I recently supervised the Master’s degree thesis project of Richard W Roeder, a German lawyer and Rotary Peace Studies Scholar at the University of Queensland who sought to ask the following research question: “How do Public Governance and Private Governance regarding the employment of Indigenous Australians / Historically Disadvantaged South Africans in the mining sector interact?“ In this article, Mr. Roeder summarizes some of the key themes and findings of his thesis.
Guest article by Richard Roeder
The relationship between employers and employees in the mining industry is first and foremost a relationship between two private parties. Usually the terms on which this relationship is governed are therefore a result of the negotiations between employers and employees and/or trade unions. Most governments have chosen to generally accept the terms of such negotiations. The reason why most governments around the globe still regulate the employment sector to some extent is the inequality of the bargaining position of employers on the one side and employees on the other side. This inequality is especially reinforced if a group of employees has or had a disadvantage in the economic landscape and or is or was marginalized. Two such groups of employees – each with a distinct history – are Indigenous Australians and Historically Disadvantaged South Africans (Black) employees in the mining industry. A comparison between Australia and South Africa is particularly important since mining is a dominant industry in both countries with a high level of employment exchange between the two lands.
Australia: A Voluntary Tale
As noted by Dr Jessie Chellam a legal scholar who has studied Australian and South African legal tradition: “until the mid 60’s there was no equal pay for Indigenous peoples. Some were paid a fraction of what their non-Indigenous workers received, but it seems that the bulk of them only received food/tobacco/clothing rather an actual steady income. But what is also apparent is that these kinds of policies existed because they were driven by the government of the day.”
Since then much has changed for the better regarding indigenous recognition but Australia has not enacted any specific legislation requiring mining companies to hire and/or educate Indigenous Australians. The courts have nevertheless had their say on matters. On June 3rd, 1992 the High Court of Australia overruled the pre-existing legal notion of “terra nullius”. The High Court ruled instead that the Meriam people [Indigenous Australians] were entitled to: “possession, occupation, use and enjoyment of “their” land” [in this case: most of the Murray Islands]”. Australia responded to the litigation – which has become to be known as the Mabo Case - by enacting the national Native Title Act of 1993. While an analysis of the Native Title Act 1993 shows that it does not directly provide for indigenous participation in ownership, management and employment in the Australian mining industry, it has had several positive effects for indigenous employment.
One effect of the Mabo Case and the Native Title Act 1993 is that where a group of Indigenous Australians have or claim native title, a mining company wanting to operate in the area in question has to interact with the Indigenous Australians to either negotiate a native title agreement or have the question at hand decided by the courts. This interaction between Indigenous Australians and Mining Companies, whilst fundamentally focused on land use, has opened communication channels and opened negotiations. The native title agreements now inter alia more and more include provisions on indigenous employment in the mining workforce in addition to the required financial compensation for the use of land by the Mining Company. This has in turn been a helpful impulse for Mining Companies to develop Indigenous Employment programs.
The government instead focuses on initiatives such as the Indigenous Australians Economic Development Strategy, an effort that aims to provide: “the same opportunities to Indigenous Australians that all Australians enjoy.” Also public-private (hybrid) initiatives such as memoranda of understanding between the Australian Government and the Minerals Council of Australia that aims to build: “a strong partnership between the mineral industry and government working with Indigenous people at a local and regional level.”
South Africa: Empowerment through Employment
In contrast with Australia, South Africa has enacted several specific laws requiring mining companies to hire and/or educate Historically Disadvantaged South Africans: inter alia the Constitution of South Africa of 1996, the Broad-based Black Economic Empowerment Act 53 of 2003, the Preferential Procurement Framework Act No. 5 of 2000 and the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA 2002), the Mining Charter of 2002 and the Mining Charter of 2010.
