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On the Threshold Of The Truth

Journalist Jan de Lange has been on a mission for the last 15 years to find out how much mining company BHP Billiton pays for its electricity. He has been sent from pillar to post and now to the Supreme Court of Appeal in South Africa.

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It’s a sunny day in the judicial capital of South Africa, Mangaung—formerly known as Bloemfontein—but inside the country’s highest court of appeal, the temperature is rising. Media conglomerate Media24, with one of its specialist journalists, Jan de Lange, are first respondents to a case against one of the biggest mining companies in the world, BHP Billiton.

The London Stock Exchange-listed company is appealing a decision by the Gauteng High Court, which declared that they should divulge the details of their contract with Eskom. The contract might reveal that BHP Billiton is actually paying very little for electricity and that the public is subsidizing their consumption.

It is big money. In his application to the High Court, de Lange mentioned, among other things: “It appears that the contracts are responsible for at least part of Eskom’s R3.2 billion ($368 million) operating loss for the year ended March 31, 2009 and the whole of its projected loss on embedded derivates of R9.5 billion ($1.1 billion) going forward.”.

It all started in 1995 after de Lange joined Media24 as a specialist reporter in the business division, Sake24.

“It was the first story I went out to when we made the trip to Eshowe for the opening of a power station; it was here that they announced that Hillside and Gencor were to become Eskom’s biggest private client. When it came to the question and answer section of the presentation, we wanted to know how much Gencor was paying for electricity. We were not given an answer. I then started following this issue closely because you could feel that something was not right,” de Lange says.

Gencor was, at the time, one of South Africa’s biggest mining companies. Under its control it had, amongst others, Impala Platinum, Goldfields and Billiton. The company was unbundled and Billiton changed its focus to non-precious metals under the leadership of former Gencor head, Brian Gilbertson.

“At that time Gencor was one of South Africa’s major companies. We were looking for growth opportunities and we identified this aluminum opportunity arising from the country’s surplus electricity at the time,” Gilbertson says from London, where he runs a resources company.

“In order for us to invest $1 billion in South Africa and over $1.5 billion into Mozambique we needed to be confident about the power supply. As part of our risk mitigation, we wanted to know that if the price of aluminum collapsed we [wouldn’t] lose all our money invested in the project and so we did something new in South Africa, which was to link the power price from Eskom to the price of aluminum in the market.”

“This meant that if the aluminum price went down, the cost of our power would go down; if the aluminum price went up, the price would go up. In this way our project would be more viable. Even President Mandela was backing the deal because we were using it to showcase to the world that South Africa would be able to build projects of this size and nature.”

In those days Eskom had a surplus of cheap electricity but this was soon to change when economic and population growth surpassed anticipated figures. BHP Billiton was purportedly doing well as a result of the cheaper tariffs they were charged.

De Lange’s investigations revealed that while the general public was hit hard by tariff increases subsequent to blackouts, BHP Billiton might have been gaining benefit through lower electricity prices.

In 2009, he went to court to try to obtain the details of the contract between Eskom and BHP Billiton.

In August last year, de Lange finally won a ruling in the Gauteng High Court in Johannesburg, which obliged Eskom to release the contract details. Eskom was willing to abide by the ruling. BHP Billiton was not and appealed.

“We have contracts with our customers and those contracts are confidential. The reason Eskom originally contested Jan de Lange’s case was that the contracts were confidential. When we lost the case we agreed to the courts findings,” says Eskom spokesperson, Hilary Joffe.

Eskom has since gone to the National Energy Regulator of South Africa (Nersa) to seek a renegotiation of the electricity supply contract for the Hillside and Bayside smelters after the Mozal Smelter (in Mozambique) deal was successfully renegotiated along with Scorpion Zinc in Namibia.

In the Mangaung courtroom, the two opposing advocates are exploring legal issues and the technical loopholes of each other’s cases.

Advocate Frank Snyckers, on behalf of BHP Billiton, states that his client is unwilling to reveal the details of the case.

“Aluminum pricing information is crucial to keep away from competitors,” he says.

It was revealed that BHP Billiton employs around 1,600 people between the two smelters. Each smelter uses at least 500MW of electricity per year. A large city like Mangaung only uses 400MW. BHP Billiton also uses around 6% of the country’s total electricity consumption.

After four hours of legal sparring, Justice Mthiyane reserved judgment for a later date.

