De Beers Should Conduct Real Consultation in Namaqualand Corporate Responsibility

Cape Times (South Africa), June 30, 2011 | Go to article overview

De Beers Should Conduct Real Consultation in Namaqualand Corporate Responsibility


An open letter to De Beers and the Department of Mineral Resources:

The Bench Marks Foundation of South Africa asks De Beers and the Department of Mineral Resources (DMR) to respond to the inadequacies in the community consultation process prior to transfer of mineral rights at Namaqualand Mines.

Responding to the official announcement by De Beers of its intended sale of Namaqualand Mines to Trans Hex, the foundation is asking De Beers Consolidated Mines (DBCM) to demonstrate that proper consultation with affected communities has taken place and that communities have had sufficient access to the relevant information and technical expertise that will have allowed for the free informed prior consent by these communities for the intended sale.

The Bench Marks Foundation notes with concern the statement by De Beers that this sale is motivated by "a deliberate strategy of reshaping its mining portfolio to focus investment on those mines that provide superior level of returns", implying that Namaqualand Mines is no longer profitable and that the costs of the mine closure and completion will exceed revenue generated by the mine.

While De Beers and the DMR are satisfied that Trans Hex can deal with the legacy of environmental challenges and social fallout, and the sale complies with the department's guidelines, the foundation predicts that, like Aurora Empowerment Systems' mines, the environmental liability at Namaqualand Mines may exceed the revenue from the mine and that this may eventually be externalised to society and the affected communities.

As such these communities will bear the burden of this sale without having been consulted. For the terms of this sale to be effectively understood and accepted by the relevant communities they would have to have access to the following critical technical information: the estimated life of the mine based on calculated diamond reserves at Namaqualand Mines; the estimated social and environmental costs of the mine closure and completion; the accumulated mine closure funds over the period in which De Beers operated; mine closure and completion plans including evidence that affected communities have been fully consulted and informed; the proposed social and labour plans submitted to the department by the intended purchaser, showing evidence that affected communities were consulted.

The foundation's interaction with HELP (a Section 21 NGO at Hondeklip Bay), correspondence with Conservation South Africa (CSA) and documents under sight from Equitable Access Campaign and the Centre for Environmental Rights, all indicate a lack of consultation with the affected communities. This is in contrast to the sustainability principle that De Beers has set itself, to "engage with communities and seek responsible ways through dialogue to obtain their informed support for our activities" (De Beers, Draft Sustainability Principles, September 2005).

The Bench Marks Foundation concurs with CSA in its assessment about the future of environmental rehabilitation and mine closure at Namaqualand Mines. DBCM has undertaken a process to sell Namaqualand Mines to dispose of associated assets and the social and environmental liability of the mine. This process has progressed to the stage where DBCM is proceeding rapidly with the transfer of all assets and liabilities in the Rm transaction.

The two key aspects of the sale are: the transfer of the mineral resource (which has a positive monetary value), and the complete liability (which has a negative monetary value). …

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