Minister on Deputy Director General appointment; ‘Polluter pay’ principle; Financial Provisioning regulations implementation

Meeting report

The Chairperson welcomed the Minister and asked him to respond to the question about the appointment of the Deputy Director General, within the department.

Minister of Mineral Resources, Joseph Zwane, apologised for not being available to provide a response earlier as requested as he had been travelling abroad on official business. He asked the Committee to provide support for the Ministry and its mandate, and said that if DMR is to respond to every rumour in the media then that means it will not be able to meet its targets. The DDG was appointed in an acting capacity, and all the proper channels were followed in her appointment. It is not true that she does not have experience in mining as she has worked in the mining industry for several years in the Free State and Northern Cape. DMR would never appoint someone who is not qualified in a technical position. He assured the Committee that the appointment followed all the necessary procedures.

Mr J Lorimer (DA) requested the Minister furnish the Committee with the papers of the qualifications of the said candidate so that it can be satisfied that the appointment was in order.

Mr I Pikinini (ANC) said that he was surprised that Mr Lorimer was still requesting further information on the matter when the Minister has already responded on the matter. He requested that the matter be put to rest so that the Committee can continue with the business of the day.

Ms M Mafolo (ANC) said that she seconds Mr Pikinini, and is surprised that during the time when transformation is at the top of the agenda, there are still people who are questioning the appointment of women to a senior position. Was it perhaps that it was a black woman that her qualifications are being questioned?

Mr Z Mandela (ANC) said that the Minister has provided the response, and if any member is not satisfied they should approach the Minister and request further information. The meeting has to continue with the agenda of the day, and should not be delayed unnecessarily. Mr Lorimer is questioning the appointment of the DDG, who is in an acting capacity in the post, because she is a black woman. If Mr Lorimer is requesting the candidate’s paper work, then there should be consistency and he must request the paper work of all the candidates.

The Chairperson put the matter to rest and requested DMR to begin its presentation.

Implementation of ‘polluter pays’ principle in mining areas
Mr David Msiza, DMR Acting Director-General, said that the absence of mine environmental legislation and proper coordination of relevant pieces of legislation made it impossible to implement the ‘polluter pays’ principle for many years. This resulted in the liability of derelict and ownerless mine sites being inherited by the state. These mines mainly comprise of hazardous asbestos sites as well as open shaft and holes which pose a high risk to neighbouring communities. A legacy of acid mine drainage was created.

The ‘polluter pays’ principle prescribes that there should be life-cycle responsibility for anything that impacts the environment, and the costs of remedying environmental pollution and of preventing, controlling and minimising environmental damage must be paid by those responsible for harming the environment. An agreement was reached between 2002 and 2011 between the Ministers of Mineral Resources, Environmental Affairs and Water and Sanitation. This agreement intended to adopt an integrated mine environmental management, with alignment of the MPRDA with NEMA to effect the “One Environmental System”.

The Mineral and Petroleum Resources Development Act (MPRDA), National Environmental Management Act (NEMA) and National Water Act (NWA) amendments have been done and the three pieces of legislation are at different levels of promulgation. The NEMA and related regulations are in place and Department of Water and Sanitation has drafted regulations to bring the water use licensing regime in line with the requirements of the one environmental system for mining. The Inter-Departmental Project Implementation Committee has been revised to monitor the implementation of the one environment system. The terms of reference have been developed for a comprehensive rehabilitation programme that is going to be one of the focus areas of the task team. This task team consists of a compliance and enforcement team that is coordinating all governmental efforts to ascertain proper implementation of section 28 of NEMA that deals with duty of care and remediation of environmental damage.

The three-year training contract for environmental mineral resource inspectors has been entered into with the University of Pretoria. The course commenced in 2014, and the first group of 28 had completed the course and included regional managers, DD: Mine Environmental Management and ASD: Mine Environmental Management. The second, third and fourth groups completed classes, and the current contract could be extended should a need arise. Environmental officials from DMR head and regional offices have received training on the NEMA Environmental Impact Assessment (EIA) process and Waste and Air Quality.

