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South Africa’s mining sector in 2021 – legal issues unpacked

For the mining sector – key issues for 2021 will be on adopting lessons from the successful response to the pandemic to other aspects of risk management within their businesses; continuing to build a culture of sustainability and managing the risks of environmental pollution.

Adapting the lessons learnt from Covid-19

According to law firm Webber Wentzel’s Kate Collier and Lizle Louw, the mining industry’s response to Covid-19 in helping employees to cope has largely been lauded.

This article first appeared in Mining Review Africa Issue 1, 2021
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Organisations that coped best were those which already had a culture of resilience and adaptability and communicated with their employees, making them feel valued.

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The most effective responses were those led by the most senior executives in a company, and mining companies showed how fully engaged executives were able to bring employees back to work, safely and as soon as permitted and practicable.

In future, the lines between work and home will continue to be blurred and the Labour Court has indicated that occupational health cannot necessarily be separated from public health issues.

  • The understanding of a workplace has to be reimagined and
  • employers should adapt their health and safety policies and systems for different workplaces which now are likely to include private homes
  • Working from home requires a new approach to managing employee performance, productivity, and defining which categories of employees can work from home.
  • In mining, there is often a clear distinction between those who can perform their duties from home and those who cannot, but in other sectors there could be a risk of unfair discrimination.
  • Work from home policies must take this into account.

Building a corporate culture of sustainability

To standardise the Environmental, Social and Governance (ESG) narrative, companies can start by incorporating ESG into their core business model and decision-making.

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This will assist to set qualitative disclosures and quantitative metrics (KPIs) and report on them transparently, according to Webber Wentzel’s Jonathan Veeran and Paula-Ann Novotny.

South Africa’s mining industry is moving in the direction of developing mining-specific standards on ESG to guide monitoring and disclosures, beyond the current independent reporting requirements under current legal frameworks (e.g. Mining Charter, procurement spend, environmental permitting compliance and Social and Labour Plans).

Operationalising ESG as a culture: Companies need to move away from seeing ESG as a reporting and data gathering exercise, to extracting value from it.

ESG standards need to inform all business decisions and be understood and believed in by all management, supervisors, employees and business units/ functions.

Environmental pollution has far-reaching consequences

According to Webber Wentzel’s Garyn Rapson and Merlita Kennedy, the number of class actions stemming from environmental pollution events is rising internationally, and especially in Africa and South Africa.

These events need not be current. South African law also covers historic pollution or pollution on land that a company owns or controls.

Even if the company was not the perpetrator, it has a duty to address it:

  • Under Section 28 of the National Environmental Management Act
  • Under Section 19 of the National Water Act.

Addressing this pollution is very complex and requires technical expertise. However, there is a risk that remedial measures could incur liability in the event of a subsequent class action.

We advise a company to:

  • appoint these experts under legal privilege
  • ensure all draft reports are written under legal privilege submit reports to government only in final form.
  • There should be a separate technical team for potential future litigation because the team involved in the clean-up will be conflicted.

It is necessary to have a co-ordinated action plan, with technical and communications teams working together.

There must be very strict document management procedures (including notes and boardroom minutes) and timeline management.

Ignoring these steps could result in administrative directives/compliance notices or even criminal liability, up to board level.

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