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When the Minister of Mineral Resources Ignores You

If a commercial transaction is concluded with a person that holds a right issued by the Department of Mineral Resources (“the department”) care must be exercised to ensure that the required regulatory approvals needed for the implementation of the transaction has been granted.

Examples of commercial transactions that need ministerial approval in terms of the Mineral and Petroleum Resources Development Act No 28 of 2002 (MPRDA) before they can be implemented include agreements that would result in:

  • a transfer a prospecting right or mining right, for example a sale, cession or donation of the right;
  • a transfer any interest in prospecting right or mining right, for example the transfer of an undivided share in a right; and
  • a transfer a controlling interest in a company holds a prospecting right or mining right, for example a sale of shares agreement or an issue and allotment of new shares resulting in a change of control (section 11(1) of the MPRDA).

To get consent to implement these transactions a formal application must be submitted to the department. Unfortunately, the legislation does not provide any maximum time limits that are applicable when considering the application. In most cases an application submitted to the department is approved without too much delay, but in some cases months, if not years, may pass without the application for consent being considered.

Delays in the approval process can have drastic consequences on commercial transactions because without the required consent they can’t become effective and can’t be implemented by the parties.

What can a person do if there is a significant delay in the approval process after the application for ministerial consent has been submitted?

The most common answer is for a person to bring an application to court, and ask the court to grant an order forcing the department to perform its duty. This court relief is referred to as a mandatory interdict, or a mandamus.

In many situations this relief would be a sufficient; the matter is referred back to the department for consideration within a court specified time line.

The purpose of this article is, however, to explore alternate legal remedies that could be used if there is a significant delay in the approval process. Particularly:

  • Can a person bring a court application for a court order granting an application that was submitted in terms of the MPRDA, without the need to refer the matter back to the minister for consideration?

The General Right to Just Administrative Action

Any action taken by an organ of state must be (i) lawful; (ii) reasonable; and (iii) procedurally fair. If an action does not meet with these requirements a person who has been affected by the action has the right to approach a court to “review” the infringing action, and ask the court for appropriate relief.

This right of judicial review stems from the Constitution of the Republic of South Africa 1996 (the Constitution), and is given effect by the Promotion of Administrative Justice Act 3 of 2000 (PAJA) (in particular see section 33 of the Constitution).

Both actions and inactions of the government can be reviewed by a court. This is because an “administrative action” is defined to include any decision taken, or the failure or refusal to take a decision, by an organ of state when exercising a public power or performing a public function in terms of legislation (the definition of “administrative action” as read with the definition of “failure” contained in section 1).

A court has wide powers when reviewing an administrative decision (see section 8 of PAJA). In cases where the government’s administrative action amounts to the failure or refusal to take a decision, then the court may grant any order that it just and equitable, including an order:

  • directing the taking of a decision; or
  • declaring the rights of the parties in relation to the taking of a decision.

Accordingly, if the minister fails to consider an application that has been submitted by a person in terms of the MPRDA, the ministers inaction will be “an administrative action”, and falls within the ambit of PAJA. Under these circumstances a person should be able to approach the court for appropriate relief.

The right to approach a court directly for relief in terms of PAJA is, however, curtailed if the applicable legislation, such as the MPRDA, contains an internal appeal procedure (section 6(2)(g) and 7(2)(a) of PAJA).

Court Action Versus the Department’s Internal Appeal Process

A person’s right to approach the court to review an administrative decision in terms of PAJA is not unlimited. A person can’t approach a court until any internal appeal process in the applicable law, such as the MPRDA, has been exhausted (section 7(2)(a) of PAJA).

It is intended that a person’s first port of call should be the legislated internal appeal procedure. A person can only approach a court if the applicable act doesn’t have an appeal procedure, or after the appeal procedure has been followed.

Exceptions to this rule do, however, exist, and a person is entitled to approach the court directly without first exhausting the internal appeal procedure is there are “exceptional circumstances” (section 7(2)(c) of PAJA).

