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1
PRESENTATION TO THE SELECT COMMITTEE ON: FRAMEWORK AGREEMENT FOR A SUSTAINABLE
MINING INDUSTRY
22 September 2015
1. Framework Agreement for a Sustainable Mining Industry
In July 2013 the Framework Agreement for a Sustainable Mining Industry was
developed
The Stakeholders are: Government Labour: (NUM, AMCU, UASA and Solidarity, supported by their Federations:
COSATU, NACTU and FEDUSA) and Business: Chamber of Mines (CoM) and South African Mining Development
Association (SAMDA)
An action plan was developed and consists of the following 5 objectives : Ensuring the rule of law, peace and stability Strengthening labour relations Improving living and working conditions of mineworkers Providing short to medium term measures to support growth and stability Identifying long-term measures to support growth and stability
4
2.1. OBJECTIVE 1: ENSURING THE RULE OF LAW, PEACE AND STABILITY
ACTIONSLaw enforcement
Enforce municipal by-laws
Establishment of Mine Crime Combating Forums (MCCFs)
Improve case management and capacity to speed up prosecutions
Denounce violence, taking active measures to eliminate violence and intimidation
6
Progress: Ensuring the Rule of Law, Peace and Stability
Enforcement of the Law
Mine Crime Combating Forum (MCCFs) have been established in North West,
Limpopo, Free State, Mpumalanga, Northern Cape and Gauteng
Monitoring of strikes and demonstrations in the mining sector with direct
involvement of PROVJOCS and NATJOC continues
SAPS always enforce s205 of the Gathering Act 1993 to ensure the rule of law
during strike action
Stakeholders continued to engage with employees to desist from violence and
intimidation
SAPS, Mine Management, Mine Security and Unions are collaborating in
implementing this framework agreement
Awareness campaigns as well as engagements with traditional leaders and
mines are taking place 7
Progress: Ensuring the Rule of Law, Peace and Stability
The revitalisation of distressed mining communities programme is
responding to the integrated development planning and
implementation in prioritised mining communities and labour
sending areas
Illegal Mining Stakeholder Forums have been established. Consists
of mining company's, unions, and Government (SAPS - HAWKS,
SANDF, DMR, Department of Home Affairs, Municipalities, etc.); Forums have been established as follows: 1 in Mpumalanga, 2 in
Gauteng, 1 in the Free State and 1 has been established in the Northern Cape to be fully operational by end of November 2015
DMR has initiated a programme to close and rehabilitate ownerless mines to address the issue of illegal mining.
8
Progress : Ensuring the Rule of Law, Peace and Stability: Case management since 2012 to date
4059 incidents were reported that led to the opening
of case dockets, 761 people were arrested
Most of the cases are general crimes and include the
illegal possession of gold and copper theft
9
Key Challenges: Ensuring the Rule of Law, Peace and Stability
Although there has been significant improvement in the working environment to promote peace and stability, there are a number of community challenges and they are being addressed as and when they occur through collaborative efforts Illegal mining and theft of copper cables have been identified in certain areas Inconsistent attendance at MCCFs meetings
10
Interventions: Ensuring the Rule of Law, Peace and Stability
Continue to strengthen monitoring capacity of any strike
and protest actions in affected mining communities
Continue to engage with communities through various
structures
Stakeholders will ensure that nominated officials to the
MCCFs participate and provide reports to their
respective principals on a quarterly basis
Continue support of initiatives to address illegal mining11
2.2. OBJECTIVE 2: STRENGTHENING LABOUR RELATIONS
Actions
Develop a protocol for verification of union membership
Fast tracking resolutions of disputes over membership status,
verification of membership figures, and recognition agreements
Re-evaluating the principles of majoriatarianism
Developing the capacity of union leaders and workers on labour
relations matters
Mobilising technical expertise to identify and address basic factors
underlying workplace conflict and improving negotiations structures
at all levels12
Key Progress: Strengthening Labour Relations
Develop a protocol for verification of union membership Completed by the CCMA and is being used during this year
Fast tracking resolutions of disputes over membership status, verification of
membership figures, and recognition agreements CCMA gives priority to referrals from the mining industry and addresses
the matters as and when they referred Re-evaluating the principles of majoritarianism
The matter was referred to NEDLAC NEDLAC agreed to the amendment of the Labour Relations Act Labour Relations Act amendments came into operation on the 1st of
January 2015 The amendments allows minority unions to have the opportunity to state
their case directly to the CCMA. The CCMA can now make a ruling whether or not the minority union can
