Minerals and Petroleum Resources Development A/B: public hearings

MINERALS AND ENERGY PORTFOLIO COMMITTEE
30 May 2007
MINERALS AND PETROLEUM RESOURCES DEVELOPMENT A/B: PUBLIC HEARINGS

Chairperson: Mr SK Louw (ANC)

Documents handed out:
Submission on the Mineral and Petroleum Resources Development Bill: Presentation
Submissions on the MPRD A/B:
D Seymore Attorneys, Gauteng Provincial Government (Agricultural, Conversation, Environment & Land Affairs, Cullinana Distric Aggricultura Union and Smart Geosciences (Geological & Geophysical Consultant and Contractors)
LWI, South African National Road Agency and South African Diomond Procuders Organisation (SAPDO)
Legal Resources Centre: Comment on Addressing Historic Pollution by Mining Activities
Legal Resources Centre: Mining on Community Land (Rightd of cummunities)
Anglo American South Africa
Webber Wentzel Bowens: Regulatory Law Issues
Webber Wentzel Bowens: Technical Mining and Environment Issues
AGRISA and Nkuzi Development Association
Chambner of Mines of South Africa: Part1 and Part2
De Beers Consolidated Mines
Richard Spoor Attorneys
Richard Spoor Attorneys submission
ASPASA

SUMMARY
The Portfolio Committee continued its public hearings on the Minerals and Petroleum Resources Development Amendment Bill.

The Legal Resources Centre made a submission on suggested amendments to the Mineral and Petroleum Resources Development Act, and Bill. They noted that not enough attention was being given to the interests of traditional communities living on communal land. Delays were being experienced with the land restitution process, and mineral rights were being granted on the land in question before the restitution process was completed. Proper consultation between all parties was essential. There were also historical environmental issues. Of further concern was the fact that communities were being destroyed by mining activities. They suggested that the definition of “community” be properly formulated, that custodianship issues be addressed in a sub-clause, and that preference be given to the historically disadvantaged. A proactive process must be followed on environmental issues, and the State should assist local communities in drafting environmental impact assessments, and in the granting and duration of prospecting rights. The poor desperately needed the protection of the State. A new clause should be inserted into the Amendment Bill to protect the old order rights of the historically disadvantaged. LRC also complained that the process of consultation was inadequate. Section 5 of the Act must be strengthened to allow for consultation of all land owners, with adequate time and report-backs. The Minister of Land Affairs should put in a claim for all affected communities. Certain amendments were also needed to clauses affecting the environment. The time permitted for retention rights and mining permits was inadequate.

Mr Richard Spoor, Attorney, represented twenty different communities, all of whom were experiencing mining activities on tribal land. Although the preamble to the Bill said that it was intended to promote community interests, these communities were facing a negative impact, particularly in the socio-economic sphere, through inroads into land and property rights. He also complained that the outcomes of the consultation process were not defined, and that consultation was vital. Communities were being compromised by inadequate consultation, and did not know their rights or lacked the skills to pursue proper consultation.

Smart Geosciences briefed the Committee on the consultants’ viewpoint. He noted that historically disadvantaged owners of companies must be acknowledged. Mineral rights were awarded to completely inexperienced people, and he stressed that consultation should be carried out. There was no certainty who would provide prospecting work programmes and environmental management plans. Tribal chiefs were insisting on black economic empowerment but there was insufficient recognition of who was putting up the costs. There should be communication between the Small-Scale Mining Board and its clients. The delays at the Council for Geosciences (CGS) were unacceptable.

Submissions were made by Mr E Maggot, and Mr Mogaga, residents of areas where there had been a problem that graves were being moved, people were being arrested for trespassing on traditional lands, there was no proper consultation and local government officials, instead of assisting the people, were working for the mines. The police were acting very harshly against residents. It was noted that although some chiefs were allowing for 26% black economic empowerment shares, this did not always work, and there was considerable delay in job creation and at the Council for Geo Science. delay in job creation. There were also delays at CGS.

