DMR agrees to Charter standstill as legal process gains steam

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SOUTH African mines minister, Mosebenzi Zwane, has agreed in writing not to implement the current redraft of the Mining Charter pending judgement of an urgent interdict brought by the Chamber of Mines.

In return, the Chamber has allowed the Department of Mineral Resources (DMR) until September to prepare its answering affidavit to the interdict application. The hearing was scheduled to take place on July 18.

This agreement is a demonstration that the legal process through which the future of the South African mining sector will be decided is firmly in motion.

A further aspect of the agreement is that the Chamber can set the urgent interdict application down for hearing on 48 hours notice should the DMR or minister breach the understanding.

The parties have asked the Deputy Judge President (DJP) of the High Court to allocate a hearing date in September 2017. This date is subject to allocation by the DJP, which is expected to occur by around the end of July.

“Chamber of Mines CEO, Roger Baxter notes that this is a satisfactory arrangement for the Chamber and the industry, whose primary objective through the interdict application remains to ensure that the DMR’s Charter does not come into effect, pending a court application to have it reviewed and set aside,” said the Chamber in a statement.

“The Chamber’s application to have the DMR’s latest version of the Mining Charter reviewed in terms of the Promotion of Administrative Justice Act (PAJA) and the Constitution will be lodged as soon as possible after judgment has been handed down in the Chamber’s urgent interdict application,” it said.

It added that an ‘Application for a Declaratory Order’ in respect of the recognition of prior BEE transactions under the Original and 2010 Charters, has been re-enrolled by the Deputy Judge President for hearing on 9 and 10 November 2017.

The drafting of a third Mining Charter was published on June 15 which set down a number of provisions that had not been negotiated with the mining sector most of which is represented by the Chamber of Mines.

This included an increase in the target for BEE ownership to 30% from the current 26% as well as a refusal to recognise certain previous empowerment deals.

The Chamber of Mines described the Mining Charter as “… a most egregious case of regulatory overreach” – a comment on certain aspect of the document that were “so obviously beyond the powers of the Minister [of mines, Mosebenzi Zwane]” as he was attempting to exercise powers that “… reside exclusively with Parliament”.

“The act of publication was and is harmful not only because of the content of the 2017 Charter, and the vague and contradictory language employed to convey that content, but also because of the clear threat to the separation of powers which that act presents,” the Chamber said.

It added that the Charter is “… so confusing and confused, and so contradictory in its core provisions, that not only are the mining companies who are supposedly obliged to comply with the 2017 Charter perplexed as to what they are required to do, but legal experts themselves are confused and find themselves unable to provide clear advice to their mining and investment clients as to the meaning and effect of the 2017 Charter.”

Zwane said last week that his department was prepared to consult with mining companies on the charter but doubted whether any of its provisions would be altered – a comment that enraged the Chamber which asked why it had not been consulted before the document was gazetted.

3 COMMENTS

  1. If the Charter is law – as the DMR claims – how is it possible that the Minister who gazetted it, can simply agree with a private sector representative organisation, not to apply it? Surely only a court can decide it is unlawful and suspend it? Or alternatively surely he needs to gazette its suspension? I think (and I am not a lawyer) that the Minister has kinda admitted here that the MC is merely a non-binding policy document anyway. How else can he do whatever he wants with it at his every whim? Apply it, not apply it, whateva! (eye roll), get my Tony and Atul on the line….

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