The National Union of Mineworkers submitted that it would campaign for the establishment of a state owned mining company by 2011. Its submission had the following bases: the Freedom Charter of 1955 which had a clause on the people’s sharing the country’s wealth; the South African Communist Party’s statement in 1962 that it would seek to place control of the vital sectors of the economy in the hands of the national democratic state to correct historic injustices, by demanding the nationalisation of mining industry; the African National Congress’s declaration in 1969 that it was inconceivable for liberation to have meaning without a return of the wealth of the land to the people as a whole; the Mineral and Petroleum Resources Development Act 2002 reverting mineral rights to the state as the custodian of mineral wealth; the African National Congress’s resolution at its Polokwane conference in 2007 - the first conference following the passing of the Mineral and Petroleum Resources Development Act - that the natural resources of which the State was the custodian on behalf of the people, including minerals, water, and marine resources, be used in a manner that promoted the sustainability and development of local communities and also realised the economic and social needs of the whole nation; the African National Congress Youth League’s call in 2008 for the state to be custodian of the people in its ownership, extraction, production and trade of mineral wealth beneath the soil; and the resolution and agreement of the National Union of Mineworkers in 2009 and 2010.
Mining directly accounted for 8% of the gross domestic product– totalling 18% after considering indirect multiplier effects and the induced effect of mining. Mining contributed directly about R218.8 billion to South African merchandise exports or 31% of the total. The mining sector accounted for 50% of merchandise if beneficiated minerals were added to primary minerals, for example, catalytic converters, ferro alloys, steel, and chemicals. Mining paid R32 billion in direct taxes, equivalent to 17.3% of company tax. The South African mining industry was the world’s largest producer of ferrochrome, chrome and platinum group metals. Mining employed 518 585 men and women, equivalent to 6.1% of non-agricultural formal employment and 7.8% of total private sector non-agricultural employment.
The National Union of Mineworkers noted that, whether Parliament took a decision on nationalisation or not, any decision would ultimately need an implementation arm or vehicle – a state owned mining company.
Interventions required from Parliament included a moratorium on any sale of Government stake in the mining sector in all the spheres and funding entities of Government by implementation of the Cabinet decision of 09 August 2009; the Government should investigate and quantify the involvement of the state in the mining industry through the Industrial Development Corporation, Public Investment Corporation (PIC) and other state investments.
The Cabinet must finalise the Mineral Beneficiation strategy and include this strategy in the second Industrial Policy Action Plan 2. The Minister of Labour must introduce legislation for minimum wages for the mining industry, including mining contractors and small scale mining. The Mineral and Petroleum Resources Development Act 2002 and the Mineral and Petroleum Resources Royalty Act would remain the legislative basis for the establishment of the State Mining Company.
The State Owned Mining Company would change the structure of the economy to absorb a large number of the masses, create new sites of accumulation, and support developmental objectives. It would change patterns of ownership patterns and empower the state to drive a development agenda by building affordable economic infrastructure, and raising revenue for human development and other economic objectives.
The State Mining Company should be established by June 2011 and be under the direct responsibility of the Department of Mineral Resources and not the Department of Public Enterprises. The Government should consider whether it would not be possible to establish a Mining Investment and Development Bank similar to the Development Bank of South Africa and the Land Bank, but still under responsibility of the Department of Mineral Resources.
Members thanked the National Union of Mine Workers for a submission that was well motivated with clear suggestions, but noted that its timeframes were too short, asked about seismic events, black economic empowerment, the failure to recover jobs lost through the ‘credit meltdown’, employment equity, the conversion of hostels into family units, the development of skills, and about mining rights and if the Department of Mineral Resources would be both a regulator and a player in the mining industry. Members hoped that the establishment of a state mining company would be expedited, said that there should be another public hearing for traditional leaders as well as for women, asked what percentage share should the state hold in those cases where traditional authorities owned land and rights, asked for the views of the Department on various issues that had been raised repeatedly, such as beneficiation and prospecting rights and the transformation processes that needed to take place in mining, commented on the paradox of South Africa’s vast mineral resources and unparalleled levels of social and economic inequality, asked how the state-owned mining company would play a meaningful role without a bias in its favour to redress inequalities, and noted that it was time to form a strategy to establish and increase manufacturing in South Africa on the basis of raw materials. Democratic Alliance Members noted that there was a distinction between the productive capacity of the mining industry and the mineral wealth below the soil, agreed with the Union that communities should be given more benefits, commended the idea of an employee share ownership scheme, noted that a problem with black economic empowerment was that it was often a small group at the top of a black economic empowerment company which reaped all the benefits. By extending benefits to the entrance level workers, one would extend the benefits to the wider community. The Chairperson said this Fourth Parliament was an activist Parliament. It had been given its marching orders by the President to work faster and smarter to ensure results at the end of the legislative process.
The Legal Resources Centre submitted that one of the perhaps unintended consequences of the Mineral and Petroleum Resources Development Act 2002 was that it did not adequately protect communities in the former homelands and coloured reserves, as well as communities with claims in terms of the Restitution of Land Rights Act 1994. Any proposed amendments to the Mineral and Petroleum Resources Development Act 2002 should address the most appropriate participation arrangements to protect community interests.
The Legal Resources Centre gave a short outline of the historic and current legal regime and how it impacted on rural communities whose land was being mined or on which mining was planned; and indicated developments in international law relating to Africa and the Mineral and Petroleum Resources Development Act 2002 relevant to the debate about state participation in mining.
The Legal Resources Centre said that under colonial and apartheid land and mining laws, the state, in the case of land occupied by black communities, had awarded royalties payable by the mining companies to itself (the state). In the case of white land there were special measures to promote the interests of the landowners and occupiers. The legislation guaranteed minimum royalties or equity to white landowners and surface occupiers. The new legislative regime governing the relationship between landowners and mining companies, introduced by the Mineral and Petroleum Resources Development Act 2002 did away with the privileged bargaining position of white landowners, but required black land owning communities, and communities in the process of acquiring land, to accept mining on their land without their agreement. The state distanced itself from protecting and promoting the rights and interest of black communities. The basis of the consultation, if any, which was required was not stipulated and nor were the conditions under which the opinion of the affected black communities was obtained. Thus, the company that stood to benefit from its acquisition of mining rights could be - and mostly was - the institution that facilitated the process of elections of 'community representatives' and obtaining community approval for a resolution that allowed the mining company to extract the minerals without proportional benefit to the community. The Amendment Act 2008 (No 36 of 2008) [not yet in operation] proposed that the Minister be given the power to determine conditions for community participation in new prospecting and mining ventures, and when authorising the conversion of old order mining rights. It would be entirely within the Minister’s discretion to afford communities participation privileges. The significance of unresolved land claims could not be underestimated. The Mineral and Petroleum Resources Development Act 2002 should be applied in a manner more consistent with the statement set out in section 12 that required a comprehensive and effective programme of assistance to historically disadvantaged persons including rural communities. Consultation with and consent by the community owners before new mining development happened should be supervised by the state, or by an independent, non-interested party delegated by the State, and governed by regulations. State assistance should be available, to those communities who gave their consent, to negotiate fair agreements and compensation.
