Abolition of Lebowa Minerals Trust Bill: discussion

Meeting report

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This Report is a Contact Natural Resource Information Service
Taking Parliament to People, and People to Parliament
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MINERALS AND ENERGY AFFAIRS PORTFOLIO COMMITTEE
12 September 2000
ABOLITION OF LEBOWA MINERALS TRUST BILL [54-2000]: DISCUSSION

Documents handed out:
Abolition of Lebowa Mineral Trust Bill
Draft Committee Programme Sept - Oct 2000
Draft Programme for Public Hearing on the Bill
Abolition of the Lebowa Minerals Trust Act
Abolition of the Lebowa Mineral Trust Bill - Ownership of Mineral Rights
What Constituted Lebowa Territory

SPEAKERS
From the Department of Minerals and Energy:
Dr J Bredell
Ado M Mononela
Mr H Taljaard
Mr J Rocha

SUMMARY

The Department presented a review of the Abolition of the Lebowa Minerals Trust Act and accepted questions from committee members. The Committee's Programme for September is the following:

• Friday, Sept. 22^nd and Saturday, Sept. 23^rd: Public Hearings on Abolition of Lebowa Mineral Trust Bill (Northern Province).
• Tuesday, Sept. 26^th: Committee Deliberations on Abolition of LMT Bill
• Wednesday, Sept. 27^th: Committee Deliberation on Abolition of LMT Bill

(all dates subject to approval)

• Wednesday, Oct. 4^th: Ministry feedback on meetings with De Beers and issues relating to the SA Diamond Board.

MINUTES

After a short introduction from chairperson Mr D Nkosi, the Department refreshed the committee on the reasons to abolish the Lebowa Minerals Trust (LMT), the content of the bill and the ownership of mineral rights. LMT was established in 1991 to privately hold all the mineral rights transferred to the government of the former Lebowa. In 1998 there was a ministerial investigation into the future of LMT and on Jan 19, 2000 the cabinet approved the abolition bill for introduction into Parliament. Reasons for abolition include that the mandate of LMT is limited to a territory which is no longer recognized by the constitution. The constitution also does not recognize mineral matters as a function beyond the bounds of national jurisdiction. The constitution seeks to establish a coherent nation-wide approach to mineral development for the benefit of the entire population - a goal that is circumvented by the existence of the LMT. Additionally, the inconsistency in state's approach to governance may be confusing to potential investors.

Long Title of the Bill

Under Clause 3, which deals with vesting in the state, it is within the power of the Minister to grant mineral rights to a person or tribe who rightfully claim ownership. During data collection initiatives, the Department did not find any minerals rights endorsed to an individual name or tribe and instead determined that all mineral rights were registered to the state.

Under Clause 4, three methods of transfer of staff are proposed: post in public service, post in associated institution (this must be an institution established by law and approved by the minister), and/or the retrenchment of staff.

The department speakers then reviewed the acquisition of mineral rights held by the government. The Proclamation R228 of 1986 outlined two separate methods of transfer:

1. Transferred land including mineral rights to the Lebowa government.
2. Transferred land held in a trust for a black person, black tribe or community to the Lebowa government to be held in trust (no reference to mineral rights).

"Government - owned mineral rights" is defined as all mineral rights transferred to the Government of Lebowa by or in terms of Proclamation R228 of 1986 and all such mineral rights which may subsequently be transferred to or acquired by the Government (Abolition of the Lebowa Mineral Trust Bill). Section 12(1) of the LMT reads that "…all Government-owned mineral rights shall vest in the Trust with effect from the date of coming into operation of this Act or the date on which such rights are acquired by the Government…". No individual claims to mineral rights are referred to in the Act, and the Department found no proof that mineral rights were being held for communities/individuals/tribes. The Department concluded by referring the committee with the government policy that "Intermediate statutory regulatory institution, such as mineral trusts, will be phased out" (Abolition of Lebowa Mineral Trust Bill).

Discussion

Mr Davidson (DP) wanted clarity as to how the state acquired mineral rights. Also, if there were no identified mineral rights attached to a land at the time of sale, who then owns the mineral rights of that property? Lastly, he suggested that the department was unable to find evidence of individual or tribal claims because within the former Lebowa there were mineral rights held privately that were perhaps not registered to the government. Mr Davidson pointed out that under apartheid tribes were not allowed to own land but still functioned as land-owners in every sense. If there was not a system of apartheid, these people would have legitimately owned the land and the subsequent mineral rights. He requested comment.

The speakers noted that under common law, the owner of the land owns everything on and below it. Mineral rights are always present and exist independently of any institution claiming mineral rights. The Department then reiterated their stance that when Lebowa was created, the community inherited those land and mineral rights by the former SA government. Lebowa then transferred these rights to the LMT. At this point Mr Davidson emphasized that although minerals are always present, mineral rights are independent from them and exist as a conceptual creation.

Mr E Lucas (IFP) then asked the Department who the board members of the LMT are and what are their functions. He asked also who did the mining and what the conditions of the mines are.

Ms D Motubatse (ANC) observed that the bill does not include reference to the people who live around the mines. He asked for a description of the current status of the bill, and more specifically, if the LMT is still functioning.

Mr S Mongwaketse (ANC) asked for the status of joint venture mineral rights.

Mr M Ramodike (UDM) inquired if the Department has investigated the issue of ownership of mineral rights in Lebowa prior to the establishment of the Lebowa government. It was also asked under which law the LMT was created. The committee also wanted to know in realistic terms, how the dissolution of the LMT will affect mining companies. The Committee asked the Department to clarify as to what extent they realistically expect entrenchment to be the last option in restaffing. They observed that the Department seems set on transference rather than considering other options such as re-training. There was a request that the Department be honest about other precedents and issues especially those concerning investors. It was pointed out that it is up to the Committee to decide if there is no other avenue to explore other than transformation.

The committee also questioned the Department's finding that there are no individual claims to mineral rights. What if the Lebowa government lacked the resources or efficiency to register individual deeds, though the rights to these deeds existed?

The speakers noted that the DG of the Department is the chairperson of the Board of LMT and s/he may delegate duties. The board includes 6 members plus the chair. Monies in LMT are allocated towards granting production rights to the mines, and loyalties are paid directly to LMT accounts. The board then decides what to do with the profits. It was pointed out that because the trust was established through the Act, it cannot exist without the Act. In other words, if the Act dissolves then the trust will dissolve simultaneously.

Referring to the concern that the bill doesn't address people living around the mines, the Department said that the proposed bill is designed to be fairly specific. The Mineral Development Bill, which is soon to be presented to the committee, contains provisions for people and communities affected by mines.

At this point, Ms D Motubatse (ANC) asked the Department how mining communities were addressed by the LMT. The speakers responded that because when the trust was created it did not address these communities, the abolition of it may not address them either. The speakers confirmed that the LMT is still currently in function and does legally hold mineral rights. Consequently, if the abolition of the LMT goes through then all the mineral rights held within it will be handed over to the government. The speaker also addressed the mineral rights of chiefs, by saying that chiefs will fall under the category of "natural persons" and that their mineral rights will be dealt with by new laws after the abolition takes place. He followed this by stating that if there was privately owned land in that sector then the government of the former Lebowa did not receive that land or its mineral rights.

Due to time constraints, the chair choose to close the meeting at this point to be reconvened next week.

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