REPORT OF THE SELECT
COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS ON THE JOINT OVERSIGHT VISIT
WITH THE SELECT COMMITTEE ON ECONOMIC DEVELOPMENT TO KWAZULU-NATAL - MTUBATUBA
AND UMHLAUTUZE MUNICIPALITIES, 02 – 06 NOVEMBER 2009
1. DELEGATION
The delegation comprised the following: Mr
F Adams (ANC), Chairperson of the SC on Economic Development; Mr DD Gamede (ANC), Chairperson
of the SC on Trade and International Relations; Ms EC van Lingen
(DA); Mr BA Mnguni (ANC);
Ms MC Dikgale (ANC); Mr AJ Nyambi (ANC); Mr MC Maine (ANC); Mr KA Sinclair (COPE); Ms SS Chen (DA); Mr
RA Lees (DA); The delegation was also accompanied by the following staff
members: Ms NG Dinizulu and Mr
H Mtileni
(Committee Secretaries); Mr L Ngqameni (Committee Assistant).
The following Government Departments, municipalities and
representatives of the private sector were also in attendance:
·
Department of Mineral Resources: B Dinga,
N Njoko-Regional Manager: KZN;
·
Exxaro KZN Sands: N Oosterhuis-General
Manager; S Mkhwanazi-Head of OH&S; E Scholtz -Technical Serv. Manager; A Fouche-Manager
SD; N Oosterhuis-General Manager ; Gumbi-Acting HR Manager; S Mkhwanazi-Head
of Safety and Health; R Otto-Manager Finance; N Keagan-
Acting Communication Manager; K Datel-Leasing
Superintendent;
·
·
Department of Economic Development
and Tourism: Mr M Mabuyakhulu- MEC; Dr R Ngcobo-Deputy
Director-General; V Tharage-Chief-Director: National
Department of Tourism.
·
Umhlathuze Municipality:
L Khoza-Senior Manager-city development; NJ Sibeko- Senior Manager –Community Services; G Readman-Mevamhlope Communications: Umhlathuze
news; Dr CQ Madlopha-Deputy Mayor; M Lourens-Exco Councillor; N Mzimela-Councillor; G Mbanjwa-Chief
Whip; Mr M Kunene-Chief
Financial Officer; MTB Ndlovu-Senior Manager
Corporate Services; N Khumalo-Assistant Chief
Financial Officer; Z Mnqayi- Mayor; E Mbatha- Speaker; NP Nhleko-
Deputy City Manager
·
Department of Environmental Affairs: D Shoyisa-Assistant
Director; B De Klerk, Mr D
Van Der Merwe from Business
and Tourism, T Chifupa- Deputy Director-General:
Department of Trade and Industry.
·
Engen
Refinery: W Oosthuizen-General
Manager; M Stead-Engen Government Liaison; P Munsamy –Personal Assistant; T Cele-Public
Affairs Manager; X Mtwa-Regional Energy Director and
M Mngomezulu-Regional Inspector: Department of
Energy.
·
ME Mthethwa-
Mayor Mbonambi municipality, Inkosi
Mbuyazi: Mbuyazi community,
MH Nkosi-Manager:
2. BACKGROUND
In strengthening its oversight work over the Executive, the
Select Committee on Trade and International Relations, in conjunction with the
Select Committee on Economic Development undertook a joint oversight visit to KwaZulu–Natal. The aim of the visit was to assess the level
of
·
Ascertaining
the readiness of the tourism industry for the forthcoming FIFA 2010 World Cup;
·
Interrogating
the Local Economic Development (LED) strategies of the Mtubatuba
and uMhlautuze municipalities in ascertaining their
alignment to the service delivery goals;
·
Looking
at the progress and status of the Richards Bay Industrial Development Zone
(IDZ);
·
Determining
the socio-economic and social responsibility commitment of Richards Bay Mineral
and Exxaro Sands;
·
Establishing
the readiness of the Engen refinery to supply fuel
during the 2010 FIFA World Cup.
3. BRIEFING BY
The
With regard to tourism, the municipality requested the
Committee’s assistance in overcoming and solving some challenges that threatens
the LED. These issues include both infrastructure development and limited
resources, and were identified as follows:
(I)
Lack
of bulk water supply;
(II)
Insufficient
bulk electricity supply;
(III)
Scarcity
of sufficient land for development, as the available land is privately owned;
(IV) Low equitable share from Government.
4. BRIEFING BY THE KZN TOURISM ON THE PROGRESS REPORT ON THE IMPLEMENTATION OF THE TOURISM PLAN FOR
FIFA 2010 SOCCER WORLD CUP
Mr Ndaba Khoza, Chief Executive Officer (CEO) of KZN Tourism
provided a progress report on the work done on the core tourism focus areas for
the 2010 FIFA Soccer World Cup. The following areas were identified as key
focus areas:
(I)
Stimulation
of greater awareness to the
(II)
Length
of stay and spread of 2010 spectators in the
(III)
Accommodation
facilities
(IV) Tourism-friendly transport system
(V)
Tourist
safety and security
(VI) Information and transaction
(VII) Events and attractions
(VIII)
Skills
and service levels
(IX)
Air
access
4.1 Stimulation of greater
awareness to the
The province is utilizing the
4.2 Length of stay and
spread of 2010 spectators in the
The province seeks to convince tourists to stay for longer
than the 2010 World Cup in order to boost tourism in the province. As part of
the plan, the KZN Tourism will among other things, engage with FIFA accredited
tour operators to include KZN in their packages. They will embark on mega
educational sessions with tour operators during the FIFA 2010 World Cup draw in
December 2009.
4.3 Accommodation facilities
In terms of accommodation, the following milestones were
highlighted:
·
6
440 rooms have been contracted by MATCH 58% of which are largely SMME
establishments.
·
Five
establishments have been contracted for the purposes of team base camps.
·
KZN
Tourism has managed to facilitate one-on-one workshops for MATCH to contract
with accommodation establishments to ensure that various key parts of the
province become accommodation satellites.
4.4 Tourism-friendly
transport system
The first phase of the tourism signage erection had been
completed and was funded by the Social Responsibility Fund from the National
Department of Tourism. All tourism routes in the province have been identified
for upgrading. Negotiations with the provincial Department of Transport
continues in terms of
the repair and upgrade of these routes.
4.5 Tourist safety and
security
In line with the national tourism safety plan, the
provincial tourism safety initiative has been finalised
and implemented.
4.6 Information and
transaction fulfillment
In order to assist foreign tourists during the 2010 FIFA
World Cup, the province outlined the following strategies to ensure access and
dissemination of information to tourists:
·
Foreign
language training courses for tour guides, and a number of tour guides has also
been enlisted for similar training;
·
The
installation of electronic translators in all information/tourist centers.
