REPORTABLE
Case no : 133 /
IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
In the matter between :
THE DIRECTOR :  MINERAL DEVELOPMENT,
GAUTENG REGION                                                                            FIRST APPELLANT
SASOL MINING (PTY) LTD                                                            SECOND APPELLANT
SAVE THE VAAL ENVIRONMENT                                                 FIRST RESPONDENT
RONSAND RANCH (PTY) LTD                                                   SECOND RESPONDENT
GIOVANNI ALBERTO MARIO RAVAZZOTTI                         THIRD RESPONDENT
SUSAN SELLSCHOP
F O U R T H
RESPONDENT
LYNNE DALE GREEN

FIFTH RESPONDENT
Composition of the court    :

MAHOMED CJ, HOWIE, MARAIS,
OLIVIER JJA AND MADLANGA AJA
Date of hearing                    :             18 FEBRUARY 1999
Date of delivery                   :                12 MARCH 1999
Environmental rights  - audi alteram partem - sec 9 of the Minerals Act, 50 of
1991  - Sec 30 (1) of the Companies Act, 61 of 1973
JUDGMENT

OLIVIER JA
[1] This is an appeal against a judgment of CASSIM AJ in an opposed
application in the High Court of South Africa, Witwatersrand Local Division, leave
to appeal having been granted by the court a quo.  The appeal raises the question
whether interested parties, wishing to oppose an application by the holder of mineral
rights for a mining licence in terms of sec 9 of the Minerals Act 50 of 1991 (‘the
Act’), are entitled to raise environmental objections and be heard by the first
appellant, who is the official designated to grant or refuse such licence (‘the
Director’).   In the present case, the Director, taking the view that consideration of
such objections would be premature at that stage, refused the respondents a hearing.
He was successfully taken on review.  The appeal is aimed at reversing the outcome
of that review.
[2] The second appellant (‘Sasol Mining’) is the holder of extensive mineral
rights, including those in respect of an area comprising three farms in the Sasolburg
district.  The farms front on the Vaal River.
[3] During May 1996 Sasol Mining was in urgent need of extending its coal
mining activities to the area in question. It was established that the only feasible

manner of mining for coal in that area was by open-cast mining.  The envisaged
mining site is in the north-west part of the area and very close to the southern bank
of the Vaal River.  Sasol Mining then applied to the Director for a mining licence in
terms of sec 9 of the Act.
[4] The first  respondent (‘Save’) is an unincorporated association.  Its members
are concerned people who own property and live along the Vaal River.   Its object,
according to its written constitution, is to assist its members to protect and maintain
the environmental integrity of the Vaal River and its environs for current and future
generations with specific focus on the area between the Letaba Weir and the Barrage
- i.e. precisely the area in the immediate vicinity of the proposed open- cast mine.
The other respondents are either members of Save or property owners in the affected
area. All the respondents are united in their opposition to the development and
exploitation of the coal reserves by open-cast mining in the area under discussion.
Their concerns are primarily of an environmental nature.
[5] In July 1996, while Sasol Mining’s application was still under consideration
by the Director, Save’s attorney, Mr Barnard, raised the contention that Save is
entitled to be heard in opposing the said application.  Towards the end of February
1997 and again in March 1997, the Director informed Barnard that he was not

obliged to hear Save at that stage and that he was not prepared to do so. On 22 May
1997 the Director issued a mining licence to Sasol Mining in respect of the
envisaged open-cast mine.
[6] The environmental concerns raised by the respondents can be summarised
as follows :
(a)
The destruction of the Rietspruit wetland.
This wetland occurs inter alia in the area under discussion.  It covers
approximately one thousand hectares.  The wetland in its present state
annually filters and purifies naturally in excess of two million cubic metres of
improved quality water into the Vaal Barrage.  This large volume of water
makes a valuable contribution to water quality in the Vaal Barrage.  It is
alleged that the wetland will be at least partially destroyed by the envisaged
open-cast mining.  It is further alleged that the eventual replacement of the
overburden after the mine has been worked out would not restore the wetland
because the upper layer of hydric soil will have been replaced by
undifferentiated soils without water storage capabilities.  The affected
wetland will thus be permanently destroyed.  Furthermore, removal of the
overburden  -  to reach the coal seams  -  will result in natural seepage water
making contact with iron pyrites in the exposed coal seams. This will create

