South Africa’s new Mining Charter has been put to halt, at least for now.
This comes after Minister of mineral resources, Mosebenzi Zwane, last week agreed not to implement the new Mining Charter. Pending the judgment of an urgent interdict by the Chamber of Mines.
The chamber wants to prevent the charter from being enforced before its court application to have the latest version, published on 15 June 2017, reviewed and set aside is heard.
Key to the Mining Charter is an increase in black economic empowerment (BEE) shareholding of all mines from a previous 26% to 30%.
The Mining Charter also requires that 50% of all board members and executive management must be black.
While 70% of all mining goods and 80% of all services in the mining industry must be procured from BEE entities.
In addition, new mining rights are subject to a 1% revenue payment to BEE shareholders prior to any shareholder distribution.
The Mining Charter has been criticised for the lack of consultation between the government and other stakeholders. Including labour and the mining industry.
Zwane has also agreed that. In the event of any breach of the agreement. The chamber can set the urgent interdict application down for hearing on 48 hours’ notice.
And based on the written undertaking. The chamber has acceded to the department of mineral resources’ request for extra time to prepare its answering affidavit to the interdict application. And for the hearing to take place on a later date.
Roger Baxter, CEO, Chamber of Mines commented, “The chamber and the industry are commited to transformation, but it is imperative that meaningful and lasting transformation be undertaken in a way that it ensures the sustainability and growth of the industry.”
Vanessa Jacklin-Levin, partner at Dentons South Africa says, “We currently have two processes running in parallel—an application for an interdict and an application for judicial review.”
The Department of Mineral Resources (DMR) has agreed not to move forward on the implementation of the charter in the meantime.
And both parties have agreed to the interdict application to be heard in September, which will give the department time to file its answering affidavit in opposition to the interdict application.
Several economists have remarked that if the court grants the interdict. Implementation of the charter will remain suspended until the review process is completed.
And If the interdict is not granted. The department could technically go ahead with implementation—but that would be risky as the review would not be complete by then.
It seems unlikely that the department would proceed with implementation of the Charter with the review unconcluded.
The process of judicial review is the chamber’s real goal. And the interdict application is a separate process to obtain interim relief until the review is concluded.
The judicial review is based on section 33 of the Constitution. Which confers rights to just administrative action, and the Promotion of Administrative Justice Act 3 of 2000 (PAJA). Which gives effect to the section 33 rights.
Under the PAJA an application for judicial review must be lodged within 180 days of the applicant’s becoming aware of the decision (which would be 15 June, when the charter was published) or from the date on which internal remedies were exhausted.
And in the normal course. The chamber has until 12 December to deliver its affidavit and notice of motion for the review. But in its interdict application it has asked the court to order that the review must be brought within 60 days of the granting of its interdict application.
“We know that the chamber is going to apply for a review because that is specified in its interdict application,” she says. “We should understand that the review is not a trial—no oral evidence is led, and the court will simply rely on affidavits from the various parties and heads of argument on the law.”
What will the review achieve? The court could declare invalid the minister’s decision to promulgate the charter on any of various grounds set out in section 6 of the PAJA.
If so. It could order him to reconsider the decision or possibly even replace it with the court’s own decision.
The PAJA also allows for an order of damages (which may form part of separate proceedings). If the court does find that the charter is the result of unjust administrative action, says Jacklin-Levin, it will most likely order the minister to reconsider the decision and begin the process of consultation all over again.
Jacklin-Levin, “Our jurisprudence indicates that the court would substitute its own decision only in exceptional circumstances, and an award of damages in such a matter seems highly unlikely,” she says. “But while the review process is likely to be lengthy, and will further delay a new Mining Charter, we should all welcome this evidence that our constitutional system is working – that is, providing a way for disputes such as this to be ventilated and resolved. It’s very important that the Mining Charter receives buy-in from all stakeholders, or it simply will not achieve the desired transformation.”