4.7 Events and attractions
In order to boost tourism, the provincial department has
engaged FIFA accredited tour operators to include local attractions in their
itineraries. Furthermore, engagements with District Municipalities are underway
to upgrade existing attractions to cater for increased visitors for 2010.
4.8 Skills and service
In enhancing the skills and improving service levels in the
hospitality sector, KZN Tourism has placed emphasis on training of BEE tour
operators and BEE Hotel Managers.
4.9 Air Access
It was indicated that the opening of the new
5. NATIONAL DEPARTMENT OF TOURISM
In his briefing to the Committee the Chief Director, Mr Victor Tharage highlighted the
role of tourism in local economic development. The Department of Tourism
indicated that tourism can be used as a vehicle for socio-economic development
to alleviate poverty, for sustainable job creation, for infrastructure
development, skills development and social cohesion. The Department supports
aspirant tourism entrepreneurs who make a living through tourism by funding an
intervention package as a Social Responsibility Programme.
This programme is linked to the Expanded Public Works
Programme (EPWP), which gives support for tourism
product development and tourism infrastructure.
To access funding from the Social Responsibility Programme,
the following criteria should be fulfilled:
·
Projects
should be within the tourism sector.
·
The
projects should be sustainable.
·
Project
should not be owned by a private individual.
·
The
project must have a job creation element for the local community.
·
The
project should subscribe to the EPWP principle of labour intensive, public infrastructure
development and skills transfer.
·
The
project must have an element of SMME development.
6.
The CEO of the iSimangaliso
The CEO outlined the main vision of iSimangaliso
as that of integrating a strong conservation of the ecological wealth of the
area, the development of tourism with the empowerment and development of
historically disadvantaged communities in and adjacent to the Park and
promoting equitable use of iSimangaliso’s natural
resources.
The Committee was briefed about the strategic vision of the
Park, which encapsulates the following pillars:
·
Co-management
agreements
·
Job
creation
·
Equitable
access
6.1 Co-management agreement
There has been a number of land
claims cases over the vast hectares of land under the iSimangaliso
6.2 Job creation and economic development programmes
In terms of job creation during the financial year 2008/09,
of the R27.5 million that was spent, 65% was spent on SMME’s
and local labour force.
6.3 Equitable access
In terms of enhancing equitable accessibility to the Park, iSimangaliso allows communities and individuals free entery to the Park and also encourages all school children
to visit the Park. The target is to have 200 schools and 5000 learners visiting
the park each year.
7. KZN DEPARTMENT OF
ECONOMIC DEVELOPMENT AND TOURISM
On day two of the oversight visit, the Committee visited
In his briefing on the opportunities that are envisaged
during the 2010 FIFA World Cup, the MEC of the Department of Economic
Development and Tourism, Hon Mike Mabuyakhulu took
the Committee through the 2006 FIFA World Cup post-analysis. According to the
Department of Economic Development and Tourism, the 2006 FIFA World Cup in
According to the Department of Economic Development and
Tourism there are a number of economic opportunities which the
·
Tangible
and intangible values
·
Regulated
and unregulated opportunities
·
Pre-event
2010 opportunities
·
2010
Post-Legacy opportunities
·
Accessing
2010 opportunities
7.1 Tangible and intangible
values
It is envisaged that the country would benefit tremendously
in terms of the tangible values, which are benefits that can be measured
generally in monetary terms which amounts to?. The
country is also expected to benefit on the intangible values, which are
benefits that are difficult to attach a rand and a
cent value. Some of the intangible benefits include nation building, community
spirit (how will these be measured) and international reputation as a World Cup
Host nation.
7.2 Regulated
and unregulated opportunities
The regulated opportunities are those opportunities that are
fall under the auspices of FIFA and the Local Organising
Committee (LOC). These opportunities include products and services which
generally relate to regulated sites such as stadia
and surrounds, the fan fest parks, official parking areas and media centres. For SMMEs to access
these opportunities, they are required to register on an official database and
will have to go through a tendering and accreditation procedure. Unregulated
opportunities are those that cannot be controlled by FIFA and the LOC.
7.3 Pre – Event 2010
opportunities
The
7.4 2010 post-legacy
opportunities
The World Cup is envisaged to leave a long lasting legacy football
national teams or other, which is the main event, shall benefit through soccer
administration support whereby FIFA shall offer training on the technical
aspects of football through the training of soccer administrators, specialist
coaches and referees. The Department of Sports and Recreation would utilize the
2010 FIFA World Cup for the development of football in the grassroots.
7.5 Accessing opportunities
The Department of Economic Development and Tourism assured
the Committee that it will be working closely with the host city and the
Department of Trade and Industry and its agencies such as SEDA and the IDC to
provide and disseminate sufficient information to SMMEs
regarding access to the 2010 opportunities.
8.
The municipality briefed the Committee on its Local Economic
Development Strategy, which focuses on the following areas:
·
Manufacturing
clustering for growth in which the municipality refocuses on its industrial
development and SMME development; regard to a business friendly environment in
which enterprises of all sizes can prosper and grow;
·
Implementation
of apprenticeships, learnerships and skills development
programmes;
·
Development
of the Community Based Development based satellite campus of the
·
Establishment
of the 100 seater Call Centre
in
·
Develop
uMhlathuze as a tourism destination and develop and
implement a tourism strategy;
·
Provide
visitor information and signage
·
Maximise the job creation potential of agriculture, through a
partnership of local and provincial role-players;
·
Strengthen
the local stake in commerce;
·
Raise
awareness of the importance of local business in order to reduce economic
leakage; and
·
Control
informal trading while improving conditions and returns of traders.
9.
DEPARTMENT OF MINERAL
RESOURCES
The
Provincial Regional Director, Ms N Njoko, briefed the
Committee on the issues affecting the two mines that have been in the media and
have been part of the discourse of many forums for many years (Exxaro and Richards Bay Mine). It was indicated that the
communities were aggrieved about the following issues:
·
Participation of communities in the
shareholding of companies;
·
Lack of a procurement strategy that
focuses on the development of local businesses and the companies’ lack of
commitment thereof;
·
Reconstruction and compensation of
households that were affected or damaged by mining operations and companies’
historical reluctance to remedy;
·
Lack of developmental initiatives by
companies in the areas affected by mining in terms of their social and labour
plans;
·
Strained relations between the
company and the community;
·
Pollution of water resources and
depletion of the rivers that have been part of the communities’ heritage.
9.1 RICHARDS
BAY MINERALS (RBM)
Ms Njoko also briefed the Committee about the concerns raised
by the communities of Mbonambi and Sokhulu. Currently the mine has a heavy mineral sand
operation affecting two communities of Mbonambi and Sokhulu. The operations will in future extend to the Dube and Mkhwanazi communities.
