Mineral & Petroleum Resources Amendment Bill [B15D-2013]: negotiating mandates; with Deputy Minister

Meeting report

The Chairperson welcomed Mr Godfrey Oliphant, Deputy Minister: Department of Mineral Resources (DMR), to the meeting, as well as the government legal advisors and other visitors. He said the Committee would go through each provincial Mineral and Petroleum Resources Development Amendment (MPRDA) Bill mandate clause by clause, starting with the Eastern Cape. However, this could start only once there was a quorum present. There was substantial pressure to conclude the Committee proceedings on the MPRDA, and Members had to apply their minds to ensure all outstanding issues were attended to without compromising the process and taking shortcuts. 

Representatives from the state legal office at the meeting were Mr Theo Hercules: State Law Advisor; Ms Shahiedah Bowers: National Council of Provinces (NCOP) Procedural Officer; and Ms Daksha Kassan: Parliamentary Legal Advisor. DMR representatives were Ms Sibongile Malie: Director, Policy Development; Mr Kagiso Menoe: Beneficiation Economist and Mr Sibusiso Kobese: Deputy Director, Mineral Policy Development. There were members from provincial legislatures, the Secretary of the Portfolio Committee on Mineral Resources, and members from the oil and gas industry, There were representatives from the Chamber of Mines, as well a from the Land Access Movement of South Africa (LAMOSA).

Committee members from the Free State, Mpumalanga, Northern Cape and Gauteng were absent during the voting on the MPRDA Bill.

The Chairperson advised that more Members were expected to attend, and Deputy Minister Oliphant to brief the Committee on some important aspects related to the MPRDA and the meeting agenda. 

Deputy Minister’s briefing

Mr Oliphant said that the “whole country” was waiting for the Committee to conclude its work on the MPRDA, as it would be pivotal in deciding in which direction the country was headed. The DMR was in discussions with a wide variety of stakeholders on the issue and other related minerals aspects, to provide some clarity on the way forward. The Department wanted to resolve the issues related to the MPRDA and the Mining Charter within the next three months.

The DMR was concerned about the inordinately long delay in concluding the Parliamentary work on the MPRDA. It did not want to interfere in the orderly running of the Parliamentary processes, but he wanted to urge the Committee to do all it could to conclude the MPRDA by the end of April if possible. The investment climate was changing, and South Africa had to be ready to move forward to reap the benefits of the impending economic growth for the country and its people. Mining was critical in developing the local economy, and he emphasised that the growth and development had to benefit all and be inclusive and transformative. It was therefore critical that work on the MPRDA be concluded as soon as possible. 

He was concerned about the ongoing practice of illegal mining, which included the loss of life of some zama zamas (illegal miners). The DMR wanted to legalise illegal mining but he admitted that the issue was complex given the country’s history of inequalities. 

The Department was also assessing how best to deal with the matters currently before the courts that related to the Mining Charter and the empowerment status of previous deals – “once empowered always empowered.” The DMR was studying the court judgments, including the declaratory order which had gone against the DMR and in favour of the Chamber of Mines, and would engage with stakeholders to come to an agreement as soon as possible.

At this stage, the KwaZulu-Natal (KZN) Committee Member joined the meeting, which meant there was a quorum.

The Chairperson thanked the Deputy Minister for his comments, and said that the Committee would definitely take them on board.

Proposal to speed up process

The Chairperson asked the Eastern Cape (EC) delegate to continue with the presentation of its negotiating mandate, clause by clause.

Ms C Labuschagne (DA, Western Cape) interjected and asked if the Committee could discuss an issue she had raised with the Chairperson in a letter regarding a possible new process which could speed up the resolution of the MPRDA mandate debate within the Committee. She said the process currently being followed, as was evident from the previous meeting, was chaotic and led to much confusion among Members. She wanted to propose a more systematic process that would improve clarity and reduce confusion and misunderstanding. 

Mr Asgar Bawa, Committee Secretary, explained that basically the new suggestion entailed grouping all the clauses in the Bill, as raised by the various provinces, together and discussing them clause by clause. This would allow each province to state its preference and once there was clarity on a clause, the provinces would vote on it, conclude it and move on to the next clause. This was different to the current process, whereby each province read out its mandates and some discussion ensued before voting on the particular province’s mandate. This process would have to be repeated nine times --each provincial mandate -- and on some issues there could be some overlap where provincial mandates were aligned. 

Mr Bawa said that although the new proposal could provide more clarity, it would add another two weeks to the process, as all the provincial mandates would have to be re-calibrated into the new format as proposed by Ms Labuschagne.

Ms E Prins (ANC, Western Cape) felt that the Committee had to proceed with the current process as the additional two weeks required to reformat the provincial mandates would be longer than the current process.

Ms Z Ncitha (ANC, Eastern Cape, said she agreed with Ms Prins. 

Mr C Smit (DA, Limpopo) reminded Committee members of the confusion that reigned when the provincial mandates on the Plant Bills were discussed. Members had to learn from that exercise and had to do the right thing in the case of the MPRDA, to avoid the problems that arose during the Plant Bills. 

