Creating Value with the Future in Mind - Anglo American South Africa

Responding to the changing
South African context
South Africa is a country that has
overcome significant historical
challenges to become a democratic
and inclusive society – one with the
courage and grace to address the
inequality of the past.
However, in 2012 the platinum
industry experienced unprecedented
levels of labour unrest characterised
by violence, intimidation and
inter-union rivalry. This presented
all parties with significant challenges
for using long-established labour
relations channels to seek resolution
and has brought to light the critical
importance of maintaining trusted
relationships between mining
companies, government, trade
unions and local communities.
The strategic
significance of
sustainable development
The events of 2012 highlighted the
complexity of societal challenges
and have clearly demonstrated the
business imperative of sustainable
development. As a business, we
cannot grow successfully in isolation
of our broader community. Issues
such as the provision of housing
and community health, economic
empowerment and stakeholder
management cannot be seen as
discrete elements of a business’s
‘social responsibility’ programme,
but as fundamental to a mining
company’s licence to operate.
As the mining company with the
most assets and employees in
South Africa, and with roots that
are firmly South African, our
exposure and response to this
unrest has come under particular
scrutiny. We have faced calls by
international investors to divest,
while there has been pressure from
other stakeholders to maintain
operations in the country regardless
of their financial viability. Managing
these competing stakeholder
expectations, and balancing the
roles and responsibilities of
business and government in
addressing developmental issues,
reflects the challenges at the
heart of the business response
to sustainable development.
The complexities
of South Africa’s
challenges
The strikes of 2012 had profound costs –
for the company, the mining sector,
our stakeholders and the country as
a whole. Already in a vulnerable state,
the platinum sector suffered severe
financial losses, significant disruption in
production and a damaged reputation.
Many of our employees and host
communities were exposed to extreme
violence and intimidation. The strikes
cost South Africa more than $1 billion in
lost mine output and half a percentage
point off the country’s economic growth,
and contributed to a significant loss in
investor confidence.
It is widely accepted that the
situation is complex; the underlying
systemic challenges that face
South Africa as a whole need a
multi-stakeholder response.
It is clear that we need to intensify our
efforts to build trust and enable more
effective communication – between
management and mine employees at
mine level, between union members and
their leaders, and between union leaders
and business leaders.
We must also work with stakeholders
to ensure that the collective bargaining
process is effective in meeting the needs
of all those involved.
Addressing these challenges will not
be easy. It will require business,
government and labour to work together
as partners for social development,
building on successes such as the
Tripartite Health and Safety Initiative
and the Mining Industry Growth,
Development and Employment Task
Team. In working together, we will need
to acknowledge the vital contribution
that each party provides in meeting the
country’s developmental priorities –
including mining’s significant positive
contribution as a mainstay of the
South African economy (contributing
9.2% of its GDP, directly employing
more than 500,000 people and
indirectly responsible for a further
840,000 jobs).
We will also need to examine how
all the contributions from the resources
sector, including procurement,
training and organisational capacity
development, can be harnessed to
support the objectives of the country’s
National Development Plan. At the same
time, each of us – business, government
and labour – needs the honesty and
humility to recognise our individual
and collective failure in addressing
some of the underlying systemic causes
of the labour unrest in 2012.
Khanyisile
Kweyama
Executive director,
Anglo American
South Africa
Within Anglo American, for example,
we have to redouble our efforts to
ensure that all of our employees
have access to decent housing.
Doing so will require leadership,
and a willingness to take bold
decisions aimed at challenging
normal business thinking, and
transforming the nature of some
of our existing relationships.
Committed to
demonstrating
leadership
Anglo American employees have
always tried to make a real difference –
with our work on safety, on health,
on housing, on education, on the
environment and on job creation. We
played an active role in contributing
to the transformation in South Africa
in the early 1990s – from facilitating
the CODESA negotiations that ended
apartheid, to running the world’s
largest and most respected
workplace HIV/AIDS testing and
treatment programme which has
been used around the world as an
example of how business can
improve society.
Our commitment to positive change
is reflected in our significant
investment in social development
initiatives. Zimele has already
created around 25,400 jobs, and we
are looking to increase that number
considerably over the next five years.
In 2012, our total spending with black
economic empowerment (BEE)
suppliers totalled some $3 billion.
Across South African businesses,
we are committed to building
tens of thousands of houses for
employees and to convert our
remaining hostel accommodation to
single-person occupancy by 2014.
In 2012, we invested $95 million in
community development initiatives
to support job creation, health,
education, infrastructure (such as
roads and schools), and community
health and welfare.
Our approach and solutions
therefore need to go beyond the
normal business thinking. We
need to take responsibility for this
breakdown in trust and appreciate
that, as leaders, we need to ask
ourselves: while we have done a
lot, have we done enough and with
enough depth? In answering this
question, we are committed to
working together – with our
business partners, our employee
representatives and with government –
to find solutions that make a
real difference.
Our approach
Anglo American plc Sustainable Development Report 2012 11