HARMONY GOLD v REGIONAL DIRECTOR, FREE STATE DEPARTMENT OF WATER AFFAIRS &
OTHERS (NORTH GAUTENG HIGH COURT, CASE No. 68161/2008, 26 JUNE 2012)
Importance
Parties
This is an extremely important case adding to our understanding of s
19 of the National Water Act, 36 of 1998 (NWA). The main issue in this
case was whether a directive issued to a landholder in terms of s 19(3),
to take reasonable measures to remedy the pollution of a water
resource, remained valid once such landholder had severed its ties
with the land in question. ‘Landholder’ in this instance should be
understood to include the owner or occupier of such land or any
person who has control over such land (with Harmony Gold, the
applicant in this case, falling into the latter category). The precedent
established by the case is that a directive, issued to a person whilst
they were a landholder, remains valid even after such landholder has
severed its ties to the land. All the arguments raised by the applicant
on the basis of perpetuity liabilities and unreasonableness, amongst
others, were rejected. However, out of this case an important
distinction emerges between the regulator’s power (i) where they
have issued a s 19(3) directive to a landholder to take reasonable
measures at the time that person was a landholder; and (ii) where they
wish to issue a s 19(3) directive to a person who has caused pollution
in the past but is not a landholder at present. There is an obiter
statement in this judgment to the effect that in the latter case, the
regulator can still issue a s 19(3) directive. However in that case, the
court held, the Minister’s power would be limited to recovering costs
(see para. 41). What is clear in terms of s 19(4) is that the Minister’s
power to take reasonable measures to remedy the pollution of water
resources hinges on there being a directive in place. However, it is not
clear then – in the case of persons who were landholders in the past –
why the remedy should be restricted from the start to the recovery of
costs. This would only apply where the ‘landholder’ no longer exists.
This obiter statement therefore has important implications for the
remediation of ownerless and derelict mines.
Applicant: Harmony Gold
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)
Facts
This case relates to a series of directives issued in terms of s 19(3) of
the NWA in 2005, to a number of mines operative in the KOSH basin.
Some of these directives had already been the subject of previous
litigation in Harmony Gold Mining Company Limited v Free State
Department of Water Affairs and Forestry 2005 JDR 0465 (SCA),
Minister of Water Affairs and Forestry v Stilfontein Gold Mining
Company Limited & others 2006 (5) SA 333 (W), and Kebble v Minister
of Water Affairs (2007) JDR 0872 (SCA).
In the earlier Harmony Gold case, it was established that the obligation
to take ‘reasonable measures’ to prevent pollution in terms of s 19(1)
of the NWA is not confined to reasonable measures that can be
effected on one’s own land, but extends to land owned, controlled or
used by another.
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 have been
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 land on which the pollution occurs was owned by African
Rainbow Minerals Gold Ltd (Armgold). In September 2003, Harmony
Gold acquired all the shares in Armgold, It 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.
Relief Sought
Legal Issues &
Judgment
An order setting aside the directive issued to Harmony Gold in terms
of s 19(3) the NWA, alternately a review of the NWA’s decision not to
withdraw the directive and an order declaring the directive invalid as
of 6 January 2009.
The court framed its deliberations in this matter by referring to the
preamble and purpose of the NWA, s 24 of the Constitution, s 28 of
NEMA and the NEMA principles. The court stated that there is ‘no
debate’ that the NWA is a law envisaged by s 2(1)(e) of the NEMA; i.e.
as a law the interpretation, administration and implementation of
which must be guided by the NEMA principles (paras 14–19).
Issue 1: The primary issue raised in this case was whether a directive
issued in terms of s 19(3) of the NWA becomes invalid when a person
ceases to be a landholder (para. 19).
Harmony Gold argued that a s 19(3) directive becomes invalid by
operation of the law when the person against whom it is issued ceases
to be a landholder (para. 23). (The court uses the term ‘landholder’ in
the sense of the owner of land, or a person in control of, or who uses
or occupies such land.) While this seems not to have been a contested
issued in the case, the judge agreed (without giving reasons) to decide
this issue in terms of the principle of legality (based on s 172(b) of the
Constitution), and not in terms of the Promotion of Administrative
Justice Act 3 of 2000 (PAJA). The import of this decision was that on
this issue Harmony Gold did not need to prove the exhaustion of
internal remedies or that the application had been instituted without
reasonable delay (para. 9).
In dealing with this issue, the court considered the following six
arguments advanced by Harmony Gold:
Argument 1: The directive is not sourced in law as it imposes liability
in perpetuity
Harmony Gold argued that because the directive imposed liability
irrespective of its causal contribution to the pollution or consideration
of the consequences imposing reasonable measures would have on
the mine, it was unreasonable and constitutionally impermissible
(para. 25). Judge Makgoka replied that the reasons for the issuance of
the directive in the first place were failure by the mines to comply with
previous directives, or to reach agreement amongst themselves as to
how the mine water problem would be managed. The perpetuity that
Harmony Gold complained of was thus of the mines own making and
remained only to the extent that Harmony Gold and the other mining
houses failed to reach agreement (paras. 26–7).
