By Warren Beech, Head of Mining and Partner at Hogan Lovells
The uncertainty and complexity surrounding the promulgation of wide-ranging environmental regulations impacting on the mining industry is a concern.
The judgement of the High Court of South Africa in the matter between platinum miner Aquarius Platinum and the Minister of Water and Sanitation delivered on 27 May 2015 highlights this in stark reality.
While the Aquarius judgment must still be confirmed (or not) by the Constitutional Court, the Aquarius judgement has potentially far reaching consequences, says Beech.
In essence, the Court held that the publication by the South African President of the Environmental Laws Amendment Act (NEMLAA), on 2 June 2014, without promulgating the regulations for the implementation of the amendments envisaged in NEMLAA, had to be set aside because the president had not acted objectively and rationally. The President ALSO did not exercise this power in a responsible and considered manner, after assessment of the progress that had been made to promulgate the relevant regulations.
The primary impact of the review and setting aside of the decision of the president to publish NEMLAA, is that the amendments to the National Environmental Management Waste Act (NEMWA), brought about by NEMLAA, will not be of force and effect. The proposed amendments to NEMWA would give effect to implementation of the "one environmental system", including application of NEMWA to mine residues, and making the Minister of Mineral Resources the responsible authority for Environmental Authorisations, in relation to mines.
While, from a legal perspective, the judgement is sound, it has created significant uncertainty regarding applications for Environmental Authorisations that have been submitted, since 8 December 2014, and the status of these applications.
The Court also pointed out the uncertainty regarding the status of historical Environmental Management Programmes, which arose out of the failure to implement the provisions of Section 38B of the Mineral and Petroleum Resources Development Amendment Act, which if enacted, would have confirmed the status of the Environmental Management Programmes.
It is perhaps appropriate to close off on a passage from the judgement which summarises some of the current sentiment surrounding the regulatory uncertainty: "the above simply demonstrates the irrationality of the President's decision to put into effect the amendments without the proper Regulations for implementation…"
It is unfortunate that the Aquarius judgement may be seen as a reflection on the Minister of Mineral Resources who has, since taking up the position, adopted a proactive and positive approach to resolving challenges facing the South African Mining Industry.