Upstream Petroleum Resources Development Bill: legal opinion; Glencore matter

Meeting report

The Chairperson said that the Committee will be dealing only with the legal opinion. There was a concern about the status of the Upstream Petroleum Resources Development Bill. The Committee had decided to request Legal Services for a legal opinion on two matters.

Legal opinion on Upstream Petroleum Resources Development Bill [B13-2021]
Mr Andile Tetyana, Parliamentary Legal Advisor, said that Legal Services received two questions.

1. The first question was on the legal implications of the lapsing of the MPRD Amendment Bill which lapsed at the end of the Fifth Parliament in April 2019. As a result, the MPRD Amendment Bill became invalid so it has no force or effect. Due to its nature, a Bill is proposed legislation introduced in Parliament. A Bill is not a law; not all Bills become Acts or law. If a Bill lapses, it will need to be reintroduced if there is a need.

He noted another aspect of a lapsed Bill having no force or effect, is who the promulgating authority is. When the President promulgates, he does it on behalf of Parliament. In actual fact, it is Parliament that has promulgating authority. In paragraph 12 of the Pharmaceutical Manufacturers Association Judgement, the Constitutional Court stated: “in the present case, administrative preparations are required to be made as a prerequisite to bringing the legislation into effect and it is left best to the Executive branch of Government to determine when the appropriate time has arrived. In the Constitutional structure of this country, it is the President as the Head of the Executive branch of Government, who is the appropriate person to whom to delegate that power. However, the power he exercises in that regard is one that is delegated to him by Parliament and not one that is conferred upon him by the Constitution.”

2. On the question if it is legal to designate a non-existing company to implement aspects of the legislation, Clause 111 of the UPRD Bill states:
(1) This Act is called the Upstream Petroleum Resource Development Act, 2021, and comes into operation on a date fixed by the President by proclamation in the Gazette.
(2) Different dates may be so fixed in respect of different provisions.”

Section 13(3) of the Interpretation Act states that if the Bill provides that the 'Act shall come into operation on a date fixed by the President by proclamation in the Gazette', it shall be deemed that different dates may be fixed for different provisions of that Act. The legal effect of this provision is that the law allows the designation of a nonexistent company to implement some aspects of legislation. However, the clauses of the UPRD Bill that deal with the state-owned company (SOC) in question cannot be promulgated until the SOC has been established. Those sections on the SOC can be passed by Parliament and assented to and signed by the President. But, those sections cannot be promulgated up until the entity is established.

Discussion
The Chairperson said that the Department called the Committee with concerns about the MPRD Amendment Bill, which was referred back to Parliament by the President before he assented to it. The Committee then dealt with it again, and it went to the NCOP. The Fifth Parliament came to an end at that point. The legal question was if you can deal with a Bill that was not finalised. Therefore they needed clarity on the status of the MPRD Amendment Bill.

The second matter was that the Upstream Petroleum Resource Development Bill makes reference to a state-owned national petroleum company, which currently does not exist. So, the Committee questioned if there would be legal implications if the Committee proceeded with the Bill.

The Chairperson asked Mr Jenkins and Mr Tetyana to provide clarity on the MPRDA Amendment Bill. It was passed by both the National Assembly and the NCOP but it was returned by the President on the grounds that the NCOP had not done proper public consultation. Secondly, there were no substantive concerns about the Bill itself including international agreements the country has. This Bill had been passed by Parliament so it is not the same as an introduced Bill. Can a Bill lapse that has been passed but referred back by the President just because the Fifth Parliament came to an end?

The Chairperson noted that there were no questions from Members but he asked for clarity on promulgation as it is the last step by the President in the legislative process. What happens when the President sends the Bill back on the basis that it does not meet constitutional muster? How does the selection process for the promulgation ensue?

Mr Tetyana replied that Parliament is the promulgating authority, but the President does so on behalf of Parliament. Whether the Bill has been referred back by the President, the fact remains that it is a Bill. So, when it lapses, it has no legal force or effect.

Adv Frank Jenkins, Senior Parliamentary Legal Advisor, said that if the President has a substantive constitutional concern about the establishment of the state-owned company then they would deal with the matter as per the Constitution. He assured the Committee that if there are technical concerns where the company is not established or the regulations are not in place, one would have the same problem as in the Pharmaceutical Manufacturers Association court case mentioned earlier. Promulgation or the action of bringing legislation into operation cannot give effect to legislation if that company is not established or certain regulations are not in place. However, processing the Bill in Parliament is not a problem nor is signing and assenting to the Bill.

On the MPRDA Amendment Bill that lapsed, it is dead until the House decides to revive it. Even though they have the Bill that they can work with, they will still have to deliberate on it.

House Chairperson letter on Glencore
The Chairperson said he received a letter from the House Chairperson which stated: “As you are aware, the mining company Glencore has pleaded guilty before US authorities on the charges of corruption in a number of countries where it operates.” The company has agreed to pay $1.18 billion (R18 461 billion) in fines and penalties for corruption when dealing with foreign countries. The company has been implicated in having a bribery network across the world to advance its international influence. Glencore is a major player in the mining sector in South Africa and Mr Ivan Glasenburg is the SA representative that can speak with Parliament on local activities. The letter requested that the Committee share with the House Chair Office how it plans to go about its oversight responsibility on the matter.

The Chairperson asked Members for their response to the letter. He knows the answer will be simple if Members agree that he can say the Committee on the 30 May dealt with the matter and it was referred to the legal and research units of Parliament so that they can provide a guide. It would be enough to say that the Committee has initiated a process to deal with the matter and it would give feedback if necessary.

Mr J Lorimer (DA) said that he agrees with the step proposed but the Committee is not making any decisions on what to do yet. They should start thinking about that. The situation is that Glencore has proved to be involved in massive bribery across the world and South Africa has had issues with bribery of officials. A fair assumption is that bribery might have happened here. Do we go back to every licence that was issued to Glencore, every inspection of a Glencore mine, and look if it was justified or not? Although it is a lot of work, it is the right thing to do. It is not something the Committee can do or ask the DMRE to do because it would be like asking it to investigate itself. Glencore is likely to deny the allegations. A third party will be needed to conduct the investigation.

The Chairperson said that they commissioned Legal Services to provide the parameters. When the Research Unit comes to present, then the Committee can make a decision on what route to take. They can seek a third party or support system if needed.

Mr S Kula (ANC) agreed to the suggestion by the Chairperson to wait for the guidance of the legal and research units. The Committee can only provide input based on what the research and legal units have to say on Glencore. The matter will be given the attention that is needed so the Committee should not jump the gun. They must wait for research and legal input. Once they have that, it will empower the Committee on the best course to deal with the matter.

Mr K Mileham (DA) said that Glencore has pleaded guilty on a number of corruption charges in various countries. The starting point for the research is to get any documentation or settlement agreements, specifically, the Securities and Exchange Commission of the United States and anyone else involved in the matter.

The Chairperson said that they should agree to write to the House Chair stating that the Committee has started the process of dealing with the matter and will outline what steps have been taken.

Mr M Mahlaule (ANC) said that they need to take Mr Lorimer’s point on investigating the issuing of licences and his point that one cannot ask the Department to investigate itself. As a point of reference, the work done by Legal Services and the Research Unit will pave the way on how to deal with the matter, and also the approach to take. It is an important point because it will be central to the consequences. He emphasised that in other countries, it has been confirmed that there was corruption.

The Chairperson said that the Members' concerns will be accommodated.

The meeting was adjourned.