Mining sector environmental governance; Rehabilitation in mining industry

Meeting report

Opening Remarks
The Chairperson apologised for arriving late, and said apologies were received from the Minister of Environmental Affairs, Ms Edna Molewa, the Deputy Minister, Ms Barbara Thompson, as well as the Director General, although they were not written apologies.

In the last meeting, serious concerns were expressed that the report went to Cabinet only recently - whilst it was completed and published on the Department of Environmental Affairs’ (DEA’s) website in 2015.

Implementation Evaluation of the Effectiveness of Environmental Governance in the Mining Sector

Mr Rudi Dicks, Outcome Facilitator, Department of Planning, Monitoring and Evaluation (DPME), apologised for the absence of a team as well.

The purpose of the evaluation was to assess the relevance and effectiveness of the legislation and the implementation thereof in achieving this objective.

Key findings:

* Inadequacies of current guidelines to ensure adequate rehabilitation

* Means of mechanisms for determining the most suitable use of land

* Appropriateness and effectiveness of current institutional mechanisms for environmental performance

* Effect of the Mineral Act and Mineral and Petroleum Resources Development Act (MPRDA) on the environmental performance of mining

* Extent to which mining-related environmental liabilities are covered by the state

* Appropriateness of the implementation and enforcement of mining related environmental governance being from within the Department of Mineral Resources (DMR)

Recommendations of the evaluation:

-To avoid confusion, legislation, particularly the National Environmental Management Act (NEMA) should provide definitions across environmental regulations including defining the term “sustainability”.

-Concurrent rehabilitation should be encouraged or enforced.

- “Sustainability” should be clearly defined; method should be defined for conducting sustainability assessments, with clear demarcation of responsibility between mine and authorities.

-Mining companies should be responsible for all foreseeable environmental impacts as approved in Environmental Management Plan (EMP) including unforeseen environmental impacts during operation. State should be liable for all other unforeseen environmental impacts.

-Communication channels within and between departments should be reviewed and improved,

-DMR should develop the capacity, skills, technical expertise and systems for an effective competent authority.

-Guideline for calculating the cost of financial provision for rehabilitation and closure of mines should be updated and training provided to mines and consultants on its implementation.

-DMR should move to automated reporting system with data stored in central database.

The presentation was a summary - full details were available in the report. Cabinet noted the report and raised concerns about impact provision on mining related liabilities with the DPME and requested these provisions to be strengthened in line with existing legislation; therefore, no additional legislation is needed.

Cabinet took the decision that the Minister of Environmental Affairs, Ms Edna Molewa will be responsible for: the reporting of the governance and implementing of the improvement plan (under Outcome 10)

The Chairperson was concerned that the presentation was summarised to the point that the essential essence of the report was lost. That could raise suspicions that questions were being avoided.

In the last meeting, serious concerns were expressed that the report went to Cabinet only recently - whilst it was completed and published on the Department of Environmental Affairs’ (DEA’s) website in 2015.

Discussion

Ms H Kekana (ANC) asked why the DPME thought cross departmental coordination was a problem, and what did they suggest moving forward?

Ms J Edwards (DA) asked why, when looking at the timeline, the process is taking so long. Is there any way to make the process shorter, but still keep it effective? Also, when looking at Annexure 4 - are we on target and if not can the timeline be made shorter? She linked with Ms Kekana in asking that if communication is not where it should be, how will the DPME make sure that it is better in the future, and what is being done right now to make it better?

Mr P Ross (DA) said it was unacceptable that the Committee only received the documents at 17:30 the day before the meeting when they should get it at least three days prior to the meeting. He asked for an explanation on the discrepancy between the mailed documents and the documents in front of him. The electronic documents stated that it was agreed in 2008 that the DMR will continue to regulate the industry while the DEA will regulate approvals, whilst in the documents in front of him it was written that the DMR will do both. Which was right and which was wrong? As a new Member of the Committee he sought clarity on the issue of closing certificates, he was struggling to understand where the responsibility lay for delay in the process that seemingly causes a “state of limbo”.

The Chairperson thanked him and said that the last question will probably have to be answered by DMR.