The Legal Resources Centre quoted the African Charter 1986. According to Article 21 (5) “States parties to the present Charter shall undertake to eliminate all forms of foreign economic exploitation….” The LRC also quoted the Polokwane Resolution 2007 calling for the use of natural resources, including minerals, in a manner that promoted the sustainability and development of local communities and realised the economic and social needs of the whole nation, and in this regard the strengthening of the implementation of the Mineral and Petroleum Resources Development Act 2002. The Centre also referred to the Centre for Minority Rights Development (Kenya) on behalf of the Endorois Welfare Council, March 2010. The LRC noted that South Africa’s historical background was institutionalised racism, and victimisation of the vulnerable. The Constitution was a map that showed the way forward. One had to ask what the hopes of an activist Parliament were. South Africa’s collective national objectives were to uplift and empower the poor, and redress the skewed, racially-defined economic relations of the country. The LRC saw the Committee’s role as ensuring a break away from the past in that the voices of the poor would never again go unheard in the process of the economic transformation of our land, and endeavouring to put our people first at all times.
A Democratic Alliance Member said that the Mineral and Petroleum Resources Development Act 2002 had resulted in de facto expropriation, and asked the Centre for suggestions to benefit those communities. Members asked about Alexkor, whether the African Charter was binding on the member states, if South Africa had ratified this Charter, asked why implementation of two sections of the Act of 2008 to amend the Mineral and Petroleum Resources Development Act 2002 had been suspended, if the land claim problem related to Section 25 of the Constitution, if revenue derived from licences for prospecting and royalties accrued in respect of trust land, about acid drainage, and how the legislation could be applied to ensure that the Department of Mineral Resources attended to the needs of mining communities. The Chairperson admired the LRC’s passion and identification with its clients, and noted its contribution since even before the dawn of democracy.
National Union of Mineworkers submission
Mr Madoda Sambatha: Parliamentary Head: National Union of Mineworkers (NUM), said that the NUM’s submission was derived from the previous Congress resolutions and the recent Mining Summit NUM Congress Resolution, May 2009: - “To campaign for and ensure the re-nationalisation of SASOL and Mittal Steel, the operationalisation of the State Owned Company in the mining industry with an ultimate aim of nationalising and socialising the commanding heights of the economy in line with the vision of the Freedom Charter”.
Mr Sambatha further indicated the background, and gave figures and facts from the Chamber of Mines on the contribution of mining to the economy. Mining had in 2008 a total income of R364 billion and a total expenditure of R383 billion, of which R144.6 billion was spent on procurement, R64 billion on capital expenditure, R58.6 billion on salaries and wages, and R25 billion was returned to owners of capital. Mining directly accounted for 8% of the gross domestic product (GDP) – totalling 18% after considering indirect multiplier effects and the induced effect of mining.
Mining in 2008 had directly accounted for 9% of the total fixed investment in the economy –13.3% of the total private sector investment. If the multiplier effect was taken into account, mining helped generate 18% of investment in the economy. Mining contributed directly about R218.8 billion to South African merchandise exports or 31% of the total. The sector accounted for 50% of merchandise if beneficiated minerals were added to primary minerals, for example, catalytic converters, ferro alloys, steel, and chemicals.
Mining paid R32 billion in direct taxes, equivalent to 17.3% of company tax. The South African mining industry was the world’s largest producer of ferrochrome, chrome and platinum group metals (PGMs). The South African mining industry was also a significant supplier of: aluminium, the ninth largest supplier in the world. It was the sixth largest supplier of coal to the world, the second largest supplier of manganese, the second largest supplier of gold, and the seventh largest supplier of iron ore.
In South Africa mining employed 518 585 men and women, equivalent to 6.1% of non-agricultural formal employment and 7.8% of total private sector non-agricultural employment.
Mr Sambatha gave political and policy perspectives. The Freedom Charter of 1955 had a clause on the people’s sharing in the country’s wealth: “The national wealth of our country, the heritage of all South Africans, shall be restored to the people; the mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole; all other industry and trade shall be controlled to assist the well-being of the people; all people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions."
Mr Sambatha quoted the South African Communist Party (SACP)’s programme, 1962. “The Road to South African Freedom”, under Economic Development, stated that “the Party will press for the strengthening of the state sector of the economy, particularly in the fields of heavy industry, machine tool, building and fuel production. It will seek to place control of the vital sectors of the economy in the hands of the national democratic state to correct historic injustices, by demanding the nationalisation of mining industry, banking and monopoly industrial establishments, thus also laying the foundation for the advance to socialism. At the same time, the state should protect the interests of private business where these are not incompatible with the public interest. It should offer assistance, by way of state loans, to non-monopolist producers, in return for state share in their undertaking, thus paving the way for gradual and peaceful transition to socialism”.
Mr Sambatha, continuing to explain political and policy perspectives, quoted from the ANC Strategy at Tactics adopted by the Morogoro conference, 1969. “In our country - more than in any other part of the oppressed world - it is inconceivable for liberation to have meaning without a return of the wealth of the land to the people as a whole. It is therefore a fundamental feature of our strategy that victory must embrace more than formal political democracy”….“To allow the existing economic force to retain their interests intact is to feed the root of racial supremacy and does not represent even the shadow of liberation”.
The 52nd National Conference of the ANC, Polokwane, 2007, the first conference following the passing of the Mineral and Petroleum Resources Development Act (MPRDA), resolved, among others, that “the use of natural resources of which the State is the custodian on behalf of the people, including our minerals, water, marine resources, [be] in a manner that promotes the sustainability and development of local communities and also realises the economic and social needs of the whole nation. In this regard, we must continue to strengthen the implementation of the Mineral and Petroleum Resources Development Act (MPRDA), which seeks to realise some of these goals.”
Mr Sambatha said that the 23rd National Conference Resolution of the African National Congress Youth League (ANCYL), December 2008, called for “the State [to] be custodian of the people in its ownership, extraction, production and trade of mineral wealth beneath the soil, monopoly industries and banks”.
Mr Sambatha said that in the NUM 13th National Congress Resolution, May 2009: Congress acknowledged the adoption of the Mineral and Petroleum Resources Development Act (MPRDA), reverting mineral rights to the state as the custodian of our mineral wealth and land. In this regard Congress mandated the National Executive Council (NEC) to engage Government on the following: the strategy and legislation for the State Owned Company in Mining; and to call for improved beneficiation of minerals and measures to regulate and stimulate the fabrication of raw materials into finished and semi-finished products.
