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Media Release: De Beers uses delaying tactics to avoid scrutiny of its sale of Namaqualand Mines

16 April 2015 at 10:14 am

Picture Mining SiteFor the past two years, civil society organisation Conservation South Africa has tried to access key environmental records from the Department of Mineral Resources (DMR) regarding the sale of De Beers’ Namaqualand Mines to TransHex subsidiary, Emerald Panther Investments 78 (Pty) Ltd. When the DMR eventually agreed to hand over the records following Conservation SA’s launch of High Court proceedings to compel it to do so, De Beers hurriedly stepped in to oppose that application.

The documents in question are expected to provide insight into information provided to the DMR by De Beers in substantiation of the reduction of the financial provision for Namaqualand Mines prior to the sale to TransHex – a reduction that is reportedly as much as 70%.

It is a legal requirement for all mines to make upfront financial provision for rehabilitation of environmental damage. In the case of Namaqualand Mines, the cost of rehabilitation will run into hundreds of millions of rands.

The requested documents included the record of decision by the Minister of Mineral Resources consenting to the transfer of the relevant mining and prospecting rights to TransHex. This ministerial decision is administrative action that should have been, but was not, subject to public participation by interested and affected parties. Conservation SA also sought access to all environmental and health and safety compliance inspection reports and directives issued by the DMR, including those pursuant to the deaths of artisanal miners at its mines in June 2012.

Last week, De Beers withdrew its opposition to Conservation SA’s court application.

The delay orchestrated by De Beers’ dilatory opposition to disclosure by the DMR has allowed the transaction for the sale of Namaqualand Mines, with reduced environmental liability to the Trans Hex subsidiary to be finalised without any public scrutiny.

IMG_0785Background

In April 2013, Conservation SA requested access to records under the Promotion of Access to Information Act (PAIA) from the DMR pertaining to the sale of Namaqualand Mines by De Beers to the TransHex Limited subsidiary.

The DMR refused Conservation SA’s request for access to these records on the basis that it contained commercial information.

In March 2014, represented by the Centre for Environmental Rights, Conservation SA instituted High Court proceedings against the DMR, citing also De Beers, TransHex and Emerald Panther for their interest in the matter. In response to the launch of this court application, DMR initially agreed that the information sought by Conservation SA was “not privileged” and undertook to release the records. However, De Beers consequently opposed the release of the information, and the DMR then withdrew its undertaking to provide the information.

In an apparent delaying tactic, De Beers provided batches of documents to Conservation SA on three occasions since court papers were issued, none of which were the documents requested.

When De Beers delayed filing an answering affidavit to explain why any of the requested documents should not be released to Conservation SA by the DMR, Conservation SA obtained an order from the High Court directing De Beers to file its answering affidavit, failing which De Beers would be barred from delivering answering papers and its opposition to the release of the records would be struck out. De Beers accordingly filed its answering papers, and the following month, the transfer of the Namaqualand Mines to TransHex was reportedly finalised. Conservation SA filed its replying affidavit thereafter and applied for a date for the hearing of the matter.

On 10 April 2015, De Beers withdrew its opposition to Conservation SA’s application, and tendered to pay Conservation SA’s legal costs. Court proceedings now continue against DMR, unopposed, and Conservation SA expects to obtain a court order compelling disclosure of the documents shortly.

Mitchellsbay5“It has been disappointing to see a company of De Beers international stature fail to adhere to their own corporate commitments to transparency.  They have known they are operating in a place that is globally unique and an incredible part of South Africa’s natural heritage, the Succulent Karoo. Yet the delays in deliberate legal wrangling to prevent disclosure of information that should be available for public scrutiny has potentially risked both the environmental integrity of the Namaqualand Coast and the communities that live there.” says Sarah Frazee, Director of Conservation SA.

According to CER Mining Programme Head Catherine Horsfield: “Mining companies notoriously withhold environmental information to avoid public scrutiny of behind-the-scenes arrangements with the DMR – secrecy that has been facilitated by the DMR. This failure by the DMR to exercise its mandate to hold mining companies accountable undermines public and corporate accountability, and fails to give effect to environmental rights and administrative justice.”

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Conservation South Africa (CSA) is a local conservation public benefit organisation and affiliate of Conservation International (CI). CSA is committed to helping societies adopt a more sustainable approach to development – one that considers and values nature at every turn.

Watch a film about the experiences of Namaqualand communities here:

Suffering is forever: Ensuring proper rehabilitation pursuant to sale of Namaqualand Mine, Northern Cape (Hondeklipbay community)