be allowed to have the necessary recognition rights.13
Key Progress: Strengthening Labour Relations
Developing the capacity of union leaders and workers on labour relations matters
Capacity building courses for employees and managers are continuously
provided by DOL (CCMA) and experts contracted in to provide the service, for
example Best Practice workshop for supervisors on Managing Discipline and
Incapacity for BECSA (BHP Billiton/South 32 Energy & Coal SA in
Mpumalanga) took place
Training and outreach programs are continuously provided to union
leadership and shop stewards eg. freedom of association and tolerance
Mobilising technical expertise to identify and address basic factors underlying
workplace conflict and improving negotiations structures at all levels
Companies and the CCMA are bringing in experts to train different unions on
how to deal with conflict and how to bring cases on behalf of union members
14
Key Progress: Strengthening Labour Relations
Labour Relations Indaba was held and agreed on the following resolutions:
The work of both the Minimum Wage Technical Task Team and the Labour Relations Technical Task team are being monitored by the Committee of Principals
This Committee, chaired by the Deputy President, brings together senior leadership of all the social partners which forms part of our social dialogue process under the auspices of the National Economic Development and Labour Advisory Council (NEDLAC)
15
Challenges: Strengthening Labour Relations
Stakeholders need to strengthen the full functionality of Future
Forums to mitigate the negative impact of downscaling In terms of management of retrenchments mining companies are
required to submit notices to the DMR and the DOL (CCMA), in
respect of the MPRDA section 52 and section 189 of the LRA;
There's a procedural challenge in that some mining companies
experience challenges as to which comes first
Stakeholders have now agreed to develop a procedural
framework to be completed by the end of September 2015. A
workshop will be held by the second week of September 2015
16
Interventions: Strengthening Labour Relations
To continue emphasise efforts to promote a culture/environment of multi-unionism, to be explored within the context of the law
The 2014 Labour Indaba resolutions to be implemented and supported by stakeholders
Continue to implement capacity building programmes in labour relation matters for role-players in the mining industry
17
2.3. OBJECTIVE 3: IMPROVING LIVING AND WORKING CONDITIONS OF MINEWORKERS
Actions
Accelerate efforts to upgrade human settlement in mining
towns (improve living working conditions)
Initiate a process to transform the migrant labour system
Assist workers with financial literacy and financial planning
18
Province & Municipality
Total Number of Informal Settlements
within Municipality
NUSP Priority informal
settlements
Categorisation of the settlements after rapid assessments (March 2015)
A B1 B2 C tbcNorth West Rustenburg 24 10 1 8 1 Madibeng 30 28 10 13 4 3 Moses Kotane 4 4 2 1 1 Matlosana 4 4 1 2 Free State Matjhabeng 20 20 5 1 14 Limpopo Greater Tubatse 7 7 3 1 3 Elias Motsoaledi 5 5 1 4 4 Lephalale 2 2 1 1 Fetakgomo 1 1 1 Mpumalanga Emalahleni 12 12 3 9 8Steve Tshwete 8 8 8Gauteng Westonaria 7 6 2 1 3 Randfontein 11 11 1 7 3 Merafong 10 10 10 Mogale City 87 87 11 3 4 68 1Totals 232 215 33 55 22 101 17
Based on the rapid assessment informal settlements are categorised as follows:A:Full Upgrading = Rapid Formalisation, full services.B 1: Interim basic services = Provision of interim services leading to eventual formalisation B 2: Emergency basic services = Provision of emergency basic services BUT leading to eventual relocation C: Rapid relocation to a site which is already available or imminently available
Progress: Accelerate efforts to upgrade human settlement in mining townsInformal Settlement Upgrading in the 15 prioritised mining towns
19
There is a strong correlation between the no. of households living in informal settlements & the no. of employees on LOA in
the SPP municipalities
Alignment of NDHS and DMR information on Informal Settlements and Housing options provided by Mining Companies as at 31 March 2015
SPP Provinces
Total Number of Informal Settlements within SPP
Municipalities in provinces
Estimated no. of households in the informal settlements
No. of employees on
LOA (DMR)
No. of employe
es in hostels (DMR)
No. of employees staying in mine
provided housing schemes (DMR)
no. of employees on
home ownership schemes (DMR)
North West 61 80041 70221 46087 6629 15908Free State 20 6331 12428 5720 744 726Limpopo 15 11789 10326 194 947 1947Mpumalanga 16 3006 4717 0 2051 6952Gauteng 111 48 316 18810 16019 15958 6324Totals 223 149 483 116 502 68 020 26 329 31 857Note: 40% of total workforce on LoA in SPP areas. Total workforce of 291 944. (DMR information)
20
Progress: Accelerate efforts to upgrade human settlement in mining
Progress: Accelerate efforts to upgrade human settlement in mining towns
