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Mine closure and rehabilitation: The hangover that follows the mining party

9 May 2016 at 7:00 am

Prof Humby presenting 5 May 2016

Prof Tracy Humby from Wits Law School presenting to audience of public interest and private lawyers, consultants, and activists at the CER Seminar

Opening the CER Seminar on Mine Closure and Rehabilitation entitled “From Dereliction to Accountability?” in Johannesburg on 5 May 2016, director of the Centre for Sustainability in Mining and Industry at the University of the Witwatersrand Prof Caroline Digby told the audience that she saw a deep resistance in the mining industry, and in government, to talking about mine closure – no-one really wants to close a mine or see any mine closed today.

Prof Digby shared findings of an international comparative assessment on mine closure undertaken in 10 jurisdictions, including South Africa, various U.S. states and various Australian states. This review showed that, internationally, regulators are starting to pay far more attention to closure and rehabilitation, partly because the economic cycle is seeing more unplanned closure, and partly because there is now far greater public awareness around these issues. It has only been in the last 15-20 years that regulators have been looking at closure – before that, mines simply “locked the gate” and walked away, leaving us with many of the legacy issues we deal with today.

Some of the challenges revealed by the international comparison included the fact that different cost models produce widely different estimates of closure costs, emphasising the need for a standard approach to the calculation of adequate financial provision for rehabilitation. Moreover, there are very few examples of successfully relinquished or closed mines, and this in itself requires scrutiny.

Prof Digby emphasised that, internationally, mine closure has largely focused on environmental impacts, while very little progress has been made in dealing with the social impacts of mine closure – in her view, despite the challenges here, South Africa was actually further advanced in thinking about this than most countries.

Dee Fischer, Chief Director: Integrated Environmental Management, Department of Environmental Affairs (DEA), was responsible for the development of the new Regulations pertaining to Financial Provision for Prospecting, Exploration, Mining or Production Operations published under NEMA in 2015. She explained how the One Environmental System, with mining now regulated under environmental laws, required a new regulatory approach to mine closure.

The new regulations take a much broader view of the lifecycle of the mine, including annual rehabilitation, rehabilitation at closure at the end of life of mine, and rehabilitation of latent or residual impacts that may arise long after mining has ended. The regulations are more specific about the accurate calculation of financial provision, and importantly now require mines at any time to have funds available to pay for rehabilitation costs within a 10 year timeframe (mining companies traditionally hold far less funds in trust for rehabilitation). The regulations also require involvement of more independent specialists, regular review and audits, and publication of financial provision and audits on mining companies’ websites. Financial provision must also be signed off by the Chief Executive Officer of the mining company to ensure accountability at the highest level.

Fischer acknowledged that there was resistance from the mining industry to the new regulations, particularly the tax implications of some of the new rules. She indicated a willingness on the part of DEA to hear criticism from mining houses and civil society stakeholders with a view to clarifying and improving the regulations.

Prof Tracy Humby from the Wits School of Law compared mine closure to a hangover: what is left after the party – and any subsequent after-parties – of mining. She said that the DEA had struck out on a bold path with the new regulations, and should be commended for this.

Prof Humby considered some of the tax complexities and implications for insurance products for mine closure and rehabilitation, and also spoke at length about the challenges of rehabilitation in the context of business rescue and insolvency – including in particular the terrible social costs that the lack of proper rehabilitation brings for affected communities.

A member of the Blyvooruitzicht community present in the audience spoke about his difficulties in getting the Department of Mineral Resources (DMR) to use the financial provision of approximately R34 million available to them to alleviate some of the dust and water pollution from the Blyvoor mining site, raising questions about DMR’s assessment of the adequacy of financial provision, and why these funds are apparently not being used by the DMR for their intended purpose.

Prof Humby described recent changes in the EIA and Financial Provision Regulations as a “wave of transparency” washing over the mining industry. These regulations now require mining companies to put their environmental authorisation, audits and financial provision on their websites, available for affected communities to see.

Prof Humby also spoke about the fact that South Africa doesn’t have a good model for deciding where not to mine, which causes major problems for closure in places where the environmental or social context should have prohibited mining from taking place at all. Fischer agreed that regulation through licensing was really just a way to mitigate the inevitable environmental and other damage. She argued for a more proactive approach of identifying where mining should not be allowed at all, and for better planning of the development of mineral resources. Prof Humby posed the possibility of doing a strategic environmental assessment to make an informed decision on where mining should and should not take place, such as was done for solar and wind energy, and is currently underway for fracking.

Prof Humby spoke about the “myth” of mine closure, arguing that requiring restoration of land to a state similar to that is was in before mining was a denial of the reality that, even though mining is a temporary land use, it transforms the geology, ecology and society in the area.

Audience members spoke at length about the many challenges of mine closure, including:

  • The lack of uniform closure standards, linked to the DMR’s general unwillingness to issue closure certificates certifying that adequate rehabilitation has been conducted.
  • The lack of implementation by the DMR of the new rules, creating “uncertainty” exploited by mining companies. Many speakers argued that, if the DMR does not enforce the law, the decision to give the mandate of environmental management of mines to the DMR should be reversed. Others argued for greater resources to be made available to get the DMR to check the reports of audits of mines’ financial provision and take enforcement action.
  • How the lack of enforcement around rehabilitation undermines insurance products for closure – punitive measures for failures to rehabilitate are not perceived as a real risk.
  • The need for enforcement tools to go beyond criminal prosecution to meaningful monetary penalties.
  • The consequences of the failure to rehabilitate for the lives and health of mining affected communities.

Copies of the presentations:

Prof. Caroline Digby joined the University of the Witwatersrand, Johannesburg as the Director of the Centre for Sustainability in Mining and Industry (CSMI), in 2014. The centre focuses on promoting responsible mining across Africa through research, training and dialogue. A development economist by training, Caroline has worked in the field of sustainability, mining and post-mining regeneration for over twenty years. Prior to Wits, she was Sustainability Director at the Eden Project in the UK. She has held posts at the International Council on Mining and Metals, the International Institute for Environment and Development and consulting group CRU International. She is a graduate of Trinity College Dublin, University of British Columbia and the London School of Economics.

Dee Fischer is the Chief Director: Integrated Environmental Management in the Department of Environmental Affairs. In that capacity, she led the development of the new Regulations pertaining to Financial Provision for Prospecting, Exploration, Mining or Production Operations published under NEMA in 2015. Dee holds a Bachelor’s degree in Architecture and an MSc in Environmental Management from the University of Johannesburg. Dee has extensive experience in the waste management field, and was instrumental in improving the health care risk waste management system while employed by the Gauteng Department of Agriculture, Conservation, Environment and Land Affairs.

Prof. Tracy Humby is an associate professor at the School of Law where she has worked for the past 13 years. Tracy researches in the area of Mining and the Environment and has undertaken consultancy work for the International Council of Mining and Metals, the Water Research Commission, the Centre for Environmental Rights, the Open Society Foundation and Natural Justice. She is a member of the IUCN Academy of Environmental Law and a research associate of the SWOP Institute at Wits. Tracy is a lawyer by training with academic credentials in music and tertiary education teaching.

The seminar was chaired by Catherine Horsfield, head of the CER’s Mining Programme.

The seminar was made possible by the Konrad Adenauer Foundation. The Foundation has supported the CER’s Environmental Rights Lunch Series – where local experts can share their knowledge and experience on compelling environmental governance and environmental rights issues – since 2015.