Authors: Peter Leon, Patrick Leyden, Ernst Muller and Amanda Hattingh
Last week StatsSA (South Africa’s official statistics authority) announced that South Africa’s economy contracted by 0.6 per cent during Q3. It is likely to contract further in Q4 as a further round of electricity blackouts occurs as a result of Eskom load shedding. The economy’s current travails are mainly driven by a contraction in the mining, manufacturing and transport sectors. The mining sector, in particular, contributed 6.1 per cent less in this quarter to the country’s Gross Domestic (GDP) Product following a decrease in production of platinum group metals, coal and iron ore.
StatsSA’s announcement followed that of the International Monetary Fund (IMF) in its Article IV Mission to South Africa on 25 November 20191 that South Africa’s medium term growth outlook remained subdued. The IMF explained this was largely due to stagnant private sector investment and exports coupled with declining productivity. This dearth of investment (both foreign and local) is in turn driven by a lack of reform to address weaknesses in the business climate, including regulatory constraints, labour market rigidities and inefficient infrastructure.2
Authors: Peter Leon, Patrick Leyden and Matthew Burnell
1. RELEVANT AUTHORITIES AND LEGISLATION
1.1 WHAT REGULATES MINING LAW?
The mineral resources sector is primarily regulated by statute and in terms of the Mineral and Petroleum Resources Development Act, 28 of 2002 (MPRDA).
Black economic empowerment (BEE) in the mining industry is regulated under the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (Mining Charter III). Mining Charter III came into force on 1 March 2019 and significantly increased BEE threshold requirements in respect of ownership, procurement and employment equity. To understand the extent of the BEE obligations for South Africa’s mining industry, regard must also be had to the Implementation Guidelines for the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (Guidelines), which the Minister of Mineral Resources and Energy (Minister) published on 19 December 2018.
In addition, prospecting and mining activities are regulated by various environmental and health and safety laws which are considered in more detail in section 9.
Authors: Silke Goldberg, Ben Rubinstein and Dr Matthew Burnell
In a 2019 global survey, 1,250 CEOs rated environmental / climate change risk the single biggest threat to business growth.1
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Author: Dr MATTHEW BURNELL
We were told that the carbon tax would come into effect from 1 June 2019. However, as the date drew nearer it seemed unlikely as the Carbon Tax Bill had not been signed by the President, the regulations needed to implement the Act were not finalised, the conflicts between the Bill and the proposed climate change legislation had not been resolved and, in fact, the greenhouse gas emission levels were well below predicted levels due to a sluggish economy. Despite these concerns the President signed the Bill and confirmed that the Act would come into effect as planned. Government lived up to their promise.
Since then, the practicalities of trying to implement, budget and cater for the tax are becoming a reality for many companies. On their behalf, business and industry associations are expressing opposition to the tax for the grounds set out above. National Treasury has remained resolute in its decision to implement the tax, indicating that the concerns mentioned will be resolved by the time the tax is payable.
Author: Dr Matthew Burnell
We have recently come across decisions made by Regional Managers within South Africa’s Department of Mineral Resources (“DMR”) in terms of sections 24P (Financial provision for remediation of environmental damage) and 28 (Duty of Care) of the National Environmental Management Act (“NEMA”). The Regional Manager does not have the requisite authority to make decisions in terms of these sections and, as a result, any such decisions are unlawful and can be challenged and overturned or (in certain instances) revoked.
Section 24P – Financial provision for remediation of environmental damage
Section 24P regulates financial provision for remediation of environmental damage arising from prospecting or mining activities. Prior to 2 September 2014, financial provisioning was regulated by section 41 of the Minerals and Petroleum Resources Development Act (“MPRDA”) read with regulations 53 and 54 of the MPRDA Regulations. These sections and regulations requires that a prospecting / mining right applicant make financial provision for the rehabilitation of negative environmental impacts arising from their mining activities. If the right holder fails to fulfil their remediation obligations in terms of the Environmental Management Plan / Programme, the DMR could implement these obligations using the financial provision.