancies Regulation 46 (b)(i)(bb); Revised SLP Guidelines 3.3 √ √

Career Progression Plan: Regulation 46 (b)(ii) Career Progression Plan: Career development matrices of each discipline (inclusive of minimum entry requirements and timeframes). Regulation 46 (b)(ii); Revised SLP Guidelines 3.4.1

Career Progression Plan: Develop individual development plans for employees. Regulation 46 (b)(ii); Revised SLP Guidelines 3.4.2

Career Progression Plan: Identify a talent pool to be fast tracked in line with the needs. Regulation 46 (b)(ii); Revised SLP Guidelines 3.4.3

Career Progression Plan: Provide a comprehensive plan with targets, timeframes and how the plan would be implemented. Regulation 46 (b)(ii); Revised SLP Guidelines 3.4.4 √ √

Mentorship plan for employees: Regulation 46 (b)(iii); Revised SLP Guidelines 3.5.1

Identify areas of development that require mentoring. Provide a detailed plan highlighting number of mentors and mentees with target and timeframes and how the plan will be implemented.

Regulation 46 (b)(iii); Revised SLP Guidelines 3.5.1.1

Link with individual development programmes. Regulation 46 (b)(iii); Revised SLP Guidelines 3.5.1.2



Requirement


Required6 Focus on learners, career progression targets, employment equity targets, interns and bursars. Regulation 46 (b)(iii); Revised SLP Guidelines 3.5.1.3

Detailed plan with targets, timeframe and how they will be achieved. Regulation 46 (b)(iii); Revised SLP Guidelines 3.5.1.4 √ √

Mentorship of Empowerment Groups Regulation 46 (b)(iii); Revised SLP Guidelines 3.5.1 √

Internship and Bursary Plan Regulation 46 (b)(iv)

Bursary Plan: Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.1

Provide targets, timeframes and budget. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.1.1 √ √

Provide areas of learning in line with the needs of the company. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.1.2

Separate internal and external bursars. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.1.3

Indicate whether bursaries are continuous or new intakes. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.1.4

Internship Plan: Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2

Provide targets, timeframes and budget. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2.1 √ √

Provide areas of learning in line with the needs of the company. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2.2 Provide how interns would be afforded the opportunity for experiential learning. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2.3

Separate internal and external internships. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2.4

The plan should be inclusive of own funded studies. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2.5 The plan should be reflective of demographics as defined in the amended Mining Charter. Regulation 46 (b)(iv); Revised SLP Guidelines 3.6.2.6

Employment Equity Programme: Regulation (b)(v); Revised SLP Guidelines 3.7 √ √

Provide form S and the current management structure as reflected below: - Executive Management (Board); - Senior management (EXCO); - Core and Critical skills; - Middle management level; and - Junior management level.

Regulation (b)(v); Revised SLP Guidelines 3.8, 3.8.1 and Annexure II √ √



Requirement


Required6 HDSA in Management: Provide the current management structure reflective of demographics; as reflected in 3.7 above. Regulation (b)(v); Revised SLP Guidelines 3.8.2

HDSA in Management: The plan should reflect the annual progressive targets as provided for in Table 3.8. Regulation (b)(v); Revised SLP Guidelines 3.8.3 √ √

HDSA in Management: Provide a detailed plan on how the targets as reflected in 3.8 would be met. Regulation (b)(v); Revised SLP Guidelines 3.8.4 √ √

Local Economic Development (LED) Plan Regulation 46 (c)

Local Economic Development (LED) Plan: Regulation 46 (c); Revised SLP Guidelines 4.1

Socio Economic Background Information: Regulation 46 (c)(i); Revised SLP Guidelines 4.1 Provide the social and economic baseline information of the mine community. Regulation 46 (c)(i); Revised SLP Guidelines 4.1.1

The background information must include but not limited to the following: Gender Profile; Population Profile; Health and HIV/AIDS Prevalence; Economic Profile; Education Levels; Expenditure Profile; Employment Profile; Income Profile; Infrastructure, Housing; Water and Sanitation as well as Electricity.

Regulation 46 (c)(i); Revised SLP Guidelines 4.1.2

Key Economic Activities: Regulation 46 (c)(ii); Revised SLP Guidelines 4.2 Provide the key economic activities of the mining community. Outline these in terms of sectors i.e. primary, secondary and tertiary. Regulation 46 (c)(ii); Revised SLP Guidelines 4.2.1

Provide names of other mining companies that operate in your area of operation. Regulation 46 (c)(ii); Revised SLP Guidelines 4.2.2

Impact on Local and Sending Communities: Regulation 46 (c)(ii); Revised SLP Guidelines 4.3

Relocation of people. Regulation 46 (c)(ii); Revised SLP Guidelines 4.3.1 √

Exhumation of graves. Regulation 46 (c)(ii); Revised SLP Guidelines 4.3.2 √

Influx of people –Informal settlements. Regulation 46 (c)(ii); Revised SLP Guidelines 4.3.3 √

Infrastructure and poverty eradication projects that the mine would undertake in line with the (I D P) of the areas and other relevant frameworks in which the mine operates and the major sending areas:

Regulation 46 (c)(iii); Revised SLP Guidelines 4.4



Requirement


Required6

Provide needs of the area in order of priority. Regulation 46 (c)(iii); Revised SLP Guidelines 4.4.1, Table 4.a

Having specified the needs, identify projects that will be implemented in line with the needs. Regulation 46 (c)(iii); Revised SLP Guidelines 4.4.2

Provide an implementation plan of the identified projects that will be implemented to address the needs. Regulation 46 (c)(iii); Revised SLP Guidelines 4.4.3 √

Provide the impact that the identified projects would have on the Community(s) and the areas in line with the duration of the mining right.

Regulation 46 (c)(iii); Revised SLP Guidelines 4.4.4

Development Projects: Regulation 46 (c)(iii); Revised SLP Guidelines 4.5

Infrastructure projects. Regulation 46 (c)(iii); Revised SLP Guidelines 4.5.1 √

Income generating projects. Regulation 46 (c)(iii); Revised SLP Guidelines 4.5.2 √

Project Plan Format Regulation 46 (c)(iii); Revised SLP Guidelines 4.6, Annexure A √

Measures to address housing and living conditions: Regulation 46 (c)(iv); Revised SLP Guidelines 4.7

Provide the current status of available dwelling for employees. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.1 √ √

Provide current status of houses within the community. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.2 √ √

Provide the municipality’s strategy to address housing. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.3 Establish the preferred requirements for housing and living conditions of the workforce. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.4

Plan to promote home ownership. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.5.1 √ √ Converting or upgrading of hostels into single quarters and family units by 2014. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.5.2 √ √

Attain the occupancy rate of one person per room by 2014. Regulation 46 (c)(iv); Revised SLP Guidelines 4.7.5.3 √ √ The housing plan should be aligned with the housing and living standards as per section 100 (1)(a) of the MPRDA. MPRDA Section 100 (1)(a)

Measures to address nutrition of mine employees. Regulation 46 (c)(v) √ √



Requirement


Required6 Procurement Progression Plan and its implementation for HDSA companies in terms of Capital Goods, Services and Consumables and the breakdown of procurement in the prescribed Form T.

Regulation 46 (c)(vi) and Annexure II √ √

Closure and Retrenchment Management Programme Regulation 46 (d)

Processes pertaining to downscaling and retrenchment: Regulation 46 (d); Revised SLP Guidelines 5

Establishment of a Future Forum: Regulation 46 (d)(i); Revised SLP Guidelines 5.1 √ Promote ongoing discussions between worker representatives and employers about the future of the mine. Regulation 46 (d)(i); Revised SLP Guidelines 5.1.1 √

Look ahead to identify problems, challenges and possible solutions with regard to productivity and employment. Regulation 46 (d)(i); Revised SLP Guidelines 5.1.2 √

Develop turnaround and redeployment strategies to help reduce job losses and to improve business sustainability. Regulation 46 (d)(i); Revised SLP Guidelines 5.1.3 √

Implement strategies agreed upon by both employer and worker parties. Regulation 46 (d)(i); Revised SLP Guidelines 5.1.4 √

Mechanisms to save jobs, avoid job losses and a decline in employment. Regulation 46 (d)(ii) √

Mechanisms to save jobs, provide alternative solutions and procedures for creating job security where job losses cannot be avoided. Regulation 46 (d)(iii); Revised SLP Guidelines 5.2 √ √

Management of Retrenchments Revised SLP Guidelines 5.3 √ √ Mechanisms to ameliorate the social and economic impact on individuals, regions and economies where retrenchment or closure of the operation is certain:

Regulation 46 (d)(iv); Revised SLP Guidelines 5.4

Comprehensive self-employment training programmes. Regulation 46 (d)(iv); Revised SLP Guidelines 5.4.1 √ √