Mr T Hadebe (DA) thanked DPME for the report and presentation. Section 37 A made funds available that were meant to be used for the rehabilitation of mines after closure. He asked if during the investigations, the DPME came across ways the previous owners of the mines can be held accountable as recourse for the situation of a recent incident where a 9-year-old boy fell down an abandoned open mine shaft and sinkholes. What recourse do we have so it does not have to be the taxpayers’ responsibility because the previous mine boss pocketed all the money?

The Chairperson suggested that DMR should present because it was unfair to ask Mr Dicks to answer these questions. It was agreed that DMR will present before commencing with further questions.

DMR Presentation
Mr David Msiza, Acting Director General (Ag DG): DMR, briefed the Committee.
It was important to give a context of the mining sector. Mining has been important for South Africa (SA) for more than 150 years and it will continue to be important also in achieving the goals set in the National Development Plan (NDP). However, because of past leaders, there were challenges. No proper legislation was in place to deal with environmental management. There are over 5000 derelict and ownerless (D&O) mines in the country that government are taking responsibility for which results to incidents such as the one Mr Hadebe referred to. Together with respective other departments work is being done, but at significant cost to government.

The total estimated cost for the rehabilitation of the 5 976 derelict and ownerless mine sites is R47 billion, whereof only R200 milllion is committed to come through in the next few years to add to the around R120 million that is available annually.

The DMR will continue to collaborate with other departments, including the DPME, DEA and the Department of Water and Sanitation (DWS).

Section 24 of the Constitution, protection of the environment and human beings in the face of exploitation of commodities, was being dealt with in the form of legislation such as the Mineral and Petroleum Resources Development Act (MPRDA).

Mr Msiza highlighted that the DMR’s Annual Performance Plan (APP) clearly indicates what plans they are to implement in response to the issue of mine closure and financial liabilities and enforcement and the implementation of Environmental Management Plans (EMP’s). Working through their entities, Mintek and the Council of Geoscience, they did the work needed for the rehabilitation of D&O mines.

Concurrent rehabilitation is encouraged, but because of the difference between mining open cast coal and gold, for instance, it cannot always be done. Concurrent rehabilitation is comparatively easy in the case of the mining of sand dunes. He referred to the phenomenon of Acid Mine Drainage (AMD) that is occurring mostly in Mpumalanga.

The current environmental state of rehabilitation in the mining industry as well as the utilisation of rehabilitation funds

Mr Andries Moatshe, Chief Director, DMR, said the DMR has been utilising the vehicles of “Cash Deposit”, “Bank Guarantees” and “Trust Funds” under the MPRDA for financial provisioning.

The objectives of the rehabilitation of D&O mine sites were to address the following:

-Public Health and Safety impact including – Cavities and subsidence features, humans and animals falling into shafts and illegal mining.

-Environmental impacts on both surface and ground water.

-Air quality impacts.

The total of such mines in SA is 5976, of which for 47.7% no rehabilitation appears necessary. A total of 0.7% has been rehabilitated and 3.2% is high priority to be rehabilitated. Asbestos mines are estimated to be around 245. In the Northern Cape 13 D&O Asbestos mines were rehabilitated, seven were rehabilitated in Limpopo and two in KwaZulu-Natal.

The DMR promotes the re-mining of legacy dumps.

DMR will continue monitoring and enforcement to ensure that mines comply with concurrent rehabilitation initiatives. Joint inspections with both DWS and the DEA will be conducted where feasible.

The DMR is finalising the verification process of D&O mine sites and updating the State Contingent Liability to reflect current developments.

The DMR will continue providing employment and work opportunities as the rehabilitation process is implemented.

Discussion
Mr Msiza reiterated that in the past there was insufficient legislation to carry the continuous responsibility of the mine owner. Because of challenges such as Acid Mine Drainage (AMD) and collapsing mines, legislation changed. The mine dumps one sees next to the roads and in the city of Johannesburg were all decommissioned in the 1950’s and 1960’s. Now it is industrial and residential areas and that has its own challenge.

To answer Mr Hadebe’s question about the death of the boy, a vertical shaft of the old Primrose Mine was sealed off but because of the heavy rains the concrete seal disintegrated.

