Case study: The far-reaching socio-economic impacts of the 2014 Platinum strike

The five-month strike between January and June in 2014 across the platinum belt in the greater Rustenburg area in South Africa was the longest in the history of industrial relations in the country and had a material socio-economic impact on employees, their dependants and communities as well as local businesses.

Rustenburg operations were suspended throughout the five-month period in order to protect the safety and security of our employees who faced the risk of violence and intimidation. The strike by the majority union Association of Mineworkers and Construction Union (AMCU) was concluded with a three-year agreement signed on 24 June 2014.

Mineworkers are a major source of income in the Royal Bafokeng Nation (RBN) villages; it is estimated that approximately 29% of the 50 000 households^* in RBN include mine employees. The lack of income during the strike had a significant impact on household nutrition, health, education, local business income, rental income and general security in the RBN, informal settlements and other surrounding communities.

^*Households – individuals who live together under one roof and eat from the same pot.

The Royal Bafokeng Administration (RBA) conducted an assessment of the far-reaching impact of the strike on communities affected. The review identified some of the following primary social and economic impacts during and following the strike:

Social impacts

• Social welfare: Welfare issues impacted by the strike included in particular an increase in the number of children left alone while their mothers went in search of food and income. Tapologo Hospice for orphans and vulnerable children in Phokeng village, which is supported by Impala through the Impala Bafokeng Trust (IBT), experienced an increase in afternoon daily feeding. The orphans and vulnerable children centres experienced a 163% increase in daily afternoon feeding compared to the same period the previous year, and a 280% increase between January and June 2014. This indicates the significant impact the strike had on the availability of food in mining households and those dependent on household income generated by the industry in various forms.
• Education: Based on evidence from school principals, the strike had a minimal impact on most schools across the Bafokeng area, with the exception of the schools surrounding the mines and especially those frequented by mine employees' children (in the south-east region such as Photsaneng and Mfidikoe). An increase in levels of absenteeism is principally attributed to families leaving the area temporarily or a lack of affordability for transport. Transport costs were likely to have affected high school learners who attend schools further away from home. Most RBN schools are non-fee schools therefore school fees were not a factor affecting attendance. Many early childhood development (ECD) centres and crèches were suspended during the strike owing to parents being unable to pay fees. While many are likely to have reopened following the resolution of the strike, the children will have been out of care for several months, increasing the burden of care on especially female family members and exposing small children to the strike-related stresses in families.
• Safety and security: The RBN’s Protective Services Unit collates statistics on all crimes to which it responds. An overall reduction in crime in the RBN area was observed during the strike period, as compared to the same period in 2013. It is unclear whether this is related to the strike or simply a continuation of a longer-term trend in reduced crime incidents based on the effectiveness of the protective services visible policing strategy. However, specific types of crime increased during the strike months, all of which are likely to have had a direct relationship to the strike. Copper cable theft increased considerably during the duration of the strike – in the RBN area and the greater Rustenburg area. Mine shafts that were quiet during the strike were targeted by groups of copper cable thieves who stole large quantities of copper cable from underground. Impala Rustenburg replaced approximately R49 million worth of electrical cables in order to resume the operation of some shafts. Copper cable theft from Eskom lines in residential RBN villages also increased. Levels of violent crime, including arson, assault with grievous bodily harm and murder, were observed to have increased during the strike action. These mostly occurred in the south-eastern and northern RBN regions, close to the mining areas, and were part of violent intimidation tactics between striking and (perceived) non-striking mine workers.

Economic impacts

• Local business revenues: During the strike, the force majeure declared by mining houses resulted in contractual obligations being unfulfilled towards certain service providers; consequently some existing contractors were not paid and there were no new contracts. Virtually all other businesses in the area, from mining input manufacturers to the hospitality industry to informal convenience shops, suffered reduced turnover of between 50% and 80%. Many small businesses retrenched staff, or closed. Some small businesses survived by diversifying their client base beyond the Rustenburg area however, a reduction in local economic diversity is expected in the medium term. While employees of the mines returned to work after the strike, the employees of defunct small businesses may have not at the time.
• Rental income: The RBA data indicates that Impala employees account for approximately 4 000 rental households in the Bafokeng villages. According to anecdotal evidence, most mining households could not afford to pay their rent by the second month of the strike. However, landlords did not evict their tenants for non-payment, in anticipation of future rental income. If the average rental income is conservatively estimated to be R350 (based on a housing market study conducted by the RBA), the rental income lost during the five-month period was approximately R7 million. This would exclude those working in support industries who would have also been affected.
• Micro-lenders and unscrupulous lenders (Mashonisas): Anecdotal evidence suggests that informal and small-scale money lenders largely went out of business as a result of the protracted strike. This includes individual informal ‘mashonisas’ as well as cash loan and pawn shops in RBN villages. It is likely that such businesses were very active in the early months of the strike but then could not collect on their lendings and therefore went out of business. Further research is needed to determine the extent to which ‘loan sharks’ returned once the strike ended, and the impact of their activities on mine workers’ back-to-work payments, their first monthly payments and their health and safety in cases of non-repayment.

During the strike the principle of no-work-no-pay was applied. As a consequence the housing bonds of employees on the Company’s home ownership scheme were affected. The Company paid these bonds throughout the period in order to assist affected striking employees.

The strike and its impact brought into sharp focus the need for an integrated and collaborative approach to addressing social challenges that exist in communities. We continue to work actively with our industry partners, government, union leaders and other stakeholders to find long-lasting solutions.