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Corporate Governance and Social Responsibility of South African Mining Companies and their Financiers in Southern Africa (compendium of case studies)

Literature › Works

Kabemba, Claude; Southall, Roger (eds); Olaleye, Wole; Lungu, John; Kapena, Sumbye; Nhancale, Camilo; Vilanculo, Herculano; Losango Nzinga, Jean Didier; Moyo, Theresa; Hwenga, Manasa; Shindondola-Mote, Hilma; Sakaria, Lipumbu; Mngxitama, Andile; Radebe, Zandi (2010). Corporate Governance and Social Responsibility of South African Mining Companies and their Financiers in Southern Africa (compendium of case studies). Southern Africa Resource Watch (SARW/OSISA) report. Southern Africa Resource Watch, Johannesburg.
Type report
Scope Post-1994 South African economy
Method mixed
Period studied 1994–2010
Regions South Africa, Zambia, Mozambique, DRC, Zimbabwe, Namibia, SADC region
Themes business and state, mining migrant labour, transition post apartheid, labour markets wages, macro fiscal finance debt, origins segregation, unions strikes, comparative theory
Citation key kabemba2010

Argument

The compendium examines how South African mining and gas firms (Metorex, Implats/Zimplats/Mimosa, De Beers/Namdeb, AngloGold/Navachab, Sasol, Mozal) and their banks behave outside South Africa after 1994. It argues that these firms behave no differently from western or Asian multinationals, exploit weak host-state regulation, breach or evade development agreements, treat CSR as public relations, and benefit from tax incentives and secrecy. South African banks sign voluntary standards (Equator Principles etc.) but lack monitoring, and the SA government has no policy regulating its firms abroad. It is qualitative, built on company reports, stakeholder interviews and union and community testimony, since companies refused access. Southall's conclusion places CSR in the history of capitalism, structural adjustment and the post-apartheid shift to GEAR. Apartheid-era economics appears only as background.

Evidence and method

Company annual and CSR reports, development agreements where obtainable, interviews with unions, community representatives, local officials and NGOs, bank website material and telephone interviews, government documents and statutes, secondary literature (e.g. Castel-Branco, Andersson), and non-participant observation. Management access was largely refused.

Findings

  • Under apartheid, mining relied on a targeted tax that forced Black men into wage work and into single-sex hostels. (p. 20)

    a system of tax exclusively targeted at the African population, which forced black males into wage employment to meet the global and domestic demand for gold and diamonds.

  • Mine labour recruitment shaped Mozambique: southern Mozambique was designated a labour reserve, and migrant numbers collapsed in the mid-1970s. (p. 103)

    the number of Mozambican migrant workers fell rapidly, from 118 000 in 1975 to 41 300 in 1977.

  • The study claims South African firms abroad mirror other multinationals and exploit weak regulation. (p. 16)

    South African companies are not behaving any differently than western and Asian companies, making a mockery of the African Renaissance.

  • Mega-projects generate output but few jobs. (p. 127)

    Mozal employed almost 10 000 workers for little more than one year during the construction phase (Castel-Branco, 2002a), and currently it is operating with only 1130 workers.

  • The South African government has no policy governing its mining firms abroad. (p. 307)

    South African law doesn’t have extra-territorial jurisdiction. In other words, we cannot use local law to regulate the conduct of South African companies operating outside the boundaries of South Africa

  • Banks sidestep Equator Principles compliance through off-balance-sheet project finance. (p. 298)

    banks have a mechanism to side step compliance via “off-balance-sheet” lending.

  • Southall links 1970s black labour militancy to the oil shock and the rise of unions, and traces the later shift from RDP to GEAR. (p. 319)

    the oil shock of 1973 coincided with the first major strike wave since the late 1950s which was to herald the rapid growth of the modern trade union movement.