Comprehensive training and re-employment programmes. Regulation 46 (d)(iv); Revised SLP Guidelines 5.4.2 √ √

Comprehensive portable skills development plan. Regulation 46 (d)(iv); Revised SLP Guidelines 5.4.3 √ √ The projects earmarked for absorbing the retrenchees should be outlined. Regulation 46 (d)(iv); Revised SLP Guidelines 5.4.4 √

The above-mentioned plans must be submitted to DMR 24 months prior to the commencement of the downscaling process. Regulation 46 (d)(iv); Revised SLP Guidelines 5.4.5 √



Requirement


Required6

Financial Provision Regulation 46 (e), MPRDA sections 23 (1)(e), 84 (1)(g)

Financial Provision: Human Resources Development Programmes Regulation 46 (e)(i); Revised SLP Guidelines 6 √ √

Financial Provision: Local Economic Development Programmes Regulation 46 (e)(ii); Revised SLP Guidelines 6 √ √ Financial Provision: Closure and Retrenchment Management Programmes Regulation 46 (e)(iii); Revised SLP Guidelines 6 √ √

Undertaking and Communications Plan Regulation 46 (f)

Statement of Undertaking Regulation 46 (f); Revised SLP Guidelines 7 Communication of SLP Regulation 46 (f); Revised SLP Guidelines 7 √


Annexure D

List of Key Definitions in the SLP ‘System’

Term DEFINITION SOURCE OF DEFINITION

ABET Adult Basic Education And Training Department of Education

Accredited Training Facility

Training facility that is accredited with the relevant SETA. Education and Training Quality Assurance Body.

Acquisition The process whereby one company may acquire another company, business unit, property or set of assets. www.investopedia.com

Affected Party

Persons/ groups (stakeholders) who are directly or indirectly affected by the company or operation, both positively and/ or negatively. Within this it is possible to distinguish between those that are directly affected and/ or indirectly affected by the company or operation.

AA1000SES ( Stakeholder Engagement Standard 2011)

BEE Entity An entity of which a minimum of 25% + 1 vote of share capital is directly owned by HDSA as measured in accordance with flow through principle.

Amendment of the Broad-Based Socio-Economic Empowerment Charter for The

South African Mining and Minerals Industry (September 2010).

BEE Controlled Company

Means a juristic person, having shareholding or similar members interest, in which black participants enjoy a right to Exchange Voting Rights that is more than 50% of the total such rights measured using the Flow Through Principle

Broad Based Black Economic Empowerment Act:

Section 9(1) Codes of Good Practice – Schedule 1

BEE Owned Company

Means a juristic person, having shareholding or similar members interest, in which black participants enjoy a right to Economic interest that is more than 50% of the total such rights measured using the Flow through Principle.



BEE Ownership

It describes the ownership status of a company in terms of Black Economic Empowerment, i.e. it refers to the percentage ‘blacks’ who have an ownership stake in the business. Black Economic Empowered companies with a black ownership of equal to or more than 26%.



Beneficiation

The transformation of mineral (or a combined of mineral) to a higher value product, which can either be consumed locally or exported. The term is often used interchangeably with mineral “value-addition” or “downstream beneficiation”.



Broad-Based Black Economic

Empowerment (“BBBEE”)

The economic empowerment of all black people including women, workers, youth, people with disabilities and people living in rural areas through diverse but integrated socio-economic strategies that include, but are not limited to –

a) Increasing the number of black people manage, own and control enterprises, and productive assets;

b) Facilitating ownership and management of enterprises and productive assets by communities, workers, cooperatives and other collective enterprisers;

c) Human resources and skills development; d) Achieve equitable representation in all

occupational categories and 20 levels in the workforce;

Broad-Based Black Empowerment Act,

2003 (No. 53 of 2003)



e) Preferential procurement; and f) Investment in enterprises that are owned and

managed by black people.

Bursary (External)

It is an award in terms of monetary assistance given to an individual who is undertaking tertiary studies at a recognised Higher education institution. Such an external bursar is not an existing employee of the company.

Department of Mineral Resources: Guideline for the submission of a Social

and Labour Plan.

Bursary (Internal)

It is an award in terms of monetary assistance given to an individual who is undertaking tertiary studies at a recognised Higher education institution. Such an internal bursar is an existing employee of the company.


and Labour Plan.

Career Path Diagrams for each discipline at

the Mine

Generic career path & pipeline diagrams that which indicate the succession requirements and opportunities within each business stream at the mine.


and Labour Plan.

Capital Expenditure

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. This type of outlay is made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building a brand new factory.

www.investopedia.com

Change Management

Change management is the process, tools and techniques to manage the people-side of change to achieve the required business outcome. Change management incorporates the organizational tools that can be utilized to help individuals make successful personal transitions resulting in the adoption and realization of change.

Change-management.com

Closure Plan

A document that addresses mine closure planning where four key objectives must be considered: •Protect public health and safety •alleviate or eliminate environmental damage •achieve a productive use of the land , or a return to its original condition or an acceptable alternative ,and •to the extent achievable, provide for sustainability of social and economic benefits resulting from mine development and operations.

Info Mine.com

Collective Bargaining

Consists of discussions and negotiations between employers and representatives of workers’ organisations for the purpose of determining working conditions and terms of employment by joint agreement. It also includes the implementation and administration of any agreements that may result from collective bargaining and the resolution of other issues that arise in the employment relationship with respect to workers represented by the workers’ organisation.

Department of Labour

Competency

Competency is the ability of an individual to do a job properly. A competency is a set of defined behaviours that provide a structured guide enabling the identification, evaluation and development of the behaviours in individual employees

Wikipedia

Competent Person An individual who has the sufficient knowledge, skills as well as the necessary experience to complete their responsibilities safely, effectively and consistently.

.



Communication

Two-way process of reaching mutual understanding, in which participants not only exchange information, news, ideas and feelings but also create and share meaning. In general, communication is a means of connecting people or places. In business, it is a key function of management--an organization cannot operate without communication between levels, departments and employees.

Business Dictionary.

Community ABET Adult Basic Education And Training opportunity offered to local community members (Non-employees).


and Labour Plan.

Community

A coherent, social group of persons with interest of rights in a particular area of land which the members have or exercise communally in terms of an agreement, custom or law.


and Labour Plan. &



Community Investment

Investments made directly into low-income or disadvantaged communities through channels such as community development banks, credit unions, loan fund and microfinance institutions. Community investing is closely tied to socially responsible investing and focuses on economically improving run-down communities by offering banking services and small loans to fund businesses, non-profit groups and affordable housing initiatives.


Consultation

Consultation means a two way communication process between the applicant (of a mining right) and the community or interested and affected party wherein the former is seeking, listening to, and considering the latter’s response, which allows openness in the decision making process.

Department of Mineral Resources - Guideline for Consultation with

Communities and Interested and Affected Parties.

Contingent Liability A possible obligation dependent on whether some uncertain future event occurs.

Acquisitions, Divestment and Joint Ventures Due Diligence.

Contractor Any third party organisation which is engaged or commissioned by a company to undertake work or provide services.

.

Appointment of Contractor

MPRDA - “If the holder of a right or permission appoints any person or employs a contractor to perform any work within the boundaries of the reconnaissance, mining, prospecting, exploration, production or retention area, as the case may be, such holder remains responsible for compliance with this Act”.

Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of

2002): Section 101.

Core Business Skills Training

Training on skills related to the core business of the Company.


and Labour Plan.

Core Mining Occupations

Any occupation on the mine which relates to the core business of mining (production orientated, not support/ administrative)

Mining Qualifications Authority

Core Skills

Means Skills that are: i. Value-adding to the activities of the company

in line with its core business ii. In areas that cannot outsource

iii. Within the production/operational part of the company’ value chain, as opposed to the supply side, services or downstream operations.





Critical skills/ Requisite skills/ Essential skills

Occupations in which there is a scarcity of qualified and experienced people, currently or anticipated in the future, either:

i. because such skilled people are not available or

ii. they are available but do not meet employment criteria

MQA guide Scarce Skills

Demographics The numerical characteristics of a population (e.g. population size, age, structure, sex/gender, race, etc.



& Department of Mineral Resources:

Guideline for the submission of a Social and labour Plan.

Discretionary spend

Discretionary spend is the sum of all spend on capital, consumables and services excluding intercompany spend, spend on government, parastatals and municipalities imported technology and imported material that is not available locally.

Downscaling Reducing both production and the size of the workforce due to operational reasons.


and labour Plan.

Downstream value addition

Involves a range of activities including large-scale capital intensive activities such as smelting and refining as well as labour-intensive activities such as craft jewelry and metal fabrication such as machinery and equipment manufacture.

As per the DMR Beneficiation Strategy document

EMP Approved environmental management programmes contemplated in section 39 of MPRDA.



