Mining: Compliance, SLP, and Socio-Economic Development

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Mining Compliance, SLP, Socio-Economic Development. Comply with the Mining Charter’s SLP whilst achieving the socio-economic development element of the BEE verification process.
Business expansion is the answer to developing and emerging economies. It must however include growth that leads to the reduction of the gap between the very rich and the very poor. In this regard, good governance ethics of those who administer the economies will matter. Empowering people through effective social and labour plans can unshackle those who are powerless and enhance their earning capacities, as well as giving them a voice.

Compliance to the Mining Charter SLP

“When my client, who has various mining sites in Pretoria, contacted me to find out how Triple E Training can help his company reach its social and labour plans target, I did not hesitate to offer him our Community Sponsored Adult Basic Education and Training Project. This programme would not only see my client reach their mine community development targets but it would also contribute to the company’s corporate social investment goals.” Mining Compliance, SLP, Socio-Economic Development[1]
In this article we will investigate the following topics:
  1. The Mining Charter
  2. Social and Labour Plan (SLP)
  3. Corporate Social Investment (CSI)
  4. Broad-Based Socio-Economic Empowerment (BBSEE)
  5. The Verification Process
  6. Mining Compliance, SLP, Socio-Economic Development
This will to assist you in gaining a comprehensive understanding of the various aspects of complying with the Mining Charter’s SLP whilst achieving the socio-economic development element of the BEE verification process. That is: Mining Compliance, SLP, Socio-Economic Development.

Mining Compliance, SLP, Socio-Economic Development

1. The Mining Charter

The Broad-Based Black Economic Empowerment (B-BBEE) Charter for the South African Mining and Minerals Industry, commonly known as the Mining Charter, was first developed in 2002. It served as an instrument through which the Minerals and Petroleum Resources Development Act (MPRDA) could fuel transformation in the industry.
The Mining Charter requires mining companies to transform themselves by providing integrated socio-economic development for host communities. This is done by integrating development plans for mining communities with special emphasis on the expansion of infrastructure.
According to the Charter, ‘community’ means a coherent, social group of persons with interests or rights in a particular area of land which members have, or exercise communally, in terms of an agreement, custom or law.
Communities should be the beneficiaries of a Social and Labour Plan (SLP). The subject of SLP’s is discussed in the next section of this article.
These beneficiaries are those who are located in close proximity of the mines that serve them, or those that travel to and from their work place in the mines. There have been reservations about the level of community involvement in the implementation of the SLP.
The Centre for Applied Legal Studies reported that the SLP did not uphold its mandate for social and economic advancement. It encouraged a relook at how the system is designed and implemented so that it benefits the communities more. [2]
Mineral Resources Minister Mosebenzi Zwane, on the topic of the Mining Industry’s responsibility to the community: “It is extremely important for industry to serve the needs of the communities in which it operates, as well as those from which it sources labour. With greater collaboration we will be able to achieve even greater things for our communities, so that we can indeed realise the objectives of the Mineral and Petroleum Resources Development Act – that the people derive sustainable benefit from the minerals beneath the soil.” [2]

2. Social and Labour Plan (SLP)

Mining Compliance, SLP, Socio-Economic Development To assure the successful implementation of an SLP it is imperative to get all of the parties involved in the process. The following participants should be drawn in to the drafting of an SLP:
  1. Department of Mineral Resources (DMR)
    The Department of Mineral Resources oversees the SLP implementation procedure and enforces applicable laws around mining.
  2. Communities
    Communities are the main beneficiaries of the SLP.
  3. Mining Companies
    Mining companies are responsible for designing and implementing programmes that will benefit the development of communities and workers.
  4. Local Government
    Local Government and municipalities are required to compile an Integrated Development Plan (IDP) that serves as a guide for development in municipalities.
  5. Traditional Authorities/Leaders
    Traditional leaders are a liaison between the community and mining companies. In particular, they deal with issues that affect communal lands.
  6. Trade Unions
    Trade Unions are associations that represent mine workers and their rights. Trade unions also play a role in developing SLP’s. Their priority is monitoring mining companies to ensure that they comply with requirements that will benefit the community.
  7. Mining Contractors
    Mining contractors are companies that employ mine workers. Workers employed by mining contractors should have the same benefits as those employed directly by the mine.
The purposes of the Social and Labour Plan are outlined in the following points:
  • Promote economic growth and development in the industry.
  • Promote employment and advanced social welfare for all South Africans.
  • Utilise and expand the existing skills base to empower and serve the community.
  • Offers a guarantee that relevant parties contribute towards the socio-economic development of the areas from which the majority of the labour force is sourced.
  • Mining Compliance, SLP, Socio-Economic Development.
It is the company’s responsibility to apply fair selection principles in this regard. The programme must match the skills development plan. It should focus on building aptitude in various skills and careers for employees and mine communities, reflective of demographics as defined in the Mining Charter. [2]

