Bracing For An Autumn Of Discontent

Following the strike at Lonmin’s platinum mine, the tally of 44 dead, 80 wounded and a tarnished police force has brought home to South Africans the fragility of its society and how close to the surface the fuse is burning. While investigations continue, the tragedy has raised a multitude of difficult questions. Tom Nevin reports.

Were low wages and poor conditions the reason for the bloody confrontation at the Lonmin platinum mine at Marikana in South Africa’s northwest Province and was the mixture made more volatile by the presence of out-of-work young miners amongst the strikers?

The cocktail became even more inebriating by the vigorous stirring of passions by competing mineworkers’ unions vying for dominance in the regional labour organising arena.

And now, almost two months after the brutal stand-off on a hill near the mine, the question most eluding a definitive answer is, What can be done to prevent it from happening again? The easy reply is: Right now, very little. As worrying is the real possibility of the unrest spreading to other mines, and not only of the platinum variety – South Africa is a mining country like no other on the continent and is studded with extractive enterprises big and small that ply their industry from precious to base metals and from ultra-valuable to semi-precious stones. The sector contributes around 18% of GDP at a value of $120bn.

And who’s to say the industrial disquiet will be confined to the mining sector? Union activity across the board is these days more politicised than ever, a spillover from South Africa’s peculiar governing structure that pieces together a political party (ANC), labour representation (Cosatu) and an anachronistic ideology (SA Communist Party) in a patchwork known as the Tripartite Alliance. Assembled to contest the 1994 democratic elections, it has remained in place despite ructions over, mainly, economic policy.

All of this is flint to the tinderbox and South Africa braces for a spring of labour discontent.

President Jacob Zuma has assembled a high-powered judicial commission of inquiry into the events at Marikana. As a result there is little public sector comment on the cause for the fatal shootings or where the blame should lie. Since the shooting, a constant stream of conjecture in the media on virtually every aspect of the incident, to the extent that if charges against the police or the strikers or both are brought, they would probably be deeply compromised by violation of the sub judice rules.

Zuma sent a strong message in his composition of the special commission investigating the shootings. To lead the team, he selected one of South Africa’s most respected jurists, Judge Ian Farlam, retired Judge of the Supreme Court of Appeal. Other members of the Commission are the highly experienced advocates Bantubonke Tokota SC and Pingla Hemraj SC.

Amongst an array of issues, the commission is probing the conduct of mine owner Lonmin Plc, in particular whether it exercised its best endeavours to resolve disputes which may have arisen between Lonmin and its labour force on the one hand and generally among its labour force on the other; whether it responded appropriately to the threat and outbreak of violence; whether the company created an environment conducive to the creation of tension, labour unrest, disunity among its employees or other harmful conduct; and whether it employed sufficient safeguards and measures to ensure the safety of its employees and property and the prevention of the outbreak of violence between any parties.

The commission is also investigating the conduct of the South African Police Service, and looking at the nature, extent and application of standing orders, policies, legislation or other instructions which gave rise to the incidents; the facts and circumstances which led to the use of force and whether this was reasonable and justifiable; and whether by act or omission, it directly or indirectly caused loss of life or harm to persons or property.

The commission is also probing the conduct of the labour unions involved and is looking into the role played by the Department of Mineral Resources or any other government department or agency.

Reporting the truth?

While the justices go about their business of getting to the truth of what happened, the coverage of the issue is not letting up, but rather finding expression in all manner of peripheral things. One of the more interesting is the result of an investigation by a journalist into how sloppy reporting can turn a story on its head with the most unfortunate consequences. Almost immediately after the shooting, inaccurate and damaging information about the mine massacre sped around the world at the speed of light. A main pillar of the strike, gathering and police response was supposedly the paltry wage paid to miners in a dangerous, enervating job by an allegedly miserly and greedy company.

Endlessly repeated in myriad stories was the ‘fact’ that the RDOs (rock drill operators), apparently at the core of the strike, received just R4,000 ($500) a month, and that they were demanding R12,500 ($1,560) and were striking to get it.

“At some point in the next few days this claim by one – or more – of the strikers seems to have hardened into accepted fact through the sheer weight of repetition,” writes the researcher who runs a regular column under the name of Ratcatcher. “On Friday, 17th August, social and political commentator Justice Malala commented in the UK Guardian that offshoot labour union AMCU “dangled a fat piece of fruit in front of the workers’ eyes: rock drillers earning R4,000 ($500) a month were promised R12,500 ($1,560) a month.”

The R4,000 ($500) a month “fact” was going globally viral. The following day the Guardian’s Africa correspondent reported that the strikers “are demanding from Lonmin, whose HQ is in London, a wage increase from R4,000 (£300) to R12,500 ($1,560) a month”. On the same day two reporters from Johannesburg’s web-based Daily Maverick had the good sense to interview a miner willing to show them his pay slip. It reported that “his basic pay for the month is R4,365.90 – add to that a R1,850 housing allowance, benefits and some bonus pay and his gross pay is around R8,124.80 ($992). After his union fees, unemployment insurance, other fund contributions and tax, his take-home pay is just over R5,000 ($610).”

That check, showing rock drill operators’ pay was twice as high as reported passed largely unnoticed. In fact, the distortions increased. A Sunday newspaper wrote that the goal of the strikers was “a monthly salary of R12,500 ($1,560)” and that “more than 3,000 rock drillers – the men who earn just R4,000 ($500) a month digging for platinum underground for eight hours every working day” had downed their tools on the previous Friday.

Reuters, ever a stickler for accuracy, stated: “Platinum sells for about $1,440 an ounce but a worker drilling underground at tonnes of rock face to extract it makes less than $500 a month.”

The number of print and electronic news media tripping over one another to perpetuate the R4,000 ($500) a month fabrication multiplied exponentially. It was now a universal truth because millions of people worldwide had read it, heard it or seen it and believed it.

As difficult to understand was the length of time the Lonmin management dithered before releasing a statement that accurately reflected the RDOs’ wage structure. It took nearly a week before the official wage figures were made public. In those seven days Lonmin’s became the Scrooge of the mining industry and “who could blame the miners for coming out and turning ugly”, was the general comment.

Eventually, Mark Munroe, Lonmin’s Executive Vice President of Mining, confirmed that “Lonmin’s Rock Drill Operators earn in the region of R10,000 ($1,220) per month without bonuses and over R11,000 ($1,343) including bonuses. These levels are in line with those of our competitors and are before the wage hike of some 9% which will come into effect on 1st October 2012.”

Add those numbers together and the tally of what they were earning is around R12,000 (S1,550) a month, just R500 ($60) short of the wage the strikers were demanding.

The real reasons

So what, exactly, were the miners striking for? Surely not for an extra $60 a month.

The Marikana tragedy comes at a time when the capitalist ethos is grappling with its long-held tenet of “profit at any cost” or, more euphemistically, “institutional investors are bound by their fiduciary duties to act in the best interests of their clients and to maximise profit”.

However, new definitions are emerging and statements like “best interests of clients” are being re-examined. In a hard look at such practices in the wake of Marikana human rights lawyer Bonita Meyersfeld and portfolio manager Malcolm Gray agree that investors should be buying into companies that generate appropriate risk-adjusted returns, but that they should also be thinking about risks associated with human rights and environmental violations. Culpable or otherwise, big business is being forced to take a careful look at itself and answer, especially, the crucial question: Do investors have a legal obligation to take steps to prevent such outcomes as that at Marikana? On that issue the investment community has remained silent.