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29 May 2015 The Director: Land Use and Soil Management Department of Agriculture, Forestry and Fisheries Private Bag X120 Pretoria 0001 e-mail: [email protected] [email protected] Dear Sir DRAFT POLICY AND BILL ON PRESERVATION AND DEVELOPMENT OF AGRICULTURAL LAND FRAMEWORK 1 Introduction The Chamber of Mines (“the Chamber”) refers to the notice which was published in the Government Gazette on 13 March 2015 inviting comments on the aforesaid draft documents by 30 May 2015. The Chamber would like to thank the Department of Agriculture, Forestry and Fisheries for the opportunity to submit our written comments. In what follows the Chamber will refer to the draft Bill as the Bill. 2 About the Chamber of Mines of South Africa The Chamber is a voluntary membership, private sector employer organisation founded in 1889. The Chamber is an association of mining finance companies and mines for various different commodities. The Chamber exists as the principal advocate of major policy positions endorsed by the mining industry employers and represents these policy positions to various organs of South African national and provincial governments and to other relevant policy making and opinion-forming entities, both within South Africa and abroad. The Chamber also works closely with the various employee organisations in formulating these positions where appropriate. It represents mining companies producing about 90% of South Africa’s mineral production and employing about 90% of the employees employed in the mining industry. document.docx

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29 May 2015

The Director: Land Use and Soil Management

Department of Agriculture, Forestry and Fisheries

Private Bag X120

Pretoria

0001

e-mail: [email protected]

[email protected]

Dear Sir

DRAFT POLICY AND BILL ON PRESERVATION AND DEVELOPMENT OF AGRICULTURAL LAND FRAMEWORK

Introduction

The Chamber of Mines (the Chamber) refers to the notice which was published in the Government Gazette on 13 March 2015 inviting comments on the aforesaid draft documents by 30 May 2015. The Chamber would like to thank the Department of Agriculture, Forestry and Fisheries for the opportunity to submit our written comments. In what follows the Chamber will refer to the draft Bill as the Bill.

About the Chamber of Mines of South Africa

The Chamber is a voluntary membership, private sector employer organisation founded in 1889. The Chamber is an association of mining finance companies and mines for various different commodities. The Chamber exists as the principal advocate of major policy positions endorsed by the mining industry employers and represents these policy positions to various organs of South African national and provincial governments and to other relevant policy making and opinion-forming entities, both within South Africa and abroad. The Chamber also works closely with the various employee organisations in formulating these positions where appropriate. It represents mining companies producing about 90% of South Africas mineral production and employing about 90% of the employees employed in the mining industry.

Some introductory comments about mining

Before dealing with the draft documents specifically, it will be useful first to make some general introductory comments in relation to mining, which should assist in putting our subsequent comments on the draft documents in context.

Special attributes of mining

There are special attributes which apply to the mining industry and which do not apply to other land uses, namely the following:

Minerals are areabound.Mineral deposits, and therefore also mining activities, extend across artificial land, municipal and provincial boundaries.Mining is in the national interest and affects the economic interest of South Africa as a whole.Vested land use and development rights have been acquired and exist under the current statutory provisions and which rights should not be subjected to negation or deprivation.Mining is a temporary land use activity.Upon cessation of mining once the minerals have been extracted, the land must as far as is reasonably practicable be rehabilitated to its natural or predetermined state.

As can be seen, mining, as a land use typology, is unique in many respects. For one, it is geographically bound to the source of the mineral and, as a result it cannot be planned for in a typical planning sense. In other words, a planning body cannot, in advance, determine the optimum situational context of a future mining land use as it would typically do for other land-use typologies, including farming. It follows that, in attending to the forward planning obligations of various bodies as contemplated in the Draft Policy and Bill on Preservation and Development of Agricultural Land Framework, the bodies concerned will simply not be capable of predetermining the future use of land for mining purposes.

The economic and social impact of mining

Mining is the Flywheel of the South African Economy -

Creates 1.35 million jobs (520 000 direct & 830 000 indirect).

Accounts for about 18% of GDP (8% direct, 10% indirect & induced).

Critical earner of foreign exchange >50%.

Accounts for 20% of private investment (12% of total investment).

Attracts significant foreign savings (R1.4 trillion/ 29% of value of JSE).

Significant contributor to transformation (>R150 BEE deals concluded)

2012, R28 billion & R5 billion in royalties.

Significant procurer of local goods and services (R488 billion)

R93.6 billion spent in wages and salaries

Significant contributor to infrastructure investment (50% of TFR volume)

94% of electricity generation via coal power plants

Significant contributor to community development through SLPs and Charter

R4 billion spent on skills development

R2 billion spent on community investment

Besides its direct contribution to the economy, mining also has significant multiplier effects

Initial impactThis is the initial direct impact on GDP of the mining sector (the actual activity of mining)

1st round effectDirect production as a result of the backward linkages (suppliers) to the mining sector

Indirect effectIndirect effect of linkages to supply chain and forward linkages of mining (the business activities created as a result of expenditures off the mine site).

Induced effectThe indirect effect of mining generated revenues and expenditures on lifting the tide of household income throughout the economy and the effect of this on expenditures in the economy.

Total impactThe sum of the above components

In summary, the positive benefits of mining on the economy are generated at all levels of the economy, i.e. at local municipal, regional, provincial and national levels. It is therefore extremely important that land use planning at all these levels is done taking into account the existence of the mining industry and its unique characteristics.