Questions by members addressed the need for more time for discussion, the consultation process, the problem that tribal chiefs might not be properly addressing community needs, or might be accessing funds illegally, the need for proactive empowerment, the need for leadership to move with the times, and the problems with delays. Members of the Committee felt that more time was needed with the presenting parties to investigate the situation further. They agreed that traditional communities were especially vulnerable to exploitation.

MINUTES
Legal Resources Centre Submission
Ms W Love, Legal Resources Centre, (LRC). introduced her delegation and noted that many of the submissions would tie in well with what had been said the previous day. The documents had been distributed to all the members of the Committee.

LRC had a number of proposals involving definitions. They proposed that the term ‘community’ be defined as a group of historically disadvantaged individuals. Restitution of land was dealt with by the Restitution Act. However, people were still living with ongoing disadvantages. It was clear that African people, women in particular, were still part of disadvantaged groups. Groups which traditionally lived on certain tracts of land were being done an injustice as they were not allowed the mineral rights despite being the rightful owners. This meant that the definition of a community should be expressed clearly. The legitimate communities living on land on which mining activities were taking place should share in the advantages.

LRC also made proposals about the custodianship of mineral and natural resources. A sub clause should be inserted stressing the importance of communities. Preference should be given to historically disadvantaged South Africans (HDSA), especially those occupying land. Although the LRC supported the concept of Black Economic Empowerment (BEE), she asked why people from the rest of the country should be empowered ahead of the local communities.

Ms Love said that a proactive process should be followed regarding environmental issues. Arrangements were unequal. The mining companies had access to large amounts of resources, expertise and experience in compiling environmental impact assessments (EIA). The local communities had nothing like this if they wished to compile their own EIA’s. The state should assist in this regard. The community needed expertise to uphold their rights.

The next issue of concern to LRC was the granting and duration of prospecting rights. She pleaded with the Committee not to allow the creation of a situation with unintended consequences. The impression that empowerment was only for people in urban areas should not be created. State engagement was needed to prevent this.

She said that the ravages of the past could not be overcome unless the State stood up for the poor. She proposed that another object should be added, namely to insure that HDSAs were not prejudiced by the old order of mineral rights. If converted applications related to land, the holder of the rights would promote the community’s rights. A new clause should be inserted into the Amendment Bill (A/B) to protect the old order rights of HDSAs. These should not begin to run in terms of the Restitution Act prior to the finalisation of claims for a ten-year period.

In terms of the principal Act, it was clear that the legal rights of the community had to be recognised. A process of consultation was needed. This was not as strong as LRC would like. There had to be a clear intent to recognise the fact that communities had been dispossessed and their rights breached.

Ms Love said that many claims had been filed, but had not yet been processed. It could happen that a mineral rights claim could be granted while a land restitution claim was still in progress, so that when the restitution claim was eventually granted the minerals claim was already in place. This could not be the intention of the legislation, but it was a reality. The frustration of the people could be increased.

She said that communication between government departments seemed to be excellent. Where the Minister of Land Affairs (LA), who was the trustee of land, knew the situation, she should put in a claim for all the affected communities. A notice should be given to the Department of Mineral Affairs (DME) so that the rights of the people involved could be resolved. They would then be in a position to claim the benefits of any mineral expropriation. The Minister of LA was keen to resolve the issues in advance of the issue being raised. The A/B would give the Minster of LA a basis to allow communities to benefit. Otherwise their only remedy would be to sue the trustee of their lands, namely the Minister of LA.

Ms Love said that the LRC regarded consultation as a vital issue. This was required in the previous legislation, but the process was not strong. LRC would prefer to see Section 5 of the principal Act being strengthened. Land owners had to be consulted. There was a clear obligation for consultations to be orchestrated in an objective manner. Adequate time had to be allowed and report backs were needed. Once again, the communities needed support

She continued that amendments relating to clauses affecting the environment should be made. Some issues were not disconnected from the community, and some issues were quite specific. The DME was very conscious of the historical pollution problem. These problems proved costly to sort out. It was difficult to enforce these measures because of the current constitutional disposition. Fifty years previously the miners themselves had resolved to clean up, but she could not say that the same situation still prevailed. Certain obligations had been contained in previous legislation, and some had been carried over. On the ownership of rights, there were still some duties.

