Socio-Economic Rights & Development: Social and Labour Plans

1. S24, Socio-economic Rights and Development:Social and Labour Plans Public Interest Law Gathering 24 July 2014

2. Introduction (s24 and Socio-economic rights) • Too often overlooked is the fact that section 24, rather than being a right of the environment itself is instead a human right to an environment ‘not harmful to health and well-being.’ • The environmental right, often referred to as a third generation right, is often misunderstood as a luxury, protecting fauna and flora to the detriment of poverty alleviation. • This is a fundamental myth as environmental justice is a precursor to the eradication of poverty. • It is at the foundation of the right to water; the right to food; the right to dignity. • The impact of environmental degradation is most acutely felt by people living in poverty, in particular by mine-affected communities. Any conception of environmental accountability divorced from human rights is therefore grossly inadequate.

3. Introduction (Social and Labour Plans) • The story of mining in South Africa is a familiar one: a mining company enters a community and extracts the minerals, destroying the prior characteristics of the land and radically altering social dynamics. • The regulatory solution introduced to balance these negative impacts is the SLP which mining companies must prepare as part of the process of applying for a mining right. • The SLP is the main mechanism through which mining corporations are to channel the proceeds of mining into benefits for the community • The SLP contains proposed programmes directed at the mine-affected communities and labour sending areas, which should offset the negative impacts of mining. • SLPs go to the core of mines’ social license to operate.

4. Introduction (Social and Labour Plans) • 10 years since the inception of a regulatory framework that promised to empower, uplift and protect workers and mine-affected communities, the distribution of wealth in the sector remains unequal. • The benefits from mineral wealth are still primarily enjoyed by investors and mining houses and not the workers and communities who remain subject to an unbreakable cycle of poverty and environmental degradation. • The promise of jobs and development consistently promoted by the mining sector, stands in stark contrast to the lived realities of mine workers and mine-affected communities, which are characterised by abject poverty, unemployment, failing infrastructure and environmental destruction.

5. Marikana • The Marikana tragedy was a wake-up call that reverberated across the entire sector and economy to business and government • The Marikana tragedy signaled that the frustrations of mine workers could not be suppressed indefinitely. • The root causes of these frustrations can largely to be said to be the lived reality of the workforce and their families. • The mine affected communities were living in poverty stricken areas without adequate housing, water, sanitation, education and opportunities to further their economic well-being.

6. Defects of design and implementation • There is mounting evidence of a stark disjuncture between the lofty rhetoric in SLPs and the lived reality of mine-affected communities who do not see the promised benefits of mining development. • To put it bluntly SLPs do not appear to cater for actual community needs, a sentiment that is echoed by mining communities throughout South Africa. • SLPs can be characterised as a regulatory system which seeks to achieve its aim of benefiting communities and workers through the partial transfer of developmental responsibilities from the state to mining companies. • In evaluating any regulatory system one should distinguish between defects of design and defects of implementation.

7. No Clear-sighted Strategy • At the most macro level are critiques of the very manner in which the system is conceived and the core assumptions underpinning this. • In this regard it appears that the SLP system is not grounded in a clear-sighted strategy to achieve a clearly defined state of best practice over and above formal compliance, capable of yielding sustained benefits to the targeted communities. The system does not promote long term planning and the incorporation of sustainability at the project design phase. • This prevents SLPs from serving as viable, long term plans and leads to incorrect determination of SLP parameters and socio-economic assessments. Foreseeable effects of large scale mining, such as the influx of migrant workers and the attendant strain on local government capacity, resources and prior development plans may be addressed inadequately in many SLPs. • SLP’s seem to be an undefined and coarse tool that is meant to deal with an intensely complicated and nuanced area, involving all manners of impact on a broad demographic which all have different needs.

8. Vagueness of Regulations • Problems of the SLP system are exacerbated by the vagueness of the current regulations. • The lack of clarity has led to loopholes that are exploited by both government and mines. • In particular, the lack of clearly demarcated responsibilities allows mines and government to continually shift responsibilities. • In this game of buck passing the loser is always the community. • Public participation is another crucial area in which the present regulations are deficient. For example no public participation is required for amendments to social and labour plans, an absence which allows for the dramatic dilution of SLPs without having to justify this to communities thereby undermining the SLP system.

