High court rules against Minerals Council in Mining Charter matter
The court has also ruled that community groups and labour must be part of Mining Charter deliberations, despite the industry group's opposition
The mining industry’s legal challenge against certain clauses in the Mining Charter took a new turn after a court ruling demanded the participation of community organisations, unions and other social parties in proceedings.
In a ruling by a full bench of three judges on June 30, the order was made that the opposition by the Minerals Council SA to parts of the third charter gazetted in 2018 be joined by the parties that contributed towards the formulation of the document.
The council had opposed the introduction of the 12 parties, arguing they had “no legal right” to be part of the case other than as friends of the court, which imposed legal limitations on their involvement.
The judgment made the argument that the charter, which is a document drawn up to give effect to parts of the Mineral and Petroleum Resources Development Act and transform the racial make-up of the mining industry, was aimed at broad participation in the sector, and it would be wrong to exclude them from this legal challenge mounted by the council.
One of the principle points of unhappiness the council has with the charter is that empowerment credits or historical transactions are not automatically renewed when mining rights are refreshed or sold, needing to be refreshed to meet the 30% black ownership stipulated in the charter.
Running concurrently with this case is an appeal brought by the department of mineral resources and energy against a judgment made in 2017 allowing for the continuing consequences of past transactions, which, under the first two charters in place since 2004, set black ownership of mining companies at 26%.
“A key issue in the 2017 case and in this case too, is whether the charter is law or policy,” the three judges said.
If the charter were law, it would be binding on mining companies, whereas policy would be the guidelines of what the department hoped to achieve and would not be legally enforceable.
The department has successfully argued in the high court in Pretoria in the matters around the 2018 charter that a broader group of parties had to be included in the latest deliberations.
The department noted the 12 groups, which included a broad coalition of communities, organised labour and black-owned mining companies, had been intimately involved in the formulation of the 2018 charter after extensive talks.
It was an argument that found favour with the full bench of judges.
The 2018 charter conferred ownership rights to host communities, trade unions and mining entrepreneurs and specified how this would be conferred, they said.
“These issues of ownership are central to the merits of this application, and if the order is granted the rights that inhere in the prescribed 30% shareholding of the ‘previously disadvantaged groups’ would be destroyed,” the judges ruled.
“The loss of these rights is no trivial matter to these parties. It follows that they have a direct, real and substantial interest in the matter — a legal interest to be exact,” they said.
The legal rights of these 12 parties would not be adequately met through applications of be “friends of the court” as the council had argued, they said.
“A party that stands to be prejudiced by an order has a legal right to be joined to the proceedings so that it can protect its interests,” the judges said.
“Furthermore, should any of the community or social partner parties succeed in being admitted as an amicus, it would be denied the opportunity to bring controversial evidence to court.
“It would consequently endure disadvantage, which not only prejudices it but would also preclude the court from fully and fairly determining the issues before it,” they said.
The council, which promotes and protects the interests of its members that account for 95% of SA’s minerals output, said on Monday its efforts to include the 12 parties as friends of the court had come to naught.
“The Minerals Council will give effect to the court order. Regrettably, this development does mean that the finalisation of the status of the contested elements of the 2018 Mining Charter will be delayed,” it said.
The council has long bemoaned the regulatory uncertainty that has been a factor of the mining sector — something minerals and energy minister Gwede Mantashe said he had paid close attention to since coming to office in early 2018.
He not only gazetted the 2018 charter, replacing the damaging and controversial 2017 version gazetted by his predecessor, Mosebenzi Zwane, but he also scrapped amendments to the act that had been in the works for about a decade and had cast a shadow over the mining, petroleum and gas industries.
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