Development needs of mining communities

To be productive, secure, accountable and sustainable, mining operations must live alongside blossoming communities; places people call home.
When an organisation registers for mining rights; it is required to submit a number of documents on its plans to mine. One of these documents is a social and labour plan (SLP). Mining Compliance, SLP, Socio-Economic Development. Social and labour plans set out how the company intends to share some of the benefits that flow from mining. These include plans for advancing the skills of their employees; upgrading local schools and roads; as well as supplying housing, water and sanitation in the area, amongst others. Once a company is granted a mining right, the social and labour plan they submitted becomes a binding legal document. 
The reality is that even though the SLP system has been around for more than a dozen years, most communities affected by mining still live in poverty, despite having strong regulations in place. To a degree, this is because SLP’s are often designed without discussions with the people who should benefit from them. For this reason, the plan may not successfully meet the challenges experienced by the communities. It is also partly because not all that is promised in an SLP is delivered. The Department of Mineral Resources does not always follow up to ensure that these guarantees are kept.
We need an urgent shift in how SLP’s are designed and implemented. The ultimate goal is achieving social justice so that affected communities and mine workers no longer remain at a social and economic disadvantage.
Mining Compliance, SLP, Socio-Economic Development
Regrettably, mines and municipalities are inclined to confer with only a small section of the community; most people in the area know nothing about the SLP. It is important that community groups know about their rights under the Mineral and Petroleum Resources Development Amendment (MPRDA) and SLP systems. Where a community is divided, companies and government must connect with all the parties in the community.
Social and labour plans must make clear how the mine aims to develop the skills of employees and the community. This should include skills applicable to mining as well as other sectors. These portable skills include adult basic education and training, artisan training, learnerships, bursaries and other training initiatives for people in the community. [3]
Constitutional Mandate Section 9 of the Bill of Rights [4] “Equality includes the full and equal enjoyment of all rights and freedoms.
To promote the achievement of equality, legislative and other measures designed to protect or advance persons or categories of persons disadvantaged by unfair discrimination maybe taken.”

3. Corporate Social Investment (CSI)

Corporate social investment (CSI), also known as community social investment, embraces projects that are separate from the day-to-day business undertakings of a company and therefore separate from profit motivation. These projects are primarily aimed at using company capital to uplift communities.
The focus is not on marketing the company but rather on developing the community.
The Mineral and Petroleum Resources Development Amendment (MPRDA) Regulations set out that this must include: [5]
  1. A skills development plan for the workforce. This must set out the numbers of workers and their skill levels.
  2. A career development plan which is a plan to ensure that workers are able to progress to more senior positions.
  3. The employment equity statistics of the mine, as well as their plan to ensure that 10% of employees are women, and 40% of management positions are occupied by historically disadvantaged South Africans within 5 years from when the mining right was granted.
  4. A mentorship plan where workers are paired with mentors to make sure they can map out their career growth.
  5. A Bursary and Internship Plan, the purpose of which is to provide bursary and experiential learning opportunities to employees and mining communities.
  6. Mentorship Plan In order to meet the requirements of Regulation 46 (b) (iii), the following should be provided:
    • Identify areas of development that require mentoring.
    • Provide a detailed plan highlighting the number of mentors and mentees with target and timeframes, and how the plan will be implemented.
    • Link with individual development programmes.
    • Focus on learners, career progression targets, employment equity targets, interns and bursars.
    • Mentorship should be made available for all levels of the workforce.
    Bursary Plan In order to meet the requirements of Regulation 46 (b) (iv) the following should be considered:
    • Provide targets, timeframes and budget.
    • Provide areas of learning in line with the needs of the company.
    • Separate internal and external bursars.
    • Indicate whether bursaries are continuous or new intakes.
    Internship Plan In order to meet the requirements of Regulation 46 (b) (iv) the following should be considered:
    • Provide targets, timeframes and budget.
    • Provide areas of training in line with the needs of the company.
    • Provide how interns would be afforded the opportunity for experiential training.
    • Separate internal and external internships.
    • The plan should be inclusive of own funded studies.
    • The plan should be reflective of demographics as defined in the amended Mining Charter. [6]

