SAIMM Mining Charter 2017 Breakfast Legal Status and Implementation of the Mining Charter, 2017 Nic Roodt 22 August 2017 #3086739v1

Chamber’s Challenges to the Charter The DMR cannot transform the Charter into an Act of Parliament Attempting to implement radical economic transformation through the back door is illegal We must be reminded of the purpose of the original Charter A non-binding guideline or statement of policy – nothing more Elevating the status of the Charter would arguably not pass constitutional muster and would be ultra vires. Minister implementing the Charter as if is legislation and in particular, as if it forms part of the MPRDA DMR argue that Charter read into definition of "this Act" in section 1 of the MPRDA. i.e. a breach thereof constitutes a breach of the MPRDA Reasoning is fundamentally flawed MPRDA Amendment Bill – includes reference to the Charter included in the definition of “the Act” this can’t transform the Charter into a statute of Parliament Unconstitutional - the doctrine of separation of powers between the legislative and executive organs of state.

Chamber’s Challenges to the Charter Grant of a mining right is an administrative act Minister may not revisit decision after granting right unless there was a fundamental flaw in the decision making process On granting a mining right, the Minister would have satisfied himself to the fact that the granting of the right would further the empowerment objectives under section 2 of the MPRDA and would meet the requirements under section 23 of the MPRDA. Argument that once granted it cannot be revoked or cancelled because certain requirements have changed after the fact, unless there is clear legislation allowing such revocation or cancellation Retrospective application – To retrospectively apply, the MPRDA would need to specifically state that this was the intention of such legislation No such intent is obvious under the current provisions of the MPRDA.

Chamber’s Challenges to the Charter PAJA –   3. Procedurally fair administrative action affecting any person.— (1) Administrative action which materially and adversely affects the rights or legitimate expectations of any person must be procedurally fair. … 4. Administrative action affecting public.— (1)In cases where an administrative action materially and adversely affects the rights of the public, an administrator, in order to give effect to the right to procedurally fair administrative action, must decide whether— (a) to hold a public inquiry in terms of subsection (2); (b) to follow a notice and comment procedure in terms of subsection (3); (c) to follow the procedures in both subsections (2) and (3); (d) where the administrator is empowered by any empowering provision to follow a procedure which is fair but different, to follow that procedure; or (e) to follow another appropriate procedure which gives effect to section 3

Minister’s Response In his answering affidavit, the Minister for Mineral Resources alleges the following: There has been wide consultation; The Charter constitutes law; Section 47 of the MPRDA read with section 2(d) and (f) gives the Charter legislative force. The Charter is constitutionally justified as furthering the empowerment objectives in the MPRDA.

Conditions in Granting Rights Section 17 and section 23 of the MPRDA set out certain requirements and obligations in regard to the granting of rights: Sections 17(6) and 23(6) Rights are subject to the MPRDA and the terms and conditions stated in the right. Section 17(4) The minister may request applicant to give effect to BEE objectives. Section 23(1)(h) The minister must grant a right if the granting of such a right will further the BEE objectives and the charter contemplated in terms of section 100.

Non-Compliance with the new Charter In terms of section 2.12 of the new Charter: “a holder who has not complied … will be dealt with in terms of section 93, read in conjunction with section 47, 98 and 99 of the MPRDA.”

Section 93- Orders, Suspension and Instructions Authorised persons may, in the event of holder: Failing to comply with the MPRDA; or Term or condition of right or any other law Order holder to take immediate rectifying steps; or Suspend or terminate operations The DG must confirm or set aside such order.

Cancellation / Suspension of Rights Section 47 allows Minister to cancel or suspend rights when right being exercised in contravention / breach of`: MPRDA Material term / condition of the right Condition of Environmental Authorisation Right based on false / fraudulent / misleading information (whether at application stage or subsequently)

Section 98 and 99 of the MPRDA - Offences and Penalties Any person is guilty of an offence if he or she – (a) contravenes or fails to comply with: … (vi) Any directive, notice, suspension, order, instruction, or condition issued, given or determined in terms of this Act; Section 99: Any person convicted of an offence in terms of the MPRDA in the case of section 98(a)(vi) is liable for a fine not exceeding R10 000.