To phrase these requirements differently, a court can be approached to review an administrative action if:

  • an internal appeal was submitted but it was unsuccessful (section 7(2)(a) of PAJA); or
  • the particular law has no internal appeal procedure that is applicable; or
  • the particular law has an internal appeal procedure, but there are exceptional circumstances that are applicable, the court exempts the applicant from having to follow the internal appeal procedure (section 7(2)(c) of PAJA).

What is the correct legal process if the minister fails to consider an application that has been submitted by a person in terms of the MPRDA?

This will depend on whether the MPRDA contains an internal remedy that can be relied on when the minister fails to take any action.

Can the MPRDA’s Internal Appeal Procedure be used when the Minister Fails to Take a Decision?

Is there an internal appeal in situations where the minister fails to take a decision, or does the internal appeal procedure in the MPRDA only apply to decisions that have actually been taken? Is it correct to argue that the internal appeal procedure must be followed in a situation where the minister fails to make a decision in terms of the MPRDA?

If the internal appeal procedure doesn’t apply to a failure to take a decision then there will be no requirement to institute an internal appeal. In these circumstances a person will be entitled to approach the court immediately without having to prove that there are exceptional circumstances that allow the court to exempt the person from the internal appeal requirements.

In order to answer this question the internal appeal procedure that is set out in the MPRDA must be examined.

The Internal Appeal Procedure in terms of the Mineral and Petroleum Resources Development Act

The MPRDA has an internal appeal process that can be relied on in some circumstances (section 96). This internal appeal process can be summarised as follows:

  • A person is prohibited from applying to court for the review of an “administrative decision” of the department until they have exhausted the remedies set out in the MPRDA (section 96(3)).
  • A person whose rights or legitimate expectations have been materially and adversely affected, or who is aggrieved by any “administrative decision”, may appeal within 30 days of becoming aware of such administrative decision (section 96(1)), setting out:
    • the actions appealed against; and
    • the grounds on which the appeal is based (regulation 74(2)).
  • A copy of the appeal will be dispatched by the department to:
    • the person in the department responsible for the administrative decision, who must then within 21 days submit written reasons for the administrative decision appealed against (regulations 74(5)(a) and 74(6)); and
    • any other person, whose rights may be affected by the outcome of the appeal, who must then within 21 days submit a replying submission indicating the extent and nature of his or her rights, and how they will be affected by the appeal (regulations 74(5)(a) and 74(7)).
  • The department will then dispatch the written reasons and any replying submissions that it received to the appellant, and the appellant is then afforded 21 days to reply to these reasons and submissions (regulation 74(8)).
  • Within 30 days from the receipt of the appellant’s response, the minister or director-general must either:
    • confirm the administrative decision concerned;
    • set aside the administrative decision concerned;
    • amend the administrative decision concerned; or
    • substitute any other administrative decision for the administrative decision concerned (regulation 74(9).
  • The lodging of an appeal does not suspend the administrative decision, unless it is suspended by the director-general or the minister (section 96(2)(a)).

Does this Procedure Apply when the Minister Fails to Take a Decision?

As discussed, a person does not have the right to approach a court to review any administrative action unless any internal appeal procedure in the MPRDA has been exhausted or unless there are exceptional circumstances that allow the court to exempt the person from the internal appeal requirements.

The MPRDA does have an internal appeal process (section 96), but does the MPRDA’s internal appeal procedure apply in situations where the minister fails to take a decision?

An “administrative action” is defined in PAJA to include the failure to take a decision, but the MPRDA’s appeal procedure doesn’t use this term. The MPRDA’s internal appeal procedure states that it applies to “administrative decisions”, a term that is not defined.