9. Developmental Responsibility • At an even more fundamental level, the very decision to (partially) transfer the state’s developmental responsibility to the private sector requires critical assessment. • The constant shifting of developmental responsibility to the private sector is blurring the line between what the obligations are between state parties and private obligations. • The privatisation of basic services to mining corporations confuses the obligations of government. As the Constitutionally mandated body responsible for local economic development, municipalities should be at the forefront of all local economic development and planning decisions. • Municipalities must be involved in all aspects of local development and ensure its alignment to municipal integrated development plans. There seems to be an invariable uncertainly between companies and local municipalities concerning the responsibility to provide basic services in mine affected communities. • The main victims of this impasse between business and government are communities who, as a result, are unable to hold anyone to account and are left without guaranteed long-term investment.

10. Co-ordination • Significant co-ordination is required due to the inherent dynamism and intersectionality of SLPs. • Each SLP should not be understood in isolation as the need to avoid both gaps in benefits and unnecessary duplication makes regional harmonisation an imperative. • SLP’s should be informed by local, regional and national developmental plans to achieve a holistic approach to economic development. • SLP’s must both reflect the expressed needs of the community and be economically sustainable, aligning with regional planning instruments especially the Integrated Development Plan (IDPs). • The lack of effective partnerships and the absence of systems and processes to enable the co-ordination required for effective implementation are greatly affecting the efficacy of the plans.

11. Accountability • A central issue of implementation is the question of accountability. Where accountability is absent, noble promises may go un-implemented. • Accountability requires that the state imposes sanctions for failure to deliver on obligations forming part of the license to operate. • While in theory there are repercussions for failure to deliver on SLP targets, in practice these seldom materialise. The MPRDA does empower the Minister to revoke or withdraw licenses for non-compliance with SLPs but we are aware of only a single instance in which a mining right was, temporarily, withdrawn as a result of the mine’s non-compliance with its SLP. • On the face of it, it would therefore appear that mining companies are not being held accountable for their SLP commitments. For accountability it is critical that there are avenues and procedures available to take the mine to task for alleged non-implementation of its binding undertakings under its SLPs. • These avenues should be accessible to all role players, but especially the mine-affected communities and employees who are the intended beneficiaries. Accountability demands that non-compliance has consequences; to ensure the system works for those it is designed to benefit, there need to be substantial, foreseeable and likely consequences for non-compliance.

12. Capacity Capacity • In part this failure of accountability stems from a lack of departmental capacity. It is evident that the capacity of the Department of Mineral Resources (DMR) is very limited in relation to SLP processing, compliance monitoring and enforcement. • More specifically, the department does not appear to have the necessary mix of skills and a sufficient numbers of appropriately skilled personnel. • SLP‘s are a complex tool that demand an interdisciplinary approach drawing on, inter alia, economics, sociology, anthropology and spatial planning. • The monitoring effort thus requires both the involvement of experts and decision-makers skilled with integrating a number of forms of knowledge. • SLPs also need to be flexible due to the state of constant flux inherent to the extractive economy without which probing, rigorous investigation and compliance monitoring cannot take place. This need for constant re-evaluation makes the oversight of SLPs expertise intensive.

13. Profit Sharing • Many argue that communities only derive meaningful benefit to the extent that they enjoy a share in the profits in addition to development of local infrastructure. • Currently there is minimal community ownership and participation in mining ventures, which is partly a result of limited legislative guidance. • The profits of this industry are grossly skewed in favour of some players, with the labour force and mine-affected communities typically excluded or given a limited share, despite their obvious importance to the system.

14. Negotiations • The initial negotiations, deliberations and scoping that precede the design of an SLP set the tone for the entire consultative process. • These initial steps are critical as this is the stage at which the first contacts between the mine and the community are made. • The success of this relationship is determined by how the mine relates to the community, who it consults with, the transparency and accessibility of communication / information and the willingness to incorporate suggestions. • Equally important is the degree of unity, organisation and legal literacy of the community, all of which are likely to influence their bargaining position in relation to the mine. • These negotiations are dominated by the power differentials between wealthy developers and poor disenfranchised members of mine affected communities, with community voices being suppressed due to the economic power and influence wielded by mining companies..

15. Public Participation • The success of the entire SLP hinges on public participation, as no meaningful response to community needs can be formulated without an accurate understanding of who the community is, how it is structured and its aspiration as a collective and those of individual members. • The obligation of ensuring that the consultation process is effective falls directly on the mining company but must be overseen by government as the regulator. The process of stakeholder identification and community understanding is crucial. • It is also a notoriously difficult exercise. Due to possible fragmentation and dispersal, the representivity of community structures should not be taken as a given. • Another issue is the effectiveness of communication with communities. The levels of literacy and legal literacy of communities will play a major role in deciding what constitutes meaningful communication with the community.

