SA in business rescue: Froneman on working with OUTA, attacking criminals

Not long ago, global mining entrepreneur Neal Froneman’s was the only name worth mentioning when asked about SA business leaders calling out its incompetent, corrupt government. Of late others have joined the Sibanye-Stillwater CEO, with the common view among SA business leaders is the country has fallen so far that it’s in a place where there is no longer any downside for those speaking truth to power. In this interview, Froneman explains why, for the first time in his long entrepreneurial career, he has joined into an organised business initiative with the government. He shares the progress so far and what he expects to achieve alongside Remgro’s CEO Jannie Durand in the Crime and Corruption workstream – and leaves us with a message of hope. – Alec Hogg

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Relevant timestamps from the interview

  • 00:08 – Introductions
  • 01:44 – Neal Froneman on his meetings with CEO and President Ramaphosa on addressing socio economic challenges present in SA
  • 06:10 – On if he’s getting any support from the South African police service
  • 08:45 – On the assistance of the NPA
  • 13:38 – On Anthea Jefferys Book and Businesses engagement with the government
  • 19:01 – His hope for the future
  • 20:55 – Updates on the 250 megawatt project
  • 23:54 – Conclusions

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Edited transcript of the interview

Alec Hogg: South Africa seems to lack prominent business heroes these days. However, you have been vocal and impactful in your contributions to the country and the global mining industry. Today, we’ll focus on a different topic, your involvement in South African businesses’ efforts to address the country’s socio-economic challenges. This is outside your usual scope as a multinational business entrepreneur – what drew you to this initiative?

Neal Froneman: Yes, I must admit that the work stream I’ve been asked to co-chair with Jannie Durand is on Crime and Corruption, which isn’t my area of expertise. My background is in developing strategies and mobilising people, and I felt that my skills could be put to use if surrounded by experts in the field. Two years ago, I already saw South Africa as a failed state, well before it was commonly acknowledged. However, I believe there’s an opportunity now, as the government seems more open to making a difference. Although they may still see business as a necessary evil, we can’t just sit by and watch everything collapse. Crime and corruption are significant issues that need to be addressed, regardless of who’s in power. Leadership changes are essential for South Africa, and I’m not pointing to one individual as the problem. We need serious change in various areas. Economic growth and investor-friendly policies remain unaddressed, and the current government’s ideology seems incompatible with growing the economy. I believe significant changes in leadership will occur after the next election. While business shouldn’t be directly involved in politics, the situation today is as serious as it was during apartheid, and business needs to be more engaged in political matters. By focusing on crime and corruption, I hope to make a positive impact and be on the right side of history.

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Alec Hogg: Your dedication to addressing crime and corruption is commendable. Given the challenges within the South African Police Services, are you receiving any support from them in your efforts?

Neal Froneman: It’s important to avoid generalisations, as there are dedicated and committed individuals within the South African Police Services (SAPS), the NPA, and other bodies we are working with. While there are some who aren’t committed to making a difference, we believe that through proper processes, we can identify and address these issues. I’ve had meetings with several SAPS generals, and I can sense their willingness to effect change. There are some basic administrative aspects that seem to be lacking, which we can help improve. The private sector and organisations like the NPA and security clusters don’t typically work together, but we’re trying to establish trust and credibility with each other. Given enough time and communication, we can realise that many of us share the same goals.

Alec Hogg: It’s great to see that you and Jannie Durand from Remgro are taking on this role with your characteristic frankness. Have you had meetings with (Police Commissioner) Bheki Cele and others from SAPS and the NPA?

