Exclusive Opinion Piece
[blurb]Africa is a continent rich with mineral resources. Like any other geographic location, the continent also plays host to a diverse and sensitive range of ecosystems, and communities dependent on the services that these ecosystems provide, which can easily be placed in peril if mining activities are not governed by stringent environmental legislation from the start.
[bodycopy]There are no universal standards that African nations are required to adhere to in the granting of mining licences. The levels of commitment to environmental and community preservation within each country are established by the countries themselves, and, to a large extent, by the mining houses operating within them.
“Each country is sovereign in developing its own legislation and no country is required to adhere to any international standards,” says Briony Liber, partner and principal environmental consultant at SRK Consulting. “However, the environmental legislation in many African countries has been influenced by international practice and in many instances has been guided and developed with funding from the World Bank and other international funding agencies.”
Most of the countries that SRK has worked in, she says have relatively competent environmental legislation, and the processes for environmental permitting are much the same in many countries across the continent. “They have similar requirements for stakeholder engagement, specialist studies, baseline data collection, disclosure of project information and methods for assessing and rating the significance of impacts and development of management commitments.”
However, she does point out that mining developers often choose to interpret legislation in a manner that falls short of the spirit or intent of the legislation, resulting in a narrow minimum compliance focus. The regulators also often have shortcomings in their capacity to enforce compliance with legislation as a result of limited resources.
“Additionally, in many instances while published emissions and effluent standards are competent, they tend to be applied prescriptively without consideration of the nature, scale and context of mining operations or risk, sometimes making management and mitigation overly onerous,” Liber says.
[subhead] Environmental authorisation and applicationWhile each country is diverse in its requirements and levels of enforcement, there are many similarities in the environmental application and licence-granting processes. “Typically the environmental authorisation process in most African countries requires that an environmental assessment practitioner is appointed by the mining developer to undertake an environmental impact assessment,” she says. “The approval of the EIA by the authorities is a prerequisite for authorisation of any mine.”
Environmental authorisation regulations are usually located either within the framework of environmental legislation or within the mining legislation. In addition to the mining authorisation process, most countries also have mining legislation that stipulates the process for applying for approval for a mine that includes the submission of a mine works programme, labour and training plans, a community or sustainable development plan, and financial provisions for rehabilitation and mine closure.
Of course, it’s not the legislation itself but rather the application of the legislation that will determine the environmental impact of mines within a country’s borders. “Countries that have had extensive mining experience tend to be better capacitated in that generally the skills are available within those countries, and the legislative frameworks have been tested,” says Liber. “However lack of adequate resources tends to undermine this in our experience resulting in the challenge of good legislative frameworks that are made lesseffective through inconsistent application and enforcement.”
For example, Cameroon and the Republic of Congo have very limited mining experience, and while the legislation exists in these countries, the legislation has not been sufficiently tested. Mali has had extensive mining experience in gold, but limited experience in uranium, and as a result has lower levels of capacity to deal with proposed uranium mining operations in that country. In addition, a military coup took place in early 2013, putting a halt to government upgrades of capacity to govern new uranium projects.
[subhead] South Africa’s advanced legislationSouth Africa, with its long mining history is one of the better placed countries on the continent for the regulation of mining’s impact on the environment. “South Africa has a broad spectrum of environmental legislation that pertains to mining with companies required to obtain permits or licences against three main Acts regulated by three different authorities,” says James Lake, associate partner and principal scientist at SRK.
The main acts are the Minerals and Petroleum Resources Development Act (Act 28 of 2002), National Water Act (Act 36 of 1998) and National Environmental Management Act (Act 107 of 1998). Depending on the project context, there are also instances where operations are also required to adhere to National Environmental Management Waste Act (Act 59 of 2008), National Environmental Management Air Quality Act (Act 39 of 2004) and National Environmental Management Biodiversity Act (Act 10 of 2008), National Resources Act (Act 25 of 199), National Forest Act (Act 84 of 1998) not to mention all the Mine Health and Safety, labour and other legislation. The recent promulgation of revised EIA regulations under NEMA, taking effect on 8 December 2014, has introduced the “One Environmental System” which is intended to streamline environmental decision making especially with regards mining applications.
