Victor Kgomoeswana
Victor Kgomoeswana

Mining charter ruling is not worth celebrating

By Victor Kgomoeswana Time of article published Apr 8, 2018

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Another baby faces the risk of being thrown out with the bathwater.

The baby is the Mining Charter of 2017 and the bathwater is Mosebenzi Zwane.

Zwane, we recall, was spat out by the big whale - the ANC - with former president Jacob Zuma.

He was one of those ministers considered too Guptarised for His Excellency Thuma Mina to retain. Msholozi had turned rogue on the movement, just like Jonah who bunked his Nineveh mission.

The whale, the ANC, kept him in its belly, courtesy of a ‘collective responsibility’ clause, regardless of the damage, but for how long? Therefore, after swimming around the ocean with a queasy feeling, the ANC had to spit him out. Among Zwane’s faults, he had hastily gazetted the Mining Charter 2017 on June 15, 2017, as the Minister of Mineral Resources.

This charter, effectively an amended version of the 2004 Charter, required that new mining rights be awarded only to companies that are at least 30% black-owned.

That sounds like common economic political sense. Post-1994 South Africa has left too many black people out of the economy.

BEE was meant to redress the imbalances of the past, but white business contrived to retain their businesses while racially marginalising 90% of the population.

This they did with a little help from the ineptitude of the government in enforcing economic transformation laws, black people with the right political currency, and greed.

Mining in South Africa was built on what could best be described as the next worst thing to black slave labour. The Mining Charter wanted to correct this injustice.

Big business, organised in the form of the Chamber of Mines, and the owners of capital objected vehemently. When the draft Mining Charter of 2004 was leaked, R57billion got eroded from the industry; and they reminded everyone of this since then to keep the government timid about true transformation.

In 2004 mining houses were given 10 years to take their black ownership to 26%. They fished around for black partners.

However, some of these black shareholders soon sold their shares - normal business practice - leaving the ownership of these companies lily-white once again.

In a strange contortion of logic, these companies found a way to retain the benefits of erstwhile black shareholding.

This was called the ‘continuing consequences’ provision.

Zwane’s charter wanted them to top up their ownership to 30% instead.

But he was Zwane and he apparently had not consulted sufficiently as required by BEE laws.

By upholding the ‘continuing consequences’ or ‘once-empowered-always empowered’ (until the new charter) provision, we are doing what one has not heard of anywhere else in the world.

Twelve months to restore one’s black ownership is already long enough, if we look at the benefits of one’s BEE status.

In South Africa, where justice in the main costs money, mining rights can still be granted to companies on the basis of black shareholding they used to have.

How do you marry someone who then divorces you - taking all the settlement with them - and yet you continue to enjoy the status of a married person?

This court ruling this week means that until we have a new charter, which Gwede Mantashe - Zwane’s successor - wants concluded by June, we are stuck with this anomaly, and the only losers here are the government of South Africa and black people.

If President Cyril Ramaphosa wants to leave a true legacy, may he be sent to fix our unequal, racially skewed economy once and for all! Court rulings such as this are not worth celebrating because they only benefit the very people who failed to transform their industry until the government intervened.

The economy of our country cannot afford any postponement of economic justice, no matter what the courts say.

The price we pay is socio-political instability. Anyone with political power and African pride should prioritise this matter such that we never need another contest in a court of law.

Already, crime is marauding us, thanks to our economic inequality.

* Kgomoeswana is author of Africa is Open for Business, a media commentator and public speaker on African business affairs, and a columnist for Destiny Man.

Twitter Handle: @VictorAfrica

The Sunday Independent

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