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The State’s Role as Public Trustee

The State’s Role as Public Trustee. An examination of the content of the state’s position as custodian over the mineral resources of South Africa. Introduction. The Mineral and Petroleum Resources Development Act (MPRDA) came into force on 1 May 2004.

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The State’s Role as Public Trustee

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  1. The State’s Role as Public Trustee An examination of the content of the state’s position as custodian over the mineral resources of South Africa

  2. Introduction • The Mineral and Petroleum Resources Development Act (MPRDA) came into force on 1 May 2004. • This act had the effect of drastically altering the common law position regarding mineral and petroleum rights.

  3. Old Order • Governed by private law • Ownership of unsevered minerals vested in land owner. • Right to prospect and mine was part and parcel of land ownership

  4. MPRDA • Section 3(1): • Mineral and petroleum resources are the common heritage of all the people of South Africa and the State is the custodian thereof for the benefit of all South Africans.

  5. Content of the State’s Roles as Custodian over Mineral Resources?

  6. Relevance?

  7. Specific Focus

  8. Comparison Fiduciary Duties owed by: • trustees • to trust beneficiaries • in the administration of trust property Fiduciary duties owed by: • the state • to the people of SA • in the administration of the mineral resources of the country.

  9. Part One

  10. The General Fiduciary Duty of Trustees

  11. The Duty of Care • Duty to manage and administer the trust property in a prudent manner, as a reasonable person would. • Trustee must exercise more care in administering the trust than he would in dealing with his own property.

  12. The Duty of Impartiality • Two components: • a duty to avoid a conflict of interest between the personal interests of the trustee and his official obligations and • a duty to treat all trust beneficiaries impartially.

  13. The Duty of Independence • Trustees must exercise rigorous and independent judgment when performing their duties as trustees. Thus a trustee may not simply act under the orders of the trust founder.

  14. The Duty of Accountability • The trustee is obliged to provide regular accounts regarding the administration of the trust, to the trust beneficiaries.

  15. Duties are context dependent

  16. Duties under the MPRDA

  17. Environmental Management Plan • Aim: ensure development of Mineral Resources in and orderly and ecologically sustainable way, while ensuring the advancement of social and economic development.

  18. Optimal Mining of Mineral Resources • Minister is empowered to direct that the holder of mineral rights take corrective measures if not mining optimally and to cancel/suspend such rights if holder does not comply.

  19. Transformation • Provision made by the MPRDA to empower previously disadvantaged communities and persons, by giving them preferential treatment in the application for mineral rights, provided certain criteria are met.

  20. Structure of MPRDA

  21. Analogous System of Duties

  22. Part Two: Problems regarding comparison

  23. Main Issue: System of Co-operative Government

  24. Tension • Potential tension between decisions made at national level that may impact upon provincial or local government’s exclusive areas of competence. • Swartland Municipality v Hugo Wiehahn Louw N.O and others 2009 13703/09 (C)

  25. Bibliography • Badenhorst and Mostert Mineral and Petroleum Law of South Africa (2004) Lexis Nexis Butterworths. • Badenhorst, Pienaar and Mostert The Law of Property 5ed. (2006) Lexis Nexis Butterworths. • Cameron, De Waal, Wunsh Honore’s South African Law of Trusts 5ed (2002) Juta. • Du Toit South African Trust Law: Principles and Practice (2002) Lexis Nexis Butterworths. • Du Toit ‘The Fiduciary Office of Trustee and the Protection of Contingent Trust Beneficiaries’ Stell LR (2007) vol 3 469. • Swartland Municipality v Hugo Wiehahn Louw N.O and others 2009 13703/09 (C)

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