Lessons from the assassination of Fikile Ntshangase
Their lessons are inspiring but also sobering. To date, the potential connectivities between their activism and potential Global North allies – including those within the same country, South Africa, which is the world’s most unequal society – were generally too weak to establish sufficient counter-power to defeat what is called, in this region, the Minerals Energy Complex (MEC).
The term MEC refers to a century-old power bloc: the coal mines that feed a dozen massive generation plants run by state energy agency Eskom, that in turn supply electricity to several dozen deep-level mining houses, metals smelters and petrochemical industries, causing the world’s third-highest greenhouse gas emissions per unit of GDP output per person (after only Kazakhstan and the Czech Republic).
And all this relies, still, on the residual-apartheid migrant labour system – hence family destruction and super-exploitation of women – plus ever-generous state permission given to mining houses, to dispossess small farmers of land, so as to dig out more coal, no matter how drought- and pollution-creating this form of energy has been. Coal leaves eastern South Africa with several of the world’s worst air-pollution hotspots for nitrous oxide and SO2, as Greenpeace has demonstrated, not to mention the water despoliation litigated regularly by the Centre for Environmental Rights (2020).
Rising climate chaos In fighting the fossil fuel industries at coal face, an adverse balance of forces – between eco-social movements (typically driven by local women) and multinational carbon-centric corporations (mainly run by older mostly-white men) – is evident nearly everywhere, across the world. And as is clear from the coastal areas near Ntshangase’s residence, the resulting climate chaos mainly hits the poor. More evidence of this emerged in 2020, because in spite of economic lockdowns caused by Covid-19, the year provided what Yale Climate Connections researchers Jeff Masters and Dana Nuccitelli (2020) list as these top ten ecocidal events:
This latter point includes catastrophies such as floods that devastated China, India and Pakistan, causing more than $40 billion in damage, and the climate-related locusts that spent 2020 eating $8.5 billion worth of crops in the Horn of African. The Atlantic and Gulf hurricanes caused another $40 billion in damage, including in the wealthy U.S., as did forest fires, with the overall cost of 2020’s climate damage estimated by Christian Aid (2020) at $150 billion. But in relative terms, the ability to survive in East Africa or Bangladesh is far less than East Texas, because in the Global South, only an estimated 4 percent of 2020’s damage was formally insured, compared to 60 percent in the North (Christian Aid 2020).
In Southern Africa, the most damaging climate-crisis episode was the March-April 2019 confluence of three processes:
If not these weather warnings, what will shake South Africa’s society and ruling class from a boiling-frog future? Some imagined Covid-19 would, because the pandemic’s mismanagement directly resulted in three major opportunities: Donald Trump’s electoral defeat and Joe Biden’s imminent revival of the Paris Climate
There is no space here to provide details, but all are, quite predictably, cases of wishful thinking, especially any faith that the Paris deal will have any impact at all, given its multiple hard-wired flaws (Bond 2016).
As for the South African government’s agenda, it hasn’t changed at all:
Also, due largely to Covid-19, the causes and effects of climate crisis were not subject to the mass coordinated global protests that had unfolded in 2018-19 thanks to Fridays for Future, Extinction Rebellion (XR) and other networks. Nevertheless, various local battles against polluters have continued, exemplified by grassroots resistance movements such as Somkhele’s Mfolozi Community Environmental Justice Organisation (MCEJO) in which Ntshangase played a major role. And to its credit, the South African chapters of XR – joined by Londoners – offered a series of vigils to remember Fikile Ntshangase on December 10, Human Rights Day, including a confrontation with the Minerals Council mining-industry bosses in central Johannesburg.
Reconsidering the strengths and weaknesses of oppositional climate politics is one way to pay tribute to Ntshangase. A central question is, will local environmental-justice groups move forward recognising not only the urgent need to defensively fight their immediate enemies (a coal firm in the case we consider below), but also the potentials for uniting with labour to demand and win a genuine Just Transition.
The latter would logically emphasise detoxing the poisoned land, plus a food sovereignty strategy that emanates from landless women’s campaigning against both corporate agriculture and ethnic patriarchal power.
It was this fusion that Rosa Luxemburg (1913) described in her book Accumulation of Capital, which considered South Africa as a classical outpost of imperialism: “Non-capitalist relations provide a fertile soil for capitalism; more strictly: capital feeds on the ruins of such relations, and although this non-capitalist milieu is indispensable for accumulation, the latter proceeds at the cost of this medium nevertheless, by eating it up.”
Fighting coal extraction and ecological destruction
Luxemburg would not be surprised when a century later, South Africa’s most famous rural land activist, Sizani Ngubane, specifically referred to a local Zulu traditional leader who doled out land dotted with homesteads to white-owned Petmin for its Tendele coal mine in Somkhele. Eating up Somkhele, just 17 kilometers from the border of Hluhluwe-iMfolozi Park (HIP), also meant attacking a vital site of conservation.
The nature reserve was established in 1895 and became most famous for reviving the near-extinct Southern White Rhinoceros in the 1960s. But the Petmin deal, in 2006, resulted in Tendele coal mine destroying the land farmed by Ntshangase’s allies in MCEJO, which at peak had 4000 members.