The NUM Central Committee, 13-14 May 2010, Mining Strategy, mandated the NEC to engage Government, Industry and Investors on a new strategy on the Mining industry which should include but not be limited to (a) a Comprehensive Mining Strategy for the South African Mining Industry; (b) mining to be as a sunrise and not a sunset industry; (c) ensuring that mining careers were fashionable and remuneration was competitive and attractive; (d) clear investment in mining and labour-sending towns; (d) recognition of the mining industry and mine workers on their role within the South African economy; and (e) an environmental protection and rehabilitation plan.
The NUM noted that, whether Parliament took a decision on nationalisation or not, the reality was that any decision would ultimately need an implementation arm or vehicle. The NUM’s view as the Union was that the current debate on nationalisation and this public hearing should be seen as integral and re-enforcing each other.
The NUM said that, on the basis of the invitation, its submission would be two-pronged: areas of interventions required from Parliament between 2010 and 2014 inclusive; and the State Mining Company.
Firstly, Mr Sambatha explained the areas of intervention required from Parliament. These included a moratorium on any sale of Government stake in the mining sector in all the spheres and funding entities of Government (implementation of the Cabinet decision of 09 August 2009).
The Government should investigate and quantify the involvement of the state in the mining industry through the Industrial Development Corporation (IDC), Public Investment Corporation (PIC) and other state investments in all the spheres.
There was a contextual relationship between the Skills Development Act, the Social Labour Plan, and Employment Equity on the prescription of white women as previously disadvantaged, and the contextual relationship between decent housing and conversion of hostels into family units.
The time frame for the above three elements should be June to November 2010.
The Cabinet must finalise the Mineral Beneficiation strategy and include this strategy in the second Industrial Policy Action Plan 2 (IPAP2). The Minister of Labour must introduce legislation for minimum wages for the mining industry, including mining contractors and small scale mining. There was a need contextually to engage on the ANC manifesto’s call for decent work and whether decent work could co-exist with labour broking.
Parliament should develop a Comprehensive Mining Strategy for South Africa. (The Planning Commission, the Department of Mineral Resources (DMR), organised labour and organised business should play an active role in this development. Parliament should develop a common approach on community or traditional authority ownership in the mining industry. A Mineral Resources Bargaining council should be established. This should be industry-based and compulsory. Parliament and the mining industry should commission a comprehensive study on alternative technology to detect possible seismic occurrences with accuracy of date, time, and exact work place that was vulnerable.
The time frame for the six elements above should be January to June 2011.
Secondly, Mr Sambatha spoke about the State Mining Company. The MPRDA and Royalties Act would remain the legislative basis for the establishment of the State Mining Company. The State Mining Company would change the structure of the economy to absorb a large number of the masses, create new sites of accumulation, and support developmental objectives. It would change patterns of ownership patterns and empower the state to drive development agenda by building affordable economic infrastructure, and raising revenue for human development and other economic objectives.
The NUM recommended that Cabinet and Government should proceed with the establishment of the State Mining Company according to the decision of the Mining Summit. In this regard the NUM would be engaging Government on the development of legislation from June to November 2010 that must include, but not be limited to the nature of the Company (it must also deal with the extent of the Company’s involvement in both new and old mining rights; the constitution of the board (including Labour representation and powers of the shareholders in relation to fiducially responsibility); remuneration of the board, executives and the workers (closing the wage gap); channelling the Company’s proceeds to fund health, education and rural development whilst other percentage should be re-invested in the State Mining Company; and restructuring the licensing process from 2014 to prescribe how the new mining rights should be apportioned.
Mining rights should be apportioned as follows: a 49 percent share holding (private investor irrespective of race and gender); a 31 percent shareholding (State Mining Company); a 10 percent shareholding (employee share ownership schemes (ESOPs)); and a 10 percent shareholding (community, traditional Authority, or worker co-operatives). The NUM noted that on the basis of success or any lessons learned out of this process, old order rights must be subjected to this scenario by 2019.
The NUM submitted that immediately after the Government had investigated and quantified the involvement of the state in mining through IDC, PIC and other state investments in all the spheres, all the state involvement should be consolidated into one entity, under the State Owned Mining Company. The entity’s name should be JB Marks SA Consolidated.
The NUM submitted that the Government take responsibility for the beneficiation programme and in the strategy stipulate firstly beneficiation as the responsibility of the State Mining Company (state with 60% and private investors irrespective of race and gender with 40%). Secondly, the strategy should prescribe that 10% of all raw minerals extracted by any company would be handed over to the State Mining Company for beneficiation purpose.
The State Mining Company should be established by June 2011 and be under the direct responsibility of the DMR and not the Department of Public Enterprises. This should then lead to taking mining licensing and applications to Department of Trade and Industry, and the inspectorate to the Department of Labour (DOL).
The Government should determine on the basis of strategy and available resources (financially), what the operational model of the State Mining company would be in relation to old mining rights and new mining rights.
The NUM submitted that the Government should consider whether it would not be possible to establish a Mining Investment and Development Bank similar to the Development Bank of South Africa (DBSA) and the Land Bank, but still under responsibility of the DMR. The Government should ring-fence revenue for minerals (royalties and taxes) from March 2011.
Mr Sambatha concluded by saying that the NUM hoped that this public hearing would not only be the platform for submissions but also a step towards the actual implementation of the State Owned Mining Company according to the ANC 2007 resolution, NUM 2009 resolution and Mining Summit 2010 agreement. It was important for the Committee to be concerned with what was currently happening in the mining industry, rather than with any discussion in the ANC on whether the mines would be nationalised. The implementation of the recommendations above and other submissions would naturally answer the question as to whether to nationalise or not. Nationalisation might provide a better path to growth, but the purpose of nationalisation should not be ‘to bail out’ the back economic empowerment enterprises (BEEEs).
The Chairperson said that the NUM submission was clearly motivated with distinct suggestions.
Ms J Ngele (ANC) thanked the NUM for ‘a fine, clear presentation’. However, some of the NUM’s timeframes were too short. The NUM had touched on her favourite topic – seismic events. It was unbelievable that after all those years from 1910 until the present nobody seemed able to predict such events. She asked what the benefit of technology was if such prediction could not be done, because such events were dangerous and were killing our people. Yet they were still happening. Members had raised this issue with the Department.
Ms B Tinto (ANC) asked what the NUM had to say about black economic empowerment (BEE). The ANC Youth League had also said that BEE was not helping society at large, but rather enriching individuals. So many people had lost jobs because of the ‘credit meltdown’. Now the Government was trying to remedy the situation, but the jobs lost had not yet been recovered.
