HARMONY GOLD MINING COMPANY LTD v REGIONAL DIRECTOR: FREE STATE
DEPARTMENT OF WATER AFFAIRS & OTHERS [2012] ZAGPPHC 127 (29 June 2012).
HARMONY GOLD MINING COMPANY LTD v REGIONAL DIRECTOR: FREE STATE
DEPARTMENT OF WATER AFFAIRS & OTHERS 2014 (3) SA 149 (SCA)
Importance
Parties
Facts
Like the Harmony Gold case of 2006, the Harmony Gold cases set out
in this fact sheet are amongst our most valuable precedents on s 19 of
the National Water Act, 1998 (NWA). They establish the rule that the
Minister’s powers under s 19(3) of the NWA are not temporally
limited; i.e. that the Minister is only empowered to use a power to
direct a landholder to take specific measures to prevent, mitigate or
remedy the pollution of a water resource while such person remains a
landholder. Provided the directive is issued whilst such person still has
a connection to the land, the obligations imposed by the directive
remain until they are fulfilled, even where the person subsequently
severs their relation with the land in question.
Applicant/Appellant: Harmony Gold Mining Company Limited
First Respondent: Regional Director: Free State Department of Water
Affairs
Second Respondent: National Manager: Compliance, Monitoring and
Enforcement Unit of the Department of Water Affairs
Third Respondent: Minister of Water and Environment Affairs
Fourth Respondent: Anglo Gold Ashanti Limited
Fifth Respondent: Simmer and Jack Mines Limited
Sixth Respondent: Simmer and Jack Investments (Pty) Ltd
Seventh Respondent: Stilfontein Gold Mining Company Limited (in
liquidation)
The first judgment in this matter was decided on 29 June 2012 in the
Gauteng North High Court (henceforth referred to as Harmony Gold
GNP); the second was decided on 4 December 2013 in the Supreme
Court of Appeal (henceforth referred to as Harmony Gold SCA)
The facts common to these cases were as follows:
In 2005 a series of directives were issued in terms of s 19(3) of the
National Water Act, 1998 to a number of mines operative in the KOSH
basin (Klerksdorp-Orkney-Stilfontein-Hartbeesfontein). In Harmony
Gold Mining Company Limited v Free State Department of Water
Affairs and Forestry 2005 JDR 0465 (SCA), Harmony Gold, challenged
one of these directives on the basis that the reasonable measures it
was required to take could only be effected on its own land, and not
on land owned, controlled or used by another. They were
unsuccessful, with the court holding that the duty to take reasonable
measures to uphold the duty of care in s 19(1) was not territorially
limited to land where the activity generating the pollution was taking
place. Thus although the initial duty of care in relation to water
resources was established by a relationship to a specific and thus
spatially-delimited piece of land, the obligation to effect reasonable
measures to control the pollution emanating from the activities on
such land could be required to be undertaken on land owned,
controlled, or used by another.
While the first Harmony Gold case centred on the spatial
delimitations of the s 19 duty of care, the cases reported on in this
factsheet focus on its temporal dimension. The directive in dispute had
been issued on 1 November 2005 and was to operate until Harmony
Gold and the other mining houses operative in the area (Anglo Gold
Ashanti, Simmer & Jack, and Stilfontein) had reached agreement on
how to deal with the long-term management of water impacted by
mining activities in the KOSH basin. Pending the implementation of
such an agreement, the mines were required to collect, treat, use or
dispose of water that might affect the current and future operation of
mines in the area, and to share the costs of doing so equally. The
agreement was supposed to be submitted to the Department of Water
Affairs (the Department) within 21 days of the directive being issued,
but it was common cause that no agreement was ever concluded.
The owner of the land on which the pollution-generating activity
was taking place was African Rainbow Minerals Gold Ltd (Armgold). In
September 2003, Harmony Gold acquired all the shares in Armgold,
and thereafter managed Armgold’s mining operations and exercised
control over the land in doing so. On 29 August 2007, Armgold sold the
mine, including the land, to Pamodzi Gold Orkney, with the sale
becoming effective in February 2008. From that time on, Harmony
Gold ceased to manage the mine and no longer exercised control over
the land on which the mine is based. Armgold transferred the land to
Pamodzi on 6 January 2009. However, in March 2009, Pamodzi was
placed in provisional liquidation.
On 25 May 2009 Harmony Gold wrote a letter to the Department
expressing the view that as of February 2008, the directive was no
longer valid against it, but rather against Pamodzi, as it was no longer
in control of the land. It further gave notice of its intention to cease to
contribute to the costs of pumping water effective 30 June 2009. Both
the Department and the other mines disagreed with this
interpretation and efforts to resolve this impasse failed. On 28 August
2009 Harmony Gold formally requested the Department to withdraw
the directive against it, but the Department refused to do so. Harmony
Gold accordingly approached the court for relief.
