November 22, 2017

Temporary respite for mining sector BEE compliance

compliance alert

South African mining companies have not been singing from the same hymn sheet with the Department of Mineral Resources (DMR) in the interpretation of compliance with the Mining Charter (BBBEE) and the DTI codes. This has been worsened by compliance statutes which blatantly clash with each other. Now, mines and associated companies have temporary respite to put their houses in order, as the Department of Trade and Industry (dti) has granted the DMR an extension of eighteen months to reconcile the acts. Only after that the DTI will have to enforce the regulations.


A press release posted on the Department of Mineral Resources’ website says: “The DMR  will be exempted from applying the provisions of section 10 (1) of the Broad Based Black Economic Empowerment Act, 2003 to the upstream petroleum and mining industries administered in terms of the Mineral and Petroleum Resources Development Act, 2002 (MPRDA). This is a short-term measure, and will be for a period of 12 months, pending the finalisation of alignment between the MPRDA and the BBBEE Act and the DTI Codes, as well as a review of the Mining Charter.” This information is also specified in the Government Gazette.


The statement quotes the Mineral Resources Minister, Mosebenzi Zwane: “The exemption is intended to avoid creating uncertainty for the mining and upstream petroleum industries as to the application of the BBBEE Act, the DTI Codes, the MPRDA and the Mining Charter.”


Unwittingly, conflicting information from the MPRDA and the BBBEE Act and the DTI Codes have created a compliance connundrum and the DMR’s move has brought relief in boardrooms of mining companies. In various forums, held recently, notably the Johannesburg Indaba, majority of industry doyennes seemed to be of a single accord that the convoluted process of compliance was taking more of their overstretched resources. There is also concern that the commodities price slump will compromise the industry’s commitment to compliance.


Meanwhile, technical teams from both departments are working on aligning the two Acts, and an update will be provided in due course.


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