Member Article

On 27 March 2020, the Minister of Mineral Resources and Energy (the “Minister”) published the Amendments to the Mineral and Petroleum Resources Development Regulations (“MPRDA Regulations”) for implementation under GNR.420 inGovernment Gazette43127 (the “Amended Regulations”). The publication of the Amended Regulations follows the publication of the draft amendments to the MPRDA Regulations for comment on 28 November 2019 (“Draft Amendments”).

Some of the salient features of the Amended Regulations are noted below.

Definition of “interested and affected persons”

Section 10 of the MPRDA requires consultation of interested and affected parties. The MPRDA Regulations previously defined an “interested and affected person” as “a natural or juristic person with a direct interest in the proposed or existing operation or who may be affected by the proposed or existing operation”. The Draft Amendments provided pointed guidance to whom such a person might be by including an open-ended list of potentially interested and affected persons. This list included “any other person (including on adjacent and non-adjacent properties) whose socio-economic conditions may be directly affected by the proposed prospecting or mining operation” (the “Everyman Provision”).

This amendment prefigured the potential exclusion of petroleum-related operations and the Amendment Regulations have confirmed this by the express inclusion of the phrase “prospecting or mining” twice in the chapeau of the amended definition. The MPRDA, in its current form however, still regulates the upstream petroleum industry and the Draft Upstream Petroleum Resources Development Bill, 2019 which was published for comment on 24 December 2019 to amend the MPRDA to move the regulation of the upstream petroleum industry into a separate statute has not been passed by Parliament.

We also note that, although the amended definition of “interested and affected persons” does not fundamentally revise the jurisprudence on consultation, the Everyman Provision will likely be the subject of judicial scrutiny in future. It may be necessary to interpret the phrase “directly affected” restrictively in order to avoid an undue burden on the minerals and mining industry. The amended definition also now refers to “mine communities” rather than the narrower concept of “host communities” as was proposed in the Draft Amendments. The definition of “interested and affected persons” in the Amended Regulations, has also been expanded to refer to an increased list of persons as compared to the definition in the Draft Amendments. We point out the typographical error in subparagraph (iii) with the deletion of the phrase “(Traditional and Title Deed owners)” (as included in the Draft Amendments) and the resulting concatenation of the term “Traditional Council”.

Definition of “meaningful consultation”

The term “meaningful consultation” was not previously defined in the MPRDA or MPRDA Regulations. A definition was inserted into the Draft Amendments which referred,inter alia, to how the “engagement” of those in the consultation process was to be approached. The concept of an “engagement” has been replaced in the new definition of “meaningful consultation” with the requirement for the applicant to have “facilitated” the “participation” of the landowner, lawful occupier or interested and affected party. Regulation 3A provides that “meaningful consultation” is to be carried out in terms of the Environmental Impact Assessment Regulations, 2014 (“EIA Regulations”) which set out the process for public participation for relevant environmental approvals. In the Draft Amendments, Regulation 3A referred only to “consultation” and not to “meaningful consultation”. In other words, the Amended Regulations now link the concept of “meaningful consultation” directly to EIA public participation processes.

Further, we note that the Amended Regulations provide that the office of the Regional Manager “may participate in the meaningful consultation process by the applicant, as an observer, to ensure that the consultation by the applicant is meaningful in accordance with these regulations”. It is not clear whether this would lead to a fettering of discretion, or whether it would mean that if the Department of Mineral Resources and Energy (“DMRE”) participated in the public participation process, the grant of such environmental approvals would constituteprima facieproof of “meaningful consultation”.

It remains to be seen how this will be dealt with in practice. In our view, the concept of “meaningful consultation” will still need to be approached by mining companies taking into account judicial interpretation of this term including but not limited to such interpretation by the Constitutional Court in Bengwenyama Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd, which deals with the concept without reference to the EIA public participation process.

Requirement to provide certified copies of authorisations

The Draft Amendments proposed introducing a new requirement that a mining company must provide certified copies of its right or permit in question, environmental authorisation and any relevant authorisations to landowners and lawful occupiers before commencing with operations. This requirement has been removed in the Amended Regulations.

The requirement for the applicant to submit to the Regional Manager proof of service of the notification to commence operations as contemplated in section 5A(c) of the MPRDA in the Draft Amendments, has been retained in the Amended Regulations.

social and labour plans

The Amended Regulations amend regulation 42 of the MPRDA Regulations pertaining to the submission of a social and labour plan (“SLP”), to make provision for the Regional Manager to refer an SLP back to the applicant with proposals within 60 days of receipt of the SLP. This also requires that the revised SLP must be re-lodged within a period specified by the Regional Manager, which may not exceed 60 days. The Draft Amendments did not contemplate a time period within which the Regional Manager was required to refer an SLP to an applicant. This is to be commended as it is likely to encourage more expedient processing of SLP approvals by the DMRE.

As was proposed in the Draft Amendments, the Amended Regulations include an obligation on an applicant to consult meaningfully with mine communities and interested and affected persons on the contents of the SLP to ensure that it addresses the relevant needs and is aligned to the updated Integrated Development Plans. This must happen within 180 days from the date of receiving notification of acceptance for a mining right from the Regional Manager. This process must take place in accordance with the process prescribed in the EIA Regulations.

Regulation 45 has been amended to require the holder of a mining right to convene a minimum of three meetings per annum with mine communities and interested and affected persons to update these stakeholders about the progress made with the implementation of the approved SLP. The outcomes of these meetings must form part of the annual report. This requirement was not previously proposed in the Draft Amendments.

