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Investor engagement with South African mining companies – what questions should you be asking?

11 October 2013

On 26 and 27 September, attendees at the United Nations-supported Principles of Responsible Investment (PRI) PRI in Person event, visited the mining operations of Lonmin and Impala Platinum near Rustenberg. Judging from several accounts, the visits were well-received by PRI attendees. Lonmin in particular appears to have made every effort to give the visitors access to senior executives. 

In the run-up to the event, Kigoda Consulting was asked by a participant for some suggested questions for these mining companies that could provide insight ahead of a panel discussion at the PRI in Person conference on “Mining in Africa: boosting sustainability in the mineral economy”. 

Here are our suggestions. These cover issues that were raised following the Marikana tragedy and other areas where investors should be engaging with South African mining companies to ensure that their ‘social licence to operate’ is secure. This is by no means an exhaustive list, but rather a starting point for engagement. 

  1. Security  and human rights:  Is the company a signatory to the Voluntary Principles on Security and Human Rights? How is this framework implemented? Are relevant personnel given training? 
  2. Labour relations: How does the company negotiate with unions on wages and other issues? What threshold for union  recognition is in place and how does management address shifts towards minority unions? If company doesn’t recognise minority unions, how does it engage them as stakeholders?
  3. Water quality and pollution: What water quality monitoring systems are in place? Are results of water monitoring made available to interested and affected parties, or confidential? What measures are in place to ensure that water resources used by surrounding communities not negatively impacted by mining?
  4. Community relations 1: Is a social and labour plan being implemented? Was it drawn up in consultation with the community or without them? Has the community seen the  plan?
  5. Community relations 2: How much community grazing and farm land has the mine taken over? Was compensation provided? How many members of the local community are employed by the mine?

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