According to Ngubane, speaking in April 2020, “Women have dumped the old culture of rain-water catchment because their roofs are always covered with thick black dust from the coal-mine. The livestock is dying because its grazing land is always covered with thick black dust. The communities have run out of water because the mine diverted the Umfolozi River into the mine and when the women followed Umfolozi into the mine – the authorities locked them out. Their houses are cracking when the mines are blasting the rocks and the members of the communities are not compensated and are not employed by these mines.” (Pikoli 2020)
Even more appropriation was underway when the water table is added to the coal mine’s takings. In March 2016, in the midst of a drought, Business Day newspaper interviewed Petmin executive Bradley Doig (2016): “You need water to wash the coal and if the drought persists, what are the next six months going to be like? Will you have to scale back production quite substantially?”
Doig answered: “We had lots of contingency plans in place obviously and one of them was we found a lot of underground water in the vicinity of our mine so we’re in a very fortunate position right now that we have sufficient water available to run all three plants at maximum capacity to the end of this calendar year.”
Surprised, the interviewer asked, “Is this something that you should do?” Doig’s (2016) answer: “Yes, we believe it’s necessary. The market is there for our product, we have the water available, and obviously we’re still anticipating rainfall. But assuming it does not rain at all, we still have sufficient water for 12 months.”
But some nearby villages certainly did not have sufficient clean water, and three years later, MCEJO women suffered 29 arrests in a protest against Tendele’s water grabbing and state water-supply failure (South African Food Sovereignty Campaign (2021). Then in April 2020, the Covid-19 lockdown reinforced the extreme urgency of improved hygienic infrastructure.
As Durban’s main newspaper reported, “The desperate search for clean, free water in the cluster of villages that make up Somkhele has long been a women’s burden: walking for as much as six hours, risking sexual harassment and rape. And now, with the threat of Covid-19, the struggle has become more harrowing for the women of Somkhele” (Bega 2020).
The main lawyer for Ntshangase and MCEJO, Kirsten Youens, begged the water minister for access to tankers, boreholes and taps: “As you may be aware, these communities are living on the border of the Somkhele open cast coal mine, which causes pollution of the rivers and streams as well as of the run-off rainwater that the communities collect from their roofs into JoJo tanks. This makes it impossible for people to utilise ways in which they used for water security… Those without access to clean, reliable water are immediately at risk. Our client and the communities living in these areas are in need of urgent government intervention for the protection and fulfilment of their basic Constitutional rights, not only to address the current Covid-19 crisis but also to provide sustainable access to water.” (Bega 2020)
Ntshangase’s close allies in the Africa-wide anti-extractivist network WoMin also complained, “With the onset of the Covid-19 pandemic, these communities are facing a major crisis. Last week, there was no water, not even the local clinic has access to water… The only water tanks available to communities are the ones placed by the municipality in central locations, but as of now, they are empty. The Umfolozi River and dam were fenced off so that the community could not have access to these water sources. The little water remaining has dried up due to a series of droughts.” (Bega 2020)
The core problem remained the Tendele coal mine. A few months later, Fikile Ntshangase told friends she was approached by mine management with a $24,000 bribe to support even more coal digging, in spite of the terrible damage it was causing (Walters 2021). Worsening intimidation by the pro-mining lobby, including the provincial government, is documented in a chilling statement by a group of allied organisations and lawyers (Mfolozi Community Environmental Justice Organisation et al 2020). But Ntshangase refused to withdraw her court challenge to the expansion project: “I refused to sign. I cannot sell out my people. And if need be, I will die for my people” (Walters 2021).
This refusal was widely considered the motivation for Ntshangase’s murder. She was reportedly one of several names on a local hit list (Pitt 2020). For at stake, if the expansion did not proceed – as the mine’s owners argued in rebuttal, while denying involvement in the hit job (Kockett and Hattingh 2020) – were not only several hundred local jobs.
There was also a 20 percent community-worker shareholding in Tendele mine, a share that had to be purchased through dividend payments (and hence delivered no benefits in the short term to the community). That share was mainly controlled by local patriarchal ethnic leadership (the Mpukunyoni Traditional Council) and three trade unions.
Tendele’s white-male executives had used local financier Nedbank’s funding in 2015 to buy off not only ethnic patriarchs with a 16 percent ‘community’ share, but an additional 4 percent for workers represented by three unions, including the one best known for fighting Lonmin at Marikana: the Association of Mineworkers and Construction Union (AMCU).
This was especially tragic, because the other two were not a surprise: the National Union of Mineworkers, founded and led by future South African President Cyril Ramaphosa during the 1980s and still allied with the ruling party; and ‘Solidarity’, a mainly white-Afrikaner union whose allied ‘cultural’ policy lobbyists – the apartheid-minimising ‘AfriForum’ (Modjadji and Goba 2020) – had so impressed Donald Trump with bogus claims of mass murder of white farmers (Msimang 2018).
These unions’ traditional focus is on increasing jobs and pay in the mining sector, without much attention to the broader ‘resource-cursing’ so evident in Somkhele (Cock 2019).
