Our general approach towards all our suppliers is that we act responsibly and expect the same from our partners. If needed, we support them in their efforts to assume their responsibilities. Based on a risk evaluation of our suppliers, we conduct sustainability risk assessments by means of independent auditors or service providers. Whenever we become aware of violations, we urge to end these. Where appropriate, we support our partners, civil society, or cross-industry initiatives for tackling related challenges together, on a broader basis of stakeholders. In other cases, we explore business alternatives and reserve the right to terminate business relations.
The Marikana incident
In August 2012, there was a strike at Lonmin platinum operations in Marikana, South Africa. An escalation of tensions culminated in violent confrontations between mineworkers and armed South African police. This violence led to the deaths of 44 people over the course of one week.
Rivalries and violence between competing unions (AMCU, NUM), tensions with the employing platinum mining industry and frustration about poor living conditions have been a historical fact in the South African platinum belt since apartheid ended. No party foreseen that those tensions could escalate in a degree of violence that was called the “Marikana massacre” later, when, on August 16, 2012, striking mineworkers were directly shot by police forces, 34 mineworkers died, many were injured, inflicting deep tragedy and grief.
The South African government launched an investigation shortly afterwards, mandating the so-called “Farlam Commission of Inquiry” to lead an investigation procedure. In June 2015, the Farlam Commission issued its report. While it was found that actions of South African police forces and striking miners were primary causes of violence, Lonmin was also identified as not having used its best de-escalating endeavors to prevent the tragedy.
After having intensively assessed the causes of the incident on their side, Lonmin changed their leadership team, implemented lessons learned, and tried to get to the roots of the problem. Lonmin immediately set up a fund to support the families and children of the killed mineworkers, whose schooling as well as studies were from then on taken care of by Lonmin. Every year on August 16, a memorial-day is organized by the company to commemorate the victims and to never forget about the lessons learned on that day. The new owner, Sibanye-Stillwater, continued this tradition immediately after the takeover in 2019, and assessed ways to respond to victims’ families’ situations and to those of the Marikana communities more broadly.
Marikana: BASF’s involvement
At the time of the Marikana incident, BASF was one of the most important platinum customers of Lonmin. As a member of the International Platinum Group Metals Association (IPA), BASF has a long-standing business relationship with the South African platinum industry. The IPA brings together South Africa’s platinum mines and fabricators of platinum group metal (PGM) that use these resources for innovative technologies, e.g. for emission reducing automobile catalysts. Through the IPA but also through close supplier relationships with South African mining houses, such as Lonmin, BASF has always participated in an intensive exchange on challenges around mining operations, including the strikes.
BASF was shocked by the incident and violence in Marikana and expressed its deepest sympathy to all those that were and still are suffering from these events. Building up on the Farlam Commission’s findings, BASF investigated on possible deficits in the responsibilities of Lonmin’s management. The NGO consortium “Plough back the fruits” had been blaming BASF as an accomplice to the massacre and a violator of its human rights obligations. BASF was advised by human rights experts, some of whom had been part of the team of the UN Special Representative on Business and Human Rights, John Ruggie. At that time the UN Guiding Principles on Business and Human Rights had recently been published.
For BASF, the main questions with respect to the Marikana incident were if BASF had violated due diligence responsibilities as a customer of Lonmin, which lessons had to be learned, and which measures had to be taken. BASF implemented the following recommendations of the human rights experts to comply with its due diligence regarding Lonmin:
- Assure Lonmin’s compliance with local laws with respect to international good industry practice regarding established international environmental, social/human rights and governance (ESG) standards.
- Clarify how BASF can participate as a customer and representative of an industry at the same time, to improve local living conditions.
Based on the recommendations of the human rights experts, BASF established the following processes:
- A continuous audit process that started in 2015 based on the Chemical Industry’s “Together for Sustainability” (TfS) sustainability audit scheme [more details on the audit and results below].
- A stakeholder dialog to take in and examine advice from civil society [more details on the stakeholder dialog and related activities below].
- An industry initiative under the IPA Sustainability Committee establishing a sustainability audit assurance scheme under which IPA platinum mines committed to carry out audits on their operations, and an exchange on success factors in addressing challenges [more details on the stakeholder dialog and related activities below].