weak sulphuric acid solutions and leaching of acid water into the Vaal
Barrage is likely.
(b)
The threat to fauna and flora.
The proposed mining area supports some two hundred and fifty-four
bird species and some forty-four endemic species of mammals.  In addition,
some thirty-three species of reptiles and amphibians are likely to occur in the
area. Some fifteen plant taxa occurring in the area, including the provincial
flower, are listed in the Free State’s Protected Plants Ordinance.
Furthermore, various red data plants (i.e. plants endangered by or threatened
with extinction) have been identified.
(c)
Pollution.
The predicted constant noise, light, dust and water pollution resulting from
the proposed strip mine will totally destroy the “sense of place” of the
wetland and the associated Cloudy Creek.  Thus the spiritual, aesthetic and
therapeutic qualities associated with this area will also be eliminated.
(d)
Loss of water quality.
The Vaal Barrage is the only water body of reasonable quality and free of
bilharzia serving the recreational needs of the Gauteng metropolitan populace.
A substantial infrastructure to support diversified nature-related recreational
activities has been developed in the Vaal River area.  The predicted

environmental degradation leading to reduced water quality and aesthetic
values resulting from the envisaged twenty years of open-cast mining on the
banks of the Vaal Barrage would be likely to destroy a major portion of such
activities with a concomitant destruction of small business enterprises and
loss of job opportunities.
(e)
Decreased value of properties.
There are indications, so it was finally alleged, that mere rumours of the
commencement of open-cast mining in the area under discussion have already
adversely affected property values and the investor.   Concerns are expressed
that the operation of the proposed open-cast mine will have a permanent
negative effect on the property market in the vicinity, with a serious
diminution of property values.
Save’s legality
[7] The last mentioned concern raised by Save, i.e. the possible diminution of
property values caused by the said mining, gave rise to a point in limine being
advanced by Sasol Mining.  It is that Save, which has more than 20 members and
is not registered as a company, is an illegal association.   Reliance was placed on sec
30 (1) of the Companies Act,  61 of 1973.  It reads :

“No company, association, syndicate or partnership consisting
of more than twenty persons shall be permitted or formed in the
Republic for the purpose of carrying on any business that has for
its object the acquisition of gain by the company, association,
syndicate or partnership, or by the individual members thereof,
unless it is registered as a company under this Act, or is formed
in pursuance of some other law or was before the thirty-first day
of May, 1962, formed in pursuance of Letters Patent or Royal
Charter.”
The critical question is whether Save,  in the words of sec 30 (1), exists for
the purpose of  “... carrying on any business that has for its object the acquisition of
gain ...”  by the association or its members as individuals.
[8] The prohibition contained in sec 30 (1) should be kept within its proper
bounds.  The underlying purpose of the prohibition in our country, as in England, is
to prevent  mischief arising from trading undertakings being carried out by large
fluctuating bodies so that persons dealing with them do not know with whom they
are contracting (see Smith v Anderson (1880) 15 Ch D 247 (CA) at 273;  Mitchell’s
Plain Town Centre Merchants Association  v  McLeod 1996 (4) SA 159 (A) at 169
I - 170 B).  On the facts before us it cannot be said that Save was trading or carrying
on a business with the object of the acquisition of gain.  Consequently, the objection
cannot be upheld.
The audi alteram partem rule (‘audi - rule’) in the present case.

[9] The respondents, contending that the rule should have been applied by the
Director, argued as follows:
(a)
The rule comes into operation whenever a statute empowers a public
official or body to do an act or give a decision prejudicially affecting a person
in his or her liberty or property or existing rights or interests, or whenever
such a person has a legitimate expectation of a hearing, unless the statute
expressly or by necessary implication indicates the contrary, or unless there
are exceptional circumstances which would justify a court in not giving effect
to it (see Du Preez and Another v Truth and Reconciliation Commission
1997 (3) SA 204 (A) at 231 C - F).
(b)
The primary substantive rights or interests on which the respondents
rely (and which according to them would be affected prejudicially by an
adverse decision of the Director) are the constitutional rights to the
environment (see sec 24 of the 1996 Constitution).
(c)
The audi - rule is neither expressly nor by necessary implication
excluded by the Act, nor are there any considerations of public policy
militating against the application of the rule.
[10]     The appellants contend that in the present case  the rule is excluded by

