MDRA Bill: National House of Traditional Leaders submission & Department response

Meeting report

Opening remarks
The Chairperson noted that the Mining Charter is out. He appealed to all stakeholders to engage with due process, recalling the nation’s struggle with racism and the need to secure the future of the next generation of South Africans. He stated that anger and ignorance are expensive exercises. He gave the example of the schools burnt in Limpopo, noting that the National House of Traditional Leaders (NHTL) has a big role to play in the maintenance of public order. He called on the NHTL to make its submissions on the MPRDA Bill.

National House of Traditional Leaders (NHTL) submission on the MPRDA Bill
The NHTL chairperson, Kgosi Maubane introduced the NHTL delegation as:
Deputy Chairperson: Inkosi Sipho Mahlangu
Legal Adviser: Attorney Maho Matlala
Chief Executive Officer: Mr Abram Sithole
Senior Manager/Chief of Staff: Jacob Mashishi

The NHTL deputy chairperson, Inkosi Sipho Mahlangu, thanked the Committee for granting the NHTL a 15-day extension for this submission. He stated that the MPRDA Bill is a section 76 Bill, contrary to the State Law Adviser’s opinion. He proposed amendments to the Bill as follows:
- The definition of ‘community’ should include traditional rulers.
- ‘Member of community’ means any person or persons tracing his/her roots to a particular traditional council
- ‘Beneficiation’ should include, among others, transformation, value addition, or downstream beneficiation of a mineral and petroleum resource to a higher value product over baselines to be determined by the Minister, which can either be consumed locally or exported.
- Substitution of ‘labour sending areas’ with ‘preferential employment opportunities,’ since labour sending areas is an apartheid system of sourcing labour.
- Insertion of subparagraph J in section 2 of the Act thus: ‘promote and ensure minimum unencumbered net value ownership by historically disadvantaged South Africans (HDSAs) in mining companies not less than 26%.
- Amendment of subparagraph “E” of section 47(1) of the Act so as to add breach of section 3 of the Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry.
- Amendments of section 9, 10 and 11 to provide for all applications for licences and related matters to be taken over by an independent body to be called the Minerals and Mining Development Council in order to eliminate conflict of interest on the part of the Minister, Regional Manager, Regional Mining Development and Environmental Committee and the Ministerial Advisory Council.
- Deletion of section 11(3) for indirectly defeating the purpose of black economic empowerment.
- Amendment of section 5(a) to prohibit prospecting and mining activities without consulting the lawful occupier and giving a 30-day notice.
- Imputation of mandatory language in sections 17, 23(2A) and 104(2)(d) concerning the Minister’s obligation to, among others, promote the rights and interests of mining communities.
- Amendment of sections 22(4), 27(5) and 50(4A) to require consultations with the community in mining activities affecting land occupied by communities.
- Amendment of section 28 to clarify ‘mine community’ and ‘rural development’.

Attorney Matlala expressed the NHTL’s objection to the removal of qualifications in the definition section of the MPRDA Bill. Also, given South Africa’s licensing regime history, the NHTL and communities wish to have an independent body that will oversee licensing of mineral rights.

Discussion
Mr H Schmidt (DA) questioned whether the MPRDA Bill is a section 76 Bill. Assuming it falls under section 76, what is the process of consultation and engagement to be followed?

Mr J Lorimer (DA) asked if the membership of a traditional community is voluntary. He sought clarity on the definition of beneficiation. He noted that the NHTL proposal of 26% could lead to less investment in mining. He sought clarity on the meaning of consultation, its distinction with consent, and who should be consulted. He queried the meaning of ‘seeking advice’ from the National Council on Minerals and Mining Development.

Mr I Pikinini (ANC) sought clarification over the tension between communal land ownership and control of minerals by the state in the context of ‘labour sending areas’ and preferential treatment of members of mining communities

Mr M Matlala (ANC) asked about the composition of the Minerals and Mining Development Council and what constitutes membership of a community. He wondered what would happen with the targets for affirmative action employment in a community that has no skills.

Mr Z Mandela (ANC) welcomed the NHTL submission. He sought clarity on the meaning of ‘community’, remarking that the Constitution has already stipulated that every citizen of South Africa is free to reside in any part of the country. He noted that communal land has always been a painful issue because a right of occupancy (permit-to-occupy/PTO) does not really mean ownership of land. He remarked that people may belong to several communities, which makes the NHTL definition of community problematic. It is absolutely ridiculous that black empowerment is pegged at a minimum percentage of 26% when it should be at least 49%.

The Chairperson advised the NHTL not to respond to contentious issues still being debated by the Committee. He summarised the questions and asked the NHTL delegation to respond.

