Training

The States Role as Public TrusteeAn examination of the content of the states position as custodian over the mineral resources of South Africa

IntroductionThe Mineral and Petroleum Resources Development Act (MPRDA) came into force on 1 May 2004.This act had the effect of drastically altering the common law position regarding mineral and petroleum rights.

Old OrderGoverned by private lawOwnership of unsevered minerals vested in land owner.Right to prospect and mine was part and parcel of land ownership

MPRDASection 3(1):Mineral and petroleum resources are the common heritage of all the people of South Africa and the State is the custodian thereof for the benefit of all South Africans.

Content of the States Roles as Custodian over Mineral Resources?Relevance?

Specific FocusComparisonFiduciary Duties owed by:trustees to trust beneficiaries in the administration of trust property Fiduciary duties owed by:the stateto the people of SA in the administration of the mineral resources of the country.

Part OneThe General Fiduciary Duty of TrusteesThe Duty of Care

Duty to manage and administer the trust property in a prudent manner, as a reasonable person would. Trustee must exercise more care in administering the trust than he would in dealing with his own property.

The Duty of ImpartialityTwo components: a duty to avoid a conflict of interest between the personal interests of the trustee and his official obligations anda duty to treat all trust beneficiaries impartially.

The Duty of IndependenceTrustees must exercise rigorous and independent judgment when performing their duties as trustees. Thus a trustee may not simply act under the orders of the trust founder.

The Duty of AccountabilityThe trustee is obliged to provide regular accounts regarding the administration of the trust, to the trust beneficiaries.

Duties are context dependentDuties under the MPRDAEnvironmental Management PlanAim: ensure development of Mineral Resources in and orderly and ecologically sustainable way, while ensuring the advancement of social and economic development.Optimal Mining of Mineral ResourcesMinister is empowered to direct that the holder of mineral rights take corrective measures if not mining optimally and to cancel/suspend such rights if holder does not comply.

TransformationProvision made by the MPRDA to empower previously disadvantaged communities and persons, by giving them preferential treatment in the application for mineral rights, provided certain criteria are met.

Structure of MPRDAAnalogous System of DutiesPart Two: Problems regarding comparisonMain Issue: System of Co-operative Government TensionPotential tension between decisions made at national level that may impact upon provincial or local governments exclusive areas of competence.

Swartland Municipality v Hugo Wiehahn Louw N.O and others 2009 13703/09 (C) BibliographyBadenhorst and Mostert Mineral and Petroleum Law of South Africa (2004) Lexis Nexis Butterworths.Badenhorst, Pienaar and Mostert The Law of Property 5ed. (2006) Lexis Nexis Butterworths.Cameron, De Waal, Wunsh Honores South African Law of Trusts 5ed (2002) Juta.Du Toit South African Trust Law: Principles and Practice (2002) Lexis Nexis Butterworths.Du Toit The Fiduciary Office of Trustee and the Protection of Contingent Trust Beneficiaries Stell LR (2007) vol 3 469.Swartland Municipality v Hugo Wiehahn Louw N.O and others 2009 13703/09 (C)