A framework for integration of Mining Charter III for inclusive procurement, supplier and enterprise development by mining organisations in Mpumalanga province

Abstract

Inclusive procurement, radical economic transformation, socio-economic transformation, local economic development, including the development of suppliers and enterprises are at the peak of the public domain discussions. The publication of Mining Charter III on 27 September 2018 and the announcement of the abolishment of Mineral and Petroleum Resources Development Act Amendment Bill appeared to provide pertinent certainty and stability, especially during the early stages of promulgating the Charter. Following the promulgation of the Mining Charter III, historically disadvantaged persons (HDP) and numerous local trade unions are confident that the socio-economic differences will be rectified and that the Mining Charter III will be enforced. Mining organisations have had to align their current supply chain strategies with the current Charter requirements to remain compliant. This has caused tension as Senior Supply Chain Management practitioners are expected to ensure strategic fit and alignment between the Mining Charter III and the corporate strategy. The in-depth scholarly review evidenced gaps in the literature and practice that, even though some mining organisations have embraced supply chain management functions, they are still exposed to concerns such as lack of proper knowledge of Mining Charter III directives, gaps in attracting and developing critical skills. This includes internal resistance by stakeholders; permeable governance systems; a paucity of ongoing monitoring and evaluation of procurement activities; and conflict of interest among procurement-related personnel. The identified gaps indicated that there was a need for the development of an integrated, coherent strategic framework regarding using inclusive procurement for development of suppliers and enterprises development in the South African mining organisations to drive socio-economic transformation and to protect the “social license to operate. Hence, the aim of this study was “to explore the approaches utilised for inclusive procurement, supplier and enterprise development which conforms to the Mining Charter III by mining organisations in South Africa within the Mpumalanga Province in an attempt to develop an integrated coherent strategy framework.” The nature of research necessitated action research as the selected qualitative methodology through observations, semi-structured interviews, and a focus group as the principal methods to gather qualitative data. The participants in this study were primarily experts employed by the selected mining organisations and occupy leadership,

management, and execution roles within the supply chain department. To ensure transferability in this study, purposive sampling was most suitable to generate the most significant volume of information of the research inquiry given the unique nature of the units of analysis. Thereafter, network diagrams of emergent themes emanated from the responses during the qualitative data analysis (QDA) interviews and how their association with each other was presented. The network diagrams were generated through the QDA software ATLAS.ti™. The main themes that emerged were policy, change management and strategy. Generally, the research results revealed that the mining organisations have engaged in forums and initiatives in analysing and understanding the requirements of the Charter. Gaps in the Mining Charter III were also outlined in the findings of the results, including the definition of concepts such as HDP owned and controlled business, discrepancies in the reporting templates, and the repercussions of noncompliance. Recommendations informed the Mining Charter and the mining organisations. They outlined how the Department of Mineral Resources and Energy will have to ensure that all the stakeholders, including miners, HDP owned and controlled businesses, municipalities, and host communities contribute in the review and formulation of the Charter. This includes mining organisations focusing on the implementation phases through integrating the current Mining Charter requirements in the mining organisational strategies, developing of change management strategies while managing their Supply Chain processes effectively without disrupting operations. In conclusion, the proposed framework for an integrated, coherent strategy framework to mutually benefit the mining sector and the local historically disadvantaged entrepreneurs through inclusive procurement, supplier and enterprise development was developed.