SA needs ‘mining Codesa’ – strategist

SA needs ‘mining Codesa’ – strategist

Johannesburg – One of the top items on the agenda at this year’s Mining Lekgotla, which concluded on Thursday, was a call to mining stakeholders to promote peace and stability in the sector.

This was strongly advocated by both government and industry leaders.

At the conference, Finance Minister Pravin Gordhan called on all stakeholders in the mining sector to work towards addressing perceptions that South Africa is a risky investment destination.

He said that investors are looking for clarity and certainty in regulations.

Chris Jacobs, conflict resolution expert at business strategy consultancy OIM, said that although discussions at the conference convey a positive message, stakeholders must now act decisively.

“Action from stakeholders in promoting peace and stability in the mining sector is still lacking and long overdue,” he said.

“It is time to put words into action and address the numerous challenges with inclusive and well-planned interventions.”

The key to improving SA’s investor climate and outlook is the creation of labour stability, according to Jacobs.

This is the responsibility of all three roleplayers: government, industry and organised labour.

Someone has to take the lead and it’s still an open question as to who will step up to the plate.

The South African mining industry recently ranked in the bottom third of countries surveyed by Canada-based Fraser Institute, which measured varies countries’ competitiveness in the global market.

The 2012/2013 study found that more than 80% of those surveyed would not invest in South Africa, based on the country’s current climate in labour regulations, employment agreements and labour militancy or work disruptions.

“In this category, South Africa ranked fourth from the bottom out of 96 areas, with third, second and first place going to Venezuela, Egypt and Bolivia respectively.”

The study ranked 197 areas according to policy potential points, measuring investors’ confidence to do business in those countries.

Overall, South Africa scored 35th out of 100, while the top performer was Finland with 95.5 points. The worst performer was Indonesia, coming in at under 10 points.

“In my view, the solution to improving relations in the mining industry and the investor climate is to establish a partnership between the three parties, similar to an ‘economic Codesa’,” said Jacobs.

“A broad framework for solutions must be agreed upon, and they should systematically address the various aspects such as socioeconomic development, transformation and ultimately productivity and efficiency.”