Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry
|11 October 2002
|Policy/Strategy (South Africa)
|Republic of South Africa
|South African Mining Charter
|The Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (‘the Charter’) was developed by the Chamber of Mines of South Africa, the Department of Minerals and Energy, the South African Mining Development Association and the National Union of Mineworkers on 11 October 2002. The purpose of the Mining Charter is ‘the pursuit of a shared vision of a globally competitive mining industry…[that] will reflect the promise of a non-racial South Africa.’
The preamble to the Charter states that it ‘is the government’s stated policy that whilst playing a facilitative role in the transformation of the ownership profile of the mining industry it will allow the market to play a key role in achieving this end’.
|Under the Broad-Based Black Economic Empowerment Act 2003, industries can make charters that will govern the way that industry counters the effects of apartheid on its ownership, management and workforce. The Charter seeks to ensure that those provisions are put into effect and contains ‘undertakings’ which stakeholders in the mining industry must subscribe to, including in the areas of:
Human resource development, including providing scholarships to students studying mining related areas and offering literacy training to all employees;
Employment equity, which refers to positive discrimination in favour of ‘historically disadvantaged South Africans’ (HDSA), including a baseline of 40% HDSA participation in management within five years;
Housing and living conditions, including that stakeholders establish measure to improve the standard of housing and nutrition of mine employees;
Procurement, including giving HDSA companies preference in supply and services;
Ownership and joint venture, including achieving 26% HDSA ownership of mining industry assets within 10 years. The Mining Charter specifies that all transactions ‘will take place in a transparent manner and for fair market value’; and
Beneficiation, whereby companies can offset the level of value that is benefiting local communities against its HDSA ownership commitments.
These are not legally binding obligations, however companies must be BEE compliant in order to be eligible for new mining rights or the conversion of old mining rights.
In addition, the Charter details obligations on government, including that it will support HDSA companies with prospecting and mining exploration. The Charter contains an agreement by industry that it will assist HDSA companies in securing finance to fund their participation in ownership of the industry.
In order to monitor its implementation, the Charter stipulates that companies must undertake to submit an annual report setting out their progress towards the goals contained in it.