Water News

FSE's REPORT FOR SEPTEMBER 2019

Written by Monday, 14 October 2019 18:46

The report is attached for download.

FSE's REPORT FOR AUGUST 2019

Written by Tuesday, 17 September 2019 12:12

The report for August 2019 is attached for download.

Report for June/July 2019

Written by Monday, 29 July 2019 16:29

The full report covering the June/July activity is attached for download.

FSE's REPORT FOR MAY 2019

Written by Tuesday, 25 June 2019 13:31

The Report for May 2019 is attached for download.

The FSE refers to the recent workshop facilitated by the DEA on the proposed Regulations pertaining to the financial provisioning on the rehabilitation and remediation of environmental damage cause by reconnaissance, prospecting, exploration, mining or production operations.

 

Firstly, the FSE wishes to express its gratitude to the DEA for the facilitation of the workshop, which provided an opportunity for meaningful engagement. 

 

The FSE hereby wishes to augment its oral comments, which the FSE put forth at the said workshop, in particular with reference to Regulation 6, subsection 6 of the proposed Financial Regulations, whereby it is stated: 

 

“The Chief Executive Officer of the applicant, holder, or person appointed in a similar position, or where liquidation or business rescue proceedings have been initiated, the liquidator or business rescue administrator of the company, is responsible for implementing the plans and report contemplated in subregulation (2)* and signing off all documentation submitted to the Minister.” 

 

*(Subregulation (2) directs an “applicant or holder to determine the financial provision through a detailed itemisation of all activities and costs, based on actual market related rates for implementing the activities for-

  1. Annual rehabilitation, determined in the annual rehabilitation plan conforming to the content requirements of Appendix 1;
  2. Final rehabilitation, decommissioning and mine closure, determined in the final rehabilitation, decommissioning and mine closure plan, apportioned per year and conforming to the content requirements of Appendix 2; and
  3. Remediation and management of residual and latent environmental impacts, including the ongoing pumping and treatment of polluted or extraneous water, determined in an environmental risk assessment report conforming to the content requirements of Appendix 3”).

 

The FSE’s involvement with the business rescue and liquidation processes of the Grootvlei Mine, the Blyvooruitzicht Gold Mining Company and the recent liquidation of the Mintails Group’s Mintails Gold (Pty) Ltd, Mintails SA (Pty) Ltd and Mintails Randfontein Cluster companies and Prof Tracy Humby’s research in this matter (Report attached) assisted the FSE in identifying certain challenges, e.g.

 

  • In terms of the Companies Act 71 of 2008 and the Insolvency Act 24 of 1936 the liquidators’ duty is to protect the interest of the creditors and the shareholders, and not the environment. 

 

Prof. Humby’s paper highlighted the following challenges:

 

