orion minerals

Since 2012, when Pilanesberg Platinum Mine (PPM) acquired mining rights over the farm Wilgespruit, the Lesetlheng Land Committee (LLC) has engaged in a longstanding dispute and many court battles with the mine.

PPM is a subsidiary of Sedibelo Platinum Mines, whose major shareholders are Pallinghurst and the Bakgatla-Ba-Kgafela tribe.

Sedibelo is chaired by well-known financier Arne Frandsen. The LLC represents a large number of people descended from the 13 clans that bought the Wilgespruit property 100 years ago.

On 8 June 2020, the LLC finally granted access rights to Pilanesburg Platinum Mines to the mining right area by signing a Reinstatement and First Addendum to the Settlement Agreement.

Webber Wentzel represented the LLC in negotiations with Pilanesburg Platinum Mines. The firm was approached by the community for pro bono representation, due to its technical expertise in mining law. Lawyers for Human Rights represented a separate interest group.

Discussions were facilitated by the joint appointment of an independent and impartial mediator, Professor Michael Solomon of the University of Cape Town Resilient Mining Platform.

The Settlement Agreement represents a significant milestone at three levels.

Firstly, in the past, mining companies tended to deal directly with tribal authorities and chieftaincies to obtain access to mining land. However, this settlement was brokered with the direct beneficiaries, who hold rights to their land under the Interim Protection of Land Rights Act.

To win the trust of the community, Pilanesburg Platinum Mines was called upon by Webber Wentzel to make full disclosure of past decisions which had aggrieved the Lesetlheng community.

Secondly, the Mineral and Petroleum Resources Development Act (MPRDA) imposes a statutory duty on the holder of a mining right to compensate the affected owner and beneficial occupier of that property but does not prescribe how the compensation is to be calculated.

Webber Wentzel believes that the method and underlying legal principles used to calculate the compensation due to the community for temporary loss of land and payment of future rental until a mine closure certificate is issued will provide a valuable precedent for other companies and communities affected by mining.

Thirdly, in addition to the monetary compensation, Pilanesburg Platinum Mines has committed to work with the LLC to realise its developmental objectives under Mining Charter III.

Pilanesburg Platinum Mines will contribute ZAR15 million towards a Community Development Trust, reserve 50% of employment opportunities for the Lesetlheng community, establish a procurement entity through which 60% of the preferential procurement opportunities will be directed to the Lesetlheng Community, commit ZAR9 million to its Social and Labour Plans over a five-year cycle for mining on Wilgespruit and dedicate 50% of bursaries, internships and learnerships to the Lesetlheng community.

Professor Solomon comments that several salient lessons were learnt from the dispute and settlement: A pure legal approach to these disputes is expensive and time-consuming. 

Constructive interest-based engagements are much more effective. Mining companies and communities can have positive, symbiotic relationships and cooperate in finding solutions to these problems.

Collaborative relationships between communities and mining companies are contingent on mutual respect that has historically been lacking from both parties in the dispute.

“Very often the internecine issues within the community can prove much more of an obstruction to constructive negotiation and a beneficial outcome than the differences between the mining company and the community,” says Professor Solomon.

Webber Wentzel’s representation of the LLC has in no way compromised the trust of its mining clients, Professor Solomon says.  In fact, the experience gained by Webber Wentzel in representing the LLC in what is a landmark settlement is to the advantage of the company’s corporate clients, as it demonstrates a high level of understanding of both sides of the settlement equation.

It also demonstrates the respective roles that must be played by human rights lawyers and corporate lawyers collaborating in finding workable, equitable and just solutions to these issues.

Both mining and communities are in a much stronger position to navigate their differences as the result of the Maledu judgement.

“The employment of corporate law firms in representing communities levels the legal playing fields, and has enhanced the ability of communities to derive fair compensation from mining companies,” says Professor Solomon.

Bruce Dickinson, partner and mining specialist at Webber Wentzel, commenting on the settlement reached with PPM:

“Corporate law firms like Webber Wentzel who traditionally represent large mining companies also have significant experience in representing communities, particularly in the development and implementation of community development structures and initiatives. 

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“This breadth of experience and deep understanding of the drivers for each party enables the firm to meaningfully assist in bridging the divide and facilitating win-win outcomes.”

AUTHOR: Asmita Thakor, partner at Webber Wentzel