Mr H Schmidt (DA) observed that it was ‘a packed presentation’. Unfortunately time did not allow for discussion on all the issues. He noted that shortfall of R19 billion in 2008 indicated what it would have cost the state to keep the mining industry going if there had been a state-owned company. The mining sector paid much more tax in comparison with the contributions to the gross domestic product (GDP) than one would have expected mining companies to pay. One would have instead expected a rather similar comparative figure: mining paid much higher taxes than its contribution to GDP. It might be offset by exports. He failed to see the reliance on the Charter when the ANC Secretary-General was on record as saying the ANC and the Government had done what the Charter was saying in terms of mineral wealth beneath the soil. That had been put into custodianship. It had been ‘nationalised in very broad terms’. The reliance on the Charter to reach the productive capacity of the mining sector did not follow, because there was a distinction between the productive capacity and the mineral wealth below the soil. This was the same argument made by the same ANC representatives. Mr Schmidt understood that prescription lapsed after a certain period of time. That issue of prescription had been raised by various political parties, like the prescription of BEE and affirmative action. He asked about ‘new order mining rights’. Why was a date of 2019 and not 2014 given? His main concern was the division of the ownership. Nationalisation was not really applicable in the framework which the NUM had given. He agreed with the NUM that ESOPs and communities should be given more benefits. It was a very interesting analysis which should be discussed in more detail.
Mr E Marais (DA) commended the idea of an employee share ownership scheme. What one wanted to do with beneficiation in any industry, not just in mining, was to enrich the life of the person who was doing the work. By enriching his life you would better his or her life and circumstances. It was of such individuals that communities were built. A problem with BEE was that often it was, for example, the four shareholders or directors who benefited, not the workers. It was often a small group at the top of a BEE company which reaped all the benefits. By extending benefits, through beneficiation, to the entrance level workers, one would extend the benefits to the wider community and South Africa in general.
Mr C Gololo (ANC) thanked the NUM for a good presentation. He hoped that the establishment of a state mining company would be expedited. This Committee had a ‘mammoth task on hand’. One could not be sure of meeting some of the timeframes. However, Members would try hard, since they were determined to have a state-owned mining company. He asked about the situation of traditional authorities where they owned land and rights and how they would be accommodated as to shareholdings. What percentage share should the state hold in those cases? He asked about seismic events in mines and underground. He said that Mintec had reported that it was close to a breakthrough in its research to find a technology to predict these events. Five minutes warning was not enough. He asked how the state would intervene on funding for mining exploration, because this was very expensive.
Ms F Bikani (ANC) said that it was basically a matter of Members’ applying their minds and implementing their oversight role. There was a Department of Mineral Resources and it was disappointing that this Department was unrepresented in the meeting. She did not see an extension of benefits to disadvantaged labourers, but rather to white women. There should be another public hearing for traditional leaders, as well as for women: they had not had a fair share in opportunities to present their views. She asked for the views of the Department on various issues that had been raised repeatedly, such as beneficiation and prospecting rights, and the transformation processes that needed to take place in mining.
Mr M Sonto (ANC) commented on the paradox that South Africa had vast mineral resources but unparalleled levels of social and economic inequality. It had to be asked why we were doing this to ourselves, to the country and to the people. This is what the presentation was saying. The answer lay with Parliament. He asked about employment equity. The Employment Equity Act suggested that white women fell under the category of previously disadvantaged persons. However there were people exploiting that provision by focusing on the gender provisions of the Act while ignoring the racial provisions. He asked if this was happening without the NUM’s knowledge. White males were being replaced by white females in the guise of employment equity. Why was this happening? 01h 47m 31s
A Member asked about the conversion of hostels into family units. She hoped that the NUM would push the bourgeois towards transformation. She was concerned at the possible delay of licensing for the people, since those people, when they had to account to the Committee, reported that they should account to the Portfolio Committee on Trade and Industry.
Ms L Moss (ANC) called for a collective approach. She asked about the development of skills. Some training schools were empty. She asked about progress in making the mining hostels family units. The process should be speeded up. She asked about raw materials, in particular, iron ore. How many worked with raw grade iron ore in South Africa? For so many years raw materials had been exported. It was time to form a strategy to establish and increase manufacturing in South Africa on the basis of these raw materials.
The Chairperson asked about a moratorium on the issuing of licences. What were the views of the NUM? It was necessary to conceptualise the relationship between the provision of decent housing and the conversion of the mining hostels into family units. Pass laws had been abolished in 1986. This meant the virtual abolition of the influx controls, at least theoretically; but if you counted from then until now, single-sex hostels were still in existence. Even since 1994, single sex hostels, which perpetuated racial stereotypes in the mining industry, as the NUM had pointed out, still remained. He asked the NUM what it wanted the Committee to do. Did the NUM want the Committee to ban such hostels? As a former migrant labourer, since the time that he had begun working, this matter had perturbed him. It was only black male and female workers who were subjected to this. Not a single white mine employee had been subjected to the indignity of staying in single-sex accommodation. He did not think that the Fourth Parliament would want to be party to the perpetuation of that racial segregation in the industry. It must be dealt with effectively. He asked about mining rights and if the Department of Mineral Resources would be both a regulator and a player in the mining industry. He was aware that the state-owned mining company would be established in terms of the Companies Act and would operate in a similar way to other companies. He asked how the state-owned mining company would play a meaningful role without a bias in its favour to redress inequalities. How would this company regulate and issue licences to other companies? He asked why only 10% of the production of a particular commodity should be beneficiated. He asked about the establishment of a financial vehicle similar to the Development Bank of South Africa. Why not use the very same Bank? Why not review the mandates of such institutions completely? Or was there really a case for a special vehicle for the mining industry?
Mr Sambatha responded that the NUM fully agreed with the Secretary-General of the ANC on his interpretation that mineral wealth underneath the soil had been nationalised through Section 3 of the MPRDA 2002. However, one should never limit the question of nationalisation to the Freedom Charter. Nationalisation should be on the basis of the socio-economic and ideological context. It must also be asked on whose behalf one was nationalising.
Mr Sambatha said that the intended consequences of the Employment Equity Act had been reversed through a narrow interpretation of who constituted the previously disadvantaged South Africans, and exploitation of a loophole in the Act. White females were being appointed at the expense of blacks. Parliament must speak on that. The NUM interrogated employment equity plans on the basis of context, not on the basis of how many people, but on the basis of who they were. If one considered only how many, one could find the Department of Labour approving reverse racism.
Mr Sambatha said that the Royal Bafokeng example must be used as an example of how to extend benefits to other communities.
Mr Sambatha said that the Department of Human Settlements should be involved in the question of the mining hostels. In the establishment of new mines, there should be no question of hostels at all, since housing for the miners should be integrated with existing townships.
Mr Sambatha said that on the question of ownership the NUM wanted an incremental approach rather than a prescriptive claim.
