The FSE alleges that there is a direct link between this incident and the DMRE’s failure to enforce non-compliances against the directors of the Mintails Group of Companies for their alleged failure in duty of care; to make safe these areas; to make adequate financial provision for environmental liabilities; and to safely close the mine. The South African Human Rights Commission (SAHRC) found that cessation of mining and liquidation of companies, without proper closure and remediation contribute to unlawful mining. (Report attached).
The findings and recommendations of the Parliamentary Portfolio Committee on Mineral Resources following their site visit of Mintails’ operations in 2018 (pages 39 – 52) found that:
- 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 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 is 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 report is attached hereto.