Trouble in the deep
| Friday June 20, 2014 16:57
When Dan Mahupela ascended to the top post at BCL Mine on September 1, 2011 his only comfort in entering the historically hostile labour sector’s gunsights was that he could not possibly become as unloved as his predecessor, Monty Mphathi.
After all, during his tumultuous eight years as BCL general manager, Mphathi, had become the subject of an intense union campaign, triggered in part by a harsh strike and the subsequent dismissal of 181 workers in 2005, followed by several high level departures and other unpopular decisions.
Labour leaders relentlessly called for Mphathi’s head, churning out a near-endless litany of allegations that essentially claimed the Serowe-born GM had created a fiefdom where he unfairly wielded unchallenged power.
Mphathi’s principals maintained faith in their man, as he gradually turned a troubled enterprise teetering on the brink of insolvency into a dividend-paying, cash-flush business promising better returns for shareholders, workers and Phikwe residents alike.
For unionists, Mphathi’s departure in March 2011 and Mahupela’s entry appeared an opportunity for a fresh start in industrial relations. With just three years experience at BCL Mine at the time of his appointment, Mahupela provided the critical independent approach unionists had been claiming his predecessor lacked.
The change appeared immediately fruitful, as Mahupela sealed a wage increase with the Senior Staff Union in a single day, less than 20 days after being appointed the acting GM. He would later clinch similar reviews with the larger – and considerably more militant BMWU, with both sides proclaiming the dawn of a new era of cordial labour relations.
This week, Mahupela’s honeymoon period came to a shattering end, with the Union and BCL announcing that they were hopelessly deadlocked and signing a Joint Statement of Dispute for mediation by the Department of Labour.
The BMWU is pressing for a 12 percent across the board increase and a P250 all-round increase in the housing allowance, while the Mine is only prepared to offer six percent across the board or a sliding increase with the lowest paid receiving 12 percent.
Even before the dispute announcement, the GM’s fall from the Union’s graces was evident late May when unionists marched from the BMWU headquarters to the Mine gate demanding Mahupela’s head on a platter for alleged “performance failures”.
The current labour crisis at BCL appears linked to a cash crunch occasioned by declining copper prices and lower production due to weaker ore extraction. Last year, the Mine recorded a P180 million loss and had a negative balance sheet of P2.3 billion due to heavy indebtedness to principal shareholder government.
While, Mahupela has told workers that the Mine is unable to meet the Union’s demands given the tightened cash flow, unionists say these are merely symptoms of deeper mismanagement evident in “the failure to initiate a sustainable mining plan to ensure the continuity of both high and low grade ore”.
However, apart from the financial dispute, the latest crisis marks the resurrection of the historical hostile labour relations at the Mine, built on what analysts explain is the “unique positioning” of BCL.
“Firstly, BCL is the country’s largest employer on a single site, with nearly 5,000 workers who entirely constitute the economy of the town,” says one analyst, who has lived in Phikwe for two and a half decades.
“The stakes in any dispute are thus always high.
“For the BMWU, BCL represents its single most important subscriber base as seen by the fact that the Union is headquartered in Selebi Phikwe.
“The Union, thus, has to be seen to be vocal in support of the Mine workers because that’s where their bread is primarily buttered.
“This is the same reason the Union is more vocal and militant about BCL Mine than any other mine in Botswana.”
Unionists, however, say BCL management is historically guilty of a “capitalist” approach where they reward themselves with high salaries and are unwilling to bend their ears to the “suffering workers”.
“They believe in a capitalist style whereby only employees at management level are paid high salaries and allowances, in that a monthly manager’s salary can pay almost 100 employees earning around P1,500,” says BMWU spokesperson, Joseph Tsimako.
“If you put issues before them in an endeavour to better employees’ conditions, they become arrogant and reject it forthwith.”
Tsimako says the 2005 dismissals left an atmosphere of “victimisation and fear” in the Mine and also heightened the Mine management’s “arrogance in addressing workers issues, thus undermining union leadership”.
The Mine’s economic position as Phikwe’s mainstay also makes it irresistible political currency for the various hopefuls around the town in the 2014 election year. Already, several parties have released strongly-worded statements on the wage dispute at BCL Mine with phrases such as “slave-wages” frequently appearing in published reactions.
“The majority of the workers live in Selebi Phikwe West under Thakadiawa ward and their sheer numbers and the appeal of their cause has excited politicians there,” says our analyst.
“No politician would miss out on an opportunity to champion a cause such as workers’ livelihoods in a town whose entire population depends on the Mine.
“The dispute thus offers a golden opportunity to win votes ahead of what should be a tight race within that constituency.” The involvement of politicians in the wage dispute has also highlighted another position unique to BCL Mine, being that it is the only mining operation almost entirely owned by government. At present, the Government of Botswana owns 94 percent of the Mine, while Norilsk Nickel holds the balance and also has the management contract.
Government’s controlling shareholding in the Mine has been built over years of debt conversions into equity, with BCL Mine repaying P1 billion in cash in March 2014 and converting a further P2.3 billion in debt to ordinary shares. Government’s paternity of the Mine, however, has not given workers the free reign they may have believed they would receive. This week, BCL Mine board chair, Akolang Tombale, with a senior public service career dating back to 1979, was unmoved by the Union demands for Mahupela’s dismissal.
“You do not just write seeking dismissal of an individual from work. There must be issues to prove that indeed there is a problem. The union did not present that,” Tombale said after meeting both the Union and BCL management.
“The issue of dismissal was not even brought up during our discussions.
“I encourage the two parties to follow processes in place to resolve their differences rather than the board being expected to resolve issues on their behalf.” Union spokesperson, Tsimako believes government is generally reluctant to weigh in on the side of the workers.
“The government knows about the situation in BCL but they are reluctant to address it,” he says.
“The chairman of the board appointed by government confirmed in our June 13 meeting that he was aware of low salaries and poor working conditions at BCL from 2010, but has never done anything about it.” Mahupela appears to enjoy the same support his predecessor did during the dark days between 2005 and 2010 when unionists demanded Mphathi’s dismissal. And like Mphathi, the calls for Mahupela’s scalp come at a time when the new GM is delivering results and turning the strife-torn operation around.
Figures released by the Mine indicate that as at March 2014, BCL Mine was debt free for the first time in recent history, placing it in prime position to approach lenders for funding. The Mine is also pressing ahead with its Polaris II strategy, which aims to transform BCL into a “major regional diversified resources group, anchored on base metals”.
The Polaris strategy, which will drive BCL and by extension, Phikwe, beyond the 2022 depletion of copper and nickel ore, will see the exploration for alternative minerals, development of an iron and steel business, extension of smelter services to other players and the establishment of a sulphuric acid plant.
Already, the iron and steel business is taking shape with phase one of the P50 million plant due to be operational by December. In addition, joint ventures with other explorers mean drilling is ongoing on licences held outside of Selebi Phikwe such as in Gantsi and Mahalapye for both copper and iron ore.
“It is worth noting that most of the projects in the pipeline are high investment developments that BCL cannot fund alone from its balance sheet, but there is an opportunity now that can be exploited to raise new funding,” a note from the Mine reads.
“Once implemented, these projects will change the Botswana economic landscape, especially the Phikwe region, both in terms of employment, revenue and foreign exchange generation.”
His supporters expect Mahupela to be a large part of this new era in BCL Mine’s long history.
His opponents hope not.