Legislative Programme for 2000: briefing

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Mineral Resources and Energy

21 June 2000
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Meeting report

This Report is a Contact Natural Resource Information Service
Taking Parliament to People, and People to Parliament


21 June 2000

Documents handed out:
Legislative Programme for 2000 (Energy and Mineral Development)
Progress Report on the Development of an Integrated Implementation Programme: Department of Minerals and Energy

The Director-General of the Department of Minerals and Energy, Adv. S. Nogxima, briefed the Committee on the upcoming legislative programme. The six bills discussed were:
- the Gas Bill;
- the Electricity Supply Industry Regulation Bill;
- the National Electrification Levies Bill;
- the Energy Bill;
- the Abolition of the Lebowa Mineral Trust; and
- the Mineral Development Bill.
Adv. Nogxima then discussed the progress of the internal restructuring that is taking place within the Department. The meeting concluded with administrative matters of the Committee, specifically the upcoming national and international study tours.

The Director-General's handout follows:


Gas Bill:
Initially scheduled to reach Parliament during second quarter of year 2000. Negotiations with private sector, government of Mozambique and Namibia. Issue is to harmonise the regulatory framework between the three countries.
In process of being published for public comment after having being approved by Cabinet on 14 June 2000. It is envisaged that the Bill will come before Parliament during the fourth quarter of 2000.

Electricity Supply Industry Regulation Bill:
This Bill was originally scheduled to reach Parliament in the second quarter of 2000.
However, due to a host of developments within the Electricity Supply Industry (ESI) especially the restructuring of the Electricity Distribution Industry (EDI) and also preliminary investigations into reforming the Generation and Transmission sectors of the industry have delayed the introduction of this Bill. These developments would have to be incorporated into the Bill. It is therefore envisaged that this bill would be introduced into Parliament towards the last quarter of 2000.

National Electrification Levies Bill:
The Bill was scheduled to reach Parliament in the second quarter of 2000.
The Bill has been finalised and forwarded to the Minister of Finance for consideration because only the Minister of Finance can introduce Money Bills.

Energy Bill:
Will now reach Parliament during the second quarter of next year. The move to develop the Integrated Energy Plan which will underpin this legislation is due to be finalised during the last quarter of this year. During the development of the IEP, it became clear that this Bill should be based on the integrated energy plan.

Abolition of the Lebowa Mineral Trust:
Need for additional consultations caused the delay. Gone through NEDLAC, and approved. Currently with the State Law Advisors for certification, the indication is that it will be tabled in Parliament by the 30th of June 2000.

Mineral Development Bill
Obtaining Cabinet approval for public release - July 26th, 2000
Publication of Draft Bill - August 4th, 2000
Concluding of consultation process, including NEDLAC - September 30th, 2000
Finalise Amendments to Bill - October 31st, 2000
Obtaining Cabinet approval for introduction into Parliament - November 30th, 2000
Finalise certification and introduction into Parliament - January 31st, 2001

The new Public Service Management framework encompassing the Public Service Act of 1994 as amended and the new Public Service Regulations came into effect 1 July 1999.

The implementation of this framework will take place over a period of time, but a directive has been given by Cabinet on the 4th of August 1999 that all those aspects of the Management framework that have direct implications for service delivery and the rightsizing of the public service be co-ordinated and put in place as soon as possible.

Towards this end the Cabinet decided that effective management plans be
established in all departments.

In the light of the new regulatory framework we revised our strategic plan of 1998. This was done with a view to ensuring a co-ordinated linkage of all processes and systems as well as aligning our work plan with the new priorities of government spelt out in the President's state of the Nation address and the new regulatory framework. Labat Africa, a consulting firm was contracted to assist the department with the strategic re-alignment of the key objectives of the department with the latest policies and priorities of the new Government and to develop and pilot a performance Management and Development System for the department. Progress made on the two projects and Management Plans is outlined hereunder:

Strategic Plan
A draft of the Strategic Plan of the Department was submitted by Labat Africa for
consideration. The draft plan makes provision for the following key aspects:

(a) An analysis of the political, economic, social, technological environment
(b) Priorities for the five-year period: 2001/01 - 2004/05
(c) Vision and mission
(d) Core objectives
(e) Planning process
(f) Departmental strategic direction
(g) Mandate
(h) Business strategies
(i) Work plan
(j) New Priority areas
(k) Organizational framework
(l) Repositioning and restructuring programme

The draft has to be finalised to make provision for the actual long and short term Business Strategies of the main component of the Department. This is still in progress.

