South Africa has to move beyond talking about labour peace and stability to real action

South Africa has to move beyond talking about labour peace and stability to real action

One of the top agenda items at this year’s Mining Lekgotla which concluded yesterday, 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 OIM, says 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. It is time to put words into action and address the numerous challenges with inclusive and well-planned interventions.  The key to improving our investor climate and outlook is the creation of labour stability. 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,” says Jacobs.

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 jurisdictions, with third, second and first place going to Venezuela, Egypt and Bolivia.”

The study ranked 197 jurisdictions according to policy potential points, measuring investors’ confidence to do business in those countries. Overall, South Africa scored 35 out of 100, while the top performer was Finland with 95.5 points.  The worst performer was Indonesia, coming in 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’. A broad framework for solutions must be agreed upon and they should systematically address the various aspects such as socio-economic development, transformation and ultimately productivity and efficiency,” concludes Jacobs.