Revisiting Mining and Municipal Planning: Mtunzini Conservancy v Tronox KZN Sands Ltd
Tracy Humby
I INTRODUCTION
The storm swirling around the mining of ancient sand dunes near the town of Mtunzini raises issues that are becoming increasingly prominent as the mining boom facilitated by the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) transforms rural South Africa. National and international mining capital, in alignment with local tribal authorities, are pressing for the dune mining to commence as soon as possible, citing job creation and development. The white, middle class residents of Mtunzini village oppose the new development in principle, but in conceding that mining may have to take place are nevertheless insistent that all required regulatory authorizations are obtained, including a development authorisation in terms of the KwaZulu Natal Planning and Development Act 6 of 2008 (KZN PDA). The municipal authority of the area, Umlalazi Municipality, appears to be split down the middle with the mayor coming out in support of the mining project, but officials of the municipality supporting the Mtunzini Conservancy in their quest to ensure that Tronox KZN Sands (Pty) Ltd (Tronox) obtainslocal planning authorisation for the project.
In Mtunzini Conservancy v Tronox KZN Sands (Pty) Ltd & another,[1]Vahed J was called upon to decide whether Tronox required a land use planning authorisation before it could start mining. The case thus invoked the Constitutional Court’s recent decision in Maccsand (Pty) Ltd v City of Cape Town & others[2] in which the relative powers of the national and local spheres of government vis-à-vis mining and land use planning were apparently settled.[3]Mtunzini was the first post-Maccsand decision in which the Constitutional Court’s wisdom regarding the overlapping powers of the national and local spheres invited application. In this note, I argue that in distinguishing this case from Maccsand and deciding that Tronox was not required to obtain a land use planning authorisation, Vahed profoundly misread the implications of Maccsand for the handling of mining and land use conflicts.The judgment also implies that the scope of power exercised by local government should be determined with reference to pre-1994 legislation such as the Minerals Act 50 of 1991 (Minerals Act), which is completely at odds with the affirmation given by the Constitution of the Republic of South Africa, 1996 of the distinctiveness, interdependence and interrelatedness of the local sphere.
Part II of this note outlines the issue and decision in the Maccsand case, before turning to an exposition of the facts, issue and judgment in Mtunzini in Parts III and IV, and closing with discussion in Part V.
II MINING AND LAND USE IN MACCSAND
Maccsand Pty Ltd v City of Cape Town involved an appeal to the Constitutional Court against an interdict initially granted by the Western Cape High Court and affirmed on appeal by the Supreme Court of Appeal. The dispute between the parties revolved around the application of the Land Use Planning Ordinance 15 of 1985 (LUPO) to land that had also become the subject of mining authorisations granted in terms of the MPRDA.[4]
The facts of the case were briefly as follows: In 2007 and 2008 the Department of Mineral Resources (DMR) granted Maccsand a mining permitand then a mining rightto mine sand on two dunes (the Rocklands and the Westridge dunes) in Mitchell’s Plain. The dunes formed part of the Cape Flats Dune Strandveld ecosystem and the land on which they were situated was owned by the City of Cape Town (the City). The scheme applicable to the area under the LUPO had zoned the erven upon which the dunes were situated as ‘public open space’ or ‘rural’. These designations did not encompass the use of land for mining. Additionally, the mining areas on both dunes were situated close to residences and schools. The City was opposed to the grant of both mining authorisations, insisting that before mining could commence either the zoning scheme had to be amended, or a departure from the zoning scheme had to be granted. Maccsand and the DMR, however, raised the argument of the exclusivity of the MPRDA, holding that the exploitation of minerals could not take place effectively unless mining was regulated solely by the MPRDA. For this reason the MPRDA had to ‘supersede’ the LUPO.
After the City of Cape Town found favour in both the Western Cape High Court and the Supreme Court of Appeal, the matter came before the Constitutional Court. In line with its earlier decisions in Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd[5]and City of Johannesburg Metropolitan Municipality v Gauteng Development Tribunal & others,[6] the Constitutional Court affirmed the distinctiveness, interdependence and interrelatedness of the national and local spheres of government. Repeatedly emphasizing that the different spheres of government do not operate in sealed compartments, the court pointed out that the MPRDA and LUPO had different objects ‘and that each did not purport to serve the purpose of the other.’[7] The LUPO did not permit a local authority to ‘usurp’the functions of national government in an unconstitutional manner – this would only have occurred if it had attempted to regulate mining.The post-1994 constitutional order, the court remarked, allowed for a decision of one sphere of government to be dependent upon the consent of another. Each sphere is allowed to exercise its respective powers. If the decisions lead to conflict, this can be resolved through co-operation between the organs of state concerned, failing which the refusal could be challenged on review.[8]
The Constitutional Court’s decision in the Maccsand matter, as I have argued elsewhere,[9]together with the earlier decisions in the Wary Holdings and Gauteng Development Tribunal cases, establisha basis for an emerging doctrine of usurpation in the context of intergovernmental relations. In terms of this doctrine, an overlap in power is legitimate where the perspective from which the different spheres of government operate in relation to the object of power is different. It is also permissible for the implementation of a decision by one sphere to depend upon the consent of another, without this being a ‘veto’ of power. An impermissible usurpation of power will only occur where one sphere of government takes on the powers of anotherand attempts to operate from the same functional perspective as the encroached sphere in relation to an object of power.[10]This would occur, for instance, if mining legislation attempted to regulate land use, or if land use planning legislation attempted to regulate mining.
