Engaging with communities – has the Minister of Mineral Resources been tied up in knots?

• South Africa
• Africa

• Infrastructure

13-06-2019

The recent judgment of the High Court of South Africa (Gauteng Division) in the matter between Duduzile Baleni and Others, and the Minister of Mineral Resources and Others, under Case No. 73768/2016 (“the Baleni Judgement”), and the Judgement of the Constitutional Court of South Africa in the matter between Grace Masele Mpane Maledu and Others, and Itereleng Bakgatla Minerals Resources (Pty) Ltd and Others, under Case No. CCT265/2017 (“the Maledu Judgement”), has, understandably, sparked substantial debate on whether or not the Minister of Mineral Resources’ discretion to grant rights in terms of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 (“MPRDA”) has been removed, or at the very least, severely restricted by the Baleni Judgement and the Maledu Judgment.

Both Judgements address the interpretation and application of the provisions of the MPRDA, and the Interim Protection of Informal Land Rights Act, No. 31 of 1996 (“IPILRA”) in relation to whether it is sufficient for consultations to take place with members of communities/communities who hold rights to land under Customary Law, before granting a mining right in terms of Section 23 of the MPRDA, or whether consent is required as contemplated in the IPILRA.

Both Judgements concluded that (a) the IPILRA requires consent from community members/the community in accordance with the particular community's custom and traditions, if they were to be deprived of their right to land as contemplated in the IPILRA, (b) mining activities that were contemplated in both situations constituted a deprivation, which, in turn therefore required consent, and (c) consent was required before the Minister of Mineral Resources (“the Minister”) could grant a mining right, in these circumstances.

The courts reconfirmed the distinction between “consent” and “consultation”. In the case of consent, this meant informed, prior consent i.e. agreement, while consultation required genuine engagement aimed at accommodating use of the land by both the landowner/occupier, and the holder of the mining right.

In the Maledu Judgement, the court also made it clear that mining companies are required to engage with owners and lawful occupiers of property to agree terms of access. If a dispute arises, then the process contemplated in Section 54 of the MPRDA must be followed.

The applicants applied to the Constitutional Court for leave to appeal against a Judgement of the High Court of South Africa, Northwest Division, Mahikeng (“the High Court”), which had granted an order evicting thirty seven applicants and all persons occupying through or under them from the relevant farm (“the Farm”). The High Court also granted an interdict restraining the applicants from entering the Farm, bringing their livestock onto the Farm and erecting any structures on the Farm.

The Farm is currently registered in the name of the Minister of Rural Development and Land Reform, who, according to the title deed, owns it “in trust for the Bakgatla-Ba-Kgafele Community”. The applicants contended that they are the rightful owners of the Farm, and that they are informal land right holders under the IPILRA.

The applicants argued further that the High Court should not have granted the interdict, for various reasons, including that the community held informal rights under the IPILRA, they had been deprived of their rights by the granting of the mining right, and they had not granted consent.

The arguments presented by the applicants and respondents, respectively, therefore required the court to consider two competing rights within the context of evictions, namely (a) the right of the applicants to occupy and enjoy the Farm, and (b) the right of the respondents to mine on the Farm. The Court was also required to determine whether the MPRDA creates an alternative avenue for relief (i.e. under Section 54 of the MPRDA) that must be exhausted, before the respondents could approach a court for an eviction application and an interdict, as granted by the High Court.

Before addressing the Judgement, it is important to note the following aspects:

• on 19 May 2008 Itereleng Bakgatla Minerals Resources (Pty) Ltd (“Itereleng”) was granted a mining right over the Farm
• on 20 June 2008 Itereleng concluded a Surface Lease Agreement with the Bakgatla-Ba-Kgafele Tribal Authority and the Minister in respect of the Farm
• in 2014, preparations for full scale mining operations on the Farm commenced
• the applicants prevented Itereleng and its business partners from engaging fully in mining operations, which resulted in the High Court, granting the eviction order, which led to the application for leave to appeal to the Constitutional Court

At 42, on page 18 of the Judgement, the court summarised what it had to determine, namely that the matter should be decided principally on the basis of Section 54 of the MPRDA and Section 2 of IPILRA, and the central issue was whether Section 54 is available to the respondents, and if it was, whether the respondents were precluded from obtaining an interdict before exhausting the mechanisms for which Section 54 provides. Related to this is the second question, namely whether the applicants had consented to being deprived of their informal land rights to or interests in the Farm.

