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.

One of the reasons for this speculation is the fact that more than 50 sections of the Amendment Bill make reference to “in the prescribed form”, “in the prescribed manner” or “as prescribed”. All references to specific timeframes have been drafted as “in the prescribed period”. This wording contemplates the reference to regulations which are promulgated pursuant to a provision in an Act. As far as we are aware, the industry has not had sight of any regulations to be promulgated
pursuant to the provisions of the Amendment Bill and, therefore, can assume that such regulations have not been drafted or finalised.

The consequence of legislation being proclaimed as effective legislation, without regulations being promulgated was dealt with by the Constitutional Court in Pharmaceutical Manufacturers Association of SA and Others; In RE: Ex Parte Application of the President of the RSA and Other [2000(3) BCLR 241 (CC)]. The Constitutional Court upheld the decision of the Full Bench of the Transvaal Provincial Division (as it was referred to at the time) that a proclamation which is made irrationally and which results in an unworkable outcome can be set aside by a court for reasons that it is null and void and of no force and effect.

Therefore, in the event that the Amendment Bill is proclaimed as effective legislation prior to the promulgation of regulations, as contemplated by the Amendment Bill, such proclamation would in essence be premature and capable of being set aside for reasons of invalidity. The correct approach to take would be the set aside the Proclamation, proclaiming the commencement of the Amendment Bill and not the entire Amendment Bill. The rationale for this application would be
that the necessary regulations have not yet been promulgated by the commencement date (as proclaimed), therefore, rendering the practical implementation of Amendment Bill impossible. The objective irrationality of proclaiming legislation effective, when in practical terms such legislation would not be able to be implemented due to lack of regulation, a court is granted the power to intervene and set the decision aside.

In the event that an applicant to the court is successful in setting aside the abovementioned proclamation, the court order would have to be confirmed by the Constitutional Court, pursuant to the provisions of the Constitution of the Republic of South Africa, 1996. Once confirmed, the resultant effect would be that the Amendment Bill was never validly brought into effect and accordingly the Mineral and Petroleum Resources Development Act, 28 of 2002 (as amended by Act 49 of 2008) would remain effective legislation. As is evident from the above, the process to set aside a Proclamation is rather lengthy and is not merely a quick fix. This may be the reason why so many pieces of legislation remain unchallenged despite their unworkable nature.

The only thing to do at this stage, is to wait and see whether the President makes the decision to postpone the commencement of the Amendment Bill until such time as the regulations have been properly promulgated. In essence the decision which the President is required to make, in particular relating to the timing of the Proclamation and when the legislation should be brought into force, requires a political judgment. It is preferable for the regulatory regime to be settled
sooner rather than later so that the angst which ensues in the industry (and from an investor perceptive) from the lack of certainty regarding the future of the regulatory environment can be alleviated, however, it is imperative so as to avoid the abovementioned legal process, that the Proclamation is made at an appropriate time when all of the subordinate legislation and regulatory infrastructure is in existence.

Lili Nupen
Director