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Why SLP Non-Compliance Carries More Legal Risk Than Most Holders Assume

Most mining right holders I work with believe the worst-case scenario for SLP non-compliance is a Departmental letter, perhaps a follow-up notice, and a slow grind toward eventual remediation. The mine carries on operating. The fines, if any, are theoretical.

This is not what the Act says.

Executive summary

  • The MPRDA provides for criminal prosecution as well as administrative enforcement for SLP non-compliance. The most serious offences carry fines of up to R500 000 and imprisonment of up to ten years. Lesser offences carry their own penalty categories.
  • Six categories of conduct create SLP-related criminal exposure: not implementing the approved SLP, not submitting the annual section 28(2)(c) report, submitting false or misleading information, ignoring a section 93 order, failing to notify the Minister under section 52 when profitability falls below 6%, and breaching any material condition of the mining right.
  • Section 52 is the sleeper provision. It imposes a live notification duty on the holder where the profit-to-revenue ratio of the operation falls below 6% on average for any continuous twelve-month period, or where downscaling will result in job losses of 10% of the workforce or 500 employees, whichever is less. Most loss-making mines have triggered this duty without realising it, and every additional year without notification compounds the exposure.
  • Personal exposure for directors and responsible employees is possible where false or misleading information is involved.
  • The bigger practical risk, in most cases, is not the criminal fine — it is section 47: the Minister’s power to suspend or cancel the mining right itself. That is what closes the mine.
  • The Department has historically chosen administrative escalation over criminal prosecution. This is a policy choice on the Department’s part, not a feature of the Act. Recent developments — the 2018 Charter, the 2020 amendment regulations, and the 2025 Draft Mineral Resources Development Bill — suggest the posture is hardening.
  • Two remediation routes remain open while the right is still live: section 93(2) (to uplift or set aside an order on good cause shown) and section 102 (to amend an approved SLP through a motivated application). Neither route survives a section 47 cancellation. Both must be invoked early

The Mineral and Petroleum Resources Development Act, 2002 — the statute under which every mining right in South Africa is held — creates a chain of consequences for SLP non-compliance that runs from administrative orders through to criminal prosecution, with fines of up to R500 000 and imprisonment of up to ten years available for the most serious offences. Lesser SLP-related offences carry their own penalty categories, including R100 000 fines, R10 000 fines, and shorter terms of imprisonment.

These provisions are not new. They have been in the Act since it came into force on 1 May 2004. They have not gone away. And in May 2025 the Minister published a draft amendment bill which, if enacted in its current or similar form, would make the penalties materially worse — including fines linked to turnover rather than fixed amounts.

The reason most holders have not felt the full weight of the Act is not that the Act is soft. It is that the Department has historically pursued administrative escalation rather than criminal prosecution. That is a choice the Department makes case by case. It is not a right the holder enjoys.

This post sets out what the Act actually says, what conduct triggers it, and why the comfortable assumption that “nothing will happen” is a misreading of the legal position rather than a description of it.

How the penalty provisions work: section 99

Section 99 of the MPRDA sets several penalty categories, the most serious of which provides for a fine of up to R500 000, imprisonment of up to ten years, or both.

Other categories within section 99 attach to different offences and provide for lesser maximum penalties — including a R100 000 / two-year category, a R10 000 category for certain failures to comply with notices, orders, suspensions, instructions and conditions, and a general six-month category where no specific penalty is determined for the offence in question.

The point that matters for holders is this: every category in section 99, including the lighter ones, exposes the holder (and in some cases the individuals responsible) to criminal liability on top of the administrative consequences. The headline penalty band of R500 000 / ten years is available to the Department for the most serious offences, but the lighter bands are not “safe” — they are simply different categories of criminal exposure.

The exact penalty category that attaches to any particular contravention is a matter for legal interpretation against the specific facts. What follows below is a description of the underlying conduct that constitutes the offence — the penalty category for each is a question for the holder’s attorneys.

What conduct creates SLP-related criminal exposure

There are six acts or omissions that, from an SLP perspective, expose a holder to criminal liability under section 98 read with section 99. Each one is grounded in a specific section of the Act, and each may expose the holder to one of the penalty categories in section 99, in addition to the administrative consequences discussed further below.

1. Not implementing your approved SLP

Section 25(2)(f) of the Act makes compliance with the approved SLP a statutory obligation of the holder of a mining right. It is not aspirational. It is not a target. It is a legal duty.