Without a Just Transition as an alternative, the mineworkers unions in the coal fields are logically opposed to Ntshangase and the broader environmental – especially climate – considerations.
But even AMCU’s national treasurer Jimmy Gama described Petmin’s “Economic Benefits Sharing” scheme (based on an extremely expensive borrow-to-buy strategy) as “an innovative Broad-Based Empowerment approach that will effect real economic benefits sharing to bridge the gap between social and mining economics” (Petmin 2015). The assessment might be true, one day in the distant future – but at an extremely high cost to community and environment.
And there was an additional ‘conservation NGO’ that favoured the mine’s expansion, albeit not westward towards the animal-rich HIP but instead north-easterly into low-income residential areas (including Ntshangase’s village): the white-dominated Wildlife and Environment Society of South Africa (2014), which expressed satisfaction that when Petmin “discovered another viable coal seam close to the HIP boundary a few years ago, they acknowledged the tangible value of the iMfolozi wilderness area and chose not to mine this seam; instead they laudably [sic] selected a seam further away to reduce the negative impacts on the HIP.”
In contrast, several trusted solidarity groups with an environmental justice philosophy –groundWork, Earthlife Africa, Mining Affected Communities United in Action, Women Against Mining United in Action, ActionAid, Southern Africa Human Rights Defenders Network, Global Environmental Trust and WoMin – have provided support to MCEJO (2020), alongside the group’s lawyers from Youens Attorneys and the Centre for Environmental Rights.
To be sure, the conservationist agenda is not always anti-people in this region, though KwaZulu-Natal Province has witnessed more than a century and a quarter of forced removals of Zulu peasants to make way for nature reserves (mainly enjoyed by whites), whether public or privately owned.
A different model was applied by HIP’s most famous employee, Ian Player, who is credited with raising the park’s white rhino population (unique in the world) from 440 in 1958 to what is now a global census of 18,000. This was possible because Player worked closely with border communities, especially through legendary Somkhele guide Magqubu Ntombela (Berry 2015).
Even before Player died in 2014, Tendele mine’s blasting for coal and air pollution had become a major threat to animal welfare, at a site the white rhino is again threatened, this time by poachers. And if the state permits a future Tendele dig to directly border HIP, that will also intensify poacher penetration, the Global Environmental Trust argues (Save our Wilderness 2021). In the calendar year of 2019 before the Covid-19 lockdown reduced the carnage, there were 126 rhinos killed for their valuable horns in HIP, mainly sold by Chinese and Vietnamese crime syndicates, though lockdown meant the number fell to 88 in 2020 (Ngema 2020).
This is, in short, an ideal site for conservationists to unite with communities and climate activists – against coal. Environmental justice is core to this campaign. A WoMin (2017) research report, “No longer a life worth living”, documented the gendered eco-social atrocities caused by Tendele coal mine, including the theft of water which resulted from Petmin ignoring even relatively weak environmental regulations.
The mine is the largest African producer of anthracite used in steel, an industry whose local output halved due to Chinese competition during the 2010s – so much more is now exported to Brazil.
Tendele also provides several million tons of thermal coal annually for both the South African market – where nearly 90 percent of power is based on coal – and export markets, contributing to the climate catastrophe. In lieu of any capacity or political will to carry out a thorough-going full-cost accounting informed by environmental economics, and to apply polluter-pay principles, such global damage was never assessed in the coal firm’s and government’s environmental impact analyses.
Days after Ntshangase’s assassination, Petmin’s reply to critics reflected its confidence that the state’s backing – and worker survival needs in these desperate circumstances – were sufficient to roll over objections. The Tendele coal mine, Petmin insisted, “is the primary source of economic activity for a community of 220,000 people in the area 85km north of Richards Bay in KwaZulu-Natal. To be sustainable for more than another two years, the mine needs to expand its operations to be able to mine a new ore body which will extend the life of the operation by another 10 years. Mining rights for this have been duly granted.” (Stoddard 2020)
Indeed Petmin’s three core points are true, since there are currently few employment alternatives; Tendele mine has voracious expansion plans; and the state suffers from mining industry influence, to the extent that Petmin had for years simply ignored water-use licensing requirement when washing its coal for better combustion, even though the Umfolozi River and its water table regularly suffered from droughts.
For peasants and other residents, water shortages worsened to the point in June 2020 that during one community protest just south of Somkhele, a Tendele coal truck was stopped by three men and set alight with petrol bombs, completely burned, with the driver fortunately escaping (Zincome 2020). (There was no record of who committed the sabotage.)
Another example of community dissent was a 2017 demonstration in which, the Zululand Observer reported, men and women “barricaded the entrance to the mine as a protest against a lack of jobs… preventing vehicles, employees, contractors and visitors from entering. The group reportedly forced a truck to tip its coal and prevented others from leaving the mine with their loads. The company said these actions resulted in ‘material loss of production and substantial financial losses.’
The Global Environmental Trust explained: “These men were relocated by the mine in 2014 and promised jobs and training which never materialized. They are all unemployed. The men blocked the entrance to the mine and demanded to speak to mine management about their grievances. The police were called and the men were arrested. Later, the wives and mothers of these men did the same thing in protest of the earlier arrests and mine management had them arrested too.”