  • The lack of articulation between the closure requirements in the MPRDA and the process for winding up companies as set out in chapter 14 of the Companies Act, 1973.  Chapter 14 establishes a process whereby insolvent companies are placed under the custodianship of a liquidator who manages the fair and equitable allocation of the company’s property amongst its various creditors. Various safeguards are built into this process to ensure that interested parties are made aware of an application to initiate the winding-up of a company; that reasons justifying the postponement or dismissal of the application for winding-up are considered; and that creditors are allowed to consider the company’s statement of affairs and prove their claims against the company. The winding-up process commences with a court granting a provisional liquidation order and appointing one or more liquidators who assume custody of the company’s affairs. The process culminates in the liquidator lodging a liquidation and distribution account with the Master of the High Court specifying how the company’s remaining assets must be applied in (i) payment of costs, charges, and expenses incurred in the winding-up process; and (ii) payment of the claims of creditors in a manner that approximates as far as possible the allocation of assets in terms of the law of insolvency. After the winding up is complete the liquidator sends a certificate to the Companies Commission which allows for the company to be dissolved and deregistered, thus ending its existence as a juristic person and it capacity to bear legal rights and obligations.
  • The MPRDA, chapter 14 places no specific obligation on the court to determine whether a company applying for a provisional liquidation order has applied for a closure certificate, ensured the transfer of environmental liabilities, or actually topped up any shortfall of funds in the chosen vehicle for financial provision. This lack of specificity is exacerbated by the narrow notice requirements, as chapter 14 requires only that employees, trade unions and SARS should be notified of a company’s intention to initiate winding up proceedings (s 346A Companies Act, 1971).
  • Government departments charged with the custodianship of mineral resources or the protection of the environment are not required to be notified and in practice are frequently caught on the back foot, becoming aware of a company’s pending liquidation after a winding-up order has already been granted by a court. Although notice of a provisional winding-up order is required to be published in the Government Gazette, capacity constraints are such that it is unlikely such departments will become aware of the application in time to participate in the court proceedings or later in the creditors’ meetings. Whether they would even be able to “represent” the financial provision for environmental rehabilitation at the creditors’ meetings is open to debate.
  • The duties and potential liability of the liquidator during the liminal phase between the granting of the provisional and final winding-up orders are unclear.  It is uncertain, for instance, whether the liquidator is obliged to apply for a closure certificate where the company itself has failed to do so, or whether the liquidator(s) would be responsible for environmental damage occurring during the liquidation phase.
  • It is not clear whether the financial provision for rehabilitation already “made” would be regarded as an asset of the company available for distribution to the creditors. In practice, the protection afforded to the financial provision would probably depend on its form. In the case of trust property, for example, s 12 of the Trust Property Control Act provides that trust property shall not form part of the personal estate of the trustee, except insofar as the trust beneficiary is entitled to the trust property. However in terms of the Standard Trust Deed used by the DMR for financial provision for rehabilitation, the trust is established for the benefit of the beneficiary, which when read with other clauses, clearly means the mining company responsible for carrying out rehabilitation and preventing and controlling pollution at its operations. Given this it would be possible to argue that protections afforded by trust legislation do not apply. Similarly, cash deposited into an account designated by the director-general could be regarded as an “asset” in the liquidation process.
  • Next, in the (likely) event of a shortfall in funds (i.e where environmental liabilities have been accounted for but funds have not actually been transferred to the vehicle for financial provision), there is no guidance on how such claim could be proved at creditors meetings. It is doubtful whether the financial provision for rehabilitation would rank as either a “secured” or a “preferent” creditor, as these terms are currently defined in the Insolvency Act. The department of mineral resources (or other state department or civil society actor) would thus have to fight with other concurrent creditors for the spoils of assets remaining after these two creditor categories have been satisfied.
  • The public interest in rehabilitation, specifically to ensure that the state and communities do not assume a disproportionate share of the environmental risks, should however be enough to justify the pre-liquidation settlement of the financial provision for environmental rehabilitation; i.e. it should be part of the court order granting provisional liquidation. However there is no clear obligation in law vesting in mining companies to do this. The Standard Trust Deed used by the department of mineral resources states that should a beneficiary go into liquidation prior to fulfilling its statutory environmental obligations it must not earlier than three months, and not later than one month prior to taking any steps terminating mining operations or initiating winding up proceedings, have final estimates prepared of the probable costs of compliance with outstanding environmental statutory obligations, to be certified by the regional manager (clause 17.1, Standard Trust Deed). If, on or after the date of termination of mining activities, the total amount estimated for outstanding environmental obligations exceeds the amount standing to the credit of the beneficiary in the trust’s account, the beneficiary “shall forthwith pay to the Trust the shortfall” (clause 17.2, Standard Trust Deed). However, the only consequence of non-compliance with this clause (and other clauses) of the trust deed is that it allows the Commissioner of SARS to apply certain tax penalties.
  • Finally, one of the most serious consequences of the winding up procedure is that the company ceases to exist as a legal person. The environmental obligations specified in the MPRDA are linked to the “holder” of a prospecting or mining right, and this in turn is defined with reference to a “person”. If no “person” legally exists these obligations by extension cannot be enforced. Amendment Act 49 of 2008 attempted to circumvent this by specifying in its amendment of s 43 that the obligation to apply for a closure certificate extends to “the previous holder of an old order right or previous owner of works that has ceased to exist”. However, the formulation “previous owner of works that has ceased to exist”, while laudable in its intention, cannot on its own resuscitate a dissolved company. How can obligations be enforced against an “owner” that is distinguished from other holders by non-existence? The amendment would have done better to refer to the “previous shareholder or shareholders of a juristic person that has ceased to exist”.