The Chairperson asked Members not to debate the issue at length. The Committee still had a long way to go on the MPRDA, so it had to start discussion on the mandates as there were other meetings in the afternoon. There was a proposal before the Committee from Ms Labushcagne, and it had to decided which way to go.

Ms Labuschagne reminded the Committee that the MPRDA Bill was a remitted Bill which had been sent back to Parliament because it had been “rushed through.” She asked that the Committee not make the same mistake -- that despite all the work currently being undertaken on the MPRDA, it would not be amended because the Committee had not done its work properly. The Committee needed clarity as sometimes provincial mandates were not quite aligned, and although they still contained many similarities with one another, because there was not total alignment it meant a “no” vote or abstention. This meant that a clause that could have improved the Bill would not be incorporated. She asked the legal advisors present to clarify the issue. 

Ms Ncitha said the Committee was following procedure and doing things the right way. There was no confusion, and perhaps Ms Labuschagne’s confusion on the mandate process was because she had been late for the previous meeting and missed some of the earlier discussion points that had clarified the issues. She proposed that the Committee proceed with current process

The Chairperson asked the EC to start the debate on the MPRDA by continuing with its provincial mandate

MPRDA Negotiating Mandates

Ms Ncitha presented the EC mandates on the MPRDA Bill, which related to the following issues in the Bill:

Clause 35(a)

To amend section 47(1)(c) of the Bill by the insertion of a new clause that would make Social and  Labour Plans (SLPs), housing and living conditions a condition of a licence to operate.

Ms Labuschagne wanted clarity on the amendment, and wanted to know what was amended in the section.

Ms Daksha Kassan, Parliamentary Legal Advisor, responded that the clause was not being amended, but that that a new clause not currently in the Bill was being proposed by the EC.

Ms Labuschagne said the reason she asked for clarity was to demonstrate why her earlier proposal on the mandate process would have been a better system, as it would have immediately identified the new clause.

Ms Ncitha said the EC was proposing a new amendment to clause 35, and was not confused about the issue.

Ms Labuschagne said her proposal would have resulted in a more systematic process of progressing through the various provincial mandates.

The Chairperson reminded Ms Labuschagne that the Committee had discussed the proposal made in the letter, and had taken a view to proceed with the current process

Dr H Mateme (Limpopo, ANC) asked the legal experts present to advise the Committee if the EC proposal would assist the country.

Mr Bawa reminded Members of the process being followed on amendments. Firstly, a provincial mandate would be communicated to Members. This would be followed by engagement on the mandate, including input from experts, such as DMR and government legal representatives. Once there was clarity on the issue, Members would vote and move on to the next mandate. 

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• Kwazulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 35(b)

Proposed that section (d) dealing with misrepresentations by mining companies be retained.

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• Kwazulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 44 (56C in the Bill)

Proposed an amendment to 56C in the Bill to include civil societies and communities affected by mining on the Board (Ministerial Advisory Council) advising the Minister.

Ms Labuschagne asked the DMR to provide clarity on which three state departments would be represented on the Board.

Ms Sibongile Malie, Director: Policy Development, DMR, advised that Board representatives would be prescribed in regulations. In addition, the Minister could appoint Board members as and when the situation arose, depending on a particular issue.

The Chairperson asked if non-governmental organisations (NGOs) would be represented to enable issues affecting mining communities to be heard.

Ms Malie said that this was possible.

Ms Ncitha wanted to know if it was correct that the DMR had removed the clause that enabled affected communities to be consulted.

Mr Sibusiso Kobese, Deputy Director: Mineral Policy, DMR, said that the issue raised by Ms Ncitha was not relevant, as 56C was part of new dispensation in the MPRDA. It referred to the establishment of the Ministerial Advisory Council -- the issue was new. 

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - abstained
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - abstained
• Western Cape - supported

Clause 58

This was related to an amendment to section 81(4) of the Bill, to increase the exploration timelines for onshore shale gas operations from the initial five years to 11 years.

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 65

This proposed that there had to be flexibility to allow for a downward adjustment of the State Carried Interest during the exploration phase (section 86A) to support shale gas operations during the exploration phase.

Ms Labuschagne asked if the DMR could comment on the EC proposal.

Ms Malie responded that the Department understood the rationale for this proposal, as the petroleum industry was a new industry that needed to be supported to ensure it developed to its potential. However, the departmental view was that it would stick to the 20% state carried interest in the exploration phase, but could reduce its stake at the production stage.

Dr Mateme was concerned that some provinces that did not have a view on issues raised, would abstain or not support another province’s mandate. This meant that in some instances good proposals would not be incorporated in the legislation.

Ms Labuschagne wanted to know if the application of retrospective state carried interest, as contained in sections 1(j) and 1(z) of the Bill, was constitutional

Deputy Minister Oliphant replied that no law could be applied retrospectively. The Department’s view was that during exploration it would take up the 20% free carry and that during the production phase, when there was better knowledge of the resource, there could be some variation.

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - abstained
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - abstained
• Western Cape - abstained

Clause 74(a)

This proposed an amendment to enable communities to ensure that their land rights or communal land due to mining would be compensated fully, i.e. 26% ownership and control.

