Employee housing

2014 CASE STUDY:

Addressing housing needs

Sibanye has been proactive in addressing the housing and accommodation needs of its employees and continues to explore ways to improve their living conditions.

By end of 2014, the Group had upgraded its high density residences on mine property, providing residents who elected to live in high density accommodation with individual private rooms. A number of family units have also been built and increasing efforts are being made to facilitate home ownership for employees – with due consideration of the needs and sustainability of local communities and municipalities.

The Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (Mining Charter), which was reviewed in 2009/10, set various agreed targets after consultation with the industry. In terms of the amended Mining Charter, apart from attaining an occupancy rate of one person per room, high density residences had to be converted into family units where possible, and home ownership had to be facilitated for all employees in consultation with organised labour.

Where employees live

Sibanye employed a total of 44,411 people by the end of 2014 – 13,376 were accommodated in high density residences and 6,540 in family accommodation while 14,392 opted to receive a living out allowance.

Sibanye has invested R608.5 million on new houses and upgrading high density residences since 2006.

High density residence upgrades at the Beatrix, Driefontein and Kloof operations have been completed. However, the acquisitions of the Cooke and Burnstone operations in 2014 have delivered employee housing challenges that are still being dealt with.

An internal employee survey carried out in 2014 revealed that Sibanye’s older employees still tend to view the labour-sending areas as “home” – these include other South African provinces and the neighbouring countries of Lesotho, Mozambique, Swaziland and Botswana – and they prefer to live in single accommodation on the mine, and to build houses back “home”. With regulatory authorities increasingly promoting a move towards recruiting locally – from the towns and villages located within 50km of operations – home ownership aspirations are articulated accordingly. This aligns with the West Rand municipalities’ preference for employees to live in communities, such as Blybank, near the operations.

High density residence upgrades

In order to satisfy the different needs of employees, upgrades of high density accommodation needed to be adaptable, including converting sections into family units, explains Elford Mayixale, Senior Property Manager for Sibanye. Upgrading high density residence rooms – each room originally accommodated as many as 16 people in the past – was, therefore, a challenge.

It was decided to subdivide the accommodation in each high density residence into units consisting of three or four grouped single rooms with common living areas. This gives residents the required personal privacy of their own bedrooms, and the flexibility to choose whether to take their meals in the central dining rooms to eat in their own rooms or cook for themselves in their unit’s kitchen. It’s all about affording employees a choice of lifestyles. All employees living in high density residences are offered three meals a day, which have been designed to meet their nutritional needs.

In addition to improvement in personal accommodation, each high density residence complex has been provided with a clinic, which operates on a 24/7 basis.

Converting high density residences can be easier said than done. While, in the past, they would be built to serve a working mine, they were built on land that had not been proclaimed for township development. And this can lead to anomalous outcomes. At Cooke 4, the former Western Areas gold mine, the high density residence is being demolished as, in terms of existing rules, it cannot be converted to provide Mining Charter-compliant accommodation.

At Driefontein, three high density residence conversions have been completed in compliance with Sibanye’s social and labour plan (SLP) agreements with the Department of Mineral Resources (DMR). However, in 2014, it became apparent that additional accommodation was needed and work began on upgrading a fourth high density residence to accommodate one person per room even though that high density residence had been closed for years.

At the Cooke 3 section, the high density residence complex is currently being upgraded and will be completed by 2017.

Living out allowances

In 1998, following a demand by the National Union of Mineworkers (NUM), employers in the gold sector agreed to provide a living out allowance to employees who opted to seek accommodation off mine property. The purpose of the living out allowance was (and is) to give employees an additional choice of residence with the living out allowance intended to be used to support rental payment and board. The amount of the allowance (a minimum of R2,000 since September 2014) was directly related to high density residence board and lodging costs, and was intended to support an equivalent standard of food and accommodation. Along with basic wages, the living out allowance has increased annually, often ahead of inflation, since it first came into effect.

Unfortunately, the living out allowance has given rise to some unintended social issues. One of the critical issues highlighted by recent labour relations instability in the mining sector is that the living out allowance has not necessarily been used by mining employees for its intended purpose and has actually been linked to the development of informal settlements adjacent to the mines. In some instances, the funds have been used to supplement the money sent by employees to their families in their rural homes or used for other spending thereby increasing indebtedness. It has been suggested that a stakeholder review of the living out allowance and its unintended negative consequences is essential.

Sibanye is also concerned that employees who live in informal settlements may not necessarily be satisfying their nutritional needs or getting required levels of good, quality sleep. This can lead to unsafe working practices and affect safety and productivity, as well as ill health and low employee morale. Moreover, informal settlements are generally more prone to crime than other formal communities. Municipalities seem to have recognised the negative consequences of living out allowances and appear reluctant to see informal settlements increasing.

These issues are complex, and Sibanye is actively engaging with communities and municipalities in order to address those issues it can. In some instances, this may be by assisting the affected municipalities with the needed management skills. Representatives of Sibanye and the municipalities sit on various committees working towards identifying and resolving the challenges facing the municipalities. Interaction is continuous against the background of municipalities sometimes pressing for housing on proclaimed land, which is subject to levies, thereby boosting the municipalities’ revenues.

Resolution of these issues will not be achieved overnight – they are complex. In addressing these problems to provide mutually agreeable outcomes, Sibanye is assisting the affected municipalities with the needed management skills. Representatives of Sibanye and the municipalities sit on various committees working towards identifying and resolving the challenges faced by the municipalities. Interaction is continuous against the background of municipalities sometimes pressing for housing on proclaimed land, which is subject to levies, thereby boosting the municipalities’ revenues.

Home ownership

Sibanye is proud of what it has achieved in its housing programme. By the end of 2014, a total of 762 family houses had been completed on the West Rand. Driefontein had committed to to building 495 houses by the end of 2014 but, by the final quarter of 2014, some 195 houses were still outstanding. Tenders are out for the construction of these houses.

Sibanye is also attempting to address the home ownership requirements of employees in the lowest employment categories. The Group is developing and structuring an affordable housing model, which allows monthly costs and capital repayments to be covered by monthly living out allowances, thereby ensuring eventual ownership of homes by employees, without requiring significant additional financing. Sibanye has built two “show houses” in the province of Gauteng to test the model and to show employees the type and quality of family housing that will be available through this programme.

In addition, Sibanye commenced with the sale of its houses to qualifying employees at discounted rates. Through these programmes, Sibanye believes that home ownership is one of the key levers that can help to deliver significant value to all its employees.