 

These challenges were confirmed by the Parliamentary Portfolio Committee (PPC) on Mineral Resources during its oversight visit of Shiva Mine and the Mintails Group in September 2018.  We attach the Report hereto.  Please refer to pages 39 to 52 of the attached Report. (Ref. 22 November 2018:  ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 174─2018. No 174—2018,  FIFTH SESSION, PARLIAMENT. Pages 39 – 52.)

 

The PPC found:

  • It is clear that some mining companies are still operating without adequate financial provision for repairing damage caused to the environment by mining activities, if they suddenly close.
  • Neither Shiva Uranium (Pty) Ltd and Mintails Mining SA (Pty) Ltd has saved all the money they were supposed to set aside under the law to pay for environmental rehabilitation. The shortfalls are R36.6-million for Shiva and R460-million for Mintails.
  • The state will inherit these liabilities if the mines are finally liquidated.
  • The DMR has failed to implement effectively and carry out the intentions of Parliament to ensure that all mines rehabilitate the damage they cause.
  • Changes to the mining law were made by Parliament after 2002 to ensure that in mining, as elsewhere, the polluter must pay.
  • The new laws have not proven effective in avoiding this situation where the state and the taxpayer still ends up paying for the environmental harm caused by mining.
  • There is a lack of clarity on the rules for the Department of Mineral Resources when it comes to Business Rescue Practitioners. It seems there is non-application of the law resulting in a free for all.
  • The DMR allowed Mintails to operate between 2012 and 2018, despite the fact that the Department had never approved the environmental management plans of the mine and had never issued the company with a mining right under the law.
  • There is a huge regulatory gap regarding the financial provision of environmental rehabilitation of a mine during the process of business rescue.
  • There is a lack of standardization by the DMR on how to relax environmental obligations of a mine during the business rescue stage.

 

The PPC recommended:

  • The DMR must identify clearly and specifically the gaps between mining, insolvency and company law that have led to this ongoing situation, where the polluter does not pay, it is the state that ends up paying.
  • DMR should get specific legal opinion on these complex issues.
  • The DMR must report to the Committee in Parliament on what it will do [or needs to do] differently in future to ensure that this situation does not continue.
  • DMR must report on what efforts they have made to hold directors and shareholders of Shiva and Mintails liable for the environmental debts of these failed ventures.
  • The DMR must actively ensure that the licensing of mines goes with responsibility and accountability.
  • The DMR should further explore the regulatory gaps resulting from the business rescue process and come up with regulations that will ensure full environmental compliance during the period when a mine s experiencing financial distress. 
  • The DMR should design and implement standardized approaches when dealing with the relaxation of environmental financial provisions for mines that are undergoing business rescue process.

 

The FSE’ presentation to the Australian High Commission and the Australian Centre of Geomechanics, which has relevance as well as some recent news media reports regarding Mintails, which also, have relevance are attached hereto. 

FSE's Report for April 2019

Written by Monday, 20 May 2019 09:40

The FSE April Report is attached for download.

FSE's Report for March 2019

Written by Tuesday, 16 April 2019 16:02

The report is attached for download.

ACG Paste 2019 Conference

Written by Friday, 05 April 2019 16:25

The Australian Centre for Geomechanics will be holding the  22nd International Conference on Paste, Thickened and Filtered Tailings in Cape Town, South Africa from 8–10 May 2019, in collaboration with Paterson & Cooke.

