South Africa: BBBEE Amendment Act And Its Impact On BEE In Mining

Last Updated: 8 March 2012
Article by Matthew van der Want

Parliament has passed several pieces of legislation since 1994 to promote black economic empowerment ("BEE"). The foundation of BEE is the Broad-based Black Economic Empowerment Act 53 of 2003 (the "BEE Act"), and the Codes of Good Practice promulgated under it ("the BEE Codes"). The BEE Act and the Codes are administered by the Department of Trade and Industry ("DTI").

The BEE Act and Codes of Good Practice employ a balanced scorecard to assess an entity's compliance with BEE. The scorecard assigns various weightings to each element of BEE and an entity's BEE compliance is scored according to those weighted scores.

Historically, there has been some debate as to whether the BEE Act and the BEE Codes apply to the mining industry, especially since the BEE Act requires every organ of state and public entity to give due consideration to the BEE Codes when issuing licenses, concession or other authorisations. However, in the mining industry, the generally accepted position is that BEE, particularly BEE in relation to companies which hold rights granted and issued under the Mineral and Petroleum Resources Development Act, 2002 ("MPRDA") lies not within the jurisdiction of the DTI, but rather within that of the Department of Mineral Resources ("DMR").

In this regard, section 100(1) of the MPRDA required the Minister of Mineral Resources ("the Minister") to publish Codes of Good Practice for the Minerals Industry ("Mining Codes") within 5 years of the entry into force of the MPRDA and section 100(2) of the MPRDA required the Minister to publish a broad-based socio-economic empowerment charter for the mining industry ("Mining Charter") within 6 months of the entry into force of the MPRDA.

The Mining Charter was duly published in August 2004 and the Mining Codes were promulgated in April 2009. The Mining Charter was reviewed during 2010 and in September 2010, the Mining Charter was amended by proclamation in the government gazette ("Revised Mining Charter").

The Broad-Based Black Economic Amendment Bill, 2011 ("the Amendment Bill") was published by the Department of Trade and Industry for public comment on 9 December 2011. The period for public comment ends on 8 February 2012. Section 23(1) of the Amendment Bill provides that: "If any conflict relating to the matters dealt with in this Act arises between this Act and the provisions of any other law save the Constitution and/or any Act expressly amending this Act, the provisions of this Act will prevail;"

Section 23 of the Amendment Bill has created some uncertainty as to the effect of the BEE Act and Codes on the Mining Charter and the Mining Codes, should the Amendment Bill be passed.

The Revised Mining Charter and the Mining Codes, while containing certain similarities to the BEE Act and the Codes of Good Practice, and drawing from certain of the concepts contained in them, can be distinguished in numerous respects from the latter Act and Codes. The most important of these for present purposes is that, in relation to equity ownership and management control, the Mining Charter and the Mining Codes require, as an absolute, that mining assets be beneficially owned by Historically Disadvantaged South Africans as to 26% by no later than May 2014 and that all levels of management of mining companies be constituted as to 40% by 2014.

In respect of equity ownership, in assessing whether or not to grant an MPRDA right to an applicant, the DMR applies this criterion strictly.

While equity ownership is a consideration in assessing an entity's BEE compliance under the BEE Act and the BEE Codes, equity ownership under that legislation is scored on a weighted basis and a company not complying with the full 26% requirement will not be automatically judged as non-compliant. Under the Revised Mining Charter and the Mining Codes, there is an 'all or nothing' approach in the sense that an entity must comply completely with specifically the ownership and management elements and is not weighted on its degree of compliance.

The BEE Codes, and in particular the generic codes issued in terms of section 9 of the BEE Act, also contains certain concessions to so-called multinationals. No such concessions are provided in the Revised Mining Charter and the Mining Codes.

Moreover, the Revised Mining Charter and the Mining Codes contain numerous further requirements which are either not contained in the BEE Act or Codes of Good Practice, or the requirements in relation to them are more stringent.

We understand that the Chamber of Mines is currently making submissions on behalf of mining companies in respect of the proposed amendments. These amendments create uncertainty as to the application of the BEE Act, the BEE Codes and the MPRDA and Mining Charter. Mining companies are well advised to consider and make representations on the proposed amendments in order to prevent a possible shifting of targets as well as to prevent uncertainty regarding the application of this proposed legislation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
ENSafrica
ENSafrica
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
ENSafrica
ENSafrica
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions