Getting a compensation figure fixed is one thing; getting it paid is another. The Mining Act 1992 and the Environment Act 2000 between them give a landholder four levers that do not depend on suing anyone.
First — get the amount established
Every one of these levers depends on the compensation being established. That means either:
a compensation agreement that has gone to the Chief Warden under section 156(3), been executed after his section 156(4) notice, and been registered by the Registrar; or
a Warden’s determination under section 157, recorded in writing with a copy given to each party.
An informal understanding, however clearly remembered, is not enough — and under section 156(2) an agreement that has not followed the section is not valid.
Lever one — it is a condition of the tenement
Subject to appeal under section 158, the provisions of a registered compensation agreement or a Warden’s determination shall be:
(c) a condition of the tenement to which it relates, the breach of which may be grounds for the cancellation of the tenement; and
(d) binding as a contract on both the holder and the landholders.
So non-payment is a breach of a tenement condition. Under section 142(1)(b) the Managing Director may, by written notice, require the holder to show cause why the tenement should not be cancelled; and where the holder fails to show cause, in the Minister’s opinion after a Council recommendation, the Minister may cancel it.
Write to the Managing Director and the Chief Warden, enclosing the registered agreement or the determination, setting out what is owed and since when, and asking that a section 142 show-cause notice be issued. Copy the Registrar.
Lever two — it blocks extension
The Minister shall extend an exploration licence where the Council advises that the holder has (a) complied with the conditions, (b) paid compensation as required by this Act, and (c) submitted an acceptable programme.
And in considering whether compensation has been paid, the Council shall rely on the advice of the Chief Warden.
An exploration licence comes up for extension every two years. The Council must be told that compensation has been paid, and it takes that from the Chief Warden.
So: tell the Chief Warden, in writing, that it has not been. And lodge an objection under section 107 — which applies to an extension as well as a grant — before the date the Registrar fixes.
Lever three — it comes out of the security
On surrender, cancellation or expiry, the Registrar shall, after deducting from the security any fee, rent, royalty, compensation, penalty or other money payable, and the Authority’s costs of ensuring that any other liabilities are met, remit the balance, if any to the former holder.
The security must be lodged within 30 days of notification of grant, in a form the Managing Director approves — a bank guarantee, insurance company bond or cash deposit (s 150). So there is a fund, and compensation is expressly among the first deductions from it.
Notify the Registrar in writing of the outstanding amount, with the registered agreement or determination attached, before a surrender is registered or the tenement expires. Under section 139(1) the Registrar must also satisfy himself, before registering a surrender, that the holder has complied with the conditions relating to cessation of operations, restoration of the land and surrender.
Lever four — the environment permit
The Director of Environment may serve a show-cause notice where, on application by a person entitled to compensation under section 87, he is satisfied that the permit holder has not paid compensation as agreed or determined under that section — and may then suspend or cancel the permit.
Section 87 of the Environment Act is a distinct compensation regime, payable by the permit holder to owners, occupiers and any person with customary rights, in relation to their several interests. It covers heads the Mining Act does not name expressly — including rights to water customarily associated with the land and damage to flora and fauna — and reaches land adjoining or in the vicinity that is damaged or depreciated in value.
Where it is unpaid, the person entitled may apply to the Director, and the permit itself is at risk. Under section 87(9) the Director may also require security for payment before operations commence or continue.
And operating a level 2 or 3 activity while the permit is suspended or cancelled carries up to K250,000 for a corporation under section 73(1).
And the offence of paying the wrong thing
Alongside these, remember section 154(4) and (5): no compensation is payable in consideration of permitting entry, for the value of minerals, or by reference to rent or royalty — and paying or agreeing to pay it is an offence carrying up to K10,000 or five years’ imprisonment.
A landholder who is offered a side payment to accept less than the determined amount, or to allow entry before compensation is settled, should refuse it and record the offer.
In order
- Get the amount fixed — registered agreement, or Warden’s determination.
- Demand payment in writing, itemised, with a date.
- Write to the Chief Warden, so the Council is told at the next extension.
- Write to the Managing Director asking for a section 142 show-cause notice.
- Write to the Registrar so the amount is deducted from the security if the tenement ends.
- Object under section 107 to any extension application.
- Apply to the Director of Environment under section 72(2)(f) if section 87 compensation is also unpaid.
- Sue if necessary — section 159(d) makes it binding as a contract, and section 158 allows an appeal to the National Court on the amount.
- Get advice — the Public Solicitor, or a firm from the law firms directory.
Sources
- Mining Act 1992 — ss 28, 107, 139, 142–144, 150, 154–160
- Environment Act 2000 — ss 72, 73, 87
- Land Disputes Settlement Act (Chapter 45)
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.