A recent Court of Appeal judgment highlights mining companies' duty of care towards project affected persons (PAPs). The Court’s decision makes it clear that PAPs are not legally obliged to vacate their properties simply because a mining company has obtained a mining licence or special mining licence over the area. The PAPs must relinquish their surface rights to enable the mineral right holder to take possession of land situated within the mining area. If the mineral right holder pursues this through contractual means, the fact that it has conducted a valuation of the property approved by the chief government valuer, does not compel the PAPs to vacate their property if they reject the compensation offered.
Despite the prohibition on erecting buildings in a mining area without consent from the mineral right holder or the Minister, the mineral right holder is still obliged to exercise care towards PAPs, even if the PAPs breach this provision by erecting buildings without consent.
The Court of Appeal of Tanzania has recently delivered a judgment that should serve as a caution to mining companies concerning their duty of care towards project affected persons (PAPs).
The case
An appeal was filed against the decision of the High Court of Tanzania at Mwanza (Mlacha, J., as he then was) handed down on 3 August 2016 in Civil Case 9 of 2013. The respondents, Chacha Kiguha, his wife Imeema Chacha, and their children, Bhoke, Kiguha, Montogori, and Surati Chacha, had sued the appellant, the general manager of African Barrick Gold Mine Ltd, for general damages to the tune of TZS 600 million.
The respondents alleged that, acting in breach of the duty of care, the appellant, a limited liability company which was holding a special mining licence (SML) over five villages in the Tarime District, including the respondents’ village of Nyamwaga, caused the respondents to contract diseases resulting from mining activities conducted in close proximity to their house situated on a piece of land owned by the first respondent (affected land). They claimed that they could not vacate the land because of the appellant’s failure to pay fair compensation for the affected land.
The appellant disputed the respondents’ claim that it failed to observe a duty of care thereby causing the respondents to contract various ailments or mental sickness, as alleged by them. The appellant contended that it did not fail to compensate the respondents. Rather, the respondents refused to receive the amount of TZS 1,76 million which was a fair and adequate compensation because it was arrived at after the valuation of the land, with the permission of the first respondent.
After considering the evidence, the trial judge found that the appellant had a duty to ensure the respondents were not harmed by its mining activities and that it breached that duty. As a result, the respondents contracted respiratory and ear diseases, and the third respondent also suffered a skin disease. The court awarded general damages in the amount of TZS 300 million being TZS 50 million to each respondent. Additionally, the court awarded interest on the decretal amount at 7% per annum from the date of judgment until full payment.
The appellant’s grounds of appeal
The appellant raised nine grounds of appeal including that:
- The trial court erred in law in entertaining and determining the suit which ought to have been entertained by a resident magistrate or a district magistrate.
- The honourable trial judge erred in fact for failing to hold that the appellant’s mining activities did not cause the respondent’s illnesses.
- The honourable trial judge erred in law and in fact for holding that the appellant breached the duty of care towards the respondents.
- The honourable trial judge erred in law and in fact in failing to hold that the appellant was not liable to the respondents as the respondents moved into the appellant’s SML area and constructed a house thereon without the appellant’s consent.
- The honourable trial judge erred in law by misconstruing the provisions of the law on relocation, resettlement and payment of compensation to people within a SML area.
- The honourable trial judge erred in law and in fact in ignoring the parties’ admission of the existence of the valuation of the land.
- The honourable trial judge erred in law and in fact in raising an issue of approval by the chief government valuer, which was not framed at the commencement of the trial.
- The honourable trial judge erred in law and in fact in awarding each respondent TZS 50 million as general damages, which is excessive.
- The evidence on record does not support the finding of the trial court.
The Court of Appeal’s decision
The Court of Appeal considered the appellant’s argument that the respondents’ act of moving and constructing a house without the appellant’s consent was a breach of Section 96(2) of the Mining Act and, therefore, the appellant did not owe them a duty of care.
The Court clarified the concept of duty of care, stating that in tort law, it is a legal obligation requiring an individual to act reasonably to avoid careless or negligent acts that could harm others within their proximity or who may be directly affected by their actions. In the context of negligence, these individuals are termed ‘neighbours’, establishing the neighbour principle.
