Infrastructure Development Bill: Final mandates; Mineral & Petroleum Resources Development Amendment Bill: Negotiating mandates; Committee Legacy Report

NCOP Economic and Business Development

25 March 2014
Chairperson: Mr F Adams (ANC, Western Cape)
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Meeting Summary

Provinces were asked to present their final mandates on the Infrastructure Development Bill, but the meeting had to be postponed twice whilst the outstanding mandates were awaited. Eventually, it was noted that Western Cape had opposed the Bill. Free State and Gauteng were only holding hearings on the Bill that afternoon. Mandates in favour of the Bill were presented from Eastern Cape, Mpumalanga, Northern Cape, North West and Limpopo, indicating their acceptance of the Bill. The Bill and the Committee Report on the Bill were therefore adopted.

The Committee then considered the negotiating mandates on the Minerals and Petroleum Resources Development Amendment Bill. No mandates had been presented by KwaZulu Natal, and the Western Cape mandate indicated that it was not in favour of the Bill and proposed amendments, although those were not attached to the mandate.

Eastern Cape supported the Bill, but proposed amendments as it was concerned that the revised section 23(2A) removed the possibility for communities to participate in mining, and it preferred the wording of the current section in the principal Act. It also proposed that the original wording for section 23(2)(b) be re-introduced. It suggested a specification of when the free carried interest would be effective. It was concerned that this Bill seemed to undermine the Department of Water Affairs authority in respect of water licences.

Free State indicated that it supported the Bill, but proposed amendments in respect of the time period for review of the socio-economic plans in section 23(1)(d), had similar concerns to Free State for section 23(2A) and wanted to phrase about conditions requiring participation to be retained, and commented that the Joint Tagging Mechanism had apparently “reclassified” the Bill. Mpumalanga similarly supported the Bill, but raised the same points about community participation, and wanted socio-economic challenges or needs of a particular area or community to be taken into account, under section 23.

Northern Cape had held public hearings and received a written submission from the National Union of Mineworkers, although no formal proposals for amendment were made. The province supported the Bill.

The North West also supported the Bill, raised the same concerns about the deletion of references to community participation, did not like the changes to section 23(2A), preferring the original wording, and had similar concerns to Eastern Cape around water licences, and the use of the phrase “where necessary” in so many clauses. This province did not support the removal of the phrase “interested parties” from section 16(4)(b) and suggested that this may be contrary to fair administrative process.

Gauteng supported the principles behind, and detail of the Bill, had made a similar recommendation to North West on section 16 and 23(2A).  It raised a concern that section 86A(1) was introducing ambiguities on state exploration and production rights. A comment was made that very short time frames had been given to provinces to process the Bill.

The Office of the Chief State Law Adviser (OCSLA), Parliamentary Law Advisers and Department of Mineral Resources answered the concerns. OCSLA submitted that a full and adequate process for consultation was set out and that although the proposals on section 23(2A) did not include community participation, it was adequately covered in other sections of the Bill, in the conditions for regulation, and the general context of this whole section. Clause 6 set out what would happen under a wider consultation process, and clause 11, referring to section 16, narrowed this down to a more focused approach. The use of “where necessary” and the conditions around the water licences must be seen in the context that this was trying to create integrated and aligned processes. It was submitted that the new section 86A(1) was already clear on free carried interest becoming effective when the Bill came into operation. It was submitted that five years was more appropriate for social and labour plans than the eighteen months suggested by Free State. This office believed that fair administrative action would apply. In regard to the tagging, the Parliamentary Legal Advisers noted that although the Department of Mineral Resources and OCSLA had suggested that a section 75 tagging seemed correct, the Joint Tagging Mechanism had come to a different conclusion, and it had the authority ultimately to tag the Bill.

The Eastern Cape delegate attempted to raise some concerns which she said were not covered in the mandate, about regulatory uncertainty, community participation, and the effect on investment, but the Chairperson reiterated his earlier, clear statements that Members must only deliver the mandates of their provinces at this stage, and not engage in any party-political debate. It was clarified that if any Member was not happy with the mandate, that was an issue to be taken up with the provinces. The comments of the OCSLA, Parliamentary Legal Advisers, and Department would be conveyed to the provincial legislatures, who would present their final mandates on the following day.