Sinkholes are caused by dolomitic ground that dissolves when it comes into contact with water. In future, prior to developments, investigation will be conducted to see if there is a danger of sinkholes because of a previous underground mine.

Mr Dicks responded that the DPME itself did not conduct evaluations. A reference team was set up, chaired by the implementing departments, three in this case. The reference team discussed the terms of evaluation. It is then commissioned to an external party to allow for independent and rigorous examination. A first draft is submitted to the reference group. There is a peer review mechanism for this. A further draft is then submitted again. From there onwards it has to go to the relevant cluster, in this case the Economic and Infrastructure cluster. The cluster may require a number of days to deal with it. This specific report had to go through more than one cluster because it could not be settled within only one. The evaluation was set down for Cabinet for October 2016, but it was taken off due to the number of items on that day. It was then shifted to the date the evaluation eventually came before cabinet.

He apologised for the length of the DPME report and said it was assumed that the Committee wanted findings and recommendations

He also apologised for the late submission and said miscommunication led to the documents not being sent timeously to the members.

Part of the answer of Ms Kekana’s communication question lay in Members engaging with the departments. Legislation is there and it is strong. Lots of work is done toward improving interdepartmental correlation. No additional policy or regulation is required. It requires a working relationship which the DMR is introducing very practically.

Cabinet decided that Minister Molewa is responsible for the implementation plan. Therefore, all the findings and subsequent recommendations in the DPME report are, very ideally, the responsibility of the DEA and the Minister. Ultimately the DEA should keep track and ensure that what is recommended is followed through.

The Chairperson asked again for a much more detailed presentation in the future. The Committee does not want a “watered down” report because the DMR and DEA should take cognisance of the issues raised in the report. Also, he would appreciate a response from the DMR on what they intend to do about the observations and key findings of the DPME. He would have liked to see something from the DMR that says what Annexure 4 from the DEA is doing, such as on this issue, this is our response, this is what we intend to do.

The Chairperson also expected “Zama-Zamas” to be included in the report. There were people, mostly from Lesotho, that went to D&O mines to mine what they think is left, killing themselves in the process. A body was discovered a few days back and the day before the police found six bodies. The people are fighting because of shortcomings in rehabilitation of mines. The DMR must find these mines and prioritise them.

Half of a house fell in a suspected sink hole recently, he expected information about that, being the practical things communities’ experience.

Regarding the vehicles for financial provisioning, it is known that the financial provisions have been promulgated but not enforced because of a number of things that have to happen for them to be completely effective. How does it work and who is in control of these trusts, for example? How does the DMR make sure that there is money for rehabilitation available when the mine owners leave?

The Chairperson asked for clarity on the fair value of the liability to former Asbestos mining sites and the contingent liabilities, and for an explanation of page 19. Was not enough provision made?

Mr S Makhubele (ANC) was concerned about the problem of lack of response from identified stakeholders to interview requests during the evaluation. He wanted to understand how the key informants were identified for a credible process with a reliable outcome. He felt the inadequacies in the guidelines that were identified previously are not yet clear; and asked if perhaps the issue of disagreement in defining sustainability was becoming an issue when it should no longer be an issue. Was the closure certificate question responded to?

In addition to the Chairperson’s question on the three vehicles for financial provision, Mr Makhubele asked if there were a problem of a lot of money being put in that the DMR is unable to utilise due to limitations of trust funds. In SA, the past is playing a major role. He asked if there were a case at all of a person (Mine Boss) that was properly and effectively pursued to still account for the sins of the past.

Mr Hadebe asked how the budget cuts affected dealing with environmental issues.

Relating to the mining companies to re-mine residue, he asked if technology is encouraged by the DMR?

Knowing that the DMR’s environmental management was empowered by legislation to go to the mining companies to establish if they had adequate funding for rehabilitation., did the DMR use that empowerment legislation and were they happy that all the mines have adequate funds to rehabilitate?

Ms H Nyambi (ANC) sought clarity on recommendation 4 in the DPME presentation. She asked what currently guides interdepartmental coordination, and is it fully implemented. What happens to mine owners that do not comply with regulation?