The Court agreed with the appellant that, according to Section 96(2) of the Mining Act, lawful occupiers of land within a SML area are prohibited from erecting buildings or structures without the consent of the SML holder. Section 96(2) of the Act provides that: ‘The lawful occupier of land in a mining area shall not erect any building or structure in the area without the consent of the registered holder of the mineral rights concerned but if the Minister considers that the consent is being unreasonably withheld, he may give his consent to the lawful occupier to do so.’
The Court of Appeal also agreed with the appellant that Section 41(4)(d) of the Mining Act, which outlines the conditions for obtaining an SML, was irrelevant to the circumstances of this case regarding the application of Section 96(2), as the appellant already held an SML. Therefore, the Court concurred with the appellant that the respondents had constructed a house on the affected land without the consent of the appellant or the Minister, in breach of Section 96(2) of the Act.
However, despite this breach, the Court dismissed grounds 3, 4, and 5 of the appeal. It did not accept the appellant’s argument that the respondents were staying on the affected land illegally. The Court observed that the first respondent still had surface rights and had not vacated the land due to an unresolved dispute over payment of compensation.
The Court emphasised that the first respondent’s mistake of constructing the house did not absolve the appellant from taking reasonable care to avoid harmful actions towards the respondents. The Court stated that the appellant was expected to adhere to the good neighbour principle and, therefore, had a duty of care towards the respondents, who were living between 50 and 100 metres from the appellant’s mine.
Regarding ground 2 of the appeal, the Court held that although there was insufficient evidence to support the respondents’ claim that the appellant’s mining activities caused their illnesses, the activities did constitute a nuisance, making the appellant liable for general damages. The Court emphasised that conducting mining operations, particularly blasting explosives, in close proximity to the respondents’ house while they were occupying the affected land breached the duty of care towards them.
The fact that the first respondent constructed a house on the affected land without the consent of the SML holder or the Minister, contrary to Section 96(2) of the Act, did not exonerate the appellant from this duty. The appellant was required to act reasonably to avoid causing harm to the respondents.
The Court stressed that there was no dispute that the respondents were subjected to nuisance. Evidence showed that the appellant continued mining operations after the respondents had moved onto the affected land, blasting explosives near their house. The mining activities also emitted dust which, given the proximity of the mine to the respondents’ residence, caused significant inconvenience. The Court disagreed with the appellant’s contention that the respondents voluntarily exposed themselves to the nuisance, noting that the appellant had not acquired the affected land, and therefore, the respondents retained rights over it.
Regarding grounds 6 and 7 of the appeal, the Court emphasised that whether there was a valuation report and whether such a report was approved by the chief government valuer were irrelevant to determining the respondents’ claim for general damages. The Court highlighted the fact that the Act does not compel a lawful occupier of land in an SML area to accept the compensation amount once it is approved by the chief government valuer.
As regards grounds 8 and 9, the Court held that despite insufficient evidence to prove that the appellant’s activities caused the respondents’ illnesses, there was sufficient evidence to prove that the appellant breached their duty of care by causing a nuisance. Therefore, the appellant was liable to compensate the respondents for the nuisance caused by this breach of duty.
In awarding damages, the Court took into account that the respondents contributed to their own injury. It was an indisputable fact that the first respondent constructed a house on the affected land in breach of Section 96(2) of the Act and moved there due to a disagreement with the appellant.
The Court awarded each respondent TSZ 25 million and ordered the appellant to pay a total of TZS 150 million plus interest at the court’s rate of 7% per annum from the date of the trial court’s judgment to the date of full satisfaction of the decree.
Conclusion
The Court’s decision makes it clear that PAPs are not legally obliged to vacate their properties simply because a mining company has obtained a mining licence or SML over the area. The mining company must still secure surface rights from the PAPs to take possession of land situated within the mining area. If the mining company pursues this through contractual means, the fact that it has conducted a valuation of the property approved by the chief government valuer, does not compel the PAPs to vacate their property if they reject the compensation offered.
Furthermore, despite the prohibition on erecting buildings in a mining area without consent from the mineral right holder or the Minister, the mineral right holder is still obliged to exercise care towards PAPs, even if the PAPs breach this provision by erecting buildings without consent. This raises uncertainty about the specific mitigating actions mining companies must take in such scenarios, especially considering that blasting is integral to their mining operations and its effects may, by nature, be hard to control.
Overall, the Court’s liberal interpretation underscores the complexity of reconciling the interests and obligations of mining companies, in carrying out their mining activities, with the interests involved when mining activities intersect with the rights of affected communities.
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