Ms Labuschagne asked the DMR to clarify what this would mean in terms of the Interim Protection of Informal Land Rights Act, insofar as it impacted on the MPRDA.

The Chairperson also wanted to know if there was any other legislation implicated by the MPRDA.

Mr Oliphant responded that the proposal by the EC specifically referred to mining in respect of community participation, which the MPRDA allowed. If there was any misalignment between the MPRDA and the EC’s recommendation, the Department would look into the matter. 

Ms Labuschagne said the Interim Protection of Informal Land Rights Act provided protection to communities. The MPRDA had indicated that community participation may occur, while the former Act involved very extensive participation.

Dr Matema commented that the fundamental principle on which mining took place was that the mineral wealth belonged to all. The EC submission would address the concerns of people whose land rights had been removed. She wanted to know if the Communal Land Rights Bill contradicted the MPRDA.

Mr Oliphant said that the MPRDA that had been passed into law in 2002 meant that all the mineral wealth in the country reverted to the state -- which he described as “a form of nationalisation” -- with the DMR as the custodian of the mineral rights on behalf of the people. This was the only law currently applying to the “ownership” of mineral rights. Other aspects of the MPRDA, such as the Mining Charter, were being finalised by the Department, its social partners and other stakeholders.

Mr Theo Hercules, State Law Advisor, said that the MPRDA was a transformative legislative document as contained in section 100 of the Bill.

Dr Mateme commented that reparation and redress were important, but she wanted to know how this would be achieved, as this was why the Bill had been remitted to the NCOP.

The Chairperson said there were imbalances that had to be corrected.

Mr Oliphant said that the MPRDA sought to address the concerns raised by Dr Matema. There were numerous instances where mining had been instrumental in uplifting peoples lives, such as labour sending areas like the EC, and SLPs to help communities so that when mining eventually stopped there were other skills in place to ensure ongoing development in the area. Johannesburg was an excellent example of this. All had to work together, to build on success stories and fix problem areas.  

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 74(b)

To amend section 100 of the Bill to redress the non-participation in the mining process of mining communities on communal land, historically disadvantaged South Africans, and other aspects of inequality.

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - supported
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 74(c)

To amend the Charter to explain how section 2 of the of the Bill would be achieved.

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - supported
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Some general points related to the EC mandate submission was then read by the EC delegate, but these were not voted upon. These mainly related to the financial provision for communities interested in mining, suitable housing for people working on mines, the 20% free state carried interest that could burden licence holders, environmental impact assessment reports being available to communities, and the fact that the Xolobeni community was vehemently opposed to mining.

This concluded the discussion on the EC MPRDA mandate. 

The Chairperson wanted to know if the meeting should continue with the alphabetical procedure, or whether it could discuss the mandate of the Limpopo province, as it contained similar issues to that of the EC.

Committee Members agreed to proceed alphabetically 

As the Free State and Gauteng members were absent, following alphabetically, KZN briefed the Committee on its MPRDA negotiating mandate

KZN Negotiating Mandate

Mr A. Singh (ANC, KZN) presented the KZN negotiating mandate related to the following issues in the Bill:

Clause 1

After line 26, on page 3 of the Bill, to insert a definition for “Black persons” to be defined as Africans, Coloured and Indians.

Ms Labuschagne asked the DMR to clarify how the current MPRDA amendments were impacted by Operation Phakisa.

Ms Malie responded that Operation Phakisa was the responsibility of the Department of Monitoring and Evaluation in the Presidency, so the DMR could not comment on Phakisa. However, regarding the MPRDA, the Department was engaging with the industry, which seemed to be happy with the MPRDA proposals. 

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 1

Before line 28, on page 3 of the Bill, to insert a definition for “carried interest” to be defined as an exploration and production right interest allocated to the state, with the cost being borne by non-state holders, in terms of section 86A of the Bill.

Voting on this clause was as follows:

• Eastern Cape - supported
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Clause 1

Before line 1, page 4 of the Bill, to insert a definition for “corresponding production right” to be defined as the right that an applicant would apply for, and that it referred to the area relating to the application. 

Voting on this clause was as follows:

• Eastern Cape - abstained
• Free State - absent
• Gauteng - absent
• KwaZulu-Natal - supported
• Limpopo - abstained
• Mpumalanga - absent
• Northern Cape - absent
• North West - supported
• Western Cape - abstained

Due to time constraints, the meeting agenda on the MPRDA provincial voting mandates was concluded. 

The Chairperson reminded Members that the MPRDA had to be concluded as soon as possible within the time frames and rules of Parliament, and that they had to allocate the appropriate time and effort to ensure all aspects and concerns were addressed so that the process was not merely “rushed through” the Parliamentary programme. He asked Members to set aside a full day, probably during early May, to enable the Committee to conclude its proceedings on the MPRDA.

Ms Malie said that the Department remained available at all times to engage with the Committee on the MPRDA. Members had to be aware that the country needed investment to drive development, so the conclusion of the MPRDA was critical.

Adoption of minutes

The Committee’s minutes of its meeting of 27 March 2018 were unanimously adopted.

The meeting was adjourned.