Section 54 notices & Chamber of Mines proposal; State Capture inquiry programme

Meeting report

The Chairperson thanked the Committee, Department of Mineral Resources and the Minister and the Deputy Minister for the support given him during the difficult time he had endured over the past three weeks.

He expressed condolences for the mine workers lost in Sibanye-Stillwater’s Masakhane shaft; which was one of the most extreme incidents that has happened in a long time. Since becoming a member of this Committee, he does not recall a death toll of more than five. He also extended his condolences for the loss of the six mineworkers whose work bus was petrol bombed near Burgersfort, Limpopo. We asked DMR to share information on Lily Mine developments. He has heard that a purchase offer had been made and a business rescue practitioner involved.

Section 54 notices: progress report
Mr Mthokozisi Zondi, DMR Acting Chief Inspector of Mines, listed the objectives of the Mine Health and Safety (MHS) Act enforcement measures:
- Encourage and ensure compliance to the MHS Act
- Reduce and eliminate occupational diseases, injuries and fatalities.
- Contribute to the reduction of fatalities and injuries. Since 2007, the number of mine fatalities had generally dropped from 219 to 88 in 2017.
- Achieve the goal of zero harm in the mining sector. There are mining companies that have operated for a year without a fatality, thus it is possible to achieve the zero harm goal.
- Inspector conducts audits (group) and inspections.

The enforcement provisions include:
- Section 54 gives inspectors powers to deal with dangerous conditions in the mine. After they have accessed the mine working environment, the inspector can decide to stop a section or the whole mine.
- Section 55 ensures that a mine complies with the MHS Act and regulations. When an inspector gives an instruction, the mine is informed that they need to comply within a specified time period.
- Section 55D deals with administrative fines and the maximum amount per fine is R1 million per transgression. If a mining company has had more than one transgression then it can receive multiple fines. Before an inspector gives a final decision, the mine manager is given a chance to make a representation.

The appeal processes include:
Mine management can appeal to the Chief Inspector of Mines (CIOM). The appeal process entails both the inspector and the mine manger have to make motivations to the Chief Inspector. The Chief Inspector assesses the motivations.  The Chief Inspector either confirms or varies what the inspector decided or comes up with a completely new decision. If the mining company is completely unhappy with the decision by the Chief Inspector, it can appeal that decision to the Labour Court. The Labour Court can confirm, vary or set aside the decision of the CIOM.

The overall statistics were:
• April 2015-March 2016: 1141 Section 54 instructions and 1306 Section 55 instructions issued.
• April 2016-March 2017: 2027 Section 54 instructions and 2714 Section 55 instructions issued.

The Mining Industry Growth, Development and Employment Task Team (MIGDETT) is chaired by the Director-General. In January 2012 concerns were raised by the industry about the abuse of Section 54 instructions. The principals decided to establish a task team to investigate if there was abuse. The investigation concluded that there was not substantial evidence of abuse of the Section 54 system.

In October 2017, DMR received proposals from the Chamber of Mines on how DMR should issue Section 54 instructions. The proposal was rejected by DMR as it felt that the protocol was inconsistent with the statutory functions of the Chief Inspector of Mines (CIOM).

In conclusion, DMR said the enforcement measures were part of the mechanism to ensure compliance with the MHS Act improved. DMR meets with mining companies to address any concerns about Section 54 on a quarterly basis. DMR trains inspectors to ensure consistency and fairness in the implementation of enforcement provisions.

Discussion
Mr H Schmidt (DA) asked how many of the Section 54 notices led to a mine being completely closed. He recalled a High Court case that ruled DMR had overreached by closing down the whole mine instead of only a section of the mine. He did not see that ruling reflected in the presentation. DMR rejected the Chamber of Mines protocol, what did the protocol entail? Was it a procedural or a substantive measure?