Neal Froneman: Yes, we’ve made significant progress with the Judicial Workstream, which is supported by the Minister, and there’s good cooperation with the NPA. They are a solid organisation, but they lack capacity. We’re looking into areas like science, technology, and forensic data analysis to enhance their effectiveness. However, we respect their independence, and we can’t influence their priorities. On the crime prevention stream, which I am more involved in, we’re focusing on syndicated crime. Rather than just addressing the lower-level criminals, we aim to target the kingpins orchestrating illegal activities like car theft, illegal mining, illicit financial flows, counterfeit goods, and more. Arresting low-level participants has proven ineffective in curbing these activities. We’ve developed a strategy that combines the judicial system, policing, and various business levers. By coordinating data from the banking, mining, and consumer sectors, we can gain meaningful insights and disrupt these syndicates. While we may not be able to immediately imprison the kingpins, we can take necessary steps to achieve that in due course through legal processes. Our focus remains on making a difference, even in the face of challenges and potential resistance.

Alec Hogg: Neal, I’d like to hear your thoughts on two different approaches. Anthea Jeffery, who authored the book “Countdown to Socialism,” argues that business engagement with the government will only lead to setbacks, and once things improve, they’ll be discarded. On the other hand, R.W. Johnson believes that South Africa is undergoing privatisation by stealth, making it difficult for ANC’s National Democratic Revolution proponents to reverse course. How do you view these strong viewpoints?

Neal Froneman: Two years ago, I would have said that we didn’t have much leverage, and we were told what we wanted to hear. However, I believe that the government now acknowledges its failures and that changes are forthcoming. Though getting tossed aside is still a possibility, it’s akin to stepping into a business in distress. We can inherit a mess, but we also have an opportunity to contribute positively. I firmly believe in stakeholder capitalism, which prioritises fair distribution of value among shareholders, government, communities, and employees. This model is not about socialism but about ensuring that everyone benefits, especially in the resources sector where natural resources are utilised. The private sector and civil society currently possess the capacity and competence to bring about change.

Read More: Boardroom Talk – RW Johnson: SA business, the only credible player left, must now step up to plate

Our crime and corruption initiative involves not only business and government but also notable civil society groups such as OUTA, Corruption Watch and others. This broader collaboration gives me hope because civil society is frustrated with issues like service delivery and rampant corruption. I foresee significant change on the horizon, and we should all contribute to facilitating this much-needed transformation.

Alec Hogg: It’s remarkable to see organisations like OUTA, Forensics for Justice, and the Helen Suzman Foundation gaining recognition at the highest level. You mentioned hope, Neal. What specifically makes you hopeful?

Neal Froneman: South Africans are realistic and mature, and I believe they will vote wisely in the upcoming elections. People have lost faith in the current party and its leadership. As a company, we support initiatives like Bobby Godsell’s campaign to encourage voting without prescribing whom to vote for. We’re witnessing the private sector making a difference, and this marks the beginning of a new wave where we must take matters into our own hands. There’s a chance for leadership change, possibly through a coalition, and we must support and help facilitate that shift.

Alec Hogg: You mentioned that a lot has changed in the last two years. I recall our last conversation it was two years ago when you applied for permission to build a 50-megawatt electricity plant, which was refused. A year ago you applied for a 250-megawatt project, and at that time, were awaiting a response. The rules have changed, opening up electricity production for all. Can you provide an update on Sibanye’s efforts to address the energy shortage in the country and any progress made?

Neal Froneman: We have made progress, but the challenges of crime and corruption run deep. Every time we overcome one hurdle, another arises, such as a land claim on the site where we planned to build a solar project. This is symptomatic of the broader cultural issues we face in South Africa. Nevertheless, we have achieved some milestones. We signed the largest wind farm power purchase agreement (PPA) in South Africa for 275 megawatts, and other projects are in the approval pipeline. Additionally, we are exploring opportunities to generate electricity from gas sourced in Mozambique, which could benefit both our operations and the national grid. The energy workstream, active for about a year, has made significant strides. Government realises that addressing the energy crisis is crucial for its political standing, so there’s a willingness to collaborate. I believe that load shedding will decrease from next year based on the tangible progress I’ve observed. Remarkably, South Africa is transitioning to a decentralised energy system at an unparalleled rate, creating a whole new economy in the process. So, despite challenges, we are witnessing positive developments in the energy sector.

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