Transnet made a submissions on the National Environmental Management: Integrated Coastal Management Amendment Bill. The company felt the need to have ownership of the sea bed and the waters within harbours. The Committee disagreed. The coast and the sea belonged to the people of the country and the state. However, it was agreed that the legislation made provision that any form of infrastructure erected by Transnet on state ground would remain the property of Transnet. Some other proposed amendments were accepted.
Three other planned submissions were cancelled as presenters were unable to attend the meeting. Their written submissions would be taken into account. The Department of Environmental Affairs was instructed to compile the amendments proposed in all the submissions by 2 August 2013. The document presented to the Committee must indicate which proposed amendments were supported by DEA and which were not.
The Chairperson announced that two of the four submissions would not take place as the presenters did not have funds to travel to Parliament. The Department of Environmental Affairs (DEA) would still consider their written submissions. The submissions remaining would be made by Transnet and the Commission on Gender Equality.
Ms Nonkululeko Mabandla, Transnet Chief Executive: Legal Services, introduced the submission. There had been engagement with DEA for some time. There had been a significant change in position. A supplementary document had been prepared.
Ms Mabandla said that Transnet fully supported the Bill. Ownership of ports was important.
Captain Rufus Lekala, Chief Harbour Master, explained the infrastructure of a port. In terms of the Ports Act, the port infrastructure included all the structures needed to operate the port for the protection and securing of the port. Vessels had to be protected from rough seas. Simulations were done when designing a port. Once constructed, the lifespan of a port should be more than 100 years. The most critical port was the terminal basins and the entrance channel, which were deemed to extend to the sea bed. These were the heart and soul of the port.
Capt Lekala explained how a breakwater was constructed. This was attached to the sea bed, the ownership of which was debatable. The sea bed belonged to the state, but the ownership of the sea bed should be with the port operator.
The Chairperson asked why this was needed. The breakwater and other structures belonged to the port, but the coast generally belonged to the people. He was flabbergasted with this obsession with the sea bed.
Capt Lekala explained that the sea bed would be at a particular depth when a port was constructed. Transnet might then need to dredge the sea bed to reach the required depth.
The Chairperson said that DEA would afford permission to conduct this operation, but Transnet did not need to own it.
Ms Mabandla said that Transnet needed the exclusive right to the sea bed.
The Chairperson read from the Act. Coastal property did not include any moveable structure whether on land or sea. It was clear that such structures would belong to Transnet and not be public property, but the land belonged to the people.
Ms Mabandla asked that an exception was needed.
The Chairperson countered this argument. There was no question of prospecting for minerals. The common law was amended by the Act. Many parastatals had been privatised to some extent. It would be complicated if Transnet were to be privatised. He did not think the ownership of the sea bed was needed. The Bill would ensure that Transnet structures build on public property would remain their property. Allowing this would open the door to other parastatals.
Ms Mabandla asked that the sea bed be excluded from coastal property.
The Chairperson disagreed.
Mr Glen Penfold, a Partner at Webber Wentzel and legal consultant to Transnet, said that the concern regarding the port infrastructure was that the infrastructure was owned by Transnet, which had sought loans on the basis of this property. In future, it wanted the surety that it would continue to own the infrastructure.
The Chairperson said that clause 2(A) would cover this.
Mr Penfold said that the clause did not say that Transnet would own the infrastructure. Generally, the owner of the land would own the building built thereon. Therefore, the public would own the infrastructure at present. He did not think there would be a title deed. One way to deal with this would be to clarify that ownership rested with Transnet. The Ports Act did provide for the ports authority to own the ports. This did not mean that Transnet should own the sea area out to the port limits, but merely that they should own the infrastructure in the port.
The Chairperson had a problem including this in environmental legislation. If it was only about the infrastructure, it should be spelled out in the National Ports Act if not done so already. It might be possible to add a rider that the Act would not affect the ownership of the property.
Mr Penfold understood this dilemma. A convenient way would be to ensure that the Act did not raise a dispute over ownership. The history went back to the days of the Union of South Africa. To exclude the issue of the ownership would not be problematical. The public would not have access to what might be below the sea bed.
The Chairperson said that issues could arise if any mineral deposits might be found below the surface. He suggested that the Bill include a provision to stipulate that there would be no effect on the current ownership of the various segments of the port. He asked that Transnet sit with DEA in order to draw up such a clause.
Ms Mabandla said that Transnet was planning a new port.
The Chairperson said that a new port would fall under the amended Act. Previous legislation might have created a legal scenario. A lawyer could interpret the existing legislation. Existing infrastructure should be protected. He said that the issue of the sea bed should be removed from the picture. The argument that the exclusion could undermine the ability to raise capital would also apply to the state.
Ms Mabandla said that the entrance channels and turning channels had also not been dealt with. Transnet had made significant investments.