The wording and context of the internal appeal procedure supports a conclusion that the term “administrative decision” can only relate to decisions that have actually been taken, and doesn’t apply to a failure to take a decision:

  • The MPRDA requires that any “decision taken” must be taken within a reasonable time, must be in writing, and must be accompanied by written reasons for the decision (sections 6(1) and (2)). In a situation where the minister has failed to consider an application there will be no “decision” taken. This non-decision is not capable of being reduced to writing, and similarly it will not be possible to give any reasons for the non-decision.
  • An internal appeal must be lodged within 30 days of becoming aware of the administrative decision (section 96(1)). It is impossible to comply with this requirement if no positive action is taken, especially when the MPRDA does not prescribe a fixed duration during which the decision must be taken. If the minister has an indeterminable amount of time to consider the application, when must this 30 day period be calculated from?
  • The internal appeal procedure is worded to apply to an administrative decision that “was taken” (section 96(1)(b)). The language of the section clearly implies that there must have been some form of act by the minister, not just a failure to take a decision.
  • The internal appeal procedure does not automatically suspend the decision that is appeal against (section 96(2)(a)). In a situation where there has been no decision at all, this provision can’t be applied because there is nothing to suspend.
  • As part of the internal appeal procedure, a person must be provided with written reason by the person who took the decision that is appealed against (regulations 74(5) and 74(6)). In a case where no decision has been taken at all, it is not possible for the department to comply with the regulation and give “written reasons for the administrative decision”.

The conclusion that the term “administrative decision” can only relate to decisions that have actually been taken, and not to a failure to take a decision, can also be demonstrated by considering what the final appeal procedure could be if the term “administrative decision” did include the failure to take an action.

  • What would the legal situation then be if the minister either failed or refused to consider the appeal in the required time lines?
  • An internal appeal would be submitted, and it would request that the minister either (i) amends the department’s failure to take a decision; or (ii) substitutes the failure to take a decision with a positive decision to grant the application (regulations 74(9)(c) and (d)).
  • What would the legal situation then be if the minister ignored an application that was submitted an internal appeal would have to be lodged with the department against this failure to take a decision.
    • Would this failure to consider the appeal fall also under the definition of an “administrative decision” in terms of the MPRDA? Would a person be prevented from applying to a court to review the failure to consider the appeal until the internal remedies in the MPRDA have been exhausted, requiring the appellant to lodge a second internal appeal against the ministers failure to determine the first appeal (section 96(3))?
    • Must the person now bring an application to court, and ask the court to grant an order forcing the minister to perform their duty and determine the first appeal (ie a mandamus)? If so, then the person has now expended considerable time and resources to bring a court action just to place it in the same position where it was immediately after lodging the appeal, namely its appeal has been lodged and the minister is now compelled (in terms of the court order this time) to comply with the required time lines.
  • When the minister considers the appeal, the minister may decide that the appeal fails, and to substitute the failure to take a decision with a decision to refuse the application.
    • In this case the person will then have to lodge an internal appeal against the ministers decision to refuse the application.
    • Once the internal appeal procedure has been exhausted, the applicant would then only be entitled to approach a court to review the administrative action.

This process is a far cry away from that an internal appeal process should achieve; a quick and cost effective method to resolve irregularities before instituting legal action.

I would submit that the term “administrative decision” in terms of the MPRDA has a narrower definition than “administrative action” under PAJA, and that this term should not be interpreted to include situations where there has been a failure to take a decision, but only to include situations where a decision has indeed been taken which is prejudicial.

The Alternative: Reliance on Exceptional Circumstances to Bypass an Internal Appeal Process

Even if the above argument is rejected, PAJA allows a person to bypass any applicable internal appeal process if there are exceptional circumstances that would allow the court to exempt the non-compliance with the internal appeal procedure (section 7(2)(c)).

It would be prudent for any person who wants to bring a court action without first lodging an internal appeal to ask the court to grant an exemption from having to lodge in internal appeal, as an alternative to the argument that there is no internal appeal.

The “exceptional circumstances” that are typically accepted by the courts when granting an exemption from complying with internal appeal procedures are discussed in the next section.

Appropriate Legal Action and Possible Relief

If the minister ignores an application that has been submitted and does not consider it at all, an affected person will be able to approach the court in terms of PAJA directly without first exhausting the internal appeal procedure because the internal appeal procedure will not be applicable in these circumstances. As an alternative, an affected person can ask the court for an exemption from the internal appeal process if there are exceptional circumstances that are applicable.