The Chambers Fundamental Disagreement with the Bill

While the Chamber necessarily agrees with the object of food security, it is of the view that the Bill does not reflect an equitable balancing of agricultural needs against justifiable economic and social development by recognising the predominant role of mining in the national interest. The Bill reflects a silo approach by the Department of Agriculture without a consideration of the broader policies of the government as a whole.

The Bill encroaches on the functional competences of other National, Provincial, and Municipal Departments of State in terms of the Constitution of the Republic of South Africa, 1996

In the Chambers respectful submission, there is a fundamental Constitutional problem with the Bill. The Subdivision of Agricultural Land Act, 1970, which the Bill is designed to replace, was intended to prevent fragmentation of agricultural land into uneconomic farming units, such as by way of bequests to descendants. The controls on selling, leasing, granting of rights, and servitudes, were inserted to prevent circumvention of the main control of subdivision. The objects of the Act were recently summarised in the Blue Crane judgment to which further reference is made in paragraph 6 below. The draft Bill however goes much further in seeking to regulate not only agricultural uses themselves, but other non-agricultural uses. It seems to the Chamber that this goes well beyond the functions of the Minister of Agriculture and encroaches upon and usurps the functions and competences of the Ministers responsible for land, for planning, and for mineral resources. Such encroachment is revealed by the references in the draft Bill to rezoning, zoning or rezoning not being within the functional competence of the Minister of Agriculture but indeed within the functional competences of the National, Provincial and Municipal authorities who are responsible for land use planning. It therefore seems to the Chamber that the Bill insofar as it attempts to regulate land use of agricultural land generally, is unconstitutional in offending against the functional competences which are provided for in the Constitution of the Republic of South Africa, 1996. For that reason the Bill gives rise to an intergovernmental dispute which will ultimately need to be decided in terms of the Intergovernmental Relations Framework Act, 2005.

Conflicts with Landowners

With landowners having lost the mineral right and compensation battles, to which the Mineral and Petroleum Resources Development Act, 2002 gave rise, the Bill would provide an ideal opportunity for intransigent and rapacious landowners, in furtherance of the perennial and age-old conflict between mining and other surface uses, to hold mining companies to ransom. That is not in the national interest.

The National Development Plan (NDP)

Chapter 6 (Inclusive Rural Economy) which deals with agricultural expansion cannot be read in isolation but instead must be read and interpreted in the context of the NDP as a whole. Chapter 3 (Economy and Employment) and Chapter 4 (Economic Infrastructure) emphasise the role of mineral and petroleum resource development in job creation, export earnings, and infrastructural development, and have resulted in the focus by the President of South Africa on infrastructural development as reflected in all his recent speeches in and outside of Parliament.

The Infrastructure Development Act, 2014

The importance of infrastructural development is also reflected in the Infrastructure Development Act, 2014. Unfortunately that Act is limited to public infrastructure, although mines, oil and gas pipelines, and refineries are listed in schedule 1 to the Act as activities, projects in relation to which may be designated as strategic integrated projects in terms of the Act. The Act espouses a one-stop-shop philosophy through the Presidential Infrastructure Co-ordinating Commission.

The one-stop-shop legislation in relation to mineral and petroleum resource development

With much acclaim including in the State of the Nation Address by the President of South Africa on 17 April 2014, the one-stop-shop system has from December 2014 been implemented in regard to the obtaining of necessary rights, permits and permissions for mineral and petroleum operations, this in respect of mining rights, environmental authorisations, waste licences, atmospheric emission licences, and water use licences. All of this occurred by way of the Mineral and Petroleum Resources Development Amendment Act, 2008, the National Environmental Management Amendment Act, 2008, the National Environmental Management Laws Amendment Act, 2014, the National Environmental Management: Waste Amendment Act, 2014, the National Environmental Management: Air Quality Amendment Act, 2014, the National Water Amendment Act, 2014 and the National Environmental Management: Integrated Coastal Management Act, 2014. The Bill runs contrary to these one-stop shop achievements in proposing yet another impediment to mining operations.

The Inter-Governmental Relations Framework Act, 2005

As more fully discussed in relation to the specific clauses of the Bill, the Bill confers a veto power on the Department of Agriculture in relation to mineral development. The Chamber submits that that is not in the national interest. Should the Bill proceed in its current form, the Chamber will consider recommending to the Minister of Mineral Resources that he declare a dispute as contemplated in the Inter-Governmental Relations Framework Act, 2005 in relation to the drafting and tabling of the Bill.

Non-recognition of State Custodianship of South Africas Mineral and Petroleum Resources

The Mineral and Petroleum Resources Development Act, 2002 (MPRDA) fundamentally changed the legal dispensation in regard to mineral and petroleum resources in South Africa by vesting custodianship of such resources in the State. In Agri South Africa v Minister for Minerals and Energy 2013 (4) SA 1 (CC), the Constitutional Court held that this did not constitute expropriation and that accordingly no compensation was payable. Unfortunately the age-old perennial and inherent conflict between landowners and mining right holders continues to endure and should not and cannot be resolved in favour of the landowners in the manner suggested in the Bill, without comprising the national interest.

The legal position of the mining industry in regard to land use, prior to the Constitution of the Republic of South Africa, 1996

Both statutorily and at common law, mining uses predominated over other land uses.

