South Africa is a country that has overcome significant historical challenges to become a democratic and inclusive society – one with the courage and grace to address the inequalities of the past.
The human tragedy of Marikana, where 34 mine workers were shot, characterised a year that saw unprecedented levels of violent strike action, the disruption of well-established trade union structures, and significant turbulence in the platinum sector. It was a year that threw into sharp relief the critical importance – and the evident fragility – of maintaining trusted relationships between mining companies, Government, trade unions and local communities.
Strikes at Amplats operations
Anglo American Platinum was also affected by the labour unrest that plagued the industry in 2012. In March, production at Modikwa Mine, a joint venture between Amplats and African Rainbow Minerals, was affected when about 3,000 members of the National Union of Mineworkers (NUM) downed tools over a wage dispute.
From mid-September 2012 to 15 November 2012, the Company endured eight weeks of unprotected industrial action over increased wage demands at five of its own mines in the Western Limb (Rustenburg and North of the Pilanesburg areas). On 12 September the Company took the swift decision to suspend operations in the Rustenburg area to protect the safety and security of employees following widespread reports of intimidation and threats of violence. Calm had returned by 18 September and employees were requested to return to work. Only about 20% of the workforce returned and an unprotected strike was declared.
During the unprotected strike, the Company continuously attempted to engage with recognised trade unions and worker representatives to encourage employees to return to work. Of the approximately 30,000 workers who went out on strike, roughly 12,000 were dismissed during the unprotected strike, although all of these workers were subsequently reinstated. The strike action cost the Company approximately R6 billion in lost revenue. Details of the wage settlement are below and the average employee salary details are provided in the box on page 7.
The strategic significance of sustainable development
The events of 2012 have highlighted the complexity of societal challenges, and have clearly demonstrated the business imperative of sustainable development. As a business, we cannot grow successfully in isolation
of our broader community. Issues, such as the provision of housing and community health, economic empowerment, industrial relations and stakeholder management cannot be seen as discrete elements of a business’s ‘social responsibility’ programme, but as fundamental to a mining company’s licence to operate.
The complexities of the challenge in South Africa
The strikes of 2012 had profound costs – for the Company, the mining sector, our stakeholders and the country as a whole. Already in a vulnerable state, the platinum sector suffered severe financial losses, significant disruption in production and a damaged reputation. Many of our employees and host communities were exposed to extreme violence and intimidation. The strikes cost South Africa more than R9 billion in lost mine revenue, and half a percentage point off the country’s economic growth. The events contributed to a significant loss in investor confidence.
It is widely accepted that the situation is complex; the underlying systemic challenges that face South Africa as a whole need a multi-stakeholder response. It is clear that we need to intensify our efforts to build trust and deliver effective communication – between management and mine employees at mine level, between union members and their leaders, and between union leaders and business leaders. We must also work with stakeholders to ensure that the collective bargaining process meets the needs of all those involved.
Addressing these challenges sustainably will require business, Government and labour to work together as partners for social development, building on successes such as the Tripartite Health and Safety Initiative and the Mining Industry Growth, Development and Employment Task Team (MIGDETT). In working together, we will need to acknowledge the vital contribution that each party provides in meeting the country’s developmental priorities – including mining’s significant positive contribution as a mainstay of the South African economy (contributing 9.2% of South Africa’s GDP, directly employing more than 500,000 people and indirectly responsible for a further 840,000 jobs).
We will also need to examine how all the contributions from the resources sector, including procurement, training and organisational capacity development, can be harnessed to support the objectives of the country’s National Development Plan. At the same time, each of us – business, Government and labour – needs the honesty and humility to recognise our individual and collective past failure in addressing some of the underlying systemic causes of the labour unrest in 2012. Within Amplats, for example, we recognise that more can be done to ensure that all our employees have access to decent housing.
Doing so will require leadership and a willingness to take bold decisions aimed at challenging normal business thinking, and transforming the nature of some of our existing relationships.
Committed to demonstrating leadership
Amplats employees have always tried to make a real difference– with our work on safety, on health, on housing, on education, on the environment and on job creation. Our commitment to positive change is reflected in our significant investment in social development initiatives. The Zimele programme which is supported by Amplats has already created about 25,400 jobs in South Africa, and we are looking to considerably increase that number over the next five years.
In 2012, our total spending on enterprise development and local black economic empowerment (BEE) suppliers totalled some R11 billion.
We are committed to building 20,000 houses for employees and to convert our remaining hostel accommodation to single-person occupancy by 2014. In 2012, we invested R276 million in community development initiatives to support job creation, health, education, infrastructure (such as roads and schools), and community health
Our approach and solutions need to go beyond the normal business thinking. We need to take responsibility for this breakdown in trust and appreciate that, as leaders, we need to ask ourselves: while we have done a lot, have we done enough and with enough depth? In answering this question, we are committed to working together – with our business partners, our employee representatives and with Government – to finding solutions that make a real difference for all our stakeholders.
OUTCOME OF THE 2012 STRIKE AT AMPLATS
After eight weeks of strike action, employees at Amplats’ Rustenburg, Union and Amandelbult mines returned to work. In order to facilitate their reintegration, a programme was implemented that incorporated Safe-Start training and medical examinations. As the three operations had been idle for two months, it was important to carry out safety checks to ensure that working areas were safe. In the interests of the employees’ safety and health, these checks were carried out before employees could resume working.
The final offer the Company made to workers contained the following:
- The reinstatement of all the dismissed Rustenburg employees.
- A once-off allowance of R4,500 (pre-tax) payable in two tranches. The first payment, of R2,000, amounted to a hardship allowance, to be paid two days after employees had returned to work; while the second payment of R2,500 was a safe start-up allowance, to be paid two weeks after employees had returned to work and had begun actual work.
- A monthly allowance of R400 (pre-tax), which would be added to base salaries.
- An undertaking by management to reopen wage negotiations early, which recognised that any agreements reached would be implemented in July 2013
in order to maintain the wage negotiation cycle.
1 The review process, announced in February 2012, was already under way.
AMPLATS SALARY FACTS
- Average minimum wage: surface R7,958 per month. All employees earn more than this amount.
- Average minimum wage: underground R8,580 per month. Only one employee earns this amount and all other employees earn above this amount.
- Average rock drill operator’s wage: R10,856 per month excluding bonuses.
- Average wage for an underground employee: R 14,154 per month.