ActionAid South Africa (AASA)

1. ActionAid South Africa (AASA) Submission to the Portfolio Committee on the Mineral and Petroleum Resources Development Amendment Bill B15-2013 18 September 2013

2. Introduction ActionAidSouth Africa was established in 2006 and is a member of ActionAid International which is a global movement of people working together to further human rights for all and to defeat poverty ensuring a life of dignity for all. We work with the communities of • Mokopanein Limpopo • Thulamelain Limpopo • Ngqushwain the Eastern Cape • Greytownin KwaZulu Natal • Joe Morolong in the Northern Cape

3. We also work with MACUA- Mining Affected Communities United in Action • national network • established in December 2012 • over 150 delegates from across South Africa Mandate: To take up the call for communities to be granted a greater say in issues that affect their human rights and which they believe is denied to them in the current version and suggested amendments of the MPRDA.

4. MACUARepresents communities in Gauteng, Limpopo, Mpumalanga, Free State and the North West Provinces and includes organizations such as: • Southern Africa Green Revolutionary Council (SAGRC), Mpumalanga • Middelburg Environmental Justice Network (MEJN), Mpumalanga • Highveld Environmental Network (HEN), Ermelo/Breyton • Mpumalanga Youth Against Climate Change (MYACC), Emalahleni,Mpumalanga • MNS Community Mining Committee, Emalahleni, Mpumalanga • DenniltonAgricultural Cooperative, Moutse, Limpopo • ClewerMining Committee, Emalahleni, Mpumalanga • Gold and Uranium Belt Impact Censoring Organisation, GUBICO, Free State • Vaal Environmental Justice Alliance, VEJA, Gauteng • Ekurhuleni Environmental Organisation, EEO, Gauteng • BUA Communities of Rustenburg, BUA, North West • Rustenburg Environmental and Social Organisation, RESO, North West • MapelaRural Development Association, (MARUDA),GaMapela Limpopo

5. AASA & partners Bench Marks Foundation (BMF) Land Access Movement of South Africa (LAMOSA)work with over 50 mining affected communities: BakoniPhethla, BakoniBamarangrang, Masha-Makopole, Sekhukhune, Ngwaabe, TshetlhaTrust, Steelpoort Park, Ngwabe, Richmond, Bakwenabaphetla, Bachoma, Basenyane, Baffelshoek, Kalkfontein, Baphalane, BakgatlaBa kgafela, Uitkyk, BakwenaBa Mogopa, Goedgevonden, Batloung, Putfontein, Blauboskuil, Marikana, Chaneng, Mafenya, Ikemeleng, Luka, Tlhabane, Segwelane, Driekop, Sterkwater, Dominionville, Kanana, Jouberton, Bophelong, Sebokeng, Sasolburg, Zamdela, Boipatong, Kwathema, Thabong, Meloding, Kutwanong, Nyakallong, Masilo, Middelburg, VanderbijlPark, TswakoMohlala, Magobading, Brownville, Bamaranrang, Atok, Masha Makopole.

6. Precious Metals Report In 2008 AASA, working with the communities of Ga-Pila, Ga-Puka, Ga-Molekane and Ga-Chaba in Mokopane, released the Precious Metals Report (ActionAid, 2008) in which the impacts of Mining Operations by the biggest Platinum miner, AngloPlats were recorded. ActionAid contends that of all the stakeholders affected by mining, the communities who host mining activities carry by far the greater cost yet get the least return from mining activities and that the Mineral and Petroleum Resources Development Act, 2002 falls short in a number of areas.

7. Findings of the Precious Metals Report • Thousands of people in rural areas have lost agricultural land – their main means of livelihood – due to mining activities undertaken by Anglo Platinum. They are generally offered little compensation and insufficient ways of making an alternative living. The result is not just increased hunger and poverty; it is also the destruction of a traditional way of life. • Whole communities have lost access to clean drinking water. Independent water sampling analysis commissioned by ActionAid had discovered serious water pollution at four sites near Anglo Platinum’s mines, including two schools. Mining activities are the most likely cause of this pollution, which has made the water unfit for human consumption.

8. Findings of the Precious Metals Report • Villagers have been removed from their homes in relocation agreements signed with associations that the company claims represent the community, but which had actually been established by the company itself. • Many communities are subject to constant and intrusive mining activity, especially blasting, which is damaging their homes and environment. • Community protests to improve services offered to villagers or to challenge Anglo Platinum over land take-overs have often been met with brutality by the police and legal action by the company. • Anglo Platinum continues to expand its mining operations in densely populated rural areas, which will result in further imminent displacements.

9. “Consultation” • The Act requires mining companies to consult with the community and report back on the outcome of those consultations to the government department responsible for mining the Department of Mineral Resources (DMR) – before a mining right is issued by the minister. • The Act does not specifically require the permission of the community. The DMR and the minister have no obligation to consult with the community affected and usually do not do so; they depend on the report given to them by the mining company, which the community has no right to see. • Our Research in the Ga-Pila case identified that section 21, not-for-profit companies, set up under South African company law by Anglo Platinum in the villages where it operates, play a critical role in Anglo Platinum’s mining operations in Limpopo.