Take-over by Sibanye-Stillwater in 2019
The Sibanye-Stillwater Lonmin merger was completed on June 10, 2019, after Sibanye-Stillwater and Lonmin shareholders voted in favor of the deal with a large majority. With the merger, Sibanye-Stillwater has become one of the world’s leading manufacturer of platinum group metals (PGM). In the meantime, the merger was implemented. Since 2018 BASF has been participating in an exchange on sustainability topics with Sibanye-Stillwater. Sibanye-Stillwater agreed to do a full mining-specific re-audit according to the chemical industry’s Initiative “Together for Sustainability” (TfS) in January 2020. Sibanye-Stillwater is a member and supporter of the IPA sustainability initiative.
In early July 2019, shortly after the take-over, Sibanye-Stillwater invited BASF to present the company’s sustainability approach, seeking exchange and cooperation on challenging sustainability topics. Sibanye-Stillwater and BASF agreed to cooperate with respect to their stakeholder dialogs and foster collaboration between stakeholders for the common good. Sibanye-Stillwater and BASF participated in the 2019 Courageous Conversations Dialogue, invited by the Anglican Archbishop of Cape Town to exchange on challenges and success factors of community projects. Tensions related to wage negotiations and retrenchments due to re-structuring measures have been settled over 2019. From early announcements to retrench approximately 12,500 jobs post-merger in November 2018, the latest numbers in January 2020 indicate 1,142 job losses due to re-structuring at Marikana operations. Sibanye-Stillwater adopted measures to reduce the number of job losses through transfer and voluntary compensation schemes and retirements. Employees affected by retrenchment are offered the opportunity to acquire new skills such as farming, plumbing, automobile mechanics, painting, brick laying, etc.
In July 2015, Lonmin agreed to a TfS sustainability audit of Marikana operations. The audit was carried out by ERM, a TfS pooled audit firm undergoing regular follow-up and trainings, with experience in the mining industry. The scope of the audit addressed environmental, social (including human rights and labor relations) and governance topics (ESG). There were some findings in the areas of environment and safety, but no findings in Lonmin’s governance, human rights or labor practices. Following the audit, BASF collaborated with Lonmin in providing knowledge sharing in areas that are comparable to the chemical industry, for example to improve the mining operations firefighting skills or sharing its experience within community engagement and grievance procedures.
In January 2017, BASF engaged ERM to initiate a follow-up TfS audit of Marikana operations. Having assessed the results of the first audit, it became clear that some of the mining-specific risks had not been covered by the original chemical industry focused TfS questionnaire. This is the reason why 90 mining-specific questions which were not or only partly covered in the basic TfS questionnaire, were added to the audit checklist for the follow-up audit. The new mining-specific questions had been elaborated by BASF and discussed with human rights experts, TfS members and ERM. They were based on the comprehensive mining audit questionnaire by the “Initiative for Responsible Mining Assurance” (IRMA) which builds on a multi-stakeholder dialog. These additional questions later became the mining module of the TfS standard audit, called enhanced (e)TfS.
The follow-up audit proved a positive result in several areas: one example being that Lonmin has high working standards. The subject of work safety is of great importance for Lonmin, particularly for underground work.
However, the audit also identified gaps that Lonmin needed to close:
- Lonmin should take steps to better understand how the mining operation affects local communities and which measures can be derived from this.
- Furthermore, Lonmin should strengthen and systematically establish dialog formats with different interest groups in the communities and implement them on a continuous basis.
- Another topic was the grievance mechanism. Lonmin had developed a new system, however, it needed to be introduced properly and communicated more comprehensively.
BASF met substantial willingness on the part of Lonmin to improve the situation regarding the identified deficiencies. BASF’s aim was to support Lonmin’s efforts. Lonmin supported the investigations and evaluations conducted by BASF and regular follow-up requests.
Among follow-up measures, Lonmin took steps to better understand the impact of mining operations on local communities and the measures that need to be derived from this knowledge. In 2018, Lonmin carried out a community perception study to define priorities for further action. This survey was conducted with local communities and a Stakeholder Development Plan (SEP) was created. The company also proposed a new “Facilitated Employee Home Ownership Strategy” focusing on improving living and housing conditions according to the miners’ needs, in collaboration with the government. In April 2018, Lonmin launched the community grievance mechanism system to improve communication and the resolution of grievances in areas where it operates. Lonmin organized a vast campaign to inform people around the mine sites about the new opportunities and ways they can address their complaints to an independent organization. The mechanism was well received and used; upcoming topics are addressed and resolved according to a clearly defined process.
