Presentation to Parliamentary Portfolio Committee on Pending Legal Cases and lessons Learned - PowerPoint Presentation

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Presentation to Parliamentary Portfolio Committee on Pending Legal Cases and lessons Learned from decided Court Cases Related to Mining Legislation

Presented By:ADVOCATE THABO MOKOENA14 November 2018

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Presentation Outline:

Update on pending and recently decided cases

Aquila Steel v ZIZA, PAMDC & Others

Treasure the Karoo Action Group v DMR & DEA

Chamber of Mines & Scholes (Mining Charter Cases)Saamwerk Soutwerke v SA Soutwerke & DMR Maledu & Others v IBMRDuduzile BaleniMabola Protected EnvironmentMining Forum South AfricaHelen Susman FoundationSibanye PlatinumLessons Learnt

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Update on Pending and Recently Decided Cases

Aquila Steel v ZIZA Ltd Pan African Mining Development Company (PAMDC)

Matter relates to a dispute between Aquila, ZIZA and its successor PAMDC regarding overlapping prospecting rights in the Northern Cape.

ZIZA applied for conversion of its unused older rights in 2005 and was granted same in 2008.

Meanwhile Aquila applied afterwards but was granted a prospecting right before 2008, albeit it was second in line.During 2016, the High Court ruled in favour of Aquila and found that the ZIZA application was defective and should have been refused.In 2017, the Supreme Court of Appeal (“SCA”) overturned this decision in favour of ZIZA and ruled that the Aquila application could not have been granted whilst the ZIZA application was pending.Matter was heard in August 2018 by the Constitutional Court and judgment has been reserved.3

Update on Pending and Recently Decided Cases

continued…Treasure the Karoo Action Group (“TKAG”) & Stern NO v Department of Mineral Resources (“DMR”).

In reaction to public concerns about hydraulic fracturing in South Africa, both applicants sought to review the Petroleum Exploration and Production Regulations promulgated in 2015; primarily on the bases that its promulgation was procedurally unfair and that the Minister of Mineral Resources does not have authority to promulgate the regulations under the Mineral and Petroleum Resources Development Act (“MPRDA”).

Stern NO succeeded in the Eastern Cape High Court but TKAG’s application was dismissed by the Gauteng High Court, Pretoria; where the latter found that the Minister of Mineral Resources was authorized to promulgate the regulations and that its promulgation was rational.

Both matters will be consolidated and heard by the Supreme Court of Appeal during next year.4

Update on Pending and Recently Decided Cases

continued…

Chamber of Mines (now Minerals Council of South Africa (“MCSA”) & Scholes (“Mining Charter Litigation”)

As previously reported, both applicants, during 2015, sought orders to perpetuate the benefit of continuing consequences of previous empowerment deals throughout the life of mine and to further seek declaratory orders as to the legal status of the 2004 and reviewed 2010 Mining Charter.

In March 2018 the High Court held in favour of MCSA and found the “once empowered always empowered’ principle to be applicable.It also noted that the Charter is not legally enforceable to the extent that the MPRDAs enforcement measures cannot be invoked upon non-compliance.DMR applied for leave to appeal the judgment.Application for Leave to Appeal pending.Meanwhile Scholes’s attempt to consolidate his matter with the MCSA application failed and he was further ordered to join all relevant parties in his matter which the court held to be different and separate from the MCSA matter.

The 2017 Mining Charter litigation had meanwhile become moot subsequent to the publication of the 2018 Mining Charter.

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Update on Pending and Recently Decided Cases

continued…

Saamwerk

Soutwerke (“Saamwerk”) v SA Soutwerke (“SAS”) & DMRIn 2011, the SCA held that a mining right granted by the DMR to Saamwerk Soutwerke (“Saamwerk”) was lawful and that SA Soutwerke (“SAS”) operated on a invalid / fraudulent permit.The Directorate of Public Prosecutions (“DPP”) investigated the matter but declined o prosecute.

The case attracted wide media attention due to SASs political affiliation in the Northern Cape.

The DMR successfully defended a separate civil claim by

Saamwerk

against it and SAS to an amount of R35 million in both the High Court and the SCA.

The SCA held that DMR was not liable but that SAS was liable for payment of damages since it should have been aware that its permit was fraudulent.

Pursuant to the DPPs decline to prosecute,

Afriforum

has shown interest to institute a private prosecution.