Employee

Any person who works for the holder of a reconnaissance permission, prospecting right, mining right, mining permit, retention permit, technical corporation permit, reconnaissance permit, exploration right and production right, and who is entitled to receive any remuneration, and includes any employee working at or in a mine, including any person working for an independent contractor.

Mineral and Petroleum Resources

Development Act, 2002 (Act No. 28 of 2002).

Employee

a. any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and

b. any other person who in any manner assists in carrying on or conducting the business of an employer, and 'employed' and 'employment' have meanings corresponding to that of ‘employee'.

Labour Relations Act

Employment Equity Plan

A Plan that which articulates on how the company is going to achieve employment equity numerical goal. It includes objectives, numerical targets for each year and a timeframe for the achievement of the goals. The Employment Equity Act requires companies to draw up an employment equity plan to be submitted to the Department of Labour.

Employment Equity Act, No. 55 of 1988

Empowerment Groups

The mine is responsible for the upliftment of local SMME's/ community members through the development of new business initiatives and to mentor such.





Empowerment Partners

Ownership partners at the mine to be mentored and assisted to ensure that they are active participants. Empowerment Partners may already be qualified professionals with sufficient experience in the Mining Industry and would not require mentoring.



Enterprise Development

Monetary and non-monetary support for existing or fostering of new HDSA companies in the mining sector of the economy, with the objective of contributing to their development, sustainability as well as financial and operational independence.



Financial Provision

Financial commitment (monetary value) being sole responsibility of the mining right holder, provided for the implementation of the social and labour plan in terms of the implementation of:

i. The human resources development programme

ii. The local economic development programmes; and

iii. The processes to manage downscaling and retrenchment


2002): Mineral and Resources Development

Regulations (46)(e) &


and Labour Plan.

Five Year Labour Ramp Up (MWP)

Labour plan for a five year period aligned to the production rates presented in the MWP


and Labour Plan.

Form Q

Form to be completed in terms of regulation 46(b) (i) (aa) of the Social and Labour Plan to report the number and education levels of employees.



Regulations.

Form R

Form to be completed in terms of regulation 46(b)(i)(bb) of the Social and Labour Plan to report the number of vacancies that the mining operation has been unable to fill for s period longer than 12 months.



Regulations.

Form S

Form to be completed in terms of regulation 46(b)(v) of the Social and Labour Plan to report employment equity statistics.


2002): Mineral and Resources Development Regulations.

Form T

Form to be completed in terms of regulation 46(c)(vi) of the Social and Labour Plan to report procurement progression plan and its implementation for HDSA.



Regulations.

Fronting

Any practices or initiatives which are in contravention of or against the spirit of any law, provision, rule, procedure, process, system, policy, practice, directive, order or any other term or condition pertaining to black economic empowerment under the Codes.

Department of Mineral Resources: Codes of Good Practice for The South African

Minerals Industry April 2009

Future Forum

It is a strategic association between management, workers and their representatives, established to look ahead for problems, challenges and potential solutions to the problems facing the organization. Forum consisting of management and employee representatives (this could include relevant Trade Union representatives, Contractors and any other Stakeholders identified by the Future Forum’s constitution) that meet regularly to promote on-going discussions between employee representatives and employers about the future of the mine and matters related to it.

The Social& Labour Plan Guidelines



Regulation 46 (d) (i)



Grievance

The purpose of the grievance procedure is to allow an employee or employees to bring to the attention of management of the Company any dissatisfaction or feeling of injustice which may exist in respect of the workplace. The Company will attempt to resolve the grievance in a manner, which is acceptable to the employee(s) concerned and the Company. A grievance pertains to any dissatisfaction with regard to matters, which are directly related to the employment relationship, which exists between the Company and the employee/s concerned. This grievance policy and procedure shall not be used to negotiate new or changes to conditions of employment.

Department of Labour

Health care and nutrition plan

Plan to improve the health and welfare of Mine employees directly and/or indirectly.


and labour Plan.

Historically Disadvantaged

person

Means: i. any persons, category of persons or

community, disadvantaged by unfair discrimination before the Constitution took effect;

ii. any association, a majority of whose members are persons contemplated in paragraph (a);

iii. any juristic person other than an association, in which persons contemplated in paragraph (a) own and control a majority of the members’ votes.


2002).

Historically Disadvantaged South

Africans (“HDSA”)

Refers to South African citizens, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993) came into operation which should be representative of the demographics of the country.



Housing Status

The status of the employees’ (mine and or contractor employees) current. This may be simply referred to the Housing Tenure Status of an employee. For Example, are they renting or owning the place where they live. Living conditions with reference to the following categories: Home Owner, Rental (Own Initiative), Mine Rental – Family Quarters, Mine Rental – Single Quarters, Mine Rental – Mine House. The Amended Charter September 2010 states: “Human dignity and privacy for mineworkers are the hallmarks to enhance productivity and expedite transformation in the mining industry in terms of housing and living conditions. In this regard mining companies must implement measures to improve the standards of housing and living conditions for mineworkers…”

Mineral and Petroleum Resources

Development Act, 2002 (Act No. 28 of 2002).

&



Human Rights

Human rights are rights inherent to all human beings, whatever our nationality, place of residence, sex, national or ethnic origin, colour, religion, language, or any other status. We are all equally entitled to our human rights without discrimination. These rights are all interrelated, interdependent and indivisible.

United Nations Human Rights

Individual Development Plan/Career

Progression Plan

Provide a detailed career progression (path) plan, which is in line with the skills development on how the Mine or Production Operation would progress the employees through the employment levels.

Social and Labour Plans Gridlines



Infrastructure Development

Projects

Infrastructure Projects that which contributes to raising the quality of life by creating amenities, providing consumption of goods (e.g. transport & communication services), and contributing to macroeconomic stability. Infrastructure does not create economic potential, but only develops it where appropriate conditions (i.e. other inputs such as labour and private capital) exist. It is an enabler of socio-economic development. Example:

i. Physical – water, roads, sanitation, electricity availability.

ii. Social – Clinics, schools, houses, recreation facilities.

iii. Economic – Enterprise development center, transport system, telecommunication. (telephones).

Department of Performance Monitoring & Evaluation, and Development Bank of

South Africa: The State of South Africa’s Economic

Infrastructure-Opportunities & Challenges 2012

Integrated Development Plan

(IDP)

A process through which municipalities prepare a strategic plan containing short, medium and long-term development objectives, strategies and programmes for the municipal area. The IDP is a principal instrument that guides and informs budgeting, management and decision making related to service delivery and development in a municipality. The IDP process enables municipalities to work together with communities and other stakeholders to find innovative and cost effective ways of eradicating poverty and growing the local economy. It serves as a guide to the private sector in making decisions with regard to areas and sectors to invest in.

Department of Provincial and Local Government – Municipal Integrated and

Development Plan.

Interested and Affected

Person/Parties (I&AP)

Natural or Juristic person or an association of persons with a direct interest in the proposed or existing operation or who may be affected by the proposed or existing operation.



Regulations (Definitions).

Interested and Affected Person

‘Interested and affected’ parties include, but are not limited to; – (i) Host Communities (ii) Landowners (Traditional and Title Deed owners) (iii) Traditional Authority (iv) Land Claimants (v) Lawful land occupier (vi) The Department of Land Affairs, (vii) Any other person ( including on adjacent and non-adjacent properties) whose socio-economic conditions may be directly affected by the proposed prospecting or mining operation (viii) The Local Municipality, (ix) The relevant Government Departments, agencies and institutions responsible for the various aspects of the environment and for infrastructure which may be affected by the proposed project.

Department of Mineral Resources:

Guideline for Consultation with Communities and Interested and

Affected Parties

Internship

An internship is a means to provide practical workplace experience/exposure to individuals studying an industry related qualification at a tertiary institution. It is also refers to experiential training.


and Labour Plan.



Internship(external) An external internship refers to an internship provided to a non-employee


and Labour Plan.

Internship(internal) An internship refers provided to an internship or experiential training opportunity provided to an employee who is linked to company supported studies.


and Labour Plan.

Job Creation or Poverty Alleviation

Projects

Projects undertaken to assist in the alleviation of poverty, by making it possible for poor people to generate income to meet basic needs; and through employment creation.


and Labour Plan. &

The South African Government programmes and policies – Small

Business Development

Junior Management It refers to persons that have some decision making powers and responsibilities with less levels reporting to them.

Employment Equity Act, No. 55 of 1998

Key Performance Indicators (KPI’s)

A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals. KPIs vary between companies and industries, depending on their priorities or performance criteria


Labour sending area

Areas from which a majority of mineworkers, both historical and current are or have been sourced.




Guideline for the submission of a Social and Labour Plan.

