Jan 24,2013 / News / Legal Brief

Long, convoluted processes and the sheer volume of appeals against the administrative authorities’ decisions in relation to mining or prospecting rights are adding to the pressure on the beleaguered mining industry. Some disputes may take as long as two or three years to resolve and run into millions of rands in costs.

“Lengthy delays are commonplace when appealing against or reviewing administrative decisions under the Mineral and Petroleum Resources Development Act (MPRDA),” says Chris Stevens, director in mining and resources at Werksmans Attorneys. He has heard that the Department of Mineral Resources has a backlog of about 2 000 unresolved appeals.

“While it’s not possible to avoid the appeal process if one is aggrieved about a decision, an appeal can be managed in a way that does not unduly prolong the process or unnecessarily inflate the costs,” he says.

The key to effectively managing an appeal under the MPRDA is to clearly understand the appeal process, the parties’ rights and the remedies available.  “There are certain actions that can strengthen your case and omissions that could weaken it,” Stevens says. “It’s important to follow the process correctly, completely and timeously.”

He says the volume of appeals being lodged with the Department of Mineral Resources demonstrates that decisions to grant or refuse a mining or prospecting right application could, and often do,  result in a party or parties becoming aggrieved. These parties include surface owners, competing rights holders, environmental groups and communities with rights of preference.

THE RIGHT TO OBJECT UPFRONT

“An important piece of advice is to be aware of an aggrieved party’s right to object before a decision on a mining or prospecting right application is taken,” Stevens says.

“The fact that an aggrieved party has objected upfront will more than likely strengthen the objector’s case if and when an appeal is lodged. Conversely, not objecting may well be taken into account, to the detriment of an appellant, in the event of an appeal being lodged.”

Provision for the lodging of objections is built into the process of applying for mining or prospecting rights. Within 14 days of accepting any application for such a right, the regional manager of the Department of Mineral Resources must call on interested or affected parties to comment on the application in writing. Objections have to be made within 30 days after that.

It should be noted that recent court decisions have clarified the position that decisions on prospecting and mining rights, even though taken by the Minister’s delegatee, are subject to the appeal process of the MPRDA before one can approach the High Court to review the decision.  When considering whether or not to appeal a decision, an important point to bear in mind is that the MPRDA appeal process is an internal administrative process managed by the Department of Mineral Resources.

DEALING WITH UNREASONABLE DELAYS

The internal appeal avenues go hand in hand with tightly circumscribed steps and timelines, with no leeway for short cuts. However, there are often delays on the part of the department or Minister in taking timely decisions on appeals.  The delay is not normally the fault of the persons in the Department running appeals but often is as a result of the Regional Manager failing to furnish reasons for the decision timeously, or at all.

Stevens says one way to deal with “unreasonable delays” is to obtain a court order (a mandamus) instructing the DG or Minister to take a decision forthwith. Commenting on what length of time might be regarded as unreasonable, he says the courts have previously held that a four-month delay in furnishing a decision is excessive.

Mining and exploration companies should bear in mind that an appeal must be based on the merits of the matter, he says. “This means the appellant will have to demonstrate that the decision taken by the administrative authority was wrong or unlawful.”

More specifically, it would have to be shown that the decision was not taken properly in accordance with the requirements of the MPRDA.  For instance, grounds for appealing against the granting of a mining right would include that the holder will cause unacceptable degradation to the environment, or is unable to mine in a healthy and safe manner, or lacks financial ability to mine.

DON’T RULE OUT THE OPTION OF A COMMERCIAL SETTLEMENT

Stevens adds that companies should also be open to the possibility that a commercial settlement might be the most advantageous way to resolve a rights dispute.

“If the appeal process becomes protracted, the rights that are the subject of the dispute may lapse before the dispute has been finalised,” Stevens says. “The costs of running the matter through the entire process up to the Constitutional Court –  of which there are examples, such as the Bengwenyama matter, could run into millions of rands. A commercial settlement could benefit both parties and obviate a long, drawn-out dispute where potentially no party wins at the end of the day.”

In the final analysis, he says, whatever choice a company takes when faced with an unfavourable MPRDA decision, it pays to be fully informed about the appeal process, aware of one’s rights and willing to consider all available options.

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