Mr J Lorimer (DA) said it was interesting to see the difference between Section 54 and Section 55 statistics. There is a wide regional variation in the statistics such as Gauteng’s statistics compared to Mpumalanga. The reason he is concerned about the overuse of Section 54 is that this means that mines become less viable. The biggest crisis in the industry is the potential loss of employment and they are approaching one of the worst times for employment. A Section 54 notice which closes an entire mine should be used as little as possible. Using a Section 55 solution is more preferable. In 2015/16, there are two standout regions as Mpumalanga and Limpopo have a much greater number of Section 54s and Section 55s. The situation changes in 2016/17 where Limpopo is much more imbalanced and the proportional use of Section 54 in Mpumalanga remains the same. That indicates a regional variation in staff. He asked DMR to explain that. As a result of the court finding against DMR on Section 54, did the Health and Safety Inspector change the operating procedures in any way and if so how? He requested the Chamber of Mines protocol and the DMR response to it.

Ms M Mafolo (ANC) asked how long it takes the CIOM to assess the representations. How many notices enforced the whole mine to be stopped.

Ms V Nyambi (ANC) referred to slides six and seven and asked if DMR has enough inspectors. She asked about the inspector training programme.

Mr Z Mandela (ANC) welcomed the Chairperson back to the Committee. He noted that DMR seeks to achieve zero harm in the mining sector. Is there a strategy in place to achieve this and is it actually attainable? When one looks at the figures, they have never dropped below 70 percent of the zero percent target. There are natural occurrences such as seismic events that DMR cannot control so zero harm cannot be guaranteed. How many inspectors does the DMR have and how many audits have they conducted in verifying they are able to carry out all those inspections. What are the challenges in carrying out the audits? He asked about the training of the inspectors and what institutions trained them.

Mr Zondi replied to Mr Schmidt that the figures are an overview of Section 54 and he does not have with him the specific figures of instances where the whole mine was closed. That information can be made available to the Committee. The Chamber of Mines protocol was more procedural. On the Mpumalanga figures raised by Mr Lorimer, Section 55 deals with ordering a mine to comply with the provision of the Act and regulations which implies that there is generally good compliance with mines in Mpumalanga but when it comes to dangerous occurrences, the inspector issued those Section 54 instructions seen in the figures. In an ideal situation where mines comply 100 percent with the Act and regulations, a very clean Section 55 will be issued. It takes between a day to two days for a final decision to be made on appeals.

Mr Gagarin Ndamse, Director of Legal Services, DMR, replied about the court cases. According to their records, the last case there was an urgent application was the Ashanti Gold. That mine decided to go to the Labour Court on an urgent basis and the court found that in terms of proportionality, the DMR should have closed one part of the mine instead of the whole mine. DMR was prepared to go back to court to argue on the merits but now the mine does not intend going back to court because they got what they wanted in that Section 54 was lifted. If one looks at the trend, DMR is doing something right because there are no other cases going to court as DMR has strengthened its internal processes.

Section 54 is not a single section. There is Section 54(1)(a) where the whole mine is closed and there is Section 54(1)(c) which is similar to Section 55 where the mine is asked to provide reasons. If an inspector goes to a mine and finds there is a dangerous situation and issues a Section 54 1)(a), immediately thereafter the inspector gives that information to the principal inspector who confirms or sets it aside. If the principal inspector confirms it, the mine can also immediately call the Chief Inspector to look at that Section 54 and if the Chief Inspector sees that both the inspector and the principal inspector are incorrect, then the Chief Inspector can set it aside. If the mine is not satisfied with that process, then they can appeal to the Labour Court. He believes that Section 54 has the means to ensure that people are not abused.

On the training of inspectors, DMR was asked to come up with a legal framework that looks at empowering inspectors. With the assistance of the MHS Council, they are developing a manual which includes ethics and legal training on how inspectors should conduct themselves. The last training DMR had was with the University of Witwatersrand where inspectors had an introduction to law course.

Mr Thabo Ngwenya, Acting Deputy Chief Inspector, DMR, stated that there are few cases where a Section 54 notice stops all mining activities. Normally Section 54 is issued for certain items such as explosives or unsafe transportation at the mine. The likelihood is less than 5% where mines have been totally shut down and in those cases it is usually small-scale mines which have no systems in place. Usually established mining companies have comprehensive health and safety practices although they sometimes lack in implementation from time to time.

