SEPTEMBER 1, 2012
Photo: Johnson Matthey
If the truth be told it is shareholders in London and elsewhere that are to blame. Profits are being made at the expense of workers and communities and with the help of political patronage.
— The Bench Marks Foundation, August 18, 2012
LONMIN PLC, HEADQUARTERED IN LONDON just steps from Buckingham Palace, is the third largest producer of platinum in the world, but it has only recently entered the global news stream beyond the financial and investment pages. The platinum giant’s unsought notoriety came when South African police massacred 34 striking miners at its Marikana mines last month.
As is usually the case when a state unleashes such brutality against a civilian populace, reporters rushed to the scene to try to determine what happened, and South African president Jacob Zuma quickly cobbled together a government Commission of Inquiry. Until the Commission releases its report — and in all likelihood, afterwards as well — it will be difficult to determine with any exactitude the dynamics of a mass police killing all too reminiscent of the bad old days of apartheid. Were the miners armed, and did they attack first? Were they driven on by the false promises of sangomas (traditional healers and practitioners of witchcraft) and an “upstart” union, as police spokesmen have implied? Or were the police poorly trained, and panicked? Perhaps, as some journalists have charged, the massacre was a pre-mediated murder of miners in retaliation for the killing of two policemen a few days prior? Did the violence stem from a conflict between miners and their multinational employer, or between rival mine unions?
It may be a while before we receive definitive answers to these questions. Meanwhile, however, in the understandable frenzy to sort through the horrific events of August 16th at Marikana, the deep background of the strike and massacre has largely been ignored. But violent conflicts do not occur out of thin air. The conditions on the platinum mines of Marikana, against which striking miners protested, reflect a disturbing confluence of international capital flows masquerading as socially responsible investment, neo-liberal claims to stimulate economic growth through private ventures in developing economies, and the impact of the mining industry on local communities like the impoverished North West Province of South Africa, where Lonmin’s mines are located. A quick glance at the historical record suggests that the social conflict and violent confrontation at Marikana was an entirely predictable consequence of the political economy of post-apartheid South Africa and the ANC’s embrace of a neo-liberal model of development.
Lonmin’s hugely profitable platinum mines are located in one of the most poverty-stricken corners of South Africa, on land that, during apartheid, was set up as a “border industry” directly adjacent to the African “Bantustan” of Bophuthatswana. Like the rest of these so-called “black homelands,” Bophuthatswana was an ersatz independent statelet scattered throughout apartheid South Africa. The white government deliberately starved this region of resources so that its population would have to migrate as temporary workers to the mines, farms, factories, and homes of so-called “white” South Africa — including the platinum mines at Marikana, first established in 1971.
Twenty years after the end of apartheid, the mines continue to rely heavily on migrant labor. More than one third of the 24,000 workers at Lonmin’s Marikana operation are contract workers, long-distance commuters (many from as far as away as the Eastern Cape) who live in horrific conditions in shack settlements near the mines. In fact, in 2011 large numbers of non-migrant miners walked off the job to demand that the company employ more local residents. As a recent study of platinum mining released by the Bench Marks Foundation notes, these contract workers
lack job security because they are not permanently employed. Therefore, sub-contracted workers will find themselves in informal settlements, in backyard shacks or in appallingly poorly maintained and managed group/hostel accommodation provided by the sub-contract that employs them. Poor nutritional levels, lack of healthy entertainment and recreational facilities, lack of potable water and electricity in many instances mean that these workers are not properly reproduced physically, spiritually and psychologically on a daily basis. They frequently visit shebeens, use sex-workers and do not eat or rest properly. Clearly all these factors will impact on their ability to work effectively, to concentrate and to look out for danger in a very dangerous environment.
The contract workers are often employed by labor brokers, but they labor for a giant multinational mining concern which benefitted from an enormous infusion of capital from the World Bank’s private sector arm, the Investor Finance Corporation, only a few years ago. This investment, offered in the name of regional development and socially responsible deployment of capital, has reaped enormous profits for Lonmin but has done little or nothing to improve the working or living conditions of the mining communities themselves.
As Lonmin’s corporate statement boasts to shareholders, “we create value by the discovery, acquisition, development and marketing of minerals and metals.” In 2007, Lonmin’s promise to do good while it did well led the IFC to underwrite $100 million in developmental loans to Lonmin’s operations, and another $5.9 million in technical assistance funds designed to do things like improve worker housing. $100 million more was made available to invest in Lonmin spin-offs that would promote BEE, Black Economic Empowerment, which might explain the coziness between Lonmin execs and ANC politicians and beneficiaries. At the time, the Lonmin CEO told the trade magazine Mining Weekly that his vision was:
To create thriving comfortably-middle-class communities, whose well-educated children would have good well-paying jobs and who would have a future that outlived Lonmin’s long-life mines in the North West.
