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Empty Promises and the Myth of Mining: Does Mining Lead to Pro-Poor Development?


Mining operations in the Global South often worsen conditions for affected communities after the conclusion of the operations as compared to pre-mining conditions. This is regression, not progress, which is contrary to the narrative surrounding mining’s promise of economic growth. While mining certainly brings profit, this profit does not result in social and economic development of affected communities and people living in poverty. This is the ‘myth of mining’ and the objective of this article is to expose this myth, identify its failings and propose a notion of ‘equitable mining’ that could ensure a pro-poor mining industry.

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Associate Professor and Director of the Centre for Applied Legal Studies, University of the Witwatersrand, Johannesburg. I am grateful to Charles Young for his insights and comments and to Tammy-Lynne Bekker for her assistance. I am also grateful to my colleagues at the Wits Law School, who gave me excellent feedback at the annual law school conference.

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1 Collier, Paul, The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done about It (Oxford: Oxford University Press, 2007) 39 .

2 For a discussion of the origin of extractives and attempts at regulation to protect indigenous or local communities, see Murombo, Tumai, ‘Regulating Mining in South Africa and Zimbabwe: Communities, the Environment and Perpetual Exploitation’ (2013) 9:1 Law, Environment and Development Journal 31 , 39.

3 Louis Snyman and Robert Krause, ‘Do Social and Labour Plans Belong to Communities? Clarity, Accountability and Responsiveness in the Legislative Framework’, paper presented at the conference ‘In Good Company? Conversations around Transparency and Accountability in South Africa’s Extractive Sector’ on 13 May 2015 (on file with the author). The same can be said for contexts of conflict. For a discussion of the corporate-linked exacerbation of conflict in the Democratic Republic of Congo, see Papaioannou, Asimina-Manto, ‘The Illegal Exploitation of Natural Resources in the Democratic Republic of Congo: A Case Study on Corporate Complicity in Human Rights Abuses’ in Olivier De Schutter (ed.), Transnational Corporations and Human Rights (Oxford: Hart Publishing, 2006) 263 .

4 This is often referred to as the ‘social license to operate’. For a discussion of the adoption of the concept by the mining industry see Owen, John R and Kemp, Deanna, ‘Social License and Mining: A Critical Perspective’ (2013) 38 Resources Policy 29 , 30. See also the analysis by Kolk, Ans and Van Tulder, Rob, ‘Poverty Alleviation as Business Strategy? Evaluating Commitments of Frontrunner Multinational Corporations’ (2006) 34 World Development 789 , 798, noting that BP, Shell and Exxon Mobil all have poverty-alleviating codes of conduct but that the ‘likelihood of compliance seems to remain fairly limited’ and that ‘monitoring is lacking in most cases’.

5 See, for example, Murombo, note 2, 33–4.

6 This is the reason for the creation by the African Commission on Human and Peoples’ Rights of a Working Group of Experts on Extractive Industries, Human Rights and the Environment in 2009. African Commission on Human and Peoples’ Rights, ‘Resolution on the Establishment of a Working Group on Extractive Industries, Environment and Human Rights Violations in Africa’, ACHPR/Res 148 (XLVI) 09 (11-25 November 2009), established at the 46th Ordinary Session held in Banjul. Although states in southern Africa are mineral rich, they remain the poorest region. World Bank, The World Development Indicators (Washington DC: The World Bank, 2012) and UNDP Human Development Report (Washington DC: UNDP, 2013), (accessed 21 July 2016).

7 See, for example, Khadija Pate, ‘Fraudulent Garnishee Orders and SA’s Poorest of the Poor’, Daily Maverick (25 June 2015) 1; Malcolm Rees, ‘Marikana Burst the Unsecured Lending Bubble, How a National Tragedy Exposed a National Evil’, Moneyweb (16 August 2013); Chantelle Benjamin, ‘Garnishee Abuse Is Order of the Day’ Mail and Guardian (25 October 2013).

8 See Centre For Applied Legal Studies, Marikana: The Lived Reality, a film by the Centre for Applied Legal Studies, (accessed 21 July 2016).