In the 2014/15 financial year more than R419m was spent of the ring-fenced budget for informal settlement upgrading in prioritised mining towns in Free State, Mpumalanga and North West provinces
Overall over 5000 units have been delivered in the 15 prioritised mining towns
For 2015/16 financial year the Department of Human Settlements has aimed to improve this delivery figure and has ring-fenced R1 billion that is anticipated to deliver approximately 19 000 housing opportunities in mining towns
21
Progress: Accelerate efforts to upgrade human settlement in mining towns
Approximately 592 hectares of land has been acquired by
municipalities supported by the DHS housing agency for the
purposes of human settlement development in the prioritized
mining towns
The majority of this land is in Limpopo (Fetakgomo) and North
West (Rustenburg). A further 5,646 hectares has been identified
for acquisition
In Marikana, two human settlement projects are being completed
that will deliver over 500 units, built on land donated by Lonmin
The houses will cater for the community and mineworkers 22
Progress: Accelerate efforts to upgrade human settlement in mining towns. Marikana Ext. 2 as at the 4th of Sep 2015
23
Progress: Accelerate efforts to upgrade human settlement in mining towns Marikana Ext. 2 as at the 4th of Sep 2015
Progress: Accelerate efforts to upgrade human settlement in mining towns : Water and Sanitation
The Department of Water and Sanitation has through engagements with Municipalities and the Department of Cooperative Governance (DCoG) prepared high level water supply needs assessments for the 15 prioritised mining towns in the five provinces
In the North West Province their partnerships between government and mining companies through the SLP to develop water and sanitation infrastructure. The following mines are actively involved:
Lonmin, Samancor, IFM and Hernic Ferrochrome
25
Progress: Accelerate efforts to upgrade human settlement in mining towns : Economic Development
The DTI, Economic Development Department (EDD) and the Department of Small Business Development (DSBD) are facilitating both large and small scale industrial projects in the 15 mining towns and in the labour sending areas
These include:
North West and Limpopo: Interventions in Bojanala and the Greater Tubatse local municipalities for the establishment of a Platinum Group Metals (PGM) SEZ
Eastern Cape: The establishment of agro-processing SEZ in the labour sending area of OR Tambo District Municipality
Eastern Cape: The Vulindlela Industrial Park Revitalisation initiative in King Sabata Dalindyebo (KSD) Municipality
26
Progress: Health and Safety The Department of Health (DoH) together with the Departments of
Labour and Mineral Resources’ have been collaborating in establishing ONE STOP SERVICE CENTRES to assist ex mine workers with compensations, UIF and pension fund payments
One stop service centers have been established in Mthatha in the Eastern Cape and Carletonville in Gauteng
The Mthatha centre is fully funded by government and approximately 3 000 ex-mine workers have already made use of the centre’s services and over 1 500 have made use of the Carletonville centre’s services
More one stop service centres will be established in other provinces, beginning in the Northern Cape – Kuruman (2015/16) and Limpopo – Burgersfort (2015/16)
Health and Safety issues remain a priority for stakeholders
While there are still some challenges, there are signs of improvement in respect of safety in the mining industry
27
Progress: Initiate a process to transform the migrant labour system
A Research team has finalised the Migrant Labour Study report
The Technical Task Team considered the report and agreed that a second phase should be undertaken to augment the report in order to include areas that were not addressed adequately, such as inclusion of impact of migration in neighbouring towns
29
Progress: Assist workers with financial literacy and financial planning
: Financial literacy STEPS TAKEN BY THE COMPANIES
A number of companies investigated the legality of Garnishing orders and actions have been taken by companies to address this matter
Example at Harmony, in December 2013 the number of emolument attachment orders against employees was 5113. This has been reduced to 4 981. At AngloGold Ashanti, there were 3110 orders and have since been reduced to 2514 by March 2015
A High Court case was instituted by one of the Chamber’s Platinum members against a large administrator in the Rustenburg area
30
Progress: Assist workers with financial literacy and financial planning
: Financial literacy EMPLOYEE FINANCIAL EDUCATION AND DEBT COUNSELLING
Assistance available to employees is published in a variety of ways; providing call centre numbers, help desks and referral agents to assist employees; providing financial education; providing on site tax service
Example of training: Harmony - The company had provided 7500 workers with financial training. The training was also made available to employees who have accepted voluntary separation packages.