Section 98 makes contravention of section 25 an offence under the Act.

If you committed in your approved SLP to spend a defined amount on Human Resources Development, and you did not spend it, that may constitute an offence under the Act and may expose the holder to criminal, administrative, and right-cancellation consequences. The same applies to LED commitments, housing commitments, procurement targets, and employment equity profiles that were committed to in the approved SLP and not implemented.

The Act does not distinguish between commitments that were “realistic” and commitments that were “ambitious.” If the SLP was approved, the commitments in it bind the holder.

2. Not submitting your annual SLP and Charter compliance report

Section 28(2)(c) requires the holder to submit, annually, a report detailing the extent of the holder’s compliance with section 2(d) and (f) of the Act, the Mining Charter contemplated in section 100, and the Social and Labour Plan.

Section 98 makes contravention of section 28 an offence.

This is the most commonly cited section in Departmental enforcement letters. Not submitting the annual report is not a procedural failure. It is a criminal offence under the Act.

3. Submitting false or misleading information

Section 98 specifically criminalises furnishing false or misleading information to the Department.

This catches inflated training spend figures, fabricated LED expenditure, overstated headcount, claimed implementation of commitments that did not in fact happen, and any other misrepresentation in an annual report, an SLP, or any other submission required under the Act.

Section 108(3) of the Act, read with the general principles of corporate criminal liability in South African law, may create personal exposure for directors, officers, or employees involved in preparing or approving the submission, not only for the company. Whether personal liability follows in any given case is fact-dependent and a question on which legal advice is needed.

4. Not complying with a section 93 order

Section 93(1) empowers the Regional Manager to issue a written instruction to a holder to take corrective measures where there is a contravention of the Act, the right, the environmental authorisation, the Charter, or the SLP.

A section 93 order is not advisory. It is a direction with statutory force. Failure to comply with it is a freestanding offence under section 98.

Operationally, this is the most dangerous provision in the Act. Once a section 93 order has been issued, the holder is on formal notice. The Department’s tolerance for further non-compliance falls to zero. Subsequent failure to act is treated as defiance rather than as oversight, and the criminal and administrative exposure both increase materially.

The route to challenge a section 93 order is section 93(2): an application to the Minister or delegate to uplift or set aside the order on good cause shown. Ignoring the order is not a route. It is an offence.

5. Not notifying the Minister of sustained low profitability

Section 52 of the Act requires the holder to notify the Minister and the Minerals and Mining Development Board where the profit-to-revenue ratio of the operation falls below 6% on average for a continuous period of twelve months, or where any mining operations are scaled down or to be discontinued resulting in job losses of 10% of the workforce or 500 employees, whichever is the lesser.

Section 98 makes contravention of section 52 an offence.

This is the sleeper provision. Most loss-making mines treat the SLP downscaling and retrenchment chapter as a theoretical document — something prepared in case of future trouble. They overlook that section 52 imposes a live notification duty that is triggered automatically when the financial threshold is crossed.

I work with mines whose audited annual financial statements show losses or sub-6% margins in five of the last six years. On a strict reading of section 52, the notification obligation was triggered years ago and remains outstanding. Every additional year without notification compounds the exposure.

6. Conducting mining in breach of a material condition of the right

The approved SLP is a condition of the mining right. Breach of a material condition is a contravention of the Act under section 98 and exposes the holder to potential criminal liability, together with the administrative consequences discussed below.

This is the broadest of the six routes and the one that captures everything not specifically caught by sections 25, 28, 52, and 93. If the right was granted on the basis of an SLP and the SLP is not being honoured, the foundation of the right itself is in question.

What the Department has actually been doing

Holders who have been around the SLP regime for more than a cycle or two will know that criminal prosecution under section 98 and section 99 is rare. The Department’s standard escalation path is administrative:

  • A request for information under section 29
  • A Notice of Non-Compliance under section 93(1)
  • An order under section 93 requiring corrective action by a specified date
  • Where the order is ignored, suspension of operations under section 93 or section 47
  • Ultimately, cancellation of the right under section 47

Criminal prosecution sits alongside this path, not at the end of it. The Department can pursue prosecution at any point. It does not need to exhaust administrative remedies first.