necessary implication.  Their arguments can be summarised as follows.  I shall at the
same time state my views in respect of each contention.
Exclusion by virtue of the provisions of sec 9 of the Act.
[11] It was argued that sec 9 is peremptory.  It provides that the Director
shall issue the mining authorisation if he is satisfied :
“(a)
with the manner in which and scale on which the applicant
intends to mine the mineral concerned optimally under such
mining authorization;
(b)
with the manner in which such applicant intends to
rehabilitate disturbances of the surface which may be
caused by his mining operations;
(c)
that such applicant has the ability and can make the necessary
provision to mine such mineral optimally and to rehabilitate such
disturbances of the surface; and
(d)
that the mineral concerned in respect of which a mining permit is
to be issued  -

(i)
occurs in limited quantities in or on the land or in tailings, as the
case may be, comprising the subject of the application;  or
(ii)
will be mined on a limited scale;  and
(iii)
will be mined on a temporary basis; or
(e)
that there are reasonable grounds to believe that the mineral

concerned in respect of which a mining licence is to be issued  -

(i)
occurs in more than limited quantities in or on the land or in tailings,
as the case may be, comprising the subject of the application; or
(ii)
will be mined on a larger than limited scale; and
(iii)
will be mined for a longer period than two years.”
[12] Counsel for the Director conceded that the audi - rule does apply to
paragraphs (a) to (e) of sec 9 (3), but then strictly within the ambit of these
paragraphs, which state requirements that he termed “jurisdictional facts”.  These
paragraphs, so he argued, amount to a numerus clausus, exhaustively defining and
limiting the discretionary power of the Director and excluding by necessary
implication the application of the audi - rule when the objection sought to be raised
is based solely upon environmental concerns.
[13] It is clear, however, that on a proper construction of paragraphs (a) to (e) of
sec 9 (3), at least some of the matters therein referred to involve environmental
issues.  For example, paragraph (b) requires an enquiry into the manner in which an
applicant intends to rehabilitate disturbances to the surfaces which may be caused
by the mining operations.  This provision requires the Director to enquire into the
nature and extent of the terrain which would be violated by the relevant mining
operations, the effect of such violation and how the terrain could and should be
rehabilitated.  In casu, he would have to take into account the alleged likelihood of
damage to the Rietspruit wetland and the question if, and to what extent, the wetland

could be rehabilitated.   These are environmental matters about which the
respondents have legitimate concerns.  The Director would therefore have to give
them an opportunity to be heard at that stage unless there are other provisions of the
Act which require them to defer raising their environmental concerns until some
other time.  Appellants submitted that such is indeed the case.  I will consider this
argument at a later stage.
[14] Counsel for Sasol Mining, on the other hand, was not prepared to concede
that the audi -rule applies to paragraphs (a) to (e) of sec 9 (3) at all.  Instead he
contended that the fact that the legislature enumerated the so-called “jurisdictional
facts” in sec 9 (3) (which, in counsel’s submission, do not include the consideration
of environmental matters), indicates, by necessary implication, a total exclusion of
the audi - rule.
[15]   The  argument is, in my view, fallacious.  We must ask ourselves : are we to
infer that it was the intention of parliament to exclude a fundamental principle such
as the audi - rule merely because the section under discussion has enumerated
certain factors which the Director must take into account in exercising his
discretion?  If that were the case the audi - rule would be excluded in virtually every
instance where some factors which an official has to take into account are

enumerated.  Such an approach would emasculate the principles of natural justice.
No rights are violated by a decision in terms of sec 9.
[16] The next argument advanced by the appellants runs like this  :
The mere issuing of a mining licence by the Director in terms of sec 9 of the Act can
have no tangible, physical effect on the environment.  For this reason no rights are
infringed and there is no case for a hearing.  Only when the environmental
management programme has been approved in accordance with sec 39 can mining
commence; and only then is there the possibility that rights may be infringed, and
only then is there a case for a hearing.  In the present matter the Director has not
approved an environmental management programme in terms of sec 39, and so, it
is argued by the appellants, the respondents have no right infringed or in jeopardy,
and have consequently no claim to a hearing.

