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NEWS
Henley offers scholarships to investigative journalists
Henley offers scholarships to investigative journalists

5 trends that can keep the South African MBA relevant
5 trends that can keep the South African MBA relevant

We need to realign government, business and civil society
We need to realign government, business and civil society

Life as a full-time MBA student
Life as a full-time MBA student

Brexit delay provides breathing space for SA
Brexit delay provides breathing space for SA

MSA joins the ADvTECH family
MSA joins the ADvTECH family

SA plunges to 117 out of 149 in gender wage equality
SA plunges to 117 out of 149 in gender wage equality

UCT’s Executive MBA recognised for its distinctive approach
UCT’s Executive MBA recognised for its distinctive approach

GIBS Executive MBA programme debuts in top 50
GIBS Executive MBA programme debuts in top 50

Can Africa fill the glass?
Can Africa fill the glass?

YALI AFRICA launch at Unisa
YALI AFRICA launch at Unisa

The fake resurrection of South Africa
The fake resurrection of South Africa

Don't panic: The digital revolution isn’t that unusual
Don't panic: The digital revolution isn’t that unusual

Why Agile works
Why Agile works

How firms can avoid the mediocrity trap
How firms can avoid the mediocrity trap

How a 100000-strong company is relearning how to innovate
How a 100000-strong company is relearning how to innovate

The changing shape of the MBA
The changing shape of the MBA

Adding climate change to curriculum is a top priority
Adding climate change to curriculum is a top priority

The MBA should turn you into a business disruptor
The MBA should turn you into a business disruptor

Innovation in SA organisations driven by C-level support
Innovation in SA organisations driven by C-level support

UNISA SBL a torch-bearer of training for military veterans
UNISA SBL a torch-bearer of training for military veterans

Scaling up the MBA for relevance in the 4IR
Scaling up the MBA for relevance in the 4IR

Moody's: SA not out of the woods yet
Moody's: SA not out of the woods yet

GIBS manufacturing-focused MBA kicks off in Durban
GIBS manufacturing-focused MBA kicks off in Durban

Henley’s Makhoalibe selected for sought-after programme
Henley’s Makhoalibe selected for sought-after programme

Personal potential, a source of power
Personal potential, a source of power

Reach your business leadership potential with a MBA from WBS
Reach your business leadership potential with a MBA from WBS

MPC: SA needs a period of stable interest rates
MPC: SA needs a period of stable interest rates

SA’s energy problems just the tip of the iceberg
SA’s energy problems just the tip of the iceberg

What's really driving disruption?
What's really driving disruption?

Why has there been such a failure of leadership?
Why has there been such a failure of leadership?

Steinhoff: Exactly where does responsibility stop and start?
Steinhoff: Exactly where does responsibility stop and start?

The cure for the loneliness of command
The cure for the loneliness of command

How to survive in the age of digital transformation
How to survive in the age of digital transformation

New MBA timetable starts in 2016
New MBA timetable starts in 2016

EVENTS
Henley MBA & PGDIP Preview Day
Henley MBA & PGDIP Preview Day
29 May 2019,
Pretoria

UCT GSB MBA Information Sessions
UCT GSB MBA Information Sessions
15 October 2019,
Johannesburg



03 MARCH 2019
Sustainable mining rests on addressing power relations
by Brian Ganson
Mining is a fraught business. Whilst the sector contributes to GDP growth and much-needed employment, it is often associated with environmental and social damage, conflict and violence. Despite the promises of jobs and development driven by Social and Labour Plans and the Mining Charter, a recent study found that eight mining-affected communities in South Africa are instead facing deteriorating health and wellbeing, and that ultimately “the mining industry only benefits a few while condemning mining-affected communities to poverty and violence.”

The violence seen at Marikana and more recently in the Richtersveld is the most visible symptom of underlying and unresolved power struggles in the industry. If left unresolved, deep-rooted tensions and disputes will inevitably lead to conflict.

And company-community conflict is bad for business. It can lead to project delays, or abandonment, decreased productivity and increased costs. A recent McKinsey & Company report found that more than four out of five mining projects come in late and over budget, by an average of 43 percent. Other research documents costs from social conflict to a single mine of more than $20 million per week after operations have started.

There is growing awareness that companies must avoid negative societal impacts and environmental harm as a matter of both risk management and corporate social responsibility – even if many, such as the South African Human Rights Commission, conclude that “the mining sector is riddled with challenges related to land, housing, water, the environment, and an absence of sufficient participation mechanisms and access to information”.

