More breathing room - NEMA financial provision regulations, 2015

​On 22 April 2021, the Minister of Forestry, Fisheries and the Environment, published notice of her intention to again amend the transitional arrangements contained in the NEMA Financial Provisioning Regulations, 2015 ("FP Regs"), for the third time.

The FP Regs were published on 20 November 2015 and created a provision which is applicable to holders of prospecting or mining rights who applied for such rights before 20 November 2015, regardless of when the right was obtained. The effect of this provision was that the holder of such rights must currently comply with the FP Regs no later than 19 June 2021. Until finally transitioned, such holders are regarded as having complied with the provisions of the FP Regs if the holder continues to comply with the old Mineral and Petroleum Resources Development Act, 2002 system of calculating and annually assessing its financial provisioning for rehabilitation and closure.

The proposed amendment seeks to further extend the transition date for compliance to 19 June 2022.

This further delay in terms of the transition to the FP Regs was inevitable because:

  • we know that the FP Regs are to be repealed and replaced by a new set of financial provisioning regulations:

    • the first draft set of replacement regulations was published on 10 November 2017 under GN R1228;
    • the second draft of the replacement regulations was published on 17 May 2019 under GN R667; and
    • the Department have indicated that a third draft of the replacement regulations is being prepared, which we expect will again be issued for public comment before the final replacement regulations are Gazetted;

  • the replacement financial provisioning regulations cannot be made final until National Environmental Management Laws Amendment Bill IV ("NEMLAA 4") has been gazetted into law.  NEMLAA 4 plays a crucial part in this puzzle as it proposes a range of changes to the NEMA, which changes must be made final before the final set of replacement regulations can be published.

Members of the public are invited to submit comments on the proposed amendment of the FP Regs transition date by 22 May 2021.

We suspect that the mining industry will not be jumping to oppose the amendment, as the further extension of the deadline will be a welcomed relief for many.


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Webber Wentzel > News > More breathing room - NEMA financial provision regulations, 2015
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