'Staan in die hof!'
Since time immemorial we have adopted the practice of rising when the presiding judge or magistrate enters or leaves the court room. It is a sign of respect, not to the person, but to the office and the institution they serve. The criminal justice system of any developed or developing society plays an integral part in ensuring social stability and peace. As one of its many facets, criminal proceedings and sanctions imposed on offenders are aimed at directing the behaviour of the citizenry.
An amendment proposed to the Mine Health and Safety Act 29 of 1996 (MHSA) seeks to increase the criminal fine that may be imposed on a convicted mining company to 10% of its annual turnover. The sanity of imposing such a draconian sanction is questionable.
The MHSA requires all mining right holders to ensure a working environment free of injury or death. It clothes the Inspectors of Mines (IoMs) with wide powers, including the right to enter mining operations at any time to conduct inspections and to give instructions to meet non-compliance with the MHSA. These powers reach as far as instructions to halt mining operations instantly.
Following an outcry by the industry that the IoMs applied their powers inconsistently, the Chief Inspector of Mines published the Mine Health and Safety Inspectorate: Enforcement Guideline in April 2011 (the Guideline). The self-proclaimed objective of the Guideline is to provide guidance to IoMs, the industry and the public on the enforcement measures used by the Department of Mineral Resources (DMR).
The status of the Guideline is somewhat of a mystery. The Guideline was not published in the Government Gazette as is required by section 49(6) of the MHSA and thus is not a guideline as contemplated by the MHSA. The DMR has labelled the Guideline an internal document, which may be applied or ignored by IoMs. This is not a satisfactory position for mines that are, on a daily basis, visited and inspected by IoMs with draconian powers.
Instructions to halt mining operations, the so-called section 54 instructions, are a bone of contention. Where an IoM determines an occurrence, practice or condition to pose a danger to the health and safety of employees, the IoM may issue any instruction he or she deems appropriate to address that danger, including an instruction to halt mining operations. Although one can scarcely dispute that most transgressions of the MHSA are dangerous, we must question the halting of mining operations by rote, as the Guideline seems to promote. This approach ignores the importance of a proper consideration of a proportionate response to the danger.
Regardless of this debate, the effect of instructions to halt mining operations is economically crippling. To some extent, these instructions have undergone a metamorphosis from being necessary to immediately prevent injury or death, to being a convenient tool to punish non-compliance. Many argue that these section 54 instructions have become a criminal tool of punishment on an industrial scale.
In addition, a failure to comply with the MHSA already holds criminal consequences, not only for the company, but also for its managers. The company may be punished by the imposition of administrative fines and its criminal prosecution. Managers, who hold statutory positions of authority, may at the same time be prosecuted personally for their failure to act reasonably.
A draft Mine Health and Safety Bill was published for comment in November 2013. The DMR has given notice of its intention to introduce this draft Bill into parliament later this year.
Most of the proposed amendments to the MHSA as contained in the Bill are useful. The Bill seeks to streamline administrative processes and to amend certain definitions of the MHSA that will make the interpretation of the MHSA much easier and more relevant in an ever evolving mining industry. However, the Bill also seeks to strengthen enforcement provisions and to introduce stiffer penalties for criminal convictions.
A mining right holder who is convicted of negligence in failing to comply with the MHSA may, under section 92, be sentenced by the withdrawal of his mining right or a fine of R3m or imprisonment of five years.
If the Bill becomes law, then these criminal sanctions will increase significantly. Where the mining right, prospecting right or equivalent permit holder is a company, then the sentence may be a fine not exceeding 10% of the company's annual turnover or 10 years’ imprisonment.
In any language, this is a massive penalty. It may in most cases be a crippling penalty and probably would mean the economic end of the mining right holder.
In her opening address to the Mining Indaba in February this year, the Minister of Mineral Resources said that amendments to the mineral legislation were proposed, inter alia, to promote investment in the mining industry. Although she did not mention the MHSA and the Bill expressly, one must interpret her comments in the context of these proposed amendments as well. It is difficult to see how a criminal penalty of this magnitude will encourage investment in the embattled mining industry.
No one in the mining industry seriously argues that mining injuries and fatalities should not be reduced by all reasonable means. Over recent years injury and fatality rates have steadily declined. However, every time a mining employee loses a life, a family unit and dependants lose a bread winner. These are horrible consequences. They are personal and real. Deaths in the mining industry are not just numbers and statistics - they affect real people.
But will a criminal sanction to the tune of 10% of a mining company's turnover really help to prevent a breach of the MHSA? I suppose it is the same question asked at the time when we argued whether the death penalty had a place in our democracy. In the end the proponents of the death penalty had great difficulty proving empirically that the death penalty reduced crime rates.
A criminal penalty of this magnitude may be the economic death sentence to a mining company. It may cause the financial distress of the company to the extent that proceedings for its business rescue under the new Companies Act may have to be invoked or, worse still, it may render the company insolvent and result in its liquidation. In liquidation, the company's mining operations will come to an end as a mining right automatically lapses upon liquidation. The negative impact this will have on employment in the mining industry is self-evident.
In a regulatory environment where the IoMs have wide powers to immediately address health and safety dangers, coupled with powers to impose administrative fines, it is questionable whether we really need such drastic criminal sanctions. Unlike in cases of unlawful competition, where fines of this magnitude are sometimes imposed because of the unlawful economic gain, there is no financial advantage derived from the MHSA crime. It is also unlikely that the proponents of such criminal sanctions would be able to demonstrate with factual certainty that these would result in any material improvement to safety compliance and the concomitant reduction of injuries and fatalities. As a corollary, such massive criminal sanctions are likely to negatively affect positive investment in the mining industry.
Perhaps the DMR's morbid fascination with criminal prosecution of the mining industry should be reconsidered in the interest of forming a partnership to enhance safety compliance, rather than to criminalise an industry that provides employment to scores of citizens and brings about material socio-economic improvement to the communities within which they operate.
But for now – "Staan in die hof!"