AGRI SA welcomed the verdict against the state about the expropriation of mineral rights

The Supreme Court verdict of Friday, 6 March, in Pretoria by Judge Hartzenberg, namely that the Mineral and Petroleum Resources Development Act, No. 28 of 2002, implies the expropriation of unused old order mineral rights and that such mineral right holders have the right to approach the court to protect their rights in terms of the Constitution, is a significant landmark in Agri SA’s attempts to protect property rights and point out errors at policy and regulatory level in this regard, says Hans van der Merwe, Chief Executive of Agri SA.
Agri SA’s aim with this court case was to prove expropriation, which will compel the state to pay compensation or to reinstate ownership of mineral rights.
On 10 February 2009 legal representatives of Agri SA and another mineral rights holder with a similar case as Agri SA, respectively, cited reasons before Judge Hartzenberg why the coming into force of the said Act leads to the expropriation of old order mineral rights, which places an obligation on the State to offer appropriate compensation in terms of section 25 of the Constitution and the stipulations of the Expropriation Act, No. 63 of 1975. The defence of the State was that such mineral right holders could pursue further administrative options before approaching the court for a decision on expropriation and that there was no talk of expropriation.
In his discussion of the relevant arguments the judge commented that the Act gives no recognition to the holding of existing mineral rights. He stated the following: “Insofar as they have not been exploited they simply disappear in thin air.”
“Against this background Agri SA is of the opinion that with the coming into force of the said Act a fundamental difference was brought about in the status and enforcement of property rights with many negative, unintentional consequences,” says Van der Merwe.
In his finding Judge Hartzenberg came to the conclusion that the Act merely gives old order mineral rights holders the right to limit their losses. Furthermore, the judge’s interpretation of this Act is that it recognises that holders of mineral rights could be deprived of their rights and that such deprivation, together with the State’s assumption of custodianship and administration of those rights, creates the expropriation of those rights.
He finds therefore that it is in fact possible for the holders of the old order mineral rights to prove that their rights have been expropriated by the coming into force of the Mineral and Petroleum Resources Development Act, No. 28 of 2002. The State’s claim that Agri SA’s point of view in this regard was ‘vague and embarrassing’ was rejected by Judge Hartzenberg and with it also the exception of the State in this regard.
Another exception cited by the State was that regarding its claim Agri SA had to first lodge an appeal with the Minister of Minerals and Energy against the administrative decision of the Director-General who had rejected its claim and should not have immediately turned to the court by means of a summons. Judge Hartzenberg rejected this argument by pointing out that the Act allows a claimant to turn to the court in order to confirm expropriation. According to the judge decision on expropriation or not is not an administrative matter. The judge also indicated that if the Act denied a claimant direct access to the court and required that all administrative remedies first had to be exhausted, it could have jeopardised the constitutionality of the Mineral and Petroleum Resources Development Act, No. 28 of 2002.Therefore, this exception of the State was also declined.
The judge ruled that both exceptions of the State were rejected with costs, including the legal costs of the claimants.
“This verdict opens the door for many old order mineral rights holders to lean on the viewpoint of the judge, namely that the coming into force of the Act leads to expropriation of mineral rights. However, each claimant would have to prove the extent of the losses due to expropriation in terms of prescribed procedures of the Expropriation Act,” says Van der Merwe.
Agri SA has not yet received the State’s reaction on this verdict, but undertakes to, in the interest of mineral right holders who suffered extensive losses due to expropriation without compensation, continue doing whatever is necessary to uphold and establish the verdict as a legal principle.
Agri SA wishes to thank its affiliates for the support, financial and otherwise, with this court case.