23 April 2020 by and Mining & Minerals Alert

Amendments to the MPRDA Regulations published for implementation

On 27 March 2020, the Minister of Mineral Resources and Energy (Minister) published, for implementation, the Amendments to the Mineral and Petroleum Resources Development Regulations (Amended Regulations) in Government Notice R420 in Government Gazette 43172.

The Amended Regulations have retained certain features of and made necessary changes to the Draft Amendments to the Mineral and Petroleum Resources Development Regulations, 2019 (Draft Amendments), which were published for public comment on 28 November 2019 and are discussed in a previous article written by Cliffe Dekker Hofmeyr. These retentions and noteworthy changes to the Draft Amendments as well as the key amendments to the former Mineral and Petroleum Resources Development Regulations (MPRDA Regulations) published in terms of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) are set out below.

Consultation obligations

The Amended Regulations have included a definition for “mine community” which refers to communities where mining takes place, major labour sending areas or adjacent communities within a local municipality, metropolitan municipality or district municipality. This definition is used in the substituted definition for “interested and affected persons” in the Amended Regulations. However, we note that the definition is not aligned with the definition of “community” in the MPRDA, nor with the definition of “host community” in the Mining Charter, which may cause confusion.

The original MPRDA Regulations’ definition of “interested and affected persons” referred to natural or juristic persons 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. As previously mentioned, the Draft Amendments expanded upon this definition of “interested and affected persons” to refer specifically to host communities, landowners (both traditional and title deed owners), traditional authorities, land claimants, lawful land occupiers, holders of informal rights, the Department of Agriculture, Land Reform and Rural Development, any person (including on adjacent and non-adjacent properties) whose socio-economic 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. This expanded definition has been substituted in the Amended Regulations for an even wider definition with whom applicants for prospecting rights, mining rights and mining permits must consult. The revised definition now includes the newly defined term of “mine communities” and further includes the Department of Co-operative Governance and Traditional Affairs, the Department of Human Settlements, Water and Sanitation as well as “civil society” which has not been defined and is therefore extremely broad.

The Amended Regulations have retained the definition of “meaningful consultation” that was included in the Draft Amendments with a minor amendment. This definition envisages an applicant in good faith facilitating participation in such a manner that reasonable opportunity is given to landowners, lawful occupiers or interested and affected parties in respect of the land subject to the application to provide comments about the impact the prospecting and mining activities would have to his or her right of use of the land and that this should be done by availing all relevant information pertaining to the proposed activities, enabling these parties to make an informed decision regarding the impact of the proposed activities. Unlike in the Draft Amendments, the definition of “meaningful consultation” is now used throughout the Amended Regulations.

The new regulations proposed under the Draft Amendments regarding the obligation of applicants to consult and of holders to give notice of the intention to commence operations have been amended under the Amended Regulations and now contemplate the following:

  • applicants for a prospecting right, mining right or mining permit are required to engage in meaningful consultation with landowners, lawful occupiers and interested and affected persons and such meaningful consultation shall be conducted in terms of the public participation process prescribed in the Environmental Impact Assessment Regulations (EIA Regulations) promulgated in terms of section 24(5) of the National Environmental Management Act 107 of 1998 (NEMA). The office of the Regional Manager is also authorised to participate in the meaningful consultation process, as an observer, to ensure that the consultation by the applicant is meaningful and in accordance with the Amended Regulations; and
  • in addition to holders of prospecting rights, mining rights and mining permits having to give landowners and lawful occupiers of the relevant land at least 21 days’ written notice of the commencement of operations in terms of section 5A(c) of the MPRDA, they are also required to submit such notice to the relevant Regional Manager within the 21-day period and must include proof of service to the landowner and lawful occupier.

Social and Labour Plans

The Draft Amendments envisaged an expansion to the objectives of social and labour plans (SLP/s) to include mining right holders contributing towards the socio-economic development of labour sending areas as well as areas in which they operate. Under the Draft Amendments, “labour sending areas” were defined as areas from which a majority of mineworkers, both historical and current, are or have been sourced, which was problematic. The definition of labour sending areas has been revised in the Amended Regulations to mean a local municipality in the Republic of South Africa from which a majority of mineworkers are from time to time permanently resident.

In terms of the Amended Regulations, if a Regional Manager wishes to refer a SLP back to an applicant with proposals for amendments, this must be done within 60 days of receipt. The applicant will then need to re-lodge a revised SLP within a period specified by the Regional Manager, which may not exceed 60 days.