Statutorily, the following are examples of provisions which applied.Sections 90(1) and 91(1) of the Mining Rights Act, 1967 respectively provided as follows:Section 90(1): The right of disposal over the surface of proclaimed land and land held under mining title is reserved to the State for the purposes of this Act or any other law, and save as is specially otherwise provided in this Act, the surface of land held under such title shall not without the written permission of the mining commissioner be used otherwise than for mining.;Section 91(1):

Commissioner may grant permission to any person to use the surface of any proclaimed land or land held under mining title for agriculture or afforestation, and the State President may authorise any department as defined in section 1 of the Public Service Act, 1957 (Act No.54 of 1957), or the railway administration to use for such purposes the surface of any such land owned by the State and not held by a Lessee.

Section 5(1) of the Minerals Act, 1991 provided that:

Subject to the provisions of this Act, the holder of the right to any mineral in respect of land or tailings as the case may be, or any person who has acquired the consent of such holder ... , shall have the right to enter upon such land or the land on which such tailings are situated, as the case may be, together with such persons, plant or equipment as may be required for purposes of prospecting or mining and to prospect and mine for such mineral on or in such land or tailings as the case may be, and to dispose thereof.,

and as a corollary s23(1) of that Act provided that:

(1)If any person in any manner uses or causes to be used or intends to use or to cause to be used the surface of any land or includes or causes it to be included or intends to include or to cause it to be included into any town planning scheme which may, in the opinion of the Minister, detrimentally affect the object of this Act in relation to the optimal exploitation of any mineral which occurs or may occur in economically exploitable quantities in or on such land or in tailings on such land, the Minister may

(a) cause an investigation to be held into the matter; and

(b) after consideration of the comment contemplated in subsection (2) if any, and the result of the investigation contemplated in paragraph (a), issue a direction ordering such person to take such rectifying steps within a period specified in the direction as may be required by the Minister..

At common law, the following prevailed.The mineral right holder was entitled to use the surface of land for prospecting, mining, and purposes incidental thereto, it having been put thus in the leading case of Hudson v Mann & Another 1950(4) SA485(T) (which was again approved recently in Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd 2007(2) SA363 SCA)):

... in the course of his operations, he ((the mineral right holder)) is entitled to exercise all such subsidiary or ancillary rights without which he will not be able efficiently to carry out his prospecting and/or mining operations.

As a corollary to the above, the mineral right holder could obtain an interdict against the landowner from engaging in land uses which would frustrate the exercise of the mineral right holders rights of surface use, such as by way of establishment of townships or agricultural holdings, and building of dams and other structures. See for example :

Transvaal Property & Investment Co Ltd v SA Townships Mining & Finance Corporation Ltd 1938 TPD 512 (township establishment)

Yelland & Others v Group Areas Development Board 1960 (2) SA151 (T)

Nolte v Johannesburg Consolidated Investment Co Ltd 1943 AD 295

Zuurbekom Ltd v Union Corporation Ltd 1947(1) SA514 (A)

Franklin and Kaplan, The Mining and Mineral Laws of South Africa, Butterworths, 1982 pages 124127.

Special recognition of mining uses in some statutory land use provisions

In recognition of the abovementioned special attributes of the mining industry and of the abovementioned recognition of the predominance of mining uses over other land uses, amongst others the following special provisions directly or indirectly applicable to mining uses appeared in legislation.

In the Townplanning and Townships Ordinance, 1986 (Transvaal), the following provisions appear:sections 21 and 22:

21Townplanning Scheme in respect of proclaimed land

(1)Subject to the provisions of subsection (3) and section 22, a local authority shall not prepare a townplanning scheme in respect of land

(a)which is proclaimed land;

(b)on which prospecting, digging or mining operations are being carried out,

unless such land is situated within an approved township or within a township in respect of which a notice as contemplated in section 111 was published.

...

22Townplanning scheme in respect of proclaimed land

(1)When a notice of intention to de-proclaim land is published in terms of section 44(3) of the Mining Rights Act, 1967, and the land defined in the notice is situated within the area of jurisdiction of a local authority

(a)the local authority may ...

...

prepare a townplanning scheme in respect of that land or any portion thereof..

Section 43(1) and (5):

(1)Where on the date of the coming into operation of an approved scheme any land or building is being used or, within one month immediately prior to that date, was used for a purpose which is not a purpose for which the land concerned has been reserved or zoned in terms of the provisions of the scheme, but which is otherwise lawful and not subject to any prohibition in terms of this Ordinance, the use for that purpose may, subject to the provisions of subsection (2), be continued after that date ...

...

(5)The local authority may, on application by the owner of any land ... extend the period ... for a further period or periods, not exceeding 15 years in the aggregate ... .

Section 69(5):

(5)Where

(a) the rights to minerals in respect of the land on which the applicant wishes to establish a township has been severed from the ownership of the land;

(b) the owner of land contemplated in paragraph (a) has, in respect of the land, granted a lease of the rights to minerals or entered into a prospecting contract ...

the applicant shall satisfy the local authority that

(i)the holder, usufructuary or lessee of the rights to minerals or the holder of the rights in terms of the prospecting contract or notarial deed

(aa)has consented to the establishment of a township;

or

(ab) cannot be traced and that the applicant has given notice of the application in such manner as may be prescribed ... .

(a)In similar fashion to s69 of the above Ordinance, regulation 21(6) of the regulations made in terms of the Development Facilitation Act, 1995 provided for notice to the mineral right holder, of a land development application and the application form (annexure B in the regulations) provided for lodgment of the mineral right holders consent.

(b)Furthermore, the definition of land development in s1 of the Development Facilitation Act, 1995 expressly excludes prospecting and mining. It reads as follows (underlining added):

land development means any procedure aimed at changing the use of land for the purpose of using the land mainly for residential, industrial, business, smallscale farming, community or similar purposes, including such a procedure in terms of Chapter V, VI or VII, but excluding such a procedure in terms of any other law relating exclusively to prospecting or mining;.

