South Africa: Draft Reviewed Housing And Living Conditions Standard For The Minerals Industry

Last Updated: 29 May 2019
Article by Godfrey Malesa

On 20 March 2019, Minister of Mineral Resources, Gwede Mantashe, published the Draft Reviewed Housing and Living Conditions Standard for the Minerals Industry, 2019 ("the Draft Reviewed Housing Standard") calling upon interested and affected parties to submit written representations within 30 days of the publication.

In terms of section 100(1)(a) of the Mineral and Petroleum Resources Development Act, 28 of 2002 ("the MPRDA") the Minister must, within five years from the date on which the MPRDA took effect and after consultation with the Minister for Housing, develop a housing and living conditions standard for the minerals industry. The MPRDA came into effect on 1 May 2004. This was done on 29 April 2009 when the 'Housing and Living Conditions Standard for the Minerals Industry' ("the 2009 Housing Standard") was published in Government Notice 445, Government Gazette 32166.

Under the then Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2010, mining companies were amongst others, required to convert or upgrade hostels into family units, attain one person per room and also facilitate home ownership options for all mine employees in consultation with organised labour by the end of 2014.

Whilst it is acknowledged in the Draft Reviewed Housing Standard that the South African mining industry has made noticeable inroads in upgrading hostels and converting them to single accommodation units, it also stated that there is still a long way to go before attainment of adequate and livable housing and living conditions for mine employees. The housing and living conditions standard is one of the elements of the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 ("Mining Charter, 2018"). It is specified in the Draft Reviewed Housing Standard that government realises that the location of the housing and living conditions standard as an element of the Mining Charter, 2018 is untenable and deprives this aspect of the mining industry of its prominence.

The Draft Reviewed Housing Standard retains many of the conditions contained in the 2009 Housing Standard. However, it introduces new requirements that existing mining right holders and new mining right holders who provide housing to their employees will be required to comply with. These include amongst others the following:

  • A mining right holder will be required after consultation with other stakeholders to "acquire land" within close proximity of the mine operations and plan housing needs in support of compact, integrated and mixed land use environment". This is a departure from the wording of the 2009 Housing Standard, which provides that "mining companies in consultation with other stakeholders shall assist financially and facilitate the acquisition of land..."
  • Mining right holders will be required to involve employees in the form of organised labour during negotiations with financial institutions.
  • With regard to existing mining right holders, in order for an existing mining right holder to comply with the housing and living conditions, it must submit a detailed Housing and Living Conditions Plan within six months from the date of publication of the document. The plan should, among others, detail how the mining right holder  plans to maintain single and family units in line with the National Norms and Standard approved by the Minister of Human Settlement. Existing mining right holders will also be required to submit:
    • a detailed plan to finalise single and family units hostel conversion upgrades;
    • a three-year detailed plan to phase out living-out allowances where verifiable decent accommodation cannot be proven and verified; and
    • an agreed (between the mining right holder and organised union) Employer Assisted Home Ownership Scheme consistent with growth plans. 
  • Whereas new mining right holders will be required to consult with organised labour, the relevant municipality and the Department of Human Settlements and enter into a housing and living conditions agreement within a period of "12 months from the date of publication of the standard" regarding its mine employee housing and living conditions needs. The reference to 'twelve months from the date of publication of the standard' appears to be an error as new mining rights may be granted long after the publication of the standard.  It appears that what was meant is twelve months from the date of commencement of the mining operations.
  • The new mining right holder must upon reaching an agreement with organised labour develop an Employer Assisted Housing Scheme, which must be signed by the mining right holder and organised labour and submitted to the DMR within 21 days from the date of signing. The signed scheme must make provision for the housing options of private home ownership, government-led housing, rental accommodation and living out allowance. The scheme must also make provision for differentiated financial solutions for mine employees.
  • The Draft Reviewed Housing Standard requires that an application for a mining right in terms of section 22 of the MPRDA must be accompanied by a preliminary Housing and Living Conditions Plan based on the applicant's employment forecast. The final Housing and Living Conditions Plan must be finalised after consultation with organised labour within 12 months from the date of commencement of operations and must be submitted to the DMR within 21 days from the date of signing. When granting a mining right, the Minister must take into account the applicants commitments in terms of the Housing and Living Conditions Plan and the extent of compliance to the principles embodied in the standard. The final plan will form part of the terms and conditions of a mining right. 
  • The Draft Reviewed Housing Standard will also require the Minister when granting a mining right to take into account the applicants commitments in terms of the Housing and Living Conditions Plan and the extent of compliance to the principles embodied in the standard.   
  • The Housing and Living Conditions Plan and any other related plan shall be applicable for the duration of a mining right and may be reviewed every five years. Furthermore, the Housing and Living Conditions Plan may not be amended or varied without the consent of the Minister.
  • Non-compliance with the approved Housing and Living Conditions Plan will render a mining right holder to be in breach of the MPRDA and subject to the provisions of section 93, 98, 99 and 47 of the MPRDA.   

Although most of the aspects of the Draft Reviewed Housing Standard represents a reasonable and workable framework, the introduction of new provisions such as applicants for new mining rights having to submit Housing and Living Conditions Plans when applying for a mining right will likely be seen as untenable and ultra vires.

In view of the judicial review application filed by the Minerals Council South Africa seeking to set aside certain clauses of the  Mining Charter, 2018, it can be expected that in the event that the provisions of the Draft Reviewed Housing Standard are finalised in their current form, a similar challenge will be brought against certain provisions of the Draft Reviewed Standard on the basis that they do not conform to the rule of law and principles of legality and administrative action which is lawful, reasonable and procedurally fair.

With the cost of providing housing squarely falling on mining companies and their employees, the DMR, mining companies and labour clearly need to reach a compromise on the provisions of the Draft Reviewed Housing Standard that would satisfy the need for the provision of the much-needed housing for the mining industry while avoiding the possibility of a prolonged litigation which will negatively affect regulatory certainty in the mining industry.

It remains to be seen whether the parties can engage meaningfully to arrive at an amicable solution that embraces transformation in the South African mining industry in terms of housing and living conditions of mining employees by ensuring that mining employees are provided with decent livable integrated human settlements.

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.

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