On the training for inspectors, they need to have similar qualifications to mine managers. Most of them have mine engineering degrees and mine manager certificates. Government finds it difficult to retain inspectors as they cannot compete with the remuneration offered by the private sector. For the training programme, DMR has a Memorandum of Understanding (MoU) with Goldfields Academy where graduates of mining engineering, geology and electrical engineering get exposure with Goldfields Academy for a period of two years. Thereafter they go through an examination for a government competency certificate for mine managers. So in terms of competence, inspectors are like mine managers. On the challenges experienced by inspectors in conducting mine audits, in some mines they do close the gates so the inspector does not have access to the mine. In a small number of cases, particularly with alluvial diamond mines, the managers who are also farmers carry guns in front of the inspectors which is very intimidating for the inspectors. In some instances, the inspectors would issue instructions and then the mines would not comply. Training of inspectors is done with Goldfields Academy and internally.

It is true that DMR does not have total control but mostly seismic events are self-inflicted due to the type of mining method used and the rate at which one mines, which influences seismicity. Gold mines are running out of reserves which forces them to mine isolated pillars which were previously unmined because they were high risk. Now that more mines are running out of reserves, they are venturing into high risk areas where seismicity is occurring and killing mineworkers.

In terms of a strategy to achieve zero harm, there is a strategy in place with the help of the MHS council. Every second year there is a summit whereby health and safety milestones are set. As DMR, they do believe that zero harm is possible many mines have worked from the first day up to the last day without anyone losing their lives.

Mr Funwell Nkuna, ‎Director: Mine Safety Policy DMR, added about inspector training that when new inspectors arrive they go through a three month induction course and after that they go to the mines with senior inspectors for a period of six months for on-the-job-training. On instances of closing a whole mine, a Section 54 notice to close the mine is issued when there is a death of a person in the mine. Another instance of closing the whole mine is if there is an accident in the shaft because the shaft is the main access to the mine. That mine will be stopped until the integrity of the shaft is assessed. Before a Section 54 is issued, DMR has legal officers that advise inspectors on whether the instruction is sound, just and fair.

Mr Lorimer requested that the Committee see that paperwork on the Chamber of Mines protocol – or does it not exist? As mines start working less and start harvesting less, is DMR expecting these kinds of accidents to rise? When there is a total mine closure, he heard that a big problem is that once the matter has been rectified, there is a long delay in securing a DMR meeting and for a big mine that could mean a loss of millions. Is DMR aware of this and is there a protocol to get mines back on stream once compliant?

Mr Schmidt stated that the Minister in his budget speech made mention of 26 Mineral and Petroleum Resources Development Act (MPRDA) Section 52 notices, being received from mines. Is there a statistical or factual basis between Section 52 notices by mines and these kinds of risky incidents taking place? Has the DMR discovered a correlation between mines running into financial trouble and an increase of injuries?

Mr Zondi replied that he is not aware of such a link between MPRDA Section 52 notices and mines that had to be closed due to Section 54 of the MHS Act. On the appeal process delays, the mining companies have raised that concern from time to time. DMR has addressed the concern in management meetings by concluding that if the Principal Inspector cannot review the appeal then one of the senior inspectors should do that.

Mr Ndamse provided background to the protocol. The protocol was devised by a platinum group in the North West who decided to come up with a protocol and ask DMR to follow that protocol. The protocol was then given to the Chief Inspector who looked at it and then forwarded it internally in the DMR. The protocol was formally discussed at the MHS Council board meeting where it was debated and the Chamber of Mines introduced the protocol. The DMR stance was that the protocol could not work for the mining industry as it is tantamount to self-regulation. The documentation on that protocol and its discussions could be shared with the Committee.

Mr Nkuna said that DMR is busy drafting an enforcement manual. All inspectors will be workshopped on the manual and the manual documents all the activities that happen in the inspectorate.