Mr Sambatha said that the NUM would not support a call for a moratorium on mining licences, since this had implications for the existence of the Union and on the security of jobs.
With regard to seismic events, Mr Sambatha said that it was necessary to find additional resources to fund this technology. It was to be noted that if a miner died underground as the result of a seismic event that had not been predicted because of lack of investment in the technology, then eventually the state would have to bear the cost of supporting that miner’s family. So a death in a mine had a bearing on the social security net. Moreover, he remarked that if many miners died, there would be fewer voters.
If a state mining company were launched now, it would, under the current regime, be the responsibility of the Department of Public Enterprises. The NUM wanted the state owned mining company to be the responsibility of the Department of Mineral Resources. A state owned mining company must comply with regulations like any other company, however, and apply for an operating licence from the Department of Trade and Industry.
Mr Sambatha said that 10% beneficiation should be applied initially for all minerals mined in the beginning. Currently it applied to diamonds.
Mr Sambatha appreciated that the Committee had at least changed the interaction between Parliament and civil society; the Union had had quite a number of interactions with the Committee, but the Committee must ensure that it “tightened up its involvement”. If the Executive was not doing well on the implementation of legislation, then Members must stand up. On the other hand, the Executive did not have powers to misrepresent legislation.
The Chairperson said that Members would apply their minds to the submission. This Fourth Parliament was an activist Parliament. It had been given its marching orders by the President to work faster and smarter to ensure results at the end of the legislative process. He asked the Committee Secretary to consolidate the submissions and prepare an executive summary upon which Members would later deliberate and conduct some analysis after their study tour. Members who wanted the file of unconsolidated submissions could receive a copy of it before the recess.
Mr Schmidt said that Members were not always clear about matters as they existed at local level, for example, the hostels. Some companies had sold them. Some had renovated them, some had not. Members were making broad statements, and he therefore suggested monthly or bimonthly visits to gather information. It was unwise to continue discussing matters only in general terms.
The Chairperson said that he would take these views into account, and noted that there was a report of a mining summit recently published. According to this report, about 36% of hostel accommodation in the mining industry was still provided on a single sex basis, which meant that there had been quite a serious move to conversion. The Committee might in future spend more time in the field on oversight visits to verify information.
Legal Resources Centre: introductory submission
Mr Henk Smith, Attorney, Legal Resources Centre (LRC), said that the LRC was a non-profit public interest law firm. Much of its work was devoted to representing poor rural communities in court cases, often against Government, and its comments on the implementation of the Minerals and Petroleum Resources Development Act and any proposed amendments thereto were made on behalf of such communities.
The LRC had submitted comments to the Department and to the Committee on the MPRD Bill in 2001, the regulations, and the Amendment Bill of 2007, and to the National Treasury and the Finance Portfolio Committee on the Royalty Bill in 2007. The LRC looked forward to participating in the public hearings for rural communities affected by mining which the Committee intended to schedule for the next term.
The LRC wished to bring its submission to the Committee’s attention at the current hearings on the establishment of a state owned mining company because it believed that it might impact on the expectations of rural communities whose communal land was being mined or on which mining was planned.
The LRC wholeheartedly endorsed the overall objectives of the current and future series of public hearings and debate about the implementation of the MPRDA, which the LRC saw as taking important steps forward in redressing past imbalances in the exploitation of the nation’s mineral resources, and which at the same time would bring the control and management of our mineral resources into line with international best practice.
One of the [perhaps unintended] consequences of the MPRDA was that it did not adequately protect communities in the former homelands and coloured reserves, as well as communities with claims in terms of the Restitution of Land Rights Act 1994 (Act No 22 of 1994). Any proposed amendments to the MPRDA should address the most appropriate participation arrangements to protect community interests.
The LRC would give a short outline of the historic and current legal regime and how it impacted on rural communities whose land was being mined or on which mining was planned; and would illustrate its oral presentation with PowerPoint slides showing developments in international law relating to Africa and the MPRDA relevant to the debate about state participation in mining.
The LRC would also like to further explore, with the Committee, the concept of “community” and its definition, the social and spatial boundaries of communities, and the challenges relating to accountability, democratic practices and elite capture in community structures.
Legal Resources Centre (LRC) submission: Rural communities & mining on their communal land: current legal regime
The LRC said that inequity in the mining industry has its roots in the dispossession of the African population of their land. The first form of redress in relation to this legacy of inequity undertaken by the democratic government was to divorce mining rights from surface land occupation and ownership rights. While the placement of the country's mineral wealth in the hands of the state enabled the nation to benefit from future extractions, it did not compensate for past injustice and plunder.
Secondly, in its effort to achieve some shift in the skewed demographics relating to the ownership of the mines in South Africa, a limited notion of black economic empowerment (BEE) was introduced. However, the following were not included in the current scheme: the fact that using the surface ownership and use rights that communities acquired through the land restitution process would be a highly effective way of enabling those who were dispossessed to exercise their rights in a manner they thought best; to derive full restitution of past rights in land; and to take up communities’ rightful places as empowered African communities holding a genuine stake in the mining industry.
The result was that rural land owning communities were not necessarily better off as a result of the operation of the Mineral and Petroleum Resources Development Act [MPRDA], and the Mineral and Petroleum Resources Royalty Act. Similarly the Communal Land Rights Act 2004 [CLRA] would not have improved the bargaining of rural communities with regard to mining on their land.
Colonial and apartheid land and mining laws discriminated against the participation of black communities in mining on the land that they occupied. In the case of land occupied by black communities, the state awarded royalties payable by the mining companies to itself (the state). In the case of white land there were special measures to promote the interests of the landowners and occupiers. The legislation guaranteed minimum royalties or equity to white land owners and surface occupiers.
The new legislative regime governing the relationship between landowners and mining companies, introduced by the MPRDA [and the CLRA] did away with the privileged bargaining position of white landowners, and required black land owning communities, and communities in the process of acquiring land, to accept mining on their land without their agreement.
The state distanced itself from protecting and promoting the rights and interest of black communities. The basis of the consultation, if any, which was required was not stipulated and nor were the conditions under which the opinion of the affected black communities was obtained. Thus, the company that stood to benefit from its acquisition of mining rights could be - and mostly was - the institution that facilitated the process of elections of 'community representatives' and obtaining community approval for a resolution that allowed the mining company to extract the minerals without proportional benefit to the community.
In examining the current legislative dispensation, it was necessary to deal with the following in order to ascertain whether the current proposals offered the appropriate solutions: past discrimination against communities - the legal regime before 1994; the legal regime after 1994 and before the MPRDA - the promise of the Constitution and the democratic Government's proclaimed policies as reflected in its White Papers; how communities were dealt with in terms of the Mineral and Petroleum Resources Development Act of 2002; and the Amendment Act 36 of 2008 [not yet in operation]; and the claims and interests of communities.
