Can a mining company get ‘SLAPP-ed’?

LEGAL

Can a mining company get ‘SLAPP-ed’?

The short answer is… probably not. When we think about ‘SLAPP’, or Strategic Litigation Against Public Participation, we think about big companies using their considerable resources to institute litigious proceedings, seeking exorbitant amounts of damages from persons who, for example, criticised their mining operations. By Muhammed Khan*

Muhammed has extensive experience advising clients on their rights and obligations under several pieces of legislation specifically impacting the mining and petroleum industries in South Africa Big companies have a goal not to recover the damages but rather to intimidate and silence such persons, which could include civil society, the public, and media.

‘SLAPP’ was a novel defence raised by defendants who were being sued by two related mining companies (and certain directors thereof) for defamation in the matter of Mineral Sands Resources (Pty) Ltd v Reddell.

The court described SLAPP in great detail and stated, “Essentially, its [SLAPP] aim is to silence those challenging powerful corporates on issues of public concern. In essence, the main purpose of the suit is to punish or retaliate against citizens who have spoken out against the plaintiffs... The signature elements of SLAPP cases are the use of the legal system, usually disguised as an ordinary civil claim, designed to discourage others from speaking on issues of public importance and exploiting the inequalities of finances and human resources available to large corporations compared to the targets…”.

The court held that the defamation suit was not genuine and in good faith but merely a pretext with the purpose to silence opponents and critics. The court further recognised that the SLAPP suit defence constituted a valid defence in South African law against the defamation suit.

Considering the description of SLAPP, it is highly unlikely that a mining company could fall victim to it. However, this does not mean that abuses of legal process cannot be used against mining companies.

Mining in South Africa is highly regulated and requires numerous licences, authorisations and other similar regulatory approvals to lawfully undertake. To mine in South Africa, a company needs, at a minimum, the following: 1. A mining right issued in terms of the Mineral and

Petroleum Resources Development Act (No. 28 of 2002 [MPRDA]). 2. An environmental authorisation issued in terms of the National Environmental Management Act (No. 107 of 1998 [NEMA]). 3. A water use licence issued in terms of the National

Water Act (No. 36 of 1998 [NWA]). The MPRDA, NEMA and NWA each make provision for appeals against decisions taken by the relevant regulator to issue licences under the relevant Act. For example, the issuing of a mining right can be appealed under section 96 of the MPRDA, the issuing of an environmental authorisation (EA) can be appealed under section 43 of NEMA, and the issuing of a water use licence (WUL) can be appealed under section 148 of the NWA.

The appeal in terms of section 96 of the MPRDA does not automatically suspend the issuing of the mining right and the holder (despite the lodgment of the appeal) could theoretically still mine under the mining right. However, a company does not only require

a mining right to mine. It would still likely require an EA and WUL. Considering this, an appeal lodged against the issuing of an EA or a WUL has the effect of immediately/automatically suspending the relevant EA or WUL.

See where this is going…

Once an appeal against the issuing of an EA or WUL has been lodged, the holder would no longer be able to undertake the listed activities or water uses authorised thereunder (because of the immediate/ automatic suspension) and will not be able to commence mining.

For a major mining company, the hold placed on one mine or operation may not have a devastating impact. However, for a junior miner with a single mining operation, such a stoppage could have potentially devastating and dire consequences, not only for the junior miner but for its employees and the surrounding community, which would otherwise benefit from the mining (through the fulfilment of social and labour obligations).

Both NEMA and the NWA provide that the respective Minister (responsible for the administration of the Act) may direct that the relevant authorisation or licence is not suspended pending the determination of the relevant lodged appeal. However, there is no prescribed method or time frame to obtain the relevant Minister’s upliftment. To further exacerbate matters, while both the MPRDA and NEMA provide for time periods for the determination of their respective appeals, the time periods are rarely adhered to by certain of the regulators and the determination of the appeal usually takes a significant amount of time. Furthermore, the NWA has no time periods for the determination of an appeal in terms of section 148 of the NWA.

In the lodging of appeals, certain interested groups such as civil society but even competing mining companies could potentially seek to halt mining operations by lodging frivolous appeals. This would likely not be a SLAPP but more of a SLAM (Strategic Litigation Against Mining).

So, what can be done?

Should mining companies be lobbying lawmakers for legislative reform? In typical legislative proceedings before a court, if a party loses a matter, they are generally ordered to pay the legal costs of the other litigating party (usually on a predetermined scale). A similar reform could be introduced to dissuade frivolous appeals from being lodged, particularly where they have the effect of automatically suspending the relevant licence or authorisation. Additionally, the applicable legislative provisions could better define the way in which an automatic suspension is uplifted following the lodging of an appeal.

Ironically, this type of legislative reform to include the potential of having an adverse cost order could similarly be used by companies to intimidate or prevent the lodgement of appeals (which is the purpose of a SLAPP).

Whether it’s a SLAPP or a SLAM, legislative measures should be introduced to dissuade the lodging of frivolous appeals. However, should a frivolous appeal still be lodged, such appeal should be vehemently opposed, not only because it may have very serious ramifications for a mining company, but also to curb any such similar conduct in the future.

LEGAL

*Muhammed Khan is a director in the Mining and Environmental Law Department of Nupen Staude de Vries Incorporated (NSDV).