The rest of the letter can be downloaded as a pdf.
The FSE is a federation of community based civil society organisations committed to the realisation of the constitutional right to an environment that is not harmful to health or well-being, and to having the environment sustainably managed and protected for future generations. Their mission is specifically focussed on addressing the adverse impacts of mining and industrial activities on the lives and livelihoods of vulnerable and disadvantaged communities who live and work near South Africa’s mines and industries.
In accordance with the above-mentioned mission, the FSE’s comments are limited to matters pertaining to the mining industry. The FSE’s comments will be substantiated by real examples within the scope of the FSE’s experience and our active participation in a significant number of environmental impacts assessments, environmental management programme reports, water use license applications, environmental authorisations, steering committees, forums, task teams, teams of experts, academic research groups, boards, etc. over a period of 15 (fifteen years).
The FSE, with the support and representation of the Legal Resource Centre (LRC), is currently in the process of preparing additional comments on the NW&SMP. In view of the aforesaid, we respectfully request allowance to refine and augment our preliminary comments.
The rest of the letter can be downloaded as a pdf.
Court victory for South Africa’s protected areas in Mabola case
On Thursday, the 8th of November 2018, the North Gauteng High Court set aside the 2016 decisions of former Mineral Resources Minister Zwane and the late Environmental Affairs Minister Molewa to permit a new coal mine to be developed in the Mabola Protected Environment near Wakkerstroom, Mpumalanga. The case was brought by the coalition of eight civil society organisations challenging a range of authorisations that have permitted an underground coal mine in a strategic water source area and a protected area. The Mabola Protected Environment was declared under the Protected Areas Act in 2014 by the Mpumalanga provincial government as part of the declaration of more than 70 000 hectares of protected area in the Mpumalanga grasslands. This followed years of extensive research and planning by a number of government agencies, including the Department of Environmental Affairs, the South African National Biodiversity Institute and the Mpumalanga Tourism & Parks Agency. In 2016, without public consultation and without notice to the coalition, the two Ministers gave their permission for a large, 15-year coal mine to be built inside the Mabola Protected Environment. The Court set aside the permission and referred the decision back to the two Ministers for reconsideration on the basis that the Ministers did not take their decisions in an open and transparent manner or in a manner that promoted public participation, and that the decisions were therefore procedurally unfair. The court criticised the Ministers for relying on the processes followed by other decision-makers instead of exercising their discretion under the Protected Areas Act independently, referring particularly to their failure to apply a cautionary approach when dealing with “sensitive, vulnerable, highly dynamic or stressed ecosystems” as “an impermissible abdication of decision-making authority”. The court also held that: “a failure to take South Africa’s international responsibilities relation to the environment into account and a failure to take into account that the use and exploitation of non-renewable natural resources must take place in a responsible and equitable manner would not satisfy the ‘higher level of scrutiny’ necessary when considering whether mining activities should be permitted in a protected environment or not. Such failures would constitute a failure by the state of its duties as trustees of vulnerable environment, particularly where it has been stated that ‘most people would agree, when thinking of the tomorrows of unborn people that it is a present moral duty to avoid causing harm to the environment'” (at 11). The permission for this mine given by Molewa and Zwane was the first in South Africa for a new mine to be permitted in a protected environment. Earthlife Africa, the Mining and Environmental Justice Community Network of South Africa (MEJCON-SA), the Endangered Wildlife Trust, BirdLife South Africa, the Federation for a Sustainable Environment, the Association for Water and Rural Development (AWARD), the Bench Marks Foundation and groundWork, represented by the Centre for Environmental Rights, challenged the late Environmental Affairs’ Minister’s and the former Minerals Minister’s decisions to allow this mine to go ahead. The court ordered that on reconsideration of the application for permission to mine in the Mabola Protected Environment, the Ministers are directed to: comply with sections 3 and 4 of the Promotion of Administrative Justice Act (PAJA); take into account the interests of local communities and the environmental principles referred to in section 2 of the National Environmental Management Act (NEMA) “with a strict measure of scrutiny”; defer their decisions on reconsideration until after the Environmental Management Programme and Water Use Licence appeals have been determined; not grant permission in terms of section 48(1)(b) of NEMPAA unless a management plan for the Mabola Protected Environment has been approved by the MEC in terms of section 39(2) of the Protected Areas Act and the management plan’s zoning of the area in which the intended mining is to take place permits such mining. The High Court expressed its criticism of “a disturbing feature in the conduct of the Ministers” and endorsed the submission made by counsel for the coalition that “ethical environmental governance and behaviour is enhanced simply by exposing it to the glare of public scrunity”. What resulted was “an unjustifiable and unreasonable departure from the PAJA presripts and lead to procedurally unfair administrative