Under Section 43, LRC proposed an amendment about retention rights and mining permits, relating to the issue of previous rights and old order mining and prospecting rights. Their proposed amendments carried forward the intention of the old legislation. The time given to prepare comments was only ten days. There was a question over EIA documentation. There was harmonisation regarding environmental issues. There were existing regulations, which were subject to independent control. The National Environmental Management Act (NEMA) had been used for housing estate developments in some cases.

Mr Henk Smith, Attorney, LRC, sketched a historical context. In the past, white landowners had been given 25% of the profits of mining operations on their land. Tenants had always got their share. Even the Land Act of 1913 had given benefits to the community. There was obligation on the Minister as the trustee of land to apply for mineral rights. This would make it possible for the communities to claim for damages sustained. There were five categories of consultation, as listed in Section 5.4 C of the principal Act. This was a crucial foundation for compensation. The first category was the consultation regarding prospecting rights. The second was the interest and effect on parties. The third was a blanket provision for consultation on all applicable notices in a region. The fourth was the most comprehensive. The Environmental Management Plan was now replaced by an Environmental Authorisation Plan, which was very thorough. Environmental issues had to be considered. Interests and rights of the landowners had to be remembered. The only power in the Act at present was for the conversion of old order rights. Old communities had never been consulted about the conversion of old order rights, and a considerate approach had to be followed. He did not know why Section 5(4) was being repealed in the A/B, although he suspected that the reasons had been documented in various reports.

Richard Spoor Attorneys Submission
Mr Richard Spoor, Attorney, referred to the amendment to Section 5(4)(c) of the principal Act (Clause 4 of the Bill). He represented twenty different communities, all of whom were experiencing mining activities on tribal land. The preamble to the A/B recognised the need to promote community interests. However, the communities were facing an overwhelmingly negative impact. The heaviest impact was felt in the socio-economic sphere. Serious inroads were being made into land and property rights, which were not respected by the Mineral and Petroleum Resources Development Act (MPRDA). There was a deprivation of land rights, and relationships of inequality had been created, which invariably influenced the outcome of the process.

He said that the outcomes of the consultation process were not defined in the Bill. It was very significant that the Minister only had insight into the reports received from the mining companies but nothing came back from the community. The consultation process was critical. Development and social upliftment had to be emphasised. One of the outcomes of the A/B would be that the failure to consult would now be decriminalised. He asked what the requirements were for the consultation process, and what the weaknesses were in the current system. Private ownership of land was an issue. It was also uncertain what was meant by adequate consultation.

Mr Spoor cited the example of the Garatao community in Limpopo. There was a written agreement with the tribal authority, but this had not filtered down to ground level, giving rise to confusion. A democratic process was needed for consultation, with exclusive agreements being reached. Communities were compromised by inadequate consultation, and did not know their rights. They also lacked the skills and resources to pursue proper consultation, and the process was not inclusive. Mining companies tended to manipulate the process by diverting attention from the real issues and subverting the process. They tended to undermine the consultation process and were unaccountable. There were no criteria to measure success, and consultation was inadequate. One thousand families had lost their land in the Matlolo area, and had been rehoused in an urban slum.


Smart Geosciences Submission
Mr Vuyani Ncoko, Geoscientist, Smart Geosciences, said that the situation should be seen from both the consultants’ and the HDSA consultant’s points of view. He had been dealing with the law since he had started at Smart Geosciences and had interacted with communities. Owners of HDSA companies were seen as BEE partners. They often took the side of overseas companies. If a company was 100% HDSA owned, this should be acknowledged. Section 16.2 of the principal Act had one paragraph allowing for foreign companies and one for 100% HDSA owned companies. Section 17(1)(a) applied to prospecting rights, funds and resources. Financial and technical competency were needed to manage these operations. There was a tendency to combine the two areas of competency, and a single company was normally called on for both.

In some cases people with no experience, such as taxi owners, were awarded mineral rights. The co-ordinates were of great importance, unless an entire farm was involved, and this necessitated the services of a consulting surveyor, which was expensive. This was necessary to avoid ambiguity. Consultation was needed; as farmers wanted a prospecting work program (PWP) and environmental management plan (EMP). He asked who must provide these documents.

