Xolobeni ruling could hurt investment, say experts
The high court says the mineral resources minister cannot award a right to mine unless full and informed consent has been obtained from the community involved
While civil society has welcomed a high court ruling which empowers communities to refuse mining on their land, mining law experts warn it could severely damage investment in SA.
The landmark judgment said the mineral resources minister could not award a right to mine in the wild coast area of Xolobeni, unless “full and informed” consent had been obtained from the community.
This power will also extend to other communities under customary law. Mineral resources minister Gwede Mantashe, has reportedly indicated he wants to appeal against the judgment.
SA in recent years has struggled to compete for investment in new mining projects, partly because of regulatory uncertainty.
Allan Reid, head of the mining and minerals sector at Cliffe Dekker Hofmeyr said that for 90% of the time, applications for new mining rights are for areas which are under customary law.
“The implications are enormous. It’s a decision which is going to cripple the mining industry,” said Reid. “Already there are so many hurdles in obtaining mining rights.”
Consultations with communities are already increasingly difficult and time-consuming as often a number of different factions have to be engage with, he said.
Peter Leon, partner at Herbert Smith Freehills, agreed the development is bound to have a negative effect on investment.
He agrees with the Constitutional Court on a different case, brought by members of the Lesetlheng community in North West, when it found that there needs to be proper consultation with communities before mining rights are granted. The complainants faced eviction from their farmland to make way for a mining project.
While the extent of consultation was clarified, that ruling did not require consent either by landowners or communities, Leon said. However, the high court judgment on Xolobeni goes much further “by seemingly importing the notion of free, prior and informed consent from the International Labour Organisation Convention 169 which SA has neither signed nor ratified”. That international law concerns the rights of indigenous peoples.
Reid said full and informed consent means one’s entire mining rights application will have to be made available to the community and its representatives. Many of the documents are highly technical in nature and it are likely to require considerable interaction with the community, he said.
Claire Tucker, head of public law and regulatory at Bowmans, said the high court judgment introduces uncertainty, as the state was understood to be the custodian of mineral resources, while the landowner, generally, would be compensated for losses but would not be able to actually stop the mining.
“If community consent is required for mining then any landowner’s consent is arguably necessary,” said Tucker.
“It is an area where whatever the outcome of the appeal, clear guidelines are required from the DMR [department of mineral resources] as this is an increasingly contentious issue in mining communities.”
Xolobeni community members have said they are prepared to fight an appeal up to the Constitutional Court.