JOHANNESBURG - The mining industry on the African continent has a bad history when it comes to exploitation of workers and the mineral wealth of countries and South Africa is no exception.
However, at the South African Human Rights Commission’s two-day seminar Business and Human Rights Dialogue in Sandton, Gauteng, Chamber of Mines senior executive for public affairs and transformation Tebello Chabana pointed out that not only was his organisation aware of the problems but was actively involved in making the mining business more ethical.
Chabana explained that the Chamber was aware of alleged involvement of the mining industry in illicit flows and that the South African Parliament has had numerous deliberations in the past two years on the matter.
“Illicit financial flows could be in the form of base erosion and profit shifting (BEPS), mis-invoicing and criminal activities of illegal product trading,” said Chabana.
In 2015, an African Union high level panel headed by former President Thabo Mbeki stated that some $50bn a year is lost to Africa through illicit flows.
In 2016, the United Nations Conference on Trade and Development (UNCTAD) issued a report also alleging widespread mis-invoicing in the mining industry in Africa, including in South Africa.
Currently the Chamber is working with parliament towards improving transparency through information sharing and improving data collection.
In 2017, the Chamber commissioned an independent review by Eunomix Research regarding the 2016 UNCTAD report on trade mis-invoicing.
“We are also aware of the Recommendations of the Davies Tax Committee (published in November 2017) to the Treasury, in response to the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting (BEPS) Report,” said Chabana.
“Some recommendations might culminate into legislation. We await to be consulted on possible legislative proposals,” he added.
“In line with our Membership Compact, our members have committed to implement and maintain ethical business practices and sound systems of corporate governance.”
Chabana also pointed out how the mining industry had contributed to the SA economy last year.
Despite all its ills the mining industry is the backbone of the SA economy, with:
-- 7 percent of GDP with another 11 percent in indirect contributions;
-- It paid R5.8 billion in royalties, and taxes of some R16 billion;
-- Exports of R307 billion representing 27 percent of the country’s R 1,1 trillion total;
-- Mining sector employment rose to 464,667 or 6,1 percent of private non-agricultural employment;
-- Those employees’ earnings amounted to R126 billion;
-- The industry is responsible for another 1.4 million jobs – people employed by suppliers to the industry;
-- Gross fixed investment in mining of R93 billion representing 18,2 percent of private and 10,8 percent of total fixed investment in the economy, asserted Chabana.
The chamber also supports wealth distribution with its mining charter designed to contribute to the broader country agenda of transformation and inclusion.
The elements include but are not limited to ownership; employment equity; community development; skills development; enterprise and supplier development.
Social and Labour Plans (SLPs) detail how a mining company will contribute towards development of mine host communities and labour-sending areas.
According to Chabana, mining companies are spending approximately R2bn per year on mine community development through SLPs and other resources, such as technical skills secondments to municipalities, skills training of communities and general CSI expenditure.