The outcome of each of the cases in the series is as follows:
 Harmony Gold (GNP): The court dismissed the application, finding
that the Minister’s powers to issue a directive under s 19(3) of the
NWA were not limited to the period during which a landholder
maintained ties to the land held at the time the directive was
issued.
 Harmony Gold (SCA): The court dismissed the appeal, finding that
the court a quo had correctly decided the case.
Harmony Gold was unsuccessful in its attempt to appeal the SCA
decision to the Constitutional Court.
An order reviewing and setting aside the 2005 directive; alternately,
Relief Sought
an order reviewing and setting aside the Department of Water Affairs’
decision not to withdraw the directive.
Legal Issues & Issue 1: Should the review be based on the provisions of the
Judgment
in Promotion of Administrative Justice Act 3 of 2000 (PAJA) or the
Harmony
Gold constitutional principle of “legality”?
Judgment: The request to conduct the review on the basis of the
(GNP)
principle of legality rather than PAJA was made at the behest of the
applicant and had largely procedural implications (institution of the
application without reasonable delay and exhaustion of internal
remedies). Makgoka J accepted the invitation to conduct the review
on this basis (para 9).
Issue 2: May the Minister direct a landholder to take reasonable
measures under s 19(3) of the NWA only for so long as they remain a
landholder?
Judgment: Harmony Gold presented a raft of arguments to the court
(summarized in para 23), justifying why its duty to take reasonable
measures had ceased mining operations in February 2008. The
arguments presented, and the judge’s response, were as follows:
 The directive is not sourced in law as it imposes liability in
perpetuity: The perpetuity argument was that the directive
imposed liability irrespective of the applicant’s link to the land,
the causal connection between the application and the
pollution, and the costs and benefits of the measures carried
out. It was argued that this constituted too extreme an
interference with Harmony Gold’s property to be
constitutionally permissible (para 25). Makgoka J noted that
the directive in question was issued after the mining houses
concerned had failed to comply with previous directives and
failed to submit the information necessary to determine
liability (para 26). Further, the directive was issued pending
the conclusion of an agreement amongst the mining houses as
to how they were going to manage the acid mine water. “The
perpetuity referred to by the applicant remains only to the
extent that the applicant and other mining houses fail to reach
and implement the envisaged agreement” the judge
concluded (para 27).
 The directive breaches the principle of cessante ratione legis
cessante ipsa lex (a law ceases to operate if the reason for it
falls away): The applicant argued that the legal rationale for
issuing the directive to Harmony Gold was their relationship to
the land. Hence when Harmony Gold ceased to be a
landholder in the sense contemplated in s 19(3), the directive
had to follow suit (para 28). Makgoka J remarked that this
interpretation ignored the “plain provisions” of s 19(3) which
made it clear that the rationale for the provision was the
preservation of the environment. As such, the Minister was
empowered to direct a landholder to take preventative
measures for as long as it took to address the risk of pollution.
The rationale for the directive, accordingly, did not fall away
when Harmony Gold ceased to be a landholder (paras 28–29).
 A restrictive interpretation of s 19(3) of the NWA is consistent
with the NEMA principles: Harmony Gold argued that the
NEMA principles did not authorize the use of any means to
ensure protection of the environment. There were indications
of constraints in the NEMA principles, which tempered the
means to be used and thereby the public power that could be
directed towards such means. The concept of “responsibility”
(connoting an active intervention) laid down in the NEMA was
an example of such a constraint, for it suggested that only
those in lawful control vis-à-vis the pollution or state of affairs
should be burdened with the legal duty of care (paras 30 – 31).
Makgoka J noted that this argument overlooked the fact that
the directive was issued while Harmony Gold was in control to
take preventive measures. Unfulfilled obligations do not
become discharged or nullified once a landholder ceases to be
in control. If a landholder severs ties with the land, “fully
knowing that his validly imposed obligations” remain
unfulfilled, “he can hardly complain if it is insisted that he
should comply with those before he is discharged from them”
(para 32).
 The directive is unreasonable: The basis of reasonableness was
built upon a number of related arguments, for example, that
Harmony Gold no longer derived any benefit from the land but
others did so at its expense, that Harmony Gold’s contribution
to the pollution and not yet been causally and morally
quantified; that the applicant remained exposed to criminal
sanctions as well as a continuing and unjustified infringement
of his right to property; etc (para 35). Makgoka J countered
these arguments by once again pointing to the fact that the
directive was issued while Harmony Gold was a landholder,
and that it had derived benefits from its pollution activities. It
was therefore incorrect to state that the applicant was being
obliged to take responsibility for pollution caused by others
(para 36). The directive had also been clear on the nature and
extent of Harmony Gold’s responsibilities and there was thus a
clear causal and moral connection between the pollution and
the applicant (para 37).