DMR monitors the mines and implements enforcement measures to ensure legal compliance. 1 889 environmental verification inspections were conducted during 2015/16. 127 notices were issued to right holders who did not have adequate financial provisioning. DMR has observed a reduction in state environmental liability thus eliminating what would have been future derelict and ownerless mines, and increases in levels of responsibility on the part of holders of rights to avoid penalties and fines.

The financial provisioning regulations were initially published during November 2015 with an intention of full implementation in February 2017. The regulations provided for rehabilitation and remediation, decommissioning and closure activities at the end of prospecting, exploration, mining or production operations and remediation of management of latent or residual environmental impacts which may become known in the future such as pumping and treatment of extraneous water.

The financial provisioning regulations were not implemented due to misalignment with the Income Tax Act as it relates to annual rehabilitation costs wherein mines would be charged double in terms of the Act, limitations of the trust fund, over regulated requirement of upfront provision, audit frequency and care and maintenance requirements. Amendments to the November 2015 Financial Provisioning Regulations were published in the Government Gazette of 26 October 2016. The Department of Environmental Affairs is effecting changes to the regulations to align the Income Tax Act by deleting the trust fund appendix and the annual rehabilitation plan, removal of the limitation to use the trust fund, and alignment of audit frequency with EIA Regulations.

The transitional provision has been extended by another 24 months, and the current ten-year period for which funds should be set aside is revised. Further engagements are required between Treasury, DMR, and Department of Environmental Affairs on closure certificates which are linked to the release of trust funds. The mining industry has indicated a desire to rehabilitate mines during engagements.

Discussion
Mr L Mokoena (EFF) asked what is being done retrospectively for communities that have been affected by pollution over the 130 years of mining. This is especially for townships such as Secunda and Embalenhle which are in mining areas and have been exposed to pollution. DMR made no mention of gold mine pollution, which is said to be the biggest polluter in the country. He asked if DMR was aware of the Harvard Law School report that speaks specifically to the acid mine drainage of gold mines. In Secunda, it was reported to Sasol that there were poisonous substances in the river that runs through Embalenhle. The municipality was given a directive to release more water into the river to dilute it instead of it being cleaned up. What can be done about this?

Mr J Lorimer (DA) asked if DMR has any idea when Department of Water and Sanitation will be publishing its regulations and what effect has their failure to do so had on the progress of DMR? What plan does DMR have for checking the adequacy of the financial provisioning of a particular mine and which mines is it prioritising to check on the soundness of the financial provision. Does DMR have internal capacity or do they use external experts. How many mines have been fined for inadequate financial provisioning since December 2014? Does DMR have a plan to monitor the publishing of financial provisions by mining companies? Does it mean that the new regulations will not apply to some of the mines regulated by previous regulations prior to 2014? Is DMR receiving audit reports from the mining companies? How many mines are concurrently being rehabilitated and who is funding this?

Ms Mafolo (ANC) asked about the sites of the ownerless and derelict mines, what criteria they use to select priority sites and the reasons for these criteria, and if the issued notices were as a result of inspections.

The Director General replied that there are indeed a significant number of ownerless and derelict mines which are asbestos mines in the Gauteng area. Some of the mines are coal mines such as TNDB in the Highveld area of eMalahleni which had spontaneous combustion and DMR has encouraged that they be re-mined. The mines are prioritised based on the risk that they pose to the neighbouring communities and rivers and streams to prevent human harm and protect the environment. There are slime dams in the Gauteng, Free State and North West areas and DMR encourages re-mining of the gold mines to avoid cyanide from entering the river streams. DMR also encourages the planting of vegetation on the areas to avoid excessive dust during the autumn months. There is a task team that is looking into the water aspect of the mines. He said that DMR has heard about the Harvard report but has not had a chance to look at it. The concerns about poisoned water in Secunda will be looked into to rectify the situation.

He said DMR is in consultations with the Department of Water and Sanitation but cannot give clear timelines at the moment. DMR does have a template to deal with the financial provision. The prioritisation is based on health factors and risks. The concurrent rehabilitation of mines is expected to be the responsibility of the right holder who is in operation. These are being funded from the running costs. The financial provision has an integrated register to try and improve enforcement and compliance.

The Director General said that DMR will provide more responses in writing as it is not able to give the exact figures for the mines that have accessed the rehabilitation trust fund or which ones have been given fines.

The meeting was adjourned.