In its response, the NHTL stated that Bills which make reference to communities must be referred to the NCOP, who must consult the NHTL. He explained membership of a traditional community. Consultation is through a procedure that resembles a town hall meeting and is an inclusive process.

Attorney Matlala clarified the meaning of ‘community’. He stated that the NHTL’s definition is wide rather than exclusive. As such, it is in compliance with the Constitution. He affirmed that the phrase ‘labour sending areas’ has negative connotations. Beneficiation in the old MPRDA Bill is too narrow and needs to be expansive.

The NHTL Deputy Chair explained that the 26% earmarked for black empowerment is merely a minimum benchmark. The NHTL is engaging with the Department of Land Affairs and Rural Development on rights of occupancy of communal land. The NHTL’s definition of community membership is wide. The NHTL is merely concerned with the independence of the Minerals and Mining Council, not its composition. However, the NHTL believes that Parliament should determine the composition, which should be broad enough to include professionals. A broad composition would prevent conflict of interest. On consultation, the views of people who are consulted should always be reflected in the eventual decisions. Consensus should always be reached, not merely consultation for the sake of meeting procedural requirements.

Department of Mineral Resources (DMR) response to NHTL submission
The DMR Director introduced his delegation. He welcomed the NHTL submission and the attention that public consultations have brought to the MPRDA Bill. He called on the DMR Deputy Director General for Mineral Policy and Promotion, to present the DMR’s response to the NHTL submission.

Mr Mosa Mabuza, DDG: Mineral Policy and Promotion, clarified the definition of a ‘community’ as members who exercise rights over a particular area in terms of customs or law. Local municipalities, metropolitan municipalities, and traditional authorities fall under this definition.

On the definition of ‘beneficiation’, there is a need for a government wide approach and improved coordination among government departments.

On the proposed substitution of ‘labour sending areas’ with ‘preferential employment opportunities’, the concept of labour sending areas was not intended to perpetuate the apartheid labour system. It aimed at dealing with the disproportionate impact of mining towards distant communities on whose blood and sweat the industry was built. Its definition elaborates the objectives of the Act, which states mineral resources as being for the benefit of all South Africans. However, there is a deliberate bias towards mining communities. There is need to prevent enclaved development, an unintended consequence which the proposal of preferential employment could cause.

The DMR supports the NHTL proposal on clause 35 of the Bill.

The MPRD Act is revolutionary because it separated land ownership from minerals ownership. Accordingly, the DMR submits that the NHTL proposal to delete section 11(3) for defeating the purpose of black empowerment is misplaced. Subsection three should not be read in isolation.

The DMR supports the increment of the notice period from 21 to 30 days. It also supports express reference to communities in consultation processes.

On concerns raised about mining and rural development projects, the Mining Charter has been reviewed to expressly provide for a threshold of revenue towards community development.

The Bill already has provisions for consulting owners/occupiers of land.

The DMR promised to collaborate with the NHTL in providing further support to the process of finalising the MPRDA Bill.

Discussion
Mr Schmidt asked the DMR to clarify its stance on an independent council to take over the awarding of mining licences.

Mr Lorimer asked the DMR to explain what it means by ongoing legal processes on the definition of a ‘community’. He also sought clarification on the Minister’s powers regarding mining licences.

Ms O Mokause (EFF) expressed the objection of the EFF to the MPRDA Bill. The EFF cannot support the MPRDA Bill because the EFF is committed to the nationalisation of mines.

Mr Mandela stated that the natural resources of South Africa have long been nationalised and belongs to all South Africans. He stated that preferential employment opportunities for mining communities need to be explained. He asked the DMR what measures it will take to ensure that companies adhere to the 26% minimum threshold.

The Chairperson remarked that the DMR need not answer political questions.

Responding, the DMR Director stated that ensuring compliance is not only the responsibility of the DMR. He called on right holders and stakeholders to join in this process.

Mr Mabuza, DDG: Mineral Policy and Promotion, stated that the need to achieve transformation cuts across all parties. The Mining Charter needs to be slightly clarified to ensure deterrence and compliance. The best way to approach labour sending areas and preferential treatment is to be mindful of unintended consequences and the need to curb abject poverty in mining communities.

Mr Mabuza replied about the DMR’s comment about ongoing legal processes on the definition of ‘community’ in the context of mining, saying DMR is open to further engagement on the inclusion of district communities in the definition, aimed at expanding the ambit of a community.

The Chairperson announced that the Committee’s next meeting will address the NHTL proposals. Thereafter, it will discuss the DMR reservations and decide the way forward. The Committee will be mainly concerned with substantive justice issues involved in the MPRDA Bill.

Meeting adjourned