Similarly to the Draft Amendments, an applicant for a mining right must, within 180 days of receiving notification of the acceptance of the application from the Regional Manager, consult with various parties on the contents of the SLP to ensure that it addresses the relevant needs and is aligned with updated Integrated Development Plans. In terms of the Draft Amendments, an applicant was required to consult with communities and the relevant structures of the local, district and metropolitan municipalities as defined by the Local Government: Municipal Structure Act 117 of 1998. In terms of the Amended Regulations, an applicant is required to consult meaningfully with mine communities and interested and affected persons, as defined, and the meaningful consultation process prescribed in the Amended Regulations must take place in terms of the public participation process prescribed in the EIA Regulations. The use of the term interested and affected persons here results in an obligation to consult with a much broader audience than previously contemplated which could result in an even lengthier process than what is currently undertaken.

The Amended Regulations have confirmed the need for SLPs to be approved and have expanded on what was stated under the Draft Amendments by providing that approved SLPs are subject to periodic 5-year reviews. As such, subject to the periodic 5-year reviews, an approved SLP will remain valid until a closure certificate has been issued. It was envisaged under the Draft Amendments that any amendments or variations to an approved SLP would require the consent of the Minister in terms of section 102 of the MPRDA. The Amended Regulations have removed this reference to section 102 and therefore, any amendments to approved SLPs will only require the consent of the Minister, without reference to any enabling provision.

In addition to the annual report on compliance with the approved SLP which must be submitted to the relevant Regional Manager, the Amended Regulations have placed further obligations on the holders of mining rights 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 in implementing the approved SLP. The outcomes of these meetings are required to form part of the annual report. Given the broader definition of interested and affected persons, this requirement is likely to be onerous to implement.

The Amended Regulations have also introduced the following new regulations, the majority of which were proposed under the Draft Amendments:

  • the proposed new regulation under the Draft Amendments regarding the obligation of mining right holders to publish approved and consulted SLPs within 30 days of receiving approval has been retained. This publication must be in English and one other dominant official language commonly used within the mine community. The requirement for the approved SLP to be published in “local newspapers” has been removed in the Amended Regulations and the amended avenues for publication are set out in the amended regulation 46A(b);
  • the proposed new regulations regarding the review of a SLP every five years have been retained in the Amended Regulations, albeit with a few minor changes. In terms of these new regulations, a SLP must be reviewed every five years, the first review being five years after the date upon which the SLP was approved. The review process may be initiated from the fourth year of the SLP and shall be done in meaningful consultation with mine communities and interested and affected persons. When reviewing a revised SLP, the Minister must consider past compliance with the approved SLP, an assessment of annual compliance reports, input, comment and reports from the mining right holder, mine community and interested and affected persons and the changing nature of the relevant needs of the mine community as per Integrated Development Plans;
  • the Amended Regulations require that collaboration on approved SLP projects must be transparent, inclusive and based on meaningful consultation with mine communities and interested and affected persons; and
  • any amendment or variation to an approved SLP pursuant to collaboration requires the consent of the Minister.

Repeal of Environmental Regulations

The repeal of all regulations in the former MPRDA Regulations relating to environmental matters has been retained in the Amended Regulations, save for regulations 56 (Principles of mine closure), 57 (Application for closure certificate), 58 (Application to transfer environmental liabilities to competent person), 59 (Qualifications of person regarding transfer of environmental liabilities and responsibilities), 61 (Closure objectives) and 62 (Contents of closure plan), which have been amended.

New regulations relating to section 52 of the MPRDA

The proposed new regulations under the Draft Amendments in relation to the notices to be sent to the Minister in terms of section 52(1) of the MPRDA have been amended under the Amended Regulations. In terms of section 52(1) of the MPRDA, such notices must be sent by mining right holders where (a) prevailing economic conditions cause the profit-to-revenue ratio of a mine to be less than 6% on average for a continuous period of 12 months, or (b) if any mining operation is to be scaled down or to cease with the possible effect that 10% or more of the workforce or more than 500 employees, whichever is the lesser, are likely to be retrenched in any 12-month period.

In terms of the Amended Regulations, a mining right holder must submit a notice contemplated in section 52(1) of the MPRDA to the Minister after the consultation envisaged in section 52(1) has taken place and such notice is required to “contain details of the prior consultation” and include “dates, times, attendance registers, minutes, considerations, proposals, resolutions, agreements, recommendations, reports and records relating to such consultation”. The notice is also required to be accompanied by an affidavit by the holder of a mining right which confirms that “the factors contemplated in section 51(1) or (2) exist”. We note that this should presumably be a reference to the factors contemplated in section 52(1)(a) or (b).