The Legacy Report was adopted, subject to some minor corrections.

Meeting report

Infrastructure Development Bill: Presentation of final mandates
The Chairperson noted that provinces had met on the bills, and that the Members had to factor in the expressions of the public hearings. He noted that Members would be acting in the mandate of their provinces, not the mandate of the political parties.

The Chairperson noted that he did not see the mandate of Free State on this Bill.

Mr M Mnguni (ANC, Free State) noted that his legislature was only meeting this afternoon on this Bill.

The Chairperson said that there was also no mandate from Gauteng.

A Parliamentary Liaison Officer from another legislature noted that the liaison officer from Gauteng was ill, and advised that Gauteng was holding hearings this afternoon.

Mr D Gamede (ANC, KwaZulu Natal) noted that this province was still applying its mind to the matter.

Ms M Dikgale (ANC Limpopo) noted that Limpopo had a public hearing late on the previous day and she hoped that she would very soon receive the mandate.

Mr A Nyambi (ANC, Mpumalanga) proposed that the meeting should adjourn for a while, to allow the outstanding mandates to be obtained.

The Chairperson noted that five provinces had submitted their mandates but of them, four were in favour of the Bill (Eastern Cape, Mpumalanga, Northern Cape and North West), and one against (Western Cape).

Ms E van Lingen (DA, Eastern Cape) wondered if the meeting should not continue to deal with other matters.

The Chairperson noted that the problem was that not all the mandates had been received for the Mineral and Petroleum Resources Development Amendment Bill (MPRDA), so the Committee could not proceed to that either.

The Chairperson asked Members to break for ten minutes, until 10:30. After that break, he noted that one or two of the legislatures still needed more time. He suggested that the meeting should be adjourned at this point so that the Select Committee on Trade and International Relations (which had the same Members) could continue with its deliberations on the National Credit Amendment Bill.

The meeting was temporarily adjourned.

On resumption of the meeting, the Chairperson summarised that six mandates had now been received (Limpopo had submitted a final mandate in the meantime in favour of the Bill). There were five in favour of the Bill and one against.

Eastern Cape
Ms van Lingen noted that the Province mandated its representative to vote in favour of the Bill, version B.

Free State
No voting mandate had been sent but Mr Mnguni noted that the Free State had indicated that the mandate was in favour.

The Parliamentary Liaison Officer noted that apparently the mandate was not signed yet but would be brought over.

KwaZulu Natal
Mr Gamede reported that the mandate would be received by 13:00

Ms Dikgale noted that Limpopo had now voted in favour of the Bill.

Mr Nyambi noted that Mpumalanga had voted in favour of the Bill, version B49B.

Northern Cape
Mr K Sinclair (COPE, North West) noted a vote in favour of the Bill.

North West
Ms K Kekese (ANC, North West) noted that the North West had voted in favour of the Infrastructure Development Bill.

Western Cape
The Chairperson read out the Western Cape mandate, which was that its delegate must vote against the Bill.

He noted that five provinces were now in favour of the Bill, with Limpopo having been added, with the Western Cape voting against. The Bill would be forwarded to the NCOP to be passed in the House.

The Chairperson asked if the Director General of the Department of Economic Development (EDD) had anything to add.

Ms Jenny Schreiner, Director General, EDD, said that this had been a very intense process and the EDD had gained a lot from it. She appreciated the manner in which the Select Committee had mobilised the legislatures to deal with the Bill.

The Parliamentary Legal Advisers and State Law Advisers indicated that they had nothing to add.

Mr Gamede said that despite the Western Cape voting against the Bill, the projects and programmes under the Infrastructure Development Bill should continue and the full benefit should hopefully still be seen.

Committee Report on Infrastructure Development Bill
The Chairperson read out the Committee Report, noting that the Select Committee, having considered the subject of the Bill, agreed to the Bill.

The Members would be making a short statement on the Bill in the House, on the following day, when the House was set to meet at 10:00. He again thanked the Director General and her staff for taking the Committee forward with the coordination aspects of the Bill and said that a lot of hard work now faced the Department, but it would be beneficial to the public.

