Who Owns Unsevered Minerals in South Africa? A provisional account

Outline of the Presentation Background. Research Question. Why this question has arisen. Overview of the proposed interpretations. Methodology. Application of the methodology to the various theories.

Background With the enactment of the Minerals Act the Common Law with regards to minerals was reinstated. In terms of the Common Law, land ownership and mineral rights can be severed. Land ownership included ownership of everything above and below the soil. Called the cuis est solum rule. Ownership of unsevered minerals vested in the owner of the land.

Research Question The issue that this paper will look at is whether the MPRDA has affected any change in this regard.

Why could the MPRDA have changed this? (1) The MPRDA’s interpretation clause: “4. (1) When interpreting a provision of this Act, any reasonable interpretation which is consistent with the objects of this Act must be preferred over any other interpretation which is inconsistent with such objects. (2) In so far as the common law is inconsistent with this Act, this Act prevails.” Analysis This clause makes a difference since it constrains how the Act can be interpreted - Rather than try to do the least harm to the common law, consider the Act’s purposes.

Why could the MPRDA have changed this? (2) The MPRDA’s Custodianship clause: “3. (1) Mineral and petroleum resources are the common heritage of all the people of South Africa and the State is the custodian thereof for the benefit of all South Africans. (2) As the custodian of the nation’s mineral and petroleum resources, the State, acting through the Minister, may— (a) … (b) … (3) The Minister must ensure the sustainable development of South Africa’s mineral and petroleum resources within a framework of national environmental policy, norms and standards while promoting economic and social development.” Analysis This clause has caused most of the debate around what has happened to the ownership of minerals. The basic gist of these arguments is that the meaning of this clause has affected a change (or not) in the ownership of unseparated minerals.

Overview of proposed interpretations Unsevered minerals of RSA now ‘belong’ to the nation. Ownership of unsevered minerals remains vested in the landowner. Ownership of unsevered minerals vest in the State. Ownership of unsevered minerals have vested in the State in its public capacity (res publicae or the public trust doctrine).

Methodology These accounts will be evaluated by using Dworkin’s fit and justification heuristic: Fit: The interpretation will be checked for consistency and coherence with the Act and case law. Justification: The reason for why this is the best interpretation for the Act will be considered.

Fit: The Statute The obvious starting place is to look at the Statutes objects: is the interpretation consistent with the objects of the Act? Besides that the various other provisions (and omissions) of the Act will be considered.

2. The objects of this Act are to— (a) recognise the internationally accepted right of the State to exercise sovereignty over all the mineral and petroleum resources within the Republic; (b) give effect to the principle of the State’s custodianship of the nation’s mineral and petroleum resources; (c) promote equitable access to the nation’s mineral and petroleum resources to all the people of South Africa; (d) substantially and meaningfully expand opportunities for historically disadvantaged persons, including women, to enter the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum resources; (e) promote economic growth and mineral and petroleum resources development in the Republic; (f) promote employment and advance the social and economic welfare of all South Africans; (g) provide for security of tenure in respect of prospecting, exploration, mining and production operations; (h) give effect to section 24 of the Constitution by ensuring that the nation’s mineral and petroleum resources are developed in an orderly and ecologically sustainable manner while promoting justifiable social and economic development; and (i) ensure that holders of mining and production rights contribute towards the socio-economic development of the areas in which they are operating.

Fit: The Case Law Recent case law will be examined to see whether it is compatible with the interpretation. The paper can’t propose to do an in depth of analysis of all of the case law that could indicate scope for the introduction of such an interpretation (e.g. for the purposes of the res publicae doctrine). This presentation won’t consider case law.

Justification: The Reasons for Favouring that Interpretation It would be impossible to engage meaningfully with all of the justifications offered in favour of the various interpretations. However some tentative questions will be asked with an emphasis on whether the justification actually requires the transfer of ownership of unsevered minerals.

Ownership of USM has moved to ‘the Nation’ (1) Fit: Words in s 3 (1) include ‘mineral… resources are the common heritage of all the people of South Africa’, ‘… the nation’s mineral resources’. There is good fit here. But: The act makes no mention of minerals vesting in anyone but the owner. ‘The Nation’ has no legal personality and as such can’t be vested with a right. This interpretation leaves it unclear how unlawful mining is to be dealt with.

