THE BLOG

Only The Elite Benefit From The Extractives Industry

The government has continued to favour profits over people as they seek greater tax and revenue streams from mining.

29/09/2017 03:59 SAST
Siphiwe Sibeko/ Reuters
Mineral Resources Minister Mosebenzi Zwane looks on during the reopening of the Highveld Steel heavy structural mill at Emalahleni in Mpumalanga province, South Africa June 6, 2017.

In a recent opinion piece, the Deputy Secretary-General [DSG] of the ANC, Jessie Duarte, asked a pertinent question with regards to the mining sector. Is South Africa benefiting enough from the extraction of its resources?

While we are delighted that such a senior leader of the majority Party would publicly question the efficacy of mining and its benefit to South Africa and its people, there remains a significant disconnect between the rhetoric that emerges from the governing party and the policies and legislation which entrenches and enables the deep and historical inequality of the past to continue into the future.

The DSG approvingly quotes the Minister of Mineral Resources, Mosebenzi Zwane as saying that "With an estimated $2.5 trillion [R30 trillion] to $3 trillion in non-energy mineral reserves still in situ, we are looking forward to another 150 years of mining in South Africa, [a]s we move mining forward, let's take everyone along and ensure that the mineral wealth beneath our soil indeed benefits all South Africans."

The DSG further asserts that "[n]atural resources belong to the people. Profits should benefit the people, not a company or a president or the individual who happened to own the ground where natural gas or iron ore was found."

The opinion is brought to conclusion by the DSG in true populist style by concluding that "We must move with greater vigour [sic] and determination to ensure that in the 150 years of mining that is left in our country, by the time all is depleted, no South African is left behind.

As the ANC begins to refine its policy recommendations at its 54th Elective Conference in December 2017, we must remain cognisant of our historic mission of building a genuine people centred developmental state, where the poor and marginalised of our society remain centrefold to our growth trajectory. Business must continue to be a vital partner to growth, but this cannot be at the expense of workers and the rural poor. Past practices need a radical shift to a more inclusive economic growth path."

There is a despotic lack of legislative and policy space for communities to be consulted when mining occurs on their land.

Juxtapose this flowery rhetoric against the lived reality of the majority affected or involved in the mining sector and the hollow nature of the rhetoric and the unchanged colonial logic of elite centred policies and legislation becomes all the more apparent.

As an example, take the despotic lack of legislative and policy space for communities to be consulted when mining occurs on their land. The Governing party has systematically developed legislation in the sector which seeks to exclude communities from deciding their own developmental paths while ensuring that benefits from any mining on their lands are controlled and used for the benefit of a few chiefs and their connected cronies.

Even in communities such as Xolobeni, who have vigorously resisted mining on their land, the governing party has not sought to claim the value of "people-centred" solutions but has used various tactics to undermine the democratic will of the people of Xolobeni and has continued to favour profits over people as they seek greater tax and revenue streams from mining.

The tension between a state which seeks to gain greater access to mining revenues without consideration for the wishes of those impacted by mining as the DSG points to in her article is central to the disconnect between the rhetoric of pursuing mining for the benefit of the people and the lived reality of those impacted and affected by mining.

As the DSG states, "The first problem then in South Africa is that natural resources are not mined by the state, therefore the majority of its revenue goes to shareholders of the companies licensed to mine and only taxes and some rents are due to the state".

This one-dimensional drive to enrich the state, which has become a vehicle for the enrichment of a disconnected elite is clearly exposed for all to see in the outcomes of the latest version of the Mining Charter. Its outcomes, while supposedly done in the interest of the "the poor and marginalised of our society", unashamedly seeks to create state vehicles through which billions of Rands could be plundered by the political elite with little to no mechanisms for oversight and transparency.

The revenues that would emerge from the new state vehicles proposed in the latest Charter will not be controlled by the poor and marginalised, neither will they have any say in its allocations and it is unclear that they will benefit in any way. If history and even contemporary history is to be used as a gauge, then the billions intended for the poor will end up in the bank accounts of the elite.

This formula of elite pacts was instrumental in deepening the inequality and poverty faced by many mining-affected communities.

This then is the first mistake made by the governing party, who appears to be wilfully ignoring the mountain of evidence which suggests that the monopoly control of the industry by a handful of mining executives cannot be overcome by the monopoly control of the industry by a handful of political elites.

Having started out at the turn of the century by forming a closed pact with the mining executives and organised labour, the state sought to run the industry through this exclusive club. This formula of elite pacts was instrumental in deepening the inequality and poverty faced by many mining-affected communities.

For two decades the Chamber of Mines was happy to be in the exclusive club and all three parties were in turn happy to exclude community voices and concerns both in legislation and in practice as long as they were benefiting from the unequal distribution of resources. It is only recently; with the top down imposition of the Mining Charter that seeks to strengthen the hand of the political elites at the expense of the members of the Chamber that they have seen fit to cry foul on their exclusion from the process which defined the Mining Charter.

It is only now that they realise that the community anguish of being excluded from decisions that impact their daily lives is deeply problematic and indeed, unconstitutional. So much so that they have sought common cause with communities on this issue. They, however, cannot bring themselves, having enjoyed over 150 years of privileged exclusivity, to recognise the rights of communities to be consulted. In this, the Chamber has more in common with the political elite than with the "poor and marginalised" -- than with the people of South Africa.

So while the SDG is publicly promoting further exclusion of stakeholders from the sector by promoting state ownership and control, and the mining executives of the Chamber are trying to find a way to claim their right to be consulted without acknowledging the right of communities to be consulted, the unequivocal answer lies not in entrenching colonial ideas of elite control and benefit, which more than obviously leads only to exclusion and inequality but in opening up the space for a plurality of views and interests and the sharing of distribution of resources in more equitable ways.

This is the only way we can ensure that "no South African is left behind" and that we achieve our "historic mission of building a genuine people centred developmental state, where the poor and marginalised of our society remains centrefold to our growth trajectory".