The proposals to amend the Financial Provisions Regulation are still being finalized.
- Minister Barbara Creecy has granted another extension for mining companies to comply with regulations related to environmental restoration.
- The extension could also undermine the country’s ability to meet climate change commitments, says a lawyer.
- The regulations ensure that the state does not become liable for the costs of addressing the environmental damage caused by mines.
Mining companies have been granted an additional extension to comply with regulations related to environmental restoration.
Minister of the Environment, Forestry and Fisheries Barbara Creecy has granted a 15-month extension to existing mineral rights holders to comply with the financial provisions regulations of the National Environmental Management Act (NEMA) of 2015. This is the fourth time that an extension is granted.
The extension – until 19 September 2023 – was granted pending the finalization of the proposed amendments to the Regulation on financial provisions.
When the regulations went into effect in 2015, holders of existing mineral rights were given a transition or grace period to comply. The regulations automatically apply to new mines, explained Catherine Horsfield, head of the mining program at the Center for Environmental Rights (CER).
There has been a push back from the industry, as regulations under NEMA put in place higher environmental standards than those of the previous Mineral and Oil Resources Development Act. But the regulations were justified because some mining companies didn’t address the full extent of environmental damage from their operations, Horsfield explained.
“The 2015 Financial Provisions Regulations improved the environmental standard for rehabilitation and established ways in which the money needed for such rehabilitation should be secured.”
Horsfield explained that communities affected by mining and the state essentially bear the brunt of pollution and environmental degradation if mines do not address the full extent of environmental damage caused by their operations.
Webber Wentzel partner Garyn Rapson shared that regulations ensure that the state does not become responsible for the costs of mitigating, rehabilitating and managing negative environmental impacts and environmental damage caused by mining. These responsibilities should fall on the owner of the mineral rights.
The regulations facilitate environmentally sustainable mining, Rapson said. They require mining companies to set aside sufficient funds for the restoration of the environment to address the pollution and damage caused by their operations.
Specifically, regulations require mines to put in place an annual rehabilitation to begin rehabilitation as they mine and not delay it once all mineral resources are exhausted, Horsfield said.
“… [B]Due to the rejection of the sector and an attempt to revise the regulations, the FDF has repeatedly extended the date on which existing mines must comply with the 2015 Financial Provisions Regulations, leading us to a situation where, more than seven years later, the Existing mines are still operating outside the law of the day. ”
– Catherine Horsfield, CE
Horsfield believes the “grace period” for mining companies has been “unreasonably” extended. The regulations have been in force for seven years and were published in the official gazette after a long period of consultation with interested parties.
“In 2015, therefore, the mining companies already knew what would be required of them. So while an initial grace period to allow existing mines to meet the new standards may have been understandable, that grace period has been consistently extended, in unreasonable way. “
Delaying compliance with regulations facilitates violations of NEMA and Section 24 of the Constitution that deals with environmental rights, Horsfield added.
Rapson said the delay creates more “desperation” for policy certainty as the market wants to know what the final set of regulations will include. Rapson added that the delay also puts the country at risk of meeting its climate change commitments.
“The funds allocated by the mining companies must be used to ensure that mining operations are closed in a sustainable way,” said Rapson. The sustainable closure of the mines contributes to the achievement by the country of the contributions determined at national level (the target emissions).
“Restoring ecosystems, biodiversity, water systems and ensuring that settlers, spontaneous coal burning and other latent problems are addressed will greatly help reduce South Africa’s carbon emissions,” said Rapson.
The Minerals Council of South Africa declined to comment.