Without substantial alternatives to mining or corporate agriculture – such as a more coherent food sovereignty option, plus public works projects to prepare Somkhele for more climate chaos – Sizani Ngubane and Fikile Ntshangase correctly feared that the various forms of environmental, economic, social and physical violence so common in South Africa would fuse against rural women. To illustrate, Tendele’s own “Local Economic Development” strategies in Somkhele were terribly weak even on their own terms, an in-house audit revealed (SRK Consulting 2014). Accountability through state regulation and the courts was also impossible give the adverse balance of forces.
“The Right to Say No!” Standing up against these realities and demanding a different future is therefore hazardous, due to the combined forces of state and capital. The assassination of Ntshangase was just one instance reflecting extreme dangers facing human rights and environmental defenders in KZN Province’s many resource conflict sites (Corcoran 2020, Heinrich Boell Foundation 2019).
As the Global Initiative Against Transnational Organised Crime (2019) had reported just five weeks before her murder, “Since 2016, there have been at least 38 assassinations and 14 attempted assassinations in mining localities in KZN… Our research found only one hit definitively linked to the KZN mining industry before 2016. Other organisations such as Human Rights Watch have documented the climate of fear and oppression which activists in South African mining communities endure.”
Why the rise in tension in the period after 2015? It may not be a coincidence that the commodity super-cycle ended that year. Mineral prices had soared, starting in 2002, peaking just before the world financial meltdown in 2008, then recovering and plateauing from 2009-14, and collapsing in 2015. For both the main mineral exports from KZN, coal and titanium dioxide, the peak dollar prices peaked in 2006-08, and have since zig-zagged.
But with price declines of that magnitude in 2015 (partially compensated by South Africa’s own currency crash), the mining industry became both more oriented to increase volumes – so as to make up for lower prices per unit – and also more violent. The assassinations associated with the Richards Bay Minerals (a subsidiary of Rio Tinto) were prolific, and in 2021 even the local CEO was the victim of a hit.
The price shifts – partly the function of a Covid-19 post-lockdown mini-boom – are not encouraging, from the standpoint of preventing climate catastrophe. Australia’s battle with China meant that in late 2020, the largest importer of coal turned for the first time in many years, to Richards Bay. While most of Tendele’s exports were destined for Brazil’s coking process, the overall price rise suggests coal remains in high demand.
While the climate implications of coal are obvious, a reverse logic operates on many of the province’s beaches, in relation to titanium dioxide drawn from ilmenite, such as is found south of the port city of Richards Bay at one of the world’s largest deposits. The mineral is becoming a crucial ingredient in the ultra-reflective (high albedo) white paint that will need to be used on building roofs and in street paving in future, to mitigate against a fast-worsening urban heat island effect (Parnell 2021).
The large deposits of titanium dioxide on the Indian Ocean coastline have been hotly contested, not only in KwaZulu-Natal not far from Somkhele, but also on the Wild Coast, a four-hour drive south, where assassinations are also a tragic reminder of the costs of fighting extractivism.
But resistance continues, so on the supply-side, anti-mining movements were important not only in Somkhele and other coal sites, but against titanium dioxide sand mining.
Causes of the conflict partly reflect shifts in global commodity prices and national politics. Hypotheses include either the mines’ attempts at increasing the volume of output to compensate during times of falling prices, or their failure to trickle-down benefits to communities during price increases.
Another reflection of community protest occurred in mid-2021, when many coal mines (especially Tendele) were shuttered due to generalised political chaos in KZN province following the arrest of the former president Jacob Zuma (who hailed from Nkandla, a district close to Somkhele).
Whatever theory holds, according to the Global Initiative Against Transnational Organised Crime (2019): “mines are frequently at the frontline of community frustration. The industry itself has noted increased opposition to its operations among neighbouring communities. Incidents such as roadblocks, hijacking of vehicles to transport protesters, arson, damage to property and labour disruption have reportedly almost doubled in some areas between 2018 and 2019.”
The philosophical stance of many mining-community activists is now often termed “the Right to say No!” A vibrant alliance of movements is making this case not only at anti-mining protests, but on twitter – https://twitter.com/hashtag/right2sayno?f=live – and in the World Social Forum’s (2020a, 2020b) activist webinars or its Thematic Forum on Mining and the Extractivist Economy. This movement gathered in 2018 at the first such major international Thematic Forum anti-mining event, which was in Johannesburg (Bond 2018a). It contrasts vividly with the 2009 African Mining Vision – an African Union (2009) plan that celebrates transnational corporations – and the annual African Alternative Mining Indaba (Bond 2015). One international network promoting this movement is Mines and Communities (2021).
Though MCEJO’s members differed over whether to advocate closing Tendele outright, the Zululand Observer reported in 2016 that an important local group – the Mpukunyoni Community Property Association, led by local entrepreneur Bongani Pearce – regularly marched to that end as their members were “fed-up with living in close proximity to Somkhele mine” (Jolly 2016). Pearce regularly suffered physical attacks and even arson due to his strong anti-mining stance. In 2018, neighbouring communities southwest of Somkhele, in Fuleni, engaged in successful protests against a proposed coal mine that would have bordered the HIP (Jolly 2018).
