15 January 2014

South Africa: Releasing the Prisoners From Their Dilemma - How to Resolve Labour Tensions in South Africa's Mining Sector


SAIIA Policy Briefing 81, December 2013

On 16 August 2012 South Africa was thrown into tumult as police opened fire with live ammunition on a crowd of striking mineworkers at Lonmin's Marikana platinum mine, killing 34 people.

The policy briefing examines the institutional factors that contributed to this tragedy and that remain in urgent need of reform. It argues that current institutional arrangements - especially labour legislation - create strong incentives for rival unions to value violence over co-operation.

An effective prisoners' dilemma (PD) exists. Mining companies simply cannot afford to offer the kind of wage increases that are being demanded.

Competing unions refuse to temper their demands, as they cannot risk being seen as weaker than the other for credibility's sake. For mining firms and unions to revise their dominant strategies, a number of policy interventions are required to transform the PD into an assurance game (AG). The latter requires a focal point around which stakeholders can converge.

The briefing proposes that a strengthening of the Council for Conciliation, Mediation and Arbitration (CCMA) to punish illegal or violent strikes by removing an offending union's bargaining rights may constitute such a focal point.

It also offers a number of other key recommendations to prevent further labour unrest and consequent mining industry decline in South Africa.

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