RBM engaged with the four communities to participate in their equity allocation
for communities and this has not been met in an equal manner by the
communities. The concerns also related
to the reluctance of the company in affording local businesses the
opportunities to have meaningful shareholding in the mine. In addition the
following concerns were noted:
·
There is suspicion that businessmen
outside Mbonambi are involved in the BEE deal with
the mine hence the Government’s reluctance to act decisively against RBM in
trying to resolve the historical problems that the communities have;
·
The community has been calling for
the Department to suspend the mining rights until such time that the issues are
resolved;
·
There is a lack of consultation by
the company;
·
These are the communities that
staged a march, barricaded roads, blocked trucks in
demonstration of their anger. RBM took the identified community members to
court and the court found the community members? guilty
and ordered them to pay compensation for loss of income. This judgement further
placed additional strain on the relations with the community.
The mining
rights for RBM have also not been transferred, the Department of Mineral Resources
wants to ensure that the community issues and all the necessary consultations
are conducted, and RBM maintains a good neighbourly relation with its
communities.
9.2 EXXARO
(KZN SANDS)
Exxaro
Mine is a company that mines Heavy Mineral Sands in the area of Gobandlovu and Mandlankala with
the KwaDube Traditional Authority. The conflict
started during 2002/2003 when a pipe carrying slime burst and caused damage to
homes in the Mandlankala community. The mine admitted
responsibility and entered into agreements with the community. Compensation was
paid for damages to about 18 homes that were affected.
In 2004 the
municipality of uMhlathuze received complaints from
the Gobandlovu community regarding water progress to 12 homes,
which they alleged was due to the mining activities of Exxaro
KZN Sands. Many studies were conducted and in some cases the mine was found
liable and in others the mine’s liability could not be confirmed conclusively.
There were
other factors that could have been contributing to an elevation in water level
thus causing flooding of the homes. As a settlement it was proposed and agreed
that Exxaro would include the building of the 12
homes for the community in their Social and Labour Plan. The amount quantified
would be the amount allocated to the building of the homes.
The meeting
was held on the 29th October 2009 and the matter was resolved in
agreement with the affected households, Government and the mine and new houses
will be built. There are three families which have not agreed to the resolution
and a further consultation process will be undertaken to reach a feasible
conclusion. A resolution of the matter has been a joint initiative by the
Department of Mineral Resources, Department of Agriculture, Environmental
Affairs and Rural Development.
9.3 KWAMBONAMBI
AND MANDLANKALA COMMUNITIES’ CONCERNS:
The
communities of KwaMbonambi and Mandlankala
noted the following:
·
RBM built schools without installing
the equipment (what specifically);
·
RBM should consult and respect the Amakhosi
and the community with regard to all the activities that have an impact on
communities;
·
The community wants to be involved
in the business opportunities at RBM;
·
In 2009, employees from KwaMbonambi and surroundings were fired because they
participated in a march, and RBM took a decision to employ people from outside
the community;
·
The communities made recommendations
that the Government should not renew the license for RBM when it expired;
·
The chemicals used by RBM have
poisoned their land and as a result their plantations do not grow;
·
The communities also raised a
concern that RBM appeared to interfere with their projects and delayed them;
·
Out of the four communities
surrounding RBM, only two communities are accommodated and this is very
divisive in the communities;
·
Communities felt that RBM is more
powerful than the Department of Mineral Resources.
10. BRIEFING
BY
10.1 Background
Richards
Bay Minerals (RBM) was established in 1976 to mine, process, beneficiate and
market the heavy minerals occurring naturally in the sand dunes along the
coastline of KwaZulu Natal (KZN), near
The
estimated remaining life span of the mining operations is 32 years with final
closure expected in the year 2041. With this in mind, RBM is giving
considerable thought to the post-mining activities of employees and the
surrounding local communities.
RBM executive management had a meeting with the Department of Minerals
and Energy (DMR) executive officials, where the relations between the company
and the regulator were repaired and restored. The National office advised that
the company should work through the Regional office on all issues of contention
as raised by the communities.
10.5 Broad-Based Black Economic
Empowerment Transaction
RBM
agreed to provide the communities with capacity building support during the
first five years of the transaction. The
purpose of the endowment of R17.5 million given to each community by PBO Trust
is to support amongst other things the training of trustees and the
establishment of initial operational infrastructure.
The
four host communities and the lead investors now participate directly through
Blue Horizon Investments 41 (Pty) Limited (Blue Horizon), a special purpose
vehicle established to hold RBM interests. Blue Horizon will hold a 24% direct
interest in RBM, while RBM’s employees will hold
their 2% equity interest directly in the company via an Employee Share
Participation Trust (ESPT).
The Social and Labour Plan, in
particular the LED section was submitted to the Committee. All the commitments
stand as they are, and a process is in place to consult and engage all
communities with the DMR and
10.7 RBM’s
economic contribution to Local Municipalities
The
principles of sustainable development drive RBM’s
programmes. RBM’s programmes are diverse and cut
across all communities, such as:
·
Education and skills development
·
Health
·
Agriculture development
·
Sports and Recreation
·
Culture and Arts
·
Business developments
·
Infrastructure/safety
·
Environment
(i)
·
Over 80% of RSA’s
output of titania slag and mineral sands;
·
3.5% of RSA’s
gross mining output;
·
50% of KwaZulu-Natal’s
gross mining output.
(ii)
Expenditure
incurred for RBM in 2007 was in relation to the following:
·
Taxes R
890 million
·
Salaries R 559 million
·
Procurement R2, 557 million
·
Richards Bay Mine, directly and
indirectly sustains about 26 600 jobs
(iii) Successes
·
All local communities benefited from
the State-of-the-art technical high school built and equipped in Eskhawini and a computer centre established at the
·
1996 and 2002- Global Best Award
(International Partnership Network) for community education partnerships.
·
1996- Presidential Award (National
Department of Education for Business in Education).
(iv) RBM’s
BEE transaction from a community perspective:
·
Direct engagement with communities
from Day 1. Communities were treated like all other partners and were engaged
in the negotiations from the outset.
·
Trickle dividends will be passed to
communities from the outset.
·
Communities will receive an
endowment benefit of R17.5 million each to initiate their CSI development
projects.
·
Communities will have the ability to
channel cash flows to other trusts to be used for enterprise development basis
(e.g. Royal Bafokeng Nation).
·
RBM will assist communities with
capacity building e.g. training and administration facilities.
