Mining sector – legally into the 4th Industrial Revolution

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Aalia Manie | Partner | Webber Wentzel | mail me


Rapid advances in technology and artificial intelligence in the mining industry raise issues like data protection, intellectual property ownership and legal liability.

In the current absence of specific legislation to govern emerging technologies like artificial intelligence, businesses must continue to rely on existing laws and ensure that they enter into robust contracts.

Commission

In December, government invited the public to nominate candidates to serve on the Presidential Commission on the Fourth Industrial Revolution (4IR).

This development should be of interest to the mining industry, where artificial intelligence, big data and technology are rapidly converging in various ways.

The 4IR is creating a need for regulation on issues such as unemployment, intellectual property (IP), data privacy and security, and liability for defects and loss of control.

The commission, announced in President Cyril Ramaphosa’s state of the nation address earlier in the year, will identify what strategies, policies and plans SA should put in place to position itself as a leading country in the technology revolution. However, these regulations have yet to be drafted and their nature and scope is not yet known.

New technologies

In the mining sector, some companies are using digital twinning, a virtual reality environment that mirrors the mining environment and is used for training employees on potential risks in the workplace.

They are increasingly investing in autonomous vehicles and equipment. There are also intelligent data analytics systems enabling valuable analysis of data, which are collected using the internet of things (IoT) technology.

For example, the latest mining equipment can be fitted with sensors that generate messages about breakdowns or safety issues. With better data, capital and labour can both be optimised, allowing for better decision-making.

Artificial intelligence is being deployed in a number of other industries, too. Yet at present there is very little specific legislation, either in SA or anywhere else, to manage its effects.

For companies wishing to access the latest emerging technologies, there are key issues that need to be addressed, no matter what business model is used.

Legally

When using or licensing technology systems or services owned by a third party, companies must be particularly cautious when they become reliant on that third party’s system or services in order to operate. Where the third party technology is integral to ensure effective or ongoing operations, companies must protect their interests through careful contracting around issues such as scope of use, termination rights, service levels, liability for loss of access or defective service delivery and insolvency of the third party.

Contractual negotiation also presents challenges. When the technology owner is aware of the company’s reliance on the system, it has greater bargaining power in setting pricing and terms.

Companies can also access or develop technology through commercial partnerships and joint ventures. A critical issue from an intellectual property perspective is ensuring clarity on ownership of jointly developed intellectual property and databases, and who owns and/or may use them if the relationship terminates (which may be particularly problematic if the termination happens on acrimonious terms).

A third way of procuring technology is through acquiring or ownership of the IP in the technology, which gives rise to typical merger and acquisition issues such as the necessity for a due diligence to confirm the rights of the seller in relation to the technology.

Companies can also build new technology by developing it in-house or with an academic institution, as some mining companies are already doing. Companies using university facilities for research and development must be aware of the IP implications of engaging in publicly funded research and development through academic institutions, which are governed by the Intellectual Property from Publicly Funded Research and Development Act (IPR) Act.

Be prepared

The technology evolution is exciting, but it also presents challenges which must be carefully considered and addressed as part of effective business planning and strategy.

Whatever approach SA takes towards regulating artificial intelligence and emerging technologies, it should align itself as closely as possible with global best practice to ensure uniformity. SA has to remain competitive as a jurisdiction for technology investment, research and development.


 

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