The mining industry is under constant pressure to demonstrate continued commitment to responsible environmental management and to the concept of sustainable development. There are currently several pieces of environmental legislation being updated or coming to the fore, which the industry will be obliged to comply with.
These include the National Environmental Management Act (Nema) regulations, which set out new obligations around mine rehabilitation.
Former Harmony Gold CEO and Joburg Indaba chairperson Bernard Swanepoel, on Thursday, opened a discussion at a breakfast leading up to the Indaba, to update stakeholders on the current and proposed legislation, to enable them to understand the financial implications and what preparatory steps can be taken to comply with the new requirements.
Law firm Webber Wentzel environment and natural resources partner Garyn Rapson explained that the National Environmental Management Laws Amendment Bill, which is a key amendment Act that has been outstanding for a while, is due to be gazetted by government soon.
Rapson believes the amendment of Section 24G of Nema, which sets out the rectification provisions, will not be welcomed by the mining industry.
“There is a clear tightening around those provisions in the Bill. It is clear that government does not want to see applications as a backstop to get environmental authorisation, which is historically what has happened.
“Mining companies used to budget for the administrative fine and gone ahead and started their operation while waiting to get their 24G application through. The proposed changes to Nema prohibits this from happening,” said Rapson.
Moreover, there are changes to the protective areas of the Act, which are a direct consequence of some key cases that have occurred in the recent past near protected areas.
There are also changes to the Waste Act in terms of the contaminated land provisions.
“The regulations are not referring to significant contamination anymore, they are saying that if you have light contamination, it needs to be notified to government,” he noted, adding that mining companies have spent years determining if their contamination is significant before notification is given, and this will now add more pressure on mining companies to assess and report contamination.
Another aspect Rapson believes the industry will not welcome is that there is a push to have a lot of the enforcement and compliance around Nema handed down to municipal level.
“These [municipal] officials will have the power to enforce Nema and other Acts, such as the Waste Act and Water Act, which mining companies will not be happy about, since officials at municipal level do not necessarily understand the intricacies of the legislation.”
Rapson also discussed the positives stemming from the amendment Bill, such as proposals to remove stockpile deposits out of the Waste Act and placing it back under Nema.
The industry will be happy about that, he said, because, under the Waste Act, the requirements for landfills immediately apply to mines’ waste dumps, which means for example that liners are necessary, which is onerous for mines.
In terms of appeals, Rapson mentioned that the moment an appeal is lodged, environmental licences are suspended, which mining companies are not happy about, especially if it is a frivolous appeal from a disgruntled community member or farmer, often lacking credibility.
Under the amendment, submissions can be made to the Minister to have such suspensions uplifted.
Further, Rapson said government is cleaning up problems regarding One Environmental System – an initiative launched by government in 2014 to streamline licensing processes for mining, environmental authorisations and water use – in terms of delegation of authority to the Department of Mineral Resources and in terms of giving power to inspectors to enforce compliance.
Meanwhile, regarding the Nema financial provision regulations, he pointed out that the new due regulations will replace 1147, with a new draft having been published under 1128. The new draft set of regulations is anticipated to be published by October.
The draft will then be open for public comment for 30 days.
By February 20 next year, mining companies are expected to comply with all new regulations, if the regulations are published in time and audits are done on time. Rapson anticipates a delay in compliance to the new Nema regulations.
In terms of the current Section 24P of Nema, the requirements to provide for financial provisioning for rehabilitation, apply only to applicants for environmental authorisations operating in the mining and oil and gas industries.
However, in the new draft, it is a blatant proposed shift and a direct casualty of the One Environmental System, since it is now proposed to impact on all industries.
Rapson said the current Section 24P of Nema is a mirror of what was historically provided for in Section 41 of the Minerals and Petroleum Resources Development Act which was brought into Nema in terms of the One Environmental System.
The original intention was never to extend these requirements to other projects outside of the mining and oil and gas industries.
The proposed new definition of "financial provisioning" is agnostic as to the Nema listed activities to which it applies, said Rapson.
Further, Section 24P is proposed to be substituted by a new version that appears to be specific to environmental authorisations issued outside of the mining and oil and gas industries and a new Section 24PA will be inserted to deal with environmental authorisations issued specific to the mining and oil and gas industries.
“Something that the mining industry will find intriguing is that the new proposed Section 24PA proposes that the Mineral Resources Minister may approve ‘drawdowns’ of financial provisioning to support final decommissioning and closure from a period of ten years prior to the expected date for final decommissioning and closure.
“Unlocking the funds set aside for rehabilitation has been a gripe of the mining industry for many years and it seems that these concerns have been heard,” Rapson highlighted.
Another positive of the new regulations is clarification around the possibility of making financial provisioning payments to a closure rehabilitation company as a suitable financial vehicle.
This offers a major opportunity to create a new specialist rehabilitation industry in the country. Other proposed vehicles include parent company or affiliate company guarantees. The catch, however, is that these new possible vehicles are subject to Ministerial approval, which could take a long time.
Financial provisioning will now have to be reviewed every three years, instead of yearly, audits will happen every three years, instead of yearly, and mines will only have to submit that to government every five years, which Rapson said “is a bonus”.
Moreover, Rapson welcomed the definitions contained in the new regulations, such as remediate, latency and rehabilitate; however, he pointed out that remediate, which means reversal, is not necessarily technically possible from a mining perspective, but at least expectations are defined more clearly.