Richards Bay
Mine has the rights to mine the following lease areas:
|
Property Description |
Lease Area |
Land Owned By |
Leased from |
Community |
Mining Activity |
|
Remainder
of Lot 5335 |
Town
Board Lease |
|
|
Mbonambi |
Past
Mining |
|
Remainder
of Reserve No.4 No. 15823 |
Tisand Mineral Lease 1 |
|
Department
of Land Affairs |
Mbonambi |
Active |
|
Remainder
of Reserve No. 4 No. 15823 |
Zulti North Mineral Lease
2,3 & 4 |
|
Department
of Land Affairs |
Sokhulu |
Active
|
|
Remainder
of Reserve No. 10 No 15830 |
Zulti South |
|
Ingonyama Trust |
Dube & Mkhwanazi
|
Active |
|
Farm
no 16317 |
None
|
|
None
|
Mbonambi area |
Smelter
and Admin offices |
Both
Sokhulu and Mbonambi
communities have lodged land claims on mining lease areas with the Commission
on Restitution of Land Rights. These claims were validated and deemed as
meeting the minimum requirements in terms of Section 2 of the Restitution Act.
The claims are at different stages towards resolution. The Mbonambi
claim was approved by the Minister. The symbolic handover of the land was done
on the 20 April 2009. Outstanding matters related to the State land disposal
process and the registration of title in the name of the appropriate community
entity. The Commission on Restitution of Land Rights and the Department of Land
Affairs and Rural Development are in the process of drafting new lease (surface
rights) agreements that will guarantee continued mining to the end of life span
of the Mine without compromising the communities.
The
lease agreements and the conditions thereof will come into effect upon transfer
of land ownership. The Sokhulu claim is at the
valuation stage and upon approval by the Minister will follow the same process
as Mbonambi. The lease agreement is being drafted to
take effect on the date of transfer. The terms of this will be aligned to the
remaining Life of the Mine. It will then
follow the same process as Mbonambi community of
State land disposal. The Zulti South mining lease
areas are not subject to land claims.
10.8 The Royalty payments are as follows:
|
ROYALTY
PAYMENTS |
|||
|
Lease
area |
Past
Payment To |
Current
Payment To |
Future
Payment To |
|
Town Board Lease |
|
Department of Mineral Resources |
National Treasury |
|
Tisand |
|
Department of Mineral Resources |
National Treasury |
|
Zulti South |
Ingonyama Trust |
Ingonyama Trust |
National Treasury |
10.9
RBM’s BBBEE process commenced in 2006 and
continued through 2007. Initially 147 parties expressed interest. Following the
RBM Board review and approval and a rigorous selection process, driven by the
RBM board of directors, 7 parties were chosen as BBBEE investors.
RBM
is proud that the transaction was structured to benefit all four host
communities, all permanent employees and lead investors who are mostly from
KZN. Leadership representatives of participating communities have, from the
outset of the negotiations, had opportunities to meet and interact with RBM
shareholder representatives and representatives of each of the participating
consortium. The communities are direct shareholders in their own right in the
BBBEE Holding Company and are aware of the lead investors and the rationale for
their leadership. All four communities are represented in the Board of the BEE
Holding company as individuals and each has a director’s seat.
RBM
has been very open about communicating the composition of its consortium and
has made several Press releases at national, provincial and local level
providing explicit detail.
The
leadership of the two communities (Sokhulu and Dube) who have signed the BEE documents transaction are
aware of the lead partners’ companies and lead individuals from interactions
they have had. A process of engagement with the other two communities (Mbonambi and Mkhwanazi) has
commenced and they are generally aware of who the lead partners are. A process towards ensuring that there is
consolidation between communities and the lead investors is in progress.
|
Lead Partners |
Key Leader |
% allocated |
Province |
|
Imbewu |
JB
Magwaza |
3.0 |
KZN |
|
Matasis |
Manne Dipico |
3.0 |
NC/Gauteng |
|
Sambulo |
Sibongile Mthembu |
2.0 |
KZN |
|
Gade |
Dr.
Ben Ngubane |
2.0 |
KZN |
|
SAWA |
Taniya Krishna |
1.4 |
KZN |
|
Ungoye |
Musa Zondi |
0.9 |
KZN |
|
Bingelela |
Phiwo Thango
|
0.9 |
KZN |
|
SUBTOTAL |
13.2 |
|
|
|
|
|
|
|
|
Communities |
|
|
|
|
Mkhwanazi Community |
Inkosi Mkhwanazi
|
2.7 |
KZN |
|
Sokhulu Community |
Inkosi Sokhulu
|
2.7 |
KZN |
|
Mbonambi Community |
Inkosi Mbuyazi
|
2.7 |
KZN |
|
Dube Community |
Inkosi Dube
|
2.7 |
KZN |
|
SUBTOTAL |
10.8 |
|
|
|
|
|
|
|
|
Employee Share) |
Participation |
Scheme |
(ESPS) |
|
All employees |
|
2.0 |
|
|
|
|
|
|
|
TOTAL |
26.0 |
|
|
RBM
shareholders consciously made a decision to equally involve all four host
communities. The communities will collectively hold 10.8% of the equity in RBM
worth approximately R2 billion.
RBM
involved all four communities in all aspects of the transaction from the onset.
Three of the four communities i.e. Sokhulu, Mbonambi and Dube were involved
in the process up to the signing of the Memorandum of Understanding on 29 July
2008. In September 2008, Mbonambi community withdrew
from the process. However, significant progress has been made to get both Mkhwanazi and Mbonambi
communities on board. As such, engagements with Mkhwanazi
community have progressed and subsequently signed of the Memorandum of
Understanding.
Re-engagement
with the Mbonambi community leadership started in
August 2009; this has led to formal repairing of relationship. The Mbonambi community will also be registering their special
purpose vehicle Trust to hold shares at RBM. The overall value of RBM was
estimated at R19 billion.
10.10 Funding strategic
partners and employees
The
global economic crisis and banking liquidity shortfall together with the
nature, size and the timing of RBM BEE transaction necessitated RBM
shareholders to:
·
Use RBM balance sheet as
security for funding;
·
Assist with shareholder
loans since most banks were not willing to fully fund a transaction of this
size due to the global economic meltdown.
The
loans were provided by the current shareholders Rio Tinto
and BHP Billiton (not RBM) and were subordinated in
respect of payment entitlements. BBBEE lead investors have contributed
unencumbered equity of R30 million to buy shareholding in RBM. This equals only 1% of the equity purchase
price. The communities and employees were not required to contribute any equity
at all.
The
current economic environment has required most companies and their shareholders
to fund their BBBEE transactions. Examples of these transactions are SAB and Foskor, both of which were fully vendor funded. The
Companies Act was changed specifically to assist in BBBEE transactions and RBM’s transaction conforms to all regulatory requirements.
RBM
has designed a structure that allows current employees to participate in the
profits of the company until the end of the life of the mine. Its shareholders
agreed on a principle of share participation for all permanent employees while
in the employment of RBM.
10.11 Employee participation
The
Employees’ Share Participation Scheme (ESPS) will own 2% of the equity in RBM
through a Trust. Employees will therefore not directly hold any shares in RBM.
The qualifying permanent employees of RBM will be beneficiaries of the trust
for the duration of their employment in RBM. This will result in the employees
participating in all dividends distributed to the Trust. Employees have not had
to contribute financially to be the members of the ESPS.
