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South Africa’s secretive DMR needs to subject itself to transparency evaluation, set reform priorities

29th June 2018

By: Martin Creamer

Creamer Media Editor

     

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Many organisations have established frameworks for ending the secrecy that continues to shroud the execution of government minerals management in South Africa.

This secrecy is the root cause of many of the ills of South Africa’s high-potential minerals.

South Africa sees itself as being above the standards laid down by the Extractive Industries Transparency Initiative (EITI) and calls made for fair, transparent disclosure around extractives, with clear and open rules of engagement between governments and mining companies, have not been heeded, at our peril.

A senior government official some years ago made a public admission during a public debate that he had deliberately held back mining rights applications.

At that time, major mining companies had plans to create a new mini city in one of the near-mine areas but never got a chance to get it off the ground because its applications had been purposely put in a bottom drawer.

Young people who would now be getting jobs from many of the ventures planned are jobless as a result.

Even in once-thriving mining areas, former mineworkers are working as car guards and battling to eke out an existence.

Those who harmed the country’s economy by being able to function in the dark continue to go unpunished and innocent victims are suffering as a result of their errant behaviour.

Yet, even against this sad background, there are still no steps being taken to have the execution of government minerals management carried out transparently.

The country has a problematic cadastre system that falls many notches below the modern systems of other mining investment destinations and all South Africans are being disadvantaged as a result.

There are any number of codes of good practice and guides on resource transparency. In addition to the EITI, there is the Natural Resource Governance Institute that can lend a hand, as well as the International Monetary Fund, which sets global standards for extractive sector fiscal transparency. Yet opacity rules.

It is as easy as pie for the Department of Mineral Resources (DMR) to proactively communicate every mineral rights decision it has taken each month and have a reference back to its website of all the opportunities still available to investors. Discretionary arrangements between government and mining companies are unsustainable.

The DMR needs to subject itself to an impartial transparency evaluation to identify its vulnerabilities – and the past period has shown that there are indeed very many – and to set reform priorities.

This needs to be accompanied by the appointment of a credible external monitor to ensure that governance is ongoing and there should also be an open revelation of what South Africa is receiving from its mining concerns.

It was recently pointed out that the biggest investors on the JSE are now workers through their pension and provident funds.

But, unless mining is made more attractive, those who manage the funds of workers will be obliged to steer clear of the minerals sector as an investment destination for fear of jeopardising the retirement nest eggs of the South African workforce.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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