Although s6(1) of the Physical Planning Act, 1967 prohibited use of land except under authority of a permit, s6(2) provided that:

(2)Subsection (1) shall not apply in respect of

...

(c)the use of land for prospecting or mining for base minerals or for any other purpose for which authority, provision or consent is required in terms of any other law ... .

Similarly, although s27(1) of the Physical Planning Act, 1991 restricted uses of land and grants of permissions in conflict with regional or urban structure plans, s27(2) provided that:

(2)The provisions of subsection (1)(b) and (c) shall not apply in respect of any right of any person to prospect for or to mine any mineral as defined in section 1 of the Minerals Act, 1991, or the use of any land for prospecting or mining purposes, or for purposes connected therewith..

Section 18(a) of the Southern Johannesburg Region Town Planning Scheme, 1962, which was the subject of Falcon Investments Ltd v CD of Birnam 1973 (4) SA 384 (A), provided that:

18... nothing in the foregoing provisions of this part of this Scheme shall be construed as prohibiting or restricting or enabling the Local Authority to prohibit or restrict

(a)the winning of minerals by underground working, or the winning of minerals by surface working, or the erection of any buildings or the carrying out of any works which is incidental thereto as regards any land not included in established townships and agricultural holdings;

... .

To address the problem of unreasonable withholding of consent by mineral right holders to township establishment the Expropriation of Mineral Rights (Townships) Act, 1969 empowered the expropriation of mineral rights in those circumstances.The Subdivision of Agricultural Land Act, 1970, which is proposed to be repealed by the Bill if enacted, in ss3(e)(i) and (ii) recognises mining as deserving of special exceptions, in providing that without Ministerial consent:

(e)(i)no portion of agricultural land, whether surveyed or not, and whether there is any building thereon or not, shall be sold or advertised for sale, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956 (Act No. 27 of 1956); and

(ii)no right to such portion shall be sold or granted for a period of more than 10 years or for the natural life of any person or to the same person for periods aggregating more than 10 years, or advertised for sale or with a view to any such granting, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956; (our underlining),

the reference to s1 of the Mines and Works Act, 1956 now falling in terms of s12(1) of the Interpretation Act, 1957 to be read as a reference to s102 of the Mine Health and Safety Act, 1996. Clauses 58 and 59 of the Bill which deal with similar topics however omit the exception for mines.

The legal position of the mining industry in regard to land use under the Constitution of the Republic of South Africa, 1996

In terms of the Constitution of the Republic of South Africa, 1996, mining is a national competence since it appears neither in schedules 4 nor 5. As a result, the Mineral and Petroleum Resources Development Act, 2002 (MPRDA), which is national legislation, provides amongst others for the following.

The objects of the MPRDA as disclosed in section 2 are to recognise the States sovereignty and custodianship over the nations mineral and petroleum resources, to promote equitable access to such resources, to expand empowerment in the mineral and petroleum industries; to promote economic growth and mineral resources development; to promote employment and advance social and economic welfare; to provide for security of tenure in respect of prospecting, exploration, mining and production operations, to promote orderly and ecologically sustainable mineral development; and to ensure socioeconomic development of mining areas.Section 3 provides that as custodian of the nations mineral and petroleum resources, the State, acting through the national Minister of Mineral Resources may grant prospecting and mining rights and that the Minister of Finance may, as he has done in the Mineral and Petroleum Resources Royalty Act, 2008, levy a royalty payable to the State.Sections 5(2) and (3) provide that the holders of prospecting and mining rights are entitled to the rights referred to in section 5 and to such other rights as may be granted under the MPRDA or any other law, and that:

(3)Subject to this Act, any holder of a prospecting right, a mining right, exploration right or production right may

(a)enter the land to which such right relates together with his or her employees, and may bring onto that land any plant, machinery or equipment and build, construct or lay down any surface, underground or under sea infrastructure which may be required for the purposes of prospecting, mining, exploration or production, as the case may be;

(b)prospect, mine, explore or produce, as the case may be, for his or her own account on or under that land for the mineral or petroleum for which such right has been granted;

(c)remove and dispose of any such mineral found during the course of prospecting, mining, exploration or production, as the case may be;

(d)subject to the National Water Act, 1998 ... , use water from any natural spring, lake, river or stream, situated on, or flowing through, such land or from any excavation previously made and used for prospecting, mining, exploration or production purposes, or sink a well or borehole required for use relating to prospecting, mining, exploration or production on such land; and

(e)carry out any other activity incidental to prospecting, mining, exploration or production operations, which activity does not contravene the provisions of this Act..

Section 48 empowers the Minister to grant a prospecting or mining right even in respect of land comprising a residential area or land reserved in terms of any other law, if the Minister is satisfied that:

(a)having regard to the sustainable development of the mineral resources involved and the national interest, it is desirable to issue it;

(b)the reconnaissance, prospecting or mining will take place within the framework of national environmental management policies, norms and standards; and

(c)the granting of such rights or permits will not detrimentally affect the interests of any holder of a prospecting right or mining right..

