The State’s Role as Public Trustee

Introduction The Mineral and Petroleum Resources Development Act (MPRDA) came into force on 1 May This act had the effect of drastically altering the common law position regarding mineral and petroleum rights.

Old Order Governed by private law Ownership of unsevered minerals vested in land owner. Right to prospect and mine was part and parcel of land ownership

MPRDA Section 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.

Content of the State’s Roles as Custodian over Mineral Resources? What steps must be taken to achieve these goals? To whom are they owed? What duties?

Relevance?

Specific Focus The private law concept of trusteeship The concept of the state as custodian over the nation’s mineral resources

Comparison Fiduciary Duties owed by: trustees to trust beneficiaries in the administration of trust property Fiduciary duties owed by: the state to the people of SA in the administration of the mineral resources of the country.

The Law of Trusts The Concept of Trusteeship Fiduciary Duties of Trustees Part One

The General Fiduciary Duty of Trustees The duty of care The duty of impartiality The duty of independence The duty of accountability

The Duty of Care Duty to manage and administer the trust property in a prudent manner, as a reasonable person would. Trustee must exercise more care in administering the trust than he would in dealing with his own property.

The Duty of Impartiality Two components: a duty to avoid a conflict of interest between the personal interests of the trustee and his official obligations and a duty to treat all trust beneficiaries impartially.

The Duty of Independence Trustees must exercise rigorous and independent judgment when performing their duties as trustees. Thus a trustee may not simply act under the orders of the trust founder.

The Duty of Accountability The trustee is obliged to provide regular accounts regarding the administration of the trust, to the trust beneficiaries.

Duties are context dependent Environment Trust property BeneficiariesTrustee

Duties under the MPRDA Environmental Management Plan Enable Transfo rmation Etc Ensure optimal mining

Environmental Management Plan Aim: ensure development of Mineral Resources in and orderly and ecologically sustainable way, while ensuring the advancement of social and economic development.

Optimal Mining of Mineral Resources Minister is empowered to direct that the holder of mineral rights take corrective measures if not mining optimally and to cancel/suspend such rights if holder does not comply.

Transformation Provision made by the MPRDA to empower previously disadvantaged communities and persons, by giving them preferential treatment in the application for mineral rights, provided certain criteria are met.

Structure of MPRDA Obligations and powers of the state in MPRDA Mining takes place in for the benefit of the public

Analogous System of Duties Fiduciary Duties of Trustees Duties in terms of the MPRDA

Part Two: Problems regarding comparison PrivatePublic

Main Issue: System of Co-operative Government NATIONAL GOVERNMENT Provincial Government Local Government

Tension Potential tension between decisions made at national level that may impact upon provincial or local government’s exclusive areas of competence. Swartland Municipality v Hugo Wiehahn Louw N.O and others /09 (C)

Bibliography 1. Badenhorst and Mostert Mineral and Petroleum Law of South Africa (2004) Lexis Nexis Butterworths. 2. Badenhorst, Pienaar and Mostert The Law of Property 5ed. (2006) Lexis Nexis Butterworths. 3. Cameron, De Waal, Wunsh Honore’s South African Law of Trusts 5ed (2002) Juta. 4. Du Toit South African Trust Law: Principles and Practice (2002) Lexis Nexis Butterworths. 5. Du Toit ‘The Fiduciary Office of Trustee and the Protection of Contingent Trust Beneficiaries’ Stell LR (2007) vol Swartland Municipality v Hugo Wiehahn Louw N.O and others /09 (C)