Deliberations on the Diamonds Amendment Bill

Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
20 October 2005
DELIBERATIONS ON THE DIAMONDS AMENDMENT BILL

Chairperson: Mr E Mthethwa (ANC)

Documents handed out:
Diamonds Amendment Bill [B27-2005]

SUMMARY
The Department of Minerals and Energy (DME) highlighted where changes had been made to the Diamonds Amendment Bill since the last meeting. Most of the changes were technical in nature, involving the correction of grammatical errors and the addition of words. A substantive change was the increase in the numbers of members of the Board of the Regulator. It now consisted of not less than 14 and not more than 17 people. Another substantive change was to subsection (3) of Clause 10 and Clause 17D(3). The Chairperson of the Board could now convene special meetings upon the request of at least a two-thirds majority of the members of the Board.

Members of the Committee asked why the Board of the Regulator was constituted in this way and wanted an increase in the number of labour representatives on the Board. The Department agreed to this increase.

MINUTES
Mr A Mngomezulu, the Deputy Director-General of the DME, went through the Bill clause by clause, highlighting changes. A new definition had been added in Clause one for "enhanced diamonds." A substantive change was the increase in the number of members of the Board of the Regulator in Clause six. It would now consist of not less than 14 and not more than 17 people. Two persons would come from the diamond industry, two from the precious metals industry and one person would come from organised labour.

The Chairperson asked why the Board was constituted in this way.

Mr Mngomezulu replied that the DME did not want to create a big Board as these usually did not work. They had settled on one person from organised labour as there was usually only one labour organisation throughout the industry chain.

Mr S Louw (ANC) said that people from the industry seemed to club together and shared the same opinions. If their number remained at four and labour had only one representative, a situation could arise where this one labour member would become marginalised. This could hamper the transformation of the industry.

Mr Mngomezulu said that the four representatives from the industry would be balanced by the four representatives from the Government, a Chairperson, a Chief Executive Officer and three other persons with skills or experience. In all, 12 of the 17 members of the Board would be appointed by the Minister.

Ms N Mathibela (ANC), Mr C Molefe (ANC) and Ms S Ngaleka (ANC) said that the number of representatives from labour had to be increased to at least two members. Ms Mathibela said that the Bill was also gender blind. The composition of the selection panel was also unclear.

Mr Mngomezulu said that it important to remember that the Board was a State organ. The Government had its own gender targets and the Committee had to trust the Department to meet or even exceed those targets. The DME had no problem increasing the number of labour representatives to two, and the same would apply to the composition of the State Diamond Trader.

Another substantive change was to subsection (3) of Clause 10. The Chairperson of the Board could now convene special meetings upon the request of at least a two-thirds majority of the members of the Board. This change was mirrored in Clause 17D(3). A new clause was added as subsection (1)(f) of Clause 16 which gave the State Diamond Trader the power to dispose of any excess unpolished diamonds through a diamond export and exchange centre.

Mr H Schmidt (DA) said that the clause needed to be tightened up to make it clear that the State Diamond Trader could only dispose of excess diamonds in its possession, and not all the excess diamonds in the market.

Mr Mngomezulu agreed with this and made the change accordingly.

Another change was the extension of a diamond dealer’s license from three to five years in Clause 32(1)(b). A new clause was introduced for Section 74 as the section currently had some errors in it.

The meeting was adjourned.