10.12 Challenges
RBM is
committed to diversity and transformation in the work place. Notwithstanding
this, the current employment equity statistics show that RBM has no women
representation at Executive level since the retirement of the General Manager:
Strategic Affairs in August 2009, Ms.Shange who
remains an advisor to the Managing Director. RBM recognises its Social Labour
Plan (SLP) commitments and has an urgent pipeline to develop women for core
mining, professional and management roles.
Below are
some examples of RBM’s direct intervention to address
this issue:
·
Strategic
level: the company has put in place a transformation committee which comprises
General Managers from key functions. This committee includes a manager from
Human Resources who has been tasked with ensuring the realisation of not only
appointments but also training and development of women in preparation for key
positions in the business.
·
Operational
level: RBM seeks to ensure that female technicians/engineers and other
professions receive equal development opportunities to their male counterparts
whilst being remunerated equitably. RBM continues to ensure that the
transformation structures / forums are fully functional and operate in line
with the targets that the company has set and committed to.
·
Ownership
level: the company has demonstrated its commitment to women empowerment by
ensuring that its BBBEE deal is inclusive of a women’s grouping which holds
1.4% of the 24% held by the BBBEE Holding consortium. Furthermore, all lead
investment partner companies have fair women representation at senior level. It
is also estimated that 50% of the community’s population are female.
RBM
pays specific focus to the employment of people with disabilities, for both
permanent employees and service providers and contractors. As such, all
facilities are compatible for use by people with disabilities. Currently RBM
employs 5 persons with disabilities. The security monitoring contractor has set
up the control room to be operated by staff confined to wheelchairs. The plan
is to increase employment of persons with disabilities.
The
company also has a number of development programs that support the empowerment
of people with disabilities, namely the establishment of a computer centre for
disabled people in the Mbonambi community that is run
and managed by people with disabilities.
These include support for the Thuthukani
special school and other three special schools in the Nkandla
area. RBM encourages its contractors to appoint people with disabilities.
In addition
to the above, RBM through Rio Tinto is a partner and
supporter of South African Women in Mining and has delivered workshops aimed to empower and educate women more about mining
and some of the opportunities that exist. This long standing relationship with
SAWIMA continues through RBM’s parent company Rio Tinto and extends beyond our local jurisdiction.
10.13 Procurement in Dube and Mkhwanazi
RBM
is committed to its transformation programme which includes increasing
procurement from historically disadvantaged South Africans and local suppliers.
Most of RBM’s mining activities have been in Mbonambi and Sokhulu areas. RBM
operates a dry mining operation in Dube and Mkhwanazi areas. The Company’s community development
programmes in Zulti South were initiated in 1998 and
will continue until the end of the life of the mine. Procurement opportunities
have been targeted at services and support of LED programmes.
Importantly,
RBM will not commence large scale mining in Zulti
South until around 2015. This represents a 17 year LED / CSI commitment prior
to economic returns to RBM.
10.14 Environmental
claims
RMB follows
transparent procedures when dealing with issues relating to community impacts.
Its goal is to curb any such incidents from occurring in the first place.
Should an incident occur the claim is handled in terms of RBM’s
Policy (POL 101). This policy stipulates that complaints and claims for damages
get assessed by a panel comprising members from the provincial Department of
Agriculture and Environment, the claimant, Indunas and
representatives of RBM. RBM then ensures that claimants are compensated based
on the outcome of the investigation.
10.15 Rehabilitation
programme
RBM’s rehabilitation program is world
renowned and is conducted according to leading practice principles which places
sustainable development at its pinnacle. RBM is aware of some of the negative
impact mining can have on the environment but seeks to ensure that its programs
are comprehensive and achieve a net positive impact.
Historically,
RBM worked closely with numerous specialist environmental organisations to
research the region’s biodiversity and dune formation. This research culminated
in a rehabilitation program tailored to the uniqueness of the species endemic
in the region and ensuring that dunes are restored to their natural state after
mining.
The
rehabilitation program is done in accordance with the requirements of the
Department of Water and Environmental Affairs, and the DMR (in full). RBM’s EMP requires that approximately one third of the rehabilitated
area is restored to natural
The
remaining two-thirds of the area is rehabilitated for
commercial plantations, to ensure sustainable future economic benefits. RBM is
in the third year of a trial aimed at assessing a wide variety of commercial
agricultural crops for suitability on the rehabilitated dunes. If successful,
this will contribute to increasing rural income from the dunal
areas.
10.16 Health and safety
of employees
The safety
of employees and ensuring a healthy working environment is important to RBM.
RBM has had no cases of respiratory disease reported in its history. RBM
products are very low in crystalline silica which is often the cause of
silicosis. Research was commissioned to verify the size of the particles
released during processing. This study showed that the particle sizes are
significantly low and would not pose any health risks or hazards.
A majority
of RBM’s plants involve wet processes that do not
generate dust. In addition to this, RBM has implemented several safety controls
which include the use of dust masks in dusty areas.
The working
environment is continuously monitored for any potential threats to the health
of employees according to the requirements of the Mine Health and Safety Act, RBM’s Code of Good Practice and Corporate Standards.
10.17 Concerns raised by
Mbonambi community to RBM
Of the
issues presented by the march organisers, the
following were found to be valid and an update is presented below:
(i)
Relocation of houses built by RBM
Significant
progress has been achieved in repairing houses that were originally constructed
for 32 households who were relocated for operational reasons. Each household
will benefit through an additional 2 roomed house constructed before the full
refurbishment of the original houses built by RBM. This plan was presented to Inkosi Mbuyazi, the Traditional
Council and the affected community members who fully supported and signed off.
This plan will be executed in 2 phases and the progress to date is as follows:
|
PHASE 1 : |
Status |
|
Group 1:
15 houses |
|
|
15 new 2
roomed houses |
Complete |
|
Full
refurbishment of 15 houses |
Scheduled
to commence by December 2009 |
|
Group 1:
17 houses |
|
|
17 new 2
roomed houses |
12
houses work in progress – 60-90% complete |
|
Full
refurbishment of 17 houses |
Scheduled
once new 2 roomed dwelling are complete |
RBM is
currently reviewing this situation with all other relocations covered by the
entire mining lease estimated at 30 dwellings. RBM will take the necessary
remedial actions.
(ii) Phase 2: Tails Treatment Plant
(TTP) employment and business opportunities
In early
2008 RBM commissioned a R1.2bn expansion project, a
Tails Treatment Plant (TTP). The Mbonambi community
demanded a sole direct shareholding in this project. This demand could not be
accommodated in the BBBEE transaction. However, the benefits of this project
are being shared in the following manner:
·
The construction of the plant commenced
in 2009. RBM and its contractors have actively been recruiting local labour
within the company’s lease area from both the Sokhulu
and Mbonambi communities. This has led to the
creation of a pool of unskilled and semi-skilled labour to draw from during the
construction phase of the TTP. To date, approximately 130 members from local
communities have been trained by RBM and employed by the contracting company Steffanutti Stocks, whilst Kentz
are looking to employ 150 additional community members.