In 2015, there are expected to be further amendments pertaining to the financial provision for the rehabilitation, closure and post-closure of prospecting, exploration, mining or production operations. “Despite the evolving legislation, the authorisation process and the subsequent reporting that operations are legally required to adhere to, have introduced a generally robust approach to the industry, with most operations striving to maintain compliance at the least,” says Lake.
He acknowledges that there are issues of personnel capacity and resources in authority in South Africa, but says that the element of internal governance that the regulations impose, assists the authority where there are capacity and resource issues. “Furthermore, the authorities have implemented a generally effective compliance monitoring division, where operations impacts on the environment and water resources are audited by the Green and Blue Scorpions respectively.”
[subhead] Pressure from other authoritiesGovernment legislation isn’t the only method by which mines are regulated. Many mining houses have their own internal governance requirements and are voluntary signatories to a suite of good international practice guidelines. These include the International Council on Mining and Metallurgy’s (ICMM) 10 principles for sustainable development, the Extractive Industries Transparency Initiative (EITI), the Voluntary Principles on Security and Human Rights (VPSHR), the Business and Biodiversity Offsets Programme (BBOP) and numerous others, and they tend to exceed the legislative requirements in most African countries.
Liber says that in addition, any mining companies that seek lender funding from any of the banking institutions that are Equator Principles Funding Institutions (EPFIs) are required to comply with the Equator Principles, the International Finance Corporations Performance Standards and the World Bank Environmental Health and Safety Guidelines.
“The major mining companies generally in our experience have internal governance and policies that align with international good practice and go beyond mere compliance into the risk management realm, as do some of the mid-tier companies,” says Lake. “Our experience however is that in many instances mining companies, junior miners especially, that are cash-strapped, tend to take a compliance focus rather than a broader risk management perspective and this is where the application of legislation may be mechanistic.”
[subhead] Steps aheadLeading the way in the integration of environmental principles into the business is Letseng Diamonds in Lesotho. Lake says that one of the differentiators at this operation is that the environmental systems that have been developed are robust and are not merely used as a check box system to support certification. Risks, when identified, are elevated to the operations executive, who then supports further investigation to quantify exactly what the risk represents. When the risk is deemed unacceptable, significant effort is invested in understanding how it can be mitigated, with these measures then being implemented as necessary.
Another leader is Swiss-based Pala Investments which operates Sierra Rutile in Sierra Leone and is conscious of sustainability, reputation and the associated risks. Pala has taken the decision to move beyond local compliance, both to build lasting relationship with local communities and to show the government that it wishes to be a serious player in the nation’s development.
“This forward-thinking approach has also proved wise in the context of industry unrest in that country,” says Lake. “While labour unrest has heavily impacted on other mines in the region, Sierra Rutile has been able to build on long-held and solid relationships with the community in the area – which date back to the mine’s establishment in the 1970s.Underpinning this cooperation is the community’s realisation that the mine is a vehicle for other benefits and, as such, is an important part of their economic development.”
Increasingly mining companies comply with or exceed legislative requirements both at the start of a mine and during its lifetime. Liber says that shareholder pressure to manage reputational risk is increasingly influencing mining companies. It seems that they have realised that in order to profit from a country’s human and mineral resources, it is essential that they give something back.
[sidebar]Developing a mining legislation framework
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About SRK Consulting www.srk.co.za
SRK Consulting is a leader in natural resource and development solutions, providing independent technical advice and services through over 50 offices in 22 countries, on six continents. With an African presence in Angola and Cameroon, and practices in the Democratic Republic of Congo, Ghana, South Africa and Zimbabwe, the global group employs more than 1,500 staff in a range of engineering, scientific, environmental and social disciplines.