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Part B: Mineral Rights - Part B-3: Large Scale Exploitation - 26. Large Scale Exploitation Licensing | 26.3 Large Scale: Licence Refusal Appeal Process

Many African mining laws lack specific provisions on the appeal of refusals to grant large scale exploitation licences. Therefore any appeals of such decisions can only be taken under the provisions of the country’s general administrative law and/or judicial law. Such laws may not take into account, however, whether the mining law grants an exploration licence holder who has complied with specific requirements an enforceable “right” to the grant of an exploitation licence, for example, or the extent to which the exploration licence holder has spent years and millions of dollars on exploration studies, planning for mine development planning and social obligations to the host community. Given the high risk nature of minerals exploration and the length, scope and cost of exploration activities needed in order to satisfy the requirements for obtaining a large scale exploitation licence (as detailed in the preceding subsection), international best practice would include provisions in the mining law that specify the rights and procedures for appeals of administrative decisions that refuse to issue requested

The provisions on the licence refusal appeal process would include some form of the following administrative and judicial components:

    1) The requirement that a refusal to grant a licence be issued in writing, delivered to the applicant within a specified time frame, specifying the reasons for the refusal;

    2) An opportunity for the applicant to respond to the decision within a specified period, presenting arguments why the licence application requirements were met, in writing and/or in person, and requesting reconsideration;

    3)The issuance of a final decision on reconsideration by the decisional authority in writing explaining its reasons, delivered to the applicant within a specified time frame, possibly subject to one limited extension of time;

    4) An opportunity for an appeal in writing by the applicant to a higher administrative authority or to an independent review board within a specified period;

    5) The issuance of the decision on appeal by that administrative authority or board within a specified timeframe, possibly subject to one limited extension;

    6) If the independent review board option is implemented, that may be the final, non-appealable decision (as an arbitration award would be);

    7) If the administrative appeal is to a higher administrative authority, then the right of the applicant to appeal an unfavourable decision of the administrative appellate authority to one or more specified levels of judicial authority would normally be provided;

    8) Preservation of the status quo pending the outcome of the appeal process, including automatic extension of the term of the applicant’s exploration licence during the appeal process, with the exploration licence terminating either upon the delivery of the large scale exploitation licence in the case of a successful appeal or after a reasonable interval such as 60 or 90 days following the issuance of the final, non-appealable decision affirming the administrative decision to refuse the licence (in order to allow for closure of the exploration site).

Factors to be considered in designing the process for appeals of a refusal to grant a large scale exploitation licence include:

  • Whether the applicant has the right to obtain the exploitation licence under the mining law, provided the applicant complies with the specified requirements, or whether the applicant has only the exclusive or priority right to apply for the exploitation licence, and the administration retains the discretion to grant the licence or not based on a variety of factors;
  • Whether the applicant has invested substantially in exploration and development planning based on a reasonable expectation of obtaining the large scale exploitation licence;
  • Whether there is a clause in the mining law or in an agreement signed with the applicant pursuant to the mining law that stabilizes the law, regulations and interpretations for a specified time period, in reliance upon which the applicant made a significant investment; and whether the law or agreement provides for resolution of any dispute as to the grant of a large scale exploitation licence by arbitration or some other alternative dispute resolution mechanism;
  • The freezing of development work on the identified deposit during the appeal process (which suggests the need for timeframes to assure an efficient appeal process);
  • The standard that the Regulatory Authority is held to in justifying its decisions;
  • Whether the country has sufficient activity in the mining industry and related disputes to necessitate and justify the existence of an independent review board or a court specialized in mining-related appeals and disputes;
  • Whether the refusal to grant the licence is due to a decision by a different authority, such as the Environmental regulatory authority, to deny an environmental permit or approval that is a prerequisite for the exploitation licence (in which case a provision for the suspension of the decision of the mining regulatory authority during an appeal of the decision of the other regulatory authority would be necessary); and
  • The extent to which general administrative and judicial appellate procedures are adequate or need adjustment in order to accommodate the need for appellate procedures with respect to refusals to grant large scale exploitation licences.

The elements of best practice and factors to be considered in regard to appeals of a refusal to grant a large scale exploitation licence are important in establishing the accountability of the regulatory authority and the governance of the licensing process by law. This is an aspect of mining law that is generally in need of greater attention in the mining laws of African countries.

26.3. Example 1:

Article [_]: Notice of decision on application for large-scale mining licence

(1) The [Regulating Authority] shall cause the applicant to be notified of, the decision on the application and–

(a)if the application is granted, of the details of the proposed large-scale mining licence; or

(b) if the application is refused, of the detailed reasons for such refusal.

(2) With the exception of subsection (2) of section [_] (on appeals of a refusal to grant an artisanal mining licence) any decision or order of the [Regulating Authority] under this [Act][Code][Law] may be reviewed upon the application of any affected party to the [Judicial Reviewer] which shall hear and determine the issue de novo but such application must be made within sixty calendar days of the date of such decision or order.