9 Ibid, where these violations are poignantly related. Murombo, note 2, 36, noting the extent of land, air and water pollution as a result of mining operations—all of which lead to severe human rights violations. It is not unusual for mining companies to operate in South Africa and other jurisdictions without water-use licenses.

10 Murombo, note 2, 37–8.

11 Laurance, William F et al, ‘Predatory Corporations, Failing Governance, and the Fate of Forests in Papua New Guinea’ (2010) Policy Perspective 95 , 98, noting ‘deficiencies in human welfare, with mean incomes, adult literacy, and its Human Development Index (HDI) all declining in recent years’.

12 For an extensive discussion of the link (or otherwise) between multinational corporations and poverty, see Kolk and Van Tulder, note 4, 792.

13 Human Rights Council, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations’ “Protect, Respect and Remedy” Framework’, A/HRC/17/31 (21 March 2011), Principle 13.

14 See Ghobadian, Abby, Mondey, Kevin and Hillenbrand, Carola, ‘Corporate Responsibility Research: Past-Present-Future’ (2015) 40:3 Group and Organisation Management 271 , 283 and in general, Bilchitz, David, ‘Do Corporations have Positive Fundamental Rights Obligations?’ (2010) 125:1 Theoria 1 .

15 For a discussion of the anomalous distinction between positive and negative rights, see Meyersfeld, Bonita, Domestic Violence and International Law (Oxford: Hart Publishing, 2010) 213 .

16 Extensive evidence is available at See, for example, the claims of Norwegian oil and gas company, Statoil, which claims the integration of respect for human rights and the adoption of the Universal Declaration of Human Rights into its business model: ‘Statoil Annual Report 2011’, (accessed 21 July 2016). Statoil was sued by one of its former human rights advisors for making false representations about its human rights commitments. See Paul Hoffman and Michael Seplow, ‘Human Rights Advisor Sues Norwegian Oil Company Over False Representations About its Commitment to Respecting Human Rights’, (17 August 2010) (accessed 21 July 2016). The moral argument that corporations are responsible for economic development is made by Sorell, Tom, ‘Project Financing in Developing Countries, New Corporate Social Responsibility, Human Rights, and Multinational Corporations’ (2008) 5 Essex Human Rights Review 6 . The historic rationale for mining companies identifying their ‘social license’ to operate is discussed by Owen and Kemp, note 4, 29. In addition to Statoil, see BHP Billiton: ‘We recognise the importance of creating lasting economic benefit for our communities. A focus on sustainability underpins all of our investments in community economic development’. Billiton, BHP, ‘Building vibrant economies as foundations for the future’, (accessed 21 July 2016) .

17 Centre for Applied Legal Studies, Structures of Governance: Enhancing or Impeding Environmental Justice? The Mapungubwe Case Study (Johannesburg: CALS, 2014), (accessed 21 July 2016).

18 See generally Collier, note 1.

19 For a critique of this position, see Bilchitz, note 14.

20 For a discussion of the notion of a ‘decent’ wage, see Kolk and Van Tulder, note 4, 792.

21 See Owen and Kemp, note 4, 31, noting the different expectations between mining companies and stakeholders as to what is ‘necessary or desirable’ for development. This is also discussed by Murombo, note 2, 33, noting the move towards indigenization in Zimbabwe due to the failure of the extractives industry to alleviate socio-economic rights violations.

22 Murombo, note 2, 36.

23 The ‘risk’ of losing profit is contrasted against the long-term development agenda. See Owen and Kemp, note 4, 30. This focus is referred to as an ‘imbalance between financial, social and environmental dimensions of business performance, typically favoring financial outcomes’. Ghobadian et al, note 14, 282.

24 Owen and Kemp, note 4, 31.

25 This is a feature of the timber industry in Papua New Guinea: ‘The rapid depletion of PNG’s forests might be justified if it led to substantial economic and social benefits for the country. Unfortunately, … income from timber operations typically produces only modest, short-term benefits to local landowners, with proceeds often being concentrated in the hands of well-connected individuals and political elites.’ Laurance et al, note 11.

