ADL2601 Exam Pack.

THE OCTOBER/NOVEMBER 2012 EXAMINATION PAPER African Silver (Pty) Ltd is an established mining company that has successfully operated its business in the South African mining industry over the last five decades under the previous mining regime. South Africa is the world’s biggest producer of platinum and African Silver (Pty) Ltd was the leading company extracting platinum in the Bushveld complex, the main platinum producing area in South Africa. African Silver (Pty) Ltd, as the leading company specializing in extracting and refining this metal, has spent years and millions of rands in order to improve its mining operations, specifically with relation to the extraction and refinement of platinum. In October 2002, the Minerals and Petroleum Resources Development Act 28 of 2002 (MPRDA) came into operation, which makes provision for equitable access to and sustainable development of the nation’s mineral and petroleum resources. In terms of the MPRDA, African Silver (Pty) Ltd’s limited real right to mine automatically ceased to exist on the date the Act came into operation. In consequence, African Silver (Pty) Ltd had to apply for “new order” mining rights to carry on with its business. On 16 January 2003, African Silver (Pty) Ltd applied for mining rights in the Bushveld complex. The application was summarily turned down by the Department of Minerals and Energy without giving any reasons to African Silver (Pty) Ltd. In the interim, mining rights pertaining to the Bushveld complex were granted to African Golden (Pty) Ltd. The official who turned down African Silver (Pty) Ltd’s application is a shareholder in African Golden (Pty) Ltd. QUESTION 1 1.1 Identify the organs of state in the given set of facts. Explain your answers with reference to the constitutional definition of organ of state. (6) In terms of section 239 of the Constitution, the following are organs of state: The Department of Minerals and Energy (any department of state or administration in the national, provincial or local sphere of government) The official who made the decision in the Department of Minerals and Energy (any other functionary or institution (ii) exercising a public power or performing a public function in terms of any legislation) 1.2 Is administrative action in evidence in the set of facts? In your answer, you should give a full definition of the concept “administrative action” with reference to the provisions of the Promotion of Administrative Justice Act (PAJA) 3 of 2000. (13) Section 1 of PAJA defines "administrative action” as any decision taken, or any failure to take a decision, by - (a) an organ of state, when- (i) exercising a power in terms of the Constitution or a provincial constitution; or (ii) exercising a public power or performing a public function in terms of any lOMoARcPSD| ADL2601 Exam Pack. legislation; or (b) a natural or juristic person, other than an organ of state, when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has a direct, external legal effect. There are exceptions to the definition. These exceptions are, however, not applicable to the given set of facts. The decision to turn down African Silver (Pty) Ltd amounts to administrative action because it complies with the definition in that it involves a decision by an organ of state (the official, the appointed person in the Department of Minerals and Energy) exercising a public power or performing a public function in terms of any legislation which has adversely affected the rights of a person (African Silver (Pty) Ltd)) and which appears to have had a direct external legal effect. 1.3 Do the following actions constitute administrative action? Explain your answers. (i) The enactment of the MPRDA (2) No, it is excluded by section 1(b)(dd) of PAJA. (ii) The decision of the Department of Minerals and Energy to grant African Golden (Pty) Ltd the mineral rights. (2) Yes, it has a direct negative external legal effect (on African Silver) and it was made by an organ of state. (iii) The request for reasons by African Silver (Pty) Ltd (2) No, the request for reasons is not a decision made by an organ of state QUESTION 2 2.1 What is the basis of administrative legality? (3) • A principle used by the courts to determine whether administrative action was not authorised by law only but also performed in accordance with the prescripts laid down by the law. • The public administration must serve and promote the public interest, protect and respect fundamental/human rights. 2.2 Explain the principle of legality in the constitutional framework. (3) • The Constitution is the supreme law of the country and is elevated above all state legislation. Section 2 of the Constitution provides that any law or conduct that is not in line with the Constitution may be declared invalid by the court. lOMoARcPSD| • Fedsure Life Assurance LTD v Greater Johannesburg 1999 (1) SA 374 (CC): the executive “may exercise no power and perform no function beyond that conferred upon them by law.” • Section 8 of the Constitution provides that the Bill of Rights binds the executive authority – state administration in all spheres of government – and all organs of state. This means that organs of state and individuals exercising public power are bound by the law and not elevated above it. 2.3 In order to determine whether African Silver (Pty) Ltd’s right to reasonable administrative action was infringed, explain the Constitutional Court’s interpretation of the right to reasonable administrative action. In your answer, you should apply the Court’s interpretation to the given set of facts and refer to the relevant case law and provisions in PAJA. • PAJA gives effect to the right to reasonable administrative action by giving an individual the capacity under section 6(1) “to institute proceedings in a court or a tribunal for the judicial review of an administrative action” on the ground that: • “the exercise of the power or the performance of the function authorised by the empowering provision, in pursuance of which the administrative action was purportedly taken, is so unreasonable that no reasonable person could have exercised the power or performed the function” (section 6(2)(h)) • The Constitutional Court gave meaning to the content of sec 6(2)(h) in the case of Bato Star Fishing (Pty) Ltd v Minister of Environment Affairs 2004 4 SA 490. • O’Regan J emphasised the importance of reading section 6(2)(h) in line with the wording of section 33(1) of the Constitution. • According to O’Regan J, the subsection must be construed consistently with the Constitution and in particular with section 33 which requires a simple test, namely that an administrative decision will be reviewable if it is one that a reasonable decision-maker could not reach. (also referred to in the study guide as the “simple” test) • What constitutes a reasonable decision will depend on the circumstances of each case as it is context-based. • O’Regan J proceeded to enumerate the following factors relevant to determining whether a decision is reasonable: • the nature of the decision • the identity and expertise of the decision-maker • the range of factors relevant to the decision • the reasons given for the decision • the nature of the competing interests involved • the impact of the decision on the lives and well-being of those affected