Was this corruption, callousness (or both)?

It is difficult not to wonder whether it was corruption or sheer incompetence and callousness that led to the unlawful decision by the Department of Mineral Resources to grant prospecting rights to a company called Genorah Resources on the land of the Bengwenyama-ye-Maswazi community. This community had been dispossessed of their land during apartheid but won back the land in a land claim. These are the kind of people whom politicians always claim to want to serve — victims of apartheid, poor but dignified — yet in this case they were not served but thoroughly screwed over.

Earler today, in the judgment of Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others, the Constitutional Court set aside the decision to grant prospecting rights over the community’s land to Genorah Resources, but the judgment leaves many questions still to be answered, not least of them being why both the High Court and the Supreme Court of Appeal refused to address the obvious injustice that had occurred in this case.

Why did the Department of Mineral resources hastily grant these rights to a company (Genorah Resources) without there having been proper consultation with the community who owns the land and without having given them a proper opportunity to apply for the rights themselves — as required by law? Did political connection play a role in the awarding of the rights and if it did, whose connections were decisive: that of the husband of the Minister of Science and Technology; those of a former  (or existing) ANC Youth League leader; or somebody else? And is there a connection to Julius Malema in all of this?

Genorah Resources is a mineral resources company with a portfolio of mineral rights and a platinum mining subsidiary, Nkwe Platinum (Pty) Ltd. One of the non-executive directors of Nkwe Platinum is Sharif Pandor, husband of Naledi Pandor. Sharif Pandor was a beneficiary of a deal put together by Brett Kebble and received almost a million Rand from Kebble. He is also a director of Blue Nightingale, whose co-directors include Andile Nkuhlu, a former ANC Youth League leader. Julius Malema is alleged to have made millions of Rand in tenders because of his shareholding in Blue Nightingale Trading (but I could not establish whether this is the same company as the one in which Mr Pandor and Nkuhlu are involved).

Oh yes, I almost forgot: the unlawful awarding of the prospecting rights happened in Limpopo Province, Julius Malema’s home base. It seems like a good case for investigative journalists to take up. Until they do, it is impossible to know exactly what happened with this deal and whether the decision by the Department was corrupt or “merely” callous.

In terms of section 104 of the Mineral and Petroleum Resources Development Act, the Bengwenyama community had a preferent right to be given rights to prospect or mine any mineral and land which is registered in the name of the community. However, in September 2006 Genorah was awarded prospecting rights over two properties, Eerstegeluk and Nooitverwacht, on which members of the Bengwenyama community reside while the community was in the process of attempting to exercise this preferent right. Why section 104 was ignored by the Department of Mineral Resources and why rights were awarded to a company with strong ANC connections remain a mystery.

How these people — who tried to wangle the Bengwenyama community out of its prospecting rights — can sleep at night, is also not clear to me. Maybe they have taken lessons from former State President PW (Die Groot Krokodil) Botha who famously told a journalist: “I never take a guilty conscience with me to bed.”

A representative of Genorah visited the traditional leader of the Community, Kgoshi Nkosi, on 3 February 2006 to try and obtain consent for Genorah’s own application for the rights. A representative of the company presented a letter in this regard for the Kgosi’s signature, but the attempt to gain support for this bid was unsuccessful and Kgoshi Nkosi never signed the letter. Kgoshi Nkosi wrote the following letter — rightly described by Justice Froneman  as “old-worldly and courteous” — to Genorah in reply, but never received a response:

Your letter that notifies us or rather consults us about your interest in our land had been received. As your letter requires us to enable you to comply with relevant provisions of the Act, as well as completion/filling of the form attached, we would like to advise that Bengwenyama-ya-Maswati would do that, once we know each other. For now, we don‘t know each other well. The form that you request us to complete, seems to be more binding, as it does not fall within the definition of our standard letter that we give to Companies that applies for similar rights.

Bengwenyama-ya-Maswati has an interest in the Property you applied for. We submitted an application for prospecting on three farms including Nooitverwacht 324 KT. The good luck wished to ourselves and other companies in an attempt of getting similar rights are also wished to your Company.