·
Contract service opportunities in
fabrication, civil and painting and steelwork have also been made available to
local companies. To date, R70m has been spent on these services.
·
In addition, RBM has a job readiness
and a skills development program for school leavers from these host
communities.
(iii) RBM’s
leverage over DMR and communities
RBM is
currently owned jointly by BHP Billiton and Rio Tinto, with Rio Tinto being the
managing partner. One of the main values of Rio Tinto
is to respect the values, norms and culture of local communities and
authorities of the jurisdiction within which it operates. It abides by the
relevant state laws and acts as a minimum. RBM is committed to continuously
ensure that it subscribes to and demonstrates mutual respect and commitment to
both the State, including the DMR, the communities and all the stakeholders.
This is also consistent with the Government’s objective of a developmental
state.
The period
from 2006 to 2009 has been characterised by sporadic public expression of dissatisfaction
by some sections of the Mbonambi community. RBM
believes that the BBBEE transaction has been the catalyst for many of these
issues. During this difficult time, RBM
has remained committed to address issues around the discussion table and with
the recognised leadership. RBM’s leadership has been
working tirelessly to resolve issues that have been raised. However it must be
recognised that certain matters raised are not owned by the community
leadership.
Building
relationships with the host communities can be a bit challenging at times,
however RBM is committed to work together with communities to deal with issues
that create problems if not attended to. Working in collaborative co-operation
with both the DMR and the communities, there is opportunity for improving lines
of engagement. RBM’s leadership is determined to
strengthen and improve these relationships.
RBM is
governed by the various regulatory legislative frameworks, which dictate
obligations on the running of operations and the business. DMR is a critical
stakeholder whose functions are key to continued
existence of the operations and RBM’s preferred
approach is to engage with the DMR as regularly as possible.
(iv) Employment
RBM employs
1 700 to 2 000 permanent employees, 80% of whom come from the Umfolozi and Umhlathuze local
municipalities. It has approximately 2000 employees from service providers
drawn in similar proportions. When taking into consideration the multiplier
effect, RBM is certain that 26 000 people indirectly benefit from its
operations in the area. RBM is the world class employer and provides lucrative
employment opportunities. The benefits are as follows:
·
Very competitive salaries
·
Pension and retirement funds
including death and disability insurance
·
Housing allowance
·
Compulsory medical aid
·
Company transport
·
Daily meal allowance
·
Generous annual and sick leave
provisions
Employees
enjoy access to many in-house and external training and personal development
programs. In addition every employee has access to education support for their
children undertaking tertiary studies.
RBM
continues to support education in the communities where it operates. Among its
programmes, the company has invested in a program for Learners with high
potential, particularly those who come from local communities. In 2008 and
2009, RBM offered 4 full bursaries and 8 grants to graduates for learners who
show commitment and excellence in their studies. It offered 12 scholarships to
tertiary students. Over and above this, its CSI education projects saw more
than R6,5m being spent in 2008.
In addition
to the above, RBM recognises that the local secondary economy is also active,
with a number of small and medium enterprises, informal traders and vendors
benefiting indirectly from being positioned at RBM’s
vicinity. RBM believes that in the next 20 years this community will be
thriving, sustainable and self sufficient.
11. DEPARTMENT OF TRADE
AND INDUSTRY (DTI) AND INDUSTRIAL DEVELOPMENT ZONE (IDZ)
The
Chairperson of the IDZ briefed the Committee on the strategic objectives of the
IDZ programme, IDZ designation process, challenges facing the IDZ programme,
and measures taken to address the challenges facing IDZ.
He
also addressed the Committee on the background to Richards Bay Industrial Development
Zone (RBIDZ), Status with the RBIDZ Operator Permit and challenges facing the
RBIDZ.
11.1 Strategic
Objectives of IDZ programme
The Industrial Development Zones in
·
To promote
competitiveness of South African enterprises through the export of value-added
manufactured products with linkages to
·
Attract foreign direct
investment;
·
Select and attract
targeted advanced foreign production and technology methods in order to gain
experience in global manufacturing and production networks; and
·
Develop linkages between
domestic and zone-based industries to optimise infrastructure, technology or
skills transfer.
11.2 Designation Process
·
The potential IDZ
applicants register interest with the Minister of the DTI;
·
The Minister consults
provincial and local governments for support of the initiatives;
·
Formal application for
IDZ Designation and Operator Permit;
·
Public participation or
consultation;
·
Manufacturing
Development Board consideration;
·
The Minister’s decision
is ratified by Cabinet;
·
Publication of the IDZ
in the Government Gazette;
·
Implementation of the
IDZ; and
·
Ongoing monitoring of
the IDZ.
11.3 Progress to date
There
are four designated IDZ’s: Coega,
East London,
11.4 Challenges facing
the IDZ programme
·
The current legislative
framework does not facilitate successful development of the world class IDZs in
·
Legislation does not
provide for policy tools to enable inter-governmental and inter-departmental
cooperation;
·
Roles and
responsibilities between three spheres of Government could not be adequately
implemented in the current inter governmental relations set-up;
·
Dual reporting and
accountability for funding is burdensome on IDZ entities and create
uncertainties;
·
Uncoordinated activities
such as investment promotion sends out mixed signals to investors;
·
Lack of appropriate set
of IDZ-specific incentives;
11.5 Measures taken to
address IDZ challenges
The
following measures have been taken to address the IDZ challenges:
·
Benchmarking exercise
with
·
IDZ summit held in 2008
where all the stakeholders, including international experts participated, of
which an action was drawn and the DTI is in the process of implementing;
·
Impact analysis of the IDZs to the economy;
·
Action plan as a
response to policy proposals;
The
Background to Richards Bay Industrial Development Zone (RBIDZ) was designated
in 2002. The TATA steel is the only investor located in the IDZ. Pulp United
registered interest to be located in the IDZ, but this was delayed due to
energy constraints. The Provincial operator permit was issued and lapsed. The
DTI raised the matter with the IDZ’s management as
far as 2007. The Richards Bay Industrial Development Zone operator could not
lodge an application due to outstanding compliance issues of land transfer to
the IDZ and shareholder agreement that entirely depend on shareholders.
The
DTI convened a stakeholder meeting which comprised RBIDZ operator, KZN
Department of Economic Development and City of uMhlathuze
to resolve outstanding compliance matters and to speed up the issuing of a
permit. It further sanctioned compliance audit to verify compliance of the
operator before funds can be transferred as required by the Public Finance
Management Act (PFMA). The audit report that was shared with the province, the
former IDZ Board and the operator reflected non-compliance and non-existence of
financial systems and controls.
