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Carroll: Anarchy benefits no one

Feb 05 2013 10:00
*Jarred Myers

Anglo American CEO Cynthia Carroll has resigned as head of the mining giant. (AFP)

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Cape Town - Cynthia Carroll is not off to the races, but that seems to be the only horse metaphor omitted from this morning’s address at the mining indaba in Cape Town.

On the heels of her not making it to the opening gate at last year’s mining indaba due to a horse riding accident, Carroll was not going to be pipped at the post in 2013.

Carroll assured listeners that she is now firmly back in the saddle. And despite handing over the reins at Anglo American [JSE:AGL], she has no intention of riding off into the sunset anytime soon.

Carroll reiterated her messages from her previous engagements, maintaining that the truth remains the truth and there is no need to apologise for the repetition.

We are at a pivotal moment, echoed Carroll, as she shared some thoughts on the path forward.

Reinforcing her passion about Anglo American, mining and South Africa, Carroll emphasised that Anglo American was born in South Africa and it remains committed heart and soul to this country.
Carroll has identified four truths.

1. No future without law and order

The first truth is that there is no future for any society without law and order.

Public order is the bedrock without which civilisation collapses.

Last year in South Africa we saw violence and unrest across the mining industry, and also in other sectors.

Violence and criminality are always unacceptable and they must never be tolerated by society. We must never go back to those days again.

2. Anarchy benefits no one

The second truth we have all learned through experience is that anarchy in the workplace ultimately benefits no one.

It is in the interests of all stakeholders – employers, employees and trade unions – to have orderly and fair processes to regulate union recognition and collective bargaining.

It is the right of employees to decide who they want to represent them, and to be able to make a free and informed choice.

And collective agreements freely negotiated should be observed – not torn up.

The rule of law is as important in the workplace as it is in every other aspect of society.

3. Economic truth hurts

The third truth I want to talk about is that none of us can defy: economic reality.

Modern businesses operate in global markets. The laws of supply and demand determine what they can afford. 

Businesses that cannot generate adequate returns ultimately collapse and die. Companies that want a future have to remain economically competitive.

At times that requires tough choices - and tough choices can be unpopular. The easy course for the short term is often the wrong course for the long term.

And the fundamental responsibility of management is to make the decisions that are right for the long term. A sustainable business can meet the needs of its stakeholders, while an unsustainable onewill ultimately serve no one.

The need to be competitive is not confined to companies – it is also relevant to countries.

4. We live in a global village

The fourth and final truth is that in the modern world, no country is an economic island.

Like any other nation, South Africa will only succeed if it fosters an environment that is conducive to business and attractive to international investors.

Creating that environment starts with the need for stable labour relations and the maintenance of law and order.

But these are not the only requirements: regulatory stability is also key to competitiveness, and nowhere is this truer than in the mining sector.

Mining is an industry with long-term horizons. When making investments, mining companies have to think decades ahead.

They need certainty as to the rules under which they will operate, and they won't invest if there is a fear of onerous and unpredictable regulatory change.

Nor will they invest if there is a threat that existing regulatory requirements will be enforced in an arbitrary and unequal manner.  

The flag is now raised for Carroll’s successor Mark Cutifani to get galloping. With portfolio companies like Amplats neck and neck with profitability, he has his work cut out for him.

As a nation we can only hope that the blinkered government does not handicap him – and in the spirit of weary optimism which is dominating this indaba, dare we stretch our leaders by asking that they assist him to go the distance?

 - Fin24

*Jarred Myers is a resources strategist and can be followed on Twitter on @JarredMyers. Opinions expressed are his own.

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sa economy  |  mining


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