Meanwhile the community made an application for the prospecting rights during the same period that Genorah was trying to get the Department to award them the rights to prospect on the land concerned. However, the community’s initial application was faulty and exchanges between the community and the Department continued in attempts to rectify these defects. Meanwhile the Department awarded the rights to Genorah, but kept this secret from the Bengwenyama community. The Constitutional Court takes up the story:

What is surprising and perplexing is that during these continuing exchanges between the Community and Bengwenyama Minerals on the one hand and the Department on the other the Department made no mention of the fact that prospecting rights on the farms had already been awarded to Genorah. What is even more perplexing is that the prospecting rights were granted over the Community‘s land without any notice to the Community.

The Act requires consultation in regard to the granting of prospecting rights — also consultation with the owners of the land. These consultation requirements are indicative of a serious concern for the rights and interests of landowners and lawful occupiers in the process of granting prospecting rights. As the Constitutional Court pointed out, the granting and execution of a prospecting right represents “a grave and considerable invasion of the use and enjoyment of the land on which the prospecting is to happen”.

One of the purposes of consultation with the landowner was to see whether some accommodation was possible between the applicant for a prospecting right and the landowner insofar as the interference with the landowner‘s rights to use the property is concerned. This required the parties to engage in good faith to attempt to reach accommodation in that regard. Failure to reach agreement at this early consultation stage might result in the holder of the prospecting right having to pay compensation to the landowner at a later stage. Genorah did not comply with these requirements for consultation in terms of the Act, so the decision to grant the prospecting rights were set aside on this ground.

Because section 104 gave the community preferent rights to be granted a prospecting licence they also had a right to a fair hearing before anyone else was granted such a licence. This never happened and the community was never given a hearing, let alone a fair hearing. As Justice Froneman pointedly notes:

The Department was at all times aware that the Community wished to acquire prospecting rights on its own farms. It gave advice to the Community over a long period of time in this regard, to the extent of requiring better protection for the Community in the investment agreement. It continued dealing with the Community and Bengwenyama Minerals in relation to their application brought on prescribed section 16 forms without informing them of the fact that approval of that application would end their hopes of a preferent prospecting right. There is no explanation from the Department for this strange behaviour.

The Court therefore also set aside the decision of the Department because the community never received a fair hearing as required by the Promotion of Administrative Justice Act (PAJA) read with the provisions of the Mineral and Petroleum Resources Development Act.

The Constitutional Court was also less than happy with the manner in which the Department treated this community throughout the process in which Genorah and the Department set out to cheat deprive the community of their mineral rights. In remarks that hint that other factors might have played a role in this flagrant disregard for the rights of the community who owned the land, Justice Froneman remarked as follows:

They [the community] were not properly assisted in what was obviously an effort to acquire prospecting rights on their own property. Genorah was allowed to lodge financial guarantees late; they were not. They were not told of the grant of the prospecting rights to Genorah, which effectively put paid to their own application. Their internal appeal was responded to only after four months had elapsed. The Community was entitled to adequate notice of the nature and purpose of the administrative action that was proposed in relation to the Genorah application. It was entitled to a reasonable opportunity to make representations in relation to the Genorah application. Once the administrative decision was taken the Community was entitled to a clear statement of the administrative action. It was entitled to adequate notice of any right to a review or internal appeal. It was entitled to adequate notice of the right to request reasons in terms of section 5 of PAJA. It was entitled to reasons. None of this was done or complied with by the Department and, finally, the Community‘s appeal was ignored for four months before it was told to bring a review application in court. This is not the way government officials should treat the citizens they are required to serve.

The decision to grant the prospecting rights to Genorah was therefore set aside and the State and Genorah were ordered to pay the community’s cost. Although the Constitutional Court judgment is careful not to make any allegations that corruption may have occurred, its use of words such as “strange”, “perplexing” and “surprising” and its finding that Genorah was given preferential treatment (when the preferential treatment was legally required to be given to the community) all suggest that there might have been more to this case than mere incompetence on the part of the Department.

Hopefully our media will investigate exactly who owns and who manages Genorah and whether political connections might have influenced this scandalous behaviour on the part of the government. Whatever the true facts, what this case demonstrates is that the granting of prospecting rights is an area that is ripe for corruption and nepotism. Recent media reports of such rights having been granted to ANC front company, Chancellor House, supports this conclusion. And for the owners of farms over which such rights have been granted this case might suggest that if they were not consulted they have possible legal remedies to overturn the corrupt granting of prospecting rights, essentially by the ANC to the ANC.

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