Mr Ngwenya replied to the question on whether seismic incidents will increase, saying DMR does not expect an increase. Not all ground should be mined underground. For instance in the Lily Mine disaster, someone decided to over mine a crown pillar which was acting as a structural support for the mine. DMR expects mines to act responsibly. If the ground is too dangerous to be mined, it should be classified as such instead of putting workers underground knowing that they are likely to be killed.

The Chairperson stated that at times he gets worried that there is no sensitivity or emotions attached to this subject.  The presentation says the main objective is to have zero harm. English is a difficult language, there is a difference between harm and a fatality. Harm is almost equivalent to injury. You cannot harm someone that is dead. The question that needs to be asked is what is DMR dealing with and the answer is that they are dealing with death. Does the Act assist in stopping the death of people who go to work and do not come back alive? It is an emotive and sensitive matter. Within the next month, there will be other people who die. He had a problem with the word “fatality”. There are different types of death: death with intention, which is murder, pre-mediated murder in particular. If the Act is meant to cap or stop deaths on the mines, is the Act assisting DMR? People are more likely to die in the mines than in the army. Soldiers are armed and when they join the army they do expect to be killed if they do go to war. Whereas mineworkers cannot kill, they can only be killed; there is no option for them.

In his view, Section 54 is more of a preventative measure, so which section deals with consequential measures. How does one explain that 150 workers are trapped underground simply because there was a lack of a generator? What would have happened if all of those people had perished? Is there a provision for this in the Act? What happens after the event has occurred? When there is non-compliance without consequences, other parties will be discouraged to comply. Since the beginning of the year, the mining sector has seen 34 deaths, who were the main culprits? Which sector? If it is gold, then which companies? He had read something that said the Minister has to come to the Committee for a mine health and safety concern. If DMR is dealing with mine health and safety, where is the matter now? It has been said that profits have been put above safety and Parliament needs to reflect on whether it is falling into the same trap. Is there a problem with enforcing the law? He asked DMR to inform the Minister to update the Committee on the process of amending the Act and ask him when he can present it to the Committee.

Mr Zondi replied that DMR strongly believes that the current Act is adequate to prevent fatalities in the mining industry and there are technological advancements in the mining industry. On the 34 fatalities that have occurred so far this year, Sibanye-Stillwater had 14 fatalities, Harmony Gold had five fatalities, Sasol mining had three fatalities and Anglo Gold Ashanti had two fatalities this year. The gold sector has 19 fatalities; other commodities including diamond, iron-ore, manganese had six fatalities, the coal sector has had five and the platinum sector had four fatalities.

Mr Ndamse replied that the MHS Act is more preventative. The criminal liability section in Section 86(1)(a) had been put there to ensure that any person, such as the CEO, responsible or negligent for any death at the mine, was guilty of a criminal offence. DMR is hoping to strengthen that in the Amendment Bill. Another basis for the Amendment Bill was to make mines feel the pinch when there is a death on the mine. After any such incident at the mine, DMR conducts an investigation to ensure that everything is in accordance with the Act. They will send the investigation to the Director of Public Prosecutions (DPP) to see if they can prosecute. Alternatively, DMR can open an inquiry and after the inquiry that report is given to the DPP. This can be problematic as the inquiry investigates in accordance with the Act and then makes recommendations to the DPP but the only aim of the DPP is to charge that person criminally. DMR does recommend prosecutions but the question remains what happens after that? He agreed that the consequential actions needed to be strengthened.

Mr Ngwenya replied that the MHS Act has a provision which requires employers and employees not to tamper with the scene of an accident. Immediately after a fatality, the mine is expected to notify DMR and within 72 hours, DMR must have sent an inspector to conduct an inspection. There are some instances when the inspection could not be completed within 72 hours but the period is then extended. Immediately after a fatality, the scene of the accident must be vacated until DMR does the inspection. Unfortunately, from time to time, some employers take chances and tamper with the accident scene to conceal evidence. DMR is not on site and if they are not told by the employees, DMR would not know that tampering has happened. Most of the time after the inquiry, DMR does recommend prosecution but most of the time the outcome from the DPP Office is that they decline to prosecute and normally they do not provide reasons why they declined. That is why the Minister stated that the DPP and DMR should engage in more a collaborative effort.