Learnership

Learnership means a learning programme which:

i. consist of a structured learning component, including work experience of a specified nature and duration;

ii. Would lead to a qualification registered by the South African Qualification Authority (SAQA) and lead to an occupation.

Skills Development Act, 1998 (No. 97 of 1998) and Learnership Regulations, 2007

Learnership Agreement

An agreement entered into for a specified period between

i. a learner; ii. an employer

iii. A training provider accredited by a body contemplated in section 5(1)(a)(ii)(bb) of the SAQA or group of such training providers.

Skills Development Act, 1998 (No. 97 of 1998) and Learnership Regulations, 2007

18.1 Learner Section 18(1) learner means a leaner who was in the employment of the employer party to the leanership agreement when the agreement was concluded.

Skills Development Act, 1998 (No. 97 of 1998) Learnership Regulations, 2007

18.2 Learner Section 18(2) learner means a learner who was not in the employment of the employer party to the leanership agreement when the agreement was concluded.

Skills Development Act, 1998 (No. 97 of 1998) Learnership Regulations, 2007

Life of Mine (LOM) The number of years that a particular mine will be operational


and Labour Plan.

Local Economic Development

The objective of Local Economic Development is building economic capacity of an area to improve its economic future and quality of life for all. It is a process by which the public, businesses and non-governmental sector work collectively to create better conditions for economic growth and employment generation.

World Bank: http://go.worldbank.org/EA784ZB3F0



Local Economic Development

Projects

Projects in the major labour sending areas that are sustainable, non-reliant on the mine for survival and can be categorised to be either poverty alleviation (job creation) or Infrastructure Development, or both.


and Labour Plan.

Local Procurement

Local procurement is referred to as providing fair opportunities for competitive local suppliers/companies to purchase goods and services that can contribute economic development of local communities.

Local recruitment Recruitment conducted within the immediate hosting communities of the mining operation.


2002) Strategic objectives.

Procurement: % Spend (ref Form T)

Percentage procurement spend (per category) on each supplier MPRDA Regulation 469c)(vi)

Preferential Procurement (Local

Procurement)

Primary: from HDSA companies within the local municipal boundaries within which the mine is situated. Secondary: Within the district provincial boundaries Tertiary: Within the provincial boundaries Finally: procured within the borders of South Africa

MPRDA, Mining Charter

Preferential Procurement Plan (HDSA ownership)

A procurement strategy to increase the number of BEE Empowered/owned (26%) companies from which capital goods, services and consumables are purchased.

MPRDA, Mining Charter

Production Operation Mine and Mining operation must be construed as a reference to a production operation. MPRDA Regulation 40 (2)(b)(d)

Mentorship

The process of assisting employees to gain further knowledge, experience and skills; it is an activity that can be successfully used where senior employees develop junior employees within a company to enhance their career development. A process through which one person (protégé/ mentee), receives structured career development guidance from a seasoned employee (mentor). This process is usually formalized in a written agreement referred to as a Mentorship Agreement.



Middle Management

Middle managers are responsible for implementing the top management's policies and plans and typically have two management levels below them. Usually among the first to be slashed in the 'resizing' of a firm, middle management constitutes the thickest layer of managers in a traditional (tall pyramid shaped) organization.

Employment Equity Act, 1998 (No. 55 of 1998)

Mining Charter The broad-based socio-economic empowerment charter for South African Mining and Minerals Industry.



Mining Charter “Calendar Year”

The one year period that begins on January 1st and ends on December 31st



Non-discretionary Procurement Expenditure

Expenditure that cannot be influenced by a mining company, such as procurement from public sector and public enterprises.

Department of Mineral Resources: The Broad Based Socio-Economic

Empowerment Charter for the South African Mining and Mineral Industry

September 2010.

Occupational Category

This refers to the list of the DoL occupational categories (which can be updated from time to time). The list includes the following: 1. Directors and Corporate Managers; 2. Professionals; 3. Technicians and Trade workers; 4. Community and Personal Service Workers; 5. Clerical and Administrative

Employment Equity Act, 1998 N(o. 55 of 1998)



Workers; 6. Sales Workers; 7. Machine Operators and Drivers; and 8. Elementary Workers.

Occupational Levels Job evaluation or grading systems used by many organisations to measure jobs according to their content and establish comparative worth between jobs.

Employment Equity Act, 1998 N(o. 55 of 1998)

Portable Skills Training

Training on skills that can be used outside of the mining environment as aligned to needs identified in the LSA, portable skills training initiatives should enable unskilled and semi-skilled employees to find alternative employment in the event of downscaling, retrenchment or closure of the operation.


and Labour Plan.

Preferential Procurement (Local

Procurement)

Primary/Local: from HDSA companies within the local municipal boundaries within which the mine is situated. Secondary/ District: Within the district provincial boundaries Tertiary/Provincial: Within the provincial boundaries Finally/National: procured within the borders of South Africa


2002). &



Recognition of Prior Learning (RPL)

Is a process whereby people’s prior learning can be formally recognised in terms of registered qualifications and unit standards, regardless of where and how the learning was attained. The process of RPL is as follows:

i. identifying what a person knows and can do; ii. matching the person’s knowledge, skills and

experience to specific standards and the associated assessment criteria of a qualification;

iii. assessing the learning against those standards; and

iv. crediting the person for skills, knowledge and experience built up through formal, informal and non-formal learning that occurred in the past

South African Qualification Authority S(AQA)

Senior Management

In a hierarchy, Senior Manager falls between Manager and General Manger. The Senior Manager, like all managers, is responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary. Comprises of managers who head specific departments (such as accounting, marketing, production) or business units, or who serve as project managers in flat organizations.

Employment Equity Act, 1998 (No. 55 of 1998)

SETA Sector Education and Training Authority Skills Development Act, 1998 (No. 97 of 1998)

Side stream

Refers to infrastructure (e.g. power, logistics etc.), research and development, human resource development and inputs such as capital goods, consumables and services.

As per the DMR Beneficiation Strategy document

Skills Development Expenditure

Monetary value that a company spends on skills development. It excludes the skills development levy payable by the company under Skills Development levies Act.



Skills Development Facilitator

The Skills Development Facilitator (SDF) is responsible for the development and planning of the enterprise's skills development strategy for a specific period. This includes the development and implementation of the annual WSP and submission of an annual training report.

Skills Development Act, 1998 (No. 97 of 1998)



Skills Development Levies

The skills development levies payable in terms of Skills Development Levies Act


Skills Development Plan

The plan for training and development that the employer provides to his employees in the workplace.




Skills Programme

A skills programme that i. occupationally based;

ii. when completed, will constitute a credit towards a qualification registered in terms of National Qualification Framework as defined in section 1 of the SAQA;

iii. uses training providers referred to in section 17(1)(c) of SDA;

iv. Complies with the prescribed requirements.


SLP Annual Report Social and Labour Plan report submitted annually to DMR’ Relevant Regional Manager or Office.



Regulations 45

SLP Budget Financial provision for all the initiatives in the Social and Labour Plan.


and Labour Plan.

Social Fund

Refers to a trust fund that provides financing for investments targeted at meeting the needs of and vulnerable communities as informed by commitments made by companies in terms of their Social and Labour Plans.



September 2010. &


and Labour Plan.

Stakeholder

Refers to a person, group, organization, or system which affects or can be affected by an organisations’s actions which may relate to policies intended to allow the aforementioned to participate in decision making in which all may have a stake



September 2010.

Stakeholder Engagement

A Stakeholder is an individual or group who affects / or could be affected by an organisation’s activities, products or services and associated performance

AA1000 Stakeholder Engagement 46

Standard 2011

Sustainable Development

The integration of social, economic and environmental factors into planning, implementation and decision-making to ensure that the mineral and resources development serves present and future generations.



Top Management

Means employees of a company who holds rights of ownership, serve on the Board, undertake the day to day management. Have overall responsibility for the overall financial management and are actively involved in developing and implementing the overall strategy of the company.



Vulnerable Groups

Individuals or groups within the project area of influence who could experience adverse impacts more severely than others based on their vulnerable or disadvantaged status. This vulnerability may be due to an individual's or group's race, sex, language, religion, political, or other opinion, national or social origin, property, birth or other status. In addition other factors should be considered

Community Investment Management



such as gender, ethnicity, culture, sickness, physical or mental disability, poverty or economic disadvantage, and dependence on unique natural resources.

Women at the Mine All women employed in Core and Non –Core Mining occupations.


and Labour Plan.

Women in Mining Women employed in Core Mining occupations. Department of Mineral Resources:


Workplace Skills Plan (WSP)

In terms of the Skills Development Act regulations a workplace skills plan is to be drawn up and that every workplace with more than fifty (50) workers has to elect a skills development committee. In essence the WSP is a plan approved by the sector Education and Training Authority (SETA) which outlines the training and development requirements for an enterprise for one (1) year.