With regard to the past discrimination against communities, examples of past statutory discrimination against black communities and promotion of white interests included the following: black people were not allowed to participate in the industry in that they were prohibited from applying for prospecting and mining permits; white land owners and tenants, that is, those who had taken or acquired the occupational ownership rights of the surface, were given legislative backing to participate in mining and shares in the proceeds of mines , whilst black people could not become owners of the land they occupied and did not get benefits from mineral exploitation on their land; and the Development Trust and Land Act of 1936 contained a blanket provision reserving all mineral rights on trust land and black owned land for the Trust and all proceeds went to the trust fund as if it was the private holder of mineral rights
Minimal benefits were obtainable under the now repealed Development Trust and Land Act of 1936 and the land control laws of former homelands. Old order landowners and surface owners received mining benefits by virtue of their land ownership and by operation of law. In Namaqualand in the 1980s, the Trans Hex mining company negotiated a lucrative mining lease with the state on a communal reserve and on 5 May 1994 converted the standard 5% state royalty to a regional community royalty, called the Diamond Fund Trust, which received 90% of the state royalty.
With regard to the legal regime after 1994 and before the MPRDA - the promise of the Constitution and White Papers, the repeal of the 1936 Act and the new constitution required that the substantive and procedural rights of occupying communities had to be recognised. The communities would have been landowners were it not for the apartheid laws. The land reform White Paper of 1996 promised consultation and community participation in all decisions concerning tenure reform, sale of communal land and development of communal land.
The Restitution of Land Rights Act provided for the restoration of rights in land, including mineral rights, to dispossessed communities. Today a fraction of the rural community claims had been finalised. A small number of these involved claims to the mineral rights associated with the land claims.
The significance of the delays in resolving the land claims that concern land where minerals were to be found was very great.
The Transformation of Certain Rural Areas Act no 94 of 1998 contained extensive provisions for equitable arrangements between landowning communities and mining companies starting new mining operations. (Unfortunately the relevant section was repealed by MPRDA in 2002.)
Concerning new mining development on community land, the stated policy of the Government was that the Minister of Land Affairs in the capacity as trustee and nominal owner of almost all communal land, provided as follows:
“If land is involved which was previously owned by the disbanded South African Development Trust (SADT) or land held in trust for a tribe or community, the Department of Land Affairs is approached by the Department of Minerals and Energy (DME). DME and Land Affairs also agreed that the latter will consult with the Provinces and the occupiers of such land or the tribe or community when they are approached to comment on applications for prospecting or mining rights. The wishes of the Provinces and the occupiers are taken into consideration before any decision concerning such land is taken by the Minister of Minerals and Energy or his delegate. Only after a final decision has been taken and conditions have been embodied in a contract, the required permit will be issued by the Director: Mineral Development concerned.”
In terms of policy directives of the Department of Land Affairs, communities with insecure tenure in the former homelands were to be treated as the putative owners of the land that they occupied. When land occupied by such a community was subject to a mining application, the Department of Land Affairs had to enter into a tripartite agreement with the relevant mining company and the community, in terms of which the community could obtain and negotiate benefits. These could include equity and/or royalty arrangements.
The Minerals and Mining Policy White Paper of October 1998 was largely based on the “use-it and keep-it” principle and licensing allowing for state determined royalties to the rights holder and surface rental to the owner [paragraph 18.104.22.168]. Prospecting fees and royalty payments had been payable where prospecting or mining operations involving state owned mineral rights had been taking place. The rates for prospecting and the level of royalties for mining were set out in a document approved by Director-General of the Department of Finance.
With regard to communities under the Mineral and Petroleum Resources Development Act of 2002 MPRDA), the stated aim of the Act (MPRDA) was to redress past racial discrimination in respect of access to the mining industry. Unused old order rights, including mineral rights where the surface and minerals were not separated, could be converted into new order mining rights within one year of the coming into operation of the Act, that is, by 1 May 2005. Other old order mining rights (those in use) could be converted into new mining rights within five years, that is, by 1 May 2009, and prospecting rights within two years, that is, by 1 May 2006. Otherwise these old order rights were permanently extinguished.
Section 104 provided that a community could apply for preferential rights to mine in respect of land to be transferred to the community. But the holder of a preferential right could not be given on land where a new or converted mining or prospecting right had already been granted or an application for such new rights was being considered.
The significance of unresolved land claims could not be underestimated.
The Minister of Land Affairs as current owner of communal land and unused old order rights did not apply on behalf of communities for new mining rights within one year. On a reading of the MPRDA, the mineral ownership rights of communities on this communal land, through the ownership of the Minister, were thereby deemed extinguished.
The MPRDA did not provide for a holding mechanism or moratorium on new mining pending the finalisation of land claims or tenure reform and transfer of ownership to communities.
The MPRDA required notification and consultation with the owner or lawful occupier before new mining commences, and this requirement might result in compensation for loss of use of the land and surface rights. But a damages claim would be limited to 'reasonable' compensation or rental for the agricultural value of the land. It did not provide for the affirmative measures afforded to old order landowners.
The MPRDA did not prescribe the procedure for consultation and notice before new mining begins. The Department was inconsistent in its application of the statutory consultation requirements and there were no regulations governing the consultation process to ensure that it was fair and protects the interests of the vulnerable and historically disadvantaged. This lacuna was expected to be addressed in the MPRDA amendment process of 2007/8. However, the Amendment Act 2008 (No 36 of 2008) limited consultation to matters relevant to environmental authorisation, and not the feasibility and sustainability of mining from a community perspective and its social impact on communities.
The Amendment Act 2008 (No 36 of 2008) [not yet in operation] contained further drastic changes. It was proposed that the Minister be given the power to determine conditions for community participation in new prospecting and mining ventures, and when authorising the conversion of old order mining rights. It would be entirely within the Minister’s discretion to afford communities participation privileges.
With regard to minerals under the CLRA, the preamble of the CLRA raised expectations that the Act dealt comprehensively with insecure tenure on communal land under the constitutional imperative embodied in section 25(5), 25(6), 25(8) and 25(9), and to effect land and related reforms. The Act raised the expectation that all rights associated with land would be transferred to communities. Section 3 provided that a community might own and dispose of immovable and movable property. But the Act failed to set out how mineral rights associated with land ownership would be dealt with.
In due course communities would become owners of their land. Arguably new land owning communities could apply for preferential rights under section 104 of the MPRDA - except where rights had already been granted. Thus, applicants for prospecting and mining rights were being given rights on communal land on a first-come-first-serve basis before the land was transferred to the rightful community owners, and before they could effectively apply for preferential rights.
The CLRA would now be replaced. It might take many years before the community entities that were to take transfer of community land were identified; before the land rights inquiries were completed; and before the land was transferred.