In response to the Chairperson asking when the Minister would address the Committee, Mr Zondi said that DMR would follow up on that.

Mr Schmidt said the Minister should address the Committee on the purpose of the new Bill.

The Chairperson said that Mr Ndamse made mention of the consequential clause, Section 86 (1)(a). The Minister should address the Committee on the need to make amendments and how far the process is. He said that when something is raised in the Committee and there is no contrary view from Members, then it becomes a Committee decision. There had been a request for the protocol and Mr Ndamse said that he had no problem with providing that. Mr Ndamse’s response stands and he must not change his mind tomorrow and say he had to consult his seniors. A commitment was made and he is expecting it before the next committee meeting so the Committee can discuss it.

Programme for Inquiry into State Capture allegations in Department of Mineral Resources
Mr Nkosinathi Kweyama, Committee Content Advisor, and Ms Fatima Ebrahim, Parliamentary Legal Adviser gave an update on the programme for the Inquiry into State Capture allegations in the DMR. An advert had been placed on the parliament website on 3 May 2018 to invite public submissions and the due date was 18 May 2018. Submissions were received and the committee staff is currently processing those submissions. Going forward, expert witnesses will be called to brief the Committee on state capture phenomenon and thereafter other witnesses will be called. After this, a report will be compiled. Only two public submissions had been received and there is also a challenge with non-availability of witnesses. For example if they were to investigate the Optimum coal mine, there is a witness based in Switzerland and they would have to work around that. The expert witnesses and the committee staff are ready. There is nothing holding the inquiry back at the moment. The two public submissions can be made available. One is a huge document and the other submission is an email which does not really talk to what the inquiry is about.

Discussion
Mr Schmidt asked if Members will be given hard copies of the two submissions. The availability of witnesses should not be a problem because that has been dealt with by the Portfolio Committee on Energy so they should latch onto that process and the witnesses should be summoned. The Chairperson of Committees, Mr Cedric Frolick, did mention in his speech the previous day said the witnesses would come to Parliament. Who are the witnesses and who does the committee consist of? When does the process start as it is overdue? Who are the expert witnesses that will give the Committee direction on where they are heading?

The Chairperson stated that the team is led by Legal Services, particularly Ms Ebrahim who is the evidence leader. There is no committee or a sub-committee, and there is no additional personnel available to her. There could be technical issues that the Committee needs to deal with. He reminded Members that the Committee had agreed to stay far away from the administrative process so they do not have undue influence on the process.

Ms Ebrahim replied that the subpoena of witnesses is an option available to the Committee but she had waited for the closing date for submissions. Only two submissions were received and she had hoped there would be more. There is a preliminary list of persons that she believes will give them some information and in the course of the following week, they will be meeting with those persons and hopefully they give them other names of persons of interest. Once she and the support staff have completed that, they can present the proposed list of initial witnesses to the Committee.

Mr Schmidt said there are expert witnesses who testify about certain facts and then there are witnesses who testify on their understanding, what they have seen or what they have discussed with other individuals. What is important is they ensure people like those who accompanied the former Minister Switzerland should also be called because it is important for the Committee to understand why they went. The process should not be limited to the Committee’s view of the factual position but also to understand the view of those people who were led to commit state capture activities.

The Chairperson said that there are witnesses who automatically by virtue of their mandate would be enlisted. Only when witnesses become antagonistic does one look at the recourse that is available. There could be witnesses who do not want to give evidence in public and therefore the support staff dealing with the inquiry should be given leeway to deal with those witnesses. So some witnesses may not be prepared to come face to face with the Committee and share details. He pleaded for the Committee to have a little more confidence in the administrative functions of the support staff in the inquiry. Members should have the discretion to recommend those who should appear as witnesses before the Committee State Capture inquiry. The Committee should have the final decision as to who should appear or not. The Committee needs to finalise if they will adopt the process suggested by the Committee staff. He does not recall if Members agreed to adopt the Terms of Reference in principle. In principle meaning in the meantime until Members were clear as to who the evidence leader would be. Now that issue has been clarified, he asked if the three weeks for submissions should be final.

