The Minerals Council of South Africa recently filed a court application for a judicial review of the Mining Charter over the continuing consequences of empowerment transactions. The Council contends that the charter, which was published in September 2018, is not fully in line with a High Court declaratory order of April 2018 on the once empowered, always empowered principle.
Mineral Resources Minister Gwede Mantashe is not impressed by the application and requested the council to rather find a solution to the problem through dialogue.
The decision to go to court could well cost the council dearly because of the negative impact it could have on relations with the minister, his department and trade unions. Embarking on a legal process that may well land up in the Constitutional Court is also short-sighted and creates regulatory uncertainty.
The Constitutional Court will probably support government’s view that when applying for a new mining licence the mining house has to meet the new target of 30% black ownership. It is surely unthinkable that the court would rule that a mining house that had achieved the previous empowerment target of 26% could remain lily white forever. That, in essence, is the effect of the April 2018 ruling.
The once empowered, always empowered clause in the charter is much more favourable than the version in the original Zwane charter. It came as a breakthrough in the negotiations when the department had largely accommodated the Minerals Council in this regard even before the ruling. Even after that, the department indicated that although there are enough legal grounds to appeal against the ruling it would rather make further concessions about ownership. Instead, the department preferred to reach a compromise with the support of the unions to prevent the ownership issue from ending up in a protracted litigation process.
As was the case with the Minerals Council mining communities, too, turned to the courts early last year, but in their case, it was because of being excluded from the consultation process. The High Court ordered the department to consult with mining communities on the charter’s content. Mantashe then undertook a nationwide roadshow to “consult” with communities and a summit was held at which communities could also give input.
After the publication of the charter mining communities contended that the consultation process had been flawed.
I spoke to some community leaders about this and, according to Chief Phathisiwe Mjoji of the Malangeni district in the Eastern Cape, consultation with a community is not a one-off event. He explained that it took a while after Mantashe’s quick visit to explain to his community what the issue was all about. When they were ready for a more productive follow-up talks, the charter had already been implemented. Prince Zwelithini Dlamini of the Lomshiyo traditional community outside Barberton endorsed this view. He contended that his community did not understand what the minister was talking about either and that there had been no opportunity for follow-up discussions. In the end, the charter’s beneficiaries had no real input into the final outcome.
A community leader from the Moruleng district near Pilanesberg who was involved in the communities’ court application, makes the point that Mantashe merely communicated the contents of the charter to them. The charter was not amended at all despite the input made at the meeting and at the summit. Further criticism is that Mantashe mainly spoke to the chiefs and did not engage with ordinary community representatives. This is contrary to the court ruling.
The communities have, however, decided in the interest of stability in the mining sector not to take any further legal steps, and for that they deserve credit.
I would suggest that the Minerals Council follow the mining communities’ pragmatic example and not pursue their risky litigation process because by pursuing it, they would pay a further price for it in the form of a hostile minister, government and populist trade unions.
Gideon du Plessis is Solidarity’s General Secretary