Thumbs down for labour clauses in new mining regulations
THE GOVERNMENT USUALLY GOES OUT WITH THE WORSTCASE SCENARIO AND THEN NEGOTIATES FROM THERE
The proposed new regulations underpinning SA’s mining act will add complication and uncertainty to an industry that has cut tens of thousands of jobs, shut mines and restructured to cope with rapidly rising costs.
The department of mineral resources & energy released draft amendments to the mineral and petroleum resources development regulations on Friday, for a month of public input, catching many in the industry by surprise as the year winds down to a close.
Praise for the amendments was reserved for the repeal of environmental aspects, which now fall under the National Environmental Management Act, removing duplication.
Criticism was levelled at clauses around restructuring and retrenchments, many of which add layers of complexity and cost and duplication with the Labour Relations Act, said lawyers.
“It makes an onerous provision potentially more onerous,” said Patrick Leyden, a director at Herbert Smith Freehills.
The provision that employers must notify the minister of mineral resources and energy within seven days after the conclusion of talks with unions was problematic, said Allan Reid, a director of corporate and commercial law at Cliffe Dekker Hofmeyr.
Section 189 of the Labour Relations Act stipulates that there has to be talks between unions and employers about retrenchments and alternative options to saving as many jobs as possible. The regulations stipulating that the minister be informed after these talks could potentially reopen negotiations with unions.
“It’s no good concluding negotiations with the unions and then going to the minister to discuss how to save jobs, because this process would be complete,” Reid said.
“There’s a lot of duplication with the Labour Relations Act. I’m not quite sure what they’re trying to achieve here. It could delay restructuring by distressed companies and force them into liquidation or business rescue.”
The demand set out in the proposed regulations for the submission of a competent people’s report as well as a due diligence report were equally illconsidered, he said. Adding the long list of documents set out in the regulations including these two, made compliance with the underlying clause 52 of the act “almost impossible”.
The third iteration of the mining charter, gazetted in late 2018, placed increased burdens on companies, making it more difficult to secure mining rights with higher levels of commitments.
Industry lobby group Minerals Council SA has filed documents in court to challenge aspects of the charter, while CEOs, such as Anglo American’s Mark Cutifani, have spoken of talks with the department to find a resolution outside court.
The proposed regulations in their current form would add fresh layers of complexity and cost to conducting mining businesses in this country, said Nedbank mining analyst Arnold van Graan.
“It is worth keeping in mind that the government usually goes out with the worst-case scenario and then negotiates from there.
“Therefore, we expect the final version to be some sort of negotiated settlement between the government and the mining industry, which tries to strike a balance between socialism and economics,” he said.
Comments on the draft regulations can be made in the 30 days after the gazetting of the draft on November 28.
“While various aspects of the new regulations were expected at some stage and offer important technical areas of clarity in various areas, the Minerals Council does need to study the document in detail to form a full picture,” said Tebello Chabana, the council’s senior executive in charge of public affairs and transformation.
“The intention is to carry out this study, consult members on their views, and to provide comment to the department by the due date,” he said.