11.6 Status with the
RBIDZ Operator Permit
The
RBIDZ submitted an application for an operating permit during June 2009. The
application was assessed by the DTI and submitted to the Manufacturing
Development Board (MDB) for recommendation to the Minister. The application was
submitted to the MDB for adjudication on the 26th of August 2009.
The MDB was satisfied with the application, even though the main concern was
that the RBIDZ has been operating from 2007 without a valid permit, and a
recommendation was made to the Minister to grant the permit in favour of the
IDZ.
There
were consultations with legal staff on the legal ramifications due to the IDZ
operating without valid a permit from 2007 to 2009 before a submission to the
Minister. After reviewing the application, the Minister had to consult more
broadly on the matter. The consultation in this regard this has been completed
and the submission has been routed back to the Minister’s office.
11.7 Challenges facing
the RBIDZ
The
DTI has the following concerns about the RBIDZ:
·
Lack of Human Resource
capacity that raises questions about the IDZ’s
ability to spend the allocated budget;
·
RBIDZ needs a
significant capital injection to become a competitive IDZ;
·
Funding remains a big
challenge;
·
Reporting lines not
clarified. There are too many authorities that the RBIDZ must report to.
The DDG responded on the issue of incentives shared by the Department of
Trade and Industry and the Department of Finance that this is the competence of
the Minister of Finance. The incentives with regard to electricity are done at
local government. The national government has not been offering incentives on
electricity. It was also reported that
the views were taken by the province in terms of electricity to have a
provincial industrial strategy to promote certain type of industry that will
not require a lot of power.
12. EXXARO MINE
Exxaro was established in 2001 by TICOR
with 700 permanent employees. It is the major export company to various parts
of the world with a turnover of R1billion p.a. It is also a major earner of
foreign currency, mainly procuring in
12.1 Priorities of Exxaro
·
The company prioritises
Local and BEE procurement;
·
Currently 90% compliance to BBBEE Mining
charter targets for 2014;
·
Budget for training and development of
employees;
·
The safety and health of employees,
contractors and the public is their first priority.
·
Social and development responsibility
towards neighboring communities and making a practical contribution by means of
LED projects, Social Investments and community procurement
12.2 Environmental
Monitoring programme for:
·
Dust
·
Emissions
·
Water Quality
·
Radiation
12.3 Rehabilitation:
Placing of 1,5m to 2m
of a sand/slimes mixture on previously mined areas. Research showed the optimal
mix and depth for the required water retention and ground stability required
for successful sugarcane farming.
Placing of the
sand/slimes mixture is also very effective in reducing wind blown dust, which
has a positive effect even before planting the area.
12.4 Heavy Mineral
products
Zircon - Use in ceramics
and tile glazing industry
Rutile - Titanium
metal; welding rods and pigment
Ilmenite - SA
– Smelting to produce iron and titanium slag
Pigment
12.5 Economic Development in
communities
·
The procurement committee was established within the
following Amakhosi areas: Dube;
Somopho; Zulu; Mkhwanazi;
·
Monthly meetings to identify contracts that
community SME’s can tender for;
·
Assistance is given with the tender processes,
registration of companies etc.;
·
Mentorship programmes in
place to mentor SME once contract has been awarded;
·
If necessary training is arranged, after needs
assessment is done;
·
First successful established community SME –Somopho Ladies;
·
Received first contract on CPC site.
12.6 Investment in Dube community
·
21 household project –investment R 1,7 million; 5
new structures -4 houses and a tuck shop, 12 houses repaired as good as new, 4
gardens has been established;
·
Community gardeners on mine property relocation and
compensation worth R601 000 compensation for existing gardens, R100 000 for
garden project to implement new gardens for 116 beneficiaries;
·
Bhekizita
relocation project – community living in a water seepage area to be relocated –
R 1,6 million investment;
·
9 new houses and community churches to be built
12.7 Completed and sustainable Local
Economic Development projects
·
Somopho Community
Creche –Somopho Traditional
Authority;
·
Somopho
Multipurpose Centre –Somopho;
·
Vusani
Agricultural Co-operative –Dube;
·
Dinangue Trading –
Developed out of
·
·
Zikulise SME
Development and Skills Training Centre –Dube;Somopho;
·
Proposed Community Clinic in Dube
– not be able to implement as a result of lack of partnership and trained staff
complement from the Department of Health.
12.8 Operational challenges
·
Current LOM only until Q3 of 2012;
·
Need to develop a new deposit as replacement mine;
·
High slimes content in the current ore-body and
other available deposits;
·
Heavy Mineral concentration and separation are technically
difficult metallurgical processes with scarce skills availability;
·
DC-arc smelting is a relatively new technology;
·
Logistics (Transportation of product between sites
and harbor);
·
Effective rehabilitation.
12.9 Market and Economic challenges
·
KZN Sands Produce lifestyle products, hence the
demand is severely affected by the recession.
·
Currently a product oversupply which resulted in
final product stocks.
·
Low increase for Heavy Mineral Commodity prices over
the last decade.
·
Earnings are highly sensitive to the Exchange Rate.
·
Cost is highly sensitive to electricity prices.
Proposed electricity prices by Eskom will have a
significant effect on the cost base.
·
Significant capital investment required to develop a
replacement mine for Hillendale.
13. MEETING WITH MANDLANKALA
COMMUNITY
The Mandlankala community raised
the following concerns:
·
The
houses situated next to the company have cracks;
·
The
company does not employ people from the community;
·
The
condition of the roads are poor, with no stop signs and fatalities have been
attributed due to motor vehicle accidents;
·
The
community wrote letters to Tyco requesting assistance to buy food for the
children at the crèche, the company never responded to their request;
·
The
community also raised a concern that Tyco divides the communities and it was
alleged that the Amakhosi and the Councilors receive
preferential treatment. It has also been noted that the Councilors were
dividing the people according to their political affiliation;
·
The
Government awarded Tyco a license
without communicating with the community;
·
The
people of Mandlankala requested the Department of
Home Affairs to bring mobile offices to assist old people to register for
pension.
14. BRIEFING BY ENGEN REFINERY
14.1 Engen
history
·
1948 - Idea to build the country’s first Crude Oil
Refinery by Standard Vacuum Oil Company. 1st Oil Refinery in
·
1951 - Plans to build the refinery to the south of
·
1952 - Foundation stone was laid.
·
1954 - First barrel of crude was discharged.
·
7 significant expansion and modernization projects
in the last 54 years.
