Communities must benefit more from mining — panel

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Residents of mining areas testified at the high-level panel on assessment of key legislation and acceleration of fundamental change about the acute disruptions caused in their lives and livelihoods by mining and their concerns are dealt with in several recommended amendments to legislation.

The residents’ problems are compounded by the role of traditional leaders who have assumed ownership of communal property and therefore the right to enter into commercial deals without consulting their populations, the panel says in its report. There are reports of forced removals in the wake of mining deals.

The panel says that to advance transformation, the Mineral and Petroleum Resources Development Act has established that mineral resources are not owned by landowners, but are the common heritage of all South African citizens, with the state as the custodian.

“To make this meaningful, the [act] abolished landowners’ rights to say no to mining on their land. While intended to advance transformation, this change has had devastating impacts for members of rural and customary communities, who have borne the brunt of the removal of the express right to say no,” the panel’s report states. “There are no real benefits for communities. Part of the solution lies in requiring compliance with the Interim Protection of Informal Land Rights Act … supplemented with express provisions in the Mineral and Petroleum Resources Development Act, ensuring that communities receive adequate information on proposed mining activities prior to deciding whether to consent or not.

“For communities who have already faced dispossession, clear provisions regarding compensation are required.”

The report says that community representatives insisted at every public hearing held by the panel in a mining area that they had seen no benefit from mining.

“Examples were put forward of traditional leaders who created a legion of miningrelated investments through contracts they enter into with the mining companies, but who never report on, or distribute these benefits among the people whose land rights are undermined in the process,” the report states. “Community companies are also hamstrung by usurious vendor financing, abuse by majority shareholders and through transfer pricing and other means linked to asymmetrical power and access to information.”

The administration of community mining revenues by provincial governments remains a contentious issue.

During apartheid, in the former Bophuthatswana homeland — now in North West province — community royalties were kept under custodianship of homeland president Lucas Mangope.

The royalties, amounting to hundreds of millions of rand, were kept in “D-accounts” (development accounts) administered by the president’s office through a system of financial controls. “When the homelands were dismantled in 1994 more than 800 Daccounts were transferred to the office of the premier of the North West. Since 1994 these accounts, worth hundreds of millions of rand, have not been audited and millions have gone missing.”

It recommends that in cases of mining on communal land where the community has not benefited, the minerals act must provide for compensation for individuals, households and communities to be calculated against the position in which they would have been had the mining not occurred.

The act must be amended to ensure that revenue from mining-related activities and opportunities generated are shared in an equitable and transparent manner among people whose land rights are directly affected, the panel recommends.

The act must also include binding financial and administrative protocols for “entities that purport to represent community interests and companies that do business with them”, including accountability mechanisms that align with customary law principles of transparency and accountability.

The panel recommends that the act be amended to provide for a charter to protect and promote customary and artisanal small-scale miners, and set a framework for the participation of communities in the sustainable and equitable exploitation of the resources of their communal land.

Section 47 (the minister’s power to suspend or cancel rights, permits or permissions) must be amended to “expressly provide” for the suspension or cancellation of mining rights where a company has significantly failed to meet its Social and Labour Plans and B-BBEE commitments.

“This power has never been used, so must be made explicit to put the matter beyond doubt.”

The Mineral and Petroleum Resources Development Act must be amended to establish a mechanism to independently investigate community grievances in an efficient, democratic, and transparent way and advise on them.

The panel proposes that Section 10 of the act be amended to expressly require that directly affected communities must be invited to negotiate and seek agreement on any mining application. It must be amended to also expressly require compliance with the Interim Protection of Informal Land Rights Act as a condition for the grant of a mining-related right.

The panel wants a further amendment to specify the minimum information to be shared with community members including full mining right applications and environmental impact assessments before any decision to accept mining.

The Mineral and Petroleum Resources Development Act must be amended to provide that a mineral-right applicant must, at own expense, invite an affected community to appoint independent experts of their choice to assist in negotiations in communal areas.

Another amendment must provide that, where more than one community is affected, each shall have the right to independently decide whether to grant or refuse its consent for mining.

This article was first published in Business Day on 22 November 2017. 

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