Navigating Community and Corporate Co-operation in The South African Mining Sector

Our client was a mining company who had concluded a commercial transaction with a neighbouring mining rights holder. However, this transaction was subject to regulatory approval, which the company had not yet received.

The Problems:

After doing some investigation, we found that the company’s Social and Labour Plan (SLP) had also been rejected by the regulator, and so their mining license was under threat. This rejection was due to historic grievances and competition for resources, because the company was only involved in economic development with a section of the community. On top of this, the involvement of traditional leaders in recruitment and procurement practices had resulted in widespread corruption. The result was significant local resentment towards the mining company, and violent rivalry between different community leaders.

To make things worse, local government felt the mining company was challenging their local leadership role, and that it was the cause of the unrest. The company had already lost its ‘social licence’ within the community, and was now in danger of losing its legal mining licence.

Our Solution:

Our first steps included:

• Designing a conflict resolution strategy and getting management buy-in.
• Engaging with hostile local government through trusted intermediaries, and choosing local consultants who had an affinity to specific stakeholders.
• Providing negotiation skills and conflict management training to company management.
• Facilitating meetings between management, local government and community representatives.
• Facilitating multi-party discussions that led to a renewed community structure, which amalgamated the two previously hostile groups.

Once this was underway, and we fully understood the causes of the conflict, we helped revise a number of company policies that had aggravated the situation, including:  

• The Social & Labour Plan (SLP)
• Procurement policies and practices, so that they aligned with the Broad-Based Black Economic Empowerment (B-BBEE) scorecard and the Mining Charter
• Recruitment practices

We also restructured the company’s external engagement team that had previously exclusively relied on the B-BBEE partner, and we organised consultations for greater community participation in the B-BBEE shareholding.

The Outcome:

The mining company’s SLP was approved, and there were no more regulatory blocks to commercial transactions. Community unrest was also averted, and key stakeholder relationships were vastly improved.