Geoscience Amendment Bill: briefing & finalisation; Mineral & Energy Affairs legislative programme: briefing

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Meeting Summary

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Meeting report

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
9 April 2003
GEOSCIENCE AMENDMENT BILL: BRIEFING & FINALISATION; MINERAL AND ENERGY AFFAIRS LEGISLATIVE PROGRAMMME: BRIEFING

Chairperson: Mr B J Tolo (ANC)

Documents handed out:
Geoscience Amendment Bill [B7-2003]
Briefing on the Geoscience Amendment Bill (Appendix)
Presentation on the Department legislative programme (document is awaited)

SUMMARY
The Committee was briefed on the Geoscience Amendment Bill. All Members agreed to the proposed amendments of the Bill. The Bill corrects an oversight in the principle act and effects the transfer of property from the Department of Mineral and Energy Affairs to the Council for Geoscience. The Committee was also briefed on the legislative programme of the Department of Mineral and Energy Affairs. Members were concerned over the lack of timeframes for the legislation and their classification as Section 75 or Section 76 bills. The Committee recommended that the Department consider framing the bills in terms of Section 76 as it could be more beneficial to the Department.

MINUTES
Briefing on Geoscience Amendment Bill
Mr P Alberts, representing the Department, discussed the Geoscience Amendment Bill and the need for the amendment.

The objective of the Bill was to effect the lawful transfer of movable and immovable property from the DME to the Council for Geoscience. This transfer of property was provided for in Section 26(1) of the Geoscience Act, 100 of 1993. A list was compiled by the Department and the Council for Geoscience of assets to be transferred.

The Department was informed by the Auditor-General that the designation of this property ought to have occurred before 1 November 1993. The Department stated that this designation could not have taken place before 1 November 1993, as the Act did not explicitly authorise the exercise of any administrative action before its commencement date. Therefore, such action would have been ultra vires.

Therefore, an amendment of Section 26 was necessary to rectify the designation of the stipulated property.

There would be no organisational and personnel, financial, communication or constitutional implications or consequences of the amendment.

Several other entities were consulted, namely, Treasury, the Council for Geoscience and the Auditor-General. They agreed with the proposed amendment.

With regard to the parliamentary procedure, the State Law Advisors and the DME believed that the Bill should be dealt with under Section 75 of the Constitution, as there are no provisions to which Sections 74 or 76 would apply.

Discussion
Ms N Ntwanambi (ANC) stated that the Bill was too technical and therefore they ought to accept it and leave it to the House to decide.

A Member asked what the meaning was of "compensation" as mentioned in the Bill.

Mr L Lever (DP) explained that this Bill was merely correcting an oversight in the principle act. It was not excessively technical. It was justified within the circumstances and no compensation was due to anyone.

The Chairperson thanked Mr Lever for clearly explaining the rationale of the Bill.

Mr Alberts, addressing the concerns of Members, added that Geoscience was formerly a branch of the DME. However, it now forms part of a new organisational structure.

The Chairperson asked Members whether the Bill would be approved at the meeting, or if Members wished to revert to the parties before taking a final decision. He did not want to delay or take up too much time and another meeting to approve the Bill.

Mr Lever was concerned that this procedure may set a precedent for future bills.

The Chairperson explained that he did not intend to set a precedent. If a Bill had a clear substantive concern, there would be a longer consultative process. However, the nature of the Bill presented by the DME reflects that there was no need to go back and consult with political parties.

Members agreed on this point.

The Chairperson read out Clause 1. All Members agreed to its contents.
He read out Clause 2. All Members agreed to its contents.
That terminated the deliberations on the Geoscience Amendment Bill.

Briefing on Department's legislative programme
The Chairperson asked the Department to highlight which Bills would be appearing, when they would arrive and a short summary of the objective of each Bill.

Seven pieces of legislation were forecast for the Department in 2003. Two were mining and five energy related.

Mr J Rocha, the Chief Director of Mineral Resources Regulation introduced mining related legislation.
-Mining Titles Registration Amendment Bill (this will amend the 1967 Act).
-Promotion of Minerals Based Beneficiation Industries and Enterprises Bill.