Managing director of EE Publishers, Chris Yelland, was one of only five people in the court’s public gallery today and he is a worried man.

“An Appeal Court is looking at obscure technical issues of a legal nature, which are being used to try and overturn a judgment of the High Court. For me, as a non-lawyer, I find this frustrating. Issues of the rights of South African public are being ignored. It is conceivable that Media24 will lose their case and if so, I hope they will take it to the Constitutional Court,” he says.

I ask de Lange if he will indeed continue fighting if he loses this round. “Of course,” he says, with a smile.

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Current Affairs

The Rage And Tears That Tore A Nation

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Snapshots of the outrage against foreign nationals and protests against sexual offenders in South Africa in recent weeks, captured by FORBES AFRICA photojournalist Motlabana Monnakgotla.


As the continent’s second-biggest economy, South Africa attracts migrants from the rest of Africa. But mired in its own problems of unemployment and political instability, September saw a serious outbreak of attacks by South Africans on foreign nationals and foreign-owned businesses. And they have been ugly.    

The spark that fueled the raging fire was in Pretoria, the country’s capital, when a taxi driver was shot dead by a foreign national who was selling drugs to a youngster in the central business district (CBD).

The altercation caused a riot and the taxi industry brought the CBD to a standstill, blocking intersections. It did not stop there; a week later, about 60 kilometers from the capital in Malvern, a suburb east of the Johannesburg CBD, a hijacked building caught fire, leaving three dead. As emergency services were putting out the fire, the residents took advantage and looted foreign-owned shops and burned car dealerships overnight on Jules Street.

The lootings extended to the CBD and other parts of Johannesburg.

To capture this embarrassing moment in South African history, I visited Katlehong, a township 35 kilometers east of Johannesburg, where the residents blocked roads leading to Sontonga Mall on a mission to loot the mall and the foreign-owned shops therein overnight.

Shop-owners and workers were shocked to wake up to no business.

Mfundo Maljingolo, a worker at Fish And Chips, was among the distressed.

“This thing started last night, people started looting and broke into the mall and did what they wanted to do. I couldn’t go to work today because there’s nothing to do; now, we are not going to get paid. The shop will be losing close to R10,000 ($677) today. It’s messed up,” said Maljingolo.

But South African businesses were affected too.

Among the shops at the mall is Webbers, a clothing and footwear store. Looters could not enter the shop and it was one of the few that escaped the vandalism.

Dineo Nyembe, the store’s manager, said she was in disbelief when she saw people could not enter the mall.

“We got here this morning and the ceiling was wrecked but there was no sign that the shop was entered, everything was just as we left it. Now, we are packing stock back to the warehouse, because we don’t know if they are coming back tonight,” lamented Nyembe, unsure if they would make their daily target or if they would be trading again.

 Across the now-wrecked mall are small businesses that were not as fortunate as Webbers, and it was not only the shop-owners that were affected. 

Emmanuel Nhlane’s home was robbed even as attackers were looting the shop outside.

“They broke into my house, I was threatened with a petrol bomb and I had to stand outside to give them a chance; they took my fridge, bed, cash and my VHS,” said Nhlane.

Nhlane had rented out his yard to foreign nationals to operate a shop. He does not comprehend why his belongings were taken because he doesn’t own a shop. Now, it means that the unemployed Nhlane will not be getting his monthly rental fee of R3,700 ($250).

Far away, the coastal KwaZulu-Natal province of South Africa, was also affected as trucks burned and a driver was killed because of his nationality. This was part of a logistics and transport industry national strike.

Back in Johannesburg, I visited the car dealerships that were a part of the burning spree on Jules Street.

The streets were still ashy and the air still smoky, two days after the unfortunate turn of events.

Muhamed Haffejee, one of the distraught businessmen there, said: “Currently, we are still not trading.” 

Cape Town, in the Western Cape province of South Africa, which hosted the World Economic Forum (WEF) on Africa from September 4 to 6, was also witness to protests by women and girls from all walks of life outside the Cape Town International Convention Centre, demanding that the leadership take action to end the spate of gender-based violence (GBV) in the country.

There were protests also outside Parliament. What set off the nationwide outcry was the shocking rape and murder of Uyinene Mrwetyana, a 19-year-old film and media student at the University of Cape Town, inside a post office by a 42-year-old employee at the post office.

