Jul 10,2014 / News / Legal Brief

The environmental regulation of mining activities has been the subject of a long-running ‘turf battle’ between the national Department of Environmental Affairs (DEA) and the Department of Mineral Resources (DMR) which culminated in the Constitutional Court judgment in the matter of Maccsand,[1] and has more recently seen the promulgation of the National Environmental Management Act (NEMA) and Mineral and Petroleum Resources Development Act (MPRDA) Amendment Acts.

The mining sector has always fought to remain independent, particularly in regard to licencing requirements, where it was often believed that the obtaining of a mining right or permit trumped the need for any other authorisation required by any other law. This mistaken belief was clarified by the Constitutional Court in the decision of Maccsand, where it was held that holding a mining right did not negate the need to obtain any further authorisations which may be triggered as a result of mining activities. More recently it is accepted that various authorisations and permits may be required in addition to a mining right before mining activities may commence. It is commonly accepted, for instance, that depending on the facts and circumstances, a water use licence under the National Water Act may be required and/or zoning approval is necessary where the zoning of the property does not permit mining. The position with regard to separate environmental authorisation under NEMA, for mining activities and activities associated with mining that are separately listed under NEMA, is less clear.

A number of amendments to NEMA and MPRDA have been published with the objective of providing for cooperative governance between mining and environmental authorities, ultimately requiring mining companies to hold environmental authorisations in terms of NEMA.

When the activities specifically related to prospecting and mining were incorporated into the NEMA listing notices in GNR 544, 545 and 546 in Government Gazette 33306 of 18 June 2010 (listing those activities which required environmental authorisation), it was on the basis that these mining activities would only come into force and effect on a proclaimed date and after the transitional periods provided for in the Amendment Acts had been completed. The transitional provisions of the Amendment Acts provided that the amended provisions of NEMA would take effect 18 months after the date on which the MPRDA Amendment Act took effect.

It is clear therefore that the Minerals Minister held the key to bringing these prospecting and mining specific activities into force under NEMA yet, did not take the necessary steps to do so for a period of five years.

THE CATALYST – THE 2008 AMENDMENTS

Amendments to both NEMA and MPRDA were passed by Parliament in 2008 and 2009 with the intention of creating one system of environmental management in terms of NEMA and so removing all environmental-related authority from the DMR, making the DEA the competent authority to address the environmental impacts of mining activities.

As noted above, as a result of the 18-month transitional process, the Amendment Acts were to work in tandem, resulting in the environmental assessment provisions of NEMA being applicable to mining rights and activities; however, the MPRDA Amendment Act was not brought into effect soon afterwards. This resulted in the revised environmental management provisions not coming into force and the dual system remaining unchanged for some time.

THE JUNE AMENDMENTS

In June 2013, the MPRDA Amendment Act was finally brought into effect. In terms of this Act, environmental authorisations would be required for mining activities from 7 December 2014. As noted above, the coming into effect of this Amendment Act follows a five-year struggle between the DEA and the DMR, to reach agreement as to who the competent authority would be in respect to environmental regulation of mining activities.

In respect to the transitional provisions, there is another 18-month interim period of a status quo, where the DMR would remain the authorising body in respect of mining applications and the approval of mining Environmental Management Programmes.

Environmental authorisations, as regulated by NEMA, would be required in respect of activities undertaken after 7 December 2014. However, the DMR would be the authorising body and not the DEA. The DMR would remain the relevant authority following another 18-month period. Following these two transitional 18-month periods, the DEA was to take over from the DMR as the authorising body in respect of environmental authorisations for mining activities.

With the coming into effect of the MPRDA Amendment Act, a number of amendments have already been effected on the main text of the MPRDA; specifically in respect to environmental management requirements. These amendments took effect in June 2013 and are detailed below:

  • Section 37 provides that the principles set out in section 2 of NEMA apply to all prospecting and mining operations, as the case may be, and any matter or activity relating to such operation; and serve as guidelines for the interpretation, administration and implementation of the environmental requirements of this Act. Any prospecting or mining operation must be conducted in accordance with generally accepted principles of sustainable development by integrating social, economic and environmental factors into the planning and implementation of prospecting and mining projects in order to ensure that exploitation of mineral resources serves present and future generations.
  • Section 38 which previously regulated environmental management and the responsibility to remedy was repealed, with sections 38A and B replacing it. Section 38A states that the DMR is the responsible authority for implementing the provisions of NEMA in respect to mining and that an environmental authorisation is a pre-condition to the granting of a mining right or permit. This section was to commence as per the 18-month transitional process discussed above. Section 38B states that an environmental management plan or programme approved in terms of this Act before and at the time of the coming into effect of NEMA is deemed to be an environmental authorisation. However, this section was not subject to the 18-month transitional process and it is unclear as to when this section will take effect.
  • Sections 39 to 42 which regulated the environmental management programme and plan development, preparation and financial provision for rehabilitation have been deleted without any replacement. This, and the fact that section 38A and B have not yet come into force,  has resulted in there being no regulatory provisions currently in effect which regulate the development of environmental management plans and programmes. In practice, applicants are making application for environmental management plans and programmes as if the repealed sections are still in existence.
  • Section 43 regulates the issuing of closure certificates and provides that the holder of a mining right remains responsible for any environmental liability, pollution, ecological degradation, the pumping and treatment of extraneous water, compliance to the conditions of the environmental authorisation and the management and sustainable closure thereof, until the Minister has issued a closure certificate in terms of this Act to the holder or owner concerned.
  • The Act also provides for collaboration between the DMR and various other authorities by stating that no closure certificate may be issued unless the Chief Inspector and each government department charged with the administration of any law which relates to any matter affecting the environment have confirmed in writing that the provisions pertaining to health and safety and management of pollution to water resources, the pumping and treatment of extraneous water and compliance with the conditions of the environmental authorisation have been addressed.