 

This will be the fifth time that the event will be held in Southern Africa: Pilanesberg (2001), Cape Town (2004), Botswana (2008) and Rustenburg (2012).

Southern Africa, as a region, is water scarce and has experienced severe droughts for the last few years. Together with changes in local legislation requiring facilities to be lined, there is a renewed interest in paste and thickened tailings and dry stack filter options in the region.

Mariette Liefferink, the CEO of the Federation for a Sustainable Environment, South Africa will be presenting the keynote address on the 10th of May 2019, titled “Selected extracts from South Africa’s environmental legislation, challenges with the management of gold tailings within the Witwatersrand gold fields and case studies”

 

See program here.

FSE's ACTIVITES IN FEBRUARY 2019

Written by Sunday, 24 March 2019 10:41

The document is attached for download.

MINING

BASEL GOLD DAY - HOW TO OBTAIN CLEAN GOLD: THE FSE'S PRESENTATION

Please find the following attached for download: 1. Basel Gold Day: How to obtain clean gold - the consumer perspective 2. Basel Gold Day: Presentation by the FSE

PROPOSED ARTISANAL MINING POLICY - DMRE'S PRESENTATION AND FSE'S SUBMISSION

Attached for download: 1. ASM Policy 20202. FSE's Submission...

SA NEWS

FSE - DONATION OF TREES AND TREE PLANTING IN SIMUNYE, WEST RAND IN ASSOCIATION WITH SOUTH DEEP MINE

The FSE, in association with Gold Fields’ South Deep Mine, donated 40 white Karee Trees (Searsia penduline) during Arbor Week to the mining affected community of Simunye in the West Rand and participated in the tree planting ceremony with the community of Simunye, the local Municipality and officials from South Deep Mine.  The FSE also delivered a presentation during the ceremony.

"Varkies" gou op hok, maar als nie pluis | Beeld

Article also available for download as an attachment.

Radon Alert - Carte Blanche

Millions of South Africans are exposed to radioactive radon gas in their homes and workplaces every day, as the naturally occurring gas escapes through cracks in the earth. The second leading cause of lung cancer in several countries, radon breaks down and when inhaled, decaying atoms emit alpha radiation that can damage the DNA. There are no safe levels of radon concentration. The United States Environmental Protection Agency emphasises any radon exposure has some risk of causing lung cancer. Carte Blanche investigates why South Africa has no regulations to protect against radon accumulation in the home and what you can do to test your home and prevent lung cancer.   Watch the video here.

WITS Economics & Finance Courses: Mining for Development: The Taxation Linkage

Economics & Finance Courses at the University of the Witwatersrand. Mining for Development: The Taxation Linkage - Understand taxation for development and sustainability in mining. View the course here. Enrolment starts on the 7th of October 2019.

WATER

The Federation for a Sustainable Environment’s ongoing role in addressing the sewage pollution in the Vaal River

