Environmental Impact Assessments as the Mining and Environmental Litigation Flashpoint

By Shamiso Mutisi

Case Note: Shangani Holistic (Pvt) Ltd v Pearline Mineral Exploration (Pvt) Ltd HC 4074/22

The facts

 On June 30, 2022, High Court Judge Musithu J, granted an interim interdict that prohibited Pearline Mineral Exploration from conducting an aeromagnetic survey over Shangani Ranch in Insiza District before carrying out an Environmental Impact Assessment (EIA). The Ranch covers an extra-ordinary 65 000 hectares. Pearline had contracted  Duration Gold (Private) Limited to conduct the survey and prospecting.  The case- Shangani Holistic (Pvt) Ltd v Pearline Mineral Exploration (Pvt) Ltd (HC 4074/22) has great legal, economic, and environmental implications. The land is said to be owned by the Oppenheimer family-owners of De Beers-the diamond magnet.

But first the facts. Shangani Ranch conducts ranching operations on the land in question. It is involved in cattle ranching with a herd of 8 000 cattle, wildlife conservation, Safari hunting and acts as an elephant sanctuary and home to White-backed Vultures and White-Headed Vultures, which are considered to be critically endangered species. It exports beef products to the United Kingdom and employs 400 employees mostly drawn from the local community.

Pearline had carried out an aerial survey using a low-flying aeroplane over land on which it had been granted an Exclusive Prospecting Order (EPO) without carrying out an EIA. Pearline was prospecting for a large suite of minerals including gold, silver, copper, antimony, lead, cobalt, manganese, zinc, nickel, chrome, graphite, and lithium. The list sounds rich, and would obviously interest any mining company. The problem is, that this was being done without a prior environmental impact assessment having been conducted as required by the law. Shangani Ranch had never been approached by the mining company in connection with the exploration works. Perturbed by the developments and the threats to its farming operations, the land owner rushed to court for an interdict.  So the case revolves around non-compliance with EIA requirements by a mineral exploration company-a major problem and headache for many landowners and communities in Zimbabwe.

The Court decision

In its decision, the court indicated that the grant of an Exclusive Prospecting Order does not exempt the prospector from first obtaining an EIA from the Environmental Management Authority. As a result the court issued an interdict against Pearline from conducting any mineral prospecting or mineral mining activities whatsoever on the Ranch without an EIA issued by the Environmental Management Agency in accordance with the Environmental Management Act [Chapter 20:27]. The Judge declared unlawful Pearline’s conduct of prospecting without an EIA and ordered Pearline to permanently cease all mineral prospecting or mineral mining activities on the Shangani Ranch.

Case implications: legal, environmental, and economic

From a procedural law perspective the case is good in three main respects as it throws out of the window, technicalities often used by lawyers and judges who have reduced the courts to a technicalities battleground thereby destroying opportunities for creating good precedence and jurisprudence in the environmental law field. The main technicalities that were unsuccessfully raised by Pearline were (a) urgency (b) jurisdiction (c) alternative remedy.

On the issue of jurisdiction, Pearline had argued that the High Court has no jurisdiction to deal with the matter. It argued that the case should have been brought before the Administrative Court. However, the court held that the Administrative Court does not enjoy powers to grant interdicts such as the one sought by Shangani Holistic. The court stated that while the Mines and Minerals Act provides for a referral of disputes to the Administrative Court, the Act does not delineate the kind of relief that court can grant, save for that which the law accords it. Lack of jurisdiction has often been raised in similar environmental cases and upheld by the courts.

On the question of urgency, Pearline had argued that the court should not entertain or hear the application on an urgent basis because the case was not urgent. It argued that Shangani Holistic delayed bringing the case to court from the time its employees saw the survey aeroplane to the time the case was filed. The aeroplane was observed on the 2^nd of June 2022 and application was filed on the 20^th of June 2022. However, the Judge disagreed with the argument. He said the facts and circumstances of the case, shows that Shangani did not sit on its laurels and there was no inordinate delay in filing the case given the time it sought legal advice and took other necessary steps before approaching the court.

Most importantly, the judge indicated that the mere fact that the aerial survey had been completed did not take away the urgency of the matter.  This has implications for future cases. In terms of the law, urgent applications are meant to provide interim relief to parties who fear that any delay in dealing with a matter might jeopardise their interests or rights. This is a provisional relief that can be granted by a court. Many environmental cases filed by communities revolve around interdicts filed on an urgent basis seeking to stop mining companies from causing irreparable damage to the environment or community rights. Many lawyers have always relied on the argument of non-urgency as a way to kill off environmental cases. In Zimbabwe the judiciary has also used this technicality to dismiss cases based on submissions by lawyers without going into the merits. This has been a feature in cases brought by communities against mining companies.[2] Therefore, the position by the High Court may provide a good precedent for similar environmental cases.

Notably, the Judge was able to discuss the law governing EIAs in Zimbabwe. This is the first major judicial statement on EIAs. Section 97 of the EMA Act requires project proponents to undertake an EIA before commencement of exploration or mining projects. It requires an EIA to be conducted before prospecting, mining and quarrying.

From court submissions, it appears Pearline wanted to obtain an EIA after the aerial survey/prospecting. It argued that an EIA certificate was to be obtained when physical mineral prospecting activities were to be commenced. The Judge said that it is unlawful for one to carry out mineral prospecting without complying with the law even if one obtained an EPO under the Mines and Minerals Act. They are not exempt  from complying with s 97(1) of the EMA Act.

