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High stakes

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High stakes

26th August 2011

By: Terence Creamer
Creamer Media Editor

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Judge Raymond Zondo of the North Gauteng High Court made it painfully clear last week that he was all too aware of the stakes, as he began considering the oral and written arguments presented to him as part of a review of the Department of Mineral Resources’ (DMR’s) decision to grant Imperial Crown Trading 289 (ICT) a prospecting right over 21.4% of the Sishen iron-ore mine, in the Northern Cape.

In reserving judgement after four days of intensive hearings, Judge Zondo warned that it was likely to take him some time to deliver a determination on what he somewhat euphemistically described as a “complex matter”.

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But, it was not only the judge who was made aware of the gravity of the case.

All those who attended the four-day hearing in courtroom 2D, officially designated a ‘Motion and Divorce Court’, gained material insight into the financial stakes, which run into the billions of rand. Equally, all left with an unmistakable impression that the credibility of administrative justice in South Africa, as well as the justice system itself, could hinge on the outcome of the review, as well as any possible further legal interventions.

The importance of the case was placed beyond doubt by the fact that Judge Zondo’s courtroom brimmed to overflowing with high-priced legal heavyweights, who had been appointed to represent both the applicants and the respondents.

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In fact, Sishen Iron Ore Company, whose application triggered the review, employed no less that six counsel, briefed by respected attorneys – the other participants also employed the services of top-class attorneys, who all briefed a handful of Silks and other counsel apiece.

The case is primarily one about the execution of State power and about whether such administration was subverted by DMR and ICT. Therefore, it goes to the very heart of what many South Africans are becoming increasingly concerned about: that those with State power are willing to exercise such power in a way that is supportive of the narrow interests of a political elite and their associates in the private sector.

Unhappily, it will probably not come as a huge surprise if the integrity of administrative justice, as applied by DMR in this case, is found wanting. But given the size of the financial rewards it is likely to raise yet more alarm bells for foreign and domestic mining investors, many of whom are already feeling less than optimistic about future prospects, not least because of the ongoing and reckless nationalisation rhetoric.

That said, if the courts emerge as a reliable safeguard against such behaviour, some confidence might be restored in the rule of law, rather than rule of interests, in South Africa.

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