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Update on Pending and Recently Decided Cases

continued…

Maledu

& Others v

Itireleng Bakgatla Mineral Resources (“IBMR”) & AnotherIBMR is the holder of a mining right on certain land in the North West Province.It entered into a surface lease agreement with the Community following a Tribal Council ResolutionWhen mining was to commence, certain members of the Community felt aggrieved about the loss of their land and refused access to the company.IBMR successfully applied for an eviction order in the High Court.The Constitutional Court set the eviction order aside and held IBMR should have exhausted the provisions of section 54 of the MPRDA to resolve the dispute.

The Court did not set the mining right aside but held that both rights enjoy statutory protection.

Section 54 plays important role in balancing the interest of landowners and lawful occupiers and mining right holders.

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Update on Pending and Recently Decided Cases

continued…

Duduzile

Baleni

& Others v DMR & OthersDuring 2016, the applicant instituted legal proceedings In the Gauteng High Court in Pretoria.Applicant seeks a number of declaratory orders to the effect that Minister of Mineral Resources is not permitted to grant mining rights in respect of tribal land without consent of tribal authority.Declaratory orders seek to make compliance with the Interim Protection of Informal Land Rights Act (“IPILRA”) compulsory.The Department opposes the application on the basis that the state is the custodian of the nation’s mineral resources as per the MPRDA.The MPRDA provides for consultation and not consent.

The application was heard in April 2018 and judgment is awaited.

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Update on Pending and Recently Decoded Cases

continued… Mabola

Protected Environment

Various statutory authorisations were issued by the Ministers of Environmental Affairs (“DEA”), DMR and the relevant MEC in Mpumalanga Province to allow

Atha Africa Ventures to mine for coal in the Mabola Protected Environment.A permission granted jointly by the Ministers of DMR and DEA in 2016 was set aside by the High Court on 8 November 2018.The Court held that the Ministers did not consult with interested and affected parties as provided for by the Promotion of Administrative Justice Act.The Court remitted the matter to the Ministers to follow a process compliant with PAJA.

DMR and DEA are yet to decide whether to appeal the whole or part of judgment or not.

The matter is therefore pending.

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Update on Pending and Recently Decided Cases

continued…Helen

Suzman

Foundation v Various Organs of State

In December 2017, the applicant instituted litigation in which it seeks various orders against the State regarding state capture allegations.The Optimum / Tegeta mining rights awards is, amongst others, the subject of contention in relation to which the applicant seeks orders.The Department has filed a record of proceedings in relation to the matters relevant to the above.Matter pending.10

Update on Pending and Recently Decided Cases

continued…

Mining Forum South Africa (“MFSA”)

During 2018, MFSA instituted legal proceedings in the High Court against, amongst others,

Lonmin and the Minister of Mineral Resources.MFSA seeks, amongst others, an order declaring that the Minister has acted in breach of his statutory obligations by failing to act against Lonmin for its failure to implement its Social and Labour Plans.The DMR apposed the application which was heard during October 2018.Judgment has been reserved.Matter pending

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Update on Pending and Recently Decided Cases

continued…Sibanye Platinum v DMR (s54 Litigation)

During 2016 / 2017 the Mine Health and Safety Inspectorate issued a number of section 54 notices against Sibanye Platinum (Rustenburg Operations).

As from 2017 to date, Sibanye Platinum has issued summons to the amount in excess of R35 million against DMR for damages as a result of a stoppages caused by the s54 notices.

DMR filed notices to defend these claims and has also filed its Pleas.The claims remain pending.12

LESSONS LEARNT

Regulatory certainty

Previous decided cases such as

Mining Charter litigation

show that appropriate amendments to legal instruments can address gaps and to maintain legal certainty.The Reviewed Mining Charter and implementation guidelines offers a ideal opportunity to achieve this objective.Obtaining clarity on complex legal issues such as interpretation of various provisions of the MPRDA, often necessitate appeals to the highest court.The pending Aquila judgment may provide clarity on some of the above matters which was also the subject of previous court cases such as Palala Resoucres and Mawetse.

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LESSONS LEARNT continued…

Communities

Mining Charter litigation

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Baleni and Maledu reveal the difficulties in finding the balance between mining and community interests.Consultation with and identification of rightful community representatives remain problematic.Maledu provides valuable guidance as to the importance of section 54 as a mechanism to facilitate conflict resolution and negotiations between communities and mining companies.Above litigation, however, also highlights the urgent need to adequately capacitate the DMR to execute its mandate to transform and grow the sector.

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