Skills Development Act, 1998 (No. 97 of 1998) Regulations

Workers’ Organization

Any organisation of workers for the purpose of furthering and defending the interests of workers with regard to working conditions and terms of employment. They are typically referred to typically as trade unions or labour unions.

Employee Consultation and Participation.

Workers’ Representative (Employee Rep)

An individual who is a member of a Workers’ Organisation and who is selected to represent them in discussions with their employer.

Employee Consultation and Participation

Working Conditions

Refers to conditions in the workplace and treatment of employees. Conditions in the workplace include the physical environment, health and safety precautions, and access to sanitary facilities. Treatment of employees includes disciplinary practices, reasons and process for termination of employees and respect for the employee’s personal dignity (such as avoiding physical punishment or abusive language (IFC Performance Standard Guidance Note 2)).


Annexure E

An Overview of Failures and Flaws in the Prevailing Legislation on the SLP ‘System’

1. Comparison of the Core Legislation driving the SLP ‘System’

The ability of the Mining industry to effectively implement and report on their obligations under the

auspices of the SLP ‘System’ have been significantly impacted by legislative ambiguity and

contradictions between various documents. This annexure will highlight several of the critical areas of

concern experienced primarily by the mining right holders and secondly by the other role-players

involved in the system in respect of the differences in the core legislation in order to provide a further

context when evaluating the failures of the SLP ‘System’.

As outlined in Section 3.2 of the document as well as Table 1 and Annexure C, Section 46 of the MPRDA

Regulations provided a very broad outline of the required contents of each SLP. The original SLP

Guideline (of 2007) provided some additional explanation and a directive approach (supported by a

series of DMR scheduled ‘training’ workshops on the Regulations during 2004/2005), followed by the

Revised SLP Guideline of October 2010. However, the Guidelines fell substantially short in critically

defining key terminology and processes associated with SLP implementation and reporting. The

subsequent institution of the DMR on-line submission process (SAMRAD) in April 2011, further

exacerbated the industry’s lack of understanding, particularly regarding implementation and reporting

requirements. Appendix B provides a summary of the areas of contradiction between these key guiding

documents.

Prior to unpacking some of the detailed contradictions and uncertainties within the plethora of

legislation and guidelines, an ongoing fundamental question posed by the industry since the

promulgation of the Act is: What is the objective of the legislation and the associated Regulatory system

in instituting two (2) parallel systems/tools - the SLP and the Mining Charter - within the auspices of the

SLP ‘System’? Both are driving towards the same Transformation goal with the stated objective in the

Preamble of the Mining Charter reading as follows:

“The objective of the MPRDA is to facilitate meaningful participation of HDSAs in the mining and

minerals industry. In particular, section 100(2)(a) of the MPRDA provides for the development of

the Mining Charter as an instrument to effect transformation with specific targets. Embedded in

the Mining Charter of 2002 is the provision to review the progress and determine what further

steps, if any, need to be made to achieve its objectives.”

It is understood that initially the SLP’s definition of BEE differed from the Mining Charter’s definition of

HDSA - both of which under-pinned many of the provisions and resultant outputs of the two (2)


systems, which may have been an argument for the differing tools. However, with the increased

similarity of BEE and HDSA definitions in recent years (from 2010), the common goal of prescribing

focus areas for the mining sector in respect of its contributions to the socio-economic development of

South Africa and the sustainable transformation of mining communities remains. Whilst the SLP is a

plan including detailed commitments, financial provisions and targets aligned to the operation’s

business plan, the Mining Charter is in a quantitative format with prescribed targets for many of the

core focus areas of the SLP. Rather than being utilized and optimized as a tool to measure progress at

an operation, the Scorecard confuses the SLP process and makes the regulatory reporting process for

mining right holders onerous in nearly all respects.

Questions are continuously raised by industry regarding the timing of these various reports within the

SLP ‘System’ and as a result the objectives behind the dual reporting process. The SLP Guideline (2010)

confirmed Annual SLP Reports must be in line with the financial year of the mining company or even the

date of granting of mining licenses (there remains ambiguity in the communication from DMR in the

past decade over which of these two (2) options is the correct requirement) versus the Charter

Scorecard which must be reported in terms of calendar year (January to December) and submitted to

the Regulator by the end of March annually. With the revised Charter, the extent of information

required to be reported on to DMR correlates to a greater extent than previously with the SLP. However

mining companies are required to submit different reports in different formats to the same Regulator

on similar topics for similar reporting periods (particularly if a company’s annual reporting period is also

aligned to the calendar year). The benefits of this dualistic reporting for the Regulator in respect of

gauging either the mining right holder’s compliance to the regulations and to the transformation of the

sector, or to gauge the collective progress of the mining sector, is yet to be seen as an output of the SLP

‘System’ from the Regulator. With the continued increase in the cost (financial and resource-wise) of

producing the relevant reports within an onerous framework, the frustrations felt by the industry in an

already ambiguous and confusing SLP ‘System’ have been exacerbated.

It is evident that there were a substantial number of contradicting directives but most pertinent were:

• The SLP Guideline of 2010 no longer made reference to the requirement for procurement baseline

information and the procurement progression plan, as stipulated by Section 46 (c) (vi) of the

Regulations to the MPRDA. Instead SAMRAD required a document (BEE Status Template) to be

submitted which included a request for “Procurement Plan with requirement for baseline

information and detailed plans on how the company plans to: Procure from BEE suppliers; develop

local communities through procurement; and the company's procurement strategy”. Uncertainty

remains however in respect of the requirements for reporting on procurement (i.e. progress against

the procurement plan) on an annual basis. Without a clear guideline on this, industry has continued


to include reporting on procurement within their Annual SLP Reports (as per the instructions from

DMR to refer to the SLP Compilation document in respect of annual reporting) even though

procurement is no longer included in the scope of the SLP Guidelines. Furthermore, Form T was not

stipulated in the 2010 Guideline or within the SAMRAD templates however it remains a

requirement within the Regulations. There are differential responses from industry on this in

respect of continued use of Form T in reports or not;

• SAMRAD ‘s BEE Template required clarification of ownership, whereas the SLP Guideline did not

require this to be specified;

• The requirements stipulated in the SLP Guideline (2010) were aligned to the tables required by the

SAMRAD on-line system in certain instances, i.e. School Support and Post Matric Programmes,

Measures to Address Housing and Living conditions and Self-employment and Portable Skills

Training Tables on the SAMRAD application template. However the SLP Guideline (2010) did not

include these prescribed table formats which caused confusion in the SLP drafting phase if

cognizance of the SAMRAD requirements were not timeously made;

• Almost simultaneous to the release of the Revised SLP Guideline was the release of the Mining

Charter in 2010. Throughout the SLP Guideline there are cross-references to the Charter, as well as

the Charter formats (e.g. Form S on the Guideline and Form S on the Charter were now in

alignment). However there were other tables which the Charter required which were not included

in the SLP Guideline, including ownership, procurement, demographic breakdown of HRD spend

and the Accommodation Report. As with the mis-alignment of the SLP Guideline and the SAMRAD

on-line documentation, the Regulator overlooked an ideal opportunity to align the Mining Charter

and the SLP Guidelines more closely, thereby removing duplication and ambiguity in requirements

between the two (2) tools in the system;

• SAMRAD BEE Template and the 2010 Charter required beneficiation information, whereas the SLP

Guideline did not. This results in a lost opportunity for a mine’s SLP to focus on a core strategy for

socio-economic up-liftment opportunities aligned to the primary objectives of the Act;

• The Mining Charter 2010 states that existing talent pools need to be identified and fast-tracked to

ensure high level operational exposure in terms of career path programmes. This is however not

measured by the Charter (aside from reporting within HRD spend category), but it is an area

required to be reported on in the Annual SLP Report. The question remains unanswered as to how

“high levels of operational exposure” and the efficacy of the fast-tracking is to be measured by the

operations within the auspices of the Charter, and whether the legislator is able to monitor and

measure this effectively?

• With the release of the 2010 Mining Charter one of the first questions from industry was: Does the

Charter of 2010 replace the 2002 Charter or must the 2010 Charter be read in concurrence with the

2002 Charter? The title of the 2010 Charter records it as an “Amendment of the 2002 Charter” as


opposed to “The Amended Charter”. In the preamble of the 2010 Charter it states "...amendments

are made to the Mining Charter of 2002 in order to streamline and expedite attainment of its

objectives". However, when reviewing the differences between the 2010 and 2002 documents

(Annexure B) it does become evident that the 2010 Charter could in fact be perceived as a

replacement and not purely an amendment. The concern being that the holders of mining rights

could call on this loophole to justify non-compliance.