Mineral & Petroleum Resources Development Amendment Bill: Negotiating mandates
The Chairperson noted that Gauteng had apparently just submitted its negotiating mandate and he was awaiting the signed copy so that it could be placed before the meeting.

The Chairperson noted that there were thus five mandates, but four provinces had indicated that they were in favour of the Bill, and one against. He suggested that the meeting be postponed for a while to await further written mandates.

Eastern Cape
Ms van Lingen noted that for her province had deliberated on the Mineral and Petroleum Resources Development Amendment Bill, version B15B-2013, on 24 March. The province had mandated its delegate to negotiate in favour of the Bill, but within the following parameters:

It was submitted that the amendment to section 23 (2A), as contained in clauses 18, removed the possibility for communities to participate in mining.

The Eastern Cape Province proposed that the original clause as it read in the introduced Bill, in respect of section 23(2)(b), be brought back

The Province suggested that words be added in respect of clause 65: that the 20% free carried interest should be “effective and executed after the commencement of this section”.

In general, there was a comment that the Department of Water Affairs (DWA) was being undermined by the numerous instances where the phrase “where necessary” appeared in the Bill, This gave an applicant mining company and the regional manager of the Department of Mineral Resources (DMR) the discretion to decide whether there must be simultaneous application for a water use licence, which affected the authority of the DWA.

Free State
Mr Mnguni noted that the Free State was voting in favour of the Bill, but wished to propose amendments.

Firstly, it believed that the words “provided for” and “five year term” should be omitted from section 23(1)(e) and replaced with “18 months”.

Secondly, it was suggested that section 23(2A) must be substituted. The words “may” should be replaced with “must” and the Minister should impose condition to promote the rights and interests of the community, including conditions requiring the participation of the community.

It was noted that the Joint Tagging Mechanism had “reclassified” and not “classified” the Bill as a section 76 bill.

Gauteng and KwaZulu Natal
The Chairperson said that both these mandates were still awaited.

Mr Nyambi noted that his province had given a mandate to negotiate in favour of the Bill, but had suggested amendments.

Firstly, it wished to challenge clause 18, dealing with section 23. His province wanted the words “including conditions requiring the participation of the community” to be re-inserted.

Secondly, it was suggested that the version of clause 18(2)(a to b) (and he noted that this was listed on page 15, not page 13 as stated in the written mandate) should be re-stated, reverting to the wording as it had appeared in the original Bill, requiring the Minister (with the use of the word “must”) to take action. The province also wanted subparagraph (b) to read “after taking into consideration the socio-economic challenges or needs of a particular area or community, direct the holder of a mining right to address those challenges or needs”.

Northern Cape
Mr Sinclair noted that public hearings were held. Although a written submission was received from the National Union of Mineworkers, no formal submission for a change to the Bill was made. The permanent delegate was mandated to support the Bill.

Ms van Lingen noted that point 5 of the written submission was referred to in the mandate, but the Committee Members had not been provided with this.

Mr Sinclair said that the procedure followed in this Committee was that there must be a formal proposal for amendment, but in this instance no such formal proposal was received, which was why the Northern Cape had mandated its representative to vote in favour of the Bill.

North West
Ms Kekese said that she, supported by officials from the Department of Mineral Resources, had briefed the legislature of North West. The North West mandated its representative to vote in favour of the Bill, with amendments that she would now read out.

The Province was concerned that the Bill was removing the possibility of participation of communities in the mining industry, as reflected by the changes that were now proposed to section 23(2A) of the Act. The North West wanted the retention of the section as it appeared in the Act.

The Province suggested that the removal of the changes being effected by clause 18(d). It was suggested that the removal of the wording that referred to imposition of conditions requiring the participation of the community was failing to respect the rights of parties to fair administrative action, and thus breached their Constitutional rights as set out in section 33 of the Constitution.

This province also had a problem with the several instances where the phrase “where necessary” was used, and wanted that wording to be removed and the wording of the original version of the Bill to be retained.

It was submitted that the phrase “any interested and” (parties) should not be removed from section 16(4)(b), as was proposed in clause 11. It would constitute an infringement of the rights of interested parties to administrative justice if it was removed.

