ENERGY company Sasol last month became the latest major company to find itself embroiled in the politics of an area where it is the main employer.
Miner Lonmin came under fire last year for the poor local conditions in the Marikana area, close to Rustenburg, where its mine was situated, and where a devastating strike led to the deaths of 44 people.
Sasolburg’s Zamdela township was the site of violent protests and looting as residents opposed a proposed merger of the town’s Metsimaholo and Ngwathe municipalities. The town was established in 1954 to act solely as a company town for Sasol’s employees, and questions remain over the nature of its involvement today and whether any damage to Sasol’s reputation, or profits, has occurred.
Small towns dominated by large firms have largely been shielded from local politics. There are many such "dorpies" in SA, including Khatu where Kumba Iron Ore runs a mine, and Balfour in Mpumalanga, site of Great Basin Gold.
Tongaat Hulett is the major employer in several small towns, such as Maidstone and Darnall in KwaZulu-Natal.
Some towns have collapsed as mining companies have moved away — such as Kleinzee, a diamond-mining town about 600km north of Cape Town, and Virginia in the Free State.
Labour analyst Tony Healy says mining firms may have had more experience than most in dealing with angry residents in the areas where they operate, because much of their labour is unskilled, relatively poorly paid and live in difficult conditions.
"Artisans and engineers will get paid a living, or better, in motor and other industrial towns. Mining companies, meanwhile, often employ low-skilled workers who struggle to live on their wages, which can cause unhappiness for their families. These families would then protest for service delivery and strike against employers," says Mr Healy.
The protests in Sasolburg were rather unique, however. For one, Sasol did not employ mainly menial workers in the town. Last year, the Sasol group committed R332.3m to socioeconomic development in SA, part of which went into the Metsimaholo municipality. This financial support also appeared to have been the cause of the protests, amid claims that residents viewed the proposed merger of the two municipalities as part of a sinister plan to divert resources to Ngwathe, the hometown of the Free State premier Ace Magashule.
Concerned Resident’s Association chairman Lucky Malebo is full of praise for Sasol.
"Companies try to improve living conditions here. I hope that the community and I can meet with government and with Sasol to do a postmortem on what has happened," he says.
Sasol spokesman Alex Anderson says the protest action has had an effect on the company’s staff and contractors. The company has about 7,200 employees at its Sasolburg operations.
At the Sasol One site, the company converts natural gas into synthesis gas as a feedstock to produce a wide variety of products, such as ammonia, hard wax, fertilisers and explosives, methanol and ethanol, monomers and ethylene, phenolic and acrylic acetate.
In Sasolburg, Sasol also operates the Natref crude oil refinery, jointly owned by Total.
Mr Anderson says the job profile of the Sasolburg operations is "wide-ranging and covers the typical skilled and unskilled work required for operations of this nature, and includes specialists in certain business functions, as well as general work".
Outside of Sasolburg, Sasol runs its Sasol Two and Sasol Three sites in Secunda in Mpumalanga. The plant uses coal liquefaction to produce petroleum-like synthetic crude oil from coal. Secunda suffered service delivery protests in 2004 and 2005, while Sasol faced a strike over wages in 2006.
"While there are slight differences in the needs of our communities, our investments in the Govan Mbeki (in Mpumalanga) and Metsimaholo municipalities are run along the same governance guidelines and principles," says Mr Anderson.
In October last year, Sasol announced an initiative that would see it invest R100m in the Metsimaholo municipality to develop the community.
As Sasol picks up the pieces in Sasolburg, project co-ordinator at the Community Law Centre of the University of the Western Cape Jaap de Visser says it is difficult to say if the company can take any responsibility for the unrest in Sasolburg.
"We have not done specific research into this but I will say that there is a debate that municipalities perhaps should have more control over the money that the private sector puts into small towns. Of course, there is the argument that municipalities have not shown good financial management," he says.
In Uitenhage in the Eastern Cape, Volkswagen SA communications GM Matt Gennrich says the company’s policies have helped to prevent unrest. " We were the first company in SA to qualify black artisans when this was illegal, to recognise trade unions, again when it was illegal. "
VW faced strikes and protests in the ’90s in Uitenhage after cost-cutting and also as national general strikes hit.