A Lonmin Verdict: Platinum mining is unsustainable

Worker has to slog for 325 years to earn the CEO’s salary

While we are asking ‘why’ at the Marikana Commission of Inquiry into the massacre two years ago, there is a growing pile of evidence about ‘how’ it happened. This week Lonmin PLC, the British company in the eye of the storm, gave evidence to the Commission. Their affairs have been scrutinised in detail by a range of experts for almost a decade and they are found seriously wanting

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Platinum mining in South Africa is not environmentally, socially or politically sustainable.This is the conclusion made by a research report called, Coping with Sustainability, Policy Gap 7, published by the Bench Marks Foundation.

The Foundation, an independent NGO, investigated Corporate Social Responsibility in the Mining Sector looking specifically at the mining giant, Lonmin. Bench Marks used Lonmin’s own company reports and did “a close reading of Lonmin’s texts from 2003 to 2012.”

The study concluded with the following alarming finding:

“Lonmin Plc has won awards for its environmental and socio-economic performance. The company says it is ‘best in class’ in sustainability. But it is running an unsustainable project. If Lonmin is ‘best in class’, platinum mining in South Africa is not environmentally, socially or politically sustainable.”

The Vast Income Gap

Commenting on income inequality between workers and management, the report cites research that says the average Lonmin mine worker had to work 325 years to earn the value of the CEO’s salary in 2011.

In a chapter studying Lonmin’s documentation on the Company’s social spending, The Bench Marks report found Lonmin guilty of contradictory reporting.

The report said: “In short, the “Social Capital” reporting consistently presents figures of around 1% of pre-tax profits or more, which is the company’s commitment. But when we look at the details of the spending on all items we understand to belong under ‘Social Capital’ – community and Social Labour Plan projects – we consistently find amounts very significantly lower than the global ‘Social Capital’ amounts. This gross overstatement of Lonmin’s ‘Social Capital’ accounting, makes it difficult to estimate its actual spending on projects which benefit the community.”

The study looked at Lonmin’s promises to build homes for their workers.

“There is extensive and detailed reporting in most of the SDRs on the housing plans, the successful securing of land for housing and the preparations of stands. But Lonmin has not built any houses to completion for its employees since 1999. This failure is obscured in a cloud of details, promising start- ups and confusion.”

Bench Marks Foundation Repot

Marikana

Failure To Provide Homes

Looking at Lonmin’s promise to convert hostels to homes, the report concluded that Lonmin, “simply doesn’t know exactly how many hostels it has, or how many it has converted”.

When the report stepped outside of the texts and documents, to consult interviews with eye witnesses and field workers, an alarming picture emerged of Lonmin’s failure to provide homes for their workers:

“According to David van Wyk, who is doing his own field work and organising community field workers for Bench Marks Foundation, the ratio between the number of workers accommodated at the hostels and the number accommodated in the “units” is 1 to 7-8. Eight beds in a hostel, translates to 1-2 beds in the new “units”. The majority of workers are not accommodated when a hostel is converted and must find accommodation themselves.”

Turning to how Lonmin reports on its own environmental impact the Bench Marks paper quotes a 2003 report by Lonmin:

“The release of dust from the smelter stack continues to exceed the limit set for dust emissions and a reduction in dust emissions will be the focus of our attention in the next reporting year.”
The study refers to this statement by the mining giant as a confession that they were in breach of the air quality permit requirement in 2003.

Not Meeting Minimum Regulations

Dust storm off a mine dump.

Dust storm off a mine dump.

The research report then continues to map how Lonmin failed to meet their own promises about emissions. The report concludes that, “, Lonmin’s obligations to meet minimum safety, social and environmental regulations are secondary to Lonmin’s financial considerations.”

The report finds that Lonmin had violated various clauses of the Mining Charter, failed to comply with the Codes of Good Practice for the Minerals Industry” and was guilty of false reporting.

“What we as the Bench Marks Foundation find in practice is a company intent on extracting minerals at the cost of communities’ health and welfare, with serious social problems the consequence of its lack of social responsibility.”

In strong words the report called for action against companies who do not comply.

“When companies do not comply, they just have to explain why they messed up. But explaining the failure to comply is not good enough. Tough action needs to be taken to ensure that people are protected, that our water is drinkable, that the air we breathe is healthy, and that externalised costs are covered by the industry and not by communities and local government who do not have the resources. At the heart of mining there are people and communities and the environment, which need to be taken into account – not just shareholder profit.”

Lonmin has not built houses since 2006.

Lonmin has not built houses since 1999.

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