Liability of Directors in terms of Environmental Legislation

By Jessica Frost
As stated by Judge Innes in the 1920 Appellate Division case of Dadoo Ltd v Krugersdorp Municipal Council, a registered company is a legal persona distinct from the members who compose it. In terms of section 19(2) of the Companies Act, 71 of 2008 (“Companies Act”), a person is not, solely by reason of being an incorporator, shareholder or director of a company, liable for any liabilities or obligations of the company. However, there are instances in our law, especially in respect of environmental legislation, where directors of companies could be held personally liable. Read more →

The restriction on the use of Rehabilitation Trusts for Mine Closure in terms of the Financial Provision Regulations, 2015

By Lia Bolz and Lili Nupen

Section 41 of the Mineral and Petroleum Resources Development Act, 28 of 2002, as amended (“MPRD Act”) read with regulations 53 and 54 of the regulations published under the MPRD Act (“MPRD Regulations”), previously regulated the obligation of a Holder of, inter alia, a Mining Right to make the prescribed financial provision for the rehabilitation or management of negative environmental impacts (“Financial Provision”) associated with mining operations (“Environmental Rehabilitation”).

As part of the introduction of the so-called ‘One Environmental System’, section 41 of the MPRD Act was repealed with effect from 7 June 2014 and financial provision for Environmental Rehabilitation is now regulated by the National Environmental Management Act, 107 of 1998, as amended (“NEMA”).

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Are contributions made to ESOP trusts by mining companies tax deductible?

By Norman Kerslake

On 16 February 2016, the South African Revenue Service (“SARS”) issued a binding private ruling (BPR 220) (“Binding Ruling”) in accordance with section 78(1) of the Tax Administration Act, 28 of 2011, in respect of contributions made by mining companies to trusts founded for establishing employee share ownership plans (“ESOPs”).

In terms of section 15(a) of the Income Tax Act certain “capital expenditure” (as defined), is deductible from the income derived by a taxpayer from mining operations. The pertinent issue dealt with in the Binding Ruling is whether a contribution made to a trust founded in order to establish an ESOP, would constitute a “capital expenditure” under section 36(11)(e) of the Income Tax Act (“Capital Expenditure”). Read more →

Applying Section 53 of the Mineral and Petroleum Resources Development Act when Establishing a Township Development

Section 53 of the Mineral and Petroleum Resources Development Act, 28 of 2002, as amended, (“MPRD Act”) provides a mechanism for ensuring that, inter alia, the mining of mineral resources is not detrimentally affected through the use of the surface of land and which may, for example, result in the sterilisation of a mineral resource.

Section 53(1) of the MPRD Act provides that –

“[S]ubject to subsection (2), any person who intends to use the surface of any land in any way which may be contrary to any object of [the MPRD Act] or which is likely to impede any such object must apply to the Minister [of Mineral Resources] for approval in the prescribed manner.” Read more →

A Contract Is The Sum of its Parts

In the recent Supreme Court of Appeal decision of Novartis South Africa (Pty) Ltd v Maphil Trading (Pty) Ltd (20229/2014) [2015] ZASCA 111, the court was tasked with deciding whether taken together a written document, oral agreement and certain emails constituted a valid contract. In practice it is often the case, particularly for instance in due diligence exercises, that a practitioner is presented with contracts that have not been signed by all the parties and appear to still require agreement on certain matters – this case demonstrates that the formal documents may only tell part of the story. Read more →

The Supreme Court of Appeal Rules on When a Prospecting Right Starts Running

In Mawetse SA Mining Corporation (Pty) Ltd v Minister of Mineral Resources and Others (3081/12) [2014] ZAGPPHC 11 the Supreme Court of Appeal (“SCA”) recently ruled on the calculation of the period for which a prospecting right endures. The SCA held that the duration should be calculated from the date on which the applicant was informed that the right has been granted (upon receipt of the grant letter) and not from the date of the notarial execution of the prospecting right or the date on which the environmental management plan was approved (if that date differed to the date of grant). Read more →

Environmental Authorisation For Mine Closure

The recent amendments to the Mineral and Petroleum Resources Development Act, 28 of 2002 (“MPRDA”) and the National Environmental Management Act, 107 of 1998 (“NEMA”) have given rise to the so called ‘One Environmental System’ and such amendments have included the introduction of additional obligations in respect of mine closure. Read more →

DMR compliance audit and the “once empowered, always empowered” rule

The DMR is currently embarking on a process whereby mining companies are being audited to determine compliance by those companies and the broader mining industry, with the transformation targets set by the Mining Charter. The Mining Charter requires that 26% of the mining industry be owned by historically disadvantaged South Africans by 1 May 2014. It is anticipated that the audit and the results of the audit, will be completed by December this year. Read more →

The Validity of Legislation Without Regulation

Everyone in the mining industry is awaiting the proclamation in a Government Gazette of the date on which the Mineral and Petroleum Resources Development Bill, 2013 (“Amendment Bill”),which has been approved by both the National Assembly and the National Council of Provinces, will come into operation. The industry has been informed that the Amendment Bill is merely awaiting the signature of the President. The rationale for the introduction of the Amendment Bill was to clarify certain legislative uncertainty in the mining industry, however, there is great speculation as to whether the current form of the Amendment Bill achieves this. Read more →