14.2 Employment approach
·
Core skills employed on permanent basis: Engineers (Chemical, Electrical,
Instrument, Mechanical) Artisans and Technicians (Chemical, Electrical,
Mechanical, Instrumentation) Operators; Lab Technicians; Planners Other
Functions include HSE, Finance, HR / Operational improvement, Procurement and
Purchasing
·
Some Specialised skills outsourced – Partnering contract: Project engineering, execution and management, Fabrication &
installation (Piping, Structural Steel and Tank repairs)
·
Some Specialised skills contracted - intermittent basis: e.g. Inspection, scaffolding, etc
·
Shutdown labour – contracts, no labour broking
allowed during shutdowns
14.3 Labour broking and wage rate control
·
Minimise Labour broking : No bakkie brigade, “Labour
broking” specialist in intermittent and non-core activities, Inspection
campaigns, Draughtsman for projects, Regulate wage rates by setting minimum
rates during normal activities, Regulate wages by setting site wide standard
rates during shutdowns and aligned rates with SEIFSA.
14.4
Opportunities for permanent employment: Continue efforts to reduce contract
staff to permanent
·
Mainly artisan personnel
– to retain skill
·
80 personnel moved
between 2005 - 2009
·
Directly contracted semi
skilled staff present the remaining challenge:
-
Loading operators
-
Dispatch
-
Semi-Artisan skills
14.5 Refinery
contribution through CSI Projects: CSI focus areas
14.5.1 Education programmes
Mathematics, Physical
Science, Technology and Early Childhood Development
·
Pre-primary teacher training program
·
Technology for all training for primary school teachers
·
Sponsor two Maths & Science Incubator Schools in Umlazi at Mangosuthu University
of Technology with 725 learners and 352 Learners at Fairvale
Secondary in Wentworth
·
89 learners in uMlazi & 39 learners in
Wentworth obtained A&B symbols in Maths & Science Matric
final exams
·
Career
Day: Career Day for Learners at Fairvale, Mangosuthu &
UKZN incubator schools
·
Lamontville Library Career Fair
·
Junior Achievers Course
-
80 Learners from 8 different
neighbouring high schools
14.5.2 Safety & Security
Crime Alleviation
·
Basketball (Peace Players)
·
·
U17 Durban Football tournament
·
uMlazi SAFA
·
Cycling ECPP
·
5 neighbouring police stations and
their CPF’s received financial help, training and
support for safety campaigns
·
Project Management course for
Community Policing Forum members and SAPS
14.5.3 Outreach Programmes
Community Development
Initiatives and Job Creation Initiatives
·
Bakery Project uMlazi/Welbedacht
·
Refurbished computers and new
printers
·
Used office furniture
·
New Community Computer Centre
refurbishments
·
Clean Drums Project
-
Exchange
·
ECO – Schools WESSA
14.5.4 Community Liaison Forum (CLF)
·
CLF consists of, local Councillors,
(+/- 25) Non Governmental Organisations from local communities, namely, Wentworth, Merebank,
Bluff, Lamontville and Umlazi
·
The NGOs represent Health, Safety,
Environment, Education, Youth, Women, Civic
Associations.
·
Engen
uses the forum to communicate, and update the community on Environmental
Issues, Corporate Social Investments and IR issues.
·
Engen assisted
the NGOs by facilitating & creating their own CLF constitution
·
The CLF has five committees, viz, Corporate Social Investment, Industrial Relations,
Health Safety & Environment, Media & Dispute Resolution
Engen
CLF sponsored R250 000 towards the Independent Electoral Commission & CLF
members were trained and worked as observers during the April 2009 elections.
14.5.5 Engen’s
intentions
·
To ensure that there is continuous
communication between Engen, the community, and other
enabling stakeholders (E.g. Local government; Business Sector of the
·
To identify & contribute towards
community needs
·
Inform community when there are
employment opportunities e.g. Turn Around, & Learnership
Programmes
14.5.6 Environmental hot-spots
·
Enref first recipient in SA of both Scheduled Trade and Effluent 5 year
permits
·
Environmental
Management Plan which looks at prioritisation of
projects
·
Extensive
monitoring on both air and water/effluent
·
Comparable
with best practise in
·
Result
of Engen’s continued co-operation with authorities at
the forefront of environmental management in SA
·
Since
inception part of MPP managed by eThekwini Health
which has become part of their Air Quality Management Plan
14.5.7 Threats
·
New
Air Emission standards
·
Implementation
of new SA Ambient air standards
·
Ever increasing Environmental standards should
take cognizance of economic impact, time for implementation and the receiving
environment impact.
·
Intergovernmental
co-operation on these.
14.5.8 Strategy tactics process: meetings
•
Yearly
offsite FM strategy session
•
Half
Yearly FM tactic session
•
Half
Yearly Imbizo Session
•
Regular
(Formerly Wednesday mornings) FM roadblock removal and tactic progress meeting
•
Monthly
Steercoms for tactics &Task Teams
14.5.9 Current Refinery Strategy
·
working
at Engen is desirable and fun working
·
Reliability
Centered Production
·
Double
our Profits
·
Responsible
environmental performance
·
Serve
your Customer
·
Leading
International Safety performance
·
Effective information flow
14.5.10 Basic Refinery Economics
There are three things that make up profitability:
·
Cost
of the crude
·
Cost of running crude: Cost of fuel and
Operating expenses (OPEX)
·
The
value of the products sold, made from the crude that we run.
14.5.11 Operating expenses
·
It
costs us about US$3.5/barrel of crude to run crude through the Refinery. The
best large Refineries in the world do this at half that cost. The advantage
they hold over us due to this is worth more than R500million per year. Large
components of this cost are: Maintenance
cost, Projects, Volume related operating
expense and Salaries and wages
15. RECOMMENDATIONS BY THE COMMITTEE
·
The
Committees recommend that the Department of Trade and Industry should explain
why funding is not available for the Industrial Development Zone (IDZ).
·
The
Richards Bay Industrial Development should have their own
bank account.
·
The
relevant Department and the
·
Eskom should investigate stumbling block in terms of power supply of
electricity in the
·
·
The
National Department of Tourism should strengthen the relationship on the
National Marketing Strategy, with Intergovernmental stakeholders.
·
·
With
regard to RBM, the Department of Mineral Resources should facilitate the
process to improve the relationship between the mineworkers and the mining
company and also expedite the process of mine workers.
·
Mining
companies should consult the communities at all times with regard to new
developments, of course through their traditional leaders and also develop a
strategy of writing newsletters and distribute them to the communities.
·
The
Department of Mineral Resources had to scrutinize the mining companies before
the approval of mining licenses.
·
The
Department of Mineral Resources should also engage the House of Traditional
Leaders, the relevant department and Mining houses with regard to the agreements.
·
The
Committees would be in contact with various Committees in the province with
regard to the progress made to develop the communities.
·
Follow-up
on Engen Refinery with regard to compliance to the
New Air Emission Standard.
·
The
Committees would make a follow-up with all stakeholders for progress report.
16. CONCLUSION
In conclusion, the Committee will engage with the relevant
Departments and monitor the progress with respect to the recommendations. The
Departments will be requested to report on the progress of the recommendations
within six months.