26 Freeman’s stakeholder theory defines ‘stakeholders’ as groups who have a stake in the corporate entity in question, including affected communities. Freeman, R Edward, Strategic Management: A Stakeholder Approach (Boston: Pitman, 1984). For a discussion of this theory in practice, see the Centre for Applied Legal Studies, Changing Corporate Behaviour: The Mapungubwe Case Study (Johannesburg: CALS, 2014) 6, (accessed 21 July 2016). For a critique of the Stakeholder Theory, see Elaine Sternberg, ‘The Stakeholder Concept: A Mistaken Doctrine’, Foundation for Business Responsibilities, Issue Paper No. 4 (November 1999), (accessed 24 July 2016).

27 See, for example, the description of the purchasing of timber rights in Papua New Guinea. Laurance et al, note 11, 96, describing villagers who sell timber rights in exchange for school fees or health services ‘although this exchange has often been less than socially equitable’. Mining in South Africa historically has its roots in compelling subsistence farmers into the mining sector, through a bracket of taxes for which self-sustaining communities had to work. See in general the work of Van Onselen, Charles, The Seed is Mine: The Life of Kas Maine, A South African Sharecropper, 1894-1985 (London: Hill and Wang, 1996) and Van Onselen, Charles, The Small Matter of a Horse: The Life of ‘Nongoloza’ Mathebula, 1867-1948 (Johannesburg: Ravan Pr of South Africa, 1985).

28 Nussbaum, Martha, ‘Women and Equality, the Capabilities Approach’ (1999) 138:3 International Labour Review 240 .

29 Pogge, Thomas W, ‘Severe Poverty as a Human Rights Violation’, UNESCO Poverty Project on ‘Ethical and Human Rights Dimensions of Poverty: Towards a New Paradigm in the Fights against Poverty’, Philosophy Seminar at All Souls College-Oxford (March 2003) 67 , (accessed 21 July 2016).

30 Murombo, note 2, 31.

31 See, for example, ‘Lonmin Annual Report and Accounts for the year ended 30 September 2012’, (accessed 21 July 2016).

32 See Meyersfeld, Bonita, ‘Institutional Investment and the Protection of Human Rights: A Regional Proposal’ in Laurance Boulle (ed.), Globalisation and Governance (South Africa: SyberInk 2011) 174 .

33 Sorell, note 16, 2.

34 See, for example, the analysis by Hamann, Ralph, ‘Corporate Social Responsibility, Partnerships and Institutional Change: The Case of Mining Companies in South Africa’ (2004) 28 Natural Resources Forum 278 .

35 Collier notes: ‘You would hope that the discovery of natural resource wealth would be a catalyst to prosperity, and sometimes it is. But these are the exceptions … indeed, the surplus from natural resource exports significantly reduces growth … Over time, countries with large resource discoveries can end up poorer, with the lost growth more than offsetting the one-off gain in income provided by the rents [of mining licenses].’ Collier, note 1, 38. Sorell argues that the poor land up subsidizing the rich where very large profits are made at the expense of local economic development. Sorell, note 16, 2.

36 Marikana Commission of Inquiry, Report on Matters of Public, National and International Concern arising out of the Tragic Incidents at the Lonmin Mine in Marikana, in the North West Province (2015) 94–5, 99 and 262, (accessed 21 July 2016).

37 Frye, Isobel, Policy Brief 2: Towards a Decent Living Level (Johannesburg: SPII, 22 November 2013), (accessed 21 July 2016).

38 See Labour Relations Act 1995 (South Africa), ss 14(1), 16(1), 18(1), 25(1)/(2), 26(1)/(2), 32(1)(a)/(b), 32(3)(a)/(b)/(c)/(d), 32(5), and 78(b). See also Cohen, Tamara, ‘Limiting Organisational Rights of Minority Unions: Popcru v Ledwaba: POPCRU v Ledwaba 2013 11 BLLR 1137 (LC)’ (2014) 17:5 Potchefstroom Electronic Law Journal 2208 ; Kruger, Johan and Tshoose, Clarence Itumeleng, ‘The Impact of the Labour Relations Act on Minority Trade Unions: A South African Perspective’ (2013) 7:16 Potchefstroom Electronic Law Journal / Potchefstroomse Elektroniese Regsblad 28 .