REGULATORY DEVELOPMENTS
The National Treasury and National Credit Regulator have recently undertaken regulatory steps that aimed at addressing employee indebtedness.
The authorities were looking at: making it more difficult to obtain loans; stricter treatment of credit providers, particularly in respect of unsecured lending; debt collectors; and a code of practice for lawyers
31
Key Challenges: Improve Living and Working Conditions of Mineworkers
Housing for mineworkers remains a challenge although positive progress is being made to address housing and living conditions in the 15 prioritized mining towns – focus will have to be put on infrastructural bulk services
Access to mineworker information held by TEBA which is needed to be used to identify mineworkers eligible for compensation is still a challenge as TEBA is selling the information
Discussions with TEBA are ongoing on this matter
32
Interventions: Improve living and working conditions of mineworkers Expansion of economic opportunities in the Labour Sending Areas
(LSA’s)
Fast tracking of economic development and economic diversification projects in mining towns and labour sending areas e.g. SEZ’s
Mining companies to collaborate with government in the delivery of houses and water and sanitation infrastructure
The Government mineworker housing strategy is being developed to be linked with the housing subsidies and grants offered to mineworkers by the mining companies
Implement Mine Health and Safety Summit commitments
Development of a database of current and ex-mineworkers which will be accessible to stakeholders 33
2.4. OBJECTIVE 4: PROVIDING SHORT TO MEDIUM TERM MEASURES TO SUPPORT GROWTH AND STABILITY
Actions Actively engage both local and foreign investors to ensure that South Africa remains an attractive investment destination
Ensure certainty in legislative and regulatory programmes
Assessment of economic and social conditions in surrounding and labour sending areas
Enforce and implement all elements and commitments of the Mining Charter
Ensure integration and implementation of Social and Labour Plans (SLP) and Integrated Development Plans (IDPs) in labour sending areas and mining areas
Develop and implement a communication strategy
34
Progress: Short to medium term measures to support growth and stability
Actively engage both local and foreign investors to ensure that South
Africa remains an attractive investment destination
Stakeholders continue to engage with international and local investment community e.g. investor road shows and participation in international and local conferences
Plans for joined participation by stakeholders at major international mining forums
Ensure certainty in legislative and regulatory programmes
MPRDA Amendment Bill is still being reviewed by parliament, once finalised it will bring policy certainty
The Mining Phakisa discussion will also assist in resolving a number of mineral policy issues especially with regards to Mineral Beneficiation
35
Progress : Short to medium term measures to support growth and stability Assessment of economic and social conditions in surrounding and labour sending areas
Socio economic diagnostic study was completed , and the study is assisting in the planning and implementation of developmental interventions
Enforce and implement all elements and commitments of the Mining Charter
Mining Charter Assessment for 2014 targets was completed and enforcement is taking place
To date a total of 463 orders have been issued in respect of the Mining Charter non-compliance
To date a total of 204 orders have been issued in respect of EMPs non-compliance
Ensure integration and implementation of Social and Labour Plans (SLP) and Integrated Development Plans (IDPs) in labour sending areas and mining areas
Ongoing MPRDA amendments also addresses strengthening of the integration
Develop and implement a communication strategy
Complete and to be implemented
36
Progress: Short to medium term measures to support growth and stability
Transfer Pricing :
SARS and CoM made presentations on the Transfer Pricing to the Technical Task Team. The findings from SARS are as follows: In the last five years, 28 audits were conducted and 7 were in the mining/extractive
industry The total value of the assessed audits was R20 billion. R9 billion of the assessment
