This post is about HDSAs and procurement under the Mining Charter. I wouldn't recommend that you start getting all the white mommies that make up the cake and candy committee at St Stithians to form a HDSA company and take a shareholding in a mine. What am I saying – that's actually a very good idea.
The preamble of the "broad-based socio-economic empowerment charter for the South African Mining and Minerals Industry", more commonly known as the Mining Charter starts with
The systematic marginalisation of the majority of South Africans, facilitated by the exclusionary policies of the apartheid regime, prevented Historically Disadvantaged South Africans (HDSAs) from owning the means of product ion and from meaningful participation in the mainstream economy. To redress these histone inequalities. And thus give effect to section 9 [equality clause) of the Constitution of the Republic of South Africa Act 108 of 1996 (Constitution), the democratic government has enacted, inter alia, the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA
This paragraph tells us a lot about the intentions of the Mining Charter. My reading tells me that there are two classes of people that may be regarded as HDSA. The first are those who were "prevented from owning the means of product ion" AND those who were prevented "from meaningful participation in the mainstream economy". Both of whom were marginalised by "the exclusionary policies of the apartheid regime".
The premise of this post is that the HDSA definition includes all women and disabled people as per the 2001 PPPFA regulations. The regulations defined HDI as
(h) "Historically Disadvantaged Individual (HDI)" means a South African citizen –
(1) who, due to the apartheid policy that had been in place, had no franchise in national elections prior to the introduction of the Constitution of the Republic of South Africa,1983 (Act No 110 of 1983) or the Constitution of the Republic of South Africa,1993 (Act No 200 of 1993) ("the Interim Constitution"); and / or
(2) who is a female; and / or
(3) who has a disability:
Provided that a person who obtained South African citizenship on or after the coming to effect of the Interim Constitution, is deemed not to be an HDI;
I don't think that it's a disputed fact that the HDSA referred to in the Mining Charter (which came out in 2010) and the 2001 PPPFA regulations are effectively the same people. The Mining Charter quite probably realised that white women would make a killing on mining deals, as one does these days. They attempted to limit white women involvement with this definition.
Historically Disadvantaged South African (HDSA) refers to South African citizens, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993) came into operation which SHOULD be representative of the demographics of the country
I wrote a year ago that the underlined sentence referred to the Economically Active Population (Manyi's scourge). I don't think this is correct. The EAP refers to those between the ages of 16-65 (give or take a year or two), who make up 66% of the total population according to the 2011 census. The EAP therefore cannot be solely viewed as reflective of the demographics of the population. This is the breakdown of the population as per the census.
Race Group |
Black African % of population |
Coloured % of population |
White % of population |
Indian or Asian % of population |
"Other" % of population |
TOTAL % |
79.20% |
8.92% |
8.86% |
2.49% |
0.54% |
Those with an eye for detail might have noticed that the Black African section must include naturalised non-South African born Africans. This is because the Other number is only 280,000, and there must be a lot more than that number of naturalised Africans. That in itself is marginally problematic for Mining Charter and BEE purposes. What the census document doesn't appear to do is breakdown the number of men and women in each racial category. But it does give us a male to female ratio which is 48.65%:51.35%. Therefore the beneficiaries of the Mining Charter would need to follow these statistics.
Race Group |
Black African % of population |
Coloured % of population |
White women % of population |
Indian or Asian % of population |
TOTAL % |
79.20% |
8.92% |
4.55% |
2.49% |
The huge difficulty we face here is that Indian/Asians would never get a look in because they make up an even smaller number than white women. And then there's the practical application of the "representative of the demographics of the country". You're not going to get a company that will be made up like this – although Davies would love this. I asked an Anglo representative about this and he said that Anglo ask for BEE certificates and measure BEE ownership as per the BEE certificates. This must be new because there is an Anglo American letter sent to suppliers stating that
Anglo American Kumba Iron Ore must procure from BEE entities. A BEE entity is defined as an entity of which a minimum of 25% + 1 vote of share capital is directly black owned as measured in accordance with the flow through principle. B-BBEE ratings do not currently form part of the Mining Charter criteria for BEE procurement.
A BEE certificate will only mention black ownership, not the breakdown of the ownership in terms of the demographics. Perhaps a solution is to calculate all procurement and measure it according to the ratios above to see if you get to meet the charter. The definition uses the word "should" which might allow for an average. If you were to favour African suppliers as a legislated requirement you are going to have trouble. I have seen a verification certificate that measures HDSA status in terms of the MPRDA. I suspect we'll see more of these in future and if the company turns out to be white women owned then I suggest that it is still in keeping with the spirit of the Mining Charter.
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