In the Mtunzini case, however, the ‘exclusivity’ argument once again raised its head, this time with reference to the earlier Minerals Act. I turn now to an exposition of the facts and judgment in this case.
III FACTS
The dunes off the pristine coastline of Zululand contain ilmenite, zircon and rutile, minerals employed in the production of titanium dioxide, which in turn is used as a pigment in many of the appurtenances of modern, urban living. International capital in the form of Tronox Limited (trading locally as Tronox KZN Sands)bought Exarro’s mineral sands operations in June 2012, which incorporated the planned Fairbreeze mine.[11]This particular operation had already years earlier been identified[12] as the successor to the minerals sands operations at Hillendale, just south of Richard’s Bay, which were winding down. Based on the presence of the ore bodies at both Hillendale and Fairbreeze, Ticor South Africa[13]had invested capital in a central processing complex at Empangeni.[14] Tronox claimed, however, to have already invested an additional 75 million ZAR in Fairbreeze.[15] The total value of the mineral sands at Fairbreeze had been estimated at a mouthwatering 25 billion ZAR and the development promised to make a substantial contribution to gross domestic product (2.7 billion rand a year) and export earnings (99% of the finished product would be exported from Richard’s Bay harbour).[16]
The mining rights to the properties constituting the Fairbreeze mines had been granted to Iscor in terms of the Minerals Act.[17]Upon the commencement of the MPRDA on 1 May 2004, these rights became ‘old order rights’ex lege.[18] The mining rights to the Hillendale and Fairbreeze properties were converted to new order rights under the MPRDA in July 2008. Vahed J correctly noted that conversion of old order rights could only take place if the holder also submitted an environmental management programme for approval.[19]
The Town Planning Ordinance 27 of 1949 (TPO) initially governed land use planning in the province of KwaZulu Natal. The original version of the TPO simply prohibited any person from establishing a private township (or selling or leasing a site in such township) without the approval of the Administrator. In 1974 the TPO was amended. In terms of s 11(2) of the amended statute, no person was allowed to ‘develop’ any land, whether inside or outside a local authority area, without the Administrator’s authorisation. Section 11(6) provided that for purposes of the section ‘development’ meant ‘the development of land without subdivision for building purposes or urban settlement or deemed by the Administrator to be destined for such purposes or urban settlement …’. On 7 May 1992 (thus before Iscor Heavy Minerals had obtained a mining right), the definition of ‘development’in s 11(6) was amended to mean ‘the erection of buildings or the use of land without subdivision for non-agricultural purposes …’. The next amendment of the TPO occurred during 2008 when the meaning of development in s 11(6) was further amended to explicitly include ‘the carrying out of … mining or other operations”. The KZN PDA, which was passed some 18 months later, provided in s 38(3) for an identical definition of ‘development’.
Tronox maintained that mining had commenced on the Fairbreeze properties in 2002. In order to avoid a dispute of fact and thus initiate the need for action proceedings, the applicant was advised to concede this point, a concession that ultimately proved fatal to their case. Although mining had apparently commenced, there was a cessation of activity until the planned resumption of operations in October 2012.
During February 2006 Tronox’ predecessor approached the KwaZulu Natal Department of Local Government and Traditional Affairs to determine whether they needed to submit a development or subdivision application. The Department advised them that no application was required, but should they wish to use the land for ‘non-agricultural purposes’ in the future a development application could be required at that stage.
The six tribal authorities that govern the area surrounding Tronox’ operations defended it vigorously, purportedly on the basis that it would lift the poor black populace of the region out of under-development. The tribal authorities have reportedly also been ‘given the pick’ of at least a dozen ‘low risk’ contracts servicing the mining operation.[20]The white residents of the small village of Mtunzini, however, were opposed to the mine in principle arguing that ecotourism is a more long-term, sustainable development scenario for the region. If mining had to take place, they maintained, due process had to be followed and authorisations in terms of applicable environmental and planning legislationhad to be obtained. They formed a not-for-profit conservancy that began to engage with Tronox over this issue.
