Minefield of Marikana: Prospects for Forging a New Social Compact

"The South African platinum belt provides a microcosm through which to explore a number of fault lines in the country’s political economy two decades into its democratic dispensation. After the Marikana tragedy of August 2012, the need to forge a new social compact among stakeholders in the mining industry became evident. This paper examines how such a compact could credibly be crafted to ensure that, rather than reproducing historical patterns of economic exclusion, the platinum sector – and the mining industry more broadly – could serve as a transmission belt out of poverty and into inclusive development. Using a theoretical framework established by the economic historians Douglass North, John Wallis and Barry Weingast, it concludes that the political incentives embedded in South Africa’s elite bargain are incongruent with the imperatives of equitable social and economic transformation. Carving out a new social compact therefore remains difficult in the prevailing context. Nonetheless, there are ways in which South Africa’s mineral wealth can be harnessed to produce pro-poor economic growth. This would involve ameliorating the worst effects of the migrant labour system by establishing more humane work cycles, providing security of land tenure in labour-sending areas, rethinking the role of traditional authorities, formulating clear mineral governance legislation, and thinking more carefully about how corporate social investment (CSI) initiatives could help to achieve the country’s development ambitions."