The most famous such case of saying no to mining in South Africa is a community’s successful struggle against titanium dioxide extraction at Xolobeni, several hours’ drive from Somkhele, down the highway along the Indian Ocean. There, the Amadiba Crisis Committee (ACC) has engaged in sustained resistance since 2007. In 2018, the ACC’s lawyers persuaded a High Court judge to declare a brazen Australian firm’s mining agenda illegal because the community had not given what is termed by the United Nations “Free, Prior and Informed Consent.”
The pro-mining government minister Gwede Mantashe – who is also chair of the ruling African National Congress – swore he would overturn the ruling or otherwise compel ‘consent’, but has failed so far (Matikinka 2019).
In September 2020, another judge ruled the same Australian mining house’s deals with Mantashe and his predecessors must be made public, pleasing ACC’s well-known eco-feminist-socialist spokesperson Nonhle Mbuthuma: “The news arrived today when we were holding a meeting discussing ou¬¬r community issues. It just changed our mood. We were so happy. Dealing with companies is so difficult for us. They only want to tell us what they are going to do but they don’t want to give us papers” (Ellis 2020a).
But less than a month after Ntshangase’s murder, Mbuthuma received a death threat on her phone, referencing the assassination of ACC chairperson Bazooka Radebe in 2016 and the suspicious death of his successor, Sibusiso Mqadi, in early November (Ellis 2020b).
Follow the mining money, back to the bankers, and then to Ohio
While activists and their lawyers are warning off the mining industry from pursuing eco-socially destructive projects like those at Somkhele and Xolobeni, the firms’ bankers are also receiving attention. In addition to Petmin’s main local financier, Nedbank, one target on the horizon is the World Bank, because it was one of Tendele’s main venture capital supporters in 2007 when the digging began.
The Bank’s private sector investment arm, the International Finance Corporation (2002), was the original backer of the venture capital fund that resurrected Petmin – an apartheid-era shell company – to start digging coal at Somkhele, a point worth returning to since reparations have been claimed by MCEJO’s leading lawyer.
The firm’s subsequent primary banker, though, is South Africa’s fourth largest lender, Nedbank, an institution which built its public relations strategy around being the country’s most eco-aware financier. Yet in September 2007 it began lending to Petmin with a generous $11.5 million credit, most of which went to Somkhele. In 2015 it offered a $19 million loan package to Petmin to make possible the 20 percent ‘Broad-Based Empowerment’ deal that split the community.
But Petmin’s dividend payments covered only the interest payments, so the passive ‘owners’ (local ethnic elites and labour leadership) were simply earning notional wealth, in turn leading to growing suspicions about the bonsala from those the coal mine oppressed: community members affected by pollution, ordinary workers and progressive conservationists.
As for Nedbank, it was a no risk proposition, because “Petmin effectively guarantees the redemption of the Nedbank funding as it will subscribe for additional preference shares in the event of a potential default in payments to Nedbank” (Fin24 2015).
The deal is so pro-creditor that in mid-2020 when the Covid-19 lockdown briefly prevented Tendele from operating, hence defaulting on a loan payment, Nedbank gladly rolled it over. The interest rates paid in South Africa on commercial bank loans far exceed inflation (usually by more than 6 percent); and internationally, only the Turkish, Pakistani and Brazilian governments typically pay a higher interest rate on 10-year state bonds than South Africa (whose rate has generally been around 9 percent since the mid-2010s).
In this context, three weeks before Ntshangase’s assassination, Nedbank (2020) issued a self-congratulatory press release: “we are proud to say that in 2020 we have proven once again that green is the new gold standard… As the green bank, our mission to achieve sustainability is reflected in how we live, work and invest. We are innovating in green finance solutions continuously by aligning our strategies for sustainable lending and investment to the United Nations’ Sustainable Development Goals. Our steadfast belief in going green has focused our lending book towards renewable energy.”
This combination of corporate public relations and corporate coziness between regulators and regulated financial institutions gave South Africa the leading position in PwC’s (2020) biannual ratings of corporate corruption (‘economic crime’) during the 2010s. In 2019, a Treasury official admitted that 3-7 percent of the country’s annual GDP output is squandered through Illicit Financial Flows (Planting 2019).
Whether licit or illicit, Petmin found a route to evacuate massive funding flows to the United States. The Somkhele profits are now being used to construct a $474 million Lake Erie (Ohio) pig-iron plant to supply the local steel industry.
Similar to Somkhele’s MCEJO, the Ashtabula community’s leading environmental activists are upset with their state government’s environmental regulator; the Ashtabula County Water Watch NGO appealed against its approval of Petmin’s factor.