39 Sibeko, Siphiwe, ‘Ramaphosa is Marikana accused Number One–Mpofu’, ENCA (12 November 2014), (accessed 21 July 2016).

40 Marikana Commission of Inquiry, note 36.

41 Lonmin Annual Report, note 31.

42 Ibid.

43 Owen and Kemp, note 4, 31.

44 Lonmin Annual Report, note 31.

45 Mineral and Petroleum Resources Development Act 2002 (MPRDA).

46 For a discussion about the transformative nature of the MPRDA, see Maccsand (Pty) Ltd v City of Cape Town and Others, CCT 103/11 [2012] ZACC 7, paras 3–5.

47 The required contents of a SLP are specified in Regulations 40 to 46 of Regulation 41 of the MPRDA.

48 See Snyman, Louis and Krause, Robert, ‘In The Marikana Commission Of Inquiry Held At Centurion, Pretoria, Qualitative And Quantitative Assessment Of Lonmin’s Social And Labour Plan’ (2013), submissions made to the Marikana Commission of Inquiry by the Centre for Applied Legal Studies on behalf of the South African Human Rights Commission,[1].pdf (accessed 21 July 2016) 14.

49 Regulation 41 of the MPRDA.

50 MPRDA, Government Notice R527, Regulation 46(b).

51 Ibid, 46(b)(v).

52 Ibid, 46(c)(ii).

53 Ibid, 46(c)(iii).

54 Ibid, 46(c)(iv).

55 Ibid, 46(c)(v).

56 Ibid, 46(e).

58 Limited, Western Platinum, ‘Lonmin Social and Labour Plan Annual Report’ (2011) 43 (Lonmin SLP).

59 Regulation 46 of the MPRDA requires local economic development to form part of a SLP. Snyman and Krause, note 48, 16.

61 Ibid.

62 Snyman and Krause, note 48, 15.

63 Snyman and Krause, note 48, 14–15.

64 Ibid, 15.

65 Ibid, 17.

66 Lonmin SLP, note 58, 59.

67 Snyman and Krause, note 48, 32.

68 Lonmin SLP, note 58, 59.

69 Snyman and Krause, note 48, 33.

70 Ibid, 33.

71 Cronje, Madelene, ‘Inquiry into Lonmin Fee Transfers to Tax Haven’, Mail and Guardian (20 September 2014), (accessed 21 July 2016).

72 Spanjers, Jospeh and Foss, Hakon Frede, Illicit Financial Flows and Development Indices: 2008–2012 (Global Financial Integrity, 2015) iii .

73 Ibid, vii.

74 Ibid, ix (noting that factors contributing to IFF include ‘opacity in the global financial system–comprising, among other things, tax haven secrecy, anonymous companies, and money laundering techniques–which facilitate these outflows’).

75 Cronje, note 71.

76 Ibid.

77 Ibid.

78 See, for example, the following reports: Bench Marks Foundation ‘Policy Gap 9: South African Coal Mining: Corporate Grievance Mechanisms, Community Engagement Concerns and Mining Impacts’ (August 2014), (accessed 21 July 2016) (describing the coal mining activities of BHP Billiton and Anglo American); Bench Marks Foundation, ‘Policy Gap 8: Steel at any Cost? A Community Voice Perspective on the Impacts of ArcelorMittal ́s Operations in Vanderbijlpark, South Africa’ (November 2013), (accessed 21 July 2016); Bench Marks Foundation, ‘Policy Gap 6: A Review of Platinum Mining in the Bojanala District of the North West Province: A Participatory Action Research (PAR) Approach’ (August 2012), (accessed 21 July 2016)); and Bench Marks Foundation, ‘Policy Gap 5: Corporate Social Responsibility in the Diamond Mining Industry in Botswana-De Beers, Botswana and the Control of a Country’ (2009), (accessed 21 July 2016).

79 See, for example, Goodland, Robert, ‘Free, Prior and Informed Consent and the World Bank Group’ (2004) 4 Sustainable Development Law and Policy 66 .

80 For a discussion of some of the limitations of FPIC, see Owen and Kemp, note 4, 33.

81 The Centre for Applied Legal Studies has developed a set of standard practices of respect and interaction to guide lawyers engaging with, inter alia, mine affected communities. See the Centre for Applied Legal Studies (CALS), ‘Community Engagement Policy’ (April 2014), (accessed 21 August 2016).