The court held as follows:

• a mining right confers on the holder certain limited real rights in respect of the mineral and the land to which it relates. It entitles the mining right holder to enter the land to which the right relates. These rights are subject to the other provisions of the MPRDA;
• Section 5(3) of the MPRDA echoes two fundamental principles of the Common Law, namely (a) the owner of the land, to which the mining right relates, is obliged to allow the holder access to his/her land to do whatever is reasonably necessary for the effective exercise of the mining holder's rights, and (b) the mining right holder is in turn, obliged to exercise rights in a reasonable manner so as to cause the least possible inconvenience to the rights of the owner
• accordingly, the Common Law requires of both the landowner and the mining right holder to exercise their respective rights alongside each other to the extent that it is reasonably possible to do so
• the above is supported by the provisions of Section 53(2) of the MPRDA which provides that farming or any use incidental thereto does not fall within the purview of Section 53(1) (Section 53(1) of the MPRDA provides that any person who intends to use the surface of any land in any way which may be contrary to the object of the MPRDA or which is likely to impede any such object must apply to the Minister for approval in the prescribed manner. In terms of Section 53(2) of the MPRDA, Section 53(1) does not apply to, amongst others, farming or any use incidental thereto)
• the purpose of IPILRA is to provide for temporary protection of certain rights to an interest in land which are not otherwise adequately protected by law. The term “community” is defined as “any group or portion of a group of persons whose right to land are derived from shared rules determining access to land held in common by such group”. Section 1(2)(b) provides that the holder of an informal right to land is deemed to be an owner of land for the purposes of Section 42 of the Minerals Act (which has been replaced by the MPRDA). Section 1 defines “informal right to land” as including the use of, occupation of or access to land in terms of any Tribal, Customary or Indigenous Law or practice of a tribe, the custom, usage or administrative practice in a particular area or community, etc.
• Section 2 of the IPILRA addresses the circumstances under which deprivation of informal rights to land may take place, and Section 2(1) provides that “no person may be deprived of any informal right to land without his/her consent”
• Section 2(2) provides that where land is held on a communal basis, a person may, subject to subsection (4) be deprived of such land or right in land in accordance with the custom and usage of that community. Section 2(4) provides that the custom and usage of a community shall be deemed to include the principle that a decision to dispose of any right may only be taken by a majority of holders of such rights present or represented at a meeting convened for the purpose of considering such disposal and of which they have been given sufficient notice, and in which they have had a reasonable opportunity to participate
• following the repeal of Section 5(4)(c) of the MPRDA, Section 54 of the MPRDA must be exhausted (before applying to the High Court for an interdict) to ensure that the MPRDA's purpose of balancing the rights of the mining right holders on the one hand and those of the surface rights holders on the other, are fulfilled. The respondents were therefore required to take all reasonable steps to exhaust the Section 54 process (which they had initiated) before approaching the court for an eviction and an interdict. Section 54 of the MPRDA is not only aimed at determining compensation, and the Section 54 process must be initiated and exhausted before persons can approach the High Court for interdictory relief. Section 54(4) of the MPRDA provides that if parties fail to reach an agreement through the Section 54 process, then they may approach a court. Pending the finalisation of the Section 54 process, there is no basis upon which a mining right holder should be entitled to mine, and to allow them to do so would undermine the purpose of Section 54 of the MPRDA, namely to strike a balance between the interests of the mining right holder and the owner
• Section 54 of the MPRDA only applies where the occupation is lawful. In the present case, members of the community/the community had lawful rights in respect of the Farm, and could not be deprived of any informal right to land without their consent. Where land is held on a communal basis, affected parties must be given sufficient notice of and be afforded a reasonable opportunity to participate, either in person or through representatives, at any meeting where a decision to dispose of their rights to land is to be taken. A decision van only be taken with the support of the majority of the affected persons
• the award of the mining right constituted a deprivation of informal rights to land, because of the rights granted to the holder both in terms of the mining right, read together with the relevant provisions of the MPRDA, including Section 5 are extensive,a nd would deprive the community of their rights to the Farm
• as a result, the respondents were obliged to comply with the provisions of IPILRA, and in particular, Section 2. Section 2 of the IPILRA required the respondents to obtain consent from the community and not merely consult with the community

The requirement of the Judgement, that the respondents, including the Minister, were required to obtain consent of the community, applies specifically under the circumstances where the IPILRA applies i.e. where there are informal rights to land, that are protected by the IPILRA. If the community was the registered owner of the Farm (which they have applied to do), then the community would be regarded as the landowner and consultation would apply, rather than requiring consent under the IPILRA.

The Baleni Judgement was handed down after the Maledu Judgement and, understandably, there was significant reference, by the court, to the Maledu Judgement.