action.” The High Court ordered the Ministers and MEC to pay the coalition’s legal costs on an attorney and client (punitive) scale. “South Africa has long recognised that the grasslands of Mpumalanga, KwaZulu-Natal and Free State are incredibly important to South Africa’s natural heritage. The grasslands are important water sources, and home to a range of production sectors that underpin economic development. In the case of Mabola, the Protected Environment falls inside a strategic water source area which feeds some of South Africa’s biggest rivers,” says Yolan Friedmann, Chief Executive Officer of the Endangered Wildlife Trust. “Moreover, protected areas not only help protect our biodiversity – particularly our incredible wildlife – and important natural ecosystems, but are also a key part of South Africa’s reputation as a global tourist destination.” Mashile Phalane, spokesperson for the Mining and Environmental Justice Community Network of South Africa (MEJCON-SA) says: “This judgement is a victory for environmental justice. We want to see protected areas actually protected against mining by our government as custodians of the environment on behalf of all South Africans. This custodianship is violated if decisions that have such important consequences are taken behind closed doors. MEJCON-SA is deeply invested in issues of accountability. This judgement reinforces the fundamental importance of fair and transparent decision making.” Catherine Horsfield, attorney and mining programme head at the Centre for Environmental Rights, welcomed the judgement. “It confirms to government and to all developers proposing heavily polluting projects in environmentally sensitive areas in South Africa that exceptional circumstances must be shown to exist to justify that proposed development. South Africa is a water-stressed country, and the Mabola Protected Environment, where the coal mine would be located, has particular hydrological significance for the country as a whole. “The judgement also confirms the foundational principles of our law that went awry when the Ministers made their decisions to permit mining here. These are that no decision of this magnitude can be made unless a fair, proper and transparent decision making process has been followed.” THE NEMPAA JUDGEMENT IS ATTACHED FOR DOWNLOAD.
Mabola NEMPAA Judgement 8 November 2018. Document attached for download...
Draft report of the Portfolio Committee on Mineral Resources on its oversight visit North West and Gauteng on the 13 – 14 September 2018
Draft report of the Portfolio Committee on Mineral Resources on its oversight vi...
Mintails placed into final liquidation
BUSINESS DAY Mintails placed into final liquidation Department of Mineral Resources will join long line of creditors hoping to recoup money 20 September 2018 - 17:27 Lisa Steyn
21 August 2018 - 05:04 Mark Olalde Pollution: Water resource management consultant Anthony Turton, with the Mintails gold plants and water treatment tanks in the background. Picture: BUSINESS DAY/FREDDY MAVUNDA Mintails Mining and several related companies have announced their liquidation, throwing into question the environmental rehabilitation of highly polluting operations near Johannesburg. Mintails mines and processes gold from a sprawling 1,715ha complex of waste piles and open pits in Krugersdorp and has for years been flagged for noncompliance. Its operations are bordered by informal settlements and suburbs housing thousands of residents, many of whom have complained of health effects, which they blame on radioactive dust and water pollution from Mintails’ mines. Records show that the cost to clean up the environment would be about R330m, but there is only R25.6m available. Observers fear that the situation could deteriorate further, as happened at the Blyvooruitzicht Gold Mine, an abandoned large-scale operation on the West Rand. A case study in the country’s deeply flawed mine closure system, Mintails teetered on the verge of collapse for years and entered business rescue in October 2015. Mariette Liefferink, the activist CEO of the Federation for a Sustainable Environment, tracked Mintails for more than a decade and is now working to intercede in the liquidation proceedings as the legal voice for what she labels the "mute environment". "There was poor planning. [Mintails’] due diligence was flawed. They overestimated the gold grade and the resource that could be reclaimed. "They continued to exploit the resource, to reclaim only the profitable parts and never top up the financial provisions," Liefferink says. As the company slips into liquidation, it passes the brunt of its environmental liability to taxpayers and, to an extent, to other mining companies. After Mintails fought for nearly three years to save the company, business rescue practitioner Dave Lake notified the Johannesburg high court in early August of his intention to liquidate the company. Provisional liquidation was granted on August 17 and a liquidator is expected to be appointed soon. THERE IS NO LONGER A REASONABLE PROSPECT OF RESCUING THE COMPANY. The business rescue plan called for the refurbishment of a gold ore processing plant but, according to a memo dated August 1 that Lake sent to the court and to affected parties, it failed when multiple investors ceased funding Mintails. "There is no longer a reasonable prospect of rescuing the company," the memo read. The liquidator will now decide how to pay back creditors with the remaining assets. Environmentalists fear this process could leave environmental liabilities low on the list of what deserves money. According to the business rescue plan, written in December 2016, Mintails owed various creditors more than R1bn, including a shortfall of about R300m in reclamation funding. Due to a web of involved companies, it remains unclear if a large portion of the already insufficient financial provisions can be accessed for environmental cleanup. DRDGold formerly held one of the mining rights and the corresponding trust fund, which are now in the Mintails group. DRDGold