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Draft Amendments to the Mineral and Petroleum Resources Development Regulations

Fasken
Reading Time 15 minute read
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According to the Draft Amendment Regulations, interested and affected parties are invited to submit written representations on the Draft Amendment Regulations, within 30 days of publication of the notice. The Department of Mineral Resources and Energy has since published a notice on its website stating that taking into account that the public comment period will run over the festive season, and to afford interested and affected parties sufficient time to consider the documents and make their inputs, the Department has extended the public comment period to the end of January 2020.

The Draft Amendment Regulations proposes various amendments to the current Mineral and Petroleum Resources Development Regulations, 2004 ("MPRD Regulations"), which include amongst others amendments concerning consultation with interested and affected persons, social and labour plans and introduces regulations dealing with the lodgment of applications under section 52, 53 and 54 of the MPRDA. The Draft Amendment Regulations also amends the current regulations dealing with internal appeals under the MPRDA and the repealing of regulations relating to environmental matters.

The Draft Amendment Regulations, once finalised, will come into operation on the date of publication in the Government Gazette.

Specific Provisions of the Draft Amendment Regulations

  1. Obligation on the part of the applicant to consult

    Under the Draft Amendment Regulations the definition of “interested and affected persons” has been amended to mean a natural or juristic person or an association of persons with a direct interest in the proposed or existing operation or who may be affected by the proposed or existing operation. These include, but are not limited to Host Communities, Landowners (Traditional and Title Deed owners), Traditional Authority, land Claimants, Lawful land occupier, Holders of informal rights, the Department of Agriculture, Land Reform and Rural Development, any other person (including on adjacent and non-adjacent properties) whose socioeconomic conditions may be directly affected by the proposed prospecting or mining operation, the Local Municipality, and the relevant Government Departments, agencies and institutions responsible for the various aspects of the environment and for infrastructure which may be affected by the proposed project.

    The current definition of ‘interested and affected persons’ provided for in the MPRDA Regulations refers to ‘a natural or juristic person or an association of persons with a direct interest in the proposed or existing operation or who may be affected by the proposed or existing operation’.

    Moreover, the Draft Amendment Regulations proposes the insertion of the term “meaningful consultation”, which means that ‘the applicant, has in good faith engaged the landowner, lawful occupier or interested and affected party in respect of the land subject to the application about the impact the prospecting o mining activities would have to his right of use of the land by availing all the information pertaining to the proposed activities enabling these parties to make an informed decision regarding the impact of the proposed activities’. We note that the definition of “meaningful consultation” has not been used in the Draft Amendment Regulations and only appears in the definition section.

    The Draft Amendment Regulations introduces new regulations which require consultation with landowners, lawful occupiers and interested and affected persons to be conducted in terms of the public participation process prescribed in Chapter 6 of the Environmental Impact Assessment Regulations, 2014, Regulations 39, 40, 41, 42, 43 and 44 ("EIA Regulations")

    Moreover, a holder of a reconnaissance permission, reconnaissance permit, mining permit, prospecting right, exploration right, mining right and production right must give the landowner or lawful occupier of the land and the Regional Manager at least 21 days written notice of his/her intention to commence with the operations. Section 5A of the MPRDA prohibits any person from prospecting or mining on any area without, inter alia, giving the landowner or lawful occupier of the land in question at least 21 days written notice. In terms of the Draft Amendment Regulations such notice must be in writing, state the date and time of entry and be accompanied by certified copies of the right or permit, and the environmental authorisation and any relevant authorisations.  The holder is also required to submit proof of service of the notice to the office of Regional Manager in whose region the right/permit relates.

  2. Social and Labour Plans

    The Draft Amendment Regulations proposes the insertion of a definition of “labour sending areas”.  According to the Draft Amendment Regulations ‘labour sending areas’ means ‘areas from which a majority of mineworkers both historical and current, are or have been sourced’.

    The Draft Amendment Regulations proposes amending Regulation 41(c) of the MPRD Regulations by including ‘labour sending areas’.  Therefore, Regulation 41(c) will read as follows:

    The objectives of a social and labour plan are to ensure that holders of mining rights contribute towards the socio-economic development of the areas in which they are operating as well as labour sending areas.’ 