With regard to the claims of communities, the LRC proposed that the MPRDA be applied in a manner more consistent with the statement set out in section 12 that required a comprehensive and effective programme of assistance to historically disadvantaged persons including rural communities.
Under the MPRDA, communities should be given assistance to apply for preferential rights under section 104 of Act 28 of 2002 in order to avoid that new prospecting or mining rights were granted on their land without their being given the opportunity to negotiate appropriate terms for benefits and participation.
Consultation with and consent by the community owners before new mining development happened should be supervised by the state, or by an independent, non-interested party delegated by the State, and governed by regulations.
State assistance should be available, to those communities who gave their consent, to negotiate fair agreements and compensation.
The LRC concluded that the existing and proposed regime with regard to the allocation of mineral rights should not be allowed to proceed in a manner that exacerbated the existing negative impact of the lengthy delays in the resolution of land claims on historically disadvantaged communities who were illegitimately dispossessed of their land.
Rights to access new order mining rights could not be allowed to be extinguished through oversight or lack of consultation by a Minister or official.
The empowerment of historically disadvantaged communities who were the direct victims of apartheid spatial design should be the first priority in pursuit of black economic empowerment and their exclusion from ownership, including equity and/or royalty participation should require cogent justification.
The lack of protection of the interests of historically disadvantaged communities in the face of the financial and technical resources that established mining companies had at their disposal to support the narrow interests of their shareholders resulted in the state’s - intentionally or unintentionally - supporting the interests of the relatively wealthy rather than protecting the interests of the poor. It was therefore essential that due process and adequate support and advice were assured in the election of community representatives, in making decisions, in developing and signing agreements, and in decisions that clearly protected their interests.
It was necessary to have clarity on the monies that had accrued to date in regard to licences, and on prospecting and mining profits and royalties that had accrued in relation to Trust land.
There were many examples of community claims for participation in mineral exploitation on their own land that had political, legal and economic merit. New order mining law should recognise this need and create enabling mechanisms to achieve outcomes that satisfied the obligation to redress the results of past racial discrimination.
Legal Resources Centre: African Charter and National Aspirations presentations
Mr Thulani Faku, Candidate Attorney, referred to the African Charter 1986. According to Article 21 (1) “All peoples shall freely dispose of their wealth and natural resources.” According to Article 21 (5) “States parties to the present Charter shall undertake to eliminate all forms of foreign economic exploitation particularly that practiced by international monopolies so as to enable their peoples to fully benefit from the advantages derived from their national resources.” According to Article 22 (2) “States shall have the duty … to ensure the exercise of the right to development.”
He referred to the 2007 Polokwane Resolution No 2.10: “The use of natural resources of which the state is the custodian on behalf of the people, including our minerals, water, marine resources in a manner that promotes the sustainability and development of local communities and also realises the economic and social needs of the whole nation. In this regard, we must continue to strengthen the implementation of the Mineral and Petroleum Resources Development Act (MPRDA), which seeks to realise some of these goals.”
He referred to the Centre for Minority Rights Development (Kenya) on behalf of the Endorois Welfare Council, March 2010. The African Commission had found that the Respondent State was in violation of Articles 1, 8, 14, 17, 21 and 22 of the African Charter. The African Commission recommended that the Respondent State: recognise rights of ownership to the Endorois and make restitution of Endorois ancestral land; pay adequate compensation to the community for all the loss suffered; and pay royalties to the Endorois from existing economic activities and ensure that they benefit from employment possibilities within the Reserve. The African Commission was of the view that in any development or investment projects that would have a major impact within the Endorois territory, the State had a duty not only to consult with the community, but also to obtain their free, prior, and informed consent, according to their customs and traditions. The African Commission was of the view that the Respondent State bore the burden for creating conditions favourable to a people’s development…. The Respondent State, instead, was obligated to ensure that the Endorois were not left out of the development process or benefits.
Mr Faku referred to the Mineral and Petroleum Resources Development Act 2002 (Act No 28 of 2002) and the Mineral and Petroleum Resources Development Amendment Act 2008 (Act No 49 of 2008). Under the Mineral and Petroleum Resources Development Act 2002, Section 12(1), the Minister may facilitate assistance to any historically disadvantaged person to conduct prospecting or mining operations. However, the Mineral and Petroleum Resources Development Amendment Act 2008 exempted African Exploration Mining Finance Corporation (Reg. No U.C. 18018) from the provisions of Sections 16, 20, 22 and 27 of the said Act in so far as it related to any activity to prospect, mine and the removal of any mineral for accumulating and stockpiling for purposes of security of supply and purposes incidental thereto.
On the matter of national aspirations, the Constitution of the Republic of South Africa was a map that showed the way forward. One had to ask what the hopes of an activist Parliament were. South Africa’s collective national objectives were to uplift and empower the poor, and redress the skewed, racially-defined economic relations of the country. South Africa’s historical background was institutionalised racism, and victimisation of the vulnerable.
The LRC saw the Committee’s role as ensuring a break away from the past in that the voices of the poor would never again go unheard in the process of the economic transformation of our land, and endeavouring to put our people first at all times.
Mr Schmidt said that one of the LRC’s submissions made for very heavy reading. It was a legal document in its entire form, and had footnotes regarding land claims. He suggested that there might be a solution in the example of one very successful community. The MPRDA had led to what in reality was expropriation. He asked the LRC what it suggested could be done to benefit those communities which had suffered such expropriation.
Mr Gololo said that he found it difficult to challenge the LRC’s document itself. He asked Mr Smith about Alexkor. Communities had been given land by the Government but still did not receive their royalties from Alexkor. He asked also about the situation of a community in the Eastern Cape.
The Chairperson asked what the status of the African Charter was, according to the LRC’s understanding. Was it binding on the member states or was it similar to one of the United Nations articles? He asked if South Africa had ratified this charter. He acknowledged that the LRC had quoted from original documents when it had referred to the Polokwane conference resolution of 2007. The LRC’s emphasis in its submission was on rural communities, but the ANC resolution did in fact embrace rural communities. He asked if the LRC could explain why implementations of two sections of the MPRDA Amendment Act 2008 had been suspended. He could not understand why these amendments in their totality had not been implemented. Members would naturally assume that since the Act had been passed, the Department would be implementing its provisions. He asked if the problem of Land Claims related to Section 25 of the Constitution – the property clause. He asked about the revenue derived from licences for prospecting and royalties accrued in respect of trust land.
Ms Bikani asked about acid drainage. She asked how the legislation could be applied to ensure that the Department of Mineral Resources attended to the needs of mining communities.
Mr Smith replied that Ms Bikani had presented the biggest challenge on how implementation could move faster and more quickly.
