THE PERENNIAL QUESTIONS OF OWNERSHIP, MINERAL RIGHTS AND LAND RIGHTS: FROM PRINCIPLES TO PRACTICE

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development, and Investment
(Apr 2013)
CHAPTER 7A
THE PERENNIAL QUESTIONS OF OWNERSHIP, MINERAL RIGHTS AND LAND RIGHTS: FROM PRINCIPLES TO PRACTICE ^*
Ana Elizabeth Bastida**
Mining Programme Director, University of Dundee
Dundee

ELIZABETH BASTIDA is a lecturer at the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP), University of Dundee. She teaches courses on the international, transnational and comparative aspects of the law and governance framework for mining. She also leads the Mining Programme, which aims at advancing knowledge and practice in the sector from a sustainable development perspective. Elizabeth has researched extensively on the analysis and evaluation of prevailing models of the legal, institutional and contractual regimes for the mining sector within a sustainable development framework. Her research aims at understanding patterns of law and regulation in the sector, exploring the interface with environmental regulation, human rights law and land law, and suggesting ways forward towards integrated frameworks that promote sustainable development. Elizabeth has been a research fellow at the Institute of Social and Legal Sciences 'Ambrosio Gioja', Law Faculty, University of Buenos Aires and has practised law with the firms Tomás de Pablos & Associates, Taffarel, Sanchez & Associates, and Hope, Duggan & Silva in Buenos Aires, with responsibilities in the Mineral and Environmental Law section. Elizabeth has been an external legal consultant to various governmental, intergovernmental, nongovernmental organisations and corporate institutions, as well as companies. She has been Deputy Managing Editor of the Journal of Energy and Natural Resources Law and assistant editor of the CEPMLP Internet Journal. She is a member of the Environmental Law Group of the IUCN, and of the Advisory Committee of the International Study Group for the Review of African Mining Regimes, under the auspices of the United Nations Economic Commission for Africa. Elizabeth is a qualified lawyer in Argentina, University of Buenos Aires (UBA); Specialisation in Natural Resources Law, (UBA, cum laude); LL.M in Resources Law and Policy (CEPMLP, Dundee; with distinction), Ph.D (CEPMLP/Dundee).

Working paper to be presented at the Rocky Mountain Mineral Law Foundation, International Mining and Oil & Gas -- Law, Development, and Investment conference, panel on "Ownership of Minerals", Cartagena, 23 April 2013.

The debate before the French National Assembly with occasion of the enactment of the 1791 French Law of Mines famously presented two antagonistic positions on the question of systems to assign ownership of minerals or defining who is originally entitled to and has the legal capacity to use, enjoy and dispose of the minerals in the subsoil. The physiocrat Merlin supported the 'accession theory' - drawing on the legal fiction of the subsurface as appurtenant to the surface land-,¹ while Mirabeau vehemently favoured the separation of mine and surface rights. He basically contended that the artificial division of land ownership does not always fit the full extent of mines. Land is divisible but a mine is not.² Where mines occupy various land properties, mine operation would be subject to agreement with various landowners, adding what we call now "transaction costs" and uncertainty to the success of the project. Furthermore, surface owners do not necessarily have the capital and expertise required to discover and operate a mine. Consistently, he argued that property of mines should fall on whoever discovers the vein first upon a concession granted by the nation. Mirabeau's arguments were fundamentally based on what system could best facilitate exploitation, and on the economic and physical differentiation of the mine (then vein deposits in the subsurface) and the surface land.

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This debate, widely quoted in Mining Law books in many Latin American countries, mirrors the millennial contention underlying the very same existence of mineral tenure regimes. The premise for the discussion in this session on "Ownership of Minerals" and the focus on the separation of minerals and surface ownership basically takes us to examining two core tenets of mining law and mineral tenure regimes: (1) the question of ownership of minerals in the subsoil (surface ownership v res nullius v State ownership); and (2) the rules for access and the processes regarding the relationship between mineral rights and surface rights (considering different and rapidly changing categories of land). This paper will provide a brief review of these main functions of mineral tenure regimes, with the caveat put forward by Anthony Scott: that "systems of mining law are not easily classified into distinct national or theoretical types"; most systems are very old and they have survived because they have been adapted to changing circumstances.³ Due to the scope required for this paper, it will review evolving principles of mining law and explore some potential implications in practice.