The Chairperson said that Transnet had spent nothing on the water. They had constructed walls, but could not be given ownership of the sea. Their assets were the infrastructure, and they had the legal authority to create and develop a port. What needed protection was the infrastructure.
Ms Sue Lund, General Manager: Public Policy and Sustainability, Transnet, explained how entrance channels and turning basins were registered. These areas comprised half of the asset value in terms of the Ports Act. The Legal Succession Act had given all the assets of Railways and Harbours prior to 1989 to Transnet.
The Chairperson said that the water could not be regarded as an asset. He asked where this property was registered.
Ms Lund said it might not be registered in the deeds office. Investments were made in the form of dredging to maintain channels.
The Chairperson said that the state would give permission for this to be done. Ownership was needed. Transnet had the infrastructure.
Mr Melanchton Makobe, Chief Director: Legal Counsel, Department of Public Enterprises (DPE), said that the sea was included in the investment. Taking this away would reduce the value.
The Chairperson said that Mr Penfold had said that Transnet did not own the sea. They would look at the claims made by Transnet, but this was the intent of this amendment. All of the sea would belong to the state. Permission would be given, if environmentally advisable, to conduct whatever operations were needed to maintain the port. He asked if DPE disagreed with the Minister, who had approved the Bill at Cabinet level.
Mr Makobe said that this was the position of Cabinet. DPE had lodged its concerns with the Minister. He did not disagree with the Minister.
Ms Mabandla wanted to seek certainty in the Act. The DEA had not done a lot to give them comfort. The situation put forward by the Chairperson should be a resolution to their concerns.
The Chairperson said that any uncertain issues would be investigated. He did not believe that the ownership issue would undermine the investment value. He did not think that the President would be so stupid as to undermine Transnet. Environmental impact assessments (EIA) would be required to determine how the coastline would be used.
Ms Mabandla said that there was an issue with the definition of 'harbour'. There should be a separate definition for 'port'. The other issue related to dumping permits. She asked that the validity of the permits be extended to five rather than the proposed two year period.
Capt Lekala said that some of the projects ran over five years, and there would be uncertainty if the permit were to expire during the life cycle of the project. Dredging was a particular project that might be affected.
The Chairperson said that approval of a harbour implied that the related maintenance was also approved. He accepted that the permit period should be extended to five years.
Ms Mabandla said that where Transnet had reclaimed land from the sea it should be vested with Transnet.
The Chairperson said that Section 7 dealt with this issue. Once permission was granted in terms of the Act no further permission was needed. Should Transnet own the land it could do with it what it wished. He requested that the issue be dealt with expediently.
Mr J Skosana (ANC) supported the views of the Chairperson, including the five year period for the permit.
Mr F Rogers (DA) wanted clarity. If there was no title deed, he did not know how it could be an asset on the balance sheet.
Ms Lund replied that the capital investment was recorded as a physical asset, such as the entrance channel. The asset register had been recognised in order to earn a return over time.
Mr Rogers felt that an asset was something that one owned. He understood that the land and property erected thereon could be an asset, but not the sea.
The Chairperson agreed. All property was registered. In Section 7(1)(g), coastal property was defined. These natural resources belonged to the people.
Mr Penfold contended that certain assets had been transferred by statute. There was no need to register this property, as it would undermine the intention of the legislation. The Legal Succession Act was complex. He provided the example of Coega, where the port had been established by an Act of Parliament. This had included that provision that the sea area was vested in Transnet. This Act had been passed in 1998. Where other ports had been created before 1994, this question of ownership could be debated.
The Chairperson felt that this argument was invalid. Ms Mabandla had backed down in the face of the counter-argument he had put forward. It seemed that Mr Penfold did not understand the new approach being taken by government. The past was no longer relevant in the face of this new policy. He respected the job being done by lawyers, being one himself. Mr Penfold must remember who the shareholders were. He was prepared to look into any misinterpretation, but lawyers could not cling to the past regime. Cabinet had resolved to move in a new direction.
Mr Penfold said that the ownership had been defined in previous legislation.
The Chairperson said that the only reason to change the Bill would be if Cabinet felt it had been wrong. The state must guard against unintended consequences. He instructed the DEA to look into such possible consequences, which could be addressed by transitional arrangements. He hoped that the Bill could be processed quickly with all the amendments put forward.
The Chairperson announced after a short interval that the other presenter would not be coming. This concluded the hearings. Many submissions had been made, none of which were politically controversial. Some technical proposals would have to be considered. He asked the DEA to consolidate the amendments. The sooner this could be done the better, as there was other legislation coming. He asked that this be done by 2 August 2013. The document presented to the Committee must indicate which proposed amendments were supported by DEA and which were not. He sketched the programme for the following two weeks.
The meeting was adjourned.
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