(12b) Good versus bad leaders: South Africa

Example: South Africa and its mines.

The world's biggest platinum producer, Anglo American Platinum or Amplats, fired 12,000 South African miners when they were on strike for higher wages. A few weeks before, 34 people died during strikes at Lonmin, another mine. How would one describe these managers? Are they good? I don't think so:

• Their employees are unhappy and strike because they say they earn too little for the dangerous work they do. And as I understand it, life in South Africa is becoming more expensive and thus people need more money.  Most of the managers live far away and earn enormous amounts of money, therefore they do not know (or bother to know) prices are increasing in South Africa and thus life becomes more difficult for everyone, including miners who have a dangers job (to understand the bad working conditions of gold miners, search the web for pictures).
• Three weeks of strikes cost the company about 700m rand ($82m; £51m) in revenue. Indeed, no platinum could be taken out the mines and thus nothing can be sold. (Maybe an increase in wages was cheaper?) But firing all miners is probably not a solution because who will now take the platinum out the mines? Who would dare to work there after the company's solution to the dispute and face the anger of so many people who lost their job? And even the new miners will start to complain about the wages, because as long as that isn't solved the problems remains.

Of course, it is difficult for a business leader to applaud strikes, but good leaders would wonder what causes the anger and how to solve them. They may acknowledge the enormous pay gap between them and the miners and then they can reduce their own payments so the anger may calm down. This will make it easier to continue talks for a fairer pay.

Where is President Zuma and other politicians? I don't think they are very good because I can't read much about their reaction, although they know the unrest is there already for some time (earlier, many miners died during fights with the police at another mine and since many years people complain the ANC doesn't do enough to remove poverty). Nevertheless, the BBC-website mentioned that President Zuma spoke with the unions and business leaders on Tuesday, 17/10/2012, asking the business leaders to freeze their salaries and bonuses while asking the miners to return to work and continue talks, indeed, two essential requirements if the company allows the return of the fired employees. I wonder:

• Is there a minimum wage in South Africa that companies have to pay to their employees?
• Are there maximum working hours?
• Are there minimum rules regarding working conditions and safety?
• Why do I not hear the President say he will investigate whether the company was right to fire all those miners? Did the miners use violence and why did they use it (e.g. maybe others started the violence and blamed the miners)? Why does it take so long to start the promised investigation into the deaths during the previous strike at another mine when it seems the situation is that urgent?
• Why are there also strikes at other companies?

President Zuma also spoke about better housing for the miners near the mines. Indeed, the mining company could provide cheap (or even free) housing, then at least life outside the mine becomes better. Building homes will also provide work for more people and the mine will be seen as something good for the community (e.g. in the UK after the closure of a mine, the company made a lasting mark in the landscape: a very large woman made of nature that may attract tourists in future and everyone is positive). It could also provide cheap education for the children of the miners. Then the miners could use their wages for their living, although they should still earn enough for the dangerous work they do.

Probably the managers of Amplats think they have won when they showed people they can be tough as they probably hope others will no longer strike. But who dares to return to work when so many people have lost their jobs? They should remember that sometimes people are so desperate they only see violence as a way out of their troubles. Then companies may have to fear Mr Julius Malema who will further radicalise to win the support of the people. Then they may fear him as president, because he may nationalise foreign companies that don't obey him as he promised he would do ones he is in power, certainly when companies refuse to do what he wants them to do. Then the companies have a short lived victory: they don't pay increased wages but loose their mines and thus have nothing (although they may think they can control him). But people who didn't and who did vote for him should also be scared as he doesn't like people who disagree with him. Thus, in this scenario, most people will loose except a few.

And the politicians should also fear. Because of their reluctance to speak out and investigate, people become angry and revolt, and mostly politicians are the first to feel the anger of people as they are the public face. Speaking out doesn't mean speaking like Mr Malema but telling both the miners to behave and telling companies to obey the laws of the country. That means investigating the working conditions of the miners. That means threatening with nationalisation when companies misbehave because even foreign companies have to obey the laws of countries they are settled. Indeed, mines are the few things companies can't abandon without loosing them. In most cases, companies can move if they don't like the country where they are settled. And is it not normal countries defend the rights of their citizens while try to attract investors?

Even in Europe the behaviour of companies are sometimes questioned. E.g. in 1997, Renault announced unexpectedly the closure of its Belgian assembly plant. There was a general consensus that the decision ignored all legal rules and procedures concerning factory closures (still, the CEO was not prosecuted). Afterwards, politicians decided to make a law forcing companies to talk with their employees before being able to close companies and if I remember well, companies have to help their previous employees find a new job. Now, during these difficult time, some politicians ask for the removal of this law. How stupid. It should be expanded over the whole of Europe. Of course, companies should be able to close when needed but with respect for the employees. In America, President Obama told during the second presidential debate that he removed licenses from companies who didn't use the right to get oil from public lands so other companies could yield the oil (thus in effect nationalised as companies didn't do what they promised to do although the future is green energy because no-one can ever defend one should continue causing climate change).

But I understand in difficult times people panic. I believe politicians from different countries should now work more together. But this is a impossible hope at this moment: many countries now promote their citizens are the least paid with the least protection and thus companies should move to them. How stupid as then the companies can demand even lower wages. Politicians should work together and say that there are certain rules that cannot be broken wherever companies move. If a company closes because it doesn't want to obey the law, then governments should take over and try to sell the company. Companies also should be forced to pay a minimum wage. And everyone, including companies, has to pay taxes so governments can use this money to help the economy and the unemployed.

But of course, this is easier said then done. Sometimes force has to be used to bring people together to talk with each other about a better future. Therefore, sometimes a bad person is needed to stop another bad person doing bad, as there is always someone worse than someone else. And in South-Africa, this bad person may be Mr Malema (or someone else) unless companies understand it is not in their advantage to anger too many people.