Draft only please do not cite or distribute without author’s permission

DRAFT ONLY – PLEASE DO NOT CITE OR DISTRIBUTE WITHOUT AUTHOR’S PERMISSION

(Conference Draft)

“A Tale of Four Mining Charters¹: The effect of the politics of development for benefit sharing with mining communities in South Africa”

Anri Heyns ^

2017 Law and Development Conference

Cape Town, South Africa

September 2017

1. Introduction

To break with colonial times, great emphasis has been placed on sharing the benefits of commercial endeavours with those affected by the exploitation accompanying these endeavours. Commercial exploitation of resources, both natural and human, characterised the relationship between the Western world and colonised nations.² It also manifests in the relationship between multinational corporations and local communities, indigenous or otherwise, living in the areas where these multinational corporations operate their commercial endeavours.

Mining is a very good example of such a commercial endeavour and its effects on local communities are well documented.³ In South Africa, benefit sharing in mining is currently pursued in terms of empowerment as provided for in the legislative system that was implemented on 1 May 2004.⁴ To promote empowerment, the legislative system specifically provides for the creation of a Mining Charter by the Minister of Mineral Resources.⁵

On 15 June 2017, more than a year after the controversial 2016 draft Mining Charter⁶ was released for comment, Minister Mosebenzi Zwane announced the 2017 final Mining Charter.⁷ The 2017 Mining Charter will be the industry’s third charter, replacing the 2004 and 2010 charters.⁸ The 2017 Mining Charter has been met with much criticism, causing the postponement of its implementation.⁹ Nevertheless, the Department maintains that this third charter will achieve growth and transformation in the mining industry while also promoting the socio-economic welfare of mining communities.¹⁰

Notwithstanding the implementation of this legislative system, the problem of poverty in mining areas persists and often causes conflict between mining companies and communities.¹¹ The empowerment of mining communities takes place mainly through development in terms of the Mining Charter.¹² This paper, therefore, proposes that an interrogation of the concept of development is required to understand why development problems faced under the previous charters will not necessarily be solved this time around.

2. Benefit sharing with poor mining communities through empowerment

Whereas benefit sharing in resource extraction primarily entailed restoring indigenous peoples’ sovereignty to their natural resources,¹³ benefit sharing can also be promoted in a less abstract manner. The term benefit sharing has been used to indicate different approaches to social responsibility or transformation. On the one hand, it is understood as practising greater social responsibility in a neoliberal, self-serving and reactionary sense.¹⁴ On the other hand, benefit sharing is compared with development, but without necessarily exploring the underlying cause for underdevelopment.¹⁵ In basic terms, however, benefit sharing merely signifies “the division and distribution of monetary and non-monetary benefits in a way that has equitable outcomes and which is procedurally fair”.¹⁶

The Mineral and Petroleum Resources Development Act’s¹⁷ transformative nature is evident from its preamble, which acknowledges that South Africa’s mineral and petroleum resources belong to the nation. Section 3 specifically states that the State holds the mineral and petroleum resources in custody “for the benefit of all South Africans”.¹⁸ The preamble, furthermore, recognises the need to promote local and rural development, as well as social upliftment of communities affected by mining.

To achieve these transformative objectives, section 100 of the MPRDA mandates the development of the Mining Charter to promote the participation of historically disadvantaged South Africans in the mining industry. As will be shown in this paper, the MPRDA, together with the Mining Charter, promote black economic empowerment (“BEE”) in the mining industry, as espoused by the Broad-Based Black Economic Empowerment Act.¹⁹ It gives effect to the right to equality as set out in section 9 of the Constitution and aims to address the inequalities of the past.²⁰ The definition of “broad based economic empowerment” in the MPRDA includes as one of the objectives “the socio-economic development of communities immediately hosting, affected by supplying labour to the operations”.²¹

Benefit sharing in the mining industry, therefore, occurs by means of empowerment in terms of the Mining Charter.²² When it comes to mining communities specifically, benefit sharing and empowerment take shape as the development of mine communities, either through projects implementing infrastructure or by allocating ownership in mine companies to mining communities.²³

The paper, therefore, proceeds with a discussion of the origin and meaning of the concept of development. The concept is furthermore analysed to expose the politics of development - that is that development is situated in a specific (Western) worldview and that it represents a specific construction of what it means to be underdeveloped or poor. The politics of development affect the manner in which development problems are framed and how the beneficiaries are represented, which inevitably affects how solutions are constructed.

After exposing the politics of development, the South African mining context will be considered. Empowerment as a concept will be investigated, firstly in the context of black economic empowerment in general, and then specifically, as it manifests in the Mining Charter regarding mining communities. The four versions of the Mining Charter are then considered to view how the empowerment of mining communities is framed in the different versions. Thereafter, it is argued that the differing approaches to mine communities included in the different charters constitute evidence of the politics of development, which create challenges for framing and addressing problems of development.

Neither the Mining Charter nor one single element of the Mining Charter,²⁴ such as mine community development, in itself, can address the problems²⁵ currently faced by persons living in mining areas. This paper, however, wishes to expose a kind of thinking that is represented by the way, in which the charter frames the problem of mining areas and represents the beneficiaries of the proposed solutions. It is therefore proposed that the empowerment of mine communities takes place from a development paradigm and that this framing may cause poverty and inequality to persist.

3.