CEO Niël Pretorius says he believes that the trust fund contained R18m but he did not identify the trustees, whose consent is vital to unlocking the money. Documents show the Mintails group acknowledged that rehabilitation would probably cost between R300m and R336.5m, but it declined to top up financial provisions. According to the environmental management programme from one of Mintails’ mining rights: "These liabilities are also historic and predate Mintails’ involvement and should thus not be for Mintails’ account." Experts debate this narrow interpretation of the law. Lake wrote in the business rescue plan: "The Mintails group’s rehabilitation liabilities have remained largely unfunded for some time, and there are simply no free funds available to the [business rescue practitioner] to enable him to immediately provide such funding." Legal Resources Centre attorney Lucien Limacher is representing the Federation for a Sustainable Environment. "This is a trend that has been occurring for a couple of years where mining companies have undertaken a business rescue plan or have applied for liquidation because they have failed to really look after the rehabilitation fund," he says. The Legal Resources Centre sent letters to several government agencies, including the department of mineral resources, the department of water & sanitation and the department of energy, asking them to intervene in the situation and threatening to pursue legal action if the department of mineral resources fails to act. Department of water & sanitation spokesperson Sputnik Ratau says they are "engaging Mintails so that the immediate measures can be put into place to ensure water resources protection. A longer-term plan is required to ensure rehabilitation of the mining-impacted areas." Lake declines to answer questions about the failed business rescue and the liquidation but he wrote for Moneyweb in January 2017 and laid out his argument for Mintails’ use of business rescue: "Mintails was sick – but it wasn’t terminal." Now the situation has become what Liefferink calls "pass the parcel", with Mintails playing the part of a "scavenger company", a term coined by researchers to describe under-resourced outfits that buy the scraps left over from larger mining companies and ultimately abandon them. Large gold, coal and platinum mines rarely, if ever, properly close in SA and there wasn’t one large-scale mine in Gauteng that achieved full, legal closure between 2011 and 2016. Mintails’ case will not affect the law that ring-fences financial assurances for reclamation, Limacher says. "But it is precedent-setting in that mines might now start applying for liquidation to avoid paying the cost of rehabilitation." Mintails’ West Rand concessions came in part from DRDGold, which also remines waste piles, and from Mogale Gold, which was in judicial management when Mintails acquired it in 2006. Since then, Mintails engaged in a pattern of environmental degradation. For example, the department of water & sanitation found in an August 2014 inspection that Mintails transported "slurry/sludge" in unlined trenches, completed insufficient monitoring, spilled slurry from pipelines and implemented no storm water management system at a pollution control dam. In December 2016, polluted runoff from waste piles was found to be seeping through a dam wall into the Wonderfonteinspruit, which has immediate downstream agricultural uses in the community of Kagiso. Now it will largely be up to the liquidator and regulators to protect the environment and public health. "That is the pattern that seems to be followed in the gold mining industry, and, I assume, would be followed in the coal and platinum mining industries, as well. "As soon as a mine is no longer very profitable, it transfers its assets," Liefferink says. "That seems to have the tacit support of the department of mineral resources." However, the department of mineral resources sent a statement that reads: "The department will engage with the appointed provisional liquidators with the intention to safeguard the environmental and social responsibilities." Mintails former CEO Johan Moolman declined to comment except to say he quit on June 26 when he learned a new investor had bought the company. Mvest Capital agreed to purchase Mintails from Paige, a vehicle of the UK-based Harbour family, with the understanding that Mvest would inject R30m into the beleaguered company to stimulate the business rescue plan. Mvest decided against handing over the full amount, paying only R5.5m. Mvest director Matthew Moodley acknowledges the initial agreement and the R5.5m. He says that after a month it became apparent the deal would require more investment to succeed. "With the increased need for working capital in July, Mvest took a decision to withdraw from the transaction," Moodley says, adding that Mvest did not "conclude a transaction with Paige". Liefferink says these companies are all "jumping from a sinking ship". She fears Mintails will go the way of the abandoned Blyvooruitzicht Gold Mine, which was once one of the country’s most productive gold operations and is now a source of pollution, violent illegal mining gangs and headaches for adjacent mines. Mintails has followed a strikingly similar pattern. In the Blyvooruitzicht case, two companies, DRDGold and Village Main Reef, almost completed a business deal to sell the nearly exhausted mine and both walked away, claiming the other carried responsibility. "That whole area, just like Blyvooruitzicht, will be left like it is," Liefferink said. While neighbouring mining companies will probably have to pump water from the void in Mintails’ absence, the consequences of "the dust fallout and the toxic water in the river systems" will be carried by communities and by the municipality. oxpeckers.org Additional reporting by #MineAlert manager Tholakele Nene https://www.businesslive.co.za/bd/companies/mining/2018-08-21-liquidation-allows-mintails-to-shirk-environmental-liabilities/
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