‘People the same as pigs’ in the VaalBy Sheree Bega | 16 Oct 2020 Foul: Pigs root in sludge in Emfuleni municipality. (Photos: Delwyn Verasamy/M&G) Clutching her one-year-old son, Monica Ndakisa jumps onto a brick to avoid the sewage that runs like a dark stain across the passage in her home.  “We’ve lived like this for years,” she says pointing to one of the culprits: her blocked toilet, which causes sewage to pool into nearly every room of her home in Sebokeng hostel in the Vaal. “The smell is too terrible.” It’s worse outside. Her small garden is submerged in a sickly, grey sewage swamp. To stop the human waste from seeping inside, Ndakisa has built a concrete barrier at her front door. But it’s futile. “My five-year-old son was in the hospital for two weeks with severe eczema and they told me it’s because of all this sewage. It makes us cough all the time. It’s so depressing to live like this.” Samson Mokoena, of the Vaal Environmental Justice Alliance (Veja), shakes his head. “It’s chaos. You can’t allow people to live in such conditions. The government is playing with our people.” Ndakisa’s neighbour, Maphelo Apleni, has used pipes to divert the stream of sewage from his garden. “It never stops,” he says grimly. “We have a municipality [Emfuleni] that doesn’t care about us.” Mziwekaya Mokwana points at a sewage-filled furrow clogged with litter where pigs are feeding. “This is no better life,” he says. “People are the same as pigs here.” Sewage in Vaal River system  Last month, the human settlements, water and sanitation department said it would take at least another three years to minimise and eventually stop the sewage flowing into the Vaal River system. In a recent presentation, it states how “design treatment capacity is at its limit, housing development investments are delayed and there are negative environmental and health impacts”. Ageing infrastructure is to blame for sewage spillages, coupled “with a lack of operation and maintenance investment” as well as theft and vandalism.  It will cost about R2.2-billion “to have a sustainable impact on the Vaal River catchment within Emfuleni local municipality”. The department’s plan aims to safeguard infrastructure; repair the bulk network to eliminate spillages, key and critical pump stations and rising mains; refurbish wastewater treatment works “in an attempt to comply with discharge licence conditions”; and achieve operation and maintenance requirements. But Maureen Stewart, the vice-chairperson of Save the Vaal (Save) is sceptical. She says there is no political will to tackle the crisis. “These problems go back over 12 yearsand reached crisis proportions when the system collapsed in 2018. The result is some 200 million litres of raw or partially treated sewage entering the Vaal River and its tributaries daily.” Stewart warns that it’s an ecological disaster that also affects agriculture and has serious health implications for people living above and below the Vaal Barrage Reservoir, which is 64km long and used to supply Johannesburg with water but is now too polluted to do so.   She says the Emfuleni municipality has been under Gauteng’s administration since mid-2018 and, despite promises, the status quo remains — unbridled sewage pollution of the Vaal River and Emfuleni.  “The Ekurhuleni Water Care Company (Erwat) was appointed to take over in 2019 and were given funding and spent R179-million. Their contribution was to unblock pipes and remove 50 tons of rubbish from the system. This opened the pipes but, as the pump stations and the three wastewater treatment plants remain dysfunctional, there has been no improvement. Raw sewage continues to flow into the Vaal River and into the streets of Emfuleni.”  Monica Ndakisa sweeps overspill from her toilet. There was a “glimmer of hope” when Minister, Lindiwe Sisulu, visited the Vaal in January this year, assuring Save that action will be taken and that funds are earmarked in the 2020-2021 budget.  “It seems her enthusiasm has not filtered down to her department,” says Stewart. “After Erwat’s contract was not renewed, the department stated they would undertake the repairs by appointing their own contractors. Tender documents have been languishing on someone’s desk at the department since July.” Sputnik Ratau, spokesperson for the department, says the government has committed resources towards solving the sewage problem in the Vaal.  “Government sent state institutions to assist Emfuleni local municipality (ELM) in this regard; these include SANDF and Erwat. Recently, the department finalised the scope of all that needs to be done to solve the sewage problem. There are 26 work packages that will be advertised in the coming weeks for competent contractors to take part in solving the sewage challenge in the Vaal.”  