Sustainable Job Creation in Mining and Mineral Resource Development
Issued by Ministry of Labour
25 FEBRUARY 2000
Master of Ceremonies
Honourable Minister of Minerals and Energy
President of the NUM
Directors General
Captains of Industry
Distinguished Guests
Ladies and Gentlemen
As we all know, this mining sector summit is a consequence of the Presidential Jobs Summit that took place a little over a year ago. At this Summit, diverse constituencies came together to craft a series of measures that they agreed could reverse the alarming trends in unemployment, underemployment and job loss. As such, government, labour, business and community representatives committed themselves in a joint declaration to undertake a range of activities, including those of particular relevance to the mining industry such as the sector summits and the Social Plan. The employment situation was and continues to be one of the country's greatest challenges. And, indeed, as this sector summit attests, the nation's eyes are focused on what we, collectively, can do to have a meaningful impact on sustainable job creation in mining and minerals resource development.
The mining industry is one of our key industries. But, as we are all aware, one seen as cause for national concern since it has come to be regarded as an industry that sets the trend for the downward spiral of retrenchments, misery and aggravated poverty. The dramatic levels of retrenchments in the industry, led primarily by the gold sector, earned the industry the unenviable title of an "industry in crisis". It was in this context that the Gold Crisis Committee was established. The specific task of the GCC, as it has become known, was to try to place a brake on the pace and scope of what appeared to the general public as unprecedented retrenchments that engulfed the sector. The GCC did in fact review the intentions of a number of mines to retrench in an effort to reduce job losses. The extent to which the GCC has indeed succeeded in meeting its objectives is in part what we have to contend with in these few days of deliberations.
The mining industry has and continues to occupy a special place in the minds of the people and in the national economy. This is true, not least because of its historical role and the way in which workers, their families and their communities have been linked to the industry. The very institutions that the industry created were synonymous with apartheid. More importantly, the industry characterised in large measure the way in which industrial policy under apartheid lead to structural distortions and disarticulations in the formal sector. For example, mining became an enclave sector, which simultaneously deprived the majority of their productive assets while exploiting some as cheap labour. It was also characterised by an inward-looking strategy that emphasized large-scale and capital-intensive forms of production with low absorptive capacity for labour.
In our own lifetime we have witnessed the gradual transformation of the industry, which has come about due to internal and external pressures in which the trade unions have had no small part.
Our government continues to implement measures to transform our economy in order to redress the inhumane and degrading poverty and inequality inherited from the apartheid regime. In order to achieve the goal of economic growth and the promotion of equity, we must identify the structural problems facing the South African economy, and how the labour market and industry must be transformed to meet the needs of the country.
This mining sector summit and the tireless work that has gone into it is a testament to this continued transformative thrust. The industry and all its role-players can take heart in the knowledge that, while there is much to be done in the industry, as can be said of all sectors in the economy, much progress has been made. As the commissions continue to carry out their work they will point out the areas in which common strategies can be forged to further advance this process. What lies at center stage is the need to transform the industry in a manner that efficiently utilises its human and other resources. But what do we mean by efficiency?
Understandably, it is the goal of every business to operate at the lowest cost, or at least business principles dictate that this should be the case. Through our discussions and experiences, it must be evident to all role-players that there are concrete ways to do this without resorting in the first instance to casting off labour. This is indeed the approach we agreed to as social partners in the Social Plan agreement. As you will note from the deliberations of the commissions, a strong emphasis in government's approach, whether it be on the social safety net, skills development for workers and human resource management or minerals promotion, has been to lower units costs while increasing efficiencies. Why do we seek these objectives? It is in order to enhance the productivity, profitability and competitiveness of the industry. We view this to be a progressive approach to the task of job creation and job retention. Incidentally, it is also an important element of the manner in which the Department of Labour itself has pursued labour market policy in this era of transformation.
Having said this, the approach does not stop there. It is imperative to also note that it is our desire and expectation that the benefits of this approach will not only accrue to the mining houses but also to labour and indeed to the country as a whole. In this context it becomes important to keep our country's employment situation at the fore and to remind all parties as to why a fundamental commitment to resolving the employment problem is so crucial and essential. It would be naive or perhaps cynical to believe that we can secure commitment from one party without reciprocal commitment from the other. This includes sharing in the spoils of the joint commitment in a concrete way. This may mean security, redistribution, assurances, responsibility, and any number of other ways in which all stakeholders are appreciated in the full sense of the word.
The imperatives of the mining summit and indeed the mining industry adopting such an approach are plainly written in the daily reality of a large segment of our population. Consider, if you will, that the reality of unemployment for a great number of people means that those who are employed must provide for a large number of family members. We know these as remittances, which are the direct consequence of earned wages. Clearly, wages or the absence thereof have a significant impact on the livelihoods of many more people than those who have jobs. Studies on the labour market have long established this, and a Department of Labour sponsored study has recently confirmed this once again.
Given these and other realities, it behooves the stakeholders to develop a sectoral employment strategy that addresses the short-, medium-, and long-term. However this must be done in a manner that creates an enabling environment, targets precisely its beneficiaries, addresses questions of security and welfare and supports skills development, all while simultaneously addressing the issues of the structural, cyclical and frictional unemployment that are prevalent in the industry and in the wider economy.
Where the sector strategy is unable to retain all existing workers and retrenchments do in fact become necessary, then we must ensure that the Social Plan is fully catered for and utilized. The first priority is obviously to ensure that all options have been considered and that there is no other way to avoid retrenchments. The Social Plan, which requires the concerted support of employers, must be utilized in order to ensure that retrenched workers have the support to re-enter the world of work as quickly as possible and in a manner that gives them real choices about re-employment, self-employment and other avenues that bodies such as the Mineworkers Development Agency have brought to the fore.
It is clear from the level of work that has gone into the preparations for this summit that for the most part the social partners have taken their tasks seriously. And, though there may always be a sense by some that more could or should be done, we must applaud the process. The tripartite process that we have elevated in South Africa has in fact become a model for many other countries, including those in the region. It is the way in which we undertake our own scope of work in the Department of Labour.
Job creation and job retention are at the fore of this summit. The efforts by all stakeholders, including the members of the task teams, the Secretariat and all those who have made this summit a reality, speak to the implementation of the process that was agreed to at the Presidential Jobs Summit and endorsed by stakeholders. This is the process that will be repeated for the various sectors that are scheduled to have their own summits and which will address job creation in their sectors.
This summit holds within it the promise of demonstrating to our country and the world that we as stakeholders in the mining industry, government, business and labour alike, indeed have the collective ability and will to emerge with a meaningful solution. None of us can do this alone. It is up to us to deliver a message of hope. This is our challenge. We dare not fail.
I thank you.