Ownership of USM has moved to ‘the Nation’ (2) Justification: The mineral wealth of a country doesn’t lie with individuals or with the State. It lies with the people of the Country. The State then acts as a custodian with public law powers that should exercised in the interests of the people of South Africa. Textual support for this kind of argument can be found in: The African Charter of Human and People’s Rights. The Freedom Charter But: Its far from clear that giving people a collective right is the best way in which to enhance receiving returns from this collective right. Dale may respond by suggesting that keeping minerals subject to private rights may be a better way to encourage individual exploitation of resources. Its more difficult for the res publicae/public trust proponents to explain why their scheme is better justified because they need to explain why the State needs to be both the custodian of the resources and also be the owner. I don’t think its impossible to make this case but its going to be difficult.

Article All peoples shall freely dispose of their wealth and natural resources. This right shall be exercised in the exclusive interest of the people. In no case shall a people be deprived of it. 2. In case of spoliation the dispossessed people shall have the right to the lawful recovery of its property as well as to an adequate compensation. 3. The free disposal of wealth and natural resources shall be exercised without prejudice to the obligation of promoting international economic cooperation based on mutual respect, equitable exchange and the principles of international law. 4. States parties to the present Charter shall individually and collectively exercise the right to free disposal of their wealth and natural resources with a view to strengthening African unity and solidarity. 5. States Parties to the present Charter shall undertake to eliminate all forms of foreign economic exploitation particularly that practised by international monopolies so as to enable their peoples to fully benefit from the advantages derived from their national resources.

The People Shall Share in the Country's Wealth! The national wealth of our country, the heritage of South Africans, shall be restored to the people; The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole;

Ownership of USM has moved to the State Fit: The use of the word ‘custodianship’ is a misnomer. What is meant is that ownership vests in the State. One of the objects of the Act is to give effect to the State’s universally accepted right to exercise sovereignty over its resources. Custodianship and sovereignty are mutually exclusive. Hence we should reject custodianship as a notion and simply transfer ownership.

But: Firstly it is not clear that custodianship and sovereignty are mutually exclusive. They can be reconciled by recognizing that sovereignty is a right between states inter se. Custodianship can be seen as an obligation between the State and its citizens. Secondly, even if these notions are operating in the same sphere of law, its not clear that sovereignty is an untrammeled right. Current developments in public law suggest that sovereignty must be exercised within limits. ‘Custodianship’ can be such a limit. Thirdly, even if custodianship and sovereignty are mutually exclusive, private ownership of minerals and sovereignty aren’t mutually exclusive. The Definition of Land in the MPRDA ‘includes the surface of the land and the sea, where appropriate’. This isn’t an exclusive definition. ‘Includes’ by implication suggests that land is more than just the surface.

Ownership of USM has moved to the State Definition:Ownership of unsevered minerals has moved to the State in its public capacity. The State then has a duty to act as custodian of certain interests to the benefit of the public as a whole. Fit: The Act makes extensive use of the word ‘custodianship’. Other recent Acts have made use of the word ‘trusteeship’. This indicates the introduction of some sort of Public Trust Doctrine (‘custodial sovereignty’). Historically, in the Common Law there was the notion of res publicae that could be extended to include minerals.

–In international law a notion of res publicae has been kept alive through treaties such as The Antarctic Treaty; Treaty on Principles Governing the Activities of States in the Exploration and use of Outer Space, including the Moon and other Celestial Bodies; the Geneva Convention on the High Seas and the Convention of the Law of the Sea. For this ‘fit’ to work, we will have to revisit the reason why something was made res publicae. Historically it was the ‘vastness, limitlessness and availability’ of the resource. Today it should be the protection of a scarce resource for future generations.

Ownership of USM has moved to the State Justification: –Certain interests in property should be reserved for the public. E.g. the public’s right to walk on the beach. This is even more relevant to minerals and the environment. The State is best placed to protect the public’s interest in that property. A public trust doctrine should be introduced to do so.

Questions and comments What will this public trust doctrine do? Create an enforceable obligation on the State. Be used as an interpretative tool. Why is it necessary for ownership of unseperated minerals to vest in the State? If ownership of unseparated minerals vest in the State, that right will be coupled with certain duties. When the State acts to comply with those duties it won’t trigger an action of expropriation or deprivation. Concerns extend to the externalities of those mining e.g. pollution