Diamond Mining And Aboriginal Rights: The Case Of Alexkor

“Impoverished South African tribesmen were awarded a lucrative diamond mine stolen from their forefathers,” reads a newspaper headline. “The Nama tribe won back land including the Alexkor mine at Alexander Bay and the right to be compensated for diamonds mined since the first gems were found on the beach in 1925.” Perusing these lines, I find it quite astonishing that there are so many diamond mining or exploration operations which are either in courts or in arbitration to secure or defend legitimate mining title. We have seen this in Angola, in Russia, in Southern Africa and elsewhere. Companies which may have spent tens or hundreds of millions on exploration are suddenly denied the rights to mine the deposits they discovered.  Sometimes, the company loses the rights simply because the mining laws were deficient or the political regime changed.

Though each situation is quite different, there are certain international “trends” distinguishable and one of these is the rather complex “aboriginal title”. Whether in Canada, Australia or Southern Africa, previous disadvantaged population groups are demanding what they view as their natural rights to ground and to the resources therein contained. These claims affect both future mines as well as mines which may have been operating for many decades. Journalistic coverage of these trials tends to be quite sensational, sympathetic to the “underdog”, often clouding the real issues involved.

This week a judgment was rendered affecting the state-owned Alexkor mine in South Africa. Some of the newspaper headings obscure the legal issues involved – and we see no valid reason to fear the continuity of Alexkor’s operations. In the Alexkor case, the role played by the state (and ANC party) is rather precarious.  The ANC's land-reform laws allow for land and compensation to be given to indigenous South Africans who lost out because of discriminatory apartheid laws. But Alexkor is state owned – so in this instance the state would be the party paying the damages. That is something the state didn’t want to do, so it rejected the tribal claims on the not-so-solid grounds that the Nama tribesmen were "so uncivilized" that they could not have property rights over the land. The Nama community accused the ANC of racism – and after a five years court battle, the tribesmen won back the diamond-rich land that was confiscated more than 70 years ago by a white-run South African government. The descendants of the original tribesmen have now been awarded mineral rights held by the state mining company, Alexkor Ltd.

How much money could the community possibly expect or what do they hope to get beyond compensation? Some figures floating around are in the $1.5 billion range – but it must be understood that no figure was set by any court at this stage. The area is still rich in diamonds and certainly ways would have to be explored on how the 3,000 people of the Richtersveld community will receive benefits in the future. There is little doubt that these impoverished people will become rich from the Constitutional Court ruling – but not yet. They not only must negotiate how much the government will pay them for future mining; the lawyers are also planning to seek compensation for more than 70 years of diamond mining.

In the court case, Alexkor and the government argued unsuccessfully that the Richtersveld community lost its rights to the land in 1847, when Great Britain annexed the area as part of what was then the Cape Colony. If the court had agreed with that claim, it would have made it impossible for the Richtersveld people to reclaim their land under the Restitution of Land Rights Act, which applies to land that was taken after 1913, when land ownership began to be regulated along racial lines.

Initially, the Land Claims Court had agreed with Alexkor and turned down the Richtersveld community's application. But the appeals court overturned that decision, and the Constitutional Court ruled that the community retained the right to its land under indigenous law, despite the British annexation. The Court said the Richtersveld people were removed from their land under racist laws and practices, and are therefore entitled to get it back. The court also ordered Alexkor to pay the community's legal bills.

South African Law professor Theunis Roux, said in a radio interview that the Richtersveld people's victory could pave the way for other communities to reclaim their ancestral lands. "Other communities who were dispossessed before the cutoff date for restitution in 1913 will be encouraged by this decision. After all, restitution is about returning people as far as possible to the position they would have been in had the dispossession not occurred," he said.

How does this affect the diamond production from the area? According to Peter Williams, Alexkor’s company secretary and legal advisor, the judgement does not affect Alexkor’s current mining operations.  Business will continue as normal until this case is finally resolved. The judgement does not affect employees and contractors who are currently employed or operational at Alexkor.