Argument 2: The directive breaches the principle of cessante ratione
legis cessat ipsa lex
This Latin maxim stands for the principle that where the reason for a
rule falls away, the rule falls way as well. Applied to the facts of the
case, when Harmony Gold ceased to be a landholder, the directive had
to follow suit (para. 28). The court held that the rationale of s 19 was
the preservation of the environment and that the Minister, acting in
terms of s 19(1), was empowered to direct a landholder to take
reasonable measures ‘for as long as it takes to address the risk of
pollution’ (para. 29).
Argument 3: A restrictive interpretation limiting liability to current
landholders is consistent with the NEMA principles
Harmony Gold argued that the NEMA principles do not authorize the
use of any means to protect the environment – and therefore, by
implication, an unrestricted State power to require the
implementation of particular means. There were indications of
‘constraints’ in the NEMA principles, one of which was that only
persons in a position to actively implement measures could be held
responsible for preventing or remedying the effects of pollution (para.
31). The court responded by saying that where a directive is issued
against a person while he is in control to take reasonable measures,
his obligations do not become discharged or nullified once he ceases
to be in control. If a person severs ties with the land knowing full well
that his validly imposed obligations have not been fulfilled, he cannot
complain if it is insisted that he comply with these obligations before
being discharged from them. Section 28(6) of NEMA could be used,
the court added, if Harmony needed to obtain access to the land in
order to implement reasonable measures (para. 32).
Argument 4: The directive is unreasonable if applicable to persons
who are no longer in control of land or derive no benefit there from
Harmony Gold argued that the directive was unreasonable on a
number of grounds. If there was no longer any causal connection
between the person against whom the directive applied and the land,
then such person could not derive a benefit from the land and others
did so at his expense; his causal and moral contribution to the
pollution could not be determined; and because he has no control
over the land he cannot be regarded as someone ‘responsible’ to take
reasonable measures – at the same time he would be exposed to
criminal sanctions for failing to take measures (para. 35). In responding
to this argument the court once again turned to the fact that the
directive had been issued to Harmony while it was still a landholder,
and that it had disposed of its entire issued share capital to Pamodzi
before fully complying with its obligations (paras 36–7).
Argument 5: The word ‘fails’ in s 19(3) indicates that this section only
applies to current landholders and restricts penalties to this category
Harmony Gold argued that the word ‘fails’ in s 19(3) of the NWA
restricts the category of persons against whom directives can be
issued and maintained to those who are in a position to fail; i.e. those
who still have control over the land. In this way it ensures that the
severe penalties that may be imposed for non-compliance are limited
to those with active control (para. 38). The court noted that if a
landholder had failed to comply with his duties while still a landholder,
he does not erase these duties by simply walking away from the
failure. It was common cause, the judge said, that the initial issue of
the directive could only be directed at someone who is an existing
landholder. But once those obligations had been imposed they
remained until fulfilled (para. 39).
Argument 6: The solution lies in recovery of costs rather than
maintaining the obligations of the directive
Harmony Gold argued that the proper solution against former owners
of property on which water pollution is occurring is for the Minister to
take measures herself and to then recover costs from the affected
parties. The court disputed this, saying that this argument would only
be correct ‘with reference to a directive issued after a former owner
had terminated connection with the land.’ In those circumstances, the
court added, the Minister’s power would be limited to the recovery of
costs. This did not apply in the present case however as the directive
had been issued whilst Harmony Gold was still a landholder (para. 41).
In addition to dispensing with these arguments, the court added
the following observations:
 There is nothing in s 19(3) to suggest that once an owner,
occupier or user of affected land ceases to be such, that
unfulfilled obligations imposed in terms of a s 19(3)
directive lapse (para. 42).
 If s 19(3) of the NWA were to be interpreted restrictively
as applicable only to current landholders, it would
undermine its effectiveness in that persons bound to the
directive’s obligations could simply sever their ties with
the land (para. 45).
 A restrictive interpretation of s 19(3) would not be in line
with the purpose of the NWA, and s 1(3) of the NWA
requires that any reasonable interpretation that is
consistent with the purpose of the NWA should be
preferred over any interpretation that is inconsistent
with that purpose (para. 46).
Issue 2: The directive was invalid because there had been no proper
delegation of powers between the Minister and the Chief Director
This was an issue that fell to be decided in terms of the PAJA (para.
50). As there is no catchment management agency for the KOSH basin,
the powers in s 19(3) vested in the Minister. The directive, however,
had been issued by the Director of Water Affairs of the Free State on
the basis of an undated and unsigned delegation of power (para. 50).
It was on this basis that Harmony Gold attacked the validity of the
directive. Against this application the other mining companies applied
the jurisdictional requirements of the PAJA, arguing that this issue was
brought out of time and without having exhausted internal remedies.
The court accepted these arguments, holding that the effective date
for launching a PAJA attack on the validity of the directive was the
Outcome
date on which the directive had been issued; i.e. 1 November 2005
(para 52). The application was thus more than 4 years out of time. As
the applicant also failed to exercise its right to appeal against the
directive in terms of s 148(1)(a) of the NWA, it had also failed to
exhaust internal remedies (para. 55). There were further no
‘exceptional circumstances’ from departing from the requirement that
internal remedies must be exhausted (para. 57).
The application was dismissed and the court ordered that the directive
remained valid.