A battle to hold mining company accountable
Mariette Liefferink toys absently with the faux gold necklace coiled tightly around her neck like a scarf.
“Perhaps, if people ask me, I can say we can all look pretty with imitation gold,” she says, flashing a smile.
The 65-year-old mining activist does not wear real gold - and she never will. The reason lies all around her here on the polluted gold fields of the West Rand.
Today, the chief executive of the Federation for a Sustainable Environment (FSE) is showing the R460 million environmental “mess” left behind by Mintails, a liquidated gold mining and tailings processing company listed on the Australian Stock Exchange.
She gestures to a cluster of unrehabilitated mine dumps on Main Reef Road. “At all their sites, there’s no access control, no stormwater and dust control or any other mitigation or management of the dumps and tailings storage facilities. This has created opportunities for zama zamas to conduct their mining operations.”
For the past 12 years, Liefferink’s quest has been to obtain “justice for communities, future generations and the mute receiving environment” affected by Mintails expansive operations stretching across Krugersdorp and Randfontein.
She has spent hundreds of hours compiling complaints and requests to authorities for investigations and enforcement, lodging Promotion of Access to Information Act requests and analysing water quality results.
The embattled firm applied for business rescue in October 2015, but was liquidated in September last year. It has an unfunded environmental liability of R485 million, but only around R25 million financial provision in its environmental rehabilitation funds.
The “delinquency”, argues Liefferink, is not only on the part of the firm and its directors but also the Department of Mineral Resources (DMR) and the Department of Water and Sanitation (DWS) for their non-enforcement of the National Environmental Management Act (NEMA), National Water Act and the Minerals and Petroleum Resources Development Act (MPRDA).
“The DMR, as well as the DWS, allowed Mintails to operate from 2012 to 2018 without a mining right, an approved environmental management programme report and financial provisions.”
While the DMR and DWS issued the company with several pre-directives and directives for non-compliance since 2013, these were not enforced.
“This resulted in this unfunded environmental liability of R460 million, clusters of open pits of 40m deep, partially reclaimed tailings storage facilities, unrehabilitated footprints and toxic and radioactive dams.”
Last week, the Legal Resources Centre (LRC), which represents the FSE, sent a final letter of demand to the DMR and DWS, to urgently intervene in addressing Mintails’ pollution. If the departments did not adequately respond by yesterday, the matter will head to court imminently.
The letter states that the DMR and DWS must enforce their directives as a matter of urgency and provide a date by when compliance must be achieved by the liquidators and directors.
“The DWS, the Mintails Group and their violations was an agenda item on every Wonderfonteinspruit catchment management forum meeting with minutes taken. No action was taken by DWS,” states Lucien Limacher, the acting regional director of the LRC, in the letter.
The letter demands that the DMR and the DWS must issue new directives to the liquidators and directors of Mintails to start remedial action and “contain the toxic sludge that is currently polluting and degrading the environment as a matter of urgency”. Further damage is allegedly being caused by continuing open pit mining.
The DMR “must take reasonable measures to remedy the situation” or apply to a competent court should the Mintails Group not comply or inadequately comply with the directives.
“Should the Mintails Group not comply with the directives, in terms of NEMA, the DMR (must) issue an ex parte application against the Mintails Group to attach and seize property and cover the expenses of the rehabilitation in terms of section 45 of the MPRDA.”
The letter also states how the DMR and the Commission and Intellectual Property Commission “must hold accountable the directors of Mintails for the rehabilitation infringements by bringing a delinquency application” under the Companies Act.
“The directors have grossly abused the position of director, intentionally or negligently, inflicted harm upon the company and the subsidiaries, acted in a manner that amounted to gross negligence and have repeatedly been personally subject to directives from the DMR and DWS.”
In November, a report by the Parliamentary portfolio committee on mineral resources stated how the DMR had failed to ensure Mintails had made the required provision to repair over R300m of environmental damage. The report was sparked by a probe into Mintails collapse by investigative environmental journalism unit, Oxpeckers.
“The committee is often confronted by instances of the devastation caused by careless mining where the DMR says it is a state liability because no one can be found to take responsibility.
“In the case of the Mintails operation, this mine went into business rescue in 2015, at a time when the mining company had an unfunded environmental liability of over R300m. It had saved barely R20m for all its responsibilities.”
The committee’s report noted how Mintails disputed its environmental liability, employing consultants who offered estimates far lower than those of the DMR.
The National Nuclear Regulator (NNR), which conducted a site visit in December as the waste had a “radioactive/nuclear element, according to the FSE, says an internal process is under way.
“You can rest assured that the NNR will play its regulatory role and discharge its responsibilities in accordance with its mandate regarding this matter,” it says.
Sputnik Ratau, spokesperson for the DWS, explains how it issued Mintails with a pre-directive in November 2017. “This required Mintails to cease the seepage of Lancaster Dam wall, clean historic spillages along the reclamation pipeline, rehabilitate the wetlands in the proximity of its tailing storage facility and address inadequate stormwater management.”
But the Mintails response to the pre-directive was “deemed unsatisfactory” by the DWS in a letter dated June 28 2018.” The firm then submitted a detailed implementation plan to curb the pollution to the DWS on July 2.
However, when Mintails was placed under provisional liquidation in August last year, this “derailed all the progress that was achieved through the pre-directive process”.
The DWS is now seeking legal advice internally. “Does the issued pre-directive and commitment made by Mintails carry over to the liquidators, directors and business rescue practitioner? Are the directors and business rescue practitioner legally obliged to comply to the issued pre-directive and implementation plan submitted by Mintails?
“Are the liquidators legally obligated to deal with operational issues such as a directive and pollution considering that they are appointed for a limited period to collect all the assets of the mine to settle the claims of its creditors and distribute any of the remainder of the assets to the shareholders of the mine.”
The DWS was previously advised in a similar case that it is not the duty of liquidators to manage the day to day business. “Their objective is to realise assets on behalf of creditors. As such, liquidators cannot be directed to manage pollution.”
Liefferink worries about impunity. “It would appear when a mining company is in business rescue or liquidation, then the directors and liquidators have no duty of care and simply walk away. The environment, future generations and communities must carry the impact, as in the case of Blyvoor and Aurora. That is totally contrary to the polluter pays principle.”
Ratau says the DWS would conduct a site investigation with the liquidators yesterday to “verify the allegations of pollution”.
The mandate of rehabilitation rests with the DMR. “However, DWS is engaging the DMR to ensure that water resources are protected.”
Mining rehabilitation laws not effective
It’s clear that some mining companies still operate without adequate financial provision for repairing damage caused to the environment by mining activities if they suddenly close, says a parliamentary portfolio committee on mineral resources report, released in November last year.
“The state will inherit these liabilities if the mines are fully liquidated The DMR (Department of Mineral Resources) has failed to implement effectively and carry out the intentions of Parliament to ensure that all mines rehabilitate the damage they cause."
Changes to the law were made in 2002 to ensure that in mining, the polluter must pay. But the report notes how the new laws haven't been effective in “avoiding this situation where the state and the taxpayer still end up paying for the environmental harm caused by mining”.
“There is a lack of clarity on the rules for the DMR when it comes to business rescue practitioners. It seems there is non-application of the law resulting in a free-for-all. The DMR allowed Mintails to operate between 2012 and 2018 despite the fact that it never approved the environmental management plans and never issued the company with a mining right under the law.”
There is a “huge regulatory gap” regarding the financial provisions of environmental rehabilitation of a mine during the process of business rescue, which the DMR must tackle.