The above rights of entry have been confirmed also by the Supreme Court of Appeal in its judgments in:

Holcim (South Africa) (Pty) Ltd v Prudent Investors (Pty) Ltd

[2011] 1 All SA 364 (SCA), and

Sephaku Tin (Pty) Ltd v Kranskoppie Boerdery,

GNP 47561/2010, 7 May 2012

Witwatersrand Estates Ltd & Others v AfriSam (South Africa)

Properties (Pty) Ltd & Others,

SGJ 29427/2012, 10 December 2013

Coal of Africa Ltd & Another v Akkerland Boerdery (Pty) Ltd,

NGP 38528/2012, February 2014

Anglo American Inyosi Coal (Pty) Ltd v Claassen & Another,

GDP 40387/2013, 28 March 2014

Joubert & Others v Maranda Mining Company (Pty) Ltd 2010(1)

SA198 (SCA) and in regard to which subsequently also

[2010] 2 All SA 67 (GNP)

The Chambers submission that mining be excluded from the Bill

In all the above circumstances, the Chamber submits that it is in the national interest that the Department of Agriculture not narrowly focus only on its own portfolio of agriculture, but instead recognise the over-arching needs of South Africa by excluding and exempting mining from regulation in terms of the Bill in the manner set forth in the detailed comments below.

Town-planning issues

One of the Chambers members, Glencore Operations (South Africa) (Pty) Ltd, has obtained a comment report by Town Planners The Practice Group (Pty) Ltd, in regard to town-planning aspects of the Bill, to which the Chamber invites your attention. A copy of this report is attached.

Comments on the Draft Policy and Bill on Preservation and Development of Agricultural Land FrameworkGeneral comments

Since ultimately the Act will be the final manifestation of the underlying policy, the Chamber will limit its comments to the provisions of the Bill and not also comment on the draft policy document. However, the principles underlying our comments on the Bill apply equally to the draft policy document.

The Chamber acknowledges that there are some provisions in the Bill which are seemingly aimed at ensuring that mining is considered when demarcation of land for agricultural purposes takes place. However, the Chamber is of the view that these provisions are totally inadequate. More importantly, a problem which remains is that often it may be unknown at the time when demarcation of land for agricultural purposes is being considered whether or not land is mineralised and hence whether or not the proposed demarcation will need to be elevated to the relevant consultative body. Since in terms of sections 2 and 3 of the MPRDA the State acting through the Minister of Mineral Resources is custodian of South Africas mineral and petroleum resources, the Chamber submits that in fact each and every demarcation of land for any specific purposes, including agriculture, will necessarily need to be elevated to the relevant consultative body.

The Chamber is of the view that the root of the problem lies in clause 3 of the Bill coupled with the definition of agricultural land. Clause 3 gives the department custodianship over agricultural land, which is defined as all land in South Africa, minus certain exceptions. Unless the definition of agricultural land is amended to exclude current and future prospecting and mining operations, the custodianship of mineralised land by the department will be in conflict with the Constitution and the MPRDA. The approach seems to be that all land in South Africa must be regarded as agricultural land, except land excluded specifically under the Bill. This approach is flawed. There are other statutes and the common law which give persons rights in land (including for other uses) and which rights cannot merely be taken away without lawful procedures (possibly expropriation procedures).

The Minister of Mineral Resources by virtue of the MPRDA and the Minister of Environment Affairs by virtue of National Environmental Management Act, 1998 and other environmental statutes are mandated to implement, administer and enforce the provisions of those statutes and to ensure the protection of the environment and conservation of natural resources, balanced with sustainable development and the equitable distribution of the benefits derived from natural resources, guided by their constitutional mandate, as contained in section 24 of the Constitution which in s24(b)(iii) refers expressly to promoting justifiable economic and social development. The concern is that where the Bill also deals with mining matters, it would not only constitute an attempt to usurp the aforesaid ministerial powers and mandates, but would also lead to duplication, fragmentation and uncertainty.

Detailed commentsChapter 1: Clause 1- Definitions

agricultural land

Paragraph (c) excludes from the definition land which, immediately prior to the date of commencement of this Act, was formally zoned for non-agricultural purposes by any sphere of government or any public entity;

Not all land in the country is currently subject to zoning (as this term is understood it is not defined in the Bill) and many mining operations are lawfully conducted on land which has not been zoned for a specific purpose. It is recommended that the words or which is the subject of any right, permit or permission in relation to minerals or petroleum or of any reservation or permission for or right to use the surface of land, and which is granted, issued, or which remains in force in terms of the Mineral and Petroleum Resources Development Act, 2002 be inserted at the end of paragraph (c).

Furthermore since zoning is not the only way in which land can lawfully be used in terms of land use planning legislation, it is suggested that after the word zoned the words or subject to a land use departure, consent use, or exemption, be inserted.

land use

The following exclusion should be inserted a the end of this definition, namely,

excluding any such activities which constitute or are related or incidental to reconnaissance, prospecting, mining, exploration, production or processing, as defined in the Mineral and Petroleum Resources Development Act, 2002.

right

The definition excludes from agricultural land, any right to minerals or a prospecting or mining right as contemplated in the MPRDA. These are not the only authorisations under the MPRDA. Further, as mentioned above, section 5 of the MPRDA gives holders of a prospecting right, mining right, exploration right and production right various other rights. The definition should therefore be amended to refer to any right, permit or permission in relation to minerals or petroleum or any reservation or permission for or right to use the surface of land, and which is granted, issued or which remains in force in terms of the Mineral and Petroleum Resources Development Act, 2002.

scheduled land use purposes

Paragraph (j) in this definition refers to rezoning of agricultural land for mining purposes. For the reasons above, the Chamber submits that rezoning of agricultural land for mining purposes should not require approval in terms of the Bill, and therefore requests the deletion of paragraph (j);

Clause 4

As mentioned above, the fundamental submission of the Chamber is that land held under right, permit or permission granted in terms of the MPRDA should not be regulated in terms of the Bill if enacted.