The firm’s 2020 filing of new – much higher – estimated emissions of nitrogen oxides, particulate matter and CO2 equivalents, meant, as the group complained, “The Petmin project relies on natural gas produced in a way that is immensely taxing on the environment and public health. We may think the consequences of fracking are out of sight and mind in western Pennsylvania, but wastewater from this process is being pumped into the earth here in any of 15 active fracking wastewater injection wells in Ashtabula County. More wells will likely follow as the fracking industry continues to ramp up production since individual wells are becoming less productive and require more and more fracking fluid. Basically, we are cheaply selling clean water from Lake Erie to the fracking industry in Pennsylvania only to have it severely polluted and then shipped back to Ashtabula County and injected into the earth where it puts our water and soil resources at risk of contamination and causes increased risk of earthquakes.” (Haytcher 2020)
By mid-2021, Petmin’s internal calculations appeared to have shifted, with the construction that had begun there in late 2020 suddenly halted a few weeks later, leading a local politician to confess he was not sure if the pig iron plant “will ever come to fruition” (Haytcher 2021).
The opportunity to derail Petmin would increase if Somkhele (or even Ashtabula) activism could be sustained through this very tough period. But would also reflect the company’s own financial contradictions. With Petmin’s disclosure of corporate filings in 2020, it was somewhat easier to assess how much Ntshangase and other local critics of coal mining were costing Tendele mine.
By 2020 it was running out of easy-to-dig surface coal and turned to drilling much deeper into the KZN crust, because due especially to legal opposition and community protests, Petmin (2020) did not get easy approval for the new areas it wanted to stripmine.
Petmin was, after 2017, no longer a publicly-listed firm, and hence not subject to shareholder oversight (its management removed it from the Johannesburg Stock Exchange in a buyout). Petmin’s bookkeeper KPMG and the broader South African accountancy profession were seen as unreliable, if not outright corrupt, given KPMG’s roles in various local corporate scandals even exceeding those of PwC, EY and Deloitte (Business Day 2020).
As a result of its record throughout the 2010s, many South Africans believe KPMG should suffer the same fate that London PR firm Bell Pottinger and World Bank-owned Cash Paymaster Services did thanks to activist pressure: the corporate death sentence of bankruptcy following major scandals in 2017 and 2020, respectively.
What Petmin (2020) did reveal, however, were massive 2018-20 machinery write-downs (capital depreciation) in Somkhele that did not correlate to the firm’s fast-rising output. Also evident from Petmin’s (2020) report is that since Tendele mine began operating in 2007, $800 million worth of coal was dug, reaching an annual peak of $120 million in 2018.
Over the years 2013-19, Petmin boasted an average net profit rate of nearly 10 percent, in part because South African royalties and taxes are so low (only drawing down around 15 percent of Petmin’s revenue). Petmin (2020) suffered a sharp drop in sales in the fiscal year through June 2020.
Covid-19’s lockdown meant two local anthracite customers – Glencore (the world’s biggest commodity trader) and Samancor – as well as Brazil’s Vale (the world’s second largest mining house) all stopped buying for a few weeks in April-May. That reported $35 million loss in sales resulted in a $7 million net loss for the year 2019-20. It was in this context that MCEJO’s blockage of further coal digging was seen by Petmin and its mineworkers as an existential threat.
This crisis, in turn, prevented mid-2020 loan repayments to Nedbank, which was typically making $2 million a year in interest revenues from its Petmin lending. Indeed, due to the Covid-19 crash and KPMG’s generous assessment of the financial records, Petmin claimed to be unable to pay $41 million in debt, requiring rescheduling. Yet at the same time, Petmin USA prepared to begin construction on the $474 million pig iron plant in Ohio.
The conclusion that could be drawn from the financial data was that reparations are due to the people of Somkhele and South Africa, for a full-cost accounting of resource depletion. But it is also useful to follow the money trail back even earlier.
World Bank reparations also overdue
The World Bank’s International Finance Corporation (IFC) funded part of Tendele’s start up during a critical phase when the Bank took equity ownership stakes in mining ‘juniors,’ as small firms are called. This investment was made under the impression – stated by IFC officials Rashad Kaldany and Haydee Celaya (IFC 2002) – that this would promote black capitalism.
But as the lawyers working for Ntshangase and MCEJO – Tembeka Ngcukaitobi and Kirsten Youens – told the Supreme Court of Appeal on November 3, 2020, the mining operation was actually illegal from the outset, lacking crucial government permissions to make such a destructive impact on the local environment and people (Masiteng 2020).
Since those authorisations were missing when mining operations began, a precedent case in the Constitutional Court (Allpay) allowed Ngcukaitobi to argue that effective remedial relief must follow a declaration of unlawfulness. He asked for a disclosure of profits made by Tendele coal mining since 2007, and that such profits acquired illegally – which include generous dividends sent to the IFC for several years – “should be paid over to communities or other entities” (Masiteng 2020).
At the point Petmin began operating Tendele in 2007, its promises of community prosperity, black advancement and environmental responsibility – made when the IFC initially got involved – were effectively jettisoned. While remaining an all-white-male executive operation (with one black board member), Petmin’s roots in apartheid mining evolved into fronting for Black Economic Empowerment operations.
As a small mining shell company, Petmin had raised venture funds to open Tendele from the New African Mining Fund (NAMF), which was the recipient of a $5 million initial IFC commitment escalating to $30 million for its second stage (albeit aborted in 2014 during the global mining crash).
