AN INCREASE in violent protests in South Africa has again put the spotlight on failed attempts to improve the lives of the poor after 18 years of democracy.
On average, South Africa experiences three strikes a day, which often end up turning violent — as seen on the country's mines, where 46 people have been killed in recent months. The violence has spread to other sectors, most recently farms.
Many attribute this to the country's failed black economic empowerment (BEE) policies, which have empowered only a few, including a politically well-connected elite.
Law firm Webber Wentzel partner Peter Leon said this lack of real transformation led to the Marikana tragedy. “The problem lies in digressions in the MPRDA [Minerals and Petroleum Resources Development Act] and the mining charter.”
Mr Leon said it is evident from the recent illegal strikes on the mines that the mining charter is not working and needs to be reviewed. The charter was last reviewed in 2010, but kept a strong focus on ownership, similar to that of the original charter drafted 10 years ago. “This means that companies can achieve their empowerment status by really only empowering four or five people.”
Mr Leon said that just a look at the disgraceful living conditions of mineworkers and communities in Rustenburg is evidence that the charter is not working for the masses.
Speakers at the Transformation Indaba last week highlighted Kumba Iron Ore's employee share scheme as an effective all-inclusive empowerment model in which workers on the ground also benefit from company successes.
The scheme saw ordinary workers receiving more than R500,000 each at the end of last year and an additional R33,000 in dividends this year.
Mr Leon said other companies would do well to implement similar models.
“We need to find a way to distribute South Africa's R35.6-trillion gross domestic product (GDP) more evenly,” he said.
Ichumile Gqada, from the South African Institute of International Affairs, said the government needs to take more responsibility. “It is unfair to only chastise the mining companies for living conditions in mining areas; government also has a role to play. In fact it is the government's mandate to do so.
“Royalty taxes paid by mining companies to government need to be ploughed back into surrounding mining communities,” she said.
The Treasury collected R5.6bn from mining companies during the 2011-12 financial year, in addition to companies paying corporate taxes.
However, the Treasury said it will not consider ring-fencing any revenues as this will weaken the integrity of the budget process by reducing transparency in a democracy and increasing inefficiency in resource allocation.
* This article was first published in Sunday Times: Business Times