Mineral Petroleum Resources Development Amendment Bill: further deliberations

Meeting report

Opening Remarks by Chairperson
The Chairperson reminded Members that in 2013, the Committee was left with outstanding matters around environmental issues in the MPRDA Bill. It was important to establish whether Members felt the Committee had sufficiently addressed all environmental issues from 2013. The Portfolio Committee on Water and Environmental Affairs had sufficiently exhausted all environmental matters. The only disagreement was that the Department of Environmental Affairs overturned a decision made by Parliament and this was viewed as the Department attempting to exclude Parliament from the legislative process. This raised a concern that such behaviour could complicate upcoming legislative processes within the Department in terms of amendments related to water and environmental affairs, with the exception of water, which the Committee was still awaiting results for.

Therefore the areas which the Committee needed to focus on would be all the areas which Members strongly felt needed attention. Areas relating to beneficiation, the petroleum, oil and gas clauses, areas concerning land and community, among other things were matters which the Committee still needed to examine in more detail. An argument was made that beneficiation had to be made a priority in the country so that the majority of South Africans could also benefit from the country’s mineral resources. The issues relating to the Petroleum Agency of South Africa (PASA) was also one which the Committee needed to look into, seeing that the institution had since been dissolved.

Discussion
Mr S Mohai (ANC) said some of the functions previously carried by PASA were coordinated into the Council for Geoscience and some functions will be incorporated into the duties of the Department of Mineral Resources (DMR).

The Chairperson said another factor which needed to be considered was that of the staffing component. What happened to the PASA staff and how had they been affected by the whole issue. There were also outstanding issues concerning provisions on the employee share ownership fare, which would form part of the Mining Charter. The other matter of concern was mineral exports. Beyond South African harbours, there was no way for the country to benefit from off-shore dealings. Free carrying interest was another matter which needed to be considered, in comparison with how other countries were dealing with this. Other issues pertained to definitions.

Mr J Lorimer (DA) said there were a few other issues such as the licence issuing regimes and the unhappiness over the extension of shares to people holding mining rights.

The Chairperson said the Committee had to consider the outcomes of the public hearings held on the “OFF PASA” and “ON PASA”, which pertained to oil and petroleum. She said it would have been ideal if the Department of Mineral Resources and the Department of Energy each had legislation on oil and petroleum when the former department split. The Committee was now faced with energy issues, for which there was no Act and these issues then needed to be incorporated into the Mineral and Petroleum Resources Development Act, each as they arose. Based on the development of shale gas mining, a possibility of separating the Act should be looked at as a priority in the new Parliament. The separate Acts would therefore look into on-shore and off-shore mining.

Mr J Moepeng (ANC) said during the presentations which were made in 2013, concerns were raised about security issues related to off-shore mining. How was the Department guarding and ensuring security of off-shore mines? He asked whether work on splitting the mining Act could not start now so that when the new administration started, there was already work in progress. He also noted that a concern was raised that Members of the new administration might not understand the challenges which the Committee was faced with relating to oil and petroleum.

The Chairperson urged Members to participate on the matter of separating the mining Act in order for energy related matters to be dealt with separately. An agreement needed to be reached on the matter.

Mr Lorimer agreed with the proposal of separating oil and gas in the main body of the MPRDA. This was a fast developing field and separate legislation was urgently required.

Mr Moepeng agreed. He suggested that the Department’s legal services should liaise with all stakeholder departments and prepare a concise document which would guide the Committee moving forward.

Mr Mohai said initially during the public hearing there were issues raised that oil and gas was a new and fragile industry, therefore there was no need for a legal framework for it. However this bordered on matters of non-transformation. The issue of fundamental transformation needed to be at the forefront of why Parliament formulated legislation. The current draft legislation should therefore be comprehensive, with no aspects being left out.

Mr Lorimer agreed that the process of separating oil and gas needed to be started as soon as possible.

The Chairperson requested some research work from the legal services or the State Law Adviser, so that the Committee could understand better whether it would be wise to work towards two Acts governing mining and energy.

Mr Moepeng said from the inputs received during public hearings, a need was identified that something had to be done regarding oil and gas. The legal services therefore had to assist the Committee in isolating the issues and separating the Act. A recommendation could then be forwarded to the Committee which addressed the issues from a legal perspective.

Mr Theo Hercules, State Law Adviser said it would probably be part of the Committee’s report on its views on the Bill. The Bill however had already been approved by Cabinet, the recommendation to split the MPRDA could therefore form part of the Committee’s report. He said further policy research was however necessary.

The Chairperson agreed that the Committee could put forward the matter as a recommendation on the Bill which was currently before them. The MPRDA was already implemented.

Mr Moepeng asked who the Committee could ask permission from, seeing that it could not be Cabinet.

The Chairperson disagreed and said the issue was not about asking for permission from Cabinet but it was about investigating and researching more on what the Committee was recommending.

Mr Moepeng said the Committee was required to report to Parliament on the work it did, therefore there was no need to seek permission from anyone. The Committee had to make decisions for the interest of the whole country. The Committee saw a need to separate the Acts from the public hearings held. The State Law Advisor should only provide direction on how the Committee could start the process.

Mr Mohai said the issue of two Acts had been expressed in the past. After the public hearings, the Department was required to respond to all submissions. One of the concerns raised was that too much legislation might scare investors away. The key issue was about whether the current Bill under discussion captured all the issues which the Committee had identified during the public consultation process.