was from the (mining/extractive industry) A total R5.8 billion was identified as Transfer mis-pricing which is regarded as an
abuse of Transfer pricing. Out of the R5.8 billion, R3.4 billion was from (mining/extractive industry)
The analysis indicates that there is transfer mis-pricing within the mining and extractive industries
On the Mining Charter, there is currently a dispute on the notion of once empowered always empowered as well as the legality and constitutionality of the Mining Charter
Discussions with the Chamber of Mines have commenced to find resolutions on the matter
Key Challenges: Short to medium term measures to support growth and stability
Transfer pricing is a issues which the country needs to be continuously monitor
On the court case relating to the Mining Charter, the ownership issue remains a challenge- as stated earlier discussions have commenced with the Chamber to resolve the matter
Potential jobs losses is an emerging challenge which needs to be addressed.
Interventions: Short to medium term measures to support growth and stability
On transfer pricing, key recommendations from SARS were to: Continue working with the World Bank to create an audit guide
book which will assist Auditors to identify and audit transfer pricing in the mining sector
Built audit capacity to ensure that employees dealing with large business tax players are equipped to engage with the complexities of transfer pricing
On investment, stakeholders to continue promoting South Africa mining industry in respect of both international and local investors Joined participation by stakeholders at major international forums
such as China Mining and Canadian Mining Investment Forum (PDAC)
39
40
Job losses: Intervention mechanism
In response to challenges relating to job losses, the Minister of Mineral Resources
convened a mining leadership retreat of organised business; organised labour and
Government (DMR and DoL) to address the potential job losses in the mining
industry. ALL stakeholders (Government, National Union of Mineworkers, AMCU,
Chamber of Mines, SAMDA, Solidarity and UASA) participated.
Stakeholders identified interventions that should be implemented to save jobs or
minimise job losses, and to ameliorate impact on affected employees
The stakeholder declaration on the identified interventions was supported by all
(including AMCU) and signed by all, except AMCU on 31st August 2015
A milestone plan is in place to implement the declaration - already being
implemented
41
Interventions Agreed upon by all Stakeholders are: 1. Delaying the implementation of retrenchments 2. Enhancing productivity and managing cost pressures 3. Accelerated concurrent rehabilitation activities to create alternative jobs
for mineworkers 4. Facilitating sale of distressed and other mining assets5. Other alternatives to avoid job losses 6. Support for mineworkers in the event that job losses cannot be avoided 7. Utilisation of the Multi National Companies’ procurement levy to also
support employment opportunities for retrenched mineworkers 8. Streamlining the processes for downscaling, updating the database and
exploring fiscal instruments 9. Investment promotion and market development10. Communication and implementation plan
Job losses: Intervention mechanismJob losses: Intervention mechanism
2.5. OBJECTIVE 5: IDENTIFYING LONG TERM MEASURE TO SUPPORT GROWTH AND STABILITY
Actions Reviewing of the long term Mining Strategy and supporting initiatives for restructuring, re-skilling to achieve competitiveness, sustainable growth and transformation is planned Continue to promote development of infrastructure to unlock growth in mining industry and related sectors
42
Progress: on implementing long term measures to support growth and stability
Mining Phakisa has been formally announced by His Excellency President J.G Zuma. The outcomes of Mining Phakisa will be considered in the development of a long term strategy for the mining industry Preparations for Mining Phakisa have commenced, and the Mining Phakisa will be held in October 2015
43
Challenges and Recommendations: long term measures to support growth and stability
Challenges:
Need to enhance infrastructure to unlock the mineral development potential of the country
Interventions:
All stakeholders to participate and support the upcoming Mining Phakisa
44