Mining multi-national corporations and natural resource's governance issues: The case study of Bakubung and Wesizwe mining company in South Africa.

Abstract

The African Countries are endowed with an abundance of a variety of natural resources. These natural resources are highly sought after worldwide, particularly by the developed countries. Most of these natural resources are extracted by the Multi-National Companies, which have interest in the mining sector. The fact these Multi-National Companies operate in more than one country provides them with an unfair advantage over the mining host communities. It implies that these MNC’s are able to draw their agreements and plans on the basis of their previous experiences. This will certainly enable the MNC’s to perfect their plans to make more profit. The existing literature has been perused. The limitation on the existing literature is that there is inadequate literature, particularly on the mining community of Bakubung Ba Ratheo of South Africa. Most of available literature is on the technical part of the mining sector. The literature gap is that after the interrogation of the existing literature, it has become apparent that no ample work exists on issue of governance and this presents a good position for the relevancy this thesis. The resource curse theory is used to explore the effect of platinum in the Bakubung Ba Ratheo area. This enabled the researcher to conclude that availability of the platinum in the Bakubung Ba Ratheo has not positively contributed to the development of the host community. The Governance theory has also been studied to explore governance of the MNC’s and natural resources matters by the community. The conclusion is that there is general poor application of the good governance principles such as transparency, honesty and accountability. The host community is generally not informed about the agreements between the community and mining company and no transparency about the royalties and the shares held by the community. This thesis sought to explore governance of Multi-National Corporations and the natural resources. The qualitative research method, with open semi-structured questions has been adopted to undertake this thesis. The judgment sampling approach selectively targeted the knowledgeable and experts in the area of mining, particularly the interested stakeholders in the host community and government. The collected data was analysed using the content analysis method. The findings were that during the inception of the mine in the Bakubung Ba Ratheo area, community consultation was not adequately undertaken. There are no plans about the infrastructure of the mining company beyond the lifespan of the mining company. It has been found that the mining community is mostly conflict-ridden most of the times. The manner in which government is resolving the conflict is favouring the mining company rather than the mining host community. The population displacement affected the farmers. Some of these farmers had to quite farming due to the fact the relocation area was too far for them. This has an adverse effect on food security. The emergence of the informal settlements in the area badly affected the planning aspect of the government, particularly on the provision of the basic services such housing, education, sanitation etc. The proliferation of the informal settlement overlaps into the livestock grazing land. This perpetuates shortage of land for food production and security. Poor communication is discovered as one area that affects the flow of information in the community. This happens despite the government having structures such as ward committees, councillors and Community Development Workers. The Social and Labour plans do not address the challenges of the Bakubung Ba Ratheo, but is more of the public relations campaign by the mining company. The appointment of the community representatives on mining issues is not based on merit, but on the level of their criticism of the mining company. This does not necessarily translate into the ability to efficiently represent the community. The community and labour protests/unrests stretches the South African Police Services to focus on the protests, thereby deviating from actual plans of crime prevention. These findings expose the inability of the government to promote good governance. Contribution to the body of knowledge: The community development model has been developed for the mining host community. This model encourages the traditional leaders not to be part of the negotiation team during the inception of the mine processes; rather there must be a dedicated team of the trained negotiators. The agreements between mine and mining host community must be developed by a team of legal experts. The model further recommends for the establishment of the Community Rehabilitation Fund. The adoption and the implementation of this model will improve the livelihoods of the mining host community.