The Chamber therefore requests that the following new clause 4(b)(iii) be inserted into clause 4, namely:

(iii)which is the subject of a right, permit or permission relating to minerals or petroleum or of a reservation or permission for or right to use the surface of land, granted, issued or which remains in force, in terms of the Mineral and Petroleum Resources Development Act, 2002..

Prohibitions on subdivision and on rezoning: clauses 5 and 6, and corresponding clauses in subsequent Parts of chapter 2

For the reasons above, the Chamber requests exemptions for land which are the subject of rights, permits and permissions granted in terms of the MPRDA.

It is requested that Clause 5 be amended as follows:

5. The subdivision of high potential cropping land is prohibited, unless

(1) approved by the Minister in accordance with section 12 (4); or

(2) it is for purposes of exercising a right, permit or permission relating to minerals or petroleum, or any reservation, permission or right to use the surface of land, granted, issued, or which remains in force, in terms of the Mineral and Petroleum Resources Development Act, 2002.

It is requested that Clause 6 be amended as follows:

6. The rezoning, with associated subdivision if required, of high potential cropping land is prohibited, unless

(1) approved by the Intergovernmental Committee in accordance with section 12 (5); or

(2) it is for purposes of exercising a right, permit or permission relating to minerals or petroleum, or any reservation, permission or right to use the surface of land, granted, issued, or which remains in force, in terms of the Mineral and Petroleum Resources Development Act, 2002.

Locus standi as applicants: clause 7, and corresponding clauses in subsequent Parts of Chapter 2

In some cases the holder of a right, permit and permission in terms of the MPRDA will not also be the landowner, but nevertheless needs to have locus standi to lodge applications in terms of the Bill if enacted.

The Chamber requests that it be expressly provided that the holder of any right, permit or permission for minerals or petroleum, or of any reservation, permission or right to use surface of land, granted, issued or which remains in force, in terms of the MPRDA, or a lessee or sub lessee of any of the aforegoing, be competent to lodge applications in terms of the Bill if enacted.

Submission of documentation by applicants: clause 8, and corresponding clauses in subsequent Parts of Chapter 2

Applicants should additionally be required to submit:

a certificate from the Regional Manager, Mineral Regulation, of the Department of Mineral Resources, giving details of:all rights, permits and permissions for minerals and petroleum, and all reservations, permissions or rights to the use of land, granted, issued or which remain in force in terms of the MPRDA, and any leases or subleases thereof;all applications for any of the items which are referred to in paragraph (i) above;the consent in terms of s53 of the MPRDA of the Minister of Mineral Resources to the proposed activities which are the subject of the application which is made in terms of the Bill if enacted;the consent of the holders and applicants in paragraphs (a)(i) and (ii) above, to the application made in terms of the Bill if enacted;a certificate by the Council for Geoscience giving details of the known or inferred geology and mineralisation of the relevant land.Clause 9

The wording of clause 9(b) should be corrected to read:

an intended future land use change to reconnaissance, prospecting, mining, exploration, production, or processing, all as contemplated in the Mineral and Petroleum Resources Development Act, 2002.

Clauses 12 and 13, and corresponding clauses in subsequent Parts of Chapter 2The following comments and requests in respect of clauses 12 and 13 will only find application should the requested amendments of clauses 4 and 5 not be given effect to.Although a rezoning application is decided by the Intergovernmental Committee, the following problems arise insofar as mining is concerned.In terms of clause 12(5), the application may only be granted if exceptional circumstances as defined in clause 13(3) exist, but these do not encompass mining uses. Although in terms of clause 86 the composition of the Intergovernmental Committee includes the Minister of Mineral Resources, he is only one of 10 members, and can be outvoted. In terms of clause 12(6)(c)(i), the Intergovernmental Committee must take into account whether the applicant is able to prove that the rezoning will not negatively affect food security.In clause 12(9), rationality should not be the sole criterion for review: see the numerous grounds of review in s6 of the Promotion of Administrative Justice Act, 2000 (PAJA) and which are not limited to rationality. Again in clause 13(2), the Intergovernmental Committee may only approve the application if exceptional circumstances exist.The definition of exceptional circumstances in clause 13(3) (which definition should perhaps be in clause 1), would not encompass mining in that the requirements of clauses 13(a) to (d) are cumulative and would not be satisfied in the case of mining.

(vii) In clause 13 (4) (e) provision should be made for the recommendation by the Minister of Mineral Resources also to be taken into account.

It is requested that:at the end of clause 12 (5) (b) the word or is inserted, and the following clause 12 (5) (c) is inserted:

the application relates to an intended future land use change to reconnaissance, prospecting, mining, exploration, production, or processing, all as contemplated in the Mineral and Petroleum Resources Development Act, 2002

Clauses 13(5) to (8) deal expressly with prospecting, mining and hydraulic fracturing, but again effectively constitute a veto against these activities in that clause 13(7) provides that a negative Agro-ecosystem Report results in the non-utilisation of any relevant right (for example a permit, permission or right granted in terms of the MPRDA). Effectively therefore, this provision trumps the powers and functions of the Minister of Mineral Resources. For the reasons earlier above, this is not in the national interest, neither is it constitutional and the aforesaid clauses must be amended with the removal of references to mining and prospecting.The Bill assumes that all mining operations are anathema to farming. That is not so in that the mining operations may be underground and have no surface effect whatsoever. The same has been held to be true of mining on township land, i.e. that mining operations and township establishment are not necessarily mutually exclusive: see Johannesburg City Council v Crown Mines Ltd 1971 (1) SA 709 (A) at 722-723 cited by Franklin & Kaplan, op cit, page 458.Deviations in terms of clause 15, and corresponding clauses in subsequent Parts of Chapter 2

Again, the requirements for deviation are cumulative and will not encompass mining. This is exacerbated by the proviso to clause 15(1)(d).