This means the company wrongly believed that an EIA can only be obtained when a company is doing physical prospecting activities which may involve drilling or other works on the ground. This case means mining companies need to closely pay attention to the law on the point at which they have to apply for an EIA. It is precisely before any exploration or prospecting work commences whether it involves physical work like drilling or aeroplane surveys. The statement by the Judge should be closely looked at by mining companies as an indication of how the judiciary is likely to look at future cases brought on an urgent basis for interdicts. Mining companies should make efforts to comply with environmental legislation as they invest in the mining sector. Failure to comply may delay projects or affect their projects leading to financial loss. The case is a flashpoint on litigating environmental rights and mining rights.

Pearline had also argued that Shangani should have approached the Environmental Management Agency to obtain an order to stop prospecting activities as an alternative remedy in terms of Section 97(3) Environmental Management Act. However, the Judge would have none of this argument. He remarked as follows “…victims of the illegal exploration may not fold their arms, and wait for the Agency to issue the order referred to in the EMA Act. A party in the position of the applicant with all the massive investments at stake, would not choose to remain nonchalant while its rights were being trampled upon. Further I do not read the law to be implying that an aggrieved party cannot approach the courts for urgent relief to protect their interests…”  This statement gives any aggrieved persons the comfort that the courts are ready to hear environmental cases. It encourages environmental litigation, including public interest litigation.

On the merits, the judge considered that an interim interdict is an extraordinary remedy, the granting of which is at the discretion of the court. An applicant must show that the right which he seeks to protect is prima facie established, that there is a well-grounded apprehension of irreparable harm to the applicant if the interim relief is not granted, the balance of convenience favours granting the interim relief, and that the applicant has no other satisfactory remedy. In this case, the judge was satisfied that the applicant established a prima facie case by showing that the respondent unlawfully conducted an aerial survey for minerals and that mineral exploration has the potential to cause harm to the environment and to livestock, and wildlife and will significantly affect the applicant’s business interests.

There is clearly a reasonable apprehension of harm if the project proceeds without due regard to the law. There is no other alternative remedy to protect the interests of Shangani.

However,  one may have to contend with the effects of an interim order. In law an interim order is temporary. The relief that Shangani obtained is temporary. It simply stops prospecting pending confirmation of the order. The case may not end soon. The judge said I do not perceive any prejudice against the respondent if its desire is to procure the EIA certificate before carrying out any exploration at some point.

While the judgment provides interim relief to Shangani Holistics, it has great potential to shape how the courts in Zimbabwe will treat future environmental cases. It is good for promoting environmental justice in similar cases. The case is one of the first major statements by the court in pronouncing itself on EIAs. It is likely to be followed by other EIA-related cases. In the past, the High Court has been dismissing environmental cases on technicalities. The court did not hesitate to grant an interdict to stop exploration activities in a biodiversity-rich area based on non-compliance with EIA requirements as was the case in the Hwange Case of Chima and ZELA V Zhongxin Mining Group in which a mining company was granted coal mining rights in Hwange National Park without following proper EIA procedures.

The case also shines some light on the increasing number of disputes likely to emerge as Zimbabwe pursues the US$12 billion mining economy and Zimbabwe is open for business mantra. Property rights questions and land ownership will arise. It appears EIAs are one of the limitations on the exercise of those rights. Arguably, the case also shows that contrary to popular belief in the mining sector, mining does not trump or supersede other lands uses. Farmer-miner conflicts will arise. Coupled with the EIA provisions in the EMA Act, Section 32 of the Mines and Minerals Act is going to be crucial in future environmental cases as it deals with disputes between landowners and prospectors. Without a fully functional and legislated mining cadastre system such disputes will increase. It may easily end up being the most litigated section in the mining sector.

The case also raises economic issues. It briefly reveals the protections offered to domestic investors with investment licences in terms of Section 22 of the Zimbabwe Investment and Development Act. It appears Shangani holds an Investment Licence from ZIDA to build an abattoir at the Ranch given its significant contribution to the country’s economy according to the Judge. The ZIDA Act is very clear on protections for such investments and these include fair and equitable treatment, equal access to the law, guarantees against expropriation and non-discrimination. Any expropriation has to be for a public purpose and should include payment of prompt, adequate, and effective compensation. These protections are equally available to mining companies and protections can, at least theoretically be guaranteed through application for applications for investment licences for special economic zones in terms of Section 32 of ZIDA Act.

The Judgment is also important in the elusive quest for sustainable development. Environmental considerations have often been sacrificed on the altar of economic expediency as mining companies and Government accord priority to implementation of economic projects without regard for environmental considerations. This, notwithstanding that the law is clear on the need to consider the environmental impacts of projects before any project is implemented. One wonders why the mining authorities do not insist that prospecting companies first conduct EIAs before any works are done. Why is EMA in some cases not provided with all EPOs granted to enable it to monitor compliance with environmental laws?

The profile of parties in this case may also be another factor to consider. As could be seen from the decision, the court marveled at the level of investment by Shangani when the Judge stated that “…A party in the position of the applicant with all the massive investments at stake, would not choose to remain nonchalant while its rights were being trampled upon...” Based on previous cases on EIAs’ that were easily dismissed by the High court, one may conclude that the courts are ready to protect the rights of big players—and businesses. The situation might have been different if it was a public interest case to protect the rights of communal farmers who do not have title over land. These differences are important to consider.

Lastly, the case may also help mining companies navigate and comply with the legal requirements in the Environmental Management Act, the Constitution, the Mines and Minerals Act and most importantly the Zimbabwe Investment and Development Act (ZIDA). The ZIDA Act sets out the responsibilities of investors in Section 21 which include an obligation to preserve the environment and to respect the national heritage, traditions, and customs of Zimbabwe. Mining companies should therefore adopt responsible sourcing standards by applying Environmental Social and Governance (ESG) standards. The Minister of Mines has in recent months encouraged companies to adopt Responsible Mining Standards. Government should also adopt a Responsible Mining Initiative. These lessons abound in the judgment by the court.