Mr Ross wanted to know who takes responsibility for activities of illegal mining. It seems to be a grey area and vast tracts of beautiful land in the Eastern Cape are being raped by illegal mining without anyone taking responsibility.

He asked if the Interdepartmental Committee that is currently chaired by the DWS is going to be rotated or always chaired by DWS.

He sought clarity on whether the DMR or DEA will be granting environmental authorisation.

Ms Kekana was concerned over air quality impact and asked if there were enough resources to draw on to ensure proper air quality for South Africans. She asked what is done to address problems of drainage in Emalahleni and the Thembelani Platinum Mine in Rustenburg.

Mr P Mabilo (ANC) said Section 24 of the Constitution ensures the right to proper health for everyone. He asked the DPME who was responsible for weak or inadequate implementation of relevant legislation, were they sure the term sustainability is adequately defined in NEMA?
He asked the DMR if there should be timeframes attributed to the addressing of challenges; and if it were possible to get a better picture of the team being able to effectively and robustly monitor and enforce operations in mines and of the DMR’s impact? Being from the Northern Cape, Mr Mabilo appreciated the efforts in Prieska, but asked if in the next meeting those efforts can be quantified to get a broader picture. What are the rough estimates for dealing with old derelict mines and what timeframe can be attached to address these challenges in a progressive manner? Lastly, he was concerned about the lack of the human factor, such as health problems, in the presentation. He was aware of class actions in Prieska and asked what the contingent plans were around people dying in deep rural areas.

Mr Z Xalisa (EFF) asked if the lives of the people are not at risk in villages around old Asbestos mines?

Mr Dicks answered Mr Makhubela that the limitation experienced in study was not sufficient to stop the study from going forward. But it is important to note that poor response does impact negatively on a study although in this case it does not undermine the quality and recommendations of the report. The post script is able to make key findings and recommendations.

Mr Dicks answered questions about communication and correlation problems. Particularly when you have concurrent functions within different departments it generally remains a major challenge. Contradictions and coordination problems emerge. The evaluation does say that there are challenges, but it makes recommendations as well on how it could improve. There is already a management response from the DEA to suggest how to deal with recommendations and now one is needed from DMR too.

Mr Dicks answered that a definition is needed for a set of things that is different for another set of things and said NEMA does not define sustainability so it has to be assumed from a particular point of view and the study indicated a need to deal with that.

The Chairperson said that Mr Mabilo wanted to know the DPME understands environmental sustainability in the mining area.

Mr Dicks replied that one has to be very clear what you mean by sustainability.

The Chairperson said that perhaps the question should rather be posed to the compilers of the report rather than expecting an answer from Mr Dicks - because the term sustainability is properly defined in the Act (NEMA) and when it is said it is not properly defined it opens up something that should not be Mr Dicks’ call on that day.

The Chairperson then remembered something that came to the Committee’s attention, related to his question about the current financial provision for rehabilitation. Information, already in the public domain, around the utilisation of rehabilitation funds of around R1.3 Billion that was approved by the DMR to be transferred from Standard Bank to the Bank of Baroda (a state-owned Indian bank with a small presence in South Africa) for the rehabilitation of the controversial Optimum Coal Mine whilst it will only be mined out in about 2030. How can we complain about insufficient funds and yet approve such transfers?

Mr Ishaam Abader, Deputy Director General (DDG): Legal, Authorisation, Compliance and Enforcement answered Mr Ross’s question that currently for mining and mining related activities environmental authorisation lies with the DMR

The Chairperson added that the Minister of the DEA can appeal.

Mr Abader confirmed that and said the Chairperson was also correct in saying that sustainability is defined in NEMA.

Regarding the management response of Annexure 4,a lot of issues raised as recommendations are included in the management response but that DEA cannot totally take credit for the response because it was a joint effort between the three departments and the only reason DEA is seen as responsible is because of Cabinet’s decision that DEA’s minister is responsible for reporting on the implementation. That does not leave the responsibility with DEA to implement though, that responsibility lies with the line department.

The Chairperson asked if the response covers all three departments.

Mr Abader said that on behalf of DEA the issues that were raised have been addressed.