The Conservancy’s opposition to the planned mining reached a head during September 2012 after the Municipality had advised them that Tronox did require authorisation in terms of the PDA. In September the Conservancy wrote to the legal representatives of Tronox advising them that it would seek appropriate relief in the High Court if Tronox commenced development of the Fairbreeze properties without the necessary authorisation. They replied to say that they would oppose the matter as the PDA was not retrospective and that at the time mining commenced (apparently 2002), mining on the Fairbreeze properties was not contemplated as ‘development’ in terms of the TPO. Four days after receiving this notification, the Conservancy applied in the Durban High Court for an interdict restraining Tronox from commencing or continuing development on any portion of the Fairbreeze properties until it had applied for and been granted approval by the Municipality in terms of s 38(1) of the KZN PDA.
IV JUDGMENT
Although the dispute between these parties threw up a number of issues, the primary issue, and the one that proved decisive for the case, was whether a development authorisation under s 11 of the TPO was required when mining at Fairbreeze commenced in 2002. It was common cause that the PDA was not retrospective in operation and could therefore not affect the legal position.[21]
Tronox argued that the version of the TPO that prevailed between 1992 and 2008 could not be applied to mining, for the following reasons: Firstly, the Minerals Act required adherence to certain other pieces of national legislation but furnished an absolute right to mineonce a mining authorisation had been granted. It was the only authority required to mine. Secondly, until the advent of the Constitution of the Republic of South Africa, Act 200 of 1993 (Interim Constitution), provincial laws were absolutely subservientto national laws. Although the 1996 Constitution gave legal force to laws that existed when it came into effect, it restricted the scope of their legal force to what it was immediately before the Constitution came into effect.[22] The reach of pre-constitutional legislation could therefore only be extended by amendment, which in the case of the TPO occurred only in 2008.[23]
The applicant had however argued that the importance of the Minerals Act was being exaggerated, and that it was important to distinguish between mining as a land use (invoking ‘mine’ as a noun) and as a process of mineral extraction (invoking ‘mine’ as a verb).[24] Whilst conceding that the Minerals Act was all encompassing insofar as the latter was concerned, the applicant argued that it had to yield to applicable planning legislation in all aspects that related to the physical presence and attributes of a mine.[25]
In his deliberation on the primary issue, Vahed J first concentrated on the submission that the Minerals Act provided that mining was regulated solely by national legislation to the exclusion of all other legislation. This stood in marked contrast, the judge observed, with s 23(6) of the MPRDA,which expressly stipulates that a mining right is subject to the Act itself ‘and any relevant law’.Already leaning in support of the arguments put forward by Tronox, Vahed J cited the definitions section of the Minerals Act, the criteria and process applicable to the granting of a mineral authorisation,[26]the entitlements associated with the right to prospect and mine,[27]the Minister’s powers in the event that surface rights were exercised contrary to the optimal utilisation of minerals,[28]and (justifying the need for the Minister to exercise such powers), the prohibitions or restrictions that applied to prospecting on certain land.[29]
After examining the development of the TPO over time, the judge appeared to accept the respondent’s argument that the mischief at which the 1992 amendment of the TPO was aimed (which introduced the term ‘non-agricultural purposes’ in the definition of ‘development’ in s 11(6)) did not relate to mining at all,[30] and that it had to be assumed ‘that the provincial government was fully aware of the fact that at the time mining was governed exclusively by national mining legislation’.[31]Therefore, while the reference to ‘non-agricultural purposes’ was apparently broad enough to include mining, in context it had to be interpreted more narrowly.
The judge then examined the next element of the respondent’s argument dealing with the subservience of provincial laws to national legislation pre-1994. He particularly highlighted s 85 of the 1961 Constitution (renamed the Provincial Government Act 32 of 1961), which provided that ‘any ordinance made by a Provincial Councilshall have the effect in and for the Province as long and as far only as it is not repugnant to any Act of Parliament.’Any interpretation of the TPO that had the effect of subjecting mining to the need for an authorisation, the respondent had submitted, was consequently of no force as it would be repugnant to the Minerals Act.[32]
The continuation of old order legislation into the new constitutional dispensation was controlled by item 2 of Schedule 6. The judge noted, in particular, that item 2(2)(a) specifically provided that the old order legislation that continues in force ‘does not have a wider application territorially or otherwise, than it had before the previous Constitution took effect unless subsequently amended to have a wider application …’.[33] If the TPO did not require provincial planning approval prior to the 1996 Constitution, then the effect of Schedule 6 was that this situation persisted.[34]The TPO amendment that unambiguously included mining within the envelope of development occurred only in 2008, well after the respondent had commenced mining at the Fairbreeze mine.
The respondent’s argument, the judge concluded was ‘most persuasive’.[35] The ‘prevailing importance and status of the Minerals Act’,[36] the judge added, was reinforced by the other provisions of the Act dealing with the environmental management programme, the removal of buildings upon the cessation of mining and the Minister’s power to make regulations dealing with an extensive range of issues. Clearly the Minerals Act ‘trumped everything else’.[37]