82 Cornwall, Andrea, ‘Unpacking “Participation”: Models, Meanings and Practices’ (2008) 43 Community Development Journal 269 , 271, discussing ‘functional participation’ whereby entities consult for the purpose of meeting project objectives more efficiently but only after the main decision to conduct the operations has been taken.

83 Owen and Kemp, note 4, 33, noting that without knowledge, skills and resources, poorer communities will be excluded from meaningful participation in decision-making processes.

84 Ibid. See also CALS, ‘Community Engagement Policy’, note 81.

85 See Meyersfeld, Bonita, ‘Business and Human Rights and Gender: A Legal Approach to External and Internal Considerations’ in Surya Deva and David Bilchitz (eds.), Human Rights Obligations of Business Beyond the Corporate Responsibility to Respect (Cambridge: Cambridge University Press, 2013) 183 , 214.

86 CALS, ‘The Mapungubwe Case Study’, note 26.

87 For a discussion about the principles of participation, see Cornwall, note 82.

88 See Kolk and Van Tulder, note 4, 792.

89 Cornwall, note 82, 271.

90 ‘Tokenism’ as a form of placation is a concept developed by Sherry Arenstein, ‘A Ladder of Citizen Participation’ (1969) AIP Journal 216–24. See Cornwall, note 82, 270.

91 This is a seminal part of the work undertaken by Louis Snyman and Robert Krause at the CALS at Wits University.

92 This model has been adopted by the CALS in its Environmental Justice Programme,

93 Meyersfeld, note 85, 214. See also Owen and Kemp, note 4, 31, noting the exclusion of certain social units from engagement and negotiation.

94 For an argument supporting the positive obligations of corporations to foster self-organization, see Kolk and Van Tulder, note 4, 793.

95 Owen and Kemp, note 4, 31.

96 Department of Mineral Resources, South Africa, ‘Beneficiation Economics’, (accessed 21 July 2016).

97 Ibid.

98 See Neumark, S Daniels, Foreign Trade and Economic Development in Africa: A Historical Perspective (Stanford: Stanford University Press, 1964).

99 Swarns, Rachel L, ‘Rarity of Black-Run Businesses Worries South Africa’s Leaders’, New York Times (13 November 2002), (accessed 21 July 2016).

100 See, for example, Fraser, Nancy, ‘After the Family Wage: Gender Equity and the Welfare State’ (1994) 22 Political Theory 591 ; Groshen, Erica L, ‘The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?’ (1991) 26 The Journal of Human Resources 457 ; Treiman, Donald J and Hartmann, Heidi I, ‘Women, Work, and Wages: Equal Pay for Jobs of Equal Value’ (1981) Committee on Occupational Classification and Analysis, National Research Council (Atlanta: National Academic Press (1981).

101 This begs the question of how the value of the work of the five sets of actors highlighted in this article should be determined. This would be a project incorporating multiple disciplines, including economists, lawyers, mining experts and sociologists.

102 The link between multinational corporations in general, including mining companies, and poverty is evidenced in ‘dynamic comparative advantage’ and a failure to monitor development undertakings. See Kolk and Van Tulder, note 4, 797.

103 See Bilchitz, David, ‘Critiquing the Normative Foundations of the GPs’ in Deva and Bilchitz (eds.), note 85, 107, 124125 . See also Kolk and Van Tulder, note 4, 790.

104 International Covenant on Economic, Social and Cultural Rights, 993 UNTS 3 (adopted 16 December 1966, entered into force 3 January 1976).

105 Of course, poverty is a complex phenomenon caused by contributions of multiple actors and variables. My point here is to note that poverty per se is not categorized as a human rights violation under international law. This is a deficiency in international law.

