Compensation
Section 54 of the MPRDA provides for compensation to be paid to mining-affected communities that object to their land being used for mining. The section applies in situations where a mining company has notified the Regional Manager that the landowner and/or lawful occupiers are preventing the prospecting or mining rights holder from entering the land.[1] Section 54 also applies if the landowner and/or lawful occupiers have notified the Regional Manager that they have suffered or are likely to suffer any loss or damage resulting from prospecting or mining.[2]
In both situations, if the Regional Manager decides that the surface landowner and/or lawful occupiers have suffered or are likely to suffer loss or damage as a result of the prospecting or mining operations, the Regional Manager will direct the parties to negotiate and try to reach an agreement regarding adequate compensation.[3] If the parties cannot agree on compensation, the matter must be arbitrated[4] or litigated in court. The arbitrator or court will determine the amount of compensation payable.[5] This section does not provide for a surface rights holder to apply to stop prospecting or mining while negotiations take place.
Most compensatory deals do not go through the above process; DMR officials are not normally involved. The mining company and community negotiate, on their own, at the same time that the mining company begins operations on community land, without the community being able to stop the mining company. This process predominantly takes place on unequal footing, where the mining affected community feels that it must accept what the mining company is offering or risk losing compensation altogether. Compensation is often inadequate and often does not account for the loss of agricultural land by the affected communities and individuals, often their ‘main means of livelihood.’[6] Compensation for the physical worth of the land alone is often “below what is considered to be appropriate in terms of global industry standards.”[7]
“[T]here are no formal guidelines or oversight provided for the calculation of compensation and the finalisation of compensation agreements... [R]elocations are often carried out before compensation agreements are reached on surface land leases, livestock, crops or housing.”[8]
The Court in Haakdoornbult Boerdery CC and Others v Mphela and Others[9] stated that compensation is intended to put the disposed in the same position as if the land had not been taken away and that fair compensation is not always the same as the market value of the property. Market value is only one aspect that must be considered. “Western concepts of expropriation and compensation are not always suitable when dealing with community held tribal land.”[10] Further, the SAHRC found that access to assets such as land, social networks and natural resources must be considered during the calculation of fair compensation and that “once-off payments and new housing structures will likewise not provide sustainable opportunities to families.”[11]
[1] MPRDA, section 54(1)
[2] MPRDA, section 54(7)
[3] MPRDA, section 54(3)
[4] Under the Arbitration Act, 1965 (Act No. 42 of 1965)
[5] MPRDA, section 54(4)
[6] CURTIS, M. 2008. Precious metal: The impact of Anglo Platinum on poor communities in Limpopo, South Africa. Johannesburg: ActionAid., p.5
[7] SAHRC. 2017. National Hearing on the Underlying Socio-economic Challenges of Mining-affected Communities in South Africa, p.6
[8] Ibid.
[9] 2008 (7) BCLR 704 (SCA)
[10] Ibid., para 48
[11] SAHRC. 2017. National Hearing on the Underlying Socio-economic Challenges of Mining-affected Communities in South Africa, p.19
Section 54 of the MPRDA provides for compensation to be paid to mining-affected communities that object to their land being used for mining. The section applies in situations where a mining company has notified the Regional Manager that the landowner and/or lawful occupiers are preventing the prospecting or mining rights holder from entering the land.[1] Section 54 also applies if the landowner and/or lawful occupiers have notified the Regional Manager that they have suffered or are likely to suffer any loss or damage resulting from prospecting or mining.[2]
In both situations, if the Regional Manager decides that the surface landowner and/or lawful occupiers have suffered or are likely to suffer loss or damage as a result of the prospecting or mining operations, the Regional Manager will direct the parties to negotiate and try to reach an agreement regarding adequate compensation.[3] If the parties cannot agree on compensation, the matter must be arbitrated[4] or litigated in court. The arbitrator or court will determine the amount of compensation payable.[5] This section does not provide for a surface rights holder to apply to stop prospecting or mining while negotiations take place.
Most compensatory deals do not go through the above process; DMR officials are not normally involved. The mining company and community negotiate, on their own, at the same time that the mining company begins operations on community land, without the community being able to stop the mining company. This process predominantly takes place on unequal footing, where the mining affected community feels that it must accept what the mining company is offering or risk losing compensation altogether. Compensation is often inadequate and often does not account for the loss of agricultural land by the affected communities and individuals, often their ‘main means of livelihood.’[6] Compensation for the physical worth of the land alone is often “below what is considered to be appropriate in terms of global industry standards.”[7]
“[T]here are no formal guidelines or oversight provided for the calculation of compensation and the finalisation of compensation agreements... [R]elocations are often carried out before compensation agreements are reached on surface land leases, livestock, crops or housing.”[8]
The Court in Haakdoornbult Boerdery CC and Others v Mphela and Others[9] stated that compensation is intended to put the disposed in the same position as if the land had not been taken away and that fair compensation is not always the same as the market value of the property. Market value is only one aspect that must be considered. “Western concepts of expropriation and compensation are not always suitable when dealing with community held tribal land.”[10] Further, the SAHRC found that access to assets such as land, social networks and natural resources must be considered during the calculation of fair compensation and that “once-off payments and new housing structures will likewise not provide sustainable opportunities to families.”[11]
[1] MPRDA, section 54(1)
[2] MPRDA, section 54(7)
[3] MPRDA, section 54(3)
[4] Under the Arbitration Act, 1965 (Act No. 42 of 1965)
[5] MPRDA, section 54(4)
[6] CURTIS, M. 2008. Precious metal: The impact of Anglo Platinum on poor communities in Limpopo, South Africa. Johannesburg: ActionAid., p.5
[7] SAHRC. 2017. National Hearing on the Underlying Socio-economic Challenges of Mining-affected Communities in South Africa, p.6
[8] Ibid.
[9] 2008 (7) BCLR 704 (SCA)
[10] Ibid., para 48
[11] SAHRC. 2017. National Hearing on the Underlying Socio-economic Challenges of Mining-affected Communities in South Africa, p.19