 A restrictive interpretation follows from the ordinary and
grammatical meaning of the word “fails” as used in s 19(3) of
the NWA: Harmony Gold’s counsel made much of the fact that
use of the term “fails” in s 19(3) limits the scope of persons to
whom a directive can be issued: If a person is no longer a
member of the circumscribed class of landholders, he can no
longer be said to have failed to comply with any legal duty
(para 38). Makgoka J dismissed this argument, noting again
that legal obligations imposed while Harmony Gold belonged
to the class of landholders remain until fulfilled (para 39).
 The Minister’s proper remedy is in the recovery of costs:
Finally, the applicant argued that the legislature’s solution to
the imposition of liability on former owners lies not in s 19(3)
but in the recovery of costs. The judge held, however, that this
argument would only be correct in respect of a directive
issued after a former owner had terminated connection with
the land (paras 41–42).
Makgoka agreed that the interpretation contended for by Harmony
Gold would undermine the effectiveness of s 19 as a person required
to take reasonable measures to limit the impact of a hazard he had
created could simply circumvent those obligations by vacating the land
(para 45). This would also be going against s 1(3) of the NWA which
requires any reasonable interpretation that is consistent with the
purpose of the NWA to be preferred over one that is not (para 46).
Such an interpretation would not only defeat the purpose of s 19(3)
but be contra to the NEMA principles and the constitutional
environmental imperatives (para 46). The directive therefore
remained valid until Harmony Gold had complied with its provisions,
notwithstanding Harmony Gold’s severance of ties to the affected land
(paras 47–48).
Issue 3: Was the directive invalid by virtue of an improper delegation
of power from the Minister to the Regional Director?
Judgment: On this point, the judge noted that he was considering the
matter on the basis of PAJA. The applicant argued that as there was no
catchment management agency in the KOSH region, the power to
issue s 19(3) directives vested in the Minister. In order for the Regional
Director to issue a directive a valid delegation of power needed to
have been in place (para 49). In response, the Department of Water
Affairs had produced an undated and unsigned delegation, which the
applicant argued was invalid and unlawful (para 50). The judge did not
decide this question directly but rather determined whether the
jurisdictional factors necessary to apply PAJA were in place
(unreasonable delay and exhaustion of internal remedies) (see paras
51–57). On the facts the court decided that it was not in the interests
of justice to condone Harmony Gold’s unreasonable delay (para 54),
and it had also failed to exhaust internal remedies (para 55).
Legal Issues & After traversing the facts of the case, the legal and conceptual frame
Judgment
in for consideration of the issue, and the decision of the court a quo, the
Harmony
Gold court (per Meyer AJA) addressed the following issues:
(SCA)
Issue 1: May the Minister direct a landholder to take reasonable
measures under s 19(3) of the NWA only for so long as they remain a
landholder?
Judgment: Meyer AJA noted that the limitation to s 19(3) Harmony
Gold was contending for would have to be read in by implication to
the section. On this point he emphasized the principle of
interpretation that “words cannot be read into a statute by implication
unless the implication is a necessary one in the sense that without it
effect cannot be given to the statute as it stands” (para 22). The court,
however, was of the opinion that effect can be given to the NWA
without the limitation suggested by the applicant (paras 22, 26), for
the following reasons:
 There was nothing in the wording of s 19(3) which warranted
the conclusion that the Minister’s powers were intended to be
limited, rather the wording made it plain that the legislature
intended to vest the Minister with “wide discretionary
powers” (para 23). The “specific measures” the Minister may
impose under s 19(3) may well be more burdensome than the
“reasonable measures” contemplated by s 19(1).
 The rationale of s 19(3) is indeed to direct the landholder to
address the pollution or risk of pollution however long it may
take to do so. This rationale does not fall away when the
landholder ceases to own, occupy, use or control the land. The
limitation contended for by Harmony Gold was not only
unnecessary to give effect to s 19(3), but defeated its purpose
and rendered it ineffective. The restrictive interpretation
would result in absurdity: Allowing a polluter to walk away
from the pollution it had caused with impunity,
notwithstanding the principle that it must pay the costs of
preventing, controlling or minimising and remedying the
pollution (para 24).
 An interpretation that does not include the limitation
contended for by Harmony is in line with the purposes of the
NWA and the NEMA principles and gives effect to s 24 of the
Constitution (para 25).
In response to Harmony’s argument that the directive established
perpetuity obligations, the court held that the terms of the directive
were not infinite and would only continue until the implementation of
an agreement on the long-term sustainable management of water in
the KOSH basin (para 29). Harmony then argued that the directive
ceased when it became clear that agreement between the mining
houses could never be reached. The court however rejected this,
pointing out that no evidence of this nature had been laid before the
course. If an agreement could indeed not be reached the appropriate
remedy was to invoke s 150 of the NWA which requires parties locked
in a dispute to submit to mediation and negotiation (para 30).