16. Public Participation • Equally the proficiency of the facilitator in the language of the community will affect how much of the messages communicated by community members are received by the company. • The role of traditional leaders can also be problematic, as chiefs are often seen as mediators between companies and communities. In some instances chiefs have, without consulting their communities, reached agreements with mining companies on their behalf. • These decisions often have far-reaching effects on the rights and interests of community members. In these cases traditional leaders have effectively served as a filter between the voices of the community and the mine. • In addition communication between the mining company and community is typically via consultants who may serve to the further dilution of the messages conveyed by community members by the time they reach the mine.

17. Access to Information • A further impediment to meaningful participation is access to information, a unique barrier in that its existence almost entirely within the control of the mine. • There is a culture of secrecy pervading both the mining industry and the Department of Mineral Resources, making the obtaining of SLPs and information pertaining to SLPs an extremely difficult exercise, even for relatively well-resourced NGOs and especially for mine-affected communities.

18. Monitoring • The monitoring of SLP’s is crucial to the performance and improvement of the system, this feeds directly into implementation as not knowing where the weaknesses are precludes improvement. • Government institutions (including the national and provincial DMR, the Provincial Department of human settlements and municipalities), are constitutionally and statutorily mandated to continually oversee the performance of SLPs in relation to the areas of the regulation of minerals, service delivery and local economic development. • This is an extremely nuanced area as trying to decode SLP reporting is challenging. It is a task in itself to try and understand what meaningful SLP reporting consists of. • There are no established performance measures and the frequent absence of clear outcome and impact indicators directly impacts on the ability to measure of the return on social investments. • The annual reports that are usually the only form of reporting required from mines do not necessarily offer a thorough audit of progress made and the impact of initiatives as the level of detail required is not spelt out in the regulations or guidelines.

19. Problems- In Sum • The MPRDA amendments if passed would introduce a compulsory review every five years. • SLPs are both a relatively new and highly polycentric, multidisciplinary and intersectional enterprise. • Consequently, pooling and integrating the particular mix of skills required presents some challenges. • In the first instance communities should serve as the eyes and ears of government, a source of feedback as to whether the results promised have been realised on the ground. • Unfortunately there is plenty of evidence suggesting that lines of communication between the community and government are often broken.

20. Proposed intervention • Consensus: The SLP system is not working. However, SLPs remain largely under-scrutinised. To the extent that they are engaged with, it is on an ad hoc basis in the context of a particular mining project. There has not yet been a systematic analysis of the SLP system. Phase 1: Access to information • Identify 30 mines whose SLPs we will examine (across minerals) • Compile and submit applications to access SLPs in terms of the Promotion of Access to Information Act (PAIA) Phase 2: Desktop research • Conduct Literature Review on SLPs • Develop an analysis instrument with which to analyse SLPs • Analyse the 30 SLPs for common trends and challenges

21. Proposed intervention Phase 3: Field research • Wits University Ethics Clearance Process • Conduct field research in 3-5 communities in order to compare SLP promises on paper with the situation on the ground Phase 4: Knowledge-sharing • Write up case studies • Develop recommendations for reform • Disseminate and engage all stakeholders regarding recommendations and learning • Ongoing advocacy around the implementation of recommendations

22. Objectives of Projects • The objectives of the research would include: • To identify common trends in the design of SLPs; • To examine the extent to which there is a disjuncture between a SLP and the lived reality for the mine-affected community concerned; • To assess whether the SLP system is achieving its desired objectives and interrogate the decision inherent in the SLP system to partially transfer the state’sdevelopmental responsibilityto the private sector; • To develop a set of recommendations for reform including legislative reforms to the extent that the research uncovers flaws in design; • To compile evidence to support advocacy efforts calling for stringent enforcement action in instances of non-compliance with SLP obligations; and • To work with mine-affected communities, the Department of Mineral Resources, municipalities and mining companies to address the problem identified.

23. Conclusion • Proposals for a new system or reforms to the present system to address the realities of mine-affected communities • Analyse the causes of these problems and their impacts in the mine affected communities • Provide the role players with recommendations on how to proceed with providing basic services for mineworkers, their families and the broader mine-affected community going forward. • Make the requirements for SLPs more robust • Make proposals aimed at strengthening enforcement of SLPs so ensure accountability • Ensure that the issues underpinning Marikana are not abandoned and that the plight of mine-affected communities is not forgotten.

24. Thank you Louis Snyman Attorney: Environment Programme Centre for Applied Legal Studies University of the Witwatersrand