10. “Community Representation” • Around the Mogalakwena mine, there are around 15 such companies comprising some15 community members each. Anglo Platinum regards section 21 companies as legitimate representatives of the communities in which it works and although it claims toconsult more widely, such as with tribal authorities and some individual community members, it is largely through them that the company conducts its “consultations” with the “community”. • However, other community and development organisations exist in the villages – notably, development committees, which have been formed to challenge Anglo Platinum’s relocation strategy, and which can consist of hundreds of members. • ActionAid’sresearch suggests that these are far more popular among villagers than the section 21 companies. Yet the company has consistently refused to consult directly with them. • Many villagers credibly regard the section 21 companies simply as proxies of the mines.

11. Reasons that communities seeSection21s as Anglo Platinum proxies Finances Anglo Platinum paid legal advisors to set up and advise the section 21 companies, which have no independent income beyond what they receive from the mine. Democracy The articles of section 21 companies established by Anglo Platinum at the Mogalakwena mine do not provide for any form of democratic control or accountability over them. Accountability There is little financial accountability between section 21companies and the wider community. No financial reports are furnished to the community. Secrecy Villagers simply do not know of many of the dealings that section 21 members have with the mines, including agreements made with the mine supposedly on behalf of the whole community.

12. Unless consultation is clearly defined as per South African jurisprudence and in line with the Constitution of South Africa, miners will continue to ignore their responsibilities in terms of the intention of the Act. At Anglo American’s annual general meeting in London in April 2007Anglo Platinum’s then chiefexecutive, Ralph Havensteinacknowledged there was a problem which had to be addressed on the unrepresentative nature of section 21 companies, and committed Anglo Platinum to engage with all stakeholders. Six years later, Anglo Platinum still refuses to deal directly with the development committees challenging the company’s relocation strategy.

13. We submit that:- the Act does not align with recent jurisprudence and with the Constitution of South Africa. It places an unfair burden on communities, whose only remedy is to seek legal relief, which is expensive and often beyond their means. • Once a mining right is awarded to a company, the Act does not require it to obtain permission from the occupiers or the owners of the land. Rather, the Act expressly authorises the company to commence laying infrastructure and undertake mining on the land. • The DMR does not require written lease agreements to be concluded between the mine and the community; the negotiation and conclusion of a lease agreement is standard practice in relation to privately owned land (land generally owned by white people) but is the exception in relation to communal land (land generally used by black people).

14. Failure to consult… • We note that a failure to consult with the correct parties in the course of a mining or prospecting application, or before activities commence, has always potentially resulted in the prospecting and/or mining right being successfully challenged either on appeal or in judicial review proceedings in the High Court. - The Bengwenyamadecision of the Constitutional Court (Bengwenyama Minerals (Pty) Ltd and others v Genorah Resources (Pty) Ltd and other 2011 (3) BCLR 229 (CC)) (J.Froneman, 2010)refers. • The Courts have shown themselves to be very concerned about the effects of mining on land owners, occupiers and neighbouring communities. The Court in Bengwenyamaemphasised this and it lead to a very onerous approach to consultation with the Courts stating that agreement with the community was to be pursued.

15. Consultation The DMR’s suggested format of the required Consultation Report that must be submitted after a consultation process, together with its Consultation Guideline, require that the applicant, inter alia: • Identifies, notifies and retains proof of notifying interested and affected parties; • Informs them in sufficient detail of what the prospecting operation would entail (this appears to be limited to prospecting in the guideline); • Consults with a view to reach an agreement regarding the existing environment and possible impacts of the proposed operations; • Record the outcome of meetings in the form of minutes or recordings; • Describe the information provided to interested and affected parties; and • List the views or concerns of interested and affected parties.

16. Consultation “The MPRDA and its regulations do not have detailed requirements for conducting a consultation process, as opposed to Environmental Impact Assessment Regulations published in terms of the National Environmental Management Act 107 of 1998 (“NEMA”). The NEMA Regulations provide, inter alia, comments on all written submissions to the decision making authority. In the mining context the requirement is that an applicant must “consult” with the landowner and the extent of this process has been developed only in case law and guidelines.” Claire Tucker Head of Environment at Bowman Gilfillan “As the prospecting of mining rights may amount to serious interference with a property right it is imperative that there is a balance between the statutory right, on the one hand, and the right to property and environmental protection, on the other. In the Bengwenyamaand Sechaba v Kotzarulings it is said that this is achieved through an effective consultation process. “A thorough consultation process is thus justified considering the extensive impact these activities may have on the human rights of communities affected by mining.”

17. We note: - • while S23 (2A) gives the Minister power to impose conditions to promote the rights and interests of communities in the event of an application (Granting and Duration of Mining Right) that affects their land, the deletion of “including conditions requiring the participation of the community” from the existing clause in the Amendment, is likely to further limit the rights of communities to be consulted. • the exclusion of communities and social partners from the Regional Mining Development and Environmental Committee in S56A. This exacerbates the legislative exclusion of communities and will only serve to further alienate communities from the process of transformation which the Act aims to foster.