It is important to recognize, says Williams, that the judgement does not give the Richtersveld Community the right to the land which is currently registered in Alexkor’s name, but merely a claim to it.  In order to understand this statement, one must understand the agreement that was previously entered into between the litigants, as well as the provisions of the Restitution of Land Rights Act. 

At the commencement of this dispute a few years ago, the parties (namely the Richtersveld Community, Alexkor and the Government) agreed to separate the trial into two phases, namely a rights phase and a remedy phase. The parties agreed that the court should first determine whether the claimants had any right in the subject land and, if so, the second phase would involve a determination of an appropriate remedy.

Williams stresses that “the Constitutional Court has merely determined the first issue and confirmed that the claimants have a legitimate claim to the subject land and the minerals. This means that (in terms of the agreement reached with the judge in the Land Claims Court (LCC)) the parties must go back to the LCC for the second phase so that the LCC can decide on an appropriate remedy.  In terms of the Restitution of Land Rights Act, the remedy (restitution) can take one of three forms, namely (1) restoration (returning the land to the community), (2) compensation or (3) alternative state land.

Alexkor’s Board operates on the understanding that compensation is normally provided in lieu of restoration and the courts do not normally provide both compensation as well as restoration, but normally only one of the two. Williams acknowledges that an approximately $1.5 billion (10 billion rand) was mentioned in the Constitutional Court, although no one could explain to the judges how this amount had been calculated. In any case, this is an issue that will have to be decided in the “second phase”, i.e. in future proceedings before the Land Claims Court.

We understand that the judgment is just the beginning of a few more years of court proceedings. Williams reminds us that “the summons in this case was issued in 1998 and the first phase has only been concluded nearly 5 years later.  The second phase can also result in a protracted legal battle if the parties adopt a confrontational approach and a further legal battle of two years is not unlikely. Alexkor’s Board of Directors feels strongly that an adversarial approach should be avoided by the parties at all costs and it will use its best endeavours to ensure that a protracted legal battle is avoided as far as is reasonably possible.”

Negotiations between the parties have taken place in the past and will resume in all earnestness.  Alexkor’s Board of Directors is hopeful that a negotiated settlement will be reached, so that the parties do not have to engage in a costly and time-consuming trial. The board of Alexkor says it “knows of no precedent anywhere in this country where a party was ordered to pay loss of income or past losses in a restitution case.  It was stated in the press that the court will be requested to calculate past losses since 1928 in order to derive at a compensation amount. In our view, this approach is not in line with the restitution process that has unfolded in our country thus far and the Restitution of Land Rights Act stipulates the factors that a court must take into account when making an award.”

The government has issued a tender to privatise the Alexkor mine and there are a number of parties that hope to assume ownership. Selling the mine might generate the cash needed by the government to pay the compensation to the 3,000 tribesmen. As none of the parties involved, including the tribesmen, have an interest in jeopardizing the amazing recovery process taking place at the mine (after it faced some losses in the past), both production and exploration are expected to continue as usual. In a political regime that is determined to gain at least 26% black economic empowerment in all its mines, the Alexkor episode underscores the complexity of dealing with the painful issues of a very distant past. As one observer notes, “this case is unique for several reasons. The Richtersveld people's claim to their land is more ancient than most in southern Africa. They are descended from the original inhabitants of the region, whereas most land claimants descend from peoples who migrated into southern Africa from other parts of the continent much more recently.”

Will the South African case impact policies in other countries, even in Africa? We don’t know. Aboriginal policies and claims have a “life of their own”. Activists, politicians and academicians often “export” these policies, and we see, for example, a considerable involvement of Australian aboriginal experts in Canada. When the Argyle mine was developed, aboriginal rights weren’t as entrenched yet in Australia’s politics. If that deposit would have been discovered today, I doubt that it would ever become an operating mine. Maybe these politics are like a pendulum – moving into both directions, depending on the mood and politics of the time. As I said before, each situation is different. What they all have in common, however, is that aboriginal or native communities have a different sense of time and of urgency. Intuitively they know – their time will come. Always. And the Nama saga in South Africa is just confirming this once more.