Minerals and Energy Laws Amendment Bill: briefing by Department

Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
23 FEBRUARY 2005
MINERALS AND ENERGY LAWS AMENDMENT BILL: DEPARTMENT BRIEFING

Chairperson: Mr E Mthethwa (ANC)

Documents handed out:
Minerals and Energy Laws Amendment Bill [B1-2005]
Department of Minerals and Energy briefing

SUMMARY
The Department of Minerals and Energy (DME) briefed the Committee on the Minerals and Energy Laws Amendment Bill [B1-2005]. The Bill sought to correct two mistakes that had been made in the version of the Mineral and Petroleum Resources Development Act, 2004 that had been promulgated. The first mistake was that the Act repealed the registration of servitudes with the Deeds Office in terms of the Deeds Registries Act, 1937. No such registration could therefore take place at the moment. The second mistake was that all references to common law mineral rights had been retained in the Deeds Registries Act, whereas they should have been deleted as such rights no longer existed.

The Committee was highly critical of the mistakes and wanted an explanation. The Department could not provide one, but promised to investigate and report on who was at fault as soon as possible. The Committee indicated that it would deal with the merits of the proposed amendments at a later, yet to be determined date.

MINUTES

Department briefing
The DME briefing was conducted by Mr J Rocha, Chief Director: Mineral Resources. A State Law Adviser, Ms T Ndlulu, was also present.

The Mineral and Petroleum Resources Development Act, 2004, had fundamentally changed the manner in which rights to prospect and mine in South Africa were treated. The Act provided that the State would become the custodian of all mineral resource-related rights and as a result the common law concept of privately-owned "mineral rights" would cease to exist after a transitional period ending on 30 April 2009.

The Act provided for the conversion of "old order" mining rights to "new order" rights that had to be registered with the Mining Titles Registration Office and not the Deeds Office as was the case in the past.

However, two major mistakes were made in the final version of the Act that was signed into law. First, the Act wrongly repealed Section 3(1)(o) of the Deeds Registries Act, 1937 that dealt with the registration of servitudes. This meant that persons intending to register servitudes could no longer do so as the enabling provision had been repealed and the Deeds Office was unwilling to continue registration in an atmosphere of legal uncertainty.

The second mistake was that all references to "mineral rights" had been retained in the Deeds Registries Act even though these rights had ceased to exist on 1 May 2004 when the Act came into effect. Further, the retention of these references meant that owners who had converted their rights since that date had not been able to register them with the Mining Titles Registration Office.

The amendment bill therefore sought to correct these two mistakes and would be applied retrospectively as if it had come into effect on 30 April 2004.

Discussion
The Chairperson requested further clarification on the proposed amendments and asked if a process of public consultation had been followed.

Mr Rocha again explained that these were technical amendments intended to correct the mistakes outlined in his presentation. He added that common law mineral rights no longer existed and that it was therefore necessary to delete references to them in the Deeds Registries Act. Further, the provision dealing with the registration of servitudes had to be re-inserted as it was causing major problems for the registration of servitudes. He confirmed that the Department had consulted the Department of Land Affairs as it administered the registration of servitudes and the Law Society of South Africa.

Mr H Schmidt (DA) was concerned that the amendment bill would apply retrospectively to 30 April 2004, saying that such provisions were highly unusual and were only used when rights had already been adversely and seriously affected. He asked if the Department had obtained independent legal opinion on this issue.

Mr Rocha responded that it was the Department’s view that retrospective application was appropriate in this case as the mistakes had created a legal "gap" after the Act had come into effect on 1 May 2004. Between then and now, requests for registration of servitudes and requests for registration of new order mining rights could not be dealt with legally. Retrospective application would allow for that. The State Law Advisors had certified the bill, but the Department had not obtained independent legal opinion.

Mr E Ngcobo (ANC) expressed concern that the mistakes could have occurred at all and asked what a servitude was. Mr Rocha stated that he did not know how the mistakes had occurred. The draft bill tabled in Parliament originally had not contained any such errors. He explained that a servitude provided that infrastructure could cross or be built on state or privately owned land. For instance, if Eskom wanted to build a power line over a certain piece of land, it registered that portion of land as a servitude.

The Chairperson stated that it was "incomprehensible" that the Department, State Law Advisors, Parliament and other stakeholders could all have missed the mistakes that were made in the Act. He commented that legislators relied on these bodies as they were not legal experts and pointedly asked who had been at fault.

Mr Rocha repeated that he did not know where the mistakes had crept in, but he promised that the Department and the State Law Advisors would investigate and report to the Committee. Ms Ndlulu added that the certified Act had been sent to the Department of Land Affairs before promulgation, but that department had also not picked up the errors.

The Chairperson indicated that the Committee would consider the proposed amendments in due course.

The meeting was adjourned.