Introduction

Mining in South Africa is a prosperous endeavour. But with great reward comes great risk. And there is no industry more perilous and fraught with disaster than the mining industry. Not only is one dealing with moving the Earth to get to the precious resource, bargaining with trade unions and appearing at commissions but over and above those Atlas-like feats one has to ensure all the strands of the regulatory web are strung: health, safety, employment, tax, BEE and the environment to name a few. And the environmental strand of the web has just gotten that much stickier with the judgment handed down in Harmony Gold Mining Company Ltd v Regional Director: Free State Department of Water Affairs (971/12) [2013] ZASCA 206 (“Harmony Gold”).

Factual Background

This matter concerns a string of interconnected gold mining operations in the North-West Province.  Not only are these gold mining operations interconnected in space but also in time. One of the greatest dilemmas in the mining meets environmental sphere has been how to repair the damage that has been done over a century of operations where companies die the death of a juristic person: liquidate. It would appear that South Africa has learnt its lesson and enacted laws to hold polluters to account in most situations as we will see. However, as the law is not retrospective in application the new laws must move from the theoretical to the practical i.e. be given effect to. And that is what has occurred in Harmony Gold.

This string of mines is a major site of acid mine drainage: the pollution which results from the pyrite contained in gold bearing ore oxidizing coming into contact with water and creating acidic conditions which in turn cause salts and heavy metals in the mineral rock to dissolve into the water. The polluted water is harmful to humans and the environment in general. In order to mitigate the negative effects of such pollution the Department of Water Affairs (DWA) issued a directive to all the mines operating in that area, namely AngloGold Ashanti Limited, Simmer and Jack Mines, Simmer and Jack Investments (Pty) Ltd, Stilfontein Gold Mining Company Limited and Harmony Gold Mining Company Limited (“Harmony”). The directive required these companies to remove and treat the polluted water for which the costs would be, for the most part, shared between the mining companies equally.

The directive furthermore envisaged this as a short-term interim solution to be put into place pending discussions between the companies and the DWA on more adequate long-term solutions.

The directive was implemented and operated relatively smoothly up until Harmony Gold sold its operations to Pamodzi Gold Orkney (Pty) Ltd (Pamodzi) in 2008. In 2009, the land on which the mine operated was transferred to Pamodzi. As such Harmony Gold was of the opinion that now that all ties with the land (no control, no use, no ownership) were severed the directive was invalid/unenforceable against Harmony Gold. Pamodzi had failed to fully comply with the monthly contributions owed by all the mining companies for the on-going rehabilitation of the water and eventually Pamodzi went bankrupt. Harmony Gold resumed the obligations under the directive but nevertheless sought release first from the DWA who refused and then in the High Court.

In the Supreme Court

Harmony Gold sought to review and set aside the directive on the grounds that, because it had sold the operations and the land, it no longer fell within the provision empowering the issuing of the directive, namely section 19 of the National Water Act 36 of 1998 (“NWA”) which provides, inter alia, that:

(1) An owner of land, a person in control of land or a person who occupies or uses the land on which-
(a)  any activity or process is or was performed or undertaken; or
(b)  any other situation exists,
which causes, has caused or is likely to cause pollution of a water resource, must take all reasonable measures to prevent any such pollution from occurring, continuing or recurring.

At first glance, one might say that Harmony makes out a reasonable case. The duty-imposing provision is drafted in the present tense i.e. in control, occupies, uses. The persons on whom this duty is imposed were collectively referred to in the judgment as “landholders”.  Let us glance again through the learned eyes of the Justices of the Supreme Court of Appeal and see the unreasonableness of Harmony’s proposition.

The Court discussed the correct interpretational stance to adopt in such a case. First, one examines the section 24 constitutional right to an environment that is not harmful to our health or well-being. Flowing from here is the legislative measures adopted to, inter alia, (and it’s a whole lot of alia) prevent pollution such as the National Environmental Management Act 107 of 1998 (“NEMA”) and the NWA. 

The Court moves to dismiss Harmony Gold’s arguments by holding rightly, in my opinion, that “the rationale of [section19] is to direct the landholder to address the pollution or risk of pollution however long it make take to do so. That rationale does not fall away when the landholder ceases to own, control, occupy or use the land” as per paragraph 24 of Harmony Gold. The Court went on to hold that the interpretation called for by Harmony would result in the person being issued with a directive to easily “evade its obligations…by simply severing its ties with the land.” This would not accord with the purposes of the NWA, the principles of NEMA nor the constitutionally enshrined environmental right.

Conclusion

As a result of Harmony Gold all polluters that have been issued with directives, whether it be under the NWA, NEMA or any one of the countless other environmental statutes, would be wary to attempt to evade their obligations by selling off the land or even the control of the polluting operations. That directive will follow you to the grave, whether that the basement office of the liquidators’ or six feet under.

Written and prepared by:
Patrick Wainwright

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