How should business talk to the government? Or more specifically, how best should it talk if it wants to prompt the changes needed to make SA a better place?
It’s an old debate within organised business, one that has taken on new life over the past couple of Covid-19 years. It’s been on stage front and centre over the past couple of months since Sibanye-Stillwater CEO Neal Froneman first made his “failed state” comments in March. And it reached a new level of theatre this week when mineral resources & energy minister Gwede Mantashe struck back against (unnamed) strong and powerful mining executives who he said “insulted” the state.
Few in business seem to believe any more that business can or should be quiescent in the face of an economy that is failing badly to provide the growth and jobs SA needs, and a dysfunctional government that is failing to do what’s needed to turn that around. Rather, the debate is, in essence, should executives be brutally honest like Froneman? Or would they be more likely to get the government to listen if they were more respectful, or in the words of another mining boss, former Anglo American CEO Mark Cutifani, more responsible?
How best to raise pressing issues has long been particularly central for the mining industry, where the licence to operate is such a tangible precondition for doing business, and where the nature of work touches on so many aspects of life, from community development to safety and health to the environment. Miners have made big profits in the commodities boom, and SA’s public purse and its balance of payments have been the beneficiaries, but the industry is plagued by many of SA’s ills — from collapsing infrastructure to crime and lawlessness — and is exposed daily to crises in the communities in which it operates.
At the release of Sibanye’s year-end results in March, Froneman said SA was practically a failed state. He cited inequality and poverty. He blamed government leadership for the lack of capacity to deliver services to communities or grow the economy, as well as for the failure to act against lawlessness and crime. At the investment conference, Cutifani countered by saying business needed to be responsible in the way it raised issues in public forums. And speaking to Business Day, he expressed concerns about industry executives who spoke of failed states, saying that while business needed movement on public policy and needed it faster, it had to be constructive and provide practical solutions if it wanted to influence the debate. “If you’re insulting politicians, why would they listen to you?” he said.
The constructive approach is very much that adopted by the Minerals Council SA, which has frequent engagements with Mantashe. He is seen as one of the most friendly ministers the industry has had, but the council has not been shy to keep raising the multitude of issues holding back investment in mining. In public, the stance is respectful, even if in private, industry executives will be blunt about the dysfunction in Mantashe’s department, with its huge backlog of mining and exploration licences, its disastrous cadastre system and its apparent efforts to make it as cumbersome as possible for mining companies to build their own renewable energy projects, despite regulatory reforms to enable this. Some will be blunt in private too about what Froneman has said in public — that the industry has to step in to deliver much-needed services to communities where the government can’t.
Some have quibbled, appropriately, about whether SA meets the definition of a failed state, but few can quibble that it is a failing one. Outgoing Treasury director-general Dondo Mogajane said in a post-budget panel that the things that defined a failing state were beginning to show, “where we don’t care about the poor and improving their lives”. And in parliament this week, he detailed the dysfunctional state of SA’s municipalities.
Froneman is clear that a failed state is what you see in SA right now, citing dysfunctional municipalities, crumbling infrastructure, lack of economic growth and rising unemployment. And he blames business in part for not being outspoken: “As business, we should also hold ourselves accountable for the mess this country is in … Because we tried to be constructive, we tried to be politically correct for 15 of the last 20 years and all that does is create confusion,” he said in an interview earlier in May.
The industry succeeded in getting the right solution on once empowered, always empowered because it took on the government in court, rather than by trying to be constructive, Froneman emphasises. And on Sibanye’s relationship with the government: “They’re not our friends and they don’t need to be. All they have to do is do their jobs, and we do our jobs and act in the national interest. Gwede knows I have no hidden agenda. I want the best for this country and we are not going to get the best by beating around the bush.”
Many might agree. But Mantashe is not buying it, at least not publicly. He has a different constituency to please and he has pushed back hard, even vindictively, threatening to revoke Sibanye’s mining licence because of the lengthy gold strike and talking at this week’s Minerals Council AGM about “temptations to insult the state” by executives with no regard for the industry’s international ratings or its relations with the government. Nor did Mantashe aim just at Froneman but also at “business associations who also find it fashionable to insult government and the governing party”. Business Leadership SA’s forthright Busi Mavuso perhaps? Or the Black Business Council?
Arguably, Froneman can be blunt in ways the leaders of organised business can’t. Industry associations such as the Minerals Council and Business Unity SA have to work with the government to try to get changes to happen, though their patience can surely not be infinite. Which is why the debate about how to talk to a government that listens but does not act is very much alive in business.
Government ministers may be sensitive to what they see as disrespect, and there is history behind that of which business must be aware. But whether its criticism is brutal or more nuanced, SA is fortunate to have a business community that keeps trying to help fix SA. Even the most sensitive of cabinet souls might keep that in mind.
• Joffe is editor at large.
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