Mining Law in the midst of a pandemic Quarter 1 2021

By LILI NUPEN, CHANTAL MURDOCK, NICOLE LIMBERIS-RITCHIE AND CALVIN MATLALA, Published in COVID-19 Mining Law

The COVID-19 pandemic has tipped the world into social and economic turmoil. Following the announcement of the national lockdown in March 2020, the operation of the South African mining industry, including ancillary and production activities relating thereto, was largely suspended, save for those operations concerning the generation of coal-fired electricity, and the production of gold.

While the price of certain minerals and commodities increased during this time of uncertainty, other prices fell due to a decrease in demand, as economic activity across the world stagnated. As the national lockdown eased and mining operations slowly returned to full production, there was a significant concern by industry role players regarding, inter alia, the impact of COVID-19 on the commitments made to mine communities, and the health and safety of mine employees who would be required to recommence with their ordinary employment activities. In what follows, we consider some key developments that the pandemic has had on mining law over the last year, in relation to:

  • meaningful consultation and the processing of mining and prospecting right applications;
  • the health and safety measures required to mitigate the impact of the outbreak of COVID-19; and
  • the potential unintended non-compliance issues that followed, or may follow, due to the temporary cessation of operations.

Meaningful consultation and the processing of mining and prospecting right applications

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The Mineral and Petroleum Resources Development Act, 2002 (the MPRDA) read with the Mineral and Petroleum Resources Development Regulations, 2004 (the MPRD Regulations) contemplates that once an application for a mining or prospecting right has been accepted by the relevant Regional Manager of the Department of Mineral Resources and Energy (the DMRE), meaningful consultation with interested and affected persons must be conducted, in terms of the public participation process prescribed in the Environmental Impact Assessment Regulations promulgated in terms of s24(5) of the National Environmental Management Act, 1998 (NEMA). Not only were mining activities halted or slowed in the second quarter of 2020, due to the national lockdown, but the processing of accepted mineral right applications by the DMRE, including the required consultation process that was to be followed by the applicants, had to be held in abeyance due to the inability of applicants to properly and meaningfully consult during this time, given the restrictions on public gatherings and social distancing requirements.

In this regard, the Minister of Mineral Resources and Energy issued directions under the Disaster Management Act, 2002 (the DMA) advising that certain administrative functions and prescribed processes in terms of the MPRDA, were to be placed on hold during the initial lockdown phase of the pandemic.

In addition, the Department of Environment, Forestry and Fisheries (DEFF) worked tirelessly to provide guidance in the form of various directions issued under the DMA to enable processes to continue where it was possible to use alternative methods to solve the consultation dilemma. Face-to-face alternatives, such as the use of video conferencing platforms which were attempted by many applicants, remained a challenge, particularly within mine communities where access to internet connectivity is not readily available.

Although consultation has since resumed, alternative methods of such consultation have had to be embraced and implemented, particularly given that gatherings remain prohibited, even under Adjusted Alert Level 3. It is anticipated that there may be a number of mining and prospecting rights that are granted in the future, which may be challenged by interested and affected parties on the basis that meaningful consultation did not take place.

Furthermore, despite the lockdown being eased significantly, we have noticed that the submission of applications and other documentation at the offices of the DMRE has remained difficult due to continued temporary office closures resulting from ongoing COVID-19 infections, and rotational-based shifts that have been implemented by the DMRE to promote social distancing.

The health and safety measures required to mitigate the impact of the outbreak of COVID-19

In late April 2020, further directions were published by the Minister. These placed a duty on employers conducting mining operations and related activities to develop and implement a standard operating procedure (SOP), in terms of which appropriate measures were to be put in place to protect the health and safety of employees during the pandemic. Unfortunately, the directions were neither specific nor informative in terms of the content of the SOP, and required only that the measures contained in the SOP were to be developed in consultation with organised labour or representatives of employees at the mine.

