Section 156 of the Mining Act 1992 creates an unusual procedure: a private agreement that is not valid unless a public official has first seen the draft.
Section 156(1) and (2) — the agreement, and the validity rule
(1) The amount of compensation payable by the holder of a tenement to the landholders in respect of the land to be entered upon for exploration or mining may be determined by agreement — a “compensation agreement”.
(2) A compensation agreement shall not be valid unless the provisions of this section have been complied with.
An agreement that does not follow the section 156 procedure is not valid. It does not satisfy section 155(a), so it does not permit entry for mining; and it does not attract the binding effect of section 159.
The protection is deliberate. Compensation is often negotiated between a well-advised company and landholders without independent advice. Section 156 puts the Chief Warden into the process before anyone signs.
Section 156(3) to (6) — the four steps
| Step | What happens |
|---|---|
| 1 — s 156(3) | Once the terms have been agreed, and before the agreement has been executed, the holder shall submit a copy of the proposed agreement to the Chief Warden |
| 2 — s 156(4) | Within 14 days of receipt, the Chief Warden shall give written notice to the parties that (a) he is prepared to recommend registration once executed; or (b) he requests the parties to consider certain amendments specified in the notice |
| 3 — s 156(5) | The parties shall consider any request for amendments, but are not obliged to accept them |
| 4 — s 156(6) | Where those steps have been complied with, the parties may then execute the agreement and submit it to the Registrar, who shall register it |
The duty is on the holder. Section 156(3) puts the obligation to submit the draft on the holder of the tenement, not on the landholders.
The Chief Warden’s notice goes to the parties — both of them. So landholders see what the Chief Warden thinks of the draft, including any amendments he suggests.
The parties are not bound to accept the amendments (s 156(5)). The Chief Warden reviews; he does not impose. But his suggestions are on the record, and a landholder who is being pressed to sign an agreement the Chief Warden proposed to amend has a strong reason to pause.
Ask whether the draft has been to the Chief Warden, and ask to see his section 156(4) written notice. Until that has happened, an executed agreement is not valid.
Take the draft away, read it, and get advice on it before signing — from the Public Solicitor, or a firm from the law firms directory. Advice for the landholders should be arranged and paid for by the landholders, not by the company across the table.
What the agreement must cover
Section 155(a) requires an agreement as to the amount, times and mode of compensation. Building it properly means working through the section 154 heads:
- Deprivation of possession or use of the natural surface — area, and for how long.
- Damage to the natural surface.
- Severance of land from other land held by the landholder.
- Loss or restriction of a right of way, easement or other right.
- Loss of, or damage to, improvements — itemised and valued.
- Loss of earnings from land under cultivation — evidenced by receipts and volumes.
- Disruption of agricultural activities.
- Social disruption — the head most often under-claimed.
- Economic trees, by reference to the values published by the Valuer-General (s 154(3)).
- Neighbouring and nearby land injured or depreciated in value (s 154(6)).
- Foreseen future loss — section 154(1) covers loss “suffered or foreseen to be suffered”.
Under section 154(4) no compensation is payable, and no claim lies, in consideration of permitting entry, for the value of any mineral, or by reference to any rent, royalty or other amount assessed in respect of mining — other than as provided in the Mining (Royalties) Act 1992.
And under section 154(5), a person who pays or agrees to pay such compensation is guilty of an offence: a fine up to K10,000.00 or imprisonment for up to five years, or both. An agreement containing such a term exposes both sides.
Section 159 — the effect of a registered agreement
Subject to appeal under section 158, the provisions of a compensation agreement duly registered under section 156 shall be:
(c) a condition of the tenement, the breach of which may be grounds for cancellation of the tenement; and
(d) binding as a contract on both the holder and the landholders.
That is why registration matters. A registered agreement is enforceable in two ways at once: as a contract, and as a tenement condition whose breach can trigger a show-cause notice under section 142 and cancellation by the Minister.
Unpaid compensation also affects extension — under section 28(1)(b) the Council must be satisfied, on the Chief Warden’s advice, that compensation has been paid — and is deducted from the security on surrender, cancellation or expiry (ss 139(2), 143(2), 144(2)).
If agreement cannot be reached
Either side may ask a Warden to determine the amount under section 157 — and that right belongs to landholders claiming an entitlement, including claimants to disputed land. Where a Land Disputes Settlement Act dispute makes agreement impracticable, section 160 requires determination under section 157 and payment into a statutory trust until the dispute is resolved.
A landholder is never obliged to agree. Section 155 means that until compensation is agreed and registered, or determined and paid or tendered, there is no entry for mining.
Sources
- Mining Act 1992 — ss 28, 139, 142–144, 154–160
- Land Disputes Settlement Act (Chapter 45)
- Constitution — ss 41, 53, 59
Before relying on anything here, read the current text of the Mining Act 1992 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.