• Impact of the 2010 Mining Charter on the Codes of Good Practice for the Mining Industry: To date

the regulation and measurement of the mining industry in respect of the provisions contained in

the Codes of Good Practice have not received focus from neither the Regulator nor industry at

large. This has resulted in further uncertainty and contradictions within the legal framework.

• It is broadly accepted that the 2010 Mining Charter is a product of the consensual agreements

documented in the Stakeholders' Declaration on Strategy for the Sustainable Growth and

Meaningful Transformation of South Africa's Mining Industry. (Refer to Section 2.2.6 in the

document). The strategy was perceived as an indication to the mining arena that DMR seeks the

involvement of stakeholders in industry, with regards to policy and legislation. However, the

subsequent changes in the legislation (specifically the most recent proposed MPRDA Amendment

Bill) as well as on-the-ground engagements, have demonstrated that the legislators will take a

coercive position in terms of the promotion of empowerment within the mining industry and this,

to an extent has created fear that the level of discretion provided to the legislator within the

legislative framework will further negatively impact potential investment.

• Further, it is stipulated that non-compliance with the provision of the Charter and the MPRDA “shall

render the mining company in breach of the MPRDA and subject to the provisions of Section 47 read

in conjunction with Sections 98 and 99 of the Act”. Does this mean that a mine needs to be in breach

of both the MPRDA as well as the Charter before receiving a Section 47, or one or either? This, in

turn, sparked further debate in industry, even to the point where there were questions in terms of

the constitutional validity of the 2010 Charter.

2. Ambiguous Definitions within the Legislation

Whilst the previous section and Annexure B have detailed the differences across the primary legislation

guiding the SLP ‘System’, a core challenge noted is the absence of or ambiguity in core definitions. This

section provides further detail on critical terminology where there have been deficiencies in clarity and

understanding within the system that have influenced the delivery of the SLP ‘System’ and the

achievement of its objectives. The Regulator has provided clarity during engagement sessions with

mining right holders on various occasions, however, in our experience the clarity provided is often

insufficient, differs between regional offices, differs between regional and national offices and between


DMR officials (Refer to Section 6.3 – Failures of the DMR as a Regulator). Several of the most critical

areas of ambiguity in definitions are as follows:

• The definition of host communities, mining communities or labour sending areas

The requirement of the Act is for the mining company to contribute to the socio-economic development

of the areas in which they operate (Regulation 41(c)). The SLP Guideline of 2002 advises “The Mine or

Production Operation in accordance with the local economic development programme must ensure co-

operation with the formulation of the integrated development plans of the areas within which they

operate; and co-operating with government in the implementation of the integrated development plans

for communities where the operation takes place and for major labour sending areas.” It is therefore

inferred that the intent of the Act would be that ‘key’ labour sending areas be included under the

definition of communities in which the mine operated, i.e. LED projects should be implemented in

Eastern Cape when a significant percentage (<15%) of a mine’s workforce emanates from, even if the

mine is located in the North-West province. However, currently the interpretation of communities in

which the mines operate is looked upon as the communities where the mine is physically located. The

Revised SLP Guidelines state the following definitions:

• “Community” means a coherent, social group of persons with interests or rights in a particular

area of land which the members have or exercise communally in terms of an agreement, custom

or law.

• “Mining Community” refers to communities where mining takes place and labour sending areas.

• “Labour Sending Area” areas from which a majority of mineworkers, both historical and current

are or have been sourced (SLP Guideline 2010).

Challenges are experienced with these definitions both separately and collectively because:

a. Communities are rarely homogeneous in political or cultural structure and conflicting

expectations and/or rights are frequently levelled towards mining right holders. For example,

two (2) or more opposing villages/ communities in proximity to a mine, which may or may not

accommodate mine employees, threaten mine management regarding the mines’ assistance to

one or the other. In one such instance an operation was unable to roll out initiatives which were

intended to run in two (2) villages in Limpopo, as both groupings insisted that they would do

insurmountable damage to mine property if the programme was implemented at the other

village. The villages demanded exclusive benefits from the mining operation resulting in

significant impacts on the mining right holders in respect of their ability to implement their LED

commitments.

b. At several operations the Regulator advised that community investment be planned within a

fifty (50) kilometer radius whilst other mines have been told not to use this measurement


criteria. Further operations have been advised to restrict investment to Local Municipality(s)

whilst other operations have been advised to focus on the District Municipality level. Some

operations have made use of their own definition due to geographical locations and/or

subjective preferences. Such conflicting direction has a direct impact upon the scope of a mines’

LED projects.

c. In certain instances, a mine may source its labour from dozens of communities and discerning

those areas where the ‘majority’ emanate from is challenging and left to subjective selection by

the mining right holders.

d. The quantitative value of “majority’ is not defined there and furthermore the percentage of

labour from other areas may vary in accordance to number of employees at contractor

companies and the inclusion of their workforce statistics into SLP reporting.

• Defining Contractors and their associated Compliance and Reporting requirements

The degree to which contractors are required to comply with the broad extent of provisions of the

legislation is one of the most contentious challenges within the SLP ‘System’. The requirements of the

Act with regards to the definition of ‘employees’ becomes extremely onerous in respect of including

every person providing a service or product to the mine into the SLP, particularly when several

contractors have a limited number of employees on site, (e.g. five (5), or less) or those who do not have

employees on site permanently. In addition, the SLP Guideline 2010 requires a separate Form Q for

contract workers to be completed, but does not define whether the Form Q should be completed for all

contracting companies combined or one (1) form per contractor. Underpinning this challenge is the

ambiguity from verbal directives received in various engagements from the DMR since the inception of

the Act to include and report on “core mining” contractors despite the definition of an employee

(Section 1 of the Act) and considering Section 101 of the Act. DMR officials were witnessed as

elaborating on this directive by defining core mining contractors as “any contractor involved in the core

business of mining”.

Due to the differential interpretation of this statement as well as the diversity in the form, size and scale

of ‘mining contracting’ companies across South Africa it is understandable that ambiguity exists in this

arena. Based on experiences with DMR in respect of the contractors to be included in SLP programmes,

there has been a notable increased focus by the Regulator in the last eighteen (18) to twenty-four (24)

months in respect of the adjudication of both SLP submissions and Annual SLP Reports. However it is

apparent that mining contractors have not been required to be reported on within the Mining Charter.

Whilst it may seemingly be explained by the fact that the contractors will largely fall under the auspices

of the DTI sector Charter, clarity on this assumption has not been formally provided.


• Challenges of Defining Women in Mining (WIM) and their Progressive Inclusion into Core Mining

Functions

It is understood that the ‘new’ provisions within the MPRDA (2002) with regards to the increased

inclusion of women into the sector were aligned to the National Development Goals and associated

NDP (refer to Sections 2.2.1 and 2.2.2 of the document). Further, the need to redress the imbalances

and restrictions placed on female participation in the sector through previous legislation are aligned to

the objects of the national imperative as well as the MPRD Act itself. However, there are recollections

of very vocal industry uncertainty, during the early days of the legislation, regarding key definitions

associated within the increased inclusion of women. Whether all women, regardless of race, were to be

included in the plan and what constituted “core mining positions” were fundamental to the effective

alignment of industry in achieving the contentious 10% target of the core mining positions to be filled

by women. The meaning of "core (and critical) skills" has not been properly defined and mining right

holders therefore interpret and report on these areas as they see fit.

Subsequent adjustments to the legislation on this topic (within the 2008 MPRDA Amendment Act and

the Revised Mining Charter), whilst attempting to increase alignment to the Department of Labour’s

(DoL’s) female equity provisions, have heightened the ambiguity. Furthermore, the 2010 Charter

Amendments gave mining houses the message that the focus was no longer on achieving women in

core mining positions. The amended stipulation was for 40% demographic representation on all

occupational levels. This entails achieving a workforce which is at least 40% representative of the

national/ provincial demographics per occupational level by 2014 (refer below). In most instances, this

would require the workforce to increase their female contingent to a minimum of 20% on each

occupational level.

• Demographically Representative Workforce

As noted above, the Mining Charter 2010 target was set at 40% demographic representation of

workforce on each occupational level by 2014. The ambiguity in this requirement lies on the following

four (4) points:

a) What is meant by 40% demographic representation?

b) What is the measurement criteria?

c) What is the distinction between board and top management level? and

d) Concern regarding the contradictions with the broader legislation in terms of directives

given by DMR officials around this matter.


Firstly, mining industry is wrestling with what is meant with 40% demographic compliance and how to

measure this effectively. The following example will help to elaborate on the uncertainty across industry

on the implications of this legislative target.

A mining right holder’s regional (provincial) demographics are follows:

Provincial Race and Gender Profile

African Coloured/ Asian White TOTAL

GENDER

Males 38% 4% 2% 44%

Females 42% 8% 6% 56%

Total Race 80% 12% 8% 100%

As the revised target is 40% representation, the workforce profile to achieve the required 40%

(excluding Occupational Level profiling) would look as follows for a workforce of one thousand (1 000).

