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(Conference Draft)

A Tale of Four Mining Charters[footnoteRef:2]: The effect of the politics of development for benefit sharing with mining communities in South Africa [2: Reference is made to the title of the classic novel: Dickens C, A Tale of Two Cities (London, Penguin Books 2000 (first published 1859)).]

Anri Heyns [footnoteRef:3] [3: Anri Heyns is currently a PhD candidate at the NRF/DST SARChI Research Chair: Mineral Law in Africa at the University of Cape Town.]

2017 Law and Development Conference

Cape Town, South Africa

September 2017

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1. Introduction

To break with colonial times, great emphasis has been placed on sharing the benefits of commercial endeavours with those affected by the exploitation accompanying these endeavours. Commercial exploitation of resources, both natural and human, characterised the relationship between the Western world and colonised nations.[footnoteRef:4] It also manifests in the relationship between multinational corporations and local communities, indigenous or otherwise, living in the areas where these multinational corporations operate their commercial endeavours. [4: Gordon RE and Sylvester JH, '"Deconstructing Development" ' 2004 (22) Wisconsin International Law Journal 1-98, 53.]

Mining is a very good example of such a commercial endeavour and its effects on local communities are well documented.[footnoteRef:5] In South Africa, benefit sharing in mining is currently pursued in terms of empowerment as provided for in the legislative system that was implemented on 1 May 2004.[footnoteRef:6] To promote empowerment, the legislative system specifically provides for the creation of a Mining Charter by the Minister of Mineral Resources.[footnoteRef:7] [5: See in general Cronje F and Chenga C, 'Sustainable Social Development in the South African Mining Sector' 2009 (26) Development Southern Africa ; CALS, Changing Corporate Behaviour: The Mapungubwe Case Study - A Research Report (2014) CALS, ;CALS, Changing Corporate Behaviour: The Mapungubwe Case Study - A Research Report (2014) CALS, ;Esteves A, 'Mining companies as agents for social development: The case for more effectual corporate-community investments' in E. B, Walde T and Warden-Fernndez J (eds), International and Comparative Mineral Law and Policy - Trends and Prospects (The Hague, Kluwer Law International 2005) ; Mbatha P and Wynberg R, 'Mining and the Myth of Benefits in South African Rural Coastal Communities' in Wynberg R and Hauck M (eds), Sharing the Benefits from the Coast (Cape Town, UCT Press 2014) ;TRC, Truth and Reconciliation Commission of South Africa Report (2003) http://www.justice.gov.za/trc/report/ accessed on 6 March 2016 ] [6: The Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) became operational on this date. See discussion below regarding empowerment in the mining industry.] [7: The Broad-Based Black Socio-Economic Empowerment Charter (Mining Charter) created in terms of s 100 of the MPRDA.]

On 15 June 2017, more than a year after the controversial 2016 draft Mining Charter[footnoteRef:8] was released for comment, Minister Mosebenzi Zwane announced the 2017 final Mining Charter.[footnoteRef:9] The 2017 Mining Charter will be the industrys third charter, replacing the 2004 and 2010 charters.[footnoteRef:10] The 2017 Mining Charter has been met with much criticism, causing the postponement of its implementation.[footnoteRef:11] Nevertheless, the Department maintains that this third charter will achieve growth and transformation in the mining industry while also promoting the socio-economic welfare of mining communities.[footnoteRef:12] [8: Draft Reviewed Broad Based Black Economic Empowerment Charter for the South African Mining and Minerals Industry 2016 (GN 450 GG 39933 of 15 April 2016), The charter was released without any prior consultation with stakeholders in the industry and while court action, instituted by the Chamber of Mines against the Department of Mineral Resources, was still pending. Seccombe A, 'Department blindsides miners with new charter' BDlive (15 April 2016) available at http://www.bdlive.co.za/business/mining/2016/04/15/department-blindsides-miners-wit-new-charter?service=print accessed on 30 July 2017.] [9: Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry 2017 ] [10: Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (GN 838 GG 33573 of 20 September 2010), ;Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry, 2004 (GN 1639 GG 26661 of 13 August 2004) ;Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry, 2004 (GN 1639 GG 26661 of 13 August 2004) ] [11: Timeslive, 'Mining minister suspends implementing new mining charter' TimesLIVE (14 July 2017) available at https://www.timeslive.co.za/politics/2017-07-14-mining-minister-suspends-implementing-new-mining-charter/ accessed on 30 July 2017.] [12: 2017 Mining Charter 1 (f).]