Mr Ncoko pointed out that tribal chiefs insisted on the 26% BEE component. It should be appreciated who was putting up the money, and everybody should share the costs proportionally. Finances were a problem, as no bank would finance exploration and prospecting. Anglo Khula was facilitating the entry of HDSA companies as junior members of corporations. They would be giving letters of comfort to companies. However, the DME demanded proof of financial capability. There were a number of needy companies operating on small scale, and they experienced a number of problems. Mining was a long process, which started with the survey process. There should be communication between the Small-Scale Mining Board (SSMB) and its clients. The delays at the Council for Geosciences (CGS) were unacceptable, and they should be encouraged to outsource work. Mining permits were also an issue in that only 1.5 hectare plots were being given permits, while he would welcome claim areas of five hectares.

Discussion
Mr C Kekane (ANC) said that he wished the Committee could have set aside more time for the LRC. He asked what the impact of mining was on the community. More time was needed to explore this question. He asked if the CGS was part of government. Small players also needed the chance to be heard.

Mr T Mahlaba (ANC) observed that there had been more emphasis on preservation the previous day, with an emphasis that operational areas must be undisturbed. This was very unfortunate, and the consultation process was part of the responsibilities of both mining companies and communities. Many companies were in the same position. The Committee needed time to interact with people. Input was needed in order to reach the best legislation.

Mr E Lucas (IFP) commented on the role of the CGS and the 26% BEE participation. The chiefs had representative committees, but were vulnerable. Ownership of the land had to be seen in the right perspective. Communities had no money and many were oppressed still. The situation was still difficult.

Rev K Zondi (IFP) said that both parties were correct. The LRC was requesting a process of consultation, but the communities themselves were not there. Mr Spoor was also correct. There were no consultations, even new consultations. A West German had been operating in Kuruman. There had been no authority granted by the persons on site. Another day was needed to discuss the issue.

Adv H Schmidt (DA) noted that the LRC’s submission was very practical. He was concerned with the consultation process. Even though it was flawed, it was regrettable that it seemed to be on its way out. He asked how this fitted in with the Promotion of Administration Justice Act, which seemed to be negated.

Mr M Matlala (ANC) said that in many cases the chiefs and their communities were still living in the past. Mr Spoor was correct. He asked if the DME were acting in a hands-on capacity, and if they were aware of the issues.

Mr C Molefe (ANC) said that some issues were being watched. There was some transformation in industry. There was agreement on some issues, but this was still needed on others. There was one case where the land was historically occupied by a community, but another where the community owned the land but did not occupy it. Proactive empowerment was needed. This had been touched on. Communities had to be educated.

Ms N Mathibela (ANC) said that the demands of 26% BEE shares went with the consultation process. She asked if the community was involved in discussions, or just the Chief. She wondered if there were any jobs or other benefits filtering back to the community from mining exploration. Prospecting had to take place before mining operations could start.

Ms Love replied that she was also concerned with the amount of time available. LRC would welcome further consultation with the Committee. The Promotion of Administrative Justice Act (PAJA) was a fundamental issue, and had to be taken into account. From a community perspective, she realised that the Committee would benefit from interaction. It might be possible to organise a visit later in the year.

Ms Love said that she knew how stubborn some traditional authorities could be. They had the mandate of the community, and played a valuable role. Some were not winning the support of their communities in an appropriate way. There could not be a case of democracy for some but not for all. Leadership must also be of benefit to the community, and had to move with the times. Regular debate was needed. Traditional law had to move towards living law. She asked where the stubbornness lay, if the traditional leaders were representing the community or merely purporting to do so.

Ms Love said that proactive empowerment had to take place. The State must undertake to refer contentious matters to expertise, using the facilities of the LRC and CGS. These would include environmental issues, legal issues and questions of rights. She asked what the situation was with traditional leaders who did not live on their land. The restitution process was unlikely to be resolved for some time, perhaps only by the end of March 2008. As the MPRDA stood, there was no reference to restitution payments. It had to be clear that old order mineral rights were still accessible and were not marred by the passage of time where there had been no application for rights on behalf of the community by the Minister.

