Mineral and Petroleum Resources Development Bill: deliberations

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.

MINERALS AND ENERGY PORTFOLIO COMMITTEE
18 June 2002
DELIBERATIONS ON THE MINERALS AND PETROLEUM RESOURCES DEVELOPMENT BILL

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

Documents handed out:
Compilation document by Department of changes proposed to the Bill during hearings
State Law Advisers document.
[e-mail [email protected] for documents]

MINUTES
Minerals and Petroleum Resources Development Bill
Mr Enver Daniels (State Law Advisers Office) was supposed to address the Committee on the Constitutionality of the Bill but he had unfortunately taken ill.
Mr Herman (State Law Advisers Office) pointed out that the Department would be in a better position to assist the Committee on the Bill. The State Law Advisers Office and the Department both presented documents summarising the submissions to the Committee.
Mr Moosa made a ruling that the Committee would not deal with the Bill's definitions at this point in time.
He proposed that the Committee work through the Bill clause-by-clause and commenced with Chapter 2, Clause 2. Members were asked to highlight those provisions in clauses that were of concern to them and if possible to propose amendments.

Chapter 2: Fundamental Principles
Clause 2: Objects of the Act
Mr I Davidson (DP) proposed that the objectives of the Bill needed to be further defined. He noted that the objects were not necessarily broad; it impacts upon the granting of licenses and was therefore very specific.
Mr Moosa said that what needs to be clarified was how the objects of the Bill ties in with the rest of it.
Mr A Nell (NNP) was still concerned about the constitutionality of Clauses 2(a) and 2(b).

Clause 3: Custodianship of nation's mineral resources
Mr Davidson said that the meaning of "custodianship" needed to be fleshed out. He felt that if it were being equated with ownership, it would pose to be a problem.

Mr H. Smuts (State Law Adviser) said that the provision was constitutional and that need not be any concern about its constitutionality.

The ANC felt the clause was acceptable.
The Chair. Mr Gomiwe noted that the DP should not hide behind the argument of constitutionality when in actual fact they had a problem with the state being the custodian of minerals in South Africa.

Mr Davidson reacted that the DA would have preferred a system of minerals rights ownership to be private. However given the aims of the Bill, larger mining companies should be encouraged to release some of their mining rights by way of offering them incentives. This was the route followed by the Minister on the Petroleum Charter. Mr Davidson said that the problem lied with the way in which the rights were being taken away from companies. If rights were being expropriated then compensation should be payable.

Mr Bell proposed that provision should be made for a recogiscence permit in Clause 3(2)(a). The Department disagreed and proposed that it be included in the general provisions of the Bill.

Mr Goniwe proposed that the word "must" be replaced by the word, "may" in Clause 3(3). He felt that the Minister should not be tied down.
Mr Moosa was concerned that the replacement would weaken Clause 2(d)(f).
He asked the Department to look into the proposal.

Clause 5: Legal nature of prospecting right or mining right and rights of holder thereof
Mr Bell noted that it seemed that the constitutional issue once again comes up in the clause. He said that the Committee needed certainty on the issue as to whether expropriation of surface and mineral rights was taking place.

Mr Moosa said that the State Law Adviser's Office had in a previous meeting already categorically stated that they were confident of the constitutionality of the Bill.

Mr Bell was nevertheless concerned about Clause 5(3)(a) and the fact that the farmer or landowner would be expropriated of his land when the mining company enters thereupon to mine.
Mr Bell suggested that provision be made for a Clause 5(4)(c) that would provide for consultation to take place between the farmer and the mining company over the use of the farmer's land.

Mr Moosa asked the Department to give their view on the issue.

Ms Nkosi (Department) said that the suggestion was a feasible one.

The Committee instructed the Department to draft a provision.

Clause 6: Principles of administrative justice
Mr Davidson noted that the Chamber of Mines had made a concrete proposal on Clause 6(1) and referred the Committee to it.
He felt that the current formulation in the clause was contradictory to specific periods that were set out in the Bill.
Mr Smuts (State Law Advisers) said that specific periods set out in the Bill must be adhered to. He said that the provision was not in conflict with set time periods in the Bill.

Chapter 3: Administration
Clause 7: Division of Republic, territorial waters and continental shelf into regions
Mr Moosa placed a proposal by the Chamber of Mines before the Committee. He felt that it was a reasonable proposal.

The Department said that it was a reasonable proposal and agreed to incorporate it into the Bill.

Clause 9: Order of processing of applications
Mr Bell was concerned as to whether applications would be processed in the order in which they were received.
Mr Moloi (Department) said that applications would be processed on a 'first come first serve basis'.
Mr Moosa and Ms Xingana (ANC) asked the Department to consider a provision that would allow for the extenuating circumstances for applications received from previously disadvantaged persons. Ms Xingana noted that previously disadvantaged persons often have to face limitations that big companies do not encounter.
Mr Bell felt it unfair to make exceptions. The 'first come first serve' was an internationally accepted principle.

The Department agreed to look into the possibility of formulating a provision in this regard.

Clause 11: Transferability and encumbrance of prospecting rights and mining rights
Mr Goniwe suggested that provision be made in Clause 11(1) for listed companies and the dynamic way in, which they function.
The Department agreed to consider the suggestion.

Mr Davidson was concerned about the requirement in Clause 11(3) that the consent of the Minister must be obtained for a bank to hold a sale in execution. He said that when banks give loans they were require security. The provision places a limit on the guarantee that banks have.

The Department agreed to look into the matter.


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