    4. Broad-Based Socio-Economic Empowerment (BBSEE)

    Broad-Based Socio-Economic Empowerment (BBSEE) refers to a social or economic strategy, plan, principle, approach or act, which is aimed at:
    1. Redressing the results of past or present discrimination based on race, gender or other disability of historically disadvantaged persons in the minerals and petroleum industry, related industries and in the value chain of such industries; and
    2. Transforming such industries so as to assist in, provide for, initiate, facilitate or benefit from the:
    • Ownership participation in existing or future mining, prospecting, exploration and beneficiation operations;
    • Participation in or control of management of such operations;
    • Development of management, scientific, engineering or other skills of HDSA’s;
    • Involvement of or participation in the procurement chains of operations;
    • Integrated Socio-economic development for host communities, major labour sending areas and areas that due to unintended consequences of mining are becoming ghost towns by mobilising all stakeholder resources.
    Mining Compliance, SLP, Socio-Economic Development. Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry. [7]
    The BBSEE Charter for the South African Mining and Minerals Industry was amended in 2010. It states that: “Mining companies must conduct an assessment to determine developmental needs in collaboration with mining communities and identify projects within the needs analysis for their contribution to community development with integrated development plans (IDP), the cost of which should be proportionate to the size of the investment.” [8]

    Why an Integrated Development Plan (IDP) is Recommended

    Mining Compliance, SLP, Socio-Economic Development
    Five reasons why you should have an IDP:[9]
    1. Effective use of resources. An IDP will assist in prioritising the needs of the local communities; enabling the company to find cost-effective ways of providing services.
    2. Service delivery is accelerated. An IDP will help you identify key areas within the community that can be incorporated into your development plan; offering a ‘check-list’ to companies to help expediate the process.
    3. Budgeting is made easier. Where clear development plans exist, a company is better able to allocate the necessary funds timeously, thus ensuring integration into the mine’s socio-economic development.
    4. Encourages co-operation with local and provincial authorities. An uplifted community is less disgruntled and more open to engage in conversation and negotiations with local and provincial authorities.
    South Africa faces many challenges of which poverty and inequality are the most prominent. Social development is one of the instruments used in an attempt to address some of these challenges. The South African government adopted a beneficial approach to social welfare. With our passion for education, we at Triple E Training equip people for life. We ensure the integration of education and training into their socio economic environment, enabling them to function efficiently as active citizens. We aim to provide the skills and motivation for them to pursue further qualifications offered at higher levels of the National Qualifications Framework.

    5. The Verification Process

    The previous 7 elements have now been condensed into 5 elements. Previously known as ‘Management Control’ and “Employment Equity”, they have merged into ‘Management Control’ element. ‘Preferential Procurement’ and ‘Enterprise Development’ merged into a new ‘Enterprise and Supplier Development’ element.
    Before we delve into the facts and figures too deeply – bear in mind that they do change every few years. A new concept of priority elements has been introduced, where a sub-minimum of 40% of the Ownership net value score, Skills Development and ESD are required.  Should large companies not meet this sub-minimum in all three elements, their BEE level would drop one level whereas Qualifying Small Enterprises (QSE’s) would drop a level only if Ownership and one of the other priority elements are not met.
    A Qualifying Small Enterprise (QSE) is one of the categories of South African businesses as per the Broad Based Black Economic Empowerment Act. A QSE is a business with a turnover of between R10 million and R50 million and is measured using the QSE Scorecard. Generic enterprises are those enterprises that have a turnover of greater than R50 million. It is estimated that only 4% of South African enterprises fall into this category. Generic enterprises must apply all elements of B-BBEE to calculate their score as per the Generic Scorecard.

    Scorecard Elements

    As we mentioned in the previous section of this article, there are now 5 Elements under the Broad-based Black Economic Empowerment Amended Codes of Good Practice.

    Ownership

    Companies need to assess ownership structures In the updated B-BBEE Codes of Good Practice that came into effect in May 2015, Ownership became an even more important requirement. This meant that companies had to assess their structures and strategies in order to remain compliant. The sector which was least affected by the updated codes is the Exempt Micro Enterprises sector, where a Level 4 status automatically applies. However, 100% black-owned enterprises in this sector will be granted Level 1 status and 51% black-owned enterprises will be granted Level 2 status.