As was proposed in the Draft Amendments, the Amended Regulations prescribe that a mining right holder must publish the approved SLP in English and one other dominant official language commonly used in the mine community within 30 days of approval on the mining company’s website, hard copies must be made available in local libraries, municipal offices, traditional council offices and the availability and content of the approved SLP must be announced, in local radio stations and local newspapers.

As was proposed in the Draft Amendments, the Amended Regulations clarify that the review of a SLP every five years from the date of approval of the SLP may be initiated from the fourth year of the SLP and must be reviewed in “meaningful consultation” with mine communities and interested and affected persons. As discussed under the definition of “meaningful consultation” above, it appears that such consultation would now need to take place under the EIA Regulations, which we do not understand to have been the intended meaning.

Labour sending areas

“Labour sending areas” has now been defined as “a local municipality in the Republic of South Africa from which a majority of mineworkers are from time to time permanently resident”. This definition of “labour sending areas” differs from the definition which was proposed in the Draft Regulations (“areas from which a majority of mineworkers both historical and current, are or have been sourced”).

Repeal of environmental regulation provisions

As was proposed in the Draft Amendments, the Amended Regulations repeal regulations 48 – 55 of the MPRDA Regulations. The reason for the repeal is that the topics dealt with in these regulations have since been incorporated into the National Environmental Management Act, 1998 (“NEMA”) and the EIA Regulations.

Closure requirements in MPRDA Regulations retained

As was proposed in the Draft Amendments, Regulations 56, 57, 58, 59, 61 and 62 have been retained and have been slightly amended to require mining right holders to prepare the various closure reports in accordance with the provisions of NEMA, the Financial Provision for Prospecting, Exploration, Mining or Production Operations, 2015 and EIA Regulations.

Section 52 process

Section 52 requires mining companies to notify the Minister, in a prescribed manner, if prevailing economic conditions cause the profit to revenue ratio of the relevant mine to be less than 6% on average for a continuous period of 12 months or if any mining operation is to be scaled down or to cease with the possible effect that 10% or more of the labour force or more than 500 employees, whichever is the lesser, are likely to be retrenched in any 12-month period. Up until now, no such format was prescribed.

As was proposed by the Draft Amendments, the Amended Regulations set out a template to be completed by mining companies and impose an obligation on mining companies to lodge the prescribed section 52 notice after consultation with registered trade union/s, affected employees or their representatives. The requirement for mining companies to submit the prescribed section 52 notice within seven days after consultation with registered trade union/s, affected employees or their representatives has been removed.

changes to section 54 processes

The proposed changes to the section 54 process that were contemplated in the Draft Amendments have not been included in the Amended Regulations.

new procedures for lodging internal appeals

Section 96(1)(a) of the MPRDA provides that appeals of decisions of the Regional Manager may be made to the Director-General (“DG”) and of decisions of the DG to the Minister. The current regulation 74 provides that an appellant must lodge the written notice of appeal with the DG or the Minister as the case may be and the notice must state clearly actions appealed against and grounds of appeal. As was proposed in the Draft Amendments, the Amended Regulations propose a new appeals procedure.

The Draft Amendments did not recognise the distinction between appeals submitted in terms of section 96(1)(a) and section 96(1)(b) of the MPRDA and proposed that appeals against the decision of the Regional Manager be made to the Minister. In terms of the Amended Regulations, an appellant is required to lodge, at the Regional office, a written notice of appeal to the Minister or the DG, as the case may be. An appellant is required to serve in terms of section 97 of theMPRDA, a copy of the notice of appeal on any person whose rights may, in the opinion of the appellant, be affected by the outcome of the appeal and who must be listed in the notice of appeal, and in writing inform such person of such person’s rights in terms of subregulation (9) and notify the DG or Minister, as the case may be, that a notice of appeal has been lodged at the Regional office and submit a copy of such notice to the DG or Minister, as the case may be.

The Draft Amendments proposed that an appeal be lodged within 30 days after the appellant has become aware of the decision or should reasonably have become aware of the administrative decision. The Amended Regulations provide that the notice of appeal must be submitted within 30 days of the date of the appellant becoming aware of the decision in respect of which the appeal is lodged. This is consistent with section 96(1) of the MPRDA which provides that any person who is aggrieved by a decision in terms of the MPRDA may appeal within 30 days of becoming aware of the administrative decision.

The Minister is a competent authority to approve environmental authorisation in respect of mining operations in terms of section 24C(2A) of NEMA. The Minister of the Environment, Forestry and Fisheries (“Minister of Environment”) is a competent appeal authority in relation to the decisions of the Minister in relation to approval of environmental authorisations in terms of 43(1A) of NEMA. A situation may therefore arise where appeals are lodged with a Regional Manager and the Minister of the Environment relating to the same prospecting or mining operations in accordance with the MPRDA and NEMA respectively and may therefore necessitate coordination. Regulation 74(15) provides that the Minister will use the Minister’s best endeavours to arrange with the Minister of Environment that if their respective departments receive separate appeals relating to decisions taken in respect of the same proposed prospecting, mining, exploration or production operation, that a copy of an appeal in terms of section 96(1) will be sent to the Minister of Environmental Affairs by the DMRE and that the Minister of Environment will furnish a copy of an appeal lodged in terms of section 43(1A) of NEMA to the Minister or DG as the case may be. And the DG or Minister and the Minister of Environmental Affairs will co-ordinate the finalisation of both appeals.

Commencement of the Amended Regulations

The Amended Regulations came into operation on the date of publication (27 March 2020).

For further information, please contact:

Lloyd Christie

Natural Resources and Environment Director

[email protected]

+27 82 210 2159

Ntsiki Adonisi-Kgame

Natural Resources and Environment Director

[email protected]

+27 82 382 7232

Edwin Berman

Natural Resources and Environment Senior Associate

[email protected]

+27 82 560 1386