Clause 17, and corresponding clauses in subsequent Parts of Chapter 2

Mining also requires water use. Once an application for subdivision or rezoning has been granted, there is no reason why existing water use licences should be retained only for agricultural purposes. Clause 17(1) should be deleted. See the reference above to the new one-shop-stop system for mining and which includes water use licences in terms of the National Water Act, 1998.

Clause 19, and corresponding clauses in subsequent Parts of Chapter 2

Some mining operations (such as underground gold mining operations under the Johannesburg Central Business District and diamond mining operations in the Kimberley Central Business District) and quarrying operations occur within, bisected by, or in close proximity to, urban areas. Clause 19 is therefore not in the national interest and should be deleted.

Clauses 5 to 28 generally

Mining is a national competence in terms of the Constitution of the Republic of South Africa, 1996, and which ranks at least equally to agriculture which is a concurrent national and provincial competence. The attempted encroachment by the Minister of Agriculture on the functional competence on the Minister of Mineral Resources is unconstitutional.

Clauses 29 to 52These clauses which relate to medium potential agricultural land are similar to the corresponding clauses in Chapter 2, part I, relating to high potential cropping land, so that the above comments apply equally to the clauses in Chapter 2, Part II.Additionally however, the position in regard to mining uses is exacerbated by the fact that the decision-maker is the MEC, whereas mining is a national competence in terms of the Constitution of the Republic of South Africa, 1996 and falls solely within the competence of the National Minister of Mineral Resources.It is requested that Clause 29 be amended as follows:

29. The subdivision of medium potential agricultural land is prohibited, unless

(a) approved by the MEC in accordance with section 26 (8); or

(b) it is for purposes of exercising a right, permit or permission relating to minerals or petroleum, or any reservation, permission or right to use the surface of land, granted, issued, or which remains in force, in terms of the Mineral and Petroleum Resources Development Act, 2002.

It is requested that Clause 30 be amended as follows:

30. (1) The rezoning, with associated subdivision if required, of medium potential agricultural land is prohibited, unless

(a) approved by the MEC; or

(b) it is for purposes of exercising a right, permit or permission relating to minerals or petroleum, or any reservation, permission or right to use the surface of land, granted, issued or which remains in force, in terms of the Mineral and Petroleum Resources Development Act, 2002.

(2) The rezoning of land of capability class IV is prohibited for an interim period of 5 years from the date of commencement of the Act, unless

(a) approved by the Minster and MEC; or

(b) it is for purposes of exercising a right, permit or permission relating to minerals or petroleum, or any reservation, permission or right to use the surface of land, granted, issued or which remains in force, in terms of the Mineral and Petroleum Resources Development Act, 2002.

Clause 53

The above comments apply equally to clause 53.

Clause 54

Mining companies are often as a result of their mining operations the owners of agricultural land. Since the primary focus of mining companies is mining, clause 54(3) should not apply to land which is the subject of a right, permit or permission granted in terms of the MPRDA. The reference to low price contravenes s25(3) of the Constitution of the Republic of South Africa, 1996.

Clause 55

Again, there should be an exemption for use of such land for mining purposes.

Clauses 57 to 59 and 68These clauses seem to be intended to replace the corresponding provisions in the Subdivision of Agricultural Land Act, 1970.However, they do not carry forward the exemptions for purposes of a mine as currently contained in ss3(e)(i) and (ii) of the Subdivision of Agricultural Land Act, 1970 and as quoted above.It is submitted that all of these provisions should be subject to exemptions for purposes of a mine. Sub clauses (6)(b) in clauses 57 to 59 are unconstitutional since they offend against the rule of law principle in s1(c) of the Constitution, in that notice of breach and opportunity to remedy must be given since non-compliance may be due to reasons beyond the control of the effected person such as for reasons of impossibility of performance, force majeure, duress, and the like. These sub clauses should be replaced by normal breach provisions such as contained in clause 151 of the Bill.Clause 59 should be subordinated to clause 68 so that where the provisos in clause 68 apply, clause 59 would also not apply. None of the previous prohibitions in earlier parts of Chapter 2 of the Bill prohibiting subdivision should apply where the provisos to clause 68 apply.In regard to the above clauses read with the existing corresponding provisions in the Sub Division of Agricultural Land Act, 1970, see the reference below to the judgment in Blue Crane Country Estate (Pty) Ltd v The National Minister of Agriculture, Forestry and Fisheries & Others, GDP case3925/2014, 23 March 2015.

(h)The requirement of Ministerial consent to conclude a long term lease agreement over property that constitutes agricultural land is extremely onerous and appears to serve no rational purpose that can be linked to the objectives of the Bill. Perhaps the intention was to replace the corresponding provisions in the Subdivision of Agricultural Land Act, 1970 that pertained to the entering into a long term lease agreement in respect of a portion of a property that constitutes agricultural land?

(i) Similarly, should clause 59 (1) (d) also not refer to the registration of a right of habitatio in respect of a portion of high potential cropping land?