    Skills Development

    Skills development as a priority element of the B-BBEE scorecard
    Skills development is one of the easiest priority elements to comply with. It measures the extent to which companies carry out initiatives designed to develop the competencies of black people internally and externally. The sub-minimum requirement for skills development is 40% of the total weighting points for skills development which, on the generic scorecard, is 20 points. It is further required that black women should form between 40% and 50% of the beneficiaries of the relevant elements of the B-BBEE scorecard, and that black people with disabilities, black youth, black people living in rural areas, and black unemployed people also form part of the beneficiaries.[10]
    Skills development initiatives in Category B and C training
    As a priority element of the scorecard, skills development initiatives in Category B and C training will enable your business to achieve the maximum weighting under the skills development element, thereby helping your business’ overall rating. One of the advantages of a well-planned skills development programme is that your company would be able to train community-based unemployed learners. This will have a further positive impact on the socio-economic development element of the scorecard.
    Category B and C Training There are three elements in which you can score through accredited Category B and C training. They are; Skills Development (SD), Enterprise and Supplier Development (ESD), and Socio-Economic Development (SED). BEE training in Category B and C in the learning programme matrix will enable your business to achieve the maximum points under the skills development element of the scorecard.

    Enterprise and Supplier Development

    Revising enterprise and supplier development lists to attain the best levels
    Enterprise and Supplier Development (ESD) is not in fact a new element, it is a fusion of Preferential Procurement and Enterprise Development elements. This element is made up of three subcategories: Preferential Procurement, Supplier Development, and Enterprise Development.
    Preferential Procurement
    The scoring is based on the suppliers your business uses; specifically concerning the amount of money you spend purchasing goods/services from them. The amount your business spends on BEE-compliant suppliers with higher BEE levels will result in a higher point allocation on the Procurement Indicator.
    Enterprise Development and Supplier Development
    These practices apply to a business that is 51% or more Black Owned, if you wish to use your contributions to gain BEE points. A Supplier Development beneficiary must, however, be one of your business’s suppliers that meet the above criteria.

    Adult Education and Training (AET)

    The Department of Education has defined Adult Basic Education and Training as follows: AET is the general conceptual foundation towards lifelong learning and development, comprising of knowledge, skills and attitudes required for social, economic and political participation and transformation, applicable to a range of contexts. There are an estimated 3.3 million illiterate adults in South Africa. AET is available to those who want to finish their education. ABET is uniquely South African. In other parts of the world, ABE means Adult Basic Education. South Africa added the T, for Training.
    ABET grew as a result of adult literacy work. Its adoption was due to political struggle, informed by research. In spite of commendable achievements of adult literacy work in the struggle, literacy alone was not considered adequate to support real social transformation. It was meant to offer an appropriately adult route to a general education aimed at making a significant improvement in quality of life.
    Learning vs Training, what is the difference? It’s important to understand the difference between learning and training. Training is the giving of information and knowledge, through speech, the written word or other methods of demonstration in a manner that instructs the trainee. Learning is the process of absorbing that information in order to increase skills and abilities and make use of it under a variety of contexts. [11]

    Triple E Training – your partner in complying with the Mining Charter SLP

    In compliance with the Mining Charter, Triple E Training consulted, on behalf of a client, with the leaders within two selected communities. 40 people from within those communities were selected for the programme. The selected group of individuals were put through our placement assessment in literacy and numeracy to ensure that they are placed on the applicable ABET/AET level. [1]
    Based on the results of the placement assessment, 20 community members at each of the two sites were enrolled in our 120-hour Communication Level 1 literacy training (basic English), providing them with a General Education Training Certificate (GETC) at ABET level 1.
    With Triple E Training as its partner our client successfully complied with the Mining Charter’s social and labour plans. They not only conformed to the requirements of the Charter, but also achieved the socio-economic development element of the BEE verification process.

    Triple E Training and AET

    ABET, or Adult Education and Training (AET), is classified as Category B training on the learning programme matrix. Triple E Training offers a variety of ABET learning areas of which numeracy and communication in English (literacy) are the two most popular.
    Learnerships are categorised as Category C and D training, and we offer NQF 1 to NQF 4 learnerships in business practice, and manufacturing and engineering related activities. The most popular learnership is the Business Practice NQF 4 qualification.
    Because Triple E Training is an accredited service provider of ABET and learnerships it means that our clients can use the training as part of their Workplace Skills Plan (WSP), Annual Training Report (ATR), the skills development and preferential procurement elements of the BEE Scorecard, and to claim tax grants and SETA rebates. [1]
    In the areas of skills development, enterprise and supplier development, and socio-economic development, there is always work to be done. It is within these areas that we have to make a positive difference in people’s lives, and directly stimulate the economy. Mining Compliance, SLP, Socio-Economic Development.

    Source documents:

    [1] www.eee.co.za
    [2] www.dmr.gov.za
    [3] www.wits.ac.za
    [4] www.justice.gov.za
    [5] www.cer.org.za
    [6] www.dmr.gov.za
    [7] www.westerncape.gov.za
    [8] wwwsahrc.org.za
    [9] www.etu.org.za
    [10] www.thedti.gov.za
    [11]www.talentlms.com