Notwithstanding the implementation of this legislative system, the problem of poverty in mining areas persists and often causes conflict between mining companies and communities.[footnoteRef:13] The empowerment of mining communities takes place mainly through development in terms of the Mining Charter.[footnoteRef:14] This paper, therefore, proposes that an interrogation of the concept of development is required to understand why development problems faced under the previous charters will not necessarily be solved this time around. [13: Between 2009 and 2015 labour unrest took place in reaction to low wages and poor working and living conditions. See Horne R, 'Patterns of ownership and labour unrest within the South African mining sector' 2015 (40) Journal of Contemporary History ] [14: The Broad-Based Black Socio-Economic Empowerment Charter created in terms of s 100 of the MPRDA.]

2. Benefit sharing with poor mining communities through empowerment

Whereas benefit sharing in resource extraction primarily entailed restoring indigenous peoples sovereignty to their natural resources,[footnoteRef:15] benefit sharing can also be promoted in a less abstract manner. The term benefit sharing has been used to indicate different approaches to social responsibility or transformation. On the one hand, it is understood as practising greater social responsibility in a neoliberal, self-serving and reactionary sense.[footnoteRef:16] On the other hand, benefit sharing is compared with development, but without necessarily exploring the underlying cause for underdevelopment.[footnoteRef:17] In basic terms, however, benefit sharing merely signifies the division and distribution of monetary and non-monetary benefits in a way that has equitable outcomes and which is procedurally fair.[footnoteRef:18] [15: 1962 UN General Assembly Resolution 1803.] [16: Wynberg & Hauck (2014) 6 refer to Jenkins 2004 and Merino A & Valor C The potential of corporate social responsibility to eradicate poverty: an ongoing debate (2011) 21 Development in Practice 157-167.] [17: Wynberg & Hauck (2014) 6 referring to Altman J Benefit sharing is no solution to development in Wynberg R, Chennels R & Schroeder D Indigenous peoples, consent and benefit-sharing: Learning from the San-Hoodia Case (2009).] [18: Wynberg & Hauck (2014) 8. Wynberg & Hauck (2014) 6 refer to Schroeder D Environmental justice and the market: The politics of sharing wildlife revenues in Tanzania (2007) 21 Society and Natural Resources 583-596. The theoretical basis of benefit sharing, as an idea, is still not well expressed and requires consideration.]

The Mineral and Petroleum Resources Development Acts[footnoteRef:19] transformative nature is evident from its preamble, which acknowledges that South Africas mineral and petroleum resources belong to the nation. Section 3 specifically states that the State holds the mineral and petroleum resources in custody for the benefit of all South Africans.[footnoteRef:20] The preamble, furthermore, recognises the need to promote local and rural development, as well as social upliftment of communities affected by mining. [19: 28 of 2002 (hereinafter the MPRDA).] [20: Before the enactment of the MPRDA the owner of the land on which the resources were situated owned mineral resources. The MPRDA therefore brought about a very significant change to the way in which mineral resources are regulated. A detailed discussion regarding this matter, however, falls outside of the scope of the current discussion. See Van der Schyff E Who owns the countrys mineral resources? The possible incorporation of the public trust doctrine through the Mineral and Petroleum Resources Development Act (2008) 4 TSAR 757 768 in this regard.]

To achieve these transformative objectives, section 100 of the MPRDA mandates the development of the Mining Charter to promote the participation of historically disadvantaged South Africans in the mining industry. As will be shown in this paper, the MPRDA, together with the Mining Charter, promote black economic empowerment (BEE) in the mining industry, as espoused by the Broad-Based Black Economic Empowerment Act.[footnoteRef:21] It gives effect to the right to equality as set out in section 9 of the Constitution and aims to address the inequalities of the past.[footnoteRef:22] The definition of broad based economic empowerment in the MPRDA includes as one of the objectives the socio-economic development of communities immediately hosting, affected by supplying labour to the operations.[footnoteRef:23] [21: 53 of 2003 (BBBEE Act). The 2017 Mining Charter