A further NEMA Amendment Act was published on 2 June 2014 (“the 2014 NEMA Amendment Act”) and comes into operation three months from the date of its publication in the Government Gazette, namely 2 September 2014.

The Act amends NEMA to allow for the integration of environmental management with mining activities, including:

  • For the Minister Mineral Resources to be the competent authority for environmental matters in so far as they relate to prospecting, exploration, mining or production of mineral and petroleum resources (section 2). The Minister of Environmental Affairs may under certain circumstances take an environmental decision in so far as it relates to prospecting, exploration, mining or production, instead of the Minister of Mineral Resources.
  • The amendment of the financial provisions of NEMA by requiring banks, insurance providers and trusts to include provision for rehabilitation, decommissioning, remediation of negative environmental impacts. This is an important development as the definition of “financial provision” in the MPRDA, which only contained a general requirement for financial provision for holders of mining authorisations to undertake rehabilitation of the affected areas, has been deleted. The new provision in NEMA is more onerous.
  • Section 24(5)(b) of NEMA provides that the Minister or MEC may make regulations laying down the certain procedures to be followed. The power to enact regulations in respect to certain wastes has been amended to remove references to residue stockpiles and deposits on a prospecting, mining, exploration and production area, allowing regulations to be enacted in respect of the management of all residue stockpiles and deposits.
  • The empowerment of the Director-General of the DMR to issue section 28 directives in so far as they relate to prospecting, exploration, mining or production and for the Minister of Mineral Resources to designate environmental mineral resource inspectors for compliance monitoring and enforcement of provisions in so far as they relate to prospecting, exploration, mining or production.
  • To provide the Minister of Environmental Affairs with the power to direct environmental management inspectors to perform compliance monitoring and enforcement duties instead of mineral resource inspectors under certain circumstances.
  • To provide for the criteria for condonation applications in the case of appeals that relate to prospecting, exploration, mining or production.

THE 2014 TRANSITIONAL PROVISIONS

Importantly, section 28 of the 2014 NEMA Amendment Act repealed section 14(2) of the 2008 NEMA Amendment Act, deleting the provisions which provided for the 18-month transitional period after the commencement of the MPRDA Amendment Act, with effect from 1 September 2014.

The MPRDA Amendment Act makes express reference to the transitional time periods prescribed in section 14(2) of the 2008 NEMA Amendment Act. As noted above, the initial 18-month transitional arrangement resulted in the requirement for environmental authorisation being effective from 7 December 2014, with this requirement being implemented in accordance with the provisions of NEMA but under the administration of the DMR.

However, with the coming into effect of the 2014 NEMA Amendment Act, the transitional period to 7 December 2014 has been deleted with effect from 1 September 2014.

This, together with the amendments to the MPRDA detailed above, has resulted in confusion regarding when the requirement to obtain environmental authorisation for mining activities will in fact commence. It is therefore essential that all three Amendment Acts be read together.

As noted above, in terms of the 2008 Amendment Acts, the requirement to obtain environmental authorisation for mining activities would have been subject to the 18-month transition period and would have come into effect 18 months after the commencement of the MPRDA Amendment Act on 7 June 2013, resulting in the need for environmental authorisation becoming effecting from 7 December 2014.

However, as a result of the repeal of these transitional provisions stemming from the 2014 NEMA Amendment Act, the 18-month transitional period and need for environmental authorisation by December 2014 would never manifest, resulting in the need for environmental authorisation in terms of these amendments to NEMA and the MPRDA never taking effect.

Should the legislature have intended another date to bring the amended provisions into effect, we assume that this date would have been expressly stated in the 2014 NEMA Amendment Act which repealed the transitional provisions contained section 14(2).

As a result of the above, the need to obtain environmental authorisation for mining activities from December 2014 is no longer a requirement. This has resulted in somewhat of a predicament as a result of the amendments affected by the MPRDA Amendment Act which repealed the provisions regulating the development of the environmental management plans and programmes and the failure to bring section 38B into effect.

Currently, there are no regulatory provisions regarding the preparation of environmental management programmes or plans under the MPRDA, nor have the provisions incorporating the requirements of NEMA and the need for environmental authorisation been incorporated. The amendments have therefore resulted in even more of a fragmented legislative position, with vast lacunae, between NEMA and the MPRDA.

We hope that this hiatus in the endeavour to achieving cooperative governance is temporary and a subsequent Amendment Act is therefore expected.

 


[1] 2012 (4) SA 181 (CC).