Johannesburg — THE Centre for Applied Legal Studies (Cals) and the Legal Resources Centre (LRC), in support of the government, have applied for permission to assist a World Bank tribunal in a legal challenge to the Mineral and Petroleum Resources Act.

Several Italian citizens and Luxembourg corporations are suing SA for compensation for what they consider to be the "expropriation of the mineral rights" to their granite-quarrying businesses.

The investors own 80% of SA's granite industry through Luxembourg-based Finstone, the holding company controlling the Marlin and Red Graniti operations.

The case is to be heard next April and is expected to have far-reaching implications for SA.

The investors argue that the act, which requires submission of an environmental protection plan and the achievement of certain broad-based black economic empowerment targets -- such as the sale of 26% of assets to historically disadvantaged South Africans -- extinguishes their mineral rights without providing adequate compensation and unfairly discriminates against them.

Cals and the LRC argue that the act is in line with SA's constitutional and international human rights obligations.

The case is being brought in terms of investment treaties entered into by SA's government with the governments of Italy, Belgium and Luxembourg, which protect the interests of foreign investors in SA. These agreements specify disputes must be settled through arbitration at the International Centre for Settlement of Investment Disputes , an arm of the World Bank.

The government argues that the act does protect the security of tenure of mining and prospective rights and complies with SA's commitments under domestic and international law.

It says the black economic empowerment targets are necessary to address the devastating socio-economic effect of apartheid.

Cals and the LRC have applied together with the Centre for International Environmental Law and Interights (Ciel ) and the International Centre for the Legal Protection of Human Rights (Interights), to assist the arbitration tribunal in interpreting the relevant South African mining legislation in context of the country's constitution and relevant international human rights law. The Ciel and Interights are international nongovernmental organisations (NGOs).

In documents submitted to the tribunal, the four NGOs argue that the act was enacted for important public policy reasons and to advance constitutionally mandated goals which include "human rights advancement, environmental protection and sound and prudent stewardship of the nations natural resources, and the need to redress the apartheid history of exploitative labour practices, forced land deprivations and discriminatory ownership policies which have characterised the South African mining sector for decades".

Jackie Dugard of Cals and Jason Brickhill of the LRC said in a joint statement yesterday that "SA's bilateral investment treaties should not read in a way that conflicts with its human rights obligations under its own constitution or under international treaties that it has signed up to".