By Banele Ginindza 
Aug 13, 2021
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THE TRADITIONAL and Khoisan Leadership Act signed into law by President Cyril Ramaphosa in 2019 as well as other existing royalties legislation is up for scrutiny to tighten loopholes, which have seen communities fleeced of billions of rands over the years by traditional leadership under the guise of representing them.
Civic organisation Corruption Watch confirmed yesterday that it had engaged a legal team to challenge the pieces of legislation at the Constitutional Court to give communities better leverage of what is ostensibly paid on their behalf by mining companies extracting minerals from land communities have owned for generations.
“The uptake for business is that they could lose their social licences when communities decide mining on their land is not beneficial for them. Rio Tinto had to declare force majeure in Richards Bay after the community refused for them to continue mining because they were not benefiting.
“Companies are diligent in paying out tax, royalties and extraction tax, but it usually falls apart after the payments have been made,” said Mashudu Masutha, legal researcher: extractives at Corruption Watch.
This was on the release of a report, Improving Transparency and Accountability in the Flow of Benefits to Mining Communities, and an accompanying Legal Review: Distribution of Mining Equity to Community Trust, which identifies upfront the rightful beneficiaries, the households who have so often been overlooked in favour of traditional authorities, government officials, consultants, mining company employees and others that have in many instances reaped the financial advantages of mining at communities’ expense.
A case in point are the deep divisions of the Bakgatla ba Kgafela tribe in Moruleng North West under Chief Nyalala Pilane, which is split over the administration of more than R600 million in royalties going back to 2004.
The Bakoena ba Mokgale in Bapong, North West, where Lonmin mines, is also rendered apart by more than R300m in endowments that did not filter down to grassroots level.
Corruption Watch contends that the large-scale looting of community funds slips through the fingers of legislators who have failed to ensure the development accounts, often signed off by the provincial governments, are not specifically inclusive of community members, leaving the door open for traditional authorities to use funds at their own discretion.
The organisation is looking for a tightening of the mining charter and the Minerals and Petroleum Resources Development Act as well as the Trust Property Act which should spur communities to having better accountability from leadership.
It contends that changes in legislation, namely the Minerals and Petroleum Resources Act 1 and the Mining Charter 2 have brought little material change to the living conditions of mining communities, which are still impoverished, vulnerable, and robbed of their livelihoods.
“Add to this the Traditional Leadership and Khoi-San Act, which empowers traditional councils to enter into partnerships and agreements with external entities, including mining companies, on behalf of communities. When traditional leaders abuse their power, the rights and interests of communities are disregarded,” Masutha said.
The report, building up on a 2018 study on mining royalties illustrated the vulnerabilities in the royalties system that have led to billions of rands being squandered, stolen or diverted because of infighting and maladministration of community funds.
It also makes an important distinction between compensation and equity, thereby shifting the conversation from merely highlighting the inadequacies and injustices of current arrangements, to providing concrete actions and recommendations for changing the status quo.
“There are aspects of the law that can be used effectively,” Masutha said.