NEAL Froneman says his blunt outspokenness is not his natural style. “I'm much more, let's call it constructive," he says with a wry smile as we chat on Teams. He is in his office at Sibanye-Stillwater's head office in Joburg. Dressed in his trademark working uniform of a shirt and no tie, everything about Froneman signals a no-nonsense, let's-just-get-on-with-it approach.
“It became clear to me, probably about four or five years ago, that business was trying to be politically correct, and that was sending mixed messages," he says. “We were creating an impression that things were not that bad, when in fact they were very bad.
“I realised the only way to take a clear message to a government that doesn't want to hear bad news was to be outspoken. So yes, it was deliberate, and I must admit, initially I felt very exposed. But we had to start getting the word out there and entice other business leaders to do the right thing."
Froneman is the CEO of South Africa's largest gold mining company and chairs the World Gold Council. Sibanye-Stillwater is the world's largest primary producer of platinum, the second largest producer of palladium and the third largest producer of gold.
When Froneman called BS on the government's denial of its grave failures, the softly-softly tap-dancing relationship between big business and the government came to an abrupt end. “Two years ago, I saw us headed for the abyss of a failed state," he says.
“But the government has now become emasculated. They've lost any ability to make a difference. They've been denuded of capacity. I don't think there's anything the government could implement on its own at the moment. Part of it is through state capture and organisations within the government having lost capacity. But it is also deeply rooted in the government's ideology that does not embrace business and capitalism."
Ironically, however, Froneman says there is an upside to the deep hole South Africa sunk into, because the perilous state of affairs seems to have made the government more receptive to help from the private sector. “There is now a lot more embracing of business. Two years ago, this would not have happened in the way it's happening.
“And, of course, we all know we are coming up to an election and the polls are not showing the ANC to be in a good place. But we are not doing what we are doing to prop up the ANC. We are doing this in the national interest."
The government's change of emphasis began with the public-private structures put in place to tackle Covid-19 “and to ensure that as a small country, we could secure vaccinations", Froneman explains.
“We are now using those same structures for the three initiatives that have been agreed to by the government, which involve business — with regards to crime and corruption, and then also on the energy and logistics side.
“Each of these three focus areas has a committee where both the government and the business sector are represented. I am intimately involved in the collaboration around crime and corruption. We have two workstreams. Jannie Durand, the CEO of Remgro, heads up the judicial workstream. The main aim is to ensure the National Prosecuting Authority has access to skills, especially in data and forensics, and finances. Project Honeybadger will establish a modern forensic laboratory. This depends on some legislation, but that is currently going through parliament."
Crime and corruption
Froneman and Durand lead the crime prevention work stream, which he says is about re-establishing Business Against Crime (BAC) “but on steroids".
He says the various business risk centres — the Banking Association, the Consumer Goods Council and the Minerals Council — do excellent work. BAC will ensure all this intelligence is properly coordinated.
“We work very closely with the Hawks and the SA Police Service. One of our first visible initiatives is to re-establish the 111 number. We are also looking at setting up special courts to address the constraints in the court system. And funded whistleblower protection programmes, because we've seen what happens to whistleblowers.
“It's also important to note that the private security sector is bigger than the SAPS. And they are all members of our crime initiative. If we can coordinate ourselves in the right way, we have a lot of capacity to change what is happening in our country."
Froneman says there has been good collaboration in the energy initiative, with the Energy Council, Eskom and the government working together.
“Like most state functions, this sector has also been denuded of good-quality people. So the first thing business did was to create a resource mobilisation mission fund to pay for good-quality people to go into these organisations to help manage them with technical expertise — by calling up retired electrical engineers, for instance.
“That has worked very well. We've seen good examples of it at Eskom. There is no doubt that load-shedding is becoming less and less, and I believe we will be beyond it within a few years.
“We've also, almost overnight, started privatising the energy-generation sector. The new renewable energy projects in the pipeline will provide six gigawatts of additional electricity. That is going to make a very positive contribution to energy availability. And again, we see that when there is collaboration on common goals and you leave the politics behind, you get good outcomes."
Transport and logistics
In the transport sector, the working committee has been focusing on a new roadmap but also on providing capacity to Transnet and other organisations in logistics.
“It is pleasing to see the people who led to the underperformance of Transnet and the ports being displaced, and the government putting in new leadership at Transnet. An essential element of turning around this sector is also privatising portions of this function because, as we have seen with the energy initiative, when the proper environment is created, the private sector steps up and invests. "
No silver bullet
Froneman says there are no quick fixes and that even with all the excellent work going on, it will be two to three years before these changes start bearing fruit.
He points to some of the longer-term initiatives, such as improving the effectiveness of police stations and modernising the police service, “but that is not something business can do. We have to convince our SAPS colleagues to look at training.
“The wheels of justice grind slowly in a system that works, let alone one that doesn't work. But we've got good ideas and good initiatives, really good backing by business, and we are well-funded. I am prepared to put a lot into this to make it work."
Froneman refers to a “very bad culture" that has taken hold in South Africa.
“Crime and corruption have become accepted as a way of life, and they're not a way of life. We've got to change that culture on the business side; we've got to elevate the thinking from dealing with crime and corruption to becoming anti-corruption.
“That means business, too, has to adopt higher standards because this is not all just pointing fingers at the government. When it comes to corruption on the business side, some in business are party to that."
Poverty and inequality are clearly the biggest issues facing South Africans, says Froneman, and the only way to address them is by creating jobs. And doing that on the massive scale required can only be accomplished by the private sector,
“The biggest inequality is not between the lowest-level worker and a CEO. The biggest inequality is between a person with a job and one without a job," says Froneman.
“I believe that capitalism, done the right way, is the only solution to addressing poverty in South Africa. We have to grow the economy and create jobs, and there's no other mechanism that they've come forward with that can do that other than business and an investor-friendly environment.
“You need a fairly stable environment with power and consistent regulations. Crime and corruption have to be under control. Transport and logistics need to be sorted out. So, you can see why we have chosen these areas to spearhead our collaboration with government."
But it goes beyond this.
“The debate around nationalisation and property and security of tenure has to change. Otherwise, foreign investors are not going to come here. Even just debating implementing a law where you can expropriate someone's property — that is not an investment climate. So, there are so many other things that have to change before business will step up and invest, but it is changing. It is moving in the right direction."
“In my view, the ANC does not deserve to lead our country," says Froneman. “They have failed horribly. Their ideologies are wrong. But when I look around, I don't see a party that can step into the place of the ANC. The DA is not big enough to take on the ANC directly, although it is clear that the Western Cape is much better run than any other province."
Froneman says when we look to the future, coalitions have to work.
“I see several parties that demonstrate good leadership and good values, and while coalitions haven't really worked so far, we need to make them work. That is the only way we will change leadership in South Africa, something we desperately need. What are we doing actually to support these coalitions and help them organise?
“We must stop treating the symptoms; we've got to deal with the root cause of where South Africa is. I don't belong to any political party, but if we want sustainable change in the national interest, we all have to vote and we have to make coalitions work."
Does he believe we can come back from the precipice we find ourselves on?
“Yes, I do. The World Cup is a perfect example of what happens when you leave South Africans to organise themselves. When you leave politics out of it, put the legacy issues aside and look forward, we have excellent skills, and we have a resilience that is second to none.
“We all understand there has to be transformation, but don't regulate it. Let us get on with it. Give us the space and freedom to play the business game like the Springboks were allowed to play the game of rugby.
“If we look forward instead of continuously looking back, and we work in the national interest, we will make a difference."
♦ VWB ♦
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