Mining Charter is but one proxy battle in ANC schism

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ANC Headquarters, Johannesburg

COMMENTING in an opinion piece on May 12, I suggested the Mining Charter would not see “light of day” in 2017 owing to the political complications likely to be thrown in its way by the ANC’s policy and elective conferences.

I also circulated speculation at that time which said the proposed charter did not have the blessing of other government departments, including the National Treasury, or even the Department of Trade and Industry. As it turned out, the redrafted Mining Charter fell very much in public view.

On June 14 the Chamber of Mines was invited to meet with the Department of Mineral Resources ahead of the charter’s June 15 public release. For reasons that are now apparent, the Chamber declined the meeting saying it would not support a policy document into which it had no formal input. It seems increasingly clear now that a similar complaint is held by elements of the ANC, primarily its Economic Transformation Committee.

What I should have said in that May column is that a supportable, practical Mining Charter would not see light of day until 2018, or perhaps even later. The view of legal experts is that the current Mining Charter redraft is so errant, so derelict in execution, that it could take more than a year to straighten out.

By way of evidence, a report by BusinessLive following the ANC’s Policy Conference this week cited a party source as saying the “design” of the Mining Charter would be changed. This got me thinking.

If I were to say I didn’t like the colour of a certain car I wanted to buy (let’s say a Mercedes  S Class since we’re talking Government matters here), you’d think my objection was an easily fixed problem concerning aesthetics. If I were to say i didn’t like the ‘design’, you’d be right to assume I wanted a different car; or worse, I thought the car was unsafe.

Clearly, there’s disagreement around the conception of the Mining Charter and apprehension of the future on which it is based. This will throw the Mining Charter back into the crucible. Even if the ANC doesn’t take the charter back to the drawing board, the Chamber will quite likely force a redraft by dint of its legal efforts. Either way, it’s a mess that has no prospect of short-term resolution; at least until after the ANC’s year-end Elective Conference.

“The ANC is particularly worried about the potential job losses that this new charter will bring about,” said Nicola Jackson, a partner at Canadian attorney, Fasken Martineau. “They may also be concerned about the impact the implementation could have on the rating agencies’ reviews.”

“This policy uncertainty is going become a fact of life for the industry for at least a good year or two; at the very least – unless government actually gets all the stakeholders around the table and starts again,” said Jackson. “With regards to the court process, the interdict should be granted in the next month or so and, in all likelihood, the review will only happen early to mid-/next year … and that is being optimistic on timing,” she said.

Said Peter Leon, an attorney at Herbert Smith Freehills: “I think it speaks to the fissures in the ANC and real divisions about the trajectory of economic policy. It is clear that the Economic Transformation Committee do not support the new Mining Charter and has said as much. My sense is that the ANC itself has increasingly less control of the government.”

The Chamber of Mines declined to comment, but Bruce Falcon, an attorney for Falcon Hume Inc, said confusion over the destiny of the Mining Charter was wrapped up in the future of the ANC as a whole.

“Aside from the usual debates about the meaning and impact of the Charter itself, one of the most useful observations we discussed was the Charter being one of the proxies for the factional battle occurring within the ANC at the moment,” he said.

“With that as the backdrop, it seems to me entirely credible that at least some of the ANC  isn’t behind Charter 3 in its current form and that it needs to be re-thought in several respects, both on principle … as well as because it’ll be a disaster for the economy long term,” he added.

As a consequence, it’s hard to see the ANC exerting any positive influence on the Mining Charter going forward. The ANC is fractured and so is Government; similarly, the DMR – like Jonathan Swift’s floating island – is utterly disconnected from the reality set before us this week in the IMF assessment of the South African economy.

Said the bank: “Low investment and consumer confidence have been associated with rising uncertainty regarding the direction of policies as well as perceptions of weakening governance”.

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