Organisational structure and post establishment:
The Department aim to link structure and strategy. A full-scale workstudy is almost complete with assistance of LABAT with a view to developing a DIAMOND-shaped structure ad advocated by the Minister.

Service Delivery Improvement programme:
DME has embarked on a development of a Service Delivery Improvement Programme. Directorates and regional offices have been requested to submit their generic and directorate specific standards of performance. The Finalisation of the SDIP awaits the approval of the Strategic Plan that will outline the key objectives of the Department.

HR Plan of the Department:
A draft HR plan for the Department has been finalised. Directorates have been requested their specific HR targets for inclusion in the Departmental HR plan. Skills audit was also conducted as part of the process to develop the HR plan.

Mr A. Nel (NNP) asked what effect the delay of the Gas Bill had on the gas industry.

Mr Nogxima replied that the companies involved had themselves asked for a consistent regulatory framework. The delay therefore had little effect on the industry.

Mr S. Mongwaketse (ANC) asked whether consensus had been reached between South Africa, Namibia and Mozambique on the regulatory framework for the gas industry.

Mr Nogxima responded that not only had consensus been reached with Namibia and Mozambique but also with the private companies involved.

Mr I Davidson (DP) asked to what extent the Gas Bill was being presented within a total energy framework.

Mr Nogxima noted that the government is currently working on an Integrated Energy Plan. The goal of this plan is to bring in a variety of energy providers to South Africa but also to prevent the domination of any of these industries over the others. The plan is designed to provide security of the energy supply and the accessibility to energy for all South Africans. The Gas Bill takes this desired balance into consideration by providing natural gas to South African consumers

Mr I Davidson (DP) followed up by stating that if the Integrated Energy Plan is only to be finalized next year, how is it possible that the Gas Bill will be completed prior to the Plan's completion.

Mr Nogxima commented that the gas policy section of the Integrated Energy Plan has been completed and it forms the underpinning of the Gas Bill. The gas industry is not yet regulated and to introduce natural gas into the country without a regulatory framework in place would be disastrous.

Mr M Ramodike (UDM) stated that the Department might be putting the cart before the horse by negotiating a deal before the approval of the program by Parliament.

Prof. I Mohamed (ANC) replied that in terms of energy provision, negotiations and legislation would by nature be piecemeal. His concern was that as of yet there was no policy on nuclear energy.

Mr E. Lucas (IFP) asked whether the government is offering any financial incentives for companies to invest in the industry.

Mr Nogxima stated that the companies investing in the natural gas pipeline would receive significant tax deductions as this will promote international investment into the project.

Mr S. Mongwaketse (ANC) asked about the 15 year moratorium on use that the builders of the pipeline have received. This moratorium means that no other company can use the pipeline infrastructure for a period of 15 years. The member was concerned that this monopoly situation could have negative effects on the consumer.

Mr M. Ramodike (UDM) stated that he was outraged that the negotiations had proceeded and been finalized before the bill had been processed through the Portfolio Committee and the National Assembly.

The Chair of the Committee, Mr D. Nkosi responded to the question by noting that this is the nature of negotiations. If the Department had to wait until Parliament approved every concept before starting negotiations, nothing would ever get done. Mr Nogxima added that when the Department enters into negotiations it comes up with a proposed bill that has to be approved by Cabinet. Cabinet can refuse to accept the draft which would effectively kill any negotiations in progress.

Mr I Davidson (DP) asked if the Committee could be briefed on the Department's entire energy plan in order to be able to contextualize the Gas Bill within a more comprehensive framework.

Mr A Nel (NNP) asked to what extent the Department has looked at alternative energy sources when compiling its Integrated Energy Plan.

Mr Nogxima replied that the Department has done extensive research into all possible carriers and that the Plan will reflect the suitability of these sources for South Africa and its population.

Study Tours
The Chair then proceeded into a discussion of the Committee's upcoming national and international study tours. The committee will visit platinum mines (Billiton) on the 26th and 27th of June. From 9-16 July three members of the Committee will travel to London, Antwerp and Tel Aviv on a diamond research tour. Finally, on 31 July and 1-2 August the Committee will also start a national diamond research tour.

The meeting was then adjourned.

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