    We note that currently, Regulation 46(c)(ii) and (iii) of the MPRD Regulations requires local economic development programmes to include the impact that the mine would have in the local and ‘sending communities’ and the projects to be in line with the Integrated Development Plans (IDPs) of the areas where the mine operates and ‘major sending areas’. The words ‘sending communities’ and ‘major sending areas’ are not defined in the MPRD Regulations. 

    The Draft Amendment Regulations make it clear that mining right holders will be required to demonstrate steps to uplift areas from which they source workers (historically and currently), not just where they operate.

     

    The Draft Amendment Regulations also introduces clear timelines on which social and labour plans (SLPs) should be submitted and when consultations with communities and other ‘relevant structures’ over the SLPs need to be held. Under Draft Amendment Regulations, applicants must within a period of 180 days from the date of receipt of the notification of acceptance of his/her mining right application from the Regional Manager, consult with communities and the relevant structures on the contents of the SLP to ensure it addresses the relevant needs of such communities and is aligned to the updated IDPs of such structures. The term ‘relevant structures’ is defined as referring to a local municipality, district municipality and metropolitan municipality as defined by the Local Government: Municipal Structures Act 117 of 1998.

    If a Regional Manager refers a SLP back to an applicant with proposals for amendments, the revised SLP must then be re-lodged within a period specified by the Regional Manager, which period may not exceed 30 days.

    The consultation process on the contents of the SLP will have to be conducted in terms of the public participation process prescribed in EIA Regulations. .

    The Draft Amendment Regulations make is clear that amendments to approved SLPs will require the consent of the Minister in terms of section 102 of the MPRDA.

    Mining right holders will be required to publish consulted and approved SLPs in English and one other dominant official language commonly used within the mine community, within 30 days of approval using the avenues set out in the Draft Amendment Regulations, which include, the company websites, local newspapers, hard copies to be placed in local libraries, municipal offices, traditional authority offices, company/mine offices and announcements may be made, where feasible, in local radio stations and relevant news outlets about the availability and content of the approved SLP. 

    According to the Draft Amendment Regulations SLPs lodged with the Regional Manager and approved by the Minister on granting of the mining right will need to be reviewed every five years from date of such approval.  The review process may be initiated from the fourth year of the SLP and shall be done in consultation with affected mine communities, adjacent communities, labour sending areas, local or district municipality. When reviewing the SLP, the Minister will be required to take into account the extent of the holder’s compliance with the approved SLP, assessment of annual reports submitted by the mining right holder, input, comment and reports from the affected communities and relevant structures, the changing nature of the relevant needs of the affected communities as per the IDP’s of the relevant structures.

    The Draft Amendment Regulations also proposes new regulations regarding collaboration on SLPS.  According to the Draft Amendment Regulations collaboration on approved SLP projects must be transparent, inclusive and based on consultation with all stakeholders.

  3. Regulation on the prescribed format for section 52 notices

    In terms of section 52(1) of the MPRDA, the holder of a mining right must, after consultation with any registered trade union or affected employees or their nominated representatives where there is no such trade union, notify the Minister in the ‘prescribed manner’ where prevailing economic conditions cause the profit to revenue ratio of the relevant mine to be less than six per cent 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.

    The current MPRD Regulations do not prescribe the form or content in which a section 52 notice is to be made to the Minister. 

    The Draft Amendment Regulations introduces new regulations dealing with the manner and form of the application in which a notice contemplated in section 52(1) of the MPRDA is to be made to the Minister. The Draft Amendment Regulations set out a draft template (Section 52(1) Notice) to be completed by mining companies.

    According to the Draft Amendment Regulations, a mining right holder must submit a notice contemplated in section 52(1) of the MPRDA to the Minister within 7 days from the date after consultations with registered trade union/s, affected employees or their nominated beneficiaries are concluded. The notice must contain details of prior consultations with registered trade unions, affected employees or their nominated representatives as contemplated in section 52(1) of the MPRDA.  The details of prior consultations must include dates, times, attendance registers, minutes, considerations, proposals, resolutions, agreements, recommendations, reports and records relating to consultations held with registered trade unions, affected employees or their nominated representatives before the notice is submitted to the Minister. The notice must also be accompanied by various supporting documents and information set out in the Draft Amendment Regulations.

