Mineral Resources Budget Review and Recommendations Report

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Mineral Resources and Energy

20 October 2015
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Meeting Summary

BRRR Archive: BRRR 2015-2010: Budgetary Review & Recommendations Reports

The report presented for adoption was a summary of the various observations of the Portfolio Committee and the corresponding recommendations to all the issues noticed by the Committee in the course of carrying out its oversight function.

The Committee was not pleased with the percentage of vacant positions in the Department which stood at 14%, this was totally unacceptable and demanded that something must be done to keep that figure lower. The Committee also discussed the funding of the Mine Health and Safety Council (MHSC). Members were of the view that there should be increased funding to Council since its mandate covered the health and safety of workers. The issue of bursary allocation along demographic and gender lines was raise and it was agreed the proposal was not tenable since it was impossible to overlook need and merit in the disbursement of bursaries.

Meeting report

The Chairperson was of the view that members should be given appropriate notice next time so that they could have time to prepare. The report to be considered for adoption was put together over the weekend and he did not think that was comfortable for most Members.

The report looked at the mandate of the Committee and this focused on certain issues facing the industry such as the weakening export markets, energy challenges which include unreliable and expensive electrical energy, the unstable labour market, job security and job shedding. The mandate of the Department covers its five entities, which are The Council for Geosciences, The Council for Mineral Technology Research (MINTEK), State Diamond Trader (SDT), the Mine Health and Safety Council (MHSC) and the South African Diamond and Precious Metals Regulator.

The purpose of the report is to present to parliament an assessment of the Department’s budgetary needs and shortfalls vis-à-vis the Department’s operational efficiency and performance, taking into consideration the fact the Department has oversight responsibilities over five entities.

The method used in the preparation of the report is the conventional method of scrutinising all available documents. Interactions were also held between the Minister and senior leadership of the DMR.

The report showed selected DMR performance indicators and their links to National outcomes and these looked positive. A summary of previous key committee recommendations and the various responses of the Department were highlighted.

The Chairperson highlighted the observations of the Committee in the report. The Committee noted that the operational and financial performance of the DMR and its entities improved. Particular mention was made of the slow progress on policy development and legislature as regards the five-year strategic plan from 2015 to 2019. This is compounded by the technicalities of parliamentary processes that had hampered the process of fast tracking the reservations raised by the President on the MPRDA Bill. The committee cannot go beyond its mandate as to what can be done to fast track the amendment of the bill.

The Committee is worried about the lack of appropriate increases in the funding levels of the Council for Geosciences (CGS). The inability of the CGS to fully recover operational costs compromises its ability to compete and retain scarce human capital.

A strategy for attracting and re-training mining inspectors is needed, especially those with specialised skills. A lack of progress in this area threatens the ability of the Department to properly regulate the industry; however a proper regulatory approach to this is recommended.

The uncertainty surrounding the mining charter was also mentioned. The delays in clarifying the future status and specific performance targets of the mining charter have created a gap in the regulatory regime for mining.

Another highlighted observation is the safety level in mines which had seen a significant improvement but the Committee advised the Department to continue to enforce safety compliance especially on occupational health problems of the mine workers, and to pay attention to issues around the improvement of their living conditions.

The Department’s efforts at reviving research in the industry were noted and a coordinated research agenda between both the private and the public sector is expected in the future.

The Committee took note of the challenges of illegal mining being faced by the Department and the initiatives that were taken in dealing with this. However, a legal framework is needed to deal with the problem and also a promotion of small-scale mining, bearing in mind the environmental consequences.

There was an observation of lack of synergy between the Provincial governments and the Department.

The Committee made some recommendations to the Department with particular time frames response. The Committee recommends that the Department report to the Committee immediately after the conclusion of the Phakisa process.

A comprehensive report on the outcomes of the mining charter including the companies that did not meet their targets should be developed and the interim measures taken clearly stated.

The status of the Mining Charter should be clarified and the interim targets mining companies are expected to meet in 2015/2016 clearly spelt.

The Committee recommends that the Department reports on applications for and granting of rights to minerals, and provides information on the outstanding information on SAMRAD as requested.

Environmental and community issues related to mining should be fully reported as well as health and safety.

The DMR should engage the Committee on the process it will undertake in implementing the findings of the Farlam commission as it relates to the Department.

The DMR and its entities should prioritise the filing of critical vacant strategic positions. The vacancy level of 14% is not acceptable.

The DMR and its entities need to align its bursary and other human resource development policies with demographic and gender target priorities of the respective organisations.

Ensuring transparency and uniformity in the conceptualisation and evaluation of social and labour plans.

The introduction of a better coordinating mechanism in ensuring that there is better coordination between activities of the Department and respective provincial and local governments.

An effective internal control measure should be developed for financial and human resources and should deal with the issue of supply chain management.

The DMR is expected to continue working with the office of the Auditor General and Treasury in order to strengthen accountability.

Costs should be considered before participation in multilateral forums.

The Women in Mining Strategy should be finalized and implemented urgently.

A better legislation and intergovernmental cooperation to deal properly with closure of mines should be developed.

The DMR needs to co-ordinate inter-governmental action on developing a comprehensive strategy on ex mineworkers.

An Account of how the MHSC intends to apply its R200m surplus should be presented to Parliament.

The Chairperson concluded with a summary of the most critical recommendations.

Mr J Lorimer (DA) was satisfied with the report but expressed reservations towards some of the recommendations. He felt the recommendation to the SDT be scrapped because it was totally unfixable. He disagreed with the recommendation that bursaries be aligned towards demographic and gender targets; bursaries should be determined by need and merit.

On the Mine Health and Safety Council, he was of the opinion the council did not do well in the assessment of its performance target taking into consideration its safety records. He supported the need for increased funding of the council.

Mr I Pikanini (ANC) commented about the aging infrastructure. 

The Chairperson responded to the issue of aging infrastructure by re-echoing the position of funding. He believes if more funds are appropriated then the issue of aging infrastructure will be well taken care of.

Commenting on the bursary scheme, the Chairperson said he does not align with the idea of gender or demographic target, rather he wants a consistency in the scheme stressing that there was no way a child who had bad grades would be awarded a bursary ahead of an academically sound child just because of the skin colour. He further stated that merit could not be sacrificed for race or demography.

The Chairperson commented on the issue of surplus fund of the MHSC stating that what the Committee wants is for them to come to the Committee to explain why funds allocated are not being spent and how they intend to address this. Only after this is done will an increase in funding be considered.

Mr Lorimer commented that the issue of funding be treated as a matter of urgency.

Ms M Mafolo (ANC) commented on the issue of coordination between the Provincial and Local Governments. She wanted the traditional leaders included in the scheme of things. She moved for the adoption of the report with the amendments.

The Chairperson responded to this by saying the report did not intend to undermine the roles of traditional leaders.

The report was adopted and the meeting adjourned.

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