Transformer: Lindiwe Zulu says the mining charter levels the playing field.
Minister of Small Business Development Lindiwe Zulu has lauded the new mining charter as a progressive piece of regulation.
Speaking at a breakfast briefing on the sidelines of the ANC policy conference on Sunday, Zulu — a close ally of President Jacob Zuma — said she wished everyone could see that the mining charter was progressive.
“Minister [Mosebenzi] Zwane is really under tremendous pressure,” said Zulu of the mineral resources minister, who is responsible for the contentious regulations that are now the subject of a legal challenge brought by the Chamber of Mines.
Zulu said those who did not want to see the charter implemented were those who were defending their own commercial interests, noting that anyone who visited any mining community would soon determine that the industry remained woefully untransformed.
She said differences over certain aspects of the charter should be fixed “without having to drag each other to court all the time”.
She has however bemoaned the lack of unity in the ANC around the charter.
Turning to ANC treasurer general Zweli Mkhize, who shared the stage with her, Zulu said: “I think the challenge, comrade Zweli, is when we as the ANC are seen to be talking in different tongues.”
Mkhize said the ANC’s view was indeed that it was much better for parties to resolve their issues among themselves without having to go to court.
“The issue of transformation in mining is a big issue,” he said. “There is obviously an issue we have to manage about this tension between the minister and the chamber. The mines have indicated to the ANC that they did not have adequate discussions with the minister.”
He said mining companies are also not satisfied that the key question of “once empowered, always empowered” has been resolved, as the matter is still awaiting the outcome of a declaratory order from the courts.
Mkhize noted that talks around transformation in mining tend to focus on issues such as ownership and can neglect the operational side and issues such as procurement.
Zulu said her ministry was working with the department of mineral resources to co-ordinate between government departments, so as to speak with one voice on policy decisions taken “so people can have confidence that we [the ANC] know where we are going”.
Zulu said the department’s core mandate was to see black business grow and it must ensure that it is not diverted from its mission.
“Our view is we must do everything we can to make sure transformation is supported.”
Zulu said that while some questioned the need for a small business ministry when it was first established in 2014, now “slowly but surely” its impact was beginning to be felt.
She said 18 000 new SMMEs registered as taxpayers in the last tax year, but that this was not good enough.
She said her ministry was busy working on collecting better data to ascertain how many of these businesses are black-owned, women-owned or started by the youth to indicate “if we are moving in the right direction”.
Contentious changes in the mining charter
Among the changes in the new mining charter that have ruffled feathers is that it requires a minimum 30% black economic empowerment for all mining rights, up from 26% previously.
For those companies claiming a historical empowerment transaction under the principle of “once empowered always empowered”, this must be topped up to 30% within a year of the charter coming into effect.
It requires 8% be apportioned to employees, another 8% to mine communities and 14% to black entrepreneurs.
It also requires a company’s shareholding be a minimum of 51% black held in order
to be granted prospecting rights.
Employment equity requires a mining company to be 50% black and 25% female at both board and executive management levels. This increases at lower levels, with junior management required to be 88% black and 44% female.
Regarding procurement, the charter requires 70% of all mining goods and 80% of services is to be procured from BEE entities.
‘Affected parties should have a say about how fines are spent’
Businesses affected by anticompetitive behaviour should have a say in how competition tribunal fines are utilised, says Small Business Development Minister Lindiwe Zulu.
Speaking at a breakfast briefing on Sunday, Zulu praised the sterling work of the Competition Commission in exposing monopolistic behaviour in the economy.
Zulu said the penalties paid by companies that flouted competition law should be used to help those who “feel the pain” of their behaviour. “Let these people be the ones who contribute [to] what happens to this money,” she said.
According to the department of economic development, the competition authorities levied R338-million in fines in the 2015-16 financial year. These revenues go directly into the fiscus. National treasury is not keen on ring-fencing revenues. In cases such as the Unemployment Insurance Fund a surplus cannot be channelled to other projects in need of funding.
The ANC’s economic transformation policy discussion documents place an emphasis on strengthening social justice. Part of this is to ensure the private sector is regulated to avoid unfair competition and price-fixing.
ANC treasurer general Zweli Mkhize said after 23 years it was high time for small and medium enterprises to be integrated into the mainstream economy.
He said government was in the process of reviewing its procurement legislation to ensure that little guys can do business with government without being decimated in the tender process.
He said the private sector must also find space to help small businesses and participate in enterprise development. He said the economy needed to be opened up to make room for all potential players.
Zulu noted that small business had not received enough attention in the economic transformation discussion document. “What is here is small; we need to expand on it and give it meat,” she said.