The loan package approved by the IFC in December 2006 rested on the presumption, as stated directly in the IFC’s pre-loan “Environmental and Social Review”(ESR), that “a major component of Lonmin’s future plans is its community development activities […] the investment is expected to have beneficial results for the workforce and surrounding communities.” But it probably had much more to do with a spiking platinum boom in South Africa; between 1994 and 2009 the industry grew by 67 percent. In 2000, platinum commanded $600 an ounce, but by the time IFC approved Lonmin’s loan package, it had doubled to $1200 an ounce; a year later, the price had rocketed to $2200 an ounce. Unfortunately for Lonmin (and the people of Marikana), in 2008, platinum prices plunged by nearly two-thirds. No doubt, this put something of a dent in the company’s elaborate plans for social development in Marikana.
In North West Province, IFC site investigators in 2006 may well have crossed paths with a team from the Bench Marks Foundation, a South African faith-based NGO that promotes corporate social responsibility. Associated with the South African Council of Churches (SACC), in 2007 Bench Marks released a report entitled The Policy Gap — A Review of the Corporate Social Responsibility Programmes of the Platinum Industry in the North West Province. Even while the IFC applauded Lonmin’s environmental, health, labor, and safety records, and noted its “robust community development framework,” the Bench Marks report on the impact of the platinum boom on the 350,000 people living in the platinum mining areas of North West concluded that
much needs to be done in terms of the environment, housing, health, labour, waste management, energy and water management, clean air and geological issues. The report demonstrates huge negative impacts on surrounding communities and goes contrary to the popular myth that the benefits from mining trickle down to local communities.
It’s hard to imagine that the IFC and Bench Marks visited the same communities.
As it turns out, over the ensuing five years, the men working underground in Marikana’s platinum mines, and the people living in the communities on the surface, saw very little of the increased “value” the IFC loans helped Lonmin create at its platinum mines. The gap between Lonmin’s extravagant promises when they secured the loans and the company’s actual impact on the local community provoked a great deal of anger among the people living around the mines. Indeed, in a follow-up study released only two days before the Marikana shootings, the Bench Marks Foundation concluded “Overall, we have seen very little improvement in the performance of the companies surveyed on corporate social responsibility [since 2007].”
This 2012 report looks closely at the records of the major platinum producers in North West Province, including Impala, Anglo, and of course Lonmin, the big three of world platinum output. In Lonmin’s case, the report highlighted “appalling” housing conditions for the company’s workers, open sewage, rampant disease, an “unacceptable” level of fatal accidents, asbestos in school buildings supported by Lonmin, unguarded railroad crossings, environmental despoliation, the use of local tribal authorities to recruit workers (leading to favoritism and sexual exploitation), and an over-reliance on sub-contracted migrant workers, most of whom lived in crime-ridden informal settlements. “Corporate citizenship and sustainability,” the report bluntly concludes, “are currently still illusions on a far horizon.”
In an August 14 press release accompanying the latest Bench Marks report, the Executive Director for the Foundation pointed out that
There is very little evidence that communities are actually consulted about their frustrations concerning the impact of mining operations on their lives. This has not changed since our last report five years ago [ …] In addition, mines are obsessed with cutting costs and of reporting low cost operations to shareholders. Cost cutting is usually at the expense of the environment, labour and communities. This usually turns into protests about low wages and unsafe working conditions.
Bench Marks also reported that “The findings of the initial 2007 report by Bench Marks showed that despite the great value extracted from platinum mining through the years, there were harmful social, economic and environmental impacts on local communities” in Marikana and the surrounding areas. These are the sort of damning indictments the anti-apartheid movement once made against the South African mining houses when they operated under the white supremacist regime. Again, all of this information was released immediately prior to the killings of 16 August.
In retrospect, it is hard to avoid the suspicion that Lonmin secured a major infusion of capital from the IFC five years ago by pimping its vastly overstated claim to corporate social responsibility. Indeed, the poverty of North West Province, historically abetted by a system of apartheid designed to insure cheap mine labor, by 2007 represented another investment opportunity for the nimble forces of global capital that had impoverished the region in the first place. As long as ANC cronies ended up on the boards of Lonmin’s associated BEE corporations, the government raised little objection to this state of affairs.
“The platinum mining companies appear on the surface to be socially responsible, respectful of communities and workers and contributing to host community development. Nothing can be further from the truth,” said Bishop Jo Seoka, President of the SACC and Chairperson of the bench Marks Foundation two days before the massacre. The shocking violence at Marikana should have come as no surprise. Lonmin’s platinum mining operations there rest on a combustible mixture: global investment hiding behind a fig-leaf of “corporate social responsibility”; an ANC government more interested in rewarding its cronies with lucrative corporate Board appointments than looking after impoverished South Africans; a once-militant miners’ union (the NUM) now working hand in glove with mining companies and ruling political parties at the same time; and masses of impoverished migrant workers denied the fruits of liberation. In South Africa, this all must sound eerily familiar, as does the brutal fusillade that marked its dénouement.