This legislation has been part of the South African landscape to create a balance in terms of equity, ownership, safety and empowerment but it does create challenges for some companies who are not able to implement their strategies and achieve full-compliance.
Initially, safety from a DMR perspective forced operations to implement and maintain requisite safety standards and policies. 
When an incident occurs this could have dire consequences when a Section 54 is issued to an operation. Operations are closed whilst the investigations are underway and therefore carry enormous production losses as a result. There is a consequence when it comes to safety and the mining community is extremely sensitive for safety issues.
When it comes to people policies, charters and legislation there is no clear distinction and the penalties have not been enforced until lately. Recently at mining operations surprise visits were conducted by the DMR.
Mining operations received severe penalties as a result of non-compliance for specific people issues. In this case, the company did not comply with the conditions as set out in their Social Labour Plan. As part of the mining licence process a company is required to develop and propose a Social Labour Plan where the operation commits itself to recruit, appoint, train and develop people from the local community. If the operation does not comply, this potentially has serious risk implications for the operation.
In a recent forum the Minister of Mineral Resources specifically indicated that more stringent enforcement will be done to ensure that organisations comply with the necessary legislation and charters. On the 1st of July this year it was reported that South Africa will remain "firm" on mining empowerment targets.
The process for dealing with potential non-compliance in the organisation is proposed as follows:
The organisation will be required to audit the respective areas in their business to determine the actual or real level of compliance. Often organisations think they comply but after detailed analysis the organisation realise that they have not complied with the entire legal framework as proposed in the applicable legislation or charter.
As a result of the analysis it is then important to identify and design all the related targets and associated plans, policies, procedures, reporting formats including enabling strategies and processes to drive the organisation and the processes towards compliance. Too often organisations put a high level plan together without any enabling strategies and plans that will realise the compliance strategy.
An implementation process is required. Some organisations will put strategies and plans together but there is no person or internal department who takes accountability for the implementation of the strategy. In other organisations the accountable person is appointed on a low level in the organisation with very limited authority to implement the strategies effectively. The individual heading up the implementation process will be required to engage and interface with senior managers in the organisation. Unless the person has the appropriate level of authority they will not have the ability to position the process, engage with the management teams on the right level. Changing process and systems is one thing, but getting an entire organisation to implement the changes is another.
There is another element to compliance that needs to be considered in the implementation process. A well defined and structured Stakeholder engagement process is crucial for the implementation of a compliance strategy. It is very important to ensure that the necessary buy-in, understanding, alignment and support are obtained from all the stakeholders. Full compliance for an organisation will have implications that need to be part of the overall business strategy and therefore require full understanding and participation from all stakeholders.
Compliance in all the relevant spheres will be part of our environment for years to come. It will be a requirement of all organisations to source externally or develop the capability internally that will ensure that the organisation move towards full-compliance. This could potentially have enormous risk for mining operators in future in South Africa and north of our border. Compliance will inevitably contribute to sustainability of business as well as stakeholder relationships.
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