1) Doctrines about Original Ownership of Minerals in the Subsoil

A basic question in resource regimes is who is originally entitled to and has the legal capacity to use, enjoy and dispose of natural resources in general -and minerals in the subsoil in particular.

Anthony Scott emphasises a very important practical difference to take into account on the question of original ownership under English common law, and civil law countries. Under English common law there is a presumption that the surface owner owns the underlying strata.⁴ In contrast, in countries of a civil law tradition the rule has been that of "State ownership" of mineral resources.

1.1 The "Landownership" Doctrine

The regime called by Merlin the "accession system" has been the traditional one in English common law countries and is based on early Roman law, which considered that minerals were an integral part of the soil, whether they were located on the surface (such as quarries) or in the subsurface.⁵ This regime is commonly defined by the said maxim Cuius est solum, ejus est usque ad coelum et ad inferos.

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Over time, the application of this system has been increasingly limited. In the United Kingdom, although there is a presumption that the surface owner owns the underlying strata in the absence of any evidence to the contrary, the rights to a range of minerals are owned or vested in either the Crown or the State by common law or statute.⁶ Furthermore, the presumption that the surface owner owns all other subjacent minerals can be refuted by providing evidence of a document (usually a deed) of severance, by which the original owner had disposed of the surface and retained the minerals (or some of the minerals) or in the other way around, as case law has established that different strata could be in separate ownership.⁷

In the United States of America, minerals in private lands are owned by surface owners.⁸ A recent amendment to the mining law in force in Ontario, Canada, withdrew Crown rights on minerals in surface lands located in South Ontario.⁹

In Latin American countries as in many others, this system has more frequently and widely applied to construction materials such as stone, sand and gravel and quarry materials.¹⁰ Unlike other minerals, these deposits do not present major geological difficulties (and have always required outstripping soil). These materials do not need processing and are most commonly traded and consumed in domestic markets; their production and prices are subject to the fluctuations of economic activity, particularly the construction industry but are not exposed to the extraordinary ups and downs of international metal prices.¹¹ Under the French Mining Code and in countries based on French legal tradition, the deposits of these materials (generally called 'carrières') are owned by the surface owner.¹²

Whenever minerals belong to the surface owner, these are subject to common property law and rights can be obtained by purchase, lease or private contracts as established under the applicable regime.¹³ As explained, in countries as the UK and USA, rights on minerals can be 'severed' from surface rights, and transferred through separate transactions.

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Even under this system the State might be willing to exercise a regulatory function in respect of what is otherwise a private law situation.¹⁴ The former 1991 South African Minerals Act is one example in which minerals were vested in the landowner -and thus their acquisition was ruled by property law- but then a licence was necessary from the State to enable the holder of rights to exercise them.¹⁵ While the first component might be a private law matter, the second one is a public law licensing component necessary to exercise the rights so acquired.¹⁶

Increasing recognition of indigenous peoples' land and resource ownership has brought another application of the landownership system. In Canada, some comprehensive land claim agreements acknowledge indigenous' ownership rights over the surface which in some areas do also include the subsurface. This is the case of the Nunavut Land Claim Agreement between the Inuit of the Territory of Nunavut and the Government of Canada which in 1993 settled all land claims by the Inuit. Under such Agreement, they were granted title to 19% of the land in Nunavut, including mineral rights to 2% of Nunavut.¹⁷

In some cases, traditional Indian tribes own surface and mineral rights in some areas in the US. Access to mineral rights is subject to tribal law and negotiation, and involves regulation by their own statutes and the Federal Bureau of Indian Affairs.¹⁸

1.2 The "Res Nullius" Doctrine

The res nullius doctrine contends that mines and minerals belong to no one until they have either been discovered or reduced to possession. The role of the State under a res nullius system is stricto sensu limited to...