Mr Lorimer said that he did not think that the request for submission should be closed because it is unknown to where the inquiry will lead. Something can come up; submissions could come from different quarters. It is important that the Committee has input about the witnesses called. Nobody can see this process as happening behind closed doors by officials, it needs to be open to people and people need to see what the Committee’s reasoning is.

Mr Schmidt said that the time frames need to be determined. It would be not fair for Members to be given short notice about who is to testify. It is important for Members to anticipate the witnesses. The support staff should also divulge who the expert witnesses are.

Ms Ebrahim clarified the purpose of meeting with people the support staff has identified as having information. They have called and indicated to these people that by speaking to them, they would be speaking behind closed doors and anything said would be in confidence and off the record. The intention of the next week is not to target witnesses that could become hostile as there is no law that compels them to speak to officials. Only a subpoena would compel them to come to Parliament and appear before the Committee. There is a substantial submission from OUTA which runs to more than a hundred pages, which would be made available to Members. OUTA is focusing on one or two aspects of the inquiry, particularly relating to the Minister. Following that, the staff will request that OUTA come before the Committee.

The support staff has made calls to academics to come forward, some of them have raised resource issues, time constraints and so forth. The important thing is for parliament to provide oversight and see what is transpiring at DMR relating to State Capture. It is the job of the Committee to check the veracity of the information that has come forward and the role of the support staff is to assist Members to get to that point.

Mr Mandela was concerned about time. Two submissions have been received. He anticipated real public participation because they are dealing with a huge matter. Now they are dealing with merely two submissions. The work of the Committee is drawing to a close and he is concerned that they will conclude this work during the tenure of this Committee. Also they would be going on recess in two weeks’ time.

Mr Lorimer asked where the advert was published and Mr Kweyama said on the parliament website. Mr Lorimer said that not many people read the parliament website; it is mainly Members of Parliament who use the website. Is there anywhere else they can place the advert?

Mr Mandela agreed and asked if there are there sufficient funds to advertise elsewhere.

Mr Kweyama replied that the reason for opting for the parliament website was there is a lack of funds.

Mr Lorimer asked why Government Communication and Information System (GCIS) could not help. Is that not what they are there for?

The Committee Secretary said that she would follow up with the media personnel. The reason for placing the advert on the parliament website was due to budget constraints. She was in contact with various media persons and she had informed them that they would put the advert on the parliament website. She will follow up with the media personnel to find out if GCIS could do this for free.

Mr Lorimer said they should go beyond that and approach a specialist mining website or have a journalistic piece on it which could be free.

Mr Schmidt said that as soon as the inquiry starts it will be reflected in the media and there may be people who would like to join, making it a growing exercise. The sooner they start, the better. As they start they can see if there are responses from the public. The process needs to be finalised within this year or before the next parliament. He is worried that the next parliament will not have the knowledge to evaluate the evidence.

Ms Ebrahim said that although the advert had a deadline, she has no intention of not allowing people to make further submissions.

Mr Lorimer asked if the intention is to do the preliminary work for the next three weeks.

Ms Mafolo asked if the staff has sufficient budget to cover those who come after the due date.

Ms Ebrahim stated that for any witness that is subpoenaed, parliament must cover their costs unless they come on their own accord. As for the time frame, the intention is to do the initial fact finding in the course of the following week. She has received indications that some of the people she will be talking to will give them names of additional persons.

The Chairperson suggested that as a Committee they should endorse the Terms of Reference. Secondly, they should endorse the timeframe for submissions and remain open for any submissions made until such time the Committee has a clearer understanding of the magnitude of the work. Some people are never prepared to appear but when their name is mentioned then they want to come forward. They have to start with the preliminary process which is twofold: an overview of the phenomena they are dealing with as well as the sensitivity that goes with the information that is shared.

Mr Lorimer said Mr Schmidt and he are able to avail themselves from Monday to Friday the following week.

The Chairperson asked Ms Ebrahim to draw up a proposed programme and from that they can consider a specific schedule. He then adjourned the meeting.