African Asian/ Coloured White Total

Min. Require-

ment

Actual Employee

Profile

Min. Require

ment

Actual Employee

Profile

Min. Require-

ment

Actual Employee

Profile

Min. Require-

ment

Actual Employee

Profile

Male 15% 588 59% 2% 30 3% 1% 162 16% 18% 781 78%

Female 17% 170 17% 3% 30 3% 2% 20 2% 22% 220 22%

Total 32% 758 76% 5% 60 6% 3% 182 18%

1000

This in essence entails that 22% of the workforce (across all Occupational Levels) in this example will

need to be women of which 17% will be required to be African women. This target will need to be

further broken down per Occupational Level and would then require that 22% of each occupational

level will need to be filled by women, of which 17% will need to be African. The current calculation on

the Mining Charter Scorecard does not measure demographic profiles in this manner, albeit this is the

stipulated requirement.

Many companies, predominantly junior miners, prospecting companies, or companies with a central

services centre have only two (2) or three (3) occupational levels, which limits the ability to achieve the

targets stipulated on the Charter i.e. they do not receive the points allocated to top and senior

management levels as there are none – which equates to a minimum of 7%.

The distinction between levels are also blurred. DMR recently advised the following in a review of a

submitted SLP to a mining rights holder in the North West Province: "it is noted that Top Management

and Board are written as one in the Charter; however companies are required to separate the two (if this


is the company's position) - therefore give an indication of the current status of the Board of Directors as

per the reviewed Mining Charter and a plan thereof if this does not meet the requirements".

Furthermore some larger companies have a shared services element allocated centrally providing

management services to the mining right areas. Even though the Regulations advise that a mine is

construed in reference to the production operation (Regulation (40) (2) (b)), DMR has recently advised a

mining company based in Gauteng, with mining rights in Northern Cape, Natal, North West and

Gauteng, to report on their shared services component on the Scorecard.

• Defining Requirements for Training Interventions and Spend on Employees and Community

Members

Other than the ‘non-employee’ learnerships (Section 18.2 learnerships), bursaries and internships, the

MPRDA Regulations and Revised SLP Guidelines are silent on the need to incorporate community

members into provisions for skills development programmes within the HRD Section of the SLP. As

previously mentioned, the SAMRAD application template includes support to schools and post matric

programmes, which is reflected by the Mining Charter Scorecard. However, none of the Guidelines,

application forms or the Charter Scorecard refer to Community ABET. It is only through experiences of

DMR feedback in this regard that mining right holders now ensure Community ABET provisions are

planned and implemented for both employees as well as community members. Whilst the intentions of

this requirement are aligned to the spirit of the Act, clarity as to the extent of the provisions required

remains absent and inconsistent across the sector. This is a further example of where the DMR’s

interpretation of the legislation directs the mining right holders’ provisions within their SLP due to

shortcomings in definitions and clarity within the Act or associated Guidelines.

The Charter stipulates that an amount equating to 5% of the value of the annual salary spend must to

be allocated to skills development. Recent mining charter reporting has shown that the HRD spend

planned in the Social and Labour Plan is not in line with this requirement. The fact that the skills spend

should be reflective of demographics, should also be taken into account, particularly with reference to

national and provincial demographics. Furthermore, if foreign workers are to be excluded, skills spend

on them would also be excluded as well as the associated payroll costs. A further ambiguity is whether

spend on community development in terms of training interventions were to be included in the

community development table of the Mining Charter Scorecard. The automatic response would be that

it would be a duplication, however from an industry perspective comprehensive reporting in terms of

community development spend is required.


Core and Portable Skills Training are reported on in the SLP Annual Report, but not specifically

mentioned within the Regulations to the Act. The DMR requires a breakdown of core and portable skills

training planned for and provided at the mine and further specifies that portable skills training should

assist employees to attain alternative, and more specifically, self-employment. The original SLP

Guideline specified core and portable skills, whilst the SLP guideline of 2010 and the SAMRAD

Application only refer to portable skills training in the Management of Downscaling and Retrenchment

section. The mining right holder then assumes that portable skills training is only to commence at

downscaling, retrenchment or closure, again only to be informed by DMR that portable skills training

needs to happen throughout life of mine.

The Charter Scorecard requires inputs on the transfer of skills and capacity building of mine

communities – which implies core and portable skills training to community members. As with other

examples cited, this is not only a costly impact in terms of finance and time, but adds to the frustrations

felt by the mining sector with regards to the objectives of the SLP ‘System’ and a context of conflict

rather than constructive planning and/or implementation.

• Measures to address the Housing and Living conditions and Nutrition of the Mine Employees

Regulation 46 (c)(iv) and (v) state that “the measures to address the housing and living conditions and

nutrition of the mine employees". This is a very broad requirement and at first perceived by industry to

only be applicable to employees living at a mine, and more specifically hostel accommodation. The Act

however does not specify the limitation to mine/ hostel accommodation and more recently with the

2010 Charter and latest SLP Guideline, housing and nutrition of all employees are clearly identified as

requiring attention. The regulation is however not clear on the requirements to ensure a mine

sufficiently comply with this section of legislation. Housing has been an area of dispute as legislation

drives home ownership, whilst employees often do not desire owning a house at the operation with the

associated rates and taxes and cost implications of this asset. Further employees require the mine to

subsidize, build or donate houses. On this specific matter, the mine may participate in an LED

infrastructure project to build houses within the community, which often cause employee

dissatisfaction as the mine did not provide housing for the workforce.

• Mentoring of Empowerment Groups/SMMES and Enterprise Development

Section 2 of the SLP Guidelines (2010) documents the mentoring of empowerment groups/ Small,

Medium and Micro Enterprises (SMME). This requirement is ambiguous when read in conjunction with

the need for enterprise development as specified in the measurement of local procurement spend and

associated strategies. The Charter 2010 definition of Enterprise Development states: “monetary and

non-monetary support for existing or fostering of new HDSA companies in the mining sector of the


economy, with the objective of contributing to their development, sustainability, as well as financial and

operational independence”

A further ambiguity in respect of enterprise development and mentoring of SMME’s is the removal

procurement development plans from the SLP Guideline 2010, but Enterprise Development remained

as a Charter Requirement. During submissions of SLPs or Annual Reports, mining right holders are

further requested to include strategies and/or progress reports on SMME mentoring and procurement

programmes, inclusive of reporting on procurement spend in local and district municipal areas.

3. Ambiguities in the Directives Provided by the Legislation

• Timing of DMR Processing of SLP Submissions and the Impacts on Implementation

A consistent area of concern across the mining industry has been the lack of clarity within the legislative

provisions for the timing of the Regulator’s processing of submitted SLPs. Whilst provisions were made

in the Act of 2002 for timeframes in which the Regulator must communicate to the applicants where

submissions are non-compliant, experience has shown these were rarely, if at all, adhered to. Several

examples of extremely lengthy processing timeframes have been witnessed across industry,

(particularly with respect to the conversion applications). Instances were reported where the five (5)

year period of the SLP expired before DMR engaged and/or communicated to the applicant around

their original SLP submission. In the authors’ experience, the timeframes for the DMR’s review and

communication to an applicant with regards to an SLP submission is between eight (8) months and two

(2) years (refer also to Section 6.3 of the document re: failures of DMR as the Regulator). Not only does

such lengthy timeframes result in significant insecurity in a mining right holder’s mining right status,

with the obvious implications for shareholders and investors, but these timeframes further impact upon

the implementation of the SLP.

Associated with the above timing constraint for SLP approvals, is the industry and the Regulator’s

interpretation of the legislation’s requirements for an SLP start date. In our experience of both face-to-

face discussions with DMR officials as well as DMR correspondence on this matter (received by mining

right holders) that the required start-date of an SLP (i.e. when implementation of the provisions within

the SLP should commence) may be any one of the following:

• The day after the SLP is submitted to the Regulator as part of a Mining Right application or

Section 102 amendment;

• On receipt of Mining Right approval from the DMR;

• On execution of the Mining Right; or

• On approval of a Section 102 SLP Amendment application.


The general approach in light of this ambiguity is to follow the strict legal interpretation and commence

reporting aligned to the date of execution of the mining right (i.e. assumes the start date is on

execution). However confusion across industry, particularly in respect of greenfield and brownfields

operations in commencing SLP delivery is prevalent.

Moreover, whilst the legislation is silent on this matter, directives from the Regulator have required

mining right holders which are at greenfields or construction phases and are not yet making a profit, or

operations that are running at a loss, to continue with their SLP provisions including significant

investment into LED programmes and skills development programmes for local community members.