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision requires the Regulating Authority to provide to the applicant the detailed reasons for a decision refusing to grant a large scale mining licence and affords the applicant an appeal to the High Court within 60 days after the decision. The High Court is to determine the issue “de novo” – i.e., the Court is not limited to reviewing the reasonableness of the Regulating Authority’s decision. The appeal procedure provides the applicant with a second chance to win the licence.

26.3. Example 2:

Article [_]

(1) Should the granting of an operating licence application be refused, reasons are to be given in writing and said refusal is subject to the right to appeal as provided for in the provisions of Articles [_] and [_] (on arbitration appeal) of the present [Code][Act][Law].

(2) An operating licence may be refused only if:

a)the feasibility study has been rejected;

b)the applicant lacks sufficient financial ability;

c)the EIA has been rejected in a final decision, in accordance with the below provisions.

(3) A feasibility study may only be rejected for the following reasons:

a)it does not comply with the directive from [the Regulatory Authority] specifying its content in accordance with generally recognised international practices;

b)the study contains manifest errors;

c)it does not comply with the EIA.

(4) Proof of the applicant's financial ability may only be rejected for one of the following reasons:

a)the financing plan does not comply with the feasibility study;

b)there is clearly insufficient proof of the likely availability of the financing which is to be obtained from the sources identified by the applicant.

(5) Proof of financial ability may not be rejected if, in the case of external funding, the applicant has produced proof from the financial sources which were identified, demonstrating the feasibility of the financing within the parameters considered by the applicant, and, in the case of internal financing, the financial statements of the person or company certified by a Chartered Accountant or a Public Accountant recognised by the courts, demonstrating their self-financing ability.

Article [_]

(1) Subject to the provisions relating to appeals to a higher administrative authority and appeal proceedings, penalties and punishments provided for by the present [Code][Act][Law], disputes which may result from the interpretation or application of the provisions of the present [Code][Act][Law], may be settled through arbitration as provided for in the present Article.

(2) Disputes resulting from the interpretation or application of the provisions of the present [Code][Act][Law], shall be the subject of arbitration according to the procedure provided for in the provisions of Articles [_] to [_] of the [Code of Civil Procedure].

(3) Notwithstanding the provisions of paragraph (2) of the present Article, disputes which may arise during the interpretation or application of the provisions of the present [Code][Act][Law] may, at either party's request, be resolved through arbitration in accordance with [the Convention on the Settlement of Investment Disputes between States and Nationals of Other States], provided that the holder is a national of another contracting State under the terms of Article [_] of said Convention.

(4) When the mining or quarrying title is issued, the holder is to consent to such arbitration in accordance with said convention and is to state this both on their own behalf and on behalf of their affiliates. In addition, they shall accept that such an affiliate shall be considered a national of another contracting State.

(5) Holders who are not nationals of another contracting State may submit disputes which arise during the interpretation or application of the provisions of the present [Code][Act][Law] to any arbitration tribunal of their choosing, but they must notify the State of the names, contact details and rules of practice for the arbitration tribunal, on the day on which the mining title is issued, to the Ministry of Mines.

Article [_]

(1) In accordance with the above Article, arbitration shall take place in French, at the place agreed on by the State and the holder.

(2) For the purposes of arbitration, the arbitration authority shall refer to the provisions of the present [Code][Act][Law], the laws of [Country] and its own rules of procedure.

(3) Decisions made by the arbitrator shall be enforceable and an application regarding enforcing said decisions may be brought before any court with jurisdiction in the National Territory according to the procedures provided for in the [Code of Civil Procedure] or in the holder's country.

(4) Should the provisions of the above paragraph be applied, the State shall waive any immunity relating to jurisdiction or enforcement.

Annotation

Drawn from the mining law of the DRC (2002), these provisions provide a robust right to appeal a decision of refusal to grant an exploitation licence, which refusal must be justified in writing. The provisions set standards for the refusal to grant a licence and circumscribes the regulatory authority’s discretion by specifying the grounds on which the licence can be refused, and explicitly limiting those grounds with respect to the three main elements of an application for an exploitation licence: the feasibility study, the financial capacity of the applicant and the environmental impact study

The provision of the DRC mining law specifically authorizes appeals of decisions refusing to grant an exploitation licence by internal or international arbitration – in the latter case, pursuant to the ICSID rules for eligible investors, or under the ICSID additional facility for ineligible international investors (from non-ICSID member countries).

With respect to arbitration, the DRC mining law provides that the law to be applied is DRC law, that the arbitral award will be enforceable in the DRC, and that the State renounces sovereign immunity as to both jurisdiction and execution. The renunciation as to execution of arbitral awards is perhaps overly broad in the current context, since most countries permit the enforcement of international arbitration awards against the commercial assets of sovereigns and their parastatal entities, regardless.

Ghana’s mining law (2006) takes a similar approach, but these DRC provisions appear to be the most specific and robust safeguards, among African mining laws, of the rights of exploration licence holders to a decision on their applications for an exploitation licence based on clear standards set forth in the mining law.