    Moreover, the Minister will be required, with 7 days of receipt of the notice, to refer the matter to the Mining and Minerals Development Board for consideration and recommendations.  The Mining and Minerals Development Board must in turn, consult with the relevant holder of the mining right, investigate and make recommendations to the Minister within 60 days of the referral by the Minister.

  4. Regulations on the prescribed format for section 53 applications

    Section 53(1) of the MPRDA provides that any person who intends to use the surface of any land in any way that may be contrary to any object of the MPRDA, or which is likely to impede any such object, must apply to the Minister of Mineral Resources (the Minister) for approval. Section 53 of the MPRDA provides a mechanism for ensuring that, inter alia, the mining of mineral resources is not detrimentally affected through the use of the surface of land and which may, for example, result in the sterilisation of a mineral resource.

    The current MPRDA Regulations do not prescribe the form or content in which a section 53 application is to be made to the Minister.

    The Draft Amendment Regulations introduces new regulations dealing the form and content in which a section 53 application is to be made to the Minister.  The Draft Amendment Regulations introduces a template for section 53 applications and the specific information that applicants will need to provide as part of a section 53 application. The information required include amongst others, the type of approval applied for, motivation for the proposed use, which motivation must include information on its relevance to the spatial development framework of the local municipality, and whether the holders of prospecting, mining, exploration or production rights within a 2 kilometre radius of the application area been identified and consulted and whether holders of the aforesaid rights have objected to the proposed land development on the basis of its incompatibility with their interests.

  5. Regulation on the procedure contemplated in section 54 of the MPRDA

    Section 54 of the MPRDA provides for a mechanism to resolve disputes between landowners or lawful occupiers and mining right holders when the former prevents the latter from commencing with mining operations. That section contemplates the possibility of the owner or lawful occupier of the land refusing to allow the holder to enter the land, placing unreasonable demands in return for access to the land or not being capable of being found.  In such a case the holder must apply for access and the section concerned outlines a procedure that is then to be followed. The section sets out the manner and process that the Regional Manager must follow in attempting to resolve the dispute.

    Draft Amendment Regulations proposes that, a notice contemplated in section 54 must be in writing as per notice template form set out in the Draft Amendment Regulations and must be accompanied by a non-refundable fee of R1 500 per notice. Currently no fee is payable to lodge a section 54 notice.

    Moreover, the Draft Amendment Regulations introduces new regulations regarding how disputes contemplated in section 54 of the MPRDA are to be processed and resolved by the Regional Manager.  We note that the process set out in the Draft Amendment Regulations is inconsistent with the provisions of section 54. 

    According to the Draft Amendment Regulations, the Regional Manager must acknowledge receipt of the notice within 7 days and initiate a negotiation process as contemplated in section 54(3) of the MPRDA.  In this regard, the Regional Manager will be required to:

    • Constitute a negotiation team comprising representation from all affected parties (the applicant, the right holder, representatives of affected communities, traditional leadership etc).
    • Develop Terms of Reference for the negotiation team with clear parameters regarding the role of the team, scope of its work, meeting dates and times and timeframes to resolve the dispute.
    • Require all affected parties to submit all relevant information (documents, agreements etc) that pertains to the dispute.
    • Chair the meetings as per the terms of reference objectively with a view to facilitate a speedy resolution of the dispute.
    • Ensure that the meetings quorate and that every party is represented and mandated.
    • Refer complicated matters to the Deputy Director General, Director General or the Minister where warranted.

    According to the Draft Amendment Regulations, the Regional Manager led process must be concluded within a period of up to 90 days. If a resettlement or compensation related dispute cannot be resolved through the Regional Manager led process, “parties to the dispute may refer the matter to an arbitration or conciliation process in terms of applicable legislation (Arbitration Act and Conciliation Act)”. The referral must be made within 30 days of the decision by the Regional Manager. The conciliation or arbitration process shall be undertaken and concluded within a period of up to 90 days. If a resettlement or compensation dispute cannot be resolved by agreement between the parties, the Regional Manager led process or the conciliation or arbitration process, the aggrieved party may take the dispute to the competent court within 30 days of the arbitration or conciliation award.