The Mining Titles Registration Bill was already certified and should be introduced in Parliament very soon. The consultation process was not fully resolved yet. The Bill would register mining rights granted by the State to guarantee security of tenure.

The Promotion of Minerals Based Beneficiation Industries and Enterprises Bill, formerly known as the Precious Metals and Diamond Bill, aims to promote beneficiation of precious metals and diamonds, access of rough diamonds and control of trade in diamonds and precious metals including the issue of conflict diamonds.

This Bill should reach Parliament by September 2003.

Mr Burger introduced the energy and petroleum related bills:
-Petroleum Pipelines Bill.
-Energy Bill.
-Petroleum Products Amendment Bill.

The proposed legislation flows from the energy policy, which was released about three years ago. These Bills give effect to policies set out in the policy document.

As a background to the Petroleum Pipelines Bill, Mr Burger explained that South Africa has a well-developed pipeline network mainly from the port of Durban to Gauteng and from Saldanha to Cape Town. The government was largely instrumental in this respect.

Petroleum is primarily about transportation and therefore it was essential to have a Bill that deals wit the regulation of pipelines. The Bill aims to centralize all regulators as part of its larger aim to promote the orderly development of the petroleum pipeline industry.

As a main objective, pipelines regulator will become a 'single energy regulator' in the near future. It will also provide for licensing of operators and tariffs for transportation of all petroleum products. It will provide for new entry, the empowerment aspect will be effected through appropriate licensing. Finally, it will provide access for participants and petroleum companies.

The Bill was gazetted and should be tabled in Parliament fairly soon.

The Petroleum Products Amendment Bill aims to amend a 30 year old Act. This will ensure that latest developments in the industry are provided for.

The main thrust will be to create a regulatory dispensation for participants in liquid sectors. It will stipulate licensing conditions; cater for wholesale operations, retail sectors (for instance, service stations) will be required to be licensed. The Bill will specify conditions for licenses and thus speaks to competitive petroleum industries.

It will have an important empowerment mechanism through licensing and prohibition of vertical integration. It deals with, inter alia, employment, availability of quality petroleum goods throughout the country, issues of arbitration and prescribes quality fuel products especially from an environmental point of view.

The State Law Advisor has agreed to certify the Bill.

The Energy Bill is considered as an omnibus bill as it deals with several issues. Essentially, it aims to create a national energy advisory committee to advise the Minister on issues related to energy, mandates the establishment of an integrated mining planning system which will plan for the right mix of energy sources. It also establishes a National Research Institute. The government is concerned about the loss of energy specialists. This research institute may become part of an established research institute. The Bill also deals with energy efficiency because there are no formal instruments in place yet to regulate this area.

The Bill has been presented to Cabinet with further instructions that further consultations with the public should take place. They are in the process of public consultation.

Mr Maluna presented the electricity related Bills.
-Electricity Supply Industry Bill.
-Regional Electricity Distributors Establishment Bills.

The electricity industry was changing and the ESI Bill takes cognisance of this. The Bill aims to update the Electricity Act and to deal with issues relating to the introduction of competition in the electricity supply industry. Among other things, it will consider renewable energy, regulation of non-grid systems, independent power producers and licensing of generators.

The Bill has received approval to repeal the Electricity Act and amalgamate all the provisions into the ESI Bill.

In terms of timeframes, the ESI Bill would be approved during the course of 2003. The initial time was June, but this may be delayed by some months.

The REDs Establishment Bill is in line with the restructuring of the industry. In terms of the Constitution, electricity distribution has a municipal function. The Bill establishes six regional distributors.

The Bill has revised aspects that related to municipal versus DME functions. It takes care of the transfer of assets and compensation for it. There is an establishment of transfer schemes, that is, vehicles through which restructuring will take place. A timeline is also established.

This Bill relies heavily on the Municipal Electricity Act. This is something that the DME is not comfortable with, but are in the process of addressing.

The Bill will be released next Friday.

Discussion
Ms ND Ntwanambi (ANC) asked for the breakdown of which bills were classified as Section 75 or Section 76.