The Amended Regulations no longer refer to the records of consultations in terms of section 189 of the Labour Relations Act 66 of 1995 having to be submitted, nor is there a need for a competent-persons report or a due-diligence report as supporting documents as envisaged under the Draft Amendments. The removal of these requirements is welcomed and will assist in the process not being overburdensome from a timing and cost perspective.

The Draft Amendments contemplated that the Mining and Minerals Development Board (Board) must consult with the holder of the mining right before making recommendations to the Minister. This has been expanded in the Amended Regulations which require the Board to consult meaningfully with the holder of the mining right as well as organised labour, to conduct investigations and to make recommendations to the Minister within 60 days of the referral by the Minister.

The template form provided for section 52(1) notices still contains a provision stating that “the company acknowledges that the Minister may invoke the provisions of sections 52(3)(c), 93, 47, 99 and related provisions to ensure compliance with requirements of section 52”, which is irregular as the applicability of particular sections is a question of law and not something which mining right holders should have to agree to or acknowledge.

New regulations relating to applications for the use of the surface of land contrary to the objects of the MPRDA

The Amended Regulations have retained the proposed new regulations under the Draft Amendments pertaining to applications for Ministerial approval in terms of section 53 of the MPRDA for persons who intend to use the surface of any land in a manner which may be contrary to the objects of the MPRDA or is likely to impede such objects.

Applicants will therefore be required to provide specific information to the relevant Regional Manager as per the form attached to the Amended Regulations which is substantially consistent with the template application form previously published by the Department of Mineral Resources and Energy.

Removal of new regulations relating to section 54 of the MPRDA

The Draft Amendments proposed new regulations regarding the manner in which disputes envisaged in section 54 of the MPRDA should be dealt with, however, these new regulations have not been retained in the Amended Regulations. This is likely due to the fact that the draft regulations envisaged a process which was inconsistent with what is set out in section 54 of the MPRDA and this is therefore positive.

Appeals

As previously stated, the Draft Amendments proposed extensive changes to the former MPRDA Regulations relating to appeals against administrative decisions, many of which were problematic and created uncertainty.

The Draft Amendments failed to make a distinction between appeals against administrative decisions submitted in terms of section 96(1)(a) and 96(1)(b) of the MPRDA and the proposed regulations seemed to only apply to appeals submitted in terms of section 96(1)(a) of the MPRDA. In terms of the Amended Regulations, the specific reference to section 96(1)(a) of the MPRDA has been removed and instead, reference is made to section 96 in general, which ultimately includes appeals in terms of both section 96(1)(a) and 96(1)(b).

The Draft Amendments also failed to provide for the responsibility of the Director-General to adjudicate appeals submitted in terms of section 96(1)(a) of the MPRDA and seemed to rather place this obligation on the Minister. The Amended Regulations have provided clarity in this respect and have accounted for the Director-General where applicable.

In terms of the Draft Amendments, a notice of intention to appeal a decision in terms of section 96(1)(a) of the MPRDA had to be submitted in writing within 30 days of the date of the administrative decision. This had the potential to create problems given that it is common for parties to become aware of an administrative decision to which these provisions apply after a period of 30 days has passed, thereby preventing such parties from appealing against an administrative decision due to no fault of their own. The Amended Regulations have done away with this proposed amendment and require that a notice of appeal be submitted within 30 days of the date of the appellant becoming aware of the decision in respect of which the appeal is lodged.

The proposed new regulations under the Draft Amendments required that a copy of the appeal be submitted to the Minister of Environmental Affairs “for processing in relation to environmental matters in accordance with the procedure set out in section 96(1)(b)”, and that the Minister and the Minister of Environmental Affairs “shall co-ordinate the finalisation of simultaneous appeals in terms of section 96(1)(a) and (b) of the MPRDA respectively affecting the same administrative decision”. This proposed regulation failed to properly distinguish between the types of appeals submitted under section 96(1) and also meant that the Minister of Environmental Affairs would receive a copy of all appeals submitted, regardless of whether the appeal related to an environmental matter or not. The Amended Regulations have provided certainty in this regard through the inclusion of a new regulation 15, which provides that if appeals are received in terms of section 96(1) of the MPRDA and in terms of section 43(1A) of NEMA, that relate to decisions taken in respect of the same proposed prospecting or mining operation, that a copy of the appeal will be sent to the Minister of Environmental Affairs. The Amended Regulations have therefore provided certainty in relation to the instances when the Minister of Environmental Affairs is to be involved in the adjudication of appeals.

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