Specifically, Broad-based black economic empowerment (B-BBEE) aims to: “promote the achievement of the constitutional right to equality, increase broad-based and effective participation of black people in the economy and promote a higher growth rate, increased employment and more equitable income distribution”. The most specific impulse came from the Broad-Based socio-Economic Empowerment Charter for the South African Mining Industry (Mining Charter 2002). It was required by the BEE Act and the MRPDA Act, and developed by the Department of Minerals and Energy with input from the South African Chamber of Mines, the National Union of Mineworkers and the South African Development Association and signed on October 11th, 2002. Its goal is to “create an industry that will proudly reflect the promise of a non-racial South Africa” and to “provide a framework for progressing the empowerment of historically disadvantaged South Africans in The Mining and Minerals Industry“. Regarding the equity of employees the Mining Charter specifically requires companies to: “Establish targets of at least 40 percent for HDSA employment equity within five years.”, to properly train HDSAs and by 2014 to achieve a 26% HDSA ownership of the mining industry.
The Amendment of the broad-based socio-economic empowerment charter for the South African mining and minerals industry of 2010 (the Mining Charter 2010) reaffirms the employment equity, human resource development and the 26% B-BBEE ownership goals. It differs from the Mining Charter 2002 by establishing an explicit enforcement mechanism: According to section 3 of the the Mining Charter 2010: “Non-Compliance with the provisions of the charter and the MRPDA 2002 shall render the mining company in breach of the MRPDA 2002 and subject to the provisions of section 47 read in conjunction with section 98 and 99 of the Act – which can negatively affect mining licenses granted under South Africa’s MRPDA 2002.
As noted by Paul Kapelus, Director, Synergy – a major consulting firm in South Africa that focuses on corporate social responsibility (CSR) research in the mining industry: “A central issue regarding employment of Historically Disadvantaged South Africans at this time is the question of localization of the workforce. While in South Africa mining projects were often based on migrant workers from the Eastern Cape, now local communities are demanding their space in the workforce of the mines. And the South African Constitution clearly states that every South African can work anywhere in Australia without discrimination. However, mining companies have to find a way to agree with the local tribal authorities which could and can demand local participation in the workforce.”
Comparative Learning: Harmonizing CSR and Regulatory Pressure
Unlike Australia where soft power and “nudging” by the government (in the cadence of Thaler and Sunstein’s classic book) has been the primary means of action, the South Africans have relied much more on hard regulation. Even where companies may claim some CSR, there is a much more definitive pressure. Kapelus goes on to state: “Adhering to Black Economic Empowerment in South Africa is not Corporate Social Responsibility, it is business survival. If you want to keep your business going, if you want to keep your mining license you must play with the new rules. You must be willing to accept that your core business is undergoing transformation.”
In Australia some legislative measures need to be implemented and/or further incentives for mining companies need to be provided. The mining boom can pass, as can company leadership. Australia currently overly relies on both the boom time business conditions and company leadership when tackling the issue of Indigenous Australian employment, while legislative measures that could most likely be politically viable at this point of time are overlooked. That legislative measures would have an impact is very likely: Mining companies explicitly name the threat of cancellation of their legal license as result of not honoring commitments (and regulatory requirements) as a risk to be avoided.
South Africa’s legislation and governmental policies on the other hand provide strong incentives to achieve a high level of HDSA participation in the mining workforce. Corporate Social Responsibility policies are heavily influenced by legislation and governmental policy, leaving them as a mere compliance mechanism. Comprehensive agreements as established in Australia are mostly being made redundant by the legislative framework and the B-BBEE incentive structure.
However, if there is a lesson Australia can learn from South Africa is how to use its power to mandate laws to, at a minimum, secure the status-quo in the employment of Indigenous Australians. By doing so, it would also level the playing field in Australia, allowing mining companies to invest in indigenous education and training without having to have a competitive disadvantage compared to mining companies that are not willing to dedicate resources to this crucial issue. If there is a lesson South Africa can learn from Australia it could be a good idea to supplement the national legislative framework provided by local comprehensive agreements, e.g. by expanding the tribal agreements to all mineworkers including migrant workers. Those comprehensive agreements – which would have to be within the scope of national legislative requirements – could then better address local differences and demands and provide room and give incentive for Corporate Social Responsibility initiatives.
Ultimately, both Australia and South Africa will need to consider not just employment but “employability” of disadvantaged communities beyond the mining boom. Diversification of the economy and an ongoing development of educational capacity and a range of skills as well as rapid reskilling programs will need to be enhanced. Only with such a long-term vision of reform will the natural resources of both these richly endowed lands benefit those who need their bounty the most.