Dear Public Protector,
- Our complaint of 16 August 2016, to which we have not received any acknowledgement or reply as yet, is forwarded below for your convenience and for the information of Justice Davis, who is copied on this email (in the hope that it will inspire further ventilation of the important issues in play).
- We so forward the email in the light of the information that came to our attention during the “Judge for Yourself” programme hosted by the Judge on ENCA channel 403 last night, a programme that is repeated at various times during the week ahead, lest you missed it.
- We learnt during the programme that you have prepared an interim report concerning the irregular goings on and maladministration in respect of the payment of royalties to the people on whose land the Marikana mine is operated by Lonmin. If we understood the startling facts correctly then it seems that R100,000,000 of the money paid by Lonmin to them has been scandalously used to build a palace for their king while they live in squalor and that over R500,000,000 seems not to have been properly accounted for by the administrator to whom it was paid over by Lonmin.
- Our complaint forwarded below concerns the failure of the DMR to hold Lonmin to its promise to provide housing in the form of 5,500 houses in terms of its SLP obligations as referred to in the Farlam commission report. (Details are set out in para 3 of the complaint forwarded below)
- Assume, for a moment, that light houses of the kind inspected by your deputy at the Newlands Forest Station in April this year, or even the predecessor temporary light house which you inspected in Hout Bay in June 2014, were built in Marikana with the money that is the subject matter of your investigation and interim report on Marikana misappropriations. Then, at R100,000 per unit for the permanent and improved light house seen by Adv Malunga or R50,000 per unit for the temporary light house design (which might be attractive to miners returning to their homelands after their contracts of employment end because it can be dismantled and taken home), simple arithmetic reveals that the cost of the housing not built under the SLP obligations of Lonmin is more than covered by the monies misspent or unaccounted for in the context of the complaint which was the subject matter of the Judge’s programme last night.
- In these circumstances we respectfully ask you to combine the investigation of our complaint set out in the email forwarded below with the complaint discussed on “Judge for Yourself” last night.
- As motivation for this request we need hardly remind you that the promotion of the achievement of equality is foundational to our new order [ C 1(a) ]. In this way a future foreshadowed in the lyrical words of C 198(a) in which our national resolve “to live as equals, to live in peace and harmony, to be free from fear and want and to seek a better life” is recorded as our supreme law.
- Should Lonmin plead poverty in relation to its lamentable failure to provide 5497 of the 5500 housing units it has promised, you may consider approaching the Judge, wearing his Tax Commission hat, for an evaluation of the effect of the practice of transfer pricing on the profitability in SA of Lonmin and the mining sector as a whole. This enquiry should be made with a view to your taking remedial action to compel the reform of transfer pricing so as not to encourage the “export” of profits made, in our mines off the sweat of the brows of our miners, to offshore tax haven based entities whole only skill is treading the fine line between tax evasion and tax avoidance so as to maximise profits on the ore mined in SA in a way that does not benefit the country.
- If transfer pricing is appropriately reformed more taxes could legitimately be raised in SA for the purposes set out in the sections of the Constitution quoted in paragraph 7 above without discouraging direct foreign investment. This is consonant with the obligation of the state to promote all of the rights in the Bill of Rights [ C7(2) ] which include the right to access to housing [ C26 ] It ought to be very discouraging for Lonmin to learn that the royalties it has paid for the benefit of the local community in Marikana have not in fact brought any discernable benefits beyond the vague and unspecified “social upliftment” and bursary projects referred to during the Judge’s programme. If the royalties have been corruptly misspent, the appropriate remedial action is obviously to refer the matter to the Hawks for independent criminal investigation and in due course prosecution by the NPA, as suggested by the Judge during his programme. (In the post Scorpions era the NPA does not accept criminal complaints itself).
- Please acknowledge receipt of this email and let us have a substantive response in due course.
Yours in accountability,
Paul Hoffman SC
Institute for Accountability in Southern Africa
Campaigning as Accountability Now