Getting unions on mining company boards is the best way to revive SA economy

AT last year’s Mining Charter III negotiations, trade unions campaigned for employee representation on company boards. A clause making provision for such representation was consequently included in the draft charter.

This clause was scrapped at the eleventh hour at the insistence of the Minerals Council South Africa, most likely owing to the robust nature of labour relations at the time. The Department of Mineral Resources (now DMR & Energy) was also uncomfortable with the clause given the fiduciary obligation it would place on employee representatives. But in the end, pulling the clause was indicative of poor cooperation and trust between role players.

Earlier this year, at the annual Africa Mining Indaba, South African president, Cyril Ramaphosa, challenged mining companies to have the courage of their convictions by giving employees representation on their boards. In response, Minerals Council president, Mxolisi Mgojo, said in May that a mature relationship between employers and trade unions had first be established before employee representation could be considered.

Germany is the world leader when it comes to employee representation on boards. The German embassy in South Africa, in collaboration with the Gordon Institute of Business Science (GIBS), last month invited Reiner Hoffmann, chairperson of the German Trade Union Confederation, and Peter Clever, board member of the Confederation of German Employers’ Associations, to address South African trade union and business leaders on the German system of co-determination.

Hoffman pointed out that after World War II, Germans realised that it was division in the ranks of trade unions and employers, and between trade unions and employers, that allowed the Nazi regime to develop. And it was division that prevented employers and employees offering a collective resistance. After the war, trade unions were therefore united in one trade union confederation and employers in one employer organisation.

According to Clever, German employers and trade unions also realised at the time that labour peace and increased productivity were essential elements for economic growth.

In practice, this means that agreements between employers and trade unions must take into account the interests of employers and employees alike. A ‘win-win’ agreement that is constructed it such a way results in labour peace.

This employer/employee maturity paved the way for the democratisation of the workplace and supervisory boards with equal representation between employees and shareholders were established in workplaces, while employees were given a further say in works councils. A key element of this system is that there is less interference from politicians in workplaces.

As with post-World War II Germany, the South African economy is in need of revival. A way of getting there, apart from good governance, will be labour peace, unity in the workplace, and increased productivity.

Martin Schäfer, the German ambassador to South Africa, warned however that labour relations will be an obstacle to economic growth if characterised by distrust and ideological warfare – which is typically the case in South Africa. If labour relations are characterised by trust, responsibility and clear rules, as in the case of Germany today, then it will lead to economic growth.

South Africa is far behind Germany when it comes to the implementation of co-determination, but Sipho Pityana, president of Business Unity South Africa (Busa), who also participated in the GIBS discussions, made the point that after the appointment of National Union of Mineworkers (NUM) founder, James Motlatsi, to the AngloGold Ashanti’s board, there was a significant decline in mining mortalities.

Motlatsi convinced board members that the interests of employees should take precedence over profit.

South Africa’s mining sector has to overcome many challenges, though, before employees will get representation on company boards. In addition to an amendment to the Companies Act to provide for employee representation, a stronger commitment from employers, employees and mining trade unions is needed to mitigate the mutual rivalry and to bring maturity to relations.

This is not going to happen overnight, but a progressive mining company that makes provision for employee representation on his board can accelerate workplace maturity by taking such a brave step.

Gideon du Plessis is Solidarity’s General Secretary

4 COMMENTS

  1. What rubbish! If Unions want representation they should buy a stake so their position is balanced. Alternatively if employees or communities have a stake in a company they would have representation anyway. With unemployment in South Africa at over 40% there should not be any unions, they are killing investment and costing Many millions of jobs!

  2. Perhaps one should also consider having DMR representative on the Board. They might then learn something about the mining business and stop sabotaging the industry with bad legislation, policies and indecision.

    • DMR and Unions have, in fact, become one and the same. Lest we forget Gwede’s history😆

      And the dream of affording everyone’s “happiness” when out with the flikkering lights😂😂😂

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