Such intentions are clearly aligned to the ‘intent’ of the Act and are critical measures to enable the

future mining operation to improve its socio-economic impact within its host community. However, the

lack of clarity within the legislation around this requirement results in mining companies embarking on

new investments failing to make the relevant financial provisions and/or include these within their

capital budgets. This frequently results in dissatisfied investors, community/Tribal Authority

representatives and an SLP ‘debt’ burden prior to operational mining.

The implication of the lack of clarity within the legislation on the above matters with regards to SLP

implementation and reporting timeframes and start-dates is significant when the regulator commences

assessing a mine’s progress against its SLP commitments. The associated practical implications are also

noted with regards to the mining right holder’s ability to commence resourcing, financial expenditure,

stakeholder communication and actual project/programme implementation and delivery. In several

instances mining companies were witnessed to experience deteriorating relationships with their

worker/union representatives and community/Tribal Authority representatives where delays in SLP

approval caused substantial delays in the delivery of SLP commitments.

• Requirement for the SLP to be a Five (5) Year Plan

The Act states that the SLP is valid until a Closure Certificate has been issued (Section 43 of the Act) and

can only be altered by ministerial consent by means of a Section 102 Amendment (Section 44)7.

However during initial verbal presentations by DMR on the SLP in 2004/2005 it was communicated that

the plan should be only a five (5) year plan and valid from the granting/ conversion of the Mining Right.

The MPRD Act, Regulations and the first SLP Guidelines (2007) were silent on such a critical

requirement. Only in 2010 with the publication of the Revised SLP Guidelines (and more recently in the

draft MPRDA Amendment Bill) was clarity on this requirement documented. These stipulations created

confusion in industry that remain today in terms of:

7 Mineral and Petroleum Resources Development Regulations, 23 April 2004


• The legality of the need to plan for and submit an updated SLP every five (5) years whilst the

SLP is valid for life of mine as per the Act;

• The applicability of the legislation’s Section 102 provisions with regards to the submission of

new five (5) year plans and the perceived associated risk to the mining right validity within this

process;

• The ability to carry over certain LED projects from one five (5) year plan to another, whilst

having a separate Section 102 (on new LED projects) running concurrently with the new five (5)

year plan;

• The strategic alignment of each Section 102 SLP Amendment application to the MWP as the

legislation is also silent as to the requirements for amendments to the MWP (further

compounded by the fact that the MWP is managed by a different department within the DMR –

Refer to Section 6.3 on Failures of the DMR as a Regulator);

A related shortfall in the ambiguity of the legislation is that the requirement placed on the mining right

holders to submit a detailed Annual SLP Implementation Plan, three (3) months prior to the end of its

financial year as articulated within Clause 18.2 of the Mining Right (Refer to Table 2). This specific

requirement is absent from the MPRD Act, Regulations and SLP Guidelines (2010). There is differential

adherence to the submission of such documentation by various mining houses as well as review and

regulation of this requirement by the DMR themselves (refer to Section 6.3 on Failures of the DMR as a

Regulator). In the authors’ experience, the majority of mining houses fail to submit Annual SLP

Implementation Plans at all within their SLP programmes, despite the practical and management

benefits for optimal annual SLP delivery.

• Uncertainty Around Dealing with Associated Minerals

Associated minerals are currently not regulated, resulting in competing rights to different minerals in

the same ore body. Geologically, the different types of metals frequently occur together, for example

Platinum and Chromium. An area of the MPRDA that needs to be amended to provide clarity on the

requirement for companies to make multiple applications for associated minerals. DMR director general

Sandile Nogxina in 2010 indicated there may be a return to the minerals law of 1991, the antecedent of

the MPRDA, which allowed for “undivided shareholding”. This implies the ability to sell metals that

occur together; however undivided shares in rights are problematic and a challenge the MPRDA set out

to correct in the first place. The MPRDA which regulates the new order rights, including the converted

old order rights, did not anticipate the fragmentation of rights. When submitting Section 102

Amendments for changes to SLPs, mining right holders now list the entire number of associated

minerals, which requires them to also amend the Mining Works Programme (MWP) and the

Environmental Management Programme (EMP); Whilst there are a range of legal and practical


challenges with this requirement, the pertinent question in the context of this analysis is whether the

required consultations with Interested and Affected Parties (I&APs) did indeed take place in these

instances? In our experience, such consultations were by-passed in a predominately legal, desk-top

process. The implications of which are that, amongst others, Environmental Stakeholders could

question the validity of the mining right (something which environmental lobbyists in North West are

threatening almost to do in terms of mining rights in the particular region).

• Beneficiation

Beneficiation remains a contentious matter for the mining industry, with enduring lack of clarity

regarding how beneficiation is to be effectively achieved from a practical and cost perspective. Further,

the entire mechanism in terms whereof beneficiation is to be measured and calculated requires

clarification. The only off-set allowed against the ownership target is for beneficiation, to a maximum of

11%. Whilst this is to be applauded, the subject of beneficiation remains to be further illuminated. The

Charter refers to the "mineral beneficiation framework". Section 4 of The Beneficiation Strategy

released in June 2011 reviews cross-cutting constraints and associated interventions to encourage

beneficiation in South Africa and Section 5 refers to a Strategic Framework8, but the document does not

provide for a comprehensive recommendation regarding beneficiation. Companies which already carry

out beneficiation may be negatively impacted as the measurement for this item is the "additional

production volume contributory to local value addition beyond the baseline". If a company is already

beneficiating most of its product in South Africa, it may be difficult to achieve substantial additional

production of beneficiation volumes.

• Procurement of Capital Goods from Companies

The Charter requires "multinational suppliers" to contribute 0.5% of procurement spend by South

African mining companies to a "social development fund’. Precisely what this fund is, who will

administer the fund and how mining companies must retrieve the 0.5% from multinationals remains to

be clarified. The weighting of the contributions made by multinational suppliers is 3% in the mining

company's scorecard. However, it is not clear whether the onus is on the mining company to make the

contribution on behalf of suppliers or if the supplier must make this contribution. Some companies

opted to allocate the 0.5% out of their own pockets (into company trusts) until further clarification

regarding the fund was received, as they surmised the cost would be added to their bottom line by the

supplier in any event. This practice is frowned upon by the legislator, as well as the unions, as it does

8 A Beneficiation Strategy for the Minerals Industry of South Africa June 2011


not create awareness with these multinational suppliers of the need for social development in the

South African communities. Many companies opted to forego the 3%. The Charter Scorecard provided

for the 3% to be allocated to mines that do not purchase Capital Goods from multinational suppliers.

• Financial Provision for the Management of Downscaling, Retrenchment and/or Closure

The Regulations to the MPRDA state that the holder of the mining right is to provide financially for the

implementation of the SLP in terms of the implementation of the process to manage downscaling and

retrenchment (Regulation 46(e)(iii)). The interpretation of this requirement could be that mines provide

for the ‘management’ of the process surrounding downscaling and retrenchment and not the actual

costs of downscaling and retrenchment such as the salary costs during the period of retrenchment.

Albeit this interpretation can be seen not to be in line with the intent of the Act, it has been used by

large mining companies in terms of their financial provision of this section of the Act.

• Communication of the SLP

Regulation (46 (f)) requires that the holder of the mining right “ensures compliance with the SLP and to

make it known to employees”. However the timing, extent and objectives of such communication

remains vague within the SLP-related Regulations. In light of the events at Marikana and other

numerous examples of worker and/or community unrest directly or indirectly related to the SLP

‘System’, the need for improved communication may be seen as a critical mitigation for such risks. With

limited provisions in the legislation regarding communication, the Regulator is failing to direct industry

to make use of such measures for the broader benefit of the industry. The SAMRAD application form

also does not include the statement of the commitment to communicate the SLP to employees. This

omission creates room for dispute, confusion and contention lack of communication measures

completely.

Finally, a fundamental failure of legislation is that the MPRDA and associated legislations seek to

equitably empower, up-skill and socio-economically develop regions as aligned to the objectives of the

National Planning Commission and the vision and strategic plan for South Africa‘s long term

development in its NDP 2030 (refer to Section 2.2). This requires Acts, inclusive of any amendment bills,

to align to international best practice and remove uncertainty and encourage investment. Which would

require legislation to advocate the roles and responsibilities of all stakeholders within the system and

require each role-player to act responsibly towards giving “effect to section 24 of the Constitution by

ensuring that the nation’s mineral and petroleum resources are developed in an orderly and ecologically

sustainable manner while promoting justifiable social and economic development”9. The current

9 Mineral and Petroleum Resources Development Act (Act No. 28 of 2002) (MPRDA) – objectives of the Act


environment and the failures on the part of each of the role-players is contributing to the demise of the

entire system. The Stakeholders' Declaration is correct in its acknowledgement that such

transformation cannot be achieved without a competitive and sustainable mining industry in South

Africa.

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