Top Menu

Legality and constitutional issues of Charter halt its implementation

The South African Chamber of Mines released a media statement on Friday explaining that an agreement has been reached to suspend the implementation of the revised Mining Charter pending judgment on a case brought by the industry.

Minister of Mineral Resources Mosebenzi Zwane explained that neither he nor the Department of Mineral Resources (DMR) would implement or apply the provisions of the 2017 Reviewed Mining Charter until judgment had been passed on the urgent interdict brought by the Chamber, which seeks to halt the charter’s implementation.

In the statement, the industry representatives explain that they have agreed to the DMR’s request for more time to prepare its response in the case, therefore postponing the hearing scheduled for 18 July for a date which will be allocated by the Deputy Judge President (DJP) of the High Court in September, as per a request.

The statement also noted that the Minister has also agreed that, in the event of any breach of the undertaking, the Chamber can set “an urgent interdict application down for hearing on 48 hours’ notice to the Minister.”

The Chamber of Mines CEO, Roger Baxter reiterated the Chamber and the industry’s commitment to transformation, and stressed that it was imperative that meaningful and lasting transformation be undertaken in a way that ensures the sustainability and growth of the industry.

The Mining Charter, which Zwane published 15 June, requires mining assets in South Africa to be 30% black-owned, up from 26% currently, and previous deals from which black investors have since sold out are not given full credit, raising concerns about dilution for existing investors.

The government said the rules are required because companies have been too slow to redress the inequity caused by apartheid, while the Chamber argues that the changes breach the Companies Act and the Constitution, and will scare off investment.

“There are a whole bunch of elements and principles in there that were never discussed with the industry, some are contrary to company law and are unconstitutional, which contradict our WTO trade obligations.

“There are also ownership issues and a bunch of targets that are not achievable by the industry in the time that is given,” said Baxter.

“The legal action is to get the Charter suspended, second is to apply for a court review and lastly that we have a declaratory order process also in place related to the ownership element of the Charter, what we call the continuing consequences issues,” he added.

Mining and labour analyst Mamokgethi Molopyane said that she was always certain that the new Mining Charter would not be implemented.

“The department’s move is an admission from the mining minister that the new charter is flawed. It also shows a lack of clarity in terms of how are they going to handle it moving forward. Remember the Charter was meant to be finalised this year so that it brings a sort of certainty to the industry…that is the kind of a crisis it has created,” she said.

Union responds

The National Union of Mineworkers expressed its disappointed in Zwane and how it would also be considering its legal options.

“We are extremely disappointed with the minister of Mineral Resources, who seems to have buckled under pressure in court and conceded in the suspension of the Mining Charter and thus delayed the meaningful inclusion of employees and communities in this exploitative industry,” NUM said in a statement.

“We expected no less from the Chamber of Mines, whose actions we feel have attacked every essence of transformation in the mining industry.”

, , , , , , ,

Comments are closed.