Our general approach towards all our suppliers is that we act responsibly and rely on our partners to act responsibly, too. Furthermore, we offer our support to partners in their efforts to meet their respective responsibilities. We conduct reviews based on sustainability risk assessments. 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 may choose to explore business alternatives and reserve the right to terminate business relations.
The Marikana incident
In August 2012, there was an extended 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 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. Unions were well established and well-protected by the new South African constitution and implementing law. Over the years, unions engagement, negotiations and related tensions had become a regular feature of relationships. No party had been cautious enough to think 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 overchallenged police forces, 34 mineworkers died, many were injured, inflicting deep tragedy and grief on people.
The South African government launched an investigation into this incident shortly afterwards, mandating the so-called “Farlam Commission of Inquiry” to lead an investigative process. 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 root causes of the incident on their side, Lonmin changed the leadership team, implemented lessons learned, and tried to address root causes. Lonmin immediately set up a fund to support the families and children of the killed mine-workers, whose school and studies were from now 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, has immediately after the takeover continued this tradition 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), we have a long-standing business relationship with the South African platinum industry. The IPA brings together South Africa’s platinum mines and fabricators, such as BASF, that need platinum group metal (PGM) for technology and innovation, e.g. for the automotive industry to reduce emissions. Through the IPA but also through close supplier relationships with South African mining houses, such as Lonmin, BASF has always intensively exchanged on challenges around mining operations, including strikes.
BASF was shocked by the incident and violence in Marikana and expressed its deepest sympathy to all those that were and are suffering from these events. Building up on the Farlam Commission’s findings, BASF investigated on possible shortcomings in management responsibilities. The NGO consortium “Plough back the fruits” had been blaming BASF to be accomplice to the massacre and to violate 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 were to be taken. As a result, BASF got more deeply involved to duly observe its due diligence regarding Lonmin with special regard to:
- Assure Lonmin’s compliance and good practices regarding all laws and obligations with respect to internationally established environmental, social/human rights and governance (ESG) standards and related South African law requirements.
- Find out which role BASF as a customer and representative of an industry can play to facilitate progress regarding local conditions and challenges related to human rights.
To this end, BASF established:
- A continuous audit process that started in 2015 based on BASF’s sustainability in procurement management process (Supplier Code of Conduct and Due Diligence), using the Chemical Industry’s “Together for Sustainability” (TfS) sustainability audit scheme [more details on the audit and results below]
- A stakeholder dialogue assessing and taking advice from civil society and NGOs how BASF could facilitate progress regarding local conditions and challenges related to human rights [more details on the stakeholder dialogue 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 this initiative below]
Take-over by Sibanye-Stillwater in 2019
The Sibanye-Stillwater Lonmin merger was completed on 10th June 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 sources of platinum group metals (PGM). Since then, the merger has been implemented. Since 2018 BASF has been exchanging 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 dialogues 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 separation schemes and retirements. Employees affected by retrenchment are offered the opportunity to acquire new skills such as farming, plumbing, motor mechanic, painting, brick laying, etc.
In July 2015, BASF initiated a series of information gathering meetings between BASF managers from its procurement and corporate sustainability departments and Lonmin executives to understand the actions that had been taken to improve Lonmin’s sustainability management performance and address the Farlam Commission findings. 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). The audit report was issued in November 2015. There were some findings in the areas of environment and safety, but neither findings in Lonmin’s governance, human rights or labor practices, nor any performance violations. 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 why around 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 and discussed with human rights experts, TfS members and ERM. They were based on the comprehensive mining audit questionnaire prepared by the Initiative for Responsible Mining Assurance (IRMA) which builds on a multi-stakeholder dialogue. These additional questions for the Lonmin follow-up audit 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: such as 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.
So far, BASF had seen substantial willingness on the part of Lonmin to improve the situation regarding the identified deficiencies. Our ambition was to support Lonmin in its efforts. Lonmin supported the investigations and evaluations conducted by BASF and regular follow-up calls.
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 dedicated procedure.
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 is under development.
- 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 will participate as a witness. Shortly after the take-over, Sibanye-Stillwater started elaborating and implementing a roadmap to address the previous SLPs backlog focusing on responding to actual needs of communities and workers through stakeholder dialogues, working towards a reviewed SLP 2018-2023.
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 openly discussed its activities with the audience. 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 proved to be extremely complex, characterized by dysfunction of state institutions, marked by the history of apartheid and poverty, and cannot be solved in the short term by companies alone. 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 dialogues 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 regularly followed-up on this stakeholder dialogue, with Bread for the World, Amnesty International, the Bench Marks Foundation, CALS, Reverend Seoka, and other members of Plough Back the Fruits Initiative. In 2019, Saori Dubourg met with Reverend Seoka twice 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 dialogue and mutual understanding between stakeholders and sparking collaboration in the mining sector for the common good.
In 2018, BASF initiated together with other fabricators 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 mine 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 good practices. IPA members endorsed audit principles on the quality of schemes assuring sustainability performance. They 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.