Mr Msiza said their role is to provide surety when they came to Parliament to engage with DEA and that challenges are being met short- and long-term. Working together as government is very important to not have contradictions. Some of the issues were already overcome by events because of measures implemented. Mr Msiza wanted to suggest that they should reflect on the report of the Inter-departmental Project Implementation Committee (IPIC) to see if there are any other issues needing attention. He assured the Committee of continuous engagement with DPME, to the extent of sharing the DMG’s APP, to go through it and see if they are comfortable with environmental enforcement before it is finalised. Continuous engagement is important.

The Chairperson sought clarity on whether DMR management responded to the Management Response or Action Plan or whether the IPIC should go through it again because what was attached was the DEA’s Management Response. Are you saying that we should wait for that meeting to consolidate or do you want to share the DMR Management Response in the meantime?

He said the Committee is relying on the DMR for the way forward.

Mr Msiza said the DMR could share what they shared with the DPME but suggested that through the process of the IPIC to continue the response.

The Chairperson asked if something could be expected for the meeting on the following Friday.

In answer to the question of Optimum Mine, Mr Msiza said the matter was responded to in the media and that the DMR did not issue approval for such a transfer and that in terms of the law the DMR understands clearly the purpose of such funds.

On the question about illegal mining, the DMR is also greatly concerned over the matter including illegal sand mining. Of great concern is the matter of illegal gold mining specifically in Gauteng, Mpumalanga and the Free State. Over time government came up with a strategy to deal with that. When accessing such mines there is, first of all, a health and safety risk as well as stability pillars being taken out creating structural challenges. Although shallow gold mines can be accessed by individuals, when deep gold mines are being accessed individuals are assisted, making it complex local and international syndicate activity, not simple at all. The gold that is extracted goes elsewhere. The Justice, Crime Prevention and Security (JCPS) Cluster went to the United Nations (UN) recently to get the countries where the gold is going to, to come up with legislation. DMR is promoting legitimate re-mining in identified areas. Mining permits are issued to mining companies to do that. Also, the Council of Geoscience is sealing holes at derelict mines. Collaboration with enforcement agencies is necessary because arresting illegal miners and not those who are fuelling the problem was happening in the past and it was not effective. Recently more and more syndicates are being arrested. Operating mines are also urged by DMR to strengthen their security, for illegal activities take place there as well. Some have done that. Furthermore, forums were established in the respective provinces.

Answering Mr Ross’ question, Mr Msiza admitted that the illegal mining of sand is difficult because of where it happens. DMR needs information and asked if there were any information it should be shared.

The recent incident of the sink hole in the West Rand might have been one of the cases where dolomitic ground dissolves with water, but the Council of Geoscience together with the relevant municipality will investigate further. These are legacy problems because, most of the time, these things happen where townships are.

Mr Reuben Masenya, Director, DMR, answered the question relating to vehicles for financial provision. They were only guarantees of which mining companies choose to determine future financial provision, if the companies are not rehabilitating in future the state should be able to access funds to do rehabilitation on their behalf. Cash Deposit is an account set up so that small players in the industry with no sufficient history for bank guarantee can deposit money into an account. For the Bank Guarantee the companies go to the bank to ask for a guarantee that if they do not rehabilitate the state can utilise the funds to rehabilitate. There were challenges with the Trust Fund also with regard to appointing members and that as time progresses the DMR will give feed-back as the South African Revenue Service (SARS) and National Treasury are giving some pointers.

The Chairperson asked if access to these funds was controlled by the DMR

Mr Masenya responded that initially, before knowing the challenges, it was carved that only DMR can access, but that now with the Trust Fund a gap was identified that funds can be accessed without the DMR, because government will only know if someone has accessed funds a year after it has been accessed. The Department was working jointly with SARS and National Treasury to make sure that in future only DMR can access these funds.

Future committed resources was R200 million and for the remaining R1.8 billion the state was still investigating ways to make it up. The estimated cost, to deal with D&O mines and the legacy of the past, is 47 billion in total.

The Chairperson asked if the Department currently had R200 million.

Mr Masenya answered that R200 million was committed for a number of years to come, and R120 million on an annual basis.