In December 2018, Lonmin provided an internal audit report on the state of the eTfS open audit items. According to this report, open items concern
- Risks related to stakeholder engagement are not yet fully addressed. A community survey has been conducted to effectively respond to needs and a register for stakeholder engagement will be developed.
- The proposed Social and Labor Plan (SLP) 2019-2023 has not been approved by the Department of Minerals Resources (DMR), the previous SLP is contested. The decision is pending.
Sibanye-Stillwater is aware of those topics and working on resolving them.
It was agreed with Lonmin that BASF will follow up with Sibanye-Stillwater on next steps regarding the eTfS audit process and open items. Sibanye-Stillwater agreed to undergo a full re-audit in January 2020.
BASF participated as an observer. At Sibanye-Stillwater, the auditors have identified generally sound management systems of good industrial practice in accordance with international standards, especially in the area of health and safety. The audit identified a few indicators for improvement. The audit team has acknowledged Sibanye-Stillwater's significant efforts in the area of social engagement since the takeover and recommended that the implementation and monitoring of the social engagement strategy should be pursued consistently. The final audit report is not yet available to BASF.
At the instigation of BASF, the annual Global Business Initiative on Human Rights (GBI) Conference, took place in Johannesburg in May 2016. At this conference, Lonmin presented and discussed its activities with the audience publicly for the first time. Following this conference, BASF held a multi-stakeholder workshop with numerous interest groups in South Africa. This workshop served as a starting point for discussions and collaboration among the key players in the mining industry, including regional operators and NGOs. The insights gained at this workshop were vital in outlining to the mining industry how to better address many societal challenges that exist in South Africa. The situation in South Africa proves to be extremely complex, characterized by malfunction of state institutions, marked by the history of apartheid and poverty, and cannot be solved in the short term by companies alone. Long-term sustainable improvements can only be achieved for the local population if all stakeholders, state institutions, civil society and companies, work together in a targeted and determined way. Identifying and addressing key challenges and success factors, upscale good practices, achieving and facilitating collaboration, is thus BASF’s core objective of multi-stakeholder dialogs and engagement.
In September 2016, a follow-up meeting took place with Lonmin, other mine operators and the Seriti Institute. In December 2016, BASF brought together key operators of platinum mines and other players in the platinum value chain in Johannesburg, South Africa. Both meetings focused on the design of concerted approaches to improve living and working conditions beyond the social and work plans. In addition, BASF representatives not only met locally with Lonmin’s management, but also with employee representatives, mine workers, union representatives, local stakeholders and South African representatives of non-governmental organizations, such as the Bench Marks Foundation or the Center for Applied Legal Studies (CALS).
Since then, BASF continuously followed-up on this stakeholder dialog, with Bread for the World, Amnesty International, the Bench Marks Foundation, CALS, Reverend Jo Seoka, retired South African Anglican bishop, and other members of the Plough Back the Fruits Initiative. In 2019, Saori Dubourg, member of the board of executive directors of BASF, met twice with Jo Seoka to follow-up on BASF engagement in South Africa. In 2019, BASF was invited and participated in the Anglican Archbishop of Cape Town Initiative on Courageous Conversations that aims at fostering dialog and mutual understanding between stakeholders and sparking collaboration in the mining sector for the common good.
In 2018, BASF, together with other fabricators, initiated a sustainability initiative under the International Platinum Group Metals Association (IPA). Under this initiative, IPA members regularly meet to discuss and address industry challenges. IPA membership comprises key South African PGM mining houses and their customers on the fabricator side, among those BASF. IPA members agreed to a sustainability initiative under the IPA Sustainability Committee to improve living and working conditions of peoples in communities around mining operations. Among important elements of this initiative are comprehensive sustainability audits in the South African PGM sector and exchange on success factors regarding community challenges and best practices. IPA members endorsed audit principles on the quality of schemes assuring sustainability performance and committed to auditing sites under this scheme. The audit principles build up on internationally recognized standards commensurate with the Initiative for Responsible Mining Assurance (IRMA), TfS’s mining standards, and ISEAL quality principles. IPA platinum mines committed to carry out audits on their operations under this sustainability assurance scheme.