An assessment of the impact of 'free-carry', on mining policy, regulations and the institutional framework for acquisition : a case study of South Africa

Abstract

South Africa is amongst many jurisdictions that hold the state as the custodian of all minerals and natural resources on behalf of its citizens. Even so, this does not automatically reduce levels of poverty, unemployment or fairly increase the country’s GDP. States can take alternative measures to increase economic growth apart from being mere custodians of natural resources. Because of the history of undeveloped countries; most of them do not have full control and ownership of their natural resources. However, a few of these countries rely on the principle of resource nationalism defined as other means of exercising control over natural resources for the benefit of its citizens. This has also brought about concerns and criticism relating to the level of ownership and control of natural resources by governments. Often in many countries; ownership of resources has been largely abused by government officials, more especially in the acquisition of those resources. Cases of maladministration, corruption and incompetence has hampered the effective application of polices and regulations in a country. This further creates uneasiness in monitoring and evaluating of government policies. Policies and legislations follow certain influences prior to their promulgation. These influences may include imbalances that a country aims to correct. However, correcting these injustices does not mean merely imposing vague policies or concepts that may not achieve the government’s goals. More so, policies are further ineffective if they do not follow the universally accepted ideologies of best practice. South Africa and other countries like the DRC and Guinea are examples of countries that need to ascertain certain features in their mining codes like the ‘Free- carry’ concept for better understanding of all stakeholders. The study will evaluate the contextual and literal meaning of the free carry concept and its impact on the legislative and institutional frameworks in a county. This study also analyses the effectiveness of imposing a Free-carry on mining companies who operate as private equities in South African and other jurisdictions. The study further formulates recommendations after evaluation of the concept as to whether it supports or contravenes the notion of business continuity. The evaluation of the concept will further align with the UN Sustainable Developmental Goals as to whether it promotes growth in local communities, protect human labour, and boost investor confidence in the mining industry.