The department, says Ratau, aims to have a “busy festive season” working with the appointed contractors. “In the 2020/21 financial year, the department has committed R911-million towards solving this challenge. The total investment by the department in 2020/21 financial year is R1.2-billion in the Vaal; this includes the building of additional wastewater treatment capacity and associated pump stations.” Maphelo Apleni installs pipes to drain sewage out of his garden. Before the end of the financial year Module 6 in Sebokeng water care works will be launched, “subject to no community unrest disrupting construction”. The department, Ratau says, has to take all necessary precautions to ensure that section 217 of the constitution is followed as far as procurement is concerned.  “Thus the departmental checks and balances had to be followed to the letter to ensure compliance with procurement processes. This unfortunately caused delays but was necessary.” Within the next month the department aims to advertise for all the contractors “that can assist in this challenge”. Ratau says commitment dates, including start and completion dates, “will be sent not only to Save but all interested stakeholders once the contractors are appointed. The department cannot preempt this before the appointments are made.” He says that R7-billion is required to “solve the pollution challenge in ELM. This needs to be coupled with operations and maintenance, which is a function of ELM at local government level”. Save is once again taking the government to court to enforce legislation to ensure infrastructure is repaired within phased completion dates and that sufficient funds are made available for ongoing maintenance and operation of the system by the municipality, supervised by the high court.   Veja’s Mokoena is glad the department is taking over the Vaal clean-up. “This situation was supposed to be fixed a long time ago. So much money has been squandered at the municipal level.” Rand Water’s delay Eight months. That’s how long it took Rand Water to release public water quality records for the Vaal Barrage system to a team of aquatic specialists investigating the ecological health of the river system.  In January, Aquatic Ecosystems of Africa submitted a Promotion of Access to Information Act (Paia) application to Rand Water for access to its water quality analysis data for the Vaal Barrage and downstream since 2015.  Nothing happened, it says, until Tshepang Sebulela, the Paia compliance officer from the South African Human Rights Commission (SAHRC) intervened late last month.  New pipelines are being installed in the Vaal. In an email to Rand Water, Sebulela noted how the multiple requests for records by Aquatic Ecosystems and the Federation for a Sustainable Environment have allegedly been ignored, which in terms of Paia are deemed refusals.  “The SAHRC is greatly concerned by a large number of public institutions who provide such important services to the public who refuse to meet their basic legislative obligations,” he wrote. The records landed in the firm’s inbox on 2 October.  Aquatic Systems’ Simone Liefferink says sourcing surface water system data is becoming increasingly difficult. “It’s disturbing the data is not adequately managed, readily accessible to the public and private sectors who pay tax and other water charges for effective catchment management to be implemented.”  Rand Water did not explain the reason behind the delay.  That the information was provided in a PDF format of almost 2 000 pages “frustrates and delays” its interpretation, says Liefferink.  She and her partner, Russell Tate, began their investigation after a major fish kill in the Vaal River in mid-2018. That September they testified at the HRC’s inquiry into the contamination of the Vaal River that high levels of ammonia from the wastewater treatment works was wiping out life in the river system. A snap-shot analysis of the data provided by Rand Water shows high levels of E coli, ammonium and ammonia — key indicators of sewage pollution. Average E coli counts soared from 12 705 colony-forming units per 100ml in 2010 to more than 107 000 in 2018 and 66 923 in 2020.  “The contributing factor is clear — dysfunctional sewage treatment conveyances and treatment plants. More disturbing is the long-standing deterioration of the system that ever increases the loss of biodiversity and other essential ecological functions and human services. Yet this matter is still not treated with extreme urgency,” says Liefferink. HRC’s long-awaited report It’s taken nearly two years for the Human Rights Commission to release its report into the Emfuleni sewage crisis. “Their report has not yet been taken to parliament, nor has it been published. Why?” asks Save’s Stewart. Buang Jones, the Gauteng manager of the HRC, says the provincial report has been finalised.  “It’s with the commissioners now for final adoption and approval. Once it’s been approved, it will be shared with implicated parties and they’ll have 10 days to comment. This is a countrywide issue and the report seeks to address broader challenges when it comes to river pollution and wastewater management,” he says.  Read the original article here.

POLLUTION OF THE VAAL RIVER INTERVENTION AS PRESENTED at Rietspruit Forum - Aug 2020

The Intervention document is attached for download....

Development of the National Eutrophication Strategy and Supporting Documents

Attached documents:1. DWS Eutrophication SA & GA PSC 1 BID2. PSC 1 Meeting A...