Draft regulations by the Department of Environmental Affairs (DEA) that seek to reduce the financial provision for mining rehabilitation to a period of three years are “hopelessly inadequate”.
This is the assertion of a group of civil society and community-based organisations that includes the Centre for Environmental Rights, WWF-SA, the Federation for a Sustainable Environment and the Mining and Environmental Justice Community Network of South Africa.
In their comments on the amended draft regulations pertaining to financial provision for prospecting, mining exploration or production operations, the organisations describe the three-year period as completely arbitrary.
The 2015 Financial Provision regulations obliged mining firms to allocate financial provisions that would cover 10 years of rehabilitation after mining activity had stopped.
The 2015 regulations, which the organisations hailed as a “much-needed improvement on the previous regulatory system for financial provision under the Mineral and Petroleum Resources Development Act and its regulations (MPRDA), were challenged by the mining industry.
“The proposed period of three years for ‘available’ financial provision is completely arbitrary and does not take into account the variability of the time it may take to rehabilitate and close a mine, let alone the period for which residual effects are likely to persist,” read the organisations comments.
As toxic acid mine drainage is the most obvious of residual environmental impacts, “a much longer period - at least 20 years - is required”.
“The explanation given by the DEA for reducing the 10-year period to three years is that committing (financial provision) for 10 years upfront will have negative financial impacts on a company.
“However, not having adequate financial provision available also has extremely negative financial impacts for a company, its shareholders, its creditors and employees, its directors, the state, the environment and affected communities.
“This is well illustrated by the example of Blyvooruitzicht (mine), where no rehabilitation work has taken place to date, to the detriment of the surrounding community.”
The draft regulations, say the organisations, do not consider the variability of the time it may take to rehabilitate and close a mine, “let alone the period for which residual effects are likely to persist.
“Financial provision availability of three years is untenable in all cases except for those exceptional situations in which good concurrent rehabilitation has been achieved throughout the life of the mine.”
A three-year financial provision would allow mining applicants, holders and holders of rights or permits to “front-load” their rehabilitation measures in the first few years of operation, which would keep their financial provision relatively low.
“This again opens the door to mine abandonment or liquidation occurring before the highest cost remediation and rehabilitation measures are implemented.”
A recent investigation by the Oxpeckers Centre for Investigative Environmental Journalism revealed that almost R60billion is being held in funds for the rehabilitation of mines across the country.
It showed how these funds could not be used for rehabilitation while a mine was still operational, but the Department of Mineral Resources (DMR) could use the funds if a mine was abandoned. But the department, Oxpeckers found, was yet to provide an instance in which the money had been used.
The signatories to the comments stated mine abandonment is “endemic”.
“(It) has a profoundly adverse impact on the country’s water and air, the productive capacity of its soil and the health and well-being of its people,” the organisations state.
“The cost of unrehabilitated mines extends to the likes of acid mine drainage remediation, unquantified health costs, unravelling of the security situation on unrehabilitated and abandoned mines, with unquantified police resources expended on informal mining and mine-related conflicts.”
The DEA states that “unease” about its mandate to address care and maintenance led to it being removed from the current draft regulations as they “would be better placed within the regulatory framework of the MPRDA”.
But the organisations say that care and maintenance is “crying out” for regulation in South Africa, and “this was one of the major achievements of the 2015 regulations”.
The failure to regulate care and maintenance, and particularly the financial provision for care and maintenance, creates “a loophole in the law that allows mining companies to ostensibly put a mine on care and maintenance while effectively closing it without rehabilitation”.