The Chairperson reminded Members that during the public hearings there were also deliberations between the Department and the National Chamber of Mines. The Committee was yet to receive feedback on what transpired during those deliberations. There were several disputes between the two entities and beneficiation was one of the “hot” topics. A report to the Committee was due.

Mr Thibedi Ramontja, Department of Energy Director General agreed with the Chairperson that discussions between the Department and the National Chamber of Mines did in fact take place. A report would be provided to the Committee. The main area of contestation was around beneficiation.

The Chairperson asked how quickly the report could be made available to the Committee as the Committee also needed to conclude its work around beneficiation.

Mr Moepeng said the issues relating to beneficiation would still remain the same whether the MPRDA was separated or now. Over and above the on-going work of the Committee, matters had arisen on the MPRDA concerning oil and gas. He argued that even when the Department presented the report to Members, the Committee would not have time to adequately deal with these matters. However, by focusing on the process of separating the MPRDA, the Committee would be able to lay ground work for the new administration.

The Chairperson said the Committee was in agreement that the recommendation would form part of the Committee’s report on the bill under discussion. Legal advice and direction on how the Committee could move forward on separating the MPRDA would be sourced from the legal team. She said the Committee could continue with the clause-by-clause discussion on the Bill, moving forward with the recommendation from Mr Lorimer that clauses on oil and gas should be left out of the discussion.

Mr Mohai said the Committee should engage the Bill clause-by-clause with all its contents.

The Chairperson agreed. She reminded the Committee that it would only be on 18 February 2014 that the Committee would do a clause-by-clause deliberation on the Bill. For now, the Committee was just discussing some outstanding matters which had been raised in 2013. The report on the amendments could then be adopted on 19 February 2014. She asked whether, from the discussions which the Department had with other stakeholders such as the Chamber of Mines, there were any other changes which were effected on the Bill which the Committee needed to know about. What was the final report from the discussions between the Department and the Chamber of Mines?

Mr Ramontja replied that the Department would be providing the Committee with the report so that the Committee could conclude its process by Monday 10 February 2014.

The Chairperson said the Department needed to forward a concluded report to the Committee.

Mr Moepeng asked how the on-going discussions between the Department and the Chamber of Mines were affecting the work being done by the Committee on the Bill.

The Chairperson replied that during the public hearings the submissions would assist the Committee in concluding its work and in providing a comprehensive report.

Mr Moepeng said the Committee had to close all inputs and contributions to the deliberations when the public hearings had been closed so that the Committee could begin to draft its report on the process. Any other contributions could be submitted as a report to the Committee after the submissions. Therefore the on-going discussions between the Department and the Chamber of Mines needed to be dealt with separately from the current work of the Committee. The conclusion from the discussions could be submitted to Cabinet as an addendum to the Committee report.

Mr Lorimer asked for an explanation as to why the discussions between the Department and the Chamber of Mines were still continuing. Had the Department been engaged in talks with other stakeholders other than the National Chamber of Mines?

Mr Ramontja replied that the Department was open to engage any stakeholder on an on-going basis. The Department was willing to provide Cabinet with reports on these discussions although the process was solely in the hands of Parliament.

The Chairperson said the clause-by-clause discussions would be dealt with on the 18 February 2014. The Department had to submit a report to the Committee on 10 February 2014.

Mr Lorimer reminded the Committee that some time ago a request was made to the State Law Adviser for a written response on whether the Bill would pass the Constitutional Master. During the public hearings some concerns were raised by some law firms that if passed, the Bill would be unconstitutional. The State Law Adviser was requested to provide a written assurance that they had in fact looked at these concerns and that the Bill was constitutionally sound.

Mr Hercules replied that the issue of constitutionality was raised by Mr Lorimer outside the meeting. He said the opinion could be provided to the Committee before the end of the week in writing.

The Chairperson asked for a summarised opinion.

Mr Hercules said the Office of the State Law Adviser had looked at the Bill and the Bill was certified as being constitutional. Issues raised during the public hearings around matters such as stockpile, beneficiation, regulations and the trade agreements were in fact certified as being consistent with the Constitution. This information would be circulated to the Committee. Some of the issues and concerns raised where therefore strengthened in the State Law Adviser’s report on these matters.

Mr Moepeng said the Committee should await the written submission from the Office of the State Law Adviser.

The Chairperson agreed. Members were reminded that the Bill was tagged as a Section 76, but the Bill should have been tagged as a Section 75 seeing that it contained matters of national competency. The Bill was initially tagged as a Section 75. The Committee therefore had to provide direction on the matter.

Mr Moepeng asked why the Bill was re-tagged as a Section 76 when the Bill was in fact a Section 75 Bill. If the Bill was going to be re-tagged as a Section 76 it would mean the Bill would have to go to the National Council of Provinces and a whole long process would be started. The Committee believed the Bill was a Section 75.

The Chairperson agreed and said the Committee was never consulted in the tagging of the Bill as a Section 76 Bill. The Committee therefore needed to write to the Joint Tagging Mechanism to ask why the Bill was a Section 75 and not Section 76. Tagging should not be decided in the absence of a Committee. She thanked the Members and the Department for their inputs.

The meeting was adjourned.