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Attorney reprises battle with DME Posted: Thu, 01 Mar 2007 [miningmx.com] -- A FEATURE of a debate this week at the Wits Business School was the swordplay between lawyer Peter Leon and Department of MInerals and Energy (DME) chief director Futhi Zikalala over legal action underway against the South African government. Leon, a partner at legal firm Webber Wentzel Bowens, represents Luxembourg registered group Finstone which is suing the South African government for €266m in compensation for expropriation of mineral rights at its Marlin granite mining operations. Present in the 200 strong audience last night were Finstone CEO Mario Marcenaro and Finstone MD Graham Treagus along with a number of mining industry executives including Impala Platinum CEO David Brown. The case is being taken to arbitration at the International Centre for Settlement of Investment Disputes (ICSID) in terms of bilateral trade treaties signed by the South African government with the governments of Italy, Luxembourg and Belgium. Zikalala is the chief director for mineral regulation and administration at the DME. She was standing in for deputy director general Jacinto Rocha who was supposed to taking part in the panel debate. No reason was given for his absence at the debate which had been planned weeks in advance. The topic of the debate was: "Is South Africa missing out on the global mining boom?" Leon reckoned it is and cited a string of regulatory issues with the Mining and Petroleum Resources Development Act (MPRDA). He said the MPRDA created a "backdoor discretion" by linking the grant of mineral rights to sections 2(d) and (f) of the Act. Said Leon: "In the case of mining rights, this requires the minister to include subjective social policy objectives in her decision-making powers and, in the case of prospecting rights, permits her to do so. "This is contrary to the fundamental rule of law principle enshrined in the Constitution which is Parliament must provide adequate guidelines to administrators in the exercise of their discretionary powers." Leon added: "The DME imposes its own internal guidelines on mining companies which are not binding in law such as the social and labour plan guidelines for the mining and production industries and BEE requirements for prospecting rights." Leon contended the MPRDA had breached South Africa’s international law obligations and told the audience the Act: "Drives a coach and horses through the bilateral treaties which has led to the legal action now taking place." Zikalala said the MPRDA was about change and commented: "Change by its nature is difficult." She stressed the importance of dealing with the negative social legacy of the mining industry. She told the audience to visit towns like Vryheid and Kuruman and "... look at what is glaring back at us. We will not shy away from addressing these issues as Government." "If you are unwilling to change then it will be difficult." In a clear jab at the Finstone legal action, Zikalala then cited the adage that people should first work through their domestic legal remedies before going outside the country. "If you go outside the country first then you may fall foul even of the international law." Leon replied by stating it would be interesting to hear what the International Arbitration Panel would have to say on the matter. Interviewed after the debate, Leon said the bilateral treaties allowed parties to chose between the domestic or international courts in which to bring legal action. In a separate interview, Zikalala said mining companies had until 2009 to convert their old order mining rights into new order rights. She believed they should work through the process until that date before deciding whether they should resort to legal action. Click Here to subscribe to our daily newsletter
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