Mineral and Petroleum Resources Development Bill: deliberations

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Mineral Resources and Energy

14 June 2002
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Meeting report

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The aim of this report is to summarise the main events at the meeting and identify the key role players. This report is not a verbatim transcript of proceedings.

14 June 2002

Mr M. Goniwe (NA)
Mr M. Moosa (NCOP)

Documents handed out:
info@pmg.org.za for documents]

Minerals and Petroleum Resources Development Bill
The Chairperson, Mr Goniwe invited the State Law Advisers to give their comments on the constitutionality of the Bill.

Mr Enver Daniels extended his apologies to the Committee for not having a comprehensive report on the constitutionality of the Bill.
He noted that in applying their minds, the State Law Advisers Office was wary of the two areas of concern ie. Expropriation and powers of the Minister.
Mr Daniels was however confident that the Bill was in fact constitutional and that it would stand the test of constitutionality. He however did caution that the only the Constitutional Court would have the final say.

Mr Moosa opened the discussion and noted that there were 3 issues to be discussed.
(i) The question was firstly whether the act of the state in taking custodianship of mineral rights in SA was expropriation from the landowners. He felt that it could not amount to expropriation since the owner of the land would not be able to place a value on the mineral rights attached to the ground.
(ii) The second instance was direct expropriation where the state compensates a landowner when mineral rich land was expropriated from an individual in favour of the state.
(iii) The third issue was one where the farmer's right to farm has been diminished because the state had granted a mining right to a company. The farmer must therefore be compensated in the amount that he would have gained had he farmed the land. Negotiations need to take place between the farmer and the company on the amount of the compensation. Mr Moosa felt that Clause 51 dealt with the issue somewhat. He noted however that the farmer would only be entitled to compensation in the present scenario if he had refused the mining company access to his land. Mr Moosa noted that the provision
should be re-evaluated.

Mr I Davidson (DP) referred the State Law Advisers to the submissions that were made by the law firms as he felt that their arguments were convincing that the actions of the state amounted to expropriation. He also asked them to look into the issue of Judicial Appeal and that it should be expressly provided for in the Bill.

Mr Moosa noted that the Bill does not prohibit the appeal against the decisions of the Minister. Making provisions for it specifically would be stating the obvious.
Mr Moosa also asked the State Law Advisers to elaborate on the international treaties that SA was a signatory to and whether the objects of the Bill would be contrary to it.

Mr Daniels said that the Bill speaks about first exhausting internal review processes before proceeding to the courts for appeal. The Bill does provide for a right to appeal.
He reiterated what he had previously stated on the constitutionality of the Bill.
Mr Daniels noted that international treaties do not prevent SA from formulating its own laws. If it was in conflict with SA law, SA would have to consider resigning itself from the treaty or the treaty itself could be amended. He added that international treaties were not hard and fast. Mr Daniels emphasized that a comparative analysis of mineral laws abroad had been done on the Bill. If the Bill was to appear before the Constitutional Court a similar comparison would be done.

Mr Davidson said that there was a huge gap in the Committee's process because of the delays in the completion of the money bill.

Mr Moosa said that a decision needed to be taken on how the Committee was to deal with the issue of royalties.

Ms Xingwana (ANC) suggested that provision should be made in the Bill for the payment of royalties to be continued to be payable to communities until such time that the money bill comes into effect. In terms of the new legislation royalties would be payable to the state and thereafter it would be distributed amongst communities.

Mr Moosa said that provision would be made for it in the transitional arrangements.
He also asked for clarity on the issue of the right of first refusal and Section 6 of the Transformation Act and how the interests of historically disadvantaged communities were being protected.

Mr Nel (NNP) pointed out that if such a provision was to be included in the transitional arrangements, then it would be in conflict with Clause 22(g) which provides for royalties to be payable to the state.

Mr Lucas (IFP) asked if stakeholders would be given the opportunity to make inputs on the money bill ie royalties. He asked if the money bill could be fast tracked.

Mr Rocha (Department) said that the Committee should be aware of the fact that when the money bill is to appear before the Committee there would be no opportunity to amend it. The Committee must either accept or reject it. A money bill cannot be amended by Parliament.
Mr Rocha noted that any comments that the Committee wished to make on the money bill must be forwarded to the Department. The Department would then in turn forward it to the National Treasury. This was the process to be followed on the money bill.
He pointed out that Clause 22(g) was an oversight by the Department. All provisions relating to royalties would be removed from the Bill as it would be covered by the money bill.
Mr Rocha said that Clause 43 did not deal with the right of first refusal. It was a right to landowners. He said that Section 6 of the Transformation Act was a misnomer. Mr Rocha said that the interests of communities were being taken into consideration.

Mr Moosa listed the issues that needed to be considered:
(i) A suspensive clause was needed in the Bill to suspend the payment of royalties
(ii) How the payment of royalties was to take place and to whom ie communities or state
(iii) How the provisions of Section 6 of the Transformation Act was being accomadated in the Bill.
(iv) The right of first refusal needed to be included in the Bill.

A lengthy discussion ensued as to whether it would be practical to informally consider the specific provisions of the Bill without have the compilation document of all the proposals by the Department before them.

Mr Moosa made a ruling as Chairperson in the absence of Mr Goniwe that it would do no harm to deal with the specific clauses in the absence of such document.

The Committee commenced the process with Clause 2.

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