[17] The argument cannot be sustained.  The issue of a licence in terms of
sec 9 enables the holder to proceed with the preparation of an environmental
management programme, which, if approved, will enable him to commence mining
operations.  Without the sec 9 licence he cannot seek such approval.  The granting
of the sec 9 licence opens the door to the licensee and sets in motion a chain of
events which can, and in the ordinary course of events might well, lead to the

commencement of  mining operations.  It is settled law that a mere preliminary
decision can have serious consequences in particular cases, inter alia where it lays
“ ... the necessary foundation for a possible decision ...” which may have grave
results.  In such a case the audi-rule applies to the consideration of the preliminary
decision (see Van Wyk N O v Van der Merwe 1957 (1) SA 181 (A) at 188 B - 189
A.).   In my view this is such a case.
The audi - rule should only be applied at the sec 39 stage.
[18] It was also argued on behalf of the appellants that because the audi-
rule would in any case be applied at the sec 39 stage, there was no need for the
application of the rule at the sec 9 stage.  In fact, so it was argued, to apply the rule
at both stages would amount to an unnecessary and costly duplication.
[19] This argument confuses the different objects of sec 9 and sec 39.  At
the sec 9 stage the basic issue is whether a mining licence should be granted or not;
at the sec 39 stage what is under consideration is the environmental management
programme. What is more, the granting of a sec 9 licence enables the holder to apply
to the Director to be exempted from the obligation to submit an environmental
management programme (see sec 39 (2) (a)).   It also enables the Director to grant
temporary authorisation for mining to commence, pending the approval of an

environmental management programme (sec 39 (4)).  Whether or not the Director
would have to afford an objector a hearing before doing either is unnecessary to
decide.  What matters is that, at the very least, the granting of a licence in terms of
sec 9 empowers the holder to make such applications and thereby subject an
objector to potential jeopardy in those respects.  It follows that a hearing in terms
of sec 39  may not address the appellants’ basic objection  to the manner of mining,
and may never take place or only take place after mining has already commenced.
[20] In the result, I am of the view that the audi-rule applies when application for
a mining licence is made to the Director in terms of sec 9 of the Act.  Such a hearing
need not necessarily be a formal one, but interested parties should at least be notified
of the application and be given an opportunity to raise their objections in writing.
If necessary, a more formal procedure can then be initiated.  Nothing in sec 9 or in
the rest of the Act either expressly or by necessary implication excludes the
application of the rule, and there are no considerations of public policy militating
against its application.  On the contrary, the application of the rule is indicated by
virtue of the enormous damage mining can do to the environment and ecological
systems.  What has to be ensured when application is made for the issuing of a
mining licence is that development which meets present needs will take place
without compromising the ability of future generations to meet their own needs (the

criterion proposed in the Brundtland Report : World Commission on Environment
and Development, Our Common Future, Oxford University Press 1987).  Our
Constitution, by including environmental rights as fundamental, justiciable human
rights, by necessary implication requires that environmental considerations be
accorded appropriate recognition and respect  in the administrative processes in our
country.   Together with the change in the ideological climate must also come a
change in our legal and administrative approach to environmental concerns.
In the result, the appeal is dismissed with costs, including the costs of two
counsel.
____________________
P.J.J. OLIVIER JA
CONCURRING :
Mahomed CJ
Howie JA
Marais JA
Madlanga AJA
Case Number : 133 / 98

RE :  THE DIRECTOR : MINERAL DEVELOPMENT, GAUTENG
REGION and SASOL MINING (PTY) LTD  v  SAVE THE VAAL
ENVIRONMENT, RONSAND RANCH (PTY) LTD, GIOVANNI
ALBERTO MARIO RAVAZZOTTI, SUSAN SELLSCHOP and
LYNNE DALE GREEN
Court a quo :
Cassim AJ
Counsel for Appellants :
1st Appellant  :
S.J. Grobler

L.G.F. Putter
2nd Appellant  :
G.L. Grobler SC

G.J. Marcus SC

L.T. Bekker
Instructed by :
1st Appellant
:
The State Attorney

JOHANNESBURG
2nd Appellant  :
Deneys Reitz
JOHANNESBURG
Correspondents :
1st Appellant
:
The State Attorney
BLOEMFONTEIN
2nd Appellant :
Webbers
BLOEMFONTEIN
Counsel for Respondent :
J.R. Gautshi SC
P.A. Meyer
Instructed by :
M o o d i e  a n d
Robertson
BRAAMFONTEIN
Correspondents :
Claude Reid Incorporated
BLOEMFONTEIN
Reportable  :
YES