“As a South African who is passionate about our country, and who is concerned with creating a future for all our people, [I believe that] the issue of ownership of South Africa’s wealth is critical to a sustainable future, if we do not want an outcome such as has happened on our northern borders.
“If we do not do this, 20 years from now, people will start to nationalise companies and take things by force, and we will look back at this period with all sorts of criticism,” he says.
Hartford says that South Africa is the third-worst country in the world in respect of ownership and wealth distribution, behind Swaziland and Botswana. He estimates that about 5% of the R3,6-trillion value of the JSE is directly in black hands. He believes that this is not a sustainable outcome for the country, 14 years into democracy.
Further, he says that the bulk of the invested equity is in the hands of black entrepreneurs and businesspeople, and not the black working class.
The mining industry employs about 550 000 people, and, with each of these people having six to eight dependants, about four-million people depend on income from mining, says Hartford. The average income, he notes, is R3 000 to R4 000 a month.
Hartford argues that broad-based empowerment is essential in ensuring long-term success in a mining company.
“Across the world, change management systems, combined with ownership, create the most productive companies in the world – that is a fact,” he says.
Before the Mining Charter was introduced in 2002, there was little to no ownership of shares by mineworkers, and even today, says Hartford, many equity deals are only completed so that mining companies comply with regulations.
He notes that the Min- ing Charter recently increased the value of free shares to employees to R50 000 over five years. This equates to an extra two months’ pay for every year of service for mineworkers, which, he says, is a significant benefit to them.
Hartford says that it is not feasible to place employee share schemes in the same category as executive share schemes, owing to the vastly different financial means available to employees, compared with executives. He says that the Mining Charter is not aimed at reregulating the mining industry, but at creating a standard that is optimally achieved through guidelines.
Hartford says that a key strategic issue is determining what one wants to achieve with regard to the beneficiary base of ownership.
“We have to find ways to reduce the risk of ownership for poor people, so that they can secure long-term benefits. We also need to create a society of owners by building a base of ownership for ordinary people,” he says.
Adding weight to Hartford’s argument is the view of executive mayor of the Sekhukuni district Dickson Masemola. He says that the current government is facing many challenges from mining companies not committed to transferring income from mining to ordinary South Africans, and that people cannot talk with “sweet tongues”, as if all is well.
“As revolutionaries, we should rightly be suspicious of those who mainly talk about the economic injustices of apartheid, and the evils of the past, and never seem to translate their words into actions and solutions,” he says.
The Esop Shop is involved in employee ownership schemes in the mining industry.