Industry, unions, government must repair relations

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When I first joined Anglo American straight from Oxford University in 1996, it was just two years after the end of apartheid. It was a time of deep distrust between management and workers.

Trade unions had been emboldened by the new, union-friendly legislation giving them collective bargaining rights. Building trust to underpin cordial industrial relations was a strategic priority.

So was the need to reinvent the mining industry, which had much to be ashamed of in its apartheid past, as a force for good in the new South Africa.

Much has been done since to transform South African mining, but there is a real risk that massacres such as the one at Marikana last month will revive old memories and reignite the tensions that beset the industry in the apartheid era.

The same challenges seem to remain and more must urgently be done to address them if the industry is to be a magnet for foreign direct investment as it can and must be.

During my time at Anglo American, we spent a great deal of time in negotiations with the unions over issues such as the apartheid wage gap, the eradication of hostels (single-sex housing units), safety and literacy classes for workers.

The National Union of Mineworkers was the main but not the only representative for workers. There were other unions representing the workers.

Unions were viewed and treated as social partners, not as enemies, and this underpinned our approach.

Expertise in consultation was necessary to win promotion into most of the senior roles and the head of industrial relations, Bobby Godsell, was one of the most powerful executives in the company.

Anglo American, because of its weight in the economy and society at large, led the way in modernising its industrial relations.

We did this firstly out of enlightened self-interest as peaceful, stable industrial relations are a business imperative for a profitable mining operation.

Secondly, it was morally and politically the right thing to do as workers would not have allowed us to deny or limit their representation.

However, it makes more sense to have strong, united and mature trade unions than to have small, fragmented and under-resourced ones, jostling to outsmart each other. Such rivalries waste management’s time and effort and, as we have seen at Marikana, can lead to a dangerous escalation in tensions.

I strongly believe that incidents such as the Marikana massacre are not inevitable.

It is now up the leaders of mining companies to work with employee representatives and with the government to prevent a recurrence of Marikana elsewhere and to restore confidence in the industry.

Here are some suggestions for how they should go about it:

n First, they must show that they are aware of, and concerned for, the plight of the workers, who generally come from the poorest parts of the country.

n The industry should do more to provide workers with decent housing in properly planned settlements, as opposed to the informal settlements in which some Marikana workers live or the hostel accommodation that is still found at some mines.

n Mining companies and unions also need to handle the demands for higher pay in a constructive manner, taking into account the dire state of the platinum industry.

n High wage demands usually reflect a lack of trust in the relationship between workers and management. Where there is trust, workers can accept lower pay in times of economic turmoil or industry crisis, which the platinum industry is facing at the moment.

n The industry’s troubles have been exacerbated by uncertainty over policy. The government needs to settle the long-running debate over nationalisation, improve the delivery of services and provide absolute clarity over the future direction of policy if the country is to retain the confidence of local and international investors.

However, the biggest threat to South African mining may turn out to be not nationalisation, but the growing discontent of workers and their families in the poor areas that supply most of the industry’s labour.

n A social contract involving workers, the industry and the government is required to build consensus on wage rates and the other issues facing workers and management in the industry.

Mining executives must work closely with trade union leaders to find effective ways of engaging with workers, such as town hall meetings.

The tragedy at Marikana was partly a result of flaws in the way in which management engages with workers.

Companies now need to make sure that their executive committees and boards include members with expertise in industrial relations.

n Last, mining executives need to put in place early warning mechanisms on the state of employee relations in their companies. This will allow them to take prompt pre-emptive action to avoid any repeat of the Marikana massacre.

In a divided society, where investment is sorely needed to help tackle unemployment, poverty and inequality, industry leaders must secure peaceful, productive labour relations if the country is to remain globally competitive in the mining arena.

Kuseni Dlamini, a Rhodes scholar, is the former head of Anglo American South Africa and a former director of Anglo American Platinum. n This article was originally published in the Financial Times.


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