Introduction
A landmark case was recently handed down by the Gauteng High Court, in a matter between De Beers Consolidated Mines (Pty) Ltd (“DBCM”) and the Regional Manager of the Limpopo Regional Office of the Department of Mineral Resources and Energy (“DMRE”), which has profound implications for role players in the industry. The heart of the matter lies in DBCM’s pursuit of a closure certificate for an open-pit diamond mine known as the Oaks Mine. This article provides a summary and analysis of the pivotal judgment in so far as it relates to section 43 of the Mineral and Petroleum Resources Development Act, 2002 (“the MPRDA”).
The Background
In 1998, DBCM was granted a mining licence in terms of the Minerals Act, 1991 (“the Minerals Act”) in respect of the Oaks Mine.
The initial Environmental Management Programme (“EMP”) that was approved in terms of the legislation at the time, contained measures to mitigate the environmental impact of mining during the construction, operational, closure and rehabilitation phases of the mine. The EMP contemplated, however, that the mine pit would remain open upon closure of the operations.
In July 2003, DBCM applied for an amendment of its initial EMP. The amended EMP also contained closure steps and rehabilitation measures which stipulated that the mine pit would remain open. The Oaks Mine operated for a period of 10 years from 1998 until 2008, when its operations ceased. The mining licence was not converted to a new order right in terms of the MPRDA and accordingly lapsed.
In 2009, DBCM submitted an application for a closure certificate in terms of section 43(3) of the MPRDA, and attached a closure plan to that application. The closure plan provided for post closure maintenance and control of the open pit, but stated, that upon closure of the Oaks Mine the mine pit was to remain open – this accorded with what had already been authorised in terms of the amended EMP. However, in 2011, the Regional Manager advised DBCM that it needed to address a number of environmental concerns before a closure certificate could be issued. In addition, a few months thereafter, the Regional Manger further indicated that he would not process the application for the closure certificate, unless DBCM addressed the Regional Manager’s earlier concerns and findings.
In the interim, on 8 December 2014, the National Environmental Management Act, 1998 (“NEMA”) was amended to introduce a provision which contemplates that the previous holder of an old order right and owner of works would, notwithstanding the issuing of closure certificate by the Minister of Mineral Resources and Energy, remain responsible for any environmental liability, pollution or ecological degradation, the pumping and treatment of extraneous water, as well as the management and sustainable closure of the operations.
On 26 February 2016, the Regional Manager sent a reminder letter to DBCM calling upon it to respond to the DMRE’s previous comments and further advising DBCM that its application for a closure certificate in respect of the Oaks Mine would only be processed after DBCM had addressed the concerns previously raised by the DMRE.
In 2017, DBCM responded to the DMRE’s letters and requested it to agree to an amendment of DBCM’s approved EMP (in what seemed to be an attempt to cater for some of the concerns raised by the DMRE) and to provide DBCM with the closure certificate after implementing DBCM’s proposal.
Despite DBCM’s request, on 23 October 2018, the DMRE rejected DBCM’s closure application and closure plan on the basis that the DMRE required the pit to be rehabilitated and filled. It further called upon DBCM to submit a new closure plan that would indicate how the pit would be rehabilitated and include proof of results of consultations with interested affected parties and the DMRE, prior its submission of the revised closure plan.
Almost a year later, on 16 October 2019 DBCM submitted its closure application and an approved EMP in response to the DMRE, and further advised the DMRE, amongst other things, that the Oaks Mine had been successfully rehabilitated in accordance with its approved authorisation. DBCM took the position that its closure application remains the one which was first submitted on 3 November 2009 – which the DMRE had failed, or refused or neglected to make a decision on and had instead only commented on. Furthermore, DBCM expressed the view that its application must be decided in terms of section 43 of the MPRDA and the MPRD Regulations as they existed on the date that the closure application was submitted in 2009.
On 6 June 2020 the Regional Manager informed DBCM that its closure application would continue or remain pending until a revised closure plan had been submitted to the DMRE explaining how the open pit would be backfilled. DBCM then decided to lodge an internal appeal in terms of section 96 of the MPRDA to the Director-General of the DMRE (“the DG”), against the refusal of the Regional Manager to process the closure certificate and his failure to take a decision on the closure application.
In addition, DBCM instituted review proceedings against the Regional Manager and the DG, for an order seeking (amongst other relief):
- a declarator that section 43 of the MPRDA as it existed when DBCM lodged its closure application on 3 November 2009 (before the MPRDA was amended) was applicable to the determination of DBCM’s closure application;
- a declarator that DBCM was not under any obligation to backfill the open pit at the Oaks Mines; and
- that the decision of the Regional Manager to refuse to grant DBCM’s closure application, alternatively refuse to decide the application, be set aside.
The Court’s Analysis and Determination
Justice Khumalo presided over the matter and had to determine a number of critical issues, including whether section 43 of the MPRDA, as amended, should be applied prospectively or retrospectively in considering DBCM’s closure application.
In this regard, the Court determined the following:
- the purpose of section 43 of the MPRDA is to ensure that environmental impacts, whether positive or negative, are identified, assessed, and managed by the persons who are legally responsible;
- this purpose should be read with the principles set out in section 2 of NEMA, applying retrospectively;
- applying section 43 of the MPRDA only prospectively, would lead to a situation where environmental statutes are in conflict with it. For example, NEMA contains duty of care and polluter pays principles. NEMA requires the holder, as far as practicable to rehabilitate the environment affected by the prospecting or mining operations to its natural or predetermined state or to the land use that conforms to the generally accepted principle of sustainable development. These principles apply retrospectively and section 43 and other sections of the MPDRA give effect to such provisions;
- if section 43 is only applied prospectively, it would not be in sync with the NEMA provisions that apply retrospectively; and
- although it is a prima facie rule that a statute should not be interpreted as having retrospective effect, it is not a strict rule and the subjective positions in which parties find themselves cannot have a bearing on the status of the provisions of the statute concerned.
The Court furthermore held that:
“In relation to the application of MPRDA’s section 43, it is instructive that even if this provision has been applied prospectively, NEMA continues to apply retrospectively. This implies that the principles of duty of care and polluter pays still applies to DBCM. It therefore would be realisable by the Application of s 43 as amended. There should therefore be compliance in terms of the new s 43 (3) and 15…”
Conclusion
This case once again highlights the intricacies of the interplay between mining and environmental law in South Africa.
The judgment may, however, give rise to several practical complications and questions. For example:
- does it mean that all applicants who applied for closure certificates before section 43 of the MPRDA was amended by the Mineral and Petroleum Resources Development Amendment Act, 49 of 2008, would need to update their applications to address the further requirements of section 43 of the MPRDA as it now applies?
- what other provisions of the MPRDA would be considered to apply retrospectively?
- will all pending closure applications be rejected by the DMRE on the basis of the judgment going forward?
This judgment evidently has huge practical implications for role players and the closure of their operations in South Africa.
Disclaimer: This article is provided for informational purposes only and is not intended to serve as legal advice. Readers should consult one of our legal professionals for advice tailored to their specific circumstances.