The Chairperson said Government can only provide R200 million over a period and you require R47 billion, meaning that we will be sitting with this problem for the next 50 years to come.

Mr Masenya said he believed the figure might be updated, the Council of Geoscience may find that more mines do not need rehabilitation, but for now the audited figure is R47 billion and that it will take between 50 and 100 years.

The Chairperson asked if all these mines were ownerless and the responsibility of the state?

Mr Masenya answered that this is unfortunately correct. The report has been overtaken by a number of events and that jointly as they proceed the points that have been highlighted will be clarified. At the IPIC gaps will be identified and things not yet addressed will be addressed.

The issue around air quality is a big and very complex challenge and the Council for Geoscience is doing studies, starting with asbestosis and that the Council has a deadline to provide a recommendation on how to deal with air quality in the mining sector.

Mr Moatshe added that on the issue of air quality the DMR was also facing the problem of spontaneous combustion at the coal mines and that now thermo surveys are being conducted leading to mechanisms put in place to quell the problem.

Mr Masenya said that on the issue of closure certificates, fragmentism in the legislation are key but there was some alignment and amendment to assist with the problem and that cooperating government and one environmental IPIC was key, and that DMR is hoping that it will be easier in the future

Yes, DMR is affected by budget cuts and one of the targets in the APP dropped from 50 to 45.

New technology was encouraged and must be utilised.

Ms Dlamini Seipati, acting DDG, answered the question of compliance. Since the promulgation and implementation of NEMA the Department established a new unit to deal with compliance and enforcement specifically. Since then environmental verification inspections are conducted that are reducing the state’s environmental liability and those who are not complying are being issued fines. A number of mine houses are applying for concurrent rehabilitation. The DMR is on the right track and with capacity building would be able to deal with this issue going forward. The main issue, though, remains D&O mines.

The Chairperson asked if the new unit worked on its own.

Ms Seipati said that it is a new unit but they are working together with that which were spoken about.

Ms Irene Singo, Chief Financial Officer (CFO), DMR, said they were covered on the finances but wanted to emphasise that the budget given is based on a database that is part of an on-going project to investigate and make sure of the number of mines that do not need to be rehabilitated, where rights can be re-issued or where the previous owner can be found. Work is done first on mines where not rehabilitating them would lead to emergency.

Mr Msiza answered that the chairpersonship of the IPIC does rotate.

He answered Mr Mabilo by saying that government is assisting people who have been affected by the legacy, by, with the help of the Department of Health and Department of Labour, to set up One-Stop-Centres to bring the services of government closer to those who have been affected by Asbestos mining. These centres may be opened in the SADC countries in the future. A Compensation Summit was also held last year to assist with regard to Asbestos Victims.

Mr Hadebe wanted to know whether DMR is confident that all the current mining companies are compliant

Mr Msiza said that there are mines that do not comply and they are issued with non-compliance notices.

Mr Hadebe was concerned that air quality was only monitored where there is spontaneous combustion or other existing problems. Are you also monitoring those who currently mine?

An official said that the DMR does not have power to enforce the Air Quality Act and that that power lies with DEA. The same with the issue of Emalahleni and the Thembelani mine’s drainage that would be the responsibility of DWS.

The Chairperson said the Committee wanted to do oversight on air quality.

Mr Msiza said the most important thing is prevention and it is very important to remove gold dumps. A mining company expressed interest in the dump outside Soweto and said they will move there as soon as the commodity price improves. Once a dump is removed new development should start.

The Chairperson thanked the DG. For one environmental system to find it proper expression a number of regulations must be promulgated, some that have not been promulgated. Therefore, the Committee will encourage the DMR to put their own regulations and processes in terms of the MPRDA (currently in a process of amendment) in place.

The DPMA must be commended for the report because it pointed out specific issues in governance. Therefore, it is important to get Management Response and after the following Friday’s meeting there should be a consolidated Management Response. That will give some kind of assurance that issues raised are attended to.

The number of D&O mines and the R47 Billion to rehabilitate is a lesson to government to say implement instruments that will make sure these companies made provision for when they are gone. These regulations must be finalised as matter of urgency.

The meeting was adjourned.