But can they do more than that and become active peace builders in fragile situations? A two-year, case-based learning project that looked at select positive examples of the private sector as a peacebuilding actor carried out by Collaborative Learning Projects (CDA), the Africa Centre for Dispute Settlement (ACDS) at the University of Stellenbosch Business School, and Peace Research Institute Oslo (PRIO), points out that mining companies have the power to improve operations – and effects on society – not necessarily by changing material conditions on the ground but by contributing to positive changes in power relationships and the institutional arrangements that underlie conflict.

Right now, there is a significant imbalance of power among the different stakeholders in the South African mining industry. This is vividly illustrated by the fact that Cape Town hosted two separate mining indabas in February.

The 25th Investing in African Mining Indaba, described as Africa’s largest mining investment event, convened investors, mining executives, and high-ranking government officials, including President Cyril Ramaphosa.

In the same week that this high-profile event drew “the most influential people in African mining” to the Cape Town International Convention Centre, a second mining indaba took place in Woodstock. Here, the 10th Alternative Mining Indaba advocated for “equality and justice where benefits of natural and mining resources are shared equally”. It convened human rights and environmental advocates, community representatives, and faith-based organisations.

This divide of interests and perspectives highlights the misalignment between business, affected communities and environmental groups and points to the underlying divisions and existing power relationships that repeatedly lead to conflict. More than that, these separate events point to a missed opportunity for all parties to come together to ensure all stakeholders’ agendas are on the table; and everyone’s voices heard. Until the underlying power relationships in the industry are addressed, any changes will be superficial and the best-laid plans for much needed development and investment may be derailed by company-community and other forms of social conflict.

As the McKinsey study points out, “systemic problems need systemic solutions”. And it is best if solution-finding starts early: “The biggest regret of leaders whose projects went wrong is that they waited too long to act and didn’t go far enough when they had a chance.”

Evidence based on decades of conflict prevention and violence reduction efforts points to the need for all stakeholders to engage early on and to collaboratively collect and analyse data to work toward a shared understanding of all parties’ interests; all stakeholders must have a voice in decision-making processes, including issues surrounding regulation, licencing, financing and operations. It is essential that mechanisms are put in place to manage disputes and that all parties have confidence that the process will be managed fairly and effectively.

An example of effective dialogue to resolve long-standing disputes is the roundtable established in Peru to address conflict at the Tintaya copper mine in 2004. Here facilitated dialogue between state, developers and communities led to the resolution of conflict over expropriated lands, environmental degradation and human rights abuses – even if later abandonment of the dialogue process allowed the situation to lapse back into conflict and violence.

This example shows that corporations hold significant power to shift the status quo, for good or for bad. When they decide to, companies can mobilise their networks and resources to catalyse more positive relations between actors in the context, facilitate constructive action together with other peace-minded actors, and influence decision-makers in questions of conflict and peace.

By bringing together those who are willing to take the risk of working together for positive change, and providing them with the support that they need, even seemingly intractable situations can shift. And the risks for companies and communities can be reduced together in ways that make places that are fragile today less risky places to do business tomorrow.

This will prove especially important in a global economy where commodity prices are low and volatile, and fewer projects are being built. As the McKinsey report points out; with profit margins slim, so is the room for error.

Brian Ganson is Head of the Africa Centre for Dispute Settlement and Adjunct Associate Professor at the UCT Graduate School of Business, where he convenes the programme on Company-Community Collaboration and Conflict Resolution for Complex Environments running this February.
Source:

University of Cape Town Graduate School of Business
UCT GSB is internationally renowned as one of a few business schools in Africa with the prestigious triple-crown accreditation with endorsements from EQUIS, AACSB and AMBA. As a top school with more than five decades of experience in Africa and other emerging markets, UCT GSB has a responsibility to engage with its socio-political and economic context. Its teaching, learning and research are directed towards addressing the complex and pressing economic and social challenges of our world today. Visit our InfoCentre or website.

University of Cape Town Graduate School of Business, Executive Education
Executive Education at the UCT Graduate School of Business is dedicated to growing the leadership backbone in organisations and individuals and inspiring a new generation of leaders to engage with the challenges of the African continent in a hyper-connected and globalised world. Visit our website.

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