The reason holders have not historically felt the criminal end of the Act is that the Department has chosen — at policy level — to treat SLP non-compliance as a regulatory problem rather than a criminal one. That choice is not a feature of the Act. It is a feature of how the Department has allocated its limited enforcement resources.

That allocation appears to be changing. The 2018 Mining Charter, the 2020 amendment regulations introducing “meaningful consultation,” and the 2025 draft amendment bill all signal a Department that intends to enforce more aggressively, with sharper teeth and broader reach. The 2025 draft bill, if enacted in its current or similar form, would substantially restructure section 99 — including provisions for fines linked to turnover rather than fixed amounts, with up to ten years’ imprisonment for certain offences. It also proposes to incorporate the Charter and the Housing and Living Conditions Standard into “this Act,” meaning non-compliance with them would become a section 98 offence in its own right.

The window in which holders could treat SLP compliance as a paperwork exercise is closing.

And then there’s cancellation of the right

The criminal penalties under section 99 are, in practice, the secondary enforcement tool. The primary tool — the one that ends operations rather than merely fining them — is section 47: the Minister’s power to suspend or cancel a mining right.

Section 47 is engaged where the holder is conducting operations in contravention of the Act, breaches a material term of the right, fails to comply with the SLP or Charter, or submits inaccurate or false information. A R500 000 fine is a problem. The loss of the right itself is an extinction-level event for the operation.

For most holders, the practical risk that warrants action is not the criminal one — it is the administrative one. Section 47 is what closes the mine.

Where this leaves most holders

If you hold a mining right and any of the following is true of your operation, both the administrative and the criminal routes are, on a strict reading of the Act, available to the Department against you:

  • You have not submitted your annual SLP and Charter compliance report under section 28(2)(c) for one or more years
  • Your spend on HRD or LED across any approved SLP cycle is materially below what you committed to
  • Your profit-to-revenue ratio has been below 6% for any continuous twelve-month period in the past several years and you did not notify the Minister under section 52
  • A section 93 order or notice has been issued against you and the corrective action specified in it has not been completed
  • Any annual report, SLP submission, or other Departmental submission contains figures that cannot be reconciled to audited records

This list is not exhaustive. It is the operational core of the exposure most mid-tier and small-scale holders carry.

The available remediation pathways

The Act provides two routes back to compliance, and both are preferable to the alternative.

Section 93(2) allows a holder against whom an order has been issued to apply for the order to be uplifted or set aside on good cause shown. The application must (a) furnish a reasonable explanation for the non-compliance, (b) set out the corrective measures the holder will implement, and (c) establish that no party will be prejudiced. Financial inability is admissible evidence under (a), though it does not on its own discharge the obligation.

Section 102 is the lawful route to amend an approved SLP. A holder cannot unilaterally walk away from SLP commitments. Where the original commitments were misaligned with the financial reality of the operation, the right vehicle is a motivated amendment application to the Minister, which if approved replaces the original commitments with revised ones going forward.

Neither route can be invoked once the Department has moved to cancellation under section 47. Both must be invoked while the right is still live.

What this means for you as a holder

The honest position is this. The criminal exposure under sections 98 and 99, the personal exposure that may follow for directors and responsible employees, and the administrative exposure under sections 47 and 93 are not theoretical. They are statutory consequences that follow from conduct most non-compliant holders are already engaged in.

The risks have not been pursued aggressively in most cases because the Department has chosen administrative escalation as its default. That choice is not binding on the Department, and shows signs of changing.

For any holder unsure whether their current SLP position carries this exposure, the answer is best found through a proper reconstruction of the four-cycle compliance position — what was committed, what was implemented, what was reported, and what gaps remain. From that base, the section 93(2) and section 102 routes are available to bring the position back within the Act before the Department’s posture hardens further.

The right time to deal with an SLP compliance gap is while the right is still live and the Department has not yet moved to formal enforcement. That window does not stay open indefinitely.

This article is a compliance-risk discussion, not legal advice. Holders should obtain legal advice from a qualified mining law practitioner on their own specific facts and circumstances. References to penalty categories under section 99 of the MPRDA are general in nature; the exact category applicable to any particular contravention is a question of legal interpretation against the specific facts.

SG Muller is the owner-manager l of Strategy4Good and SLP4Good. The firm provides Social and Labour Plan compilation, assessment, and historical reconstruction services to mining right holders across South Africa. For an assessment of your current SLP compliance position, contact [email protected].