    Section 54 of the MPRDA does not require the Regional Manager to constitute a negotiation team, but merely requires the Regional Manager to consider the issues raised by the right holder and the written representations by the owner or the lawful occupier of the land and if the Regional Manager concludes that the owner or lawful occupier has suffered or is likely to suffer loss or damage as a result of the operations,  he or she must request the parties to endeavour to reach an agreement for the payment of compensation for such loss or damage. Moreover, in terms of section 54(4) of the MPRDA if the parties fail to reach an agreement, compensation must be determined by arbitration in accordance with the Arbitration Act, 42 of 1965, or by a competent court.

  6. Internal Appeals

    The Draft Amendment Regulations proposes a number of amendments to the current regulations of the MPRD Regulations dealing with appeals against administrative decisions taken under the MPRDA.

    Internal appeals under the MPRDA are dealt with in section 96 of the MPRDA.  Section 96(1) of the MPRDA provides that, “any person whose rights or legitimate expectations have been materially and adversely affected or who is aggrieved by any administrative decision in terms of the MPRDA may appeal in the prescribed manner to:

    1. the Director-General, if it is an administrative decision by a Regional Manager or an officer; or
    2. the Minister, if it is administrative decision by the Director-General or designated agency.”

    The Draft Amendment Regulations proposes that Regulation 74 of the MPRD Regulations be amended. The proposed amendments under the Draft Amendment Regulations refers to “any person who appeals in terms of section 96(1)(a)”.  Section 96(1)(a) refers to appeals to the Director-General, if it is an administrative decision by a Regional Manager or an officer. The Draft Amendment Regulations seems to only be referring to appeals contemplated in section 96(1)(a) of the MPRDA and seems to exclude appeals contemplated in section 96(1)(b) (an appeal submitted to the Minister where a party wishes to appeal an administrative decision made by a Director-General or the designated agency).  

    It may be that reference to ‘appeals in terms of section 96(1)(a)’ in the Draft Amendment Regulations instead of appeal in terms of section 96 or 96(1) is an error.  If not, this will create uncertainty regarding the manner in which appeals submitted in terms of section 96(1)(b) of the MPRDA will be processed and the time periods applicable thereto.

    Under the Draft Amendment Regulations notice of intention to appeal must be submitted within 30 days of the date of the decision.  The proposed amendment differs to the current MPRDA Regulations which requires any persons who appeals to submit a written notice of appeal within 30 days after he/she has become aware of the or should reasonably become aware of the administrative decision concerned.

    In terms of the Draft Amendment Regulations, the Regional Manager must, within 10 days of receiving the notice of intention to appeal, identify any other person whose rights may, in the opinion of the Regional Manager, be affected by the outcome of the appeal not already listed in the notice of the intention to appeal.  The Regional Manager must then give the appellant contact details of such identified persons and the appellant must without delay serve the notice of intention to appeal on such further identified persons. 

    Upon receipt of the notice of intention to appeal, but not less than 10 days thereafter, the Regional Manager must make all records pertaining to the decision subject to the appeal available to the appellant for inspection and submit a copy to the Minister as well.

    The appellant must then within 15 days after filing a notice of intention to appeal submit the appeal to the Regional Office from which the decision emanates and to all identified persons who may have an interest in the outcome of the appeal and notify the Minister in writing that the appeal has been submitted.  

    Persons affected by the outcome of the appeal will have 30 days from the date of receipt of the appeal notice to submit to the Regional Manager and the appellant a responding statement, whereafter the appellant may submit an ‘answering statement’ within 30 days after having being served with the affected parties’ responding statement.  The appellant must within 10 days of filing of his/her answering statement or the expiry of the period of 30 days, submit to the Minister and the Regional Manager the appeal document with all required annexures, all documentation pertaining to the decisions subject to the appeal, all responding statements received from third parties who may be affected by the outcome of the appeal, if any, and the answering statement by the appellant if any.

  7. Repeal of environmental regulations

The Draft Amendment Regulations propose the repeal of all environmental regulations for mineral development, petroleum exploration and production (regulations 47 to 55, regulations 58 to 60 and regulations 64 to 73), save for regulations 56, 57, 61, and 62 , which deal with mine closure.

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