The Chairperson noted that it seemed that the Department did not want to commit itself to dates. He pressed the Department to give sort of indication of dates or which quarter the Committee may anticipate the arrival of these bills. He explained that as this was an election year, it would be a short year.

Mr T Setona (ANC) agreed that most of the legislation appeared to be in a formative stage. This therefore made it difficult for the Department to commit themselves. Moreover, they ought to mention what is priority for the Department.

Mr Lever agreed with Ms Temba's concerns about the classification of Bills as Section 75 or 76 concern as they would have to reply to their constituencies.

Mr Rocha said that the Electricity Bill may be interpreted in terms of Section 76.

Mr Burger stated that Petroleum and Energy Bills will be Section 75 bills. The Energy Bill will be introduced by the end of 2003/early 2004. The Petroleum Pipelines Bill and the Petroleum Product Amendment Bill are already in the system.

Mr Maluna explained that the REDs and ESI bills will be introduced in the third quarter of 2003. The ESI Bill has been stalled owing to the integration process with the Electricity Act. The Bills will be introduced in terms of Section 76.

The Chairperson asked whether the Department could prioritize the Bills.

Mr Lever suggested that the Department interact with the Chairperson to utilize the Section 76 process, as there may be great benefits for the Department.

The Chairperson stated that all bills should initially commence with the NCOP, as this would enable broader participation.

The meeting was adjourned.

BRIEFING BY THE DEPARTMENT OF MINERALS AND ENERGY ON THE GEOSCIENCE AMENDMENT BILL

1. OBJECT OF THE BILL

The object of the Bill is to effect the lawful transfer of movable and immovable property from the Department of Minerals and Energy to the Council for Geoscience.

2. BACKGROUND AND DELIBERATION

Section 26(1) of the Geoscience Act, 1993 (Act No.100 of 1993) provides that movable and immovable property belonging to the State and which immediately prior to the commencement of Act was being utilized by the Geological Survey Branch of the Department and which the Minister, with the concurrence of the Minister of State Expenditure, and where applicable, the Minister of Public Works, may designate, shall on the said date of commencement devolve upon the Council without any compensation being payable in respect thereof by the Council.

The Department and the Council for Geoscience compiled a detailed list of assets to be transferred, after which the said movable and immovable property were designated during April 1994.

The Audit on General informed the Department that the designation of the above property should have taken place before 1 November 1993, and that the Department did therefore not comply with the provisions of section 26(1) of the Act, as no property was designated which could have devolved on the Council on the date of commencement.

The Department advised that designation of the said property could not have taken place before 1 November 1993, because the Act does not explicitly authorize the exercise of any administrative action prior to its commencement date. Such designation would in any event have been ultra vires.

In order to obtain legal certainty on this, the Chief State Law Adviser was subsequently requested to furnish the Department and the Auditor-General with a legal opinion. The Chief State Law Adviser confirmed the view of the Auditor-General that the Department did not comply with the provisions of section 26(1) of the Act, in that no property was designated which could have devolved on the Council on the date of commencement. The Department was further advised that the designation of property prior to the commencement of the Act, was legally possible, despite the fact that the Act does not specifically provide for such action prior to the commencement date.

An amendment of section 26 has therefore now become necessary to rectify the matter.

3. ORGANISATIONAL AND PERSONNEL IMPLICATIONS
None

4. FINANClAL IMPLICATIONS
None

5. COMMUNICATION lMPLICATlONS
None.

6. CONSTITUTIONAL IMPLICATIONS
None.

7. OTHER ENTITIES CONSULTED
The Department of Finance, the Department of State Expenditure, the Council for Geoscience and the Auditor-General were consulted and are in agreement with the proposed amendment.

8. PARLIAMENTARY PROCEDURE
The State Law Advisers and the Department of Minerals and Energy are of the opinion that this Bill must be dealt with in accordance with the procedure established by section 75 of the Constitution since it contains no provision to which the procedure set out in section 74 or 76 of the Constitution applies.

9. RECOMMENDATION
It is recommended that Committee agree to the Bill.

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