Sibanye Stillwater Ltd

The B-BBEE Act establishes a national policy on broad-based black economic empowerment with the objective of increasing the

participation of black people in the economy. The B-BBEE Act provides for various measures to promote B-BBEE, including empowering the

Minister of Trade, Industry and Competition to issue the Codes of Good Practice for Broad-based Black Economic Empowerment (B-BBEE

Codes), with which organs of state and public entities and parties interacting with them or obtaining rights and licences from them would be

required to comply. The B-BBEE Act and the B-BBEE Codes do not require the DMPR to apply the B-BBEE Codes when determining the

qualification criteria for the issuing of mining rights, nor do they require that the DMPR apply the B-BBEE Codes as a requirement for the

retention of existing mining rights. The B-BBEE Codes will nevertheless apply to mining companies if they wish to be scored for the purpose of

contracting with state institutions. B-BBEE also has a cascading effect, even where a particular company does not interact with the South

African government or the public sector. In order to score highly on the procurement element of the scorecard, companies need to ensure

that as many of their service providers as possible also score highly on the scorecard and will, therefore, give preference to service providers

who have good B-BBEE credentials. Whilst compliance with the B-BBEE Codes is more often a commercial imperative as opposed to a legal

one, a public company listed on the JSE must annually submit a compliance report (in terms of section 13G(2) of the B-BBEE Act) to the B-

BBEE Commission in the prescribed form.

In 2014, the B-BBEE Amendment Act, 2013 (B-BBEE Amendment Act) was brought into operation. Under the B-BBEE Amendment Act, the B-

BBEE Act overrides the provisions of any other law in South Africa that conflict with the B-BBEE Act, provided any such conflicting laws were in

force immediately prior to the effective date of the B-BBEE Amendment Act. This provision came into effect on 24 October 2015 and, on 27

October 2015, the Minister for Trade, Industry and Competition published a government gazette notice declaring an exemption in favour of

the DMPR from applying the requirements contained in section 10(1) of the B-BBEE Act for a period of 12 months. The exemption can be

read as confirmation that the Department of Trade, Industry and Competition sees the B-BBEE Codes as “applicable” to the Mining Industry

after the exemption was lifted on 27 October 2016.

This raises the question of whether the B-BBEE Act and the B-BBEE Codes may overrule the Mining Charter (which for the purposes of

comparison with the B-BBEE Act, would include later iterations of the Mining Charter) in the future. There is no clarity on this point at this

stage. The revised Broad-Based Black Economic Empowerment Codes of Good Practice (the Revised BEE Codes) became effective on 1

May 2015. Both the B-BBEE Amendment Act and the Revised BEE Codes expressly stipulate that where an economic sector in South Africa

has a sector code in place for B-BBEE purposes, companies in that sector must comply with the Sector Code. For purposes of the B-BBEE Act,

the Mining Charter (as amended) is not a Sector Code. It is not clear at this stage how the Mining Charter and Revised BEE Codes relate to

each other. On 17 February 2016, the Minister of Trade, Industry and Competition published a gazette notice which repealed and confirmed

the validity of a number of Sector Codes. The omission of the Mining Charter from the notice can be interpreted as confirmation that the

Mining Charter is not contemplated as a Sector Code. This supports the interpretation that the B-BBEE Act was not intended to trump the

Mining Charter. While it is not clear how this will be interpreted, it appears that the B-BBEE Act and the B-BBEE Codes will not overrule the

Mining Charter in the future. However, this remains undetermined in law and may be resolved through either government clarification or

judicial intervention.