Transformation

The Chamber plays a critical role in engaging with government and other stakeholders, and in lobbying government on behalf of its members on all matters relating to transformation. The Chamber is committed to supporting the aims of the Mineral and Petroleum Resources Development Act (MPRDA) and its associated Mining Charter.

Critical team members

  • Tebello Chabana: Senior Executive, Public Affairs and Transformation
  • Thandeka Dlamini: Senior Analyst, Transformation

Context

Section 100 of the MPRDA requires the Minister of Mineral Resources to set socio-economic targets through the Mining Charter. These were set after broad agreement between the tripartite stakeholders, namely government, business and organised labour.

The Mining Charter has been reviewed twice since it was implemented in 2004, and was revised in 2010, again in consultation with stakeholders. The Chamber was a key player in the development of the Charter, and has continued to play a critical role in negotiating revisions to targets on behalf of its members, to ensure that the targets set are realistic and can be implemented.

The mining industry recognises that transformation is not only a regulatory requirement, but a business imperative that the industry is determined to fulfil. The year 2014 was a milestone for the industry as it marked the 20-year anniversary of democracy and the delivery date for agreed Mining Charter targets. All members of the Chamber have demonstrated their commitment to meeting their Mining Charter obligations.

The Chamber monitors the progress of its members in respect of the Charter targets. As part of its monitoring role, the Chamber identifies challenges faced by its members in achieving these targets, and engages with the DMR for immediate attention and revision where necessary.

Key activities

Most of the negotiations and discussions about transformation in general and the Mining Charter in particular are held under the auspices of the tri-partite Mining Industry Growth Development and Employment Task Team (MIGDETT) in which Chamber represents the mandated positions of its members. The Chamber also leads the delegation of members when the industry is required to present to Parliament on the progress made by the mining industry in respect of the Mining Charter.

An important function of the Chamber is to ensure that the ‘rules of the game’ are maintained. So, when the DMR undertakes a review of progress in the achievement of Mining Charter targets, for example, the Chamber plays a key role in ensuring that the instrument being used in conducting the assessment does not deviate from what was agreed initially, and the assessors do not introduce new criteria not agreed upon.

In 2015, the Chamber, on behalf of its members, approached the courts for a declaratory order for guidance on the principles applicable to the assessment of the ownership element of the Mining Charter, particularly in respect of the continuous consequences of previous BEE deals. This action was taken after an agreement in March 2015 between the industry and the DMR to jointly seek court resolution on the matter. While the parties had since engaged on this approach, it subsequently became clear that the parties could not bring a joint application as they would be asking for different forms of relief.

The Chamber’s members are listed entities and their boards have fiduciary responsibilities to seek and secure regulatory certainty in respect of continuing consequences on which basis mineral rights have been granted. The companies have made disclosures to their shareholders for years on these matters, and now these have been called into question. Rather than wait for a potentially adversarial legal process in which each company applies to confirm its status, the Chamber is seeking to do this pre-emptively. That said, the DMR has been kept fully apprised of the Chamber’s approach and has indicated, as has the Chamber, that a negotiated resolution to the impasse would be preferable.

Now that the 10-year Mining Charter period has come to an end, preparation for a review of the Charter and has potential way forward has begun within the Chamber and its members. The Chamber has already initiated discussions with the DMR on what the new charter would look like, and will represent its members’ views both on the review of the Mining Charter and likely changes to targets.

An important consideration for this review is to ensure that the new Mining Charter is not in conflict with the amended BEE Codes published by the Department of Trade and Industry. In this regard, the Chamber welcomed the recent decision announced by the DMR that the industry will be exempted from compliance with the provisions of the Broad Based Black Economic Empowerment Act (BEE), 2003. The announcement indicates clear recognition by government that the mining industry and its stakeholders need continuity and certainty to be able to effect the transformation envisaged in the MPRDA and to continue to sustain and grow investment in our sector.

External processes/bodies

The Chamber is a key member of Business Unity South Africa (BUSA), and participates in the BUSA committees that deal with BEE Act.