There was anger against the ghastly crimes and wave of GBV in the country that continues unabated. According to Stats SA, there has been a drastic increase of women-based violence in South Africa; sexual offences are up by 4.6%, from 50,108 in 2018 to 52,420 in 2019.

A week later, on a Friday, Sandton, Africa’s richest square mile and one of the biggest economic hubs, was shut down by hundreds of angry women and members of advocacy groups from across Johannesburg. They congregated by the Johannesburg Stock Exchange (JSE), the cynosure of business, singing and chanting, to demand “a 2% levy on profits of all listed entities to help fund the fight against GBV and femicide”.   

Among the protesters was Cebi Ngqinanbi, holding a placard that read: “I’m not your punching bag.”

“We came here to disrupt Sandton as the heart of Johannesburg’s economic hub. We want to make everyone aware that women and children are being killed every day in South Africa and they [Sandton] continue with business as usual, sitting in their offices with air-conditioners and the stock exchange whilst people on the ground making them rich are dying. That is why we are here, to speak to those that have economic power,” said Ngqinanbi.

She added that if women can be given economic power, they will be able to fend for themselves and won’t fall prey to abusive men, since most women stay in abusive relationships because men are more financially stable.

Amid the chanting and singing of struggle songs, Nobuhle Ajiti addressed the crowd and shared her own haunting experience as a migrant in South Africa and survivor of GBV. She spoke in isiZulu, a South African language.

“I survived a gang rape; I was thrown out of a moving car and stabbed several times. I survived it, but am I going to survive xenophobia that is looming around in South Africa? Will I able to share my xenophobia story like I can share my GBV story?” questioned Ajiti.

She said as migrants, they did not wake up in the morning and decide to come to South Africa, but because of the hardships faced in their home countries, they were forced to come to what they perceived as the city of opportunities. And as a foreign national, she had to deal with both xenophobia and GBV.

“We experience institutionalized xenophobia in hospitals; we are forced to pay huge amounts for consultation. I am raped and I need medical attention and I am told I need to pay R5,000 ($250).

“As a mere migrant, where am I going to get R5,000? I get abused at home and the police officer would ask me where I’m from because of my accent, I sound Zimbabwean. What does my nationality have to do with my husband beating me at home or with the man that just raped me?” she asked.

Women stop traffic while they hold up placards stating their grievences against GBV. Picture: Motlabana Monnakgotla

Addressing the resolute women outside was the JSE CEO Nicky Newton-King who received the memorandum demanding business take their plight seriously, from a civil society group representing over 70 civil society organizations and individuals.

The list of demands include that at all JSE-listed companies contribute to a fund to resource the National Strategy Plan on GBV and femicide, to be launched in November; transport for employees who work night shifts or work after hours; establish workplace mechanisms to provide support to GBV survivors as part of employee wellness, and prevention programs that help make workplaces safe spaces for all women.

Newton-King assured the protestors she would address their demands in seven days. But a lot can happen in seven days. Will there be more crimes in the meantime? How many more will be raped and killed in South Africa by then?

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How LinkedIn Is Looking To Help Close The Ever-Growing Skills Gap

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As the job market has evolved, so too have the skills required of seekers. But when 75% of human resources professionals say a skills shortage has made recruiting particularly challenging in recent months, it would appear as though the workforce hasn’t quite kept pace. Now LinkedIn is stepping in to help close the gap.

On Tuesday, the professional social network announced the launch of a “Skills Assessments” tool, through which users can put their knowledge to the test. Those who pass are given the opportunity to display a badge that reads “passed” next to the skill on their profile pages, a validation of sorts that LinkedIn hopes will encourage skills development among its users and help better match potential employees with the right employers.  

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“We see an evolving labor market and much more sophistication in how recruiters and hiring managers look for skills. … We also see a changing learning market,” says Hari Srinivasan, senior director of product management at LinkedIn Learning. “The combination of those two made us excited about changing our opportunity marketplace to make the hiring side and the learning side work better together.”

So how exactly does it work? Let’s say a user wants to showcase her proficiency in Microsoft Excel. Rather than simply listing “Excel” in the skills section of her profile, she can take a multiple-choice test to demonstrate the extent to which she is an expert.

If she aces the test, not only will a badge verifying her aptitude will appear on her profile, but she will be more likely to surface in searches by recruiters, who can search for candidates by skill in the same way they might do so by college or employer. If she fails, she can take the test again, but she’ll have to wait a few months—plenty of time to develop her skillset.   

