A former senior executive told The Independent on Sunday that BHP Billiton and one of its South African arms, Samancor, have not yet fully complied with the black empowerment programme, alleging BHP Billiton "see it as a form of nationalisation, save that the new shareholders are effectively nominated by the government. They intend taking a hard line on how much black empowerment they are being pushed into."
Another former executive, David Wellbeloved, who worked for Samancor for 17 years as a development manager before leaving in 2001, said that he felt the company was reluctant to adopt the policy. "They will do as little as possible as late as possible to implement black empowerment," he told the IoS.
BHP Billiton has denied the allegation of non-compliance. "BHP Billiton is fully committed to the black economic empowerment process which we see as a way that businesses can support and contribute to the growth of the South African economy," the company said in a statement.
"BHP Billiton intends to go beyond the requirements of the legislation as we believe that a prosperous South Africa will also support our growth plans in South Africa and have therefore set ourselves ambitious BEE [Black Economic Empowerment] targets."
The code of practice, soon to be pressed into law, ensures that black people, post-apartheid, are empowered through share ownership, control of assets, management positions, employment equity and preferential procurement for contracts. Introduced in 2003, the code is seen as best practice for firms in South Africa.
The alleged failure to fully adopt black empowerment, according to the former executive, led the South African authorities to remove licences held by Samancor, owned 60 per cent by BHP Billiton, to key manganese deposits in the Kalahari desert.
BHP Billiton accepts there was a problem with the licences but argues it will obtain new mineral rights. "At Samancor Manganese, BHP Billiton negotiated a significant black empowerment transaction which was unsuccessful because the black empowerment partner could not deliver on the transaction, as it could not obtain from government all the land integral to the agreement," the company said.
"BHP Billiton has made applications for several new mineral rights and certain of these have been granted with empowerment transactions being concluded. Others are awaiting approval from the government."
- More about:
- Bhp Billiton