Marikana: Lonmin’s broken promises

The evidence leaders are the legal team that has a central role in the gathering and presentation of evidence. They do not represent any interested party.

In their Heads of Argument, which will be presented to retired Judge Ian Farlam today, Geoff Budlender, Matthew Chaskalson, Kameshni Pillay, Charles Wesley, Tantaswa Lupuwana and Matthews Mojapelo describe how housing commitments made under the Mineral and Petroleum Resources Development Act have not been met.

At present most Lonmin workers live in “unacceptable” single sex hostel accommodation on Lonmin property or in shacks in informal settlements like Nkaneng which do not have water, sanitation or electricity, they say. There are less than ten taps in the settlement and most mine workers shower at work because there is no water in their yards. As many as 20 people may share a pit toilet.

Lonmin has acknowledged that the strike and deaths at Marikana during August 2012 were linked to the critical shortage of housing, the evidence leaders say.

In terms of commitments made under the Act, Lonmin’s operating subsidiaries Western Platinum Limited (WPL) and Eastern Platinum Limited (EPL) undertook to phase out all single sex hostel accommodation, converting most hostels into bachelor or family units and building an additional 5,500 houses for migrant workers, by September 2011. In the first three years, 3,200 houses were to be built and 70 hostels converted.

But by the end of the 2009 financial year, only three of the 3,200 houses had been built and only 29 hostels converted.

Photo included in the evidence leaders’ Heads of Argument showing living conditions in Wonderkop. Here a woman is queuing for water. Photo by A Benya.

In its 2009 report, Lonmin abandoned any reference to the figures promised and stated: “The financial situation of the company impacted by the global economy on the price of platinum resulted in a review of the housing and hostel upgrade programme.”

The new target for the 2009 financial year was reduced to the construction of three show houses.

“An unconditional obligation to construct 5,500 houses over five years with a capital budget of R665 million was converted into a contingent obligation to build houses only for workers who could obtain mortgages,” say the evidence leaders.

Photo included in the evidence leaders’ Heads of Argument showing a shack occupied by a mine worker and his family. Photo by A Benya.

Lonmin, they say, offered two reasons for breaking its promises: delays in getting land approved for construction, and lack of funds because of the financial crisis.

The first argument is a “red herring”, says the evidence leaders; there were 780 serviced stands available from the start and plenty of vacant land within the hostel complexes. And the second argument is “irrelevant” to Lonmin’s obligations under the Act. “This attempt by Lonmin to wash its hands of an obligation that it repudiated must be rejected”, they say, pointing out that in any case there was plenty of money available.

Between 2007 and 2011, when the housing would have cost R665 million, the two mining companies paid more than R1.3 billion in “marketing commissions” to Lonmin Management Services and/or a Bermudan subsidiary, Western Metal Sales. Between 2008 and 2011, Lonmin Management Services made a profit of more than R643.5 million on these “marketing commissions”.

Photo included in the evidence leaders’ Heads of Argument showing a pit latrine in Nkaneng. Photo by A Benya.

Read the evidence leaders’ Heads of Argument.

Also see:

• Marikana: Phiyega “not fit for office”.
• Marikana: How the police “constructed” their story