The tool has been in beta mode since March, and while just 2 million people have used it—a mere fraction of LinkedIn’s 630 million members—early results seem promising. According to LinkedIn, members who’ve completed skills assessments have been nearly 30% more likely to land jobs than their counterparts who did not take the tests.

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“This has been a really good way for members to represent what they know, what they are good at,” says Emrecan Dogan, LinkedIn group product manager.

While new to LinkedIn, the practice of assessing candidates’ skills has been a standard among hiring managers for decades. But when research commissioned by LinkedIn revealed that 69% of employees feel that skills have become more important to recruiters than education, LinkedIn felt as though this was the time to give job seekers the opportunity to prove themselves from the get-go.

As important as the hard skills that members can put to the test through LinkedIn’s new tool may be, Dawn Fay, senior district president at recruiting firm Robert Half, encourages those on both side of the job search not to forget the importance of soft skills. “You wouldn’t want to rule somebody in or out just based on how they did on one particular skill assessment,” she says.

“Have another data point that you can use, question people about how they did on something and see if it’s something that can feed into the puzzle to find out if somebody is going to be a good fit.”

-Samantha Todd; Forbes

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Economy

Why The High Number Of Employees Quitting Reveals A Strong Job Market

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While recession fears may be looming in the minds of some, new data from the Bureau of Labor Statistics shows that the economy and job market may actually be strengthening.

The quits rate—or the percentage of all employees who quit during a given month—rose to 2.4% in July, according to the BLS’s Jobs Openings and Labor Turnover report, released Tuesday. That translates to 3.6 million people who voluntarily left their jobs in July.

This is the highest the quits rate has been since April 2001, just five months after the Labor Department began tracking it. According to Nick Bunker, an economist at the Indeed Hiring Lab, the quits rate tends to be a reflection of the state of the economy.

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“The level of the quits rate really is a sign of how strong the labor market is,” he says. “If you look at the quits rate over time, it really drops quite a bit when the labor market gets weak. During the recession it was quite low, and now it’s picked up.”

The monthly jobs report, released last week, revealed that the economy gained 130,000 jobs in August, which is 20,000 less than expected, and just a few weeks earlier, the BLS issued a correction stating that it had overestimated by 501,000 how many jobs had been added to the market in 2018 and the first quarter of 2019. Yet despite all that, employees still seem to have confidence in the job market.Today In: Leadership

The quits level, according to the BLS, increased in the private sector by 127,000 for July but was little changed in government. Healthcare and social assistance saw an uptick in departures to the tune of 54,000 workers, while the federal government saw a rise of 3,000.

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The July quits rate in construction was 2.4%, while the number in trade, professional and business services, and leisure and hospitality were 2.6%, 3.1% and 4.8%, respectively. Bunker of Indeed says that the industries that tend to see the highest rate of departuresare those where pay is relatively low, such as leisure and hospitality. An unknown is whether employees are quitting these jobs to go to a new industry or whether they’re leaving for another job in the same industry. Either could be the case, says Bunker.

In a recently published article on the industries seeing the most worker departures, Bunker attributes the uptick to two factors—the strong labor market and faster wage growth in the industries concerned: “A stronger labor market means employers must fill more openings from the ranks of the already employed, who have to quit their jobs, instead of hiring jobless workers. Similarly, faster wage growth in an industry signals workers that opportunities abound and they might get higher pay by taking a new job.”

Even so, recession fears still dominate headlines. According to Bunker, the data shows that when a recession hits, employers pull back on hiring and workers don’t have the opportunity to find new jobs. Thus, workers feel less confident and are less likely to quit.

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“As the labor market gets stronger, there’s more opportunities for workers who already have jobs. So they quit to go to new jobs or they quit in the hopes of getting new jobs again,” Bunker says. He also notes that recession fears may have little to do with the job market, instead stemming from what is happening in the financial markets, international relations or Washington, D.C.

So what does the BLS report say about the job market? “Taking this report as a whole, it’s indicating that the labor market is still quite strong, but then we lost momentum,” Bunker says. While workers are quitting their jobs, he says that employers are pulling back on the pace at which they’re adding jobs. “While things are quite good right now and workers are taking advantage of that,” he notes, “those opportunities moving forward might be fewer and fewer if the trend keeps up.”

-Samantha Todd; Forbes

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