Clause 60 and the definition of citizen in clause 1

Some of the Chambers members are companies the shareholders of which are not South African Citizens and others are listed companies with active trading of its shares locally and abroad. Accordingly, clause 60 should not apply to holders of rights, permits or permissions granted in terms of the MPRDA.

The problem is exacerbated by the vague reference in paragraph (c) of the definition of citizen in clause 1, to certain thresholds of foreign involvement. It is submitted that such vagueness renders this part of the definition contrary to the rule of law requirement in s1(c) of the Constitution and hence unconstitutional.

Clause 61

Consolidation of land has not previously been subject to control. Consolidation is sometimes required for purposes of consolidation of a mining area as defined in s1 of the MPRDA. Again, clause 60 should contain an exemption for purposes of a mine.

In regard to clause 61(6)(b), see the comments on clauses 57 to 59 above.

Clause 65

In regard to the reference to clause 54 in clause 65(1), see the comments on unconstitutionality in relation to clause 54(3) above.

Chapter 4

It is suggested that the register also contain details of all rights, permits and permissions granted in terms of the MPRDA.

Chapter 5

It is suggested that Agro-ecosystem Reports also contain information in regard to:

applications for and holdings of rights, permits and permissions in terms of the MPRDA;known or inferred geology and mineralisation;reconnaissance, prospecting, mining, exploration, production, and processing operations conducted pursuant to the MPRDA. Chapter 6, part I, Intergovernmental CommitteeAs mentioned above, the Chamber will suggest to the Minister of Mineral Resources, and for which purpose a copy of these submissions is being sent to him, that the draft Bill should be referred already now to dispute resolution in terms of the Intergovernmental Relations Framework Act, 2005. Clause 83(1) is not correct in referring to the Intergovernmental Committee as merely a consultative forum, in that it has decision-making powers in terms of Chapter 2, part I. The factors in clause 85 need to be extended to refer to factors relevant to mining.Although the Minister of Mineral Resources is a member of the Intergovernmental Committee, he is only one of 10 members, and can be outvoted in terms of clause 87. The Minister of Mineral Resources should have overriding powers insofar as mining matters are concerned.Chapter 6, Parts II, III, IV and V

The position is even worse in regard to the Commission and Committees which are referred to in Chapter 6, Parts II, III, IV and V, on which the Minister and Department of Mineral Resources should, but do not, have representation.

Chapter 6, Part VI: Review BoardThe reference to a Review Board seems to be intended to replace judicial review in terms of s6 of PAJA. Perhaps PAJA should be stated to apply mutates mutandis to the Review Board as if the Review Board were a tribunal as contemplated in PAJA.The Chamber notes that clause 132 contemplates an appeal to the High Court from decisions of the Review Board. Clause 131 should be subordinated to clause 132.Chapter 7: Intergovernmental disputesAs mentioned above, the Chamber will recommend to the Minister of Mineral Resources that he now already declare a dispute in regard to the drafting and tabling of the Bill insofar as it attempts to use his competence in mining matters.Chapter 7 should refer to the Intergovernmental Relationship Framework Act, 2005.Chapter 8: Provincial and Municipal responsibilities

All these provisions should require that mining be taken into account.

Clause 152: TaxationExemptions should be provided in relation to mining uses.Clause 152 flies in the face of income tax and royalties generated in terms of the Income Tax Act, 1962 and the Mineral and Petroleum Resources Royalty Act, 2008, by mining. The Local Government: Municipal Property Rates Act, 2004 also provides for a separate rating category for property used for mining purposes.Clauses 154 and 164Provision should be made that pending applications made in terms of the Subdivision of Agricultural Land Act, 1970 and which are pending and not finalised on date of commencement of the Bill once enacted, will be processed to finality in terms of that act as if that Act had not been repealed.It should be made expressly clear that the exemptions in s3(e)(i) and (ii) of the Subdivision of Agricultural Land Act, 1970 continue to apply in respect of sales and grants which were concluded prior to the repeal of that Act.

(29) Clause 168 and Schedule I

The Subdivision of Agricultural Land Act 70 of 1970 was repealed by the Subdivision of Agricultural Land Act Repeal Act 64 of 1998 as assented to on 16 September 1998 and with its date of commencement still to be proclaimed.

The Blue Crane Judgment

The judgment in Blue Crane Country Estate (Pty) Ltd v The National Minister of Agriculture, Forestry and Fisheries & Others, GDP case 3925/2014, 23 March 2015, which related to the Subdivision of Agricultural Land Act, 1970, is instructive in regard to the purpose of that act and which should also be the purpose of the Bill. The judgment itself, and the cases cited in it, make it clear that the object of the Act was to prevent the fragmentation of agricultural land into smaller uneconomical units of agricultural land. For example, this could happen where an owner of land subdivided his land among his 10 sons, who each then in turn subdivided their portion of land among each of their 10 sons, and so on. It was not designed to prevent change of use from agricultural to other uses, such as now contemplated in the Bill.

Conclusion

Regrettably, unless the Chambers submissions are headed, the Chamber does not find itself able to support the Bill. It nevertheless thanks the Department of Agriculture for having afforded it the opportunity to comment on the Bill and if it could be recorded as an interested and affected party in regard to hearings on or redrafts of the Bill both during the Departmental process and during the Parliamentary process.

Yours faithfully

Anton van AchterberghLegal Consultant

T: 27 11 498 7378 F: 27 11 4987375 C: 083 2657816 E:[email protected] Policy: www.chamberofmines.org.za

AvA/CoM/notes/2015/Draft CoM comments on draft Agricultural Framework documents 29 May

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