NAMF founder Doig soon also became Petmin’s highest-profile leader. He began working as Chief Operating Officer there in 2006, and his personal page on the corporate website highlights the IFC investment that got Tendele up and running. Petmin initially received the majority of funds from NAMF for its main operation, Somkhele, and that stake, in turn, was the main reason the NAMF could declare an annual 39 percent profit rate at the time the IFC enjoyed its 6 percent stake in the fund.
It is not known how much the IFC earned from the NAMF and the largest investment, Tendele coal mine, for data about its Petmin shares remain opaque, but it is likely to exceed $10 million.
Another NAMF investment at the time was catastrophic: the Canadian firm Africo was victimised by the notorious Israeli tycoon Dan Gertler and his New York ally the Och-Ziff investment firm, as pointed out in a report by the NGO Rights and Accountability in Development (2019), which complained about the IFC’s blasé attitude to mining industry corruption.
If such profits were returned, they could begin a process of financing the desperately-needed decarbonisation of Somkhele. For the economically-impoverished local men supporting the coal mine, there remains no alternative in what for generations had been an apartheid Bantustan zone of economic despair, where before freedom in 1994, the only cash income came from migrant workers’ remittances.
By using potential reparations payments to link more closely the community, conservationists and potential climate-solidarity movements, a demand for a genuine Just Transition would potentially be capable of addressing the deep-seated conflict over coal mining.
In this way, protecting the climate also would entail interconnected eco-socio-economic objectives in Somkhele: emissions-source mitigation, drought adaptation and other climate-crisis resilience projects, funded by the state, self-managed by workers, controlled by communities and especially women and youth. The need has never been greater.
Specifically, though, World Bank reparations are certainly due to oppressed South Africans. Apartheid profiteering by the Bank began in 1951 and lasted more than two decades before the United Nations forbade further loans. Its neoliberal policy advice is a major reason inequality increased to the world’s highest level (a Gini Coefficient of 0.63) after apartheid ended in 1994.
Other Bank and IFC investments here have reeked of socio-ecological destruction, the most predatory capitalism, and outright corruption. For example, the largest coal-fired power plant underway anywhere now was the Bank’s largest-ever loan: $3.75 billion for Eskom’s Medupi generator, one riddled with fraud and without exaggeration a clear case of Odious Debt (Bond 2012).
And at the same time the IFC was investing in the NAMF, another controversial mining stake in South Africa was simultaneously underway: the IFC’s $50 million equity share in – and promised $100 million loan to – Lonmin, so as to promote Community Social Investment (CSI) at a particularly controversial mine producing a vast share of the firm’s platinum: Marikana. The IFC made this mine its poster child for CSI, yet the hatred that mineworkers and their community supporters felt towards Lonmin built up, resulting in the strike in August-September 2012, five years into the IFC intervention.
An interesting footnote is that in 2008-09, Ramaphosa – by then a major coal-mining tycoon – in alliance with the world’s largest commodity dealer, Glencore, had attempted to purchase Tendele coal mine but they failed, and Petmin retained control (South African Competition Tribunal 2009).
In 2015, the main Marikana women’s group, Sikhala Sonke, attempted to get the World Bank’s Compliance Advisor/Ombudsman (CAO) to force the IFC to take responsibility, requesting a formal Dispute Resolution process with Lonmin to give community relief from socio-economic repression. They gave up after the internal Bank process proved useless (Bond 2018b).
Lonmin, facing bankruptcy, was purchased by a local mining house in 2017 and the Sikhala Sonke grievances against the IFC and the Marikana mining operation remain unresolved. In another appeal to the Bank CAO to compel the IFC to make good on massive damages caused by a South African investment, the well-regarded women-led social advocacy group Black Sash (2017) insisted the IFC’s $107 million (22 percent) share in Cash Paymaster Services (CPS) compelled it “to put measures in place to address and rectify impugned conduct.”
The activists had documented “unauthorised and fraudulent deductions from the social grants of beneficiaries to the benefit of” CPS (and the IFC), “unlawful and unethical use of social grant beneficiary data and information, persistent allegations of corruption and other unethical business practices.
Failing to get relief from the IFC, Black Sash (2020) and local allies not only had CPS’s lucrative “financial inclusion” contract with the state welfare department cancelled but also sued CPS for reparations, and in 2020 the firm’s holding company placed it into bankruptcy to avoid further damage.
But this demand for profit repayment is the precedent for forcing the IFC to “pay back the money,” a local activist phrase used regularly since the Zuma era’s corruption became the source of social fury (Postman 2020).
All of these efforts to discipline IFC-owned firms in South Africa occurred prior to the Bank’s 2019 loss of its immunity from prosecution in the U.S. Supreme Court (Center for International Environmental Law 2019).
That may scare the Bank into settling in other jurisdictions, for fear the Foreign Corrupt Practices Act or other tort law may hold the IFC accountable in the U.S., where it has never had prior reason to fear prosecution.
In the meantime, since the culture of criminality that prevails in the South African IFC portfolio is widespread, instead of relying upon the institution’s own fatally-flawed internal review mechanisms, South Africa’s courts may consider taking the advice of MCEJO’s lawyers. That would entail beginning a long-overdue process of not only cease-and-desist against IFC-owned corporations, but the compulsion of reparations payments from the firms and their ethics-challenged financiers.