18. We support: - • the joint submission made by Earthlife Africa Johannesburg Branch, GroundWork South Africa, Centre for Environmental Rights, Environmental Monitoring Group and Vaal Environmental Justice Alliance. • We support the submission of the LRC that calls on the Portfolio Committee to engage in a “thorough and comprehensive public participation programme”, at a regional level, in which communities affected by mining are allowed an opportunity to express their views before the committee.

19. Compensation • The law allows for the DMR to Request parties to reach an agreement for the payment of compensation for loss or damage”. • In practice, efforts by communities to enforce this provision have consistently been unsuccessful. • Compensation offered by mining companies (the only offer) in respect of the agricultural value of the land, not a proportion of the value of precious metals or minerals in the ground. • Under Apartheid law white land owners/tenants had exclusive rights to prospect and first option to mine or transact to nominee mining company; owners received 25% profit share or royalty payable to the state. • Under our democratic dispensation, communities (already disadvantaged and disposed under Apartheid) living on state owned land are further disadvantaged and dispossessed in terms of the MPRDA. • We believe that compensation should be more clearly defined and should also take into account the historical nature of dispossession in South Africa, the value of precious metals or minerals in the ground and loss of future income and or Livelihood.

20. SLP`sas a whole • The communities we work with have expressed their belief and with which ActionAidagrees, that there is an obligation on the part of the DMR to make the SLPs public – under various acts concerning public information including the Freedom of Information Act, PAIA and PAJA. • It is of particular concern that the SLPs are not made public since these are a fundamental part of the compensatory commitment by the mines and which should accrue to the community. • Local municipalities often rely on the companies’ SLPs to promote local economic development, since there are often not many other investments. The fact that local communities are not even aware of what are in these plans contributes to the mistrust that has permeated relations between mines, local municipalities and communities and does not foster social or economic development.

21. Amendments ActionAidsupports the submission made by the LRC on the Amendments and submit that further Amendments should be included to ensure: • Communities have greater rights to be fully consulted and give Free Prior and Informed Consent before mining concessions are granted • The consultation process is supervised by the State or an independent, non-interested party delegated by the State and strictly governed by regulations. • Environmental assessments and safeguards are retained and strengthened and remain under the control of the Department of Environmental and Water Affairs. • Mining companies’ Black Economic Empowerment obligations include equity participation and/or community royalties for historically disadvantaged communities in mining areas.

22. Rights and Responsibilities ActionAid believes the current MPRDA does not: • adequately deal with the rights of communities affected by mining and who bear the highest costs in terms of violations of their Human Rights. • place sufficient responsibility with the mining companies who are the only ones who ultimately benefit from mining activities. We submit that mining has obvious environmental and social impacts which significantly change the social relations of communities affected by mining, most significantly the growing inequality witnessed across the mining provinces.

23. Price Waterhouse Coopers Report 2012 PWC 2012 report for trends in the mining industry, in which it tracks the financial results of 39 mining companies with a primary listing on the Johannesburg Stock Exchange (JSE), as well as those with a secondary listing whose main operations are in Africa, and which included companies with a market capitalization of more than R200 million at the end of June 2012 claims: - • All stakeholders in mining with the exception of Shareholders and management are taking a smaller piece of the pie, including government who received 16% in taxes for 2012 against 18% in 2011 • Companies’ mining operations achieved :- • increased Net Profit of 25%totaling R65 Billion for 2011 • shareholder dividends increased from 12% of value created in 2011 to 18% in 2012. • distribution to shareholders more than doubled from the prior yearfrom 17 billion in 2011 to 36 billion in 2012 or by 116% in Rand terms • employee share of the value created by the companies decreased from 29% in 2011 to 28% in 2012.

24. Of all the stakeholders affected by mining, the communities who host mining activities carry the greatest cost, yet get the least return from mining activities; these costs include impacts that deny them their human rights: - • Right to Equality, together with dignity and freedom, • Right to food • Right to water • Right to housing • Right to a healthy environment

25. Responsibility to promote sustainable development “...Recognising the need to promote local and rural development and the social upliftment of communities affected by mining’ (Mineral and Petroleum Resources Development Act, 2002, Preamble)…Any prospecting or mining operation must be conducted in accordance with generally accepted principles of sustainable development by integrating social, economic and environmental factors into the planning and implementation of prospecting and mining projects in order to ensure that exploitation of mineral resources serves present and future generations.”

26. Responsibility to promote sustainable development  ActionAid contends that the negative impact of mining on communities we work with hardly promotes the “social upliftment” or transformation of communities envisaged by the act, nor is it consistent with accepted principles of “sustainable development”. Addressing and remedying these rights violations are an urgent priority for the communities discussed in this submission and we call for greater levels of consultation with the communities affected by mining on the bill placed before you.

27. We thank you for your time and audience. ActionAidSouth Africa Christopher Rutledge Mining Extractives Coordinator Tel: +27 (0) 11 731 4575 Mob: +27 (0) 82 784 3333 Email: Christopher.Rutledge@actionaid.org www.actionaid.orgwww.facebook.com/actionaid ActionAidis a global movement of people working together to further human rights for all and defeat poverty.