19 Aug 2015

Challenge to Mining Charter

Update courtesy of Mantis Networks

While many are wondering about the implications of the “Trumping Clause” in the BEE Amendment Bill for the mining industry an interesting legal development is reported in Business Day of 18th August.

It reports that law firm Malan Scholes Inc. has gone to court to set aside the Mining Charters of 2004 and 2010, arguing that they are unconstitutional, vague and contradictory, allowing for abuse by the mineral resources minister and officials.

Malan Scholes Inc. asserts in its affidavit to the High Court that "It will be shown that by developing and publishing the original charter in a form which is riddled with ambiguity, contradiction and inconsistencies and exacerbating the problems arising from the original charter by publishing the further so-called amended charter with even more incongruities, the minister did little to generate confidence in his willingness to take steps to enhance the regulatory certainty required for improved investment in the mining industry."

The affidavit focuses on the vague, contradictory, ambiguous and "irrational provisions" of the charters asserting that they are contrary to what the Constitution demands for the principles of the rule of law. As a consequence they are policy documents, not enforceable by law and the opportunity for corruption is cultivated by the vague, open-ended and uncertain ownership element in the charters.

The fact that mining companies falling short on their charter compliance could have their licences revoked, posed a real threat to the security of tenure of holders of Mineral and Petroleum Resources Development Act rights.

One cannot help speculating whether this action may not open the door to others in the light of the manifest unfairness of the affidavit process for black owned QSEs and the targeting of African, rather than black South Africans, as envisaged in the Financial Sector draft Charter and the draft Preferential Procurement Policy Framework Gazette.