By Mr. Trevor Simumba(Associate Director of the Citizens Democratic Party-National Policy Council)
Mining is a global business. The copper mining value chain involves many players including; input suppliers, mining companies, smelters, contracted suppliers of labour, wholesalers, and consumers. Others are governments, labour unions, mining NGO’s, chamber of mines, other business associations, London Metal Exchange, transporters etc. Anything that goes on at KCM affects the whole nation and as the Citizens Democratic Party a party whose philosophy is ‘Putting People First’ it is of great concern to us that KCM is seen to be taking our citizenry for granted, as the MMD government plays a spectator role.
[pullquote]So it is clear that KCM have been doing this as part of their business strategy for a while and their recent denials were simply a smoke screen. What is even more disappointing is the fact that the Mines Department and Labour Department were caught unawares and only responded when the threat of a strike was made by the unions[/pullquote].
Just in the past few days , KCM has not helped its cause by making contradictory statements. In fact, it is a well known fact that KCM has posed significant challenges to the nation from its sale to Vedanta through its usually controversial business practices. Right from the start the sale of KCM to Vedanta has been a source of controversy. The recent spat involving the outsourcing of labour has re-ignited these tensions between the mineworkers and the KCM major shareholders management from India. Although outsourcing has become a widely-used mechanism to drive labour costs down in the mining industry worldwide, it is also a source of considerable conflict with unions and requires clear and effective regulation by Government. In July 2007 the big Chilean State owned mine saw a 35-day strike by roughly half the 28,000 subcontracted workers at Chile’s state National Copper Corporation (CODELCO) which set a precedent for labour rights in the country. Zambia will do well to draw lessons from CODELCO, as it is the world’s largest copper producer, extracting 1.78 million tons of refined copper in 2006, and is the main contributor to Chile’s state coffers. CODELCO is a private enterprise, yet smart negotiations with a government willing to take a stand for its citizens has not impeded Chile’s copper production. We expect both KCM and the MMD government to take responsibility for the clear discontent they are propagating. Inaction by our government will not only make them seem week, but will perilously set a dangerous precedent for future investors, who will feel very free to sideline Zambians.
The CDP National Policy Desk, having researched this pressing matter has discovered that Zambia’s largest copper miner by output, Konkola Copper Mines (KCM), is implementing strategies including outsourcing labour for key activities across its mining and processing operations to improve efficiency and reduce costs, a company spokesman has said. According to the spokesman, as quoted on foxbusiness.com, is has been stated that (per KCM spokeman Rahul Kharkar)“despite the better global economic situation, KCM continues to face operational challenges and is looking at ways of optimizing the available resources, to attain maximum efficiency, so as to remain viable. The sentence to carefully note is “The effects of the global credit crunch on the operations are still potent and despite improvements in the price of copper…a sudden collapse of the copper prices would place the company in a highly vulnerable situation,” he said in a statement.
So it is clear that KCM have been doing this as part of their business strategy for a while and their recent denials were simply a smoke screen. What is even more disappointing is the fact that the Mines Department and Labour Department were caught unawares and only responded when the threat of a strike was made by the unions. The main question one would ask is firstly: What do our labour laws say about outsourcing? And secondly how is the recruitment of expatriates regulated in the copper mining industry? Surely how can KCM even contemplate appointing a foreigner as HR Director for such a large company that employs so many Zambians? Surely the Ministry of Labour must have laws and regulations which must be applied in this case.
Even next door in Botswana and a little further in South Africa there are clear laws on outsourcing and the employment of foreigners in the mining industry with a strong indigenous empowerment law. The key difference we see is that while many of our friends enforce their laws, in Zambia we seem to react only when there is a threat especially when unions threaten to support the opposition.
We as the Citizens Democratic Party, therefore implore the Government through the Ministries of Mines and Labour to enforce the current mining and labour laws effectively. Secondly, KCM must behave more responsibly as Zambia’s largest mining company and be open with their employees on how they would like to improve KCM’s operations. Efficiency does not equal bringing in more expatriates, it should mean better use of local labour resources and ensuring that they company look at the big picture in the long term. It is not in anyone’s interest to antagonise the mine workers in Zambia lest an even worse Government is elected into office on the back of frustrations amongst Zambians. Foreign investors should respect the country in which they gain huge profits while similarly the Government must enforce the law without fear or favour.
Thanks for this well thought after article. CODELCO works on the Chilean laws, so does the mines in Botswana and South Africa. In Zambia we’re got Jungle Laws under a Monkey president. I wil not blame KCM, it’s a private Company and does make any laws to compel them to be good corporate citizens. Come 2011, let’s put in the PF/UPND Pact who will work towards what governments in other Countries are doing.
Ooo! Great to read your article Trevor, come back to Zambia.I must admit there is a problem with our Ministry of Labour, it is the worst ministry in the entire government followed by the ministry of home affairs, how do they even issue work permits to people without skills?
You ll see how some hopeless bloggers will spew their bile on this topic simply because they cant stand to have their president criticised
The author has give a very well thought through analysis which gives very easy-to-follow logic.
One wonders why the government cant just for once put interests of the ordinay Zambian at heart rather than the ‘out-to-get-rich-quick’ so called investors!
Aba ba Citizens Democratic Party balikwata amano. At least they dont talk about making Zambia a super power of green energy kwati ba Chipimo besu with NAREP. I can see already they are behaving responsibly and maturely looking like they can handle serious issues for the country. Let us hope and encourage them not to follow the Sata/RB syndrome of useless politics. These are politics not insulting each other day in day out. Good job ba Trevor and CDP.
KCM is a funny big mining company. maybe they have become too big we split it!!!! even if it’s a private company. Anyway this suggestion can bring up serious non ending debate. However, KCM was sold for a song. Yes they pumped in money and YES they have recouped it already due to high prices at one time and still high copper selling price now. What we are asking including several other mining companies is to plough back some of the riches or proceeds to the communities they operate in. Chingola used to be cleanest town, not any more.
Everyone one is aware of what is happening in KCM and other mining firms. The simple truth of the matter is that our leaders have sold us out to foreigners. As long our top government leaders, their families and friends are well off, they do not care about peoples suffering! Africans will never change, even more than 300 years ago our traditional rulers sold our African people in the diaspora for material things. Even today it is true. Who is issuing work permits? KCM is a big company which cannot do anything unnoticed! Whatever KCM is doing it is with the blessing of our Government. Period!
Its mad to out source labour in zambia , machinary and equipment, yes and let the locals work with them.
Out sourcing should be a cheaper option and labour in zed at the moment is the cheapest why out source madness, madness, madness.
its good to have sensible patriotic zambians getting involved in zambian politics. KCM must learn to behave responsibly. its too big a company to do things outside the law and endanger zambia’s peace
Well articulated article Trevor. Copper prices have been recording rocket high prices since 2008 and if the Country was reaping what it deserved from these proceeds we would be back to Economic boom, but Alas the main beneficiaries are the operators of the mines. Historical records show that there was a long phase when demand for Copper was quite low, so the current scenario will not last for ever, by the next slump they operators would have made their bucks and left us to lick the wounds again. Then it will be back to looking for other investors to buy the mines for a song. We have real problem with how these contracts were negotiated as we certainly have a raw deal!
So what is the controvesy? The mine is no longer a government entity. So why is the government getting involved. These should have been considerations prior to provatization, but NO the people in power just wanted money. So if the new owners are outsourcing and trying to drive down the costs of doing business, why is the Ministry of Mines and Labor unions getting involved. If the governments aim is to keep people employed purchase the mines back and run them.