An affected person can approach the court as soon as there has been an unreasonable delay in taking a decision (sections 6(2)(g) and 6(3)(a) of PAJA). It is possible to ask the court to grant any order that it just and equitable (section 8(2) of PAJA), including an order:

  • substituting or varying an administrative action (section 8(1)(c)(ii)(aa));
  • directing the taking of a decision (section 8(2)(a)); or
  • declaring the rights of the affected person (section 8(2)(b). (It might be noted that the legal action listed has relief in terms of both sections 8(1) and 8(2) of PAJA, even though the failure to take an administrative action falls in the ambit of section 8(2). I submit that the wording of section 8(2), permitting the grant of any order that is just and equitable, would not preclude the court from substituting its decision where the minister has failed to act. See the discussion by C Hoexter (Hoexter, C. 2012. Administrative Law in South Africa. Cape Town: Juta, at pg. 557) for further argument in support of this submission).

There has been a lot of recent discussion about the legal doctrine of the separation of powers; how the courts (judiciary) should not overstep its role and perform acts that fall into the realm that should be occupied ministers (the executive). PAJA does, however, directly empower the court to come to the aid of a person when the executive acts unlawfully, and allows the court to effectively make a decision on behalf of the minister when the minister fails to take a decision in a reasonable time (see sections 8(1)(c)(ii)(aa) and 8(2)(a) of PAJA; de Ville, JR. 2003. Judicial Review of Administrative Action in South Africa. Durban: LexisNexis Butterworths, at pg. 370; Hoexter, C. 2012. Administrative Law in South Africa. Cape Town: Juta, at pg. 552).

There are four situations where a court will be prepared to substitute its decision with the decision of the minister, without referring the matter back to the minister for decision. These are:

  • when the end result is a forgone conclusion;
  • when any further delay will cause unjustifiable prejudice;
  • when the original decision maker has exhibited bias or incompetence; or
  • where the court is as well qualified as the original authority to make the decision (Hoexter, 2012, pgs. 552 – 557).

For many applications the MPRDA doesn’t allow the minister to use any discretion when considering the application. The power granted to the minister is not a discretionary power; the minister must grant consent if the requirements for transfer are complied with. If the requirements are met the result is a forgone conclusion; the minister must grant the application.

Applications where the minister is compelled to grant a compliant application include applications for consent to transfer a right (section 11(2)), applications for prospecting rights (section 17(1)) and applications for mining rights (section 23(1)).

For these categories of applications it can be argued that, (i) the court is as qualified as the minister to make the decision, and (ii) that the end result of the application is a foregone conclusion. Once the court has had the opportunity to review and consider the application that was submitted, the court will be as well qualified as the minister to determine if the application placed before it meets the objective criteria the applicable section, and grant the application if all the requirements are met.

In addition to meeting these two requirements for substitution of a decision by the court, a person may also be able to advance reasons to show the court that further delay will cause unjustifiable prejudice.

Based on these considerations I submit that a person would be entitled to approach a court for direct relief and ask the court to substitute its decision with the minister’s decision.

Conclusion (Too Long; Didn’t Read)

What should be done if an application has been submitted to the Department of Mineral Resources, and the department has failed to take any action or consider the application?

  • If time is not of the essence in the underlying commercial transaction, a court application can be brought asking for an order to force the department to perform its duty. The matter would then be referred back to the department for consideration within a court specified time line.
  • If time is of the essence, a person can approach a court for direct relief and ask the court to grant the application, effectively substituting its decision with the minister’s decision. In order to be successful it must be argued that:
    • the MPRDA’s internal appeal process does not apply to situations where the minister fails to take a decision, alternatively that there are exceptional circumstances that would allow the court to exempt the non-compliance with the internal appeal procedure; and
    • the end result is a forgone conclusion; or
    • when any further delay will cause unjustifiable prejudice; or
    • when the original decision maker has exhibited bias or incompetence; or
    • where the court is as well qualified as the original authority to make the decision.

This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.