By Malusi Mkhize

On 23 June 2014, the longest mining sector strike in South African history ended when the Association of Mineworkers and Construction Union (AMCU) accepted a revised wage offer from platinum producers. The economic and social costs of the strike were crippling. It is reported that the platinum producers lost over R 24 billion in revenue, while employees lost wages of over R 10,6 billion. These figures do not include the loss of investor confidence and the impact of the strike on local businesses or the families of the striking workers.

So what went so terribly wrong and how do we, as South Africans, prevent this from happening again? In considering this question it is important to have regard to the objectives set out in chapter 2 of the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA) which, inter alia, include to:

‘(b)     give effect to the principle of the State’s custodianship of the nation’s mineral and petroleum resources;

…

(e)      promote economic growth and mineral and petroleum resources development in the Republic, particularly development of downstream industries through provision of feedstock, and development of mining and petroleum inputs industries;

(f)      promote employment and advance the social and economic welfare of all South Africans’.

State’s custodianship

The MPRDA extinguished private ownership of mineral rights and proclaimed that mineral and petroleum resources are the common heritage of all the people of South Africa. The state is the custodian of the resources for the benefit of all South Africans. The state, through the Minister of Mineral Resources (the Minister), is tasked with ensuring that the objectives of the MPRDA are met. South Africa is endowed with the largest in situ mineral deposits in the world and, as custodian, the Minister has a duty to ensure the sustainable development of South Africa’s mineral and petroleum resources within a framework of national environmental policy, norms and standard while promoting economic and social development. No other government body or institution is entrusted with this duty.

It became evident towards the latter stages of the strike, which lasted over five months, that although the state is responsible for administering and managing mining and prospecting rights, its attempts to resolve the strike were proving futile. This was not due to a lack of effort, which saw the President, the newly appointed Minister of Mineral Resources and even a Labour Court judge attempting to mediate the negotiations and bring an end to the strike. Perhaps of more concern, was that there was no clear strategy or mechanism of how to resolve the deadlock. Neither the MPRDA nor the South African labour laws provide for a maximum period that a strike can continue without intervention of some kind.

The MPRDA does not give the Minister or any other government official any powers to take action or intervene in situations of prolonged strike action. In fact, South African law does not recognise the concept of ‘prolonged strike action’, yet we are aware that it is possible in an economic environment where trade unions have a substantial presence, and where mining companies are seen by some as having failed to manage worker expectations through the trade unions.

The Commission for Conciliation, Mediation and Arbitration (CCMA) was also unable to assist in resolving the prolonged strike action. The CCMA’s director differentiated between South Africa’s labour laws and those of other jurisdictions in that bodies similar to the CCMA in other jurisdictions can force parties to stop strike action. In terms of South African labour laws this mechanism simply does not exist.

Expanding opportunities, economic growth and promotion of employment

In exercising its role as custodian, the state is required to expand opportunities substantially and meaningfully so that all South Africans may benefit from the exploitation of resources. These opportunities simply cannot be nurtured in the midst of crippling strike action. The strikes defeat various objects of the MPRDA.

The prolonged strike has had severe consequences for South Africa, a member of the BRICS (Brazil, Russia, India, China and South Africa) countries of emerging national economies. It is reported that the South African economy contracted by 0,6% in the first quarter of 2014 and the prolonged strike added extra pressure. The mineral resources of South Africa have long been earmarked as a means of developing not only the mining sector, but also other sectors of the economy. This is in line with government’s objective to boost industrialisation and local beneficiation. The Minister has suggested that any legislation passed should work towards that goal.

At the end of March 2014, 25,2% of the South African population was unemployed. Ironically, members of AMCU were striking for a better wage while others did not have employment at all. AMCU was unsuccessful in attempting to secure a moratorium on mining companies restructuring following the strike (with one of the effects of that being retrenchments). It is inevitable that retrenchments will follow as the mining companies attempt to return to profitability. The question then arises as to whether we are on a sustainable path to promoting and meeting the objectives of the MPRDA?

Conclusion

The Minister has recently alluded to the fact that it is time that our legal system provides clear mechanisms to assist all stakeholders in trying to meet the objectives of the MPRDA. A failure to regulate strikes better and the inability of the state or other parties to intervene in prolonged strike action does not support achieving the objectives of the MPRDA aimed at promoting economic growth and mineral development, employment and the social and economic welfare of all South Africans.

The legislative environment should be susceptible to prevailing market conditions and strikes must be managed. This does not mean that one should detract from employees’ right to strike, but rather the ability to say when enough is enough. The mineral resources of South Africa were and continue to be pivotal in the country’s development. Prolonged strike action threatens economic growth and will inevitably result in increasing unemployment. This would be failing the objectives of the MPRDA. An effective mechanism allowing parties to intervene in prolonged strike action would certainly go a long way in aiding all stakeholders within the mining industry to promote and ultimately meet the objectives in the MPRDA in the interest of our country and all its people.

Malusi Mkhize LLB (UKZN) is a candidate attorney at Webber Wentzel in Johannesburg.

This article was first published in De Rebus in 2014 (Oct) DR 58.