Business Day

Thumbs down for labour clauses in new mining regulation­s

- Allan Seccombe Resources Writer seccombea@businessli­ve.co.za

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.

 ?? /Robert Tshabalala ?? Unearthing problems: Lawyers and analysts say proposed amendments to mining regulation­s will create labour uncertaint­y and duplicatio­n with labour laws.
/Robert Tshabalala Unearthing problems: Lawyers and analysts say proposed amendments to mining regulation­s will create labour uncertaint­y and duplicatio­n with labour laws.

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