The Minister of Mineral Resources and Energy (“Minister”) published the Draft Mine Community Resettlement Guidelines, 2019 (“Guidelines”) for public comment on 4 December 2019. Taking into account that the public comment period will run over the festive season, the closing date for submission of written representations has been extended until 31st January 2020 by the Department of Mineral Resources and Energy (“DMRE”).

The Guidelines recognise the positive contributions of the mining and minerals industry to the economy, whilst simultaneously recognising “the direct or indirect negative socio-economic and environmental impacts on land owners, lawful occupiers, holders of informal and communal land rights, mine communities and host communities (“Affected Parties”)”. The Guidelines note that mining has an effect of displacement of communities where mining activities take place in the form of physical resettlement, exhumation of graves, loss and damage to property, influx of people to the mining community and a boom in informal settlements.

The Guidelines apply to both applicants and existing holders  of mining rights, prospecting rights and  mining permits (“Applicants” / “Holders”) in terms of the Mineral and Petroleum Resources Development Act 28 of 2002 (“MPRDA”) where prospecting or mining activities will have the effect of displacement or resettlement of the Affected Parties.

The Guidelines set out the following fundamental principles for resettlement: meaningful consultation; gender equality; protection of existing rights; conditions relating to meetings; and avoid and minimise resettlement and its consequences where possible.

The Guidelines require Applicants and Holders to make provision for development of a Resettlement Plan, Resettlement Action Plan and Resettlement Agreement. The Guidelines define a Resettlement Plan as a broader consultative document which is concerned with project description; impact analyses; costs and budgetary considerations and consultation mechanisms. The Resettlement Action Plan must list what steps must be taken to achieve the goals set out in the Resettlement Plan, clarify resources required, timelines and identify responsible stakeholders. The Resettlement Agreement serves to record in full all the commitments made by a holder in the Resettlement Plan and Resettlement Action Plan. It should outline rights and obligations of all parties to the agreement (including authorised representatives of mine communities) and must be signed by all relevant stakeholders and submitted to the office of the Regional Manager for noting.

Other noteworthy aspects of the Guidelines are those regarding compensation and dispute resolution mechanisms. The Guidelines provide that no mining activity shall commence until a Resettlement Agreement is reached on the appropriate amount of compensation as a result of resettlement of the Affected Parties. An applicant or holder, where feasible, must provide financial assistance to Affected Parties  The Guidelines also envisage a “Party to Party dispute resolution process” that must be invoked prior to embarking on the Regional Manager-led process in section 54 of the MPRDA .

In our view, there are a number of potential issues with the Guidelines. In Bengwenyama Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd 2011 4 SA 113 (CC), the Constitutional Court (“CC”) held that one of the purposes of consultation with a landowner is to see whether some accommodation is possible. The CC further held that the MPRDA does not impose an obligation to reach agreement; the parties ought to engage in good faith to attempt to reach some accommodation. Failure to reach agreement might result in the holder having to pay compensation to the landowner at a later stage.

In Maledu and Others v Itereleng Bakgatla Mineral Resources (Pty) Limited and Another 2019 (2) SA 1 (CC), the CC held that depending on the facts of a particular case, the Regional Manager-led process in section 54 of the MPRDA must be exhausted before an interdict can be sought.

To the extent that the Guidelines require an agreement regarding compensation to be reached prior to the commencement of mining activities, they are ultra vires the MPRDA and inconsistent with CC jurisprudence on the duty to consult.

Another concern with the Guidelines is that they attempt to apply to Holders and not merely Applicants. Even the Guideline for Consultation with Communities and Interested and Affected Parties, which was published by the DMRE, only applied to applicants. It will be interesting to see how the DMRE would compel Holders to undertake new Resettlement Agreements where mining has already taken place and relocations already negotiated and implemented given that the Guidelines are not enforceable.

There is also some ambiguity in respect of the purpose of the Guidelines. The title suggests that they seek to apply to certain types of landowners, namely “communities” as defined in the MPRDA. But the Guidelines refer to landowners more generally and therefore clarity is required  as to whether these Guidelines will apply to all landowners requiring resettlement as a result of mining activities or communities only. Linked to this are the practical challenges associated with determining who constitutes a community for purposes of the MPRDA and obtaining the signature of the authorised representatives of a particular community. This is especially difficult in communities with factions.  

We are of the view that a better balance could be struck between mineral development and individual / community property rights. Resettlement can be a difficult process for all Affected Parties and we welcome guidance and assistance from the DMRE in achieving successful resettlement arrangements.

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.