Hon Speaker, Ministers, Deputy Ministers and Acting Chairperson of the Portfolio Committee on Mineral Resources, once more we are tabling an amendment which has the intention of contributing towards the transformation of our economy in South Africa.
In defining our democratic future, we understood the need to be informed by an understanding of the current environment and our unique historical underpinnings that accentuated the current state of the mining industry globally and specifically in South Africa. As we traversed this journey, enjoined with the responsibility to redress past imbalances whilst we grow our industry, we have accordingly worked tirelessly at ensuring that the regulatory and legislative framework is optimised for the development of our natural resources. Even after more than a century, mining remains a sunrise industry that provides impetus for the development of various sectors of our economy, whilst it plays a critical role as we tackle the triple challenges of inequality, unemployment and poverty.
The Mineral and Petroleum Resources Development Act, a milestone piece of legislation in the South African mining and minerals sector, was signed into law and came into effect in May 2004. It vested custodianship of mineral resources with the state, giving effect to the internationally accepted right of the state to exercise sovereignty over all its mineral and petroleum resources.
Notwithstanding the tremendous progress achieved since the implementation of the Mineral and Petroleum Resources Development Act that created an enabling environment for growth and the basis for the transformation of the industry, South Africa's broader developmental objectives require a paradigm shift to allow development of the country's natural resources, especially solid minerals and petroleum, in a way that benefits our people, workers and investors alike. There is absolutely no reason why development of these resources cannot embrace the notion of shared value in which all stakeholders can benefit sustainably. The need to balance the interests and benefits of investors and the people of this country can neither be overemphasised nor treated as mutually exclusive.
We immediately directed the development of the mining strategy for sustainable growth and meaningful development of the mining industry. The strategy identifies major opportunities and binding constraints to the attainment of its objectives. Having considered the strategy, the department embarked on a process to amend the mining and regulatory reforms in a manner that will achieve both sustainable growth and meaningful transformation of South Africa's mining and petroleum industry. The Amendment Bill before you presents the necessary enhancement of the mining and upstream petroleum regulatory framework to augment the gains of the first decade of implementation.
The primary objective of the Mineral and Petroleum Resources Development Act is to improve the current construct of the Act by removing ambiguities that exist within the Act; make provisions for improved consultation processes; link the sanction provision to the turnover of the right holder; provide for the regulation of associated minerals; partition the rights and enhance provisions relating to the beneficiation of minerals; promote energy security; and finally, streamline the administrative processes with the departments of Water Affairs and Environmental Affairs.
The fragmentation of licensing for mining rights, environment and water use licenses were identified amongst the binding constraints to investment and the optimal development of the sector. As a result, the process of engagement amongst the departments of Mineral Resources, Water Affairs and Environmental Affairs culminated in the integrated licensing system which necessitated amendments to the three pieces of legislation. In terms of this process, the Minister of Mineral Resources will be the competent authority for the implementation of the National Environmental Management Act in respect of mine environmental management, whilst the Minister of Environmental Affairs will be the appeals authority. Section 96 has been amended to give effect to the aforementioned designation.
The streamlining of licensing processes improves the ease of doing business and provides the necessary certainty for investment by ensuring that the licensing process is achieved within a period of 300 days. This is indeed a good story to attract investment into South Africa but also contributes to a better economy for our country.
Section 9 is amended to deal with the order of processing applications and empowers the Minister to periodically invite applications by notice in the Government Gazette. The amendment brings about certainty, transparency as well as the orderly and optimal development of the nation's mineral and petroleum resources.
Section 26 of the Amendment Bill is aimed at strengthening the linkages between the mining and manufacturing sectors in order to maximise the value realised from the country's mineral resources by its citizens, thus contributing to government's objective of eliminating the triple developmental challenges of unemployment, inequality and poverty. Strengthening these linkages will be achieved by identifying key mineral inputs into the country's developmental imperatives which include infrastructure development, energy security, food security and industrialisation.
There have been concerns raised relating to unfettered ministerial discretion in terms of section 26 of the Act in that it lends itself to regulatory uncertainty. May I once more draw your attention to the constitutional ruling in the Kumba Iron Ore matter, which recognised and supported the entrenched principle of ministerial discretion where it is indeed appropriate and provided it is within the confines of the law.
Our experience of separate approaches of licensing to the intrinsically linked gas and coal resources has demonstrated that there is a general licensing duplication that creates uncertainty. It is precisely for this reason that the Bill is emphatic in its intent to affirm a cohesive and co- ordinated legislation for development and promotion of the country's solid minerals and petroleum resources. Chapter 6 of the Act deals exclusively with petroleum resources and is accordingly amended through the proposed Bill.
In terms of upstream petroleum development, section 86(a) is inserted to provide for state participation in petroleum development. The state has a right to a free-carried interest in all exploration and production rights. The insertion will ensure that the state is directly involved in the optimal exploitation of petroleum to achieve national development imperatives.
Section 23 is amended to further enhance provisions relating to the socioeconomic developmental impact of mining in respect of the Social and Labour Plan. This is an amendment which intends to take us to a future South Africa where poverty and unemployment will be issues of the past. Therefore, we are here to table this Bill as one of the most progressive steps in improving and contributing towards our economic development. I thank you. [Applause.]