These directions were regarded by several employees and trade unions as insufficient, particularly because of the high risk of employees contracting COVID-19 at the mines and, in turn, infecting their families and surrounding communities. This ultimately gave rise to an urgent application initiated by the Association of Mineworkers and Construction Union (AMCU) against the Minister ( Association of Mineworkers and Construction Union v Minister of Mineral Resources and Energy and Others (J427/2020) [2020] ZALCJHB 68; (2020) 41 ILJ 1705 (LC); [2020] 9 BLLR 929 (LC) (4 May 2020)), in terms of which it was argued that the regulations and directions that had been issued to inform the return of mine employees to work were inadequate.

AMCU highlighted the fact that section 9 of the Mine Health and Safety Act, 1996 (the MHSA) empowers the Minister and the Chief Inspector of Mines to impose binding obligations on employers, and that the powers afforded in terms of this section ought to have been exercised to impose compulsory and specific measures on employers to better protect mineworkers from the COVID-19 pandemic whilst at work.

The Labour Court agreed with AMCU's sentiment and confirmed that the directions published by the Minister were inadequate, and did not support the fundamental purposes of the MHSA. It was determined that a code of practice under s9 of the MHSA would be the most appropriate measure to ensure that COVID-19 risks were addressed effectively across all mining operations. A further benefit of this would be that the Chief Inspector would have the authority to review the code of practice and instruct an employer to amend any code of practice which did not comply with what had been prescribed.

This judgment led to the Chief Inspector issuing Guidelines for a Mandatory Code of Practice on the Mitigation and Management of COVID-19 under s49(6), read with s9(3) of the MHSA requiring employers to prepare and implement a mandatory code of practice, to mitigate the impact of COVID-19 on the health and safety of employees.

The objective of this Guideline is to assist employers, as far as reasonably practicable, to establish and maintain a COVID-19 prevention, mitigation, and management programme at mines. The publication of the Guideline made it mandatory for an employer to prepare and implement an appropriate code of practice, addressing and detailing, as a minimum, the following key elements:

  • risk assessment and review;
  • start-up and on-going procedure for mines;
  • COVID-19 Management Programme;
  • monitoring and reporting; and
  • compensation for occupationally acquired COVID-19.

The potential unintended non-compliances that followed, or may follow, due to COVID-19

In addition to the developments in the law already mentioned, a number of practical challenges have arisen. For example, some mining companies have recently found themselves unable to mine in accordance with their approved mining work programme, due to the temporary cessation and disruption of operations over the past year. The national lockdown, and the slow ramp up due to capacity restrictions, has resulted, or may in the future result in the unintended contravention of s25(2)(c) of the MPRDA. This, in turn, may expose the holder of the right to receipt of non-compliance directives and orders.

COVID-19 has also made it exceptionally difficult for mining right holders to comply with, and fully implement, the commitments in terms of approved Social and Labour Plans (SLPs). This has been compounded by the challenges experienced in respect of conducting meetings with mine communities and interested and affected persons during the pandemic, which is now required pursuant to an amendment to the MPRD Regulations. Failure to comply with an approved SLP is, strictly speaking, a contravention of s25(2)(f) of the MPRDA and may result in a non-compliance directive and order being issued by the DMRE.

It is anticipated, therefore, that over the next 18 months, mining right holders may need to consider the necessity of submitting applications in terms of s102 of the MPRDA to amend their MWPs and SLPs to cater for the unforeseen consequences that have, and still will, arise as a result of COVID-19 and, at the very least, to engage the DMRE with regards to deviations from approved authorisations. As approved SLPs now need to be reviewed every five years, it is also highly likely that, in future, SLP commitments will be required to be aligned with municipal LED projects, centred around strategic COVID-19 economic recovery projects.

Conclusion

Until such time as the COVID-19 pandemic is defeated, these developments and challenges remain relevant. It is recommended that all mining and prospecting right applicants, and holders of these rights, retain complete and proper records of all consultations conducted electronically, and that strict compliance with the Guideline, Mandatory Code of Practice on the Mitigation and Management of COVID-19, MWP and SLP, to mention a few, be monitored.

Nupen is a Director, Limberis-Ritchie and Murdock Senior Associates and Matlala a Candidate Attorney with Nupen Staude de Vries.