Mr Smith responded to the Chairperson’s question relating to the Development Trust and Land Act 1936 to establish a fund where all the mining royalties and least monies accrued to a trust fund. It had to be asked what had happened to the trust monies. The trust had been disbanded under the Abolition of Racially Discriminatory Land Measures Act 1986. Communities were still asking what had happened to their monies. No answer could be given, even though the LRC had asked the Minister on a number of occasions. Now we were planning new dispensations, but one had to ask about the past.
Mr Smith said that the alignment and coordination of land claims envisaged in the 1994 legislation and the MPRDA never happened. There were supposed to be sunset clauses to ensure that land claims were dealt with, whilst new mining applications happened. The LRC had explained in its document that attempts to align these two processes had been unsuccessful. The LRC had found that the majority of rural land claims remained unresolved. However, mining and prospecting applications for new mining on land-claimed land were happening apace. This was a real problem for communities. In 2001 the LRC had made proposals on how it could be redressed, but it remained an unresolved issue. Land claims had been politicised to a large extent. The rights-based nature of land claims was overshadowed by political decisions by the Commission, but this did not absolve us from the responsibility of attempting at a level of principle to address new mining happening on land claims, and also to address the historical exploitation of minerals on land claims. If a community received back land of less value because the minerals had been taken from the land, or the land had been rendered unusable - it could not be used because it had been rendered sterile and one could not graze cattle upon it – this was a matter that should be addressed. So the LRC was saying that these two processes were inter-related, but this was not the case at the moment.
Mr Smith said that the African Charter stood alongside the Constitution. The state must report annually on progress on implementation of resolutions approved by the African Union. Compared to the international instruments on other continents, the African Charter was one of the strongest, and South Africa had committed itself by signing and ratifying the Charter to implement the decisions of its constituting bodies. It was stronger that the Southern African Development Community (SADC) Charter. It was as important to bring out statutes in alignment with ‘soft law’ or proposals of international law. The Committee would do well to consider the protocol, on mining in Africa and the conduct of foreign companies and South African companies in other parts of Africa, being developed by the Africa Economic Commission and the United Nations Development Programme (UNDP). The Committee recognised that the LRC was preoccupied with the issue of communities, but that was its brief, and it would stick to it.
Mr Smith said that the Royal Bafokeng model was said not to be replicable because of the time when that community had entered into the platinum industry, and because the mineral concerned was platinum. It was not possible in any of the other sectors to make those super profits. A surface rental had been converted into a lease, a royalty and now into equity.
Mr Smith said that the Alexkor situation had arisen because of a land claim and a very particular set of facts, which resulted in a 49% equity on land mining. However, diamonds were not being mined on land largely at Alexkor at the moment.
Mr Smith said that there were two communities with significant stakes as owners of equity in mining in South Africa. He said it was a very important starting point that communities should be recognised as stakeholders in new mining on their own land and more so when there was a historical dispossession.
Mr Smith said that there should not necessarily be a ceiling. It depended on the circumstances. If there had been historical exploration, it might mean that the community should have a better bargaining position in working out an equitable equity stake, or royalty arrangement if it did not want to take the risk of a new venture. Therefore community participation really depended on the circumstances. However, it should be supervised if required, and there should be statutory normative standards to guide parties in these very important constituting moments of a new venture or the restructuring of an existing venture.
Mr Smith said that the LRC understood that the non-implementation of the 2008 Act had to do with the alignment of the MPRDA Amendment and the supervision of the decision-making powers of the Department of Mineral Resources with regard to environmental authorisations and an enforceable and unenforceable arrangement between the two previous Ministers in this regard. There was said to be a period of two years in which there would be a handover of environmental authorisations. Unfortunately there were problems in this regard. That Amendment Act, in Section 5, reduced the possibility of community consultation and consent to mining on their land. The 2008 Amendment Act therefore gave with the one hand but took away with the other.
Mr Smith said that it was necessary to find compatibility between these various reform measures. Land claims and mining and mineral claims ‘did not speak to one another’. If one were to adopt the transforming measures that were needed in this mining industry, it was also necessary to justify them to the international community. The LRC believed that the authority was in our international law and in international economic policy that we could take transformative measures. In particular it was justifiable in the roots of the structure of the mining industry of South Africa, and the LRC said that it had its roots in the land question. “We’ll get the mining question right, if we get the land question right.”
Mr Schmidt commented that Mr Smith’s remark that “We’ll get the mining question right, if we get the land question right” was a heavily loaded statement. It would need a review of the structure of the MPRDA.
Mr Smith said that there was limited value in reviewing ownership, as the LRC understood it, under common law. It was necessary to approach it from a decision-making angle. The community must participate in development decisions. If it had not happened in the past, then it was necessary to put them in a position to participate in such decisions with equality of “arms” in terms of bargaining, because “there was no equality of arms when we were driven off the land”. This equality did not necessarily have to derive from ownership. With regard to minerals it was important to put people in a bargaining position in which they could work something out. It was not unlike the change in ownership gradually over time that the Committee had heard about earlier that day.
The Chairperson thanked the LRC. The Committee might require LRC’s presence again to clarify certain matters. The Committee sought more than one legal opinion. Moreover, he admired the LRC’s passion. It was evident that the LRC identified with the community. That kind of identification was important, since how could one represent a client with whom one did not identify. He acknowledged the contribution of the LRC since even before the dawn of democracy.
The Chairperson said that there were still applications for oral submissions. The Committee Section would assess whether there were sufficient outstanding applications for oral submissions to warrant a meeting for public hearings on Wednesday, 02 June 2010. The Committee would also have to consider arrangements for its study tour. The Committee Secretary would notify Members, at the latest on 31 May 2010, of arrangements for the Committee’s last meeting of the present term.
The meeting was adjourned.
Assistance to historically disadvantaged persons
12. (l) The Minister may facilitate assistance to any historically disadvantaged person to conduct prospecting or mining operations.
(2) The assistance referred to in subsection (1) may be provided subject to such terms and conditions as the Minister may determine.
(3) Before facilitating the assistance contemplated in subsection (1), the Minister 25 must take into account all relevant factors, including-
(a) the need to promote equitable access to the nation's mineral resources; ( b) the financial position of the applicant;
(e) the need to transform the ownership structure of the minerals and mining industry; and
(d) the extent to which the proposed prospecting or mining project meets the objects referred to in section 2(1), (d), (e), (f) and (i).
(4) When considering the assistance referred to in subsection (1), the Minister may request any relevant organ of State to assist the applicant concerned in the development of his or her prospecting or mining project.
- National Union of Mineworkers Establishment of State Owned Mining Company Submission
- Legal Resources Centre Letter to the Chairperson, Portfolio Committee on Mining
- Legal Resources Centre Rural communities and mining on their communal land: the current legal regime
- Legal Resources Centre National aspirations Presentation
- Legal Resources Centre [The African Charter 1986, and other documents] Presentation
- We don't have attendance info for this committee meeting
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