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The economic impact of Marikana

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In addition to the human impact, one cannot ignore the effect it has had on the economic landscape

Tony Healy, Bheki Sibiya, moderator John Perlman, Dr Mzukisi Qobo and Neil Coleman at the Mail & Guardian business breakfast in Johannesburg.
(Lisa Skinner)

The miners' strike at Mari- kana, close to Rusten- burg, in August this year, will long be remembered for the violence and loss of life associated with it and its effect on South Africa's economy.

A Mail & Guardian business break- fast, sponsored by Neotel and held last week in Johannesburg, exam- ined this issue. Panellists included Tony Healy, a labour relations expert at Tony Healy & Associates; Dr Mzukisi Qobo, a political risk analyst at the University of Pretoria; Bheki Sibiya, the chief executive of the Chamber of Mines and Neil Coleman, advisor to the secretary general of the Congress of South African Trade Unions (Cosatu), Zwelinzima Vavi.

Sibiya said: "The collective bar- gaining structures that were put in place were undermined during the strike. Because the management of the mine came under severe pres- sure at the time, they felt that they had no choice but to engage with people faster than they would ordi- narily have done. Communications between all the parties involved were handled badly." He said the violence at Marikana was just one aspect of the effect of the strike, with some state-owned enterprises being downgraded by various ratings agencies being another element.

"We believe that all the stakehold- ers need to collectively take owner- ship of the problem, which needs to be solved in a sustainable way. Consumers will pay the price for Marikana if one looks at food prices, rising petrol costs, and so on," he said.

A history of violence

Healy said the strike could be viewed at a macro-level as a venting of pub- lic frustration about the economic enfranchisement of South Africans not happening as quickly as the political enfranchisement. "This is not a justification for what happened, nor is it a good excuse.

"We have one of the most progres- sive labour legislations in the world and processes exist for parties to fol- low in various disputes. However, employers have cer- tainly become more adept at man- aging strike situations. The strike 'weapon' has become less so as it is managed through contingencies," he said.

The problem is that industrial action in South Africa is often associ- ated with violence. Healy said the state must show leadership on the road ahead. The short-term pain needs to be com- pared with the long-term conse- quences of not acting decisively and clearly.

Coleman said South Africa is facing a moment of truth in that Marikana has shown people the reality of what is happening in the country.

"Marikana shows issues of general application to the economy but also specifically to the platinum min- ing industry. In many respects, the platinum sector is a microcosm of the challenges the country is facing," said Coleman. "One cannot appreciate the events at Marikana without understanding the importance of the mining indus- try in South Africa.

"The situation is so complex and there are so many issues that it is difficult to unravel. On the one hand you have a rich and rapacious indus- try that has become a law unto itself and on the other you have workers who risk their lives for very little remuneration," he said.

Charting the road to nowhere?

Coleman said the Mining Charter has had little impact since its implementation.

"The success of mining in South Africa has generated social squalor, with executives getting all the money and the workers struggling to survive.

"Although employment in the plat- inum sector has virtually doubled in the past 10 years, it has resulted in the exploitation of workers who are living in desperate and damaged communities. "The labour force is still divided along racial lines. And then there is the brutality of mine security. This is an industry that thrives on divisions," he said.

Qobo said Marikana had put the spotlight on the weaknesses of the business and political leadership in the country. "The economical challenges we are experiencing in the country are underlined by the recent credit downgrading by Moody's and Standard & Poor's. This did not come as a result of Marikana.

"The International Monetary Fund released a report earlier this year looking at the macroeconomic state of the country and touched on the short to medium outlook. The results of the report point to policy and political uncertainty," he said. This uncertainty, Qobo said, has a significant impact on corporate deci- sion-making. Companies are looking at how costly it is to hire employees and how quickly they can dismiss workers.

"Government, business and labour need to meet and discuss a new roadmap for the mining sector. It is essential for the government to cre- ate a sense of confidence in the sec- tor. Because of Marikana, a lot has changed in the country.

"The political risk has heightened and the failures of government con- stitute a serious security risk for citi- zens of the country in terms of the long-term economic situation," he said.

Sibiya agreed, saying: "There are some investors who are jittery and want to take their money elsewhere. Other investors are staying in the country because South Africa is one of the richest places in the world when it comes to mineral resources. We want to have an economic Codesa to come up with a sustain- able solution. But unfortunately the government does not want to listen to the mining sector." Coleman said he saw an opportunity in the situation.

"The government has the chance to look at poverty, unemployment and the inequality of the social condi- tions of people. "One thing that can be done to change this is to relook the wage structure in South Africa. It needs to be more equitable in order to unleash the productive parts of soci- ety. If Brazil can create 17-million jobs in the last 10 years, why can't we follow suit?"

Qobo did not absolve the mining industry of its responsibilities.

"The mining industry should not have waited for the [Mining] Charter to start improving the living and working conditions of its workers.

"A great start would have been for the industry to have been unified and to have proposed to government what it would do to improve condi- tions. The fact is that the mining industry has a tattered reputation in South Africa. It lost the perfect opportunity years ago to overcome the social backlog of the apartheid industry," he said.

Coleman echoed this sentiment by saying the mining industry needed to take a close look at itself.

"We do not want to follow the apartheid model where you have cheap labour. Instead, we need to look at a solution that improves the entire value chain to improve quality of life for all."

One thing is certain from the dis- cussions: the South African land- scape is changing and it is incum- bent on all the stakeholders to look at how they can change things. There needs to be collaboration and dis- cussions on a scale that has not hap- pened before.

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