Navigating a just transition in the coal sector must cushion workers
|Published
Lebogang Mulaisi
The Workers Month beknown as “Red October” during which trade unions across the world campaign and rally to commemorate their toil and to make renewed calls for a better world of work and of decent work, has come and gone.
Decent work as demanded by workers of the world means opportunities for work that is productive, with a fair and equitable income, security in the workplace, social protection, higher prospects for personal development, freedom to organise and participate in decisions making. Overall, decent work is the sum of the aspirations of people in their working lives.
Clouded by a climate of uncertainty in the fragile coal mining sector and its broader value chain, this Red October was an opportune moment to reflect on the coal sector that was, as it coincided and sailed through the troubling reports about historic level job cuts and losses in the coal mining sector in our country.
Job losses in South Africa remain an explosive subject due to high unemployment rate of 32.9% and the ailing but recovering state of the economy which has perpetuated high levels of inequality, poverty, and unemployment.
Are the job losses in the coal mines a signal of a softening of the coal value chain?
The answer is not always straight forward.
While coal is still central to South Africa’s economy and energy supply, the long-term sustainability of coal mining faces challenges from depleting reserves, environmental pressures, and the global push toward cleaner energy sources.
Seriti Resources recently announced plans to cut approximately 1,137 jobs at its Middelburg Mine Services and Klipspruit South-East operations due to ongoing unprofitability resultant from a combination of factors including decreased coal prices, disruptions in transport and rail logistics and general market instability.
These issues have limited Seriti’s ability to capitalise on recent European demand for coal, particularly after the spike in coal demand following Ukraine crisis.
The life of coal is likely to diminish gradually as the country shifts toward a more diversified energy mix.
We have an opportunity to embed just transition principles even in the context of the current coal mine retrenchments to entrench best practices in the system thus enable justice across the sector. But an approach of this manner requires leadership and political will from all affected and disaffected alike.
During their optimal operations, mining companies provide communities with basic services such as early childhood, healthcare, water, and recreational facilities. When companies downsize or worse close down, these services are discontinued, leaving communities deprived from the basic services they have relied on for their livelihoods and economic opportunities of coal value chain.
For the unions, the protection of current jobs is paramount, as it is the basis of their own existence and membership, who want to be included in decision making early enough to avoid unilateral job cuts and casualisation, whilst business on the other hand has to navigate the anxieties of shareholder interests, financial and operational adjustments for profitable bottom-line and the imperatives of corporate citizenship.
Companies such as Seriti are balancing operational costs, labour demands as well as environmental pressures. South African coal mines can benefit from government incentives, partnerships with renewable companies, and tax credits. But this must be done in agreement to mitigate job losses and the negative socio-economic impacts of the transition. Government’s role is crucial to ensure an enabling environment through policy formulation, regulation, and funding and to incentivise green investments, subsidise training programs and developing the necessary safety nets for a sector whose woes have just begun.
The October 2023, Presidential Climate Commission recommendation report on the lessons learned from Komati process highlighted the importance of local government to ensure communities are not negatively affected and reaffirmed the need for adopting collaborative approaches and necessary transformative frameworks to ensure sustainability during the transition from coal.
The Komati Decommissioning process evidenced that poorly managed transitions have significant repercussions especially for communities that heavily rely on the coal mines and the adjacent power stations for the basic services, employment, and entrepreneurial opportunities – broadly their livelihoods.
When communities experience mismanaged transitions, not only will they reject it, but will also resist any future development initiatives viewing as a threat rather than an opportunity, thus creating long-term obstacles to the decarbonisation pathway of the country.
There is clearly a lot of energy and effort that goes into planning for the transition pathway for South Africa and for any of this to materialise, thoughtful planning and collaborative support is needed from government, business, labour, and community organisations.
South Africa needs to avoid the multi-fanged devastation and misery that comes with coal mine closures, and for that to not happen, it is critical to devise measures that ensures a transition that is fair for workers and communities.
Lebogang Mulaisi is an executive manager, policy and research, at the Presidential Climate Commission.
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