Mr Spoor said that a number of community members were interested. Historically people had been forced off their land, and at least twenty were in this position. They were now on tribal land. The platinum value had increased as an accident of history. Some of these operations were on private land rather than communal land. The PAJA safeguard was fine, and was well understood. There were no rights to refuse. The A/B at present was at odds with international best practice. Indigenous communities in other countries enjoyed special rights, yet the traditional communities in South Africa did not. There had been an incident in which the community in Pondoland had been forced to allow a mining development, although this mine would destroy their culture. Another community in Limpopo was receiving R 50 000 per annum although the mine operating on their land counted its annual profits in billions, and their culture had also been destroyed. The Provincial Government in Limpopo recognised the problem, and had set up a multi-department Committee to address this issue.

Further submissions: Mr E Maggot, Mr Mogaga, and Mr Ncoko
Mr E Maggot was a resident of Amanuensis in Limpopo. He said that the government was not taking care of the people in mining areas. Graves had been moved and people relocated, arrested and tortured by the police. If proper consultation had taken place then there would have been no conflict. Mining companies were paying no compensation. Moving graves was culturally extremely offensive. Companies were not coming to the communities. Local government officials resigned and were now working for the mines. Leaders were there in name, but were not in fact representing the community interests. Government had to address the problem. In Garatau, a Mr Pando had been given a prospecting licence. He had arrived in the area without warning, and had moved into houses to drill on their properties without even consulting with the home-owners. He refused to communicate any information.

Mr Magoga suspected that the Police were involved. The mines were supported by government and the police. He had be been arrested for trespassing on his father’s land. He asked how this was possible. He had spent three days in jail, and blamed the government for this situation.

Mr Ncoko said that there were demands for the 26% BEE share. Some chiefs did make these in the name of their communities. There was not always a follow-up on consultations. Letters were only sent after the council had met, and could only then be submitted to DME. Therefore the benefit was not just for the chiefs, but some education was needed. Some companies were owned by HDSAs but they did not like the system of chiefs because of historical grievances. A period of prospecting was needed before mining operations could commence, and results were needed before mining could start. Projects could often last longer than expected. For example, in one case the first phase had taken six months and was still incomplete. An application for mining rights could take another year; therefore there was a delay in job creation. There were also delays at CGS.

Discussion
Ms Mathibela said that consultations should only need to be done through the Chief if it was shown that he was talking to his council.

Mr Ncoko replied that sometimes the Chief would meet with his council and other times not. In any event, meetings with the council were only held after submissions had been made. Sometimes Chiefs did send messages to some key people.

The Chairperson remarked that several important issues had been raised. He appealed to observers from DME to meet with the LRC before the follow-up with the Committee. Concerning the questions raised at this meeting, they had to be captured in answers. The Committee would meet again on 6 June.

Mr N Nene (ANC) said that the Committee was at pains to hear the issues. The guests should remember the foundations of the ruling party. Several of its servants were limited as members. He had never heard these sentiments expressed before.

Ms D Seadimo (ANC) asked about the time for licence applications to be processed. This impacted onto the process. She asked which structures could be consulted.

Mr Kekana said that if the process was incorrect, it was not helping the situation. Money was an issue. There was a risk that a Chief might have “hot fingers” and he suggested that perhaps it would be better to hold consultation rather with groups representing the community than with individuals, as there was a risk of bribery. Government could not allow people to go hungry while applications were processed. Benefits should be given to social development. Money was always risky, as issues of trust arose. The DME should find a way to guide the process. However, this could complicate the process rather than help.

Rev Zondi said that physical abuse was also taking place. The Committee could not police these issues, but the wanted to correct the issues within the community. It was unacceptable that people were harassed on their forefathers’ land. He appealed for those concerned to sit with the DME to resolve the issue,

Ms Love asked which structure should be consulted. There were other activities. Ownerships was being regulated in terms with the Restitution Act. There would be benefits to the community. Their proposals regarding the A/B could be improved. She stressed that communities must receive benefits from mineral exploitation.

The meeting was adjourned.