Conclusion: The climate reparations they demand and deserve
There is another financial linkage that may also be vital in future: reviving climate debt demands. In 2014-15, veteran Durban activist Faith ka-Manzi traveled to Somkhele several times, first working within the University of KwaZulu-Natal Centre for Civil Society (which I then directed) and in 2016 translating and organising with WoMin, to not only help the activists there articulate their stories, but also provide climate critique to bolster their case for halting Tendele in its tracks.
One 2015 visitor was the head of Greenpeace International, Kumi Naidoo – also a KZN native, born and raised in Durban – and he spoke to MCEJO (through ka-Manzi) about the urgency of switching from coal to renewable energy.
But how to pay for all the Just Transition transformations that will be necessary in such sites?
In addition to profit repatriation of the sort MCEJO’s lawyers demanded from Petmin in 2019, another approach is a northern downpayment on climate debt due to places like the Somkhele villages, which were ravaged by a severe drought for several years.
The concept of a wealthy northern country making such a downpayment comes from indigenous and eco-feminist Ecuadoreans who opposed Chevron (then Texaco) and later Chinese oil extraction from the eastern part of the country, in the upper reaches of the Amazon Basin.
The Yasuni Park is the most biodiverse site in the world, but contained an estimated $10 billion of oil – so the ‘Yasunisation’ strategy is the demand by climate justice activists that such fossil fuel not be extracted, but instead compensated (Temper et al 2013).
Activists demanded that, as part of the climate debt, the Global North should pay $3.6 billion to the people of Ecuador, via its state, then run by Rafael Correa, in exchange for Yasuni’s permanent protection.
The proposal failed in 2013 because of bad faith negotiations by both the German and Ecuadoran governments, with Berlin insisting on carbon trading instead of a climate debt downpayment to raise (what was a tiny proportion of) the needed funds, and Correa secretly negotiating Yasuni oil-drilling contracts with Sinopec as his Plan B. But the idea is continually revived.
The most famous proponents of Global North liability for climate damage are former Bolivian UN Ambassador Pablo Solon (Transnational Institute 2010) and writer-activist Naomi Klein (2009).
But a decade earlier, Quito-based eco-feminists Accion Ecologica (1999) and Joan Martinez-Alier were defining the concept as, “the debt accumulated by the Northern industrial countries towards the countries and peoples of the South on account of resource plundering, environmental damages, and the free occupation of environmental space to deposit wastes, such as greenhouse gases.”
Against this, the single most famous critique of climate debt was a Trump-style denialist declaration by U.S. State Department climate negotiator Stern, replying to Solon at the 2009 Copenhagen climate summit: “We absolutely recognise our historic role in putting emissions in the atmosphere up there that are there now. But the sense of guilt or culpability or reparations? I just categorically reject that.”
As the most influential figure in the UN talks, Stern maintained this stance over the subsequent years, and was successful in forcing it into the 2015 Paris Climate Agreement, which refused to countenance ‘polluter pays’ liability principles.
Having witnessed the 2011 United Nations climate fiasco in Durban, ka-Manzi was adamant that base activists do more to both think locally and make demands globally. Describing the struggles after a 2015 visit, for example, we wrote together of why and how “a climate debt paid to anti-coal activists might work. The present system of payments for greenhouse gas mitigation and adaptation via the Korea-based Green Climate Fund is already a failure on multiple levels, and the ‘loss and damage’ liability accounting Third World countries have pushed for in the United Nations climate summit since 2012 is being blocked by rich countries. Instead of relying on the elites to start this process, a people-to-people solidaristic strategy is needed, initially. More successors are needed to the heroic but unsuccessful ‘leave the oil in the soil’ campaign for Ecuador’s Yasuni national park.”
We were worried that Ntshangane’s movement need a wider range of allies: “The challenge to coal companies to leave the coal in the hole seems like a losing battle if it is only to be waged by poor women in rural areas who are disadvantaged by traditional patriarchy and a lack of resources to fight this battle. Still, hope now rises that the campaign will inspire not just animal lovers and conservationists, but more climate activists and many more ordinary citizens who do not like seeing such extreme environmental injustice along the lines of race, gender and class.” (Manzi and Bond 2015)
Conditions to establish a fund that could have helped Ntshangase and MCEJO activists fight Petmin more effectively were not yet in place (Bond 2018c). On the one hand, the balance of forces were not likely to change, with former U.S. Secretary of State John Kerry – appointed the Biden Administration’s climate czar in early 2021 – apparently unwilling to open up debate on the U.S. historic obligations for polluter-pays reparations (Bond 2021).
But on the other hand, Northern climate-liability consciousness may be rising again, witnessed in 350.org founder Bill McKibben’s New Yorker column on December 2, 2020, entitled “The climate debt the U.S. owes the world.” Paying reparations, McKibben concludes, is “the only honorable, and only sensible, course: they don’t call it global warming for nothing, and you can’t control it anywhere without controlling it everywhere.”
And if fighting fossil fuels is one of the most appropriate of beneficiaries of such reparations payments, then the Somkhele movement led by MCEJO is one of the most appropriate places in which to invest.