She noted that water use licences were now only to be necessary if ground water was to be used. Parallel applications for such licences would be discretionary, and the Province shared the concerns of the Eastern Cape that this would result in the authority of the Department of Water Affairs being undermined.

Western Cape
The Chairperson noted that the Western Cape did not wish to support the Bill, and said that the amendments were set out in a document attached to the mandate. He began to read the attachment, which stated that the Bill was a technical amendment bill requiring expert consultation and input. It consisted of 84 clauses and 44 pages.

At this point he noted that this was the Committee Report that had been attached, not amendments, and ceased reading.

The Chairperson, in the absence of a permanent delegate, noted that Gauteng had submitted a mandate that supported the principles and the detail of the Bill, but referred to proposed amendments.

However, no amendments had been attached to that mandate.

Ms van Lingen noted that the front page had also not been made available.

Mr Sinclair noted that he had been provided with five copies of the same page, and passed them to the other Members.

The Chairperson flipped through the amendments, which he had now picked up in a separate document. The provincial legislature's committee had recommended an amendment of section 16 of the principal Act, as the deletion of a reference to an interested party was undermining the principles of administrative justice. The definition of “affected parties” did not cover “interested parties”.

It was noted that section 86A(1) was introducing an ambiguity in regard to State exploration and production rights.

Clause 18(d) of the Bill, which proposed the deletion of the phrase “including conditions requiring the participation of a community” from section 23(2A) of the principal Act, would result in communities no longer having the ability to become shareholders.

Concerns were raised on the inadequate timeframes given to provinces to process the Bill. However, with those concerns and amendments, Gauteng indicated that it would support the Bill.

The Chairperson asked the Department and the legal advisers to comment.

Office of Chief State Law Adviser input
Mr Theo Hercules, Principal State Law Adviser, Office of the Chief State Law Adviser, commented that clause 18 of the Bill amended section 23 of the Act, which dealt with the granting of prospecting rights. There were issues raised around consultation. It was important to note that the proposed amendment to section 23(2A) excluded the words “including conditions requiring the participation of the community”. However, he noted that the remainder of the clause must also be read in context. This noted that concerns relating to communities must be taken into account when the Minister imposed other conditions.

Furthermore, clause 77 was proposing an amendment to section 107 of the principal Act, which provided for the power of the Minister to make regulations. Clause 77(c) imposed some new conditions. Subparagraph (jD)(i) related to the manner in which interested parties may be informed of the right and (jD)(ii) covered the manner and form of consultation. In addition, the Minister must, when making regulations, consult with the stakeholders. The scheme for consultation was, in his view, adequate for the protection of the communities. The concerns and rights and interests of communities would be taken into account.

Another issue raised on consultation related to clause 11 of the Bill, which was amending section 16. North West had raised concern about the removal of the phrase “any interested and”. Section 10 of the principal Act must be taken into account. Clause 6 dealt with consultation with interested and affected parties, and there was a wider consultation process. Section 16 was referring to a more focused process. The land owner and lawful occupier, and an affected party would be consulted. The concerns appeared thus to be covered.

Mr Hercules noted the remarks made about the water legislation and the use of the phrase “where necessary”.  He reminded Members that this Bill provided for an integrated licensing system but it was not intended that it should take over other legislation, but rather seek to align with it. The words “where necessary” referred to cases where permission must be sought. This Bill would not undermine the national water legislation.

Clause 65 dealt with state participation. The proposal from Eastern Cape was that wording be added. However, he believed this unnecessary, because the new section 86A(1) stated that the State had a right to a 20 percent free carried interest, from the effective date of such rights, which would be from the date of commencement of the Bill. It was therefore not necessary to include the Eastern Cape proposed wording.

Mr Hercules noted that a proposal was also made on clause 18, amending section 23(1)(e). This made reference to the time period of five years. Currently, a period of five years was required for the review of the prescribed social and labour plans to be reviewed. From a policy perspective, five years was probably more appropriate for reviews than the eighteen months suggested.

In regard to the Joint Tagging Mechanism classification, he noted that the Bill had been classified, but the Parliamentary Law Advisers could speak to that issue.

Commenting on the concerns about fair administrative action, he said that his Office believed that the consultation scheme in regard to the processing of applications was adequate. The Minister also had the power to make regulations on specific matters.

