Mining magnate joins EFF cause on industry crisis
ANC member Bridgette Radebe has joined calls by the EFF for government to curb the controversial practice of transfer pricing in the mining industry.
Julius Malema’s Economic Freedom Fighters have found a powerful ally in their call for the government to investigate the so-called transfer pricing in the mining industry.
Malema couldn’t contain himself and applauded during a meeting of parliament’s portfolio committee on mineral resources on Wednesday, when mining magnate and ANC member, Bridgette Radebe called on Parliament to urgently act and curb the practice of transfer pricing in the mining industry and ensure compliance with the mining charter.
Radebe suggested that a number of problems in the sector – including the labour unrests and service delivery problems in mining communities could have been avoided if it was not for the “off-shore ownership” of South African mines.
Radebe was addressing the parliamentary meeting on behalf of the South African Mining Development Association, a body representing black-owned mining companies. The committee had invited the mining sector unions and other bodies including the Chamber of Mines to discuss challenges facing the sector.
‘Sleeping on the job’
Radebe called for the government to take steps against mining companies that fail to comply with the transformation and empowerment targets of the Mining Charter, as she accused the “foreign-owned” companies of failure to honour the ownership, local procurement and beneficiation targets. “For as long as you have people owning your economy, they will dictate your destiny and the time has come for us to be charter compliant. We can’t continue to be sleeping on the job,” said Radebe.
Radebe pointed out that the charter states that by May 1 2014, mining companies should not have less than 26% of ownership in the hand of the historically disadvantaged South Africans and this was not happening. She said her association did research looking at 49 companies listed in the Johannesburg Stock Exchange, and found that those companies are worth R2,57-trillion. “If each of those 49 companies had at least 26% active participation of the historically disadvantaged South Africans, we should have R669-billion of active participation in the hands of black people, but that is not happening.”
She blamed the alleged transfer pricing for this and added that the practice has led to service delivery unrest, charter non-compliance, “Marikana” and lots of labour unrest, and also affects rural communities and the country at large and has become a crisis.
She also said it would be important to interrogate how many of the listed companies had black CEOs and how many of them had white or black women. “How many of them employ foreign blacks instead of promoting our local blacks to try and make a mockery of our transformation and say we are BEE, when the people come from the neighbouring countries?”
Radebe said while South Africa needed to partner with neighbouring countries, it should “not be at the expense of making a mockery of transformation”.
Radebe said all these issues were not being addressed by the sector because of “off-shore ownership”. The EFF has brought the issue of multinational companies’ alleged practice of transfer pricing and offshore profit shifting since its arrival in Parliament in May this year. The party has been calling for the government to investigate the matter and perhaps ban the practice.
During a sitting of the National Assembly on Tuesday, EFF MP, Floyd Shivambu proposed that Parliament hold a debate on the matter.
Radebe, who is also the chairperson of Mmakau Mining, spoke very strongly against the practice on Wednesday. She described the practice as arrangements involving the transfer of goods and services at an artificial price in order to transfer income or expenses from one enterprise to an associate enterprise in a different jurisdiction. “The trickle effect is that taxation is not declared as it should be,” she said.
Radebe warned that if Parliament fails to interrogate transfer pricing to establish how much money has been exported through the practice it would be impossible to interrogate whether mining companies can afford the R12 500 that miners demand.
Radebe was one of the senior ANC members who stood up at the party’s national general council in September 2010 and proposed that the ANC conducts research on the then calls by the ANC Youth League for the nationalisation of mines.
On Wednesday, she told Parliament that her association supported strongly that the state becomes the custodian of the mineral rights so anyone could go to the state for access.
Earlier, Malema clashed with the Chamber of Mines chief executive and ANC MPs when he asked the chamber to give details of how much it had allowed “white capital” to get out of the mining sector. He questioned why it was easy for the chamber to state the amounts it spends on black economic empowerment and on mining communities, but was reluctant to give the figures of how much was spent on white bosses.
ANC MP, Mandla Mandela led a charge by ANC MPs to stop Malema from asking the questions, saying the meeting was only meant to discuss challenges in the sectors. After an angry exchange, Malema was allowed to pose his questions to the chamber.