An open letter to De Beers and the Department of Mineral Resources:
The Bench Marks Foundation of South Africa asks De Beers and the Department of Mineral Resources (DMR) to respond to the inadequacies in the community consultation process prior to transfer of mineral rights at Namaqualand Mines.
Responding to the official announcement by De Beers of its intended sale of Namaqualand Mines to Trans Hex, the foundation is asking De Beers Consolidated Mines (DBCM) to demonstrate that proper consultation with affected communities has taken place and that communities have had sufficient access to the relevant information and technical expertise that will have allowed for the free informed prior consent by these communities for the intended sale.
The Bench Marks Foundation notes with concern the statement by De Beers that this sale is motivated by “a deliberate strategy of reshaping its mining portfolio to focus investment on those mines that provide superior level of returns”, implying that Namaqualand Mines is no longer profitable and that the costs of the mine closure and completion will exceed revenue generated by the mine.
While De Beers and the DMR are satisfied that Trans Hex can deal with the legacy of environmental challenges and social fallout, and the sale complies with the department’s guidelines, the foundation predicts that, like Aurora Empowerment Systems’ mines, the environmental liability at Namaqualand Mines may exceed the revenue from the mine and that this may eventually be externalised to society and the affected communities.
As such these communities will bear the burden of this sale without having been consulted. For the terms of this sale to be effectively understood and accepted by the relevant communities they would have to have access to the following critical technical information: the estimated life of the mine based on calculated diamond reserves at Namaqualand Mines; the estimated social and environmental costs of the mine closure and completion; the accumulated mine closure funds over the period in which De Beers operated; mine closure and completion plans including evidence that affected communities have been fully consulted and informed; the proposed social and labour plans submitted to the department by the intended purchaser, showing evidence that affected communities were consulted.
The foundation’s interaction with HELP (a Section 21 NGO at Hondeklip Bay), correspondence with Conservation South Africa (CSA) and documents under sight from Equitable Access Campaign and the Centre for Environmental Rights, all indicate a lack of consultation with the affected communities. This is in contrast to the sustainability principle that De Beers has set itself, to “engage with communities and seek responsible ways through dialogue to obtain their informed support for our activities” (De Beers, Draft Sustainability Principles, September 2005).
The Bench Marks Foundation concurs with CSA in its assessment about the future of environmental rehabilitation and mine closure at Namaqualand Mines. DBCM has undertaken a process to sell Namaqualand Mines to dispose of associated assets and the social and environmental liability of the mine. This process has progressed to the stage where DBCM is proceeding rapidly with the transfer of all assets and liabilities in the R225m transaction.
The two key aspects of the sale are: the transfer of the mineral resource (which has a positive monetary value), and the complete liability (which has a negative monetary value). The amended environmental management programme report (EMPR) outlines proposed changes in the intended end land use state of areas within Namaqualand Mines, the manner in which the environmental liability will be remediated or rehabilitated, and the cost of the liability associated with this remediation.
In the mining sector, EMPRs are regularly updated to reflect progress on remediation and changes in methodologies employed through amendments. According to the Mineral and Petroleum Resources Development Act, public consultation on changes in the EMPR is only required when the changes are “significant”.
The Bench Marks Foundation concurs with CSA that the process to review the EMPR is inadequate. We believe that the changes are significant and call for full public disclosure and proper consultation with the relevant communities. Some of the statements and methods made in the amended EMPR have not been proven, and some of the approaches will not achieve the stated outcomes and are unsound environmental practices.
The Bench Marks Foundation is calling on DeBeers to make proper and adequate financial provision to remediate current and potential impacts during mining operations and at closure; to restore all degraded areas, including the post-1980 footprint; apply a precautionary principle to all earth-moving calculations on slope remediation; engage community stakeholders and other interest groups in developing the end land use vision and calculate costs of implementing that vision accordingly; and contract an independent audit of the environmental management programme amendment and revised financial closure cost modelling to ensure financial provisions are adequate for meeting legal requirements for environmental restoration.
In addition, the foundation recommends that:
n a proper social and economic impact assessment be made of the implications of this sale for the relevant communities and that De Beers reconsiders the foundation’s proposals on post mining restorations and the economic life of the community;
n communities be properly consulted and involved in the creation of social and labour plans;
n communities be properly informed of mine closure and completion plans, including the planning for the continued economic and social sustainability of these communities beyond mining;
n there be greater community inclusivity and community participation and benefit from the operations of the Namaqualand Mines;
n the “Aurora scenario” be avoided at all costs. In this regard, we call on the DMR to regulate or legislate in such a manner that will make it impossible for mining corporations to sell off environmental and social responsibilities prior to mine closure and completion.
We assume that De Beers will live up to the lofty standards it has set for itself in its own code of ethics… and live up to its responsibilities towards impacted and affected communities in Namaqualand.
We agree with CSA’s assessment that De Beers’ process for transfer of mineral rights… has been very poor and communities and the state will be left with an unusable wasteland if the current plan is handed over in any sales deal.
John Capel is the executive director of the Bench Marks Foundation, an NGO monitoring corporate social responsibility.