Parliamentary Legal Advisor input
Adv Desiree Swartz, Parliamentary Legal Adviser, said that she would not comment on matters already covered by Mr Hercules, with which she agreed.

She did differ from Mr Hercules in relation to the conditions for communities, and noted that this concern had been highlighted in several of the provincial mandates. Although the wording, as it read now, did not actually preclude consideration of communities, she felt that having that wording specifically included would serve to emphasise what the Minister should be required to do.

Ms Swartz said that the point about the classification was raised in the Memorandum on the Objects of the Bill. The Bill had in fact always been classified as a section 76 bill, so it was not correct to refer to “reclassification”.

Department of Mineral Resources input
Mr Mosa Mabuza, Deputy Director General, Department of Mineral Resources, said that the Department had noted and was in agreement with the explanations provided by the Office of the Chief State Law Adviser.

In regard to the concerns about the removal of the phrase about participation of communities, he pointed out that, in the definitions section, the Bill expressly referred to the Amended Broad Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (in paragraph (zD)(b)). The definition of “ownership” in that Charter said that ownership had to be three tiered: involving entrepreneur, worker and communities. The DMR therefore suggested that this Bill was not removing the ability for community participation and in fact emphasised it, through the inclusion of the Mining Charter in the ambit of the Bill.

Mr Sinclair wanted to speak again to the tagging. The paragraph on Parliamentary procedure, on page 48, stated that the State Law Advisers and the DMR were of the opinion that the Bill must be dealt with as a section 75 Bill. However, 4.3 of the Memorandum on the Objects of the Bill noted that the Joint Tagging Mechanism (JTM) had classified it as a section 76 Bill. He asked how this worked.

The Chairperson said that the State Law Adviser and the Department did not tag, merely aired their opinion.

Adv Swartz added that this was quite correct: the State Law Adviser and the Department merely made proposals. In the Parliamentary sphere, the JTM asked for the opinion of the Parliamentary Legal Advisers prior to doing the tagging, and the latter had given their opinion that the beneficiation provisions put this Bill into the provincial sphere. The JTM had agreed with that opinion and accordingly classified the Bill as a section 76 bill.

Ms van Lingen was not satisfied with Mr Hercules' assurances that the ownership clauses would protect communities. The references to “interested” and “affected” parties related to community participation. There were 30 instances where the Minister had the right to rule by regulation, and the “where necessary” clauses seemed to carry that principle even further. This led to regulatory uncertainty, which she was worried about. She hoped that the community share was properly covered; if the communities were unable to participate, she was not sure that they would not be able to share properly.

There were other issues that were not reflected in the provincial mandate that were also of concern to her. She was worried about investment, and oil and gas operations. There was an inference that lower prices should be given to manufacturers for coal.

The Chairperson interrupted her at this point, and noted that Mr Nyambi also wanted to raise a point of order.

Mr Nyambi said he was somewhat confused and asked how the Committee was dealing with these points. The Chairperson had specifically asked the Members to stick to the mandates of their provinces.

The Chairperson noted that a chance was now being given to the provinces to respond to the comments of the State Law Adviser and Parliamentary Law Advisers. These responses would be sent back to the provinces also, so that they could give their final mandates.

Mr Nyambi said that h was not sure whether the opinion of a political party could be voiced at this point, when the province had given a mandate.

The Chairperson noted that party views should be dealt with at the provincial level, not in this Committee.

Ms van Lingen said that when oversight was done in the Eastern Cape, in Kosani District, where coal mining was running into problems, there were problems raised about mining. The same happened at Alexkor, where the question had been asked how mining could take place on community land. She was also concerned that some procedural issues had not been followed. She questioned public participation under section 118 of the Constitution..

The Chairperson asked her to stop at this point. She was showing blatant disrespect for his Committee. The Committee had ruled already that no party politics should be aired before this meeting. The responses of the State and Parliamentary Law Advisers, and the Department, would be sent to her province, who must debate the matter.

Mr Mnguni said that he had heard the comment of the State Law Adviser, which appeared to address some of the Free State’s concerns.

The Chairperson noted that the minutes would be sent to Gauteng, who must then also comment in its final mandate.