106 See Sen, Amartya, Development as Freedom (Oxford: Oxford University Press, 1999); International, Oxfam, The Rigged Rules of Global Trade (Oxford: Oxfam International, 2014); Oxfam International, ‘Pricing Farmers Out of Cotton: The Costs of World Bank Reforms in Mali’, Oxfam Briefing Paper (2007). See also the Human Rights Council, ‘Guiding Principles on Extreme Poverty and Human Rights’, A/HRC/21/39 (18 July 2012) and the keynote address of the Special Rapporteur on extreme poverty and human rights, Philip Alston, at the Nordic Trust Fund for Human Rights and Development Annual Workshop: ‘Rethinking the World Bank’s Approach to Human Rights’ (15 October 2014), noting that the World Bank president Jim Yong Kim, ‘did not speak of the need for redistribution, nor of the need for fair and equitable taxation systems, nor about tackling international tax avoidance … the implication of this analysis seems to be that poverty eradication can be severed from the struggle for rights...’ (

107 Nussbaum, note 28, 233.

108 Ibid.

109 Guiding Principles on Extreme Poverty, note 106.

110 Meyersfeld (2011), note 32. Murombo, note 2, 33, noting that ‘extractives underpin most economies in Africa’. See Pogge, Thomas, World Poverty and Human Rights, 2nd edn. (New York: Polity, 2008) 104106 .

111 Ibid, 101–2.

112 Ibid, 121.

113 See Plessis, Max Du, The International Criminal Court that Africa Wants (Pretoria: Institute for Security Studies, 2010), (accessed 6 August 2016); and Jalloh, Charles C, Akande, Dapo and du Plessis, Max, ‘Assessing the African Union Concerns about Article 16 of the Rome Statute of the International Criminal Court’ (2011) 4:1 African Journal of Legal Studies 5 .

114 This is evident from the Committee of Privy Counsellors, ‘Report of the Iraq Inquiry, Report of a Committee of Privy Counsellors’, HC 264 (6 July 2016), commonly referred to as the Chilcot Report, (accessed 21 July 2016). The Report finds that Prime Minister Blair’s decision to deploy large-scale forces in Iraq was unlawful (p122 of the Executive Summary).

115 The Prosecutor v Charles Ghankay Taylor, SCSL-2003-01-1, (accessed 21 July 2016).

116 Although there has been an attempt to hold corporate actors responsible for their involvement in fueling the civil war: DLH lawsuit regarding the Liberian civil war, (accessed 21 July 2016).

117 Global Witness, ‘Bankrolling Brutality Why European Timber Company DLH should be held to account for profiting from Liberian conflict timber’ (2010), (accessed 21 July 2016).

118 For a discussion of the role of mining corporations in the conflict in the Democratic Republic of Congo, see Papaioannou, note 3, 263.

119 See Freeman, Richard B, ‘People Flows In Globalization’ (2006) 20:2 Journal of Economic Perspectives 145 .

120 CALS, ‘Structures of Governance’, note 17, 35.

121 Centre for Applied Legal Studies, The Social and Labour Plan Series, Phase 1: System Design Trends Analysis Report (Johannesburg: CALS, 2015) 11 .

122 Ibid.

123 Examples of the ‘blame-game’ include: Peter Moskowits, ‘As Coal Struggles, the Blame Game Begins’, Al Jazeera, (8 November 2014), (accessed 21 July 2016); Martin Creamer, ‘Mining’s Damaging “Blame Game” Destroying South Africa’, Mining Weekly (26 June 2013),; and Niren Tolsi and Paul Botes, ‘Marikana: The Blame Game: A Special Report’, (accessed 21 July 2016).

124 Carroll, Lewis, Through the Looking Glass (London: Collins Classics, 2010) 65 .

125 Ali, Saleem H, ‘The Ethics of Space and Time in Mining Projects: Matching Technical Tools with Social Performance’ (2004) 135:4 Journal of Business Ethics, 645 , 649.

126 Shell is a favourite example of exploitative business operations in the developing world. Kolk and Van Tulder, note 4, 798.

127 For a discussion of volatile revenue, see Collier, note 1, 40.

* Associate Professor and Director of the Centre for Applied Legal Studies, University of the Witwatersrand, Johannesburg. I am grateful to Charles Young for his insights and comments and to Tammy-Lynne Bekker for her assistance. I am also grateful to my colleagues at the Wits Law School, who gave me excellent feedback at the annual law school conference.

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