It is most important to note the context of the Baleni Judgement, namely an application to prevent the granting of a mining right through declaratory relief. In the case of the Maledu Judgement, a mining right had already been granted, and the emphasis was on obtaining leave to appeal against the judgement of the High Court, interdicting and restraining the applicants in that case from being on the Farm and carrying out related activities. In the Baleni Judgement, the emphasis was on preventing the mining right from being granted, and it therefore has far-reaching effects.

The court held as follows:

• the primary issue before the court was whether prior consent is required from the community, before a mining right may be granted. The matter requires a consideration of the provisions of the IPILRA and the MPRDA in respect of the level of engagement that must be achieved prior to the grant of a mining right i.e. whether consent is required, or consultation is sufficient. Put differently it involves a consideration of the interaction between the MPRDA and the IPILRA, and more specifically whether the consultation requirement contained in the MPRDA applies to the exclusion of the consent requirement contained in the IPILRA
• the fundamental difference between the MPRDA and the IPILRA pertaining to the granting of the mining right is that in terms of the MPRDA, consultation is required before the granting of a mining right and not consent as provided for under IPILRA. This has fundamental implications, the most important of which is that, in regard to a Common Law owner of land, the Minister (provided that there had been consultation), may grant a mining right against the will of the landowner
• on the other hand, in terms of Section 2(1) of the IPILRA, the consent of the holder of an informal right is required before he/she can be deprived of property. IPILRA recognises that many informal rights are not held individually but as a community, and provides that a “person” includes a community
• the grant of a mining right constitutes a deprivation as contemplated in Section 2(1) of the IPILRA and therefore the consent of the community is required
• the MPRDA does not purport to regulate Customary Law and communities with rights in land are treated differently, and are given greater protection
• communities must be afforded broader protection in terms of IPILRA than the protection afforded to Common Law owners as contemplated under the MPRDA when mining rights are considered by the Minister. The MPRDA continues to apply, but so does the IPILRA which imposes the additional obligation upon the Minister to seek the consent of the community which holds land in terms of Customary Laws as opposed to merely consulting with them as is required in terms of the MPRDA. Granting community special protection is not in conflict with the provisions of the MPRDA, and especially Section 23(2A) where it is made clear that protecting community rights to land is part of the purpose of the MPRDA
• requiring free, prior and informed consent from the community is aligned with the principles of International Law

The order of the court was in the form of a declarator and the court declared that (a) the Minister lacks any lawful authority to grant a mining right unless there has been compliance with the provisions of the IPILRA, and (b) in terms of the IPILRA, the Minister is obliged to obtain the full and informed consent of the community prior to granting any mining right.

There are two broad implications for the Mining and Natural Resources Sector, namely (a) in relation to those mining areas in respect of which a mining right has already been granted to the Mining and Natural Resources Sector, and (b) the circumstances under which The Mining and Natural Resources Sector applies for a new mining right.

The Maledu Judgement deals specifically with the circumstances where a mining right has already been granted. In these circumstances, if members of a community/a community hold informal rights to land in terms of the IPILRA, and they continue to occupy and/or make use of the relevant land, The Mining and Natural Resources Sector cannot evict such persons, without exhausting the provisions of Section 54 of the MPRDA, first.

The court in the Maledu Judgement reconfirmed the prominence of Section 2 of the IPILRA and confirmed that consent is required from the members of the community/the community in accordance with that particular community's customs and traditions (depending on the particular customs and traditions of the particular community, consent may be required from a greater portion of that community, than a majority if, for example, the tradition and custom is consent on a consensus basis. This was the case in relation to the community in the Baleni Judgement).

Where the Mining and Natural Resources Sector intends applying for a mining right, and members of the community/a community hold informal rights under the IPILRA in respect of the proposed mining area or a portion of it, then consent will be required from that community, under Section 2 of the IPILRA, before the Minister is entitled to grant the mining right.

Although the Judgements did not address the scenario where a prospecting right is applied for, if the prospecting activities constitute a deprivation as contemplated in Section 2 of the IPILRA, then consent may be a pre-requisite.

With regard to applications for renewal of a mining right, the principles of the Maledu Judgement may be applicable. The relevant community may, if it comes to its attention that a renewal application has been submitted, oppose the renewal application on the basis that consent has not been obtained for the further deprivation of their rights, in terms of Section 2 of the IPILRA. This aspect has not however been addressed in the two Judgements referred to above.

It is also theoretically possible that the principles of the Judgements may apply where applications are made in terms of Section 11 of the MPRDA. Once again, communities may take the opportunity to raise their informal rights to land in terms of the IPILRA, at that time.