He noted that KwaZulu Natal was still busy with deliberations and no negotiating mandate had been provided.

Mr Nyambi said that the comments would be conveyed to Mpumalanga.

Mr Sinclair said that, in the course of discussions in the Northern Cape, important points had been raised, that similarly were not necessarily reflected in the mandate. The point was made that there should be creation of a sustainable framework for regulation. The Northern Cape hoped that the wealth of this province would be utilised to the benefit of everyone, including communities.

Ms Kekesi said that the responses given had covered her concerns, particularly in regard to consultation.

The Chairperson noted that the Western Cape matters were covered.

The Chairperson noted that the Final Mandates would be presented on the following day. The provinces had indicated that they had received submissions and there had been public participation. This Committee could not prescribe to provinces how they should carry out participation. The delegates here were mandated by their provinces, and any queries on how they were mandated must be made to their provincial legislatures. Similarly, any interested parties wanting to make submissions on the legislation still should do so to the provincial legislatures, who had the final say on the matter.

He noted that during the deliberations in the NCOP, the provincial delegations would be empowered to vote in favour of or against the Bill.

The Department of Mineral Resources thanked the Committee for the opportunity to speak.

Ms van Lingen asked the Chairperson for his opinion whether the Bill would stand constitutional muster.

The Chairperson said that this question should be posed to the provinces, who had legal advisers also. He did not want to enter into dialogue; this was a question that the permanent delegate should take up with her province. His own province had indicated that it was not supporting the Bill. He urged Members to discuss matters and concerns with the Premier, Speaker or Chairpersons in the provinces before presenting the final mandates.

Members agreed that they accepted the negotiating mandates as presented.

Ms van Lingen wanted to stress that the proposed Eastern Cape amendments should be reflected in the Bill. The concerns had been shared by all other provinces.

Mr Sinclair was not sure that this was correct.

The Chairperson said that doing “political egg-dances” was not assisting this meeting. He repeated that the minutes would be sent to the provinces. Five provinces had noted that their mandates were to accept the Bill.

Mr Sinclair added that, procedurally, he believed that Ms van Lingen was incorrect. She could not motivate for inclusion of these amendments, and it was incorrect to suggest that because the Eastern Cape put forward amendments, they must therefore be included, as her mandate had been “vote in favour, subject to the following parameters”. The legal advisers had responded on the concerns.

The Chairperson reiterated that the answers given by the legal advisers and Department would be sent to the provinces. It was not for the delegates here to make a decision on the final mandates, as that would be unconstitutional and unprocedural. The provinces gave the mandates, and therefore the responses must be sent to the provinces for them to give the final mandates to their permanent delegates.

Mr Nyambi pointed out that the Chairperson had a mandate from Western Cape to vote against the Bill, and he had led by example, merely presenting the mandate but not attempting to manipulate it. When proposals for amendments were raised by provinces, it would be incorrect to try to separate the general mandate of acceptance (the general context) and deal with the proposals as a “non-negotiable” issue.

The Chairperson noted that the Bill would be debated at the plenary on Thursday. Another meeting of this Committee would take place around 17:00 (after plenary) on the following day, to consider the Final Mandates.
Legacy Report adoption
The Chairperson noted that the report was circulated electronically two weeks previously. Grammatical errors would be corrected in the final editing process.

He asked Members to go through the report, page by page.

Ms E van Lingen (DA, Eastern Cape) noted that she would send through the corrections that she had marked to the Committee Secretary.

Ms van Lingen said that under 1.1, on page 2, line 5, there was a reference to “political administration”, and she asked if this was the correct terminology.

The Chairperson thought that it would read better to refer to the Fourth Parliament, or the fourth term.

The Content Adviser said it was possible to change that. He said the intention was to refer to the Executive.

The Chairperson pointed out that the Department was established before any Cabinet Member was appointed to it, so that this was not quite correct. It should rather read “In 2009, the President established the Economic Development Department”.

Ms van Lingen said that the last sentence of the second paragraph on page 3 repeated the second last paragraph on page 2, and suggested that this be tidied up.

Members raised some other grammatical issues, and agreed that those must still be edited.

Members then adopted the Legacy Report, subject to the amendments raised.

The meeting was adjourned. 

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