Mine Health and Safety Amendment Bill, National Energy Bill: briefing

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Mineral Resources and Energy

13 August 2008
Chairperson: Mr E Ncgobo (ANC)
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Meeting Summary

The Department of Minerals and Energy briefed the Committee on the Mine Health and Safety Amendment Bill. The objectives of the Bill were to strengthen its enforcement provisions, to simplify the administrative system for issuing of fines and to reinforce offences and penalties. Some other amendments introduced by the Bill dealt with training records, employer investigation, the re-establishment of the Mine Health and Safety Inspectorate, the establishment of permanent committees of the Mine Health and Safety Council (MHSC), the increase of administrative fines from R200 000 to R1million, and also the government’s powers to enter mines.

The Committee raised serious concerns about the capacity of inspectors to enforce legislation. Other questions and comments included:

- the objectivity of an employer’s self-investigation of accidents
- the capacity of the Inspectorate
- the need to establish a new agency
- the training of mineworkers
- the power of the Minister to visit mines
- the appropriateness of the fines

 In addition, the Department briefed the Committee on the amendments effected to the National Energy Bill. Notably, it was proposed that the Bill abandon the concept of a National Energy Modelling and Information Agency and retain all modelling functions and activities within the Department. Members asked questions about the capacity of the Department and the accountability of Ministers. Members also discussed issues of constitutionality and boards.

Meeting report

Overview of the Mine Health and Safety (MHS) Bill by Department of Minerals and Energy (DME)
Mr Thabo Gazi, Chief Inspector of Mines: DME, indicated that prior to 1996, mine health and safety issues in the country were regulated under the Minerals Act. Currently, the setting, monitoring and enforcement of mine health and safety standards were governed by the Mine Health and Safety Act (MHSA), which came into force in 1996. The MHSA was premised on the guidelines of the International Labour Organisation’s Convention (176), which delineated a specific responsibility on the State to develop and enforce a policy on health and safety issues in the mining industry. Unlike the rule-driven, prescriptive approach of the previous regulatory system, the MHSA operated from the principle the principle that the obligation for health and safety rested with employers (owners of mines). The Act established the Mine Health and Safety Council (MHSC) with the clear objective of advising the Minister of Minerals Energy on health and safety issues at mines as well as promoting a health and safety culture within the sector. In this context, the Bill sought to amend the Act so as to review and reinforce the enforcement provisions, simplify the administrative system for issuing of fines, harmonise the administrative processes of the Act with the processes of the Promotion of Administrative Justice Act, and lastly to establish the Mine Inspectorate as an entity of government.

The amendments had been canvassed with all the affected stakeholders within the industry. On the 16 May 2008 the Bill was published in the Government Gazette for public comment. Comments had been received for consideration, and where possible, had been incorporated into the Bill. The key amendments introduced in the Bill included the obligations on the employer to keep training records and to initiate accident investigations. The remaining changes re-established the Mine Health and Safety Inspectorate (MHSI or Inspectorate), established permanent committees of the MHSC, increased administrative fines from R200 000 to R1million and empowered the Minister of Minerals and Energy to enter mines at any time for health and safety reasons. The presenter expanded on the rationale behind each amendment and also pointed out that the amendments dealing with employer investigations and employer offences had been highly contested.

In conclusion, Mr Gazi stated that the provisions were not dissimilar to those in other jurisdictions. He hoped that by strengthening the legislative provisions, the culture of mine health and safety standards would be elevated in the country.

Mr T Mahlaba (ANC) asked whether the amendments were prompted by research conducted by the Department or by pressure exerted on it by stakeholders within the industry. .

Mr Gazi confirmed that a combination of factors, such as in-depth analysis of statistics, observation over 10 years and an intensive campaign by organised labour, motivated the review into the MHSA.

Mr Mahlaba sought clarity on the establishment of the MHSI as an entity of government.

Mr Gazi clarified that the MHSC was originally established as an advisory body and was never intended to become a public entity. However, because it collected levies and funded research, the Minister of Finance listed it as a public entity. This modification created several governance and compliance issues, and given the challenges that the MHSC had around capacity, it was felt that that the existing entity should be relocated.

On the same issue, the Chairperson suggested that the functions of the MHSC and the Inspectorate should be amended rather than establishing a new agency. He lamented the tendency of government departments to establish ineffective satellite administrations.

Mr Gazi confirmed that that the Department was engaging with companies to determine what the best model was because it differed from one jurisdiction to another. In the UK, they had a Health and Safety Commission, which was the equivalent of the MHSC. In addition to that, they had an Inspectorate, called the Health and Safety Executive. Both bodies were housed together. This model assisted in quantifying what governance structure would be more effective in South Africa.

The Chairperson could not understand why the Department wanted to interfere with the MHSC. He argued that the MHSC should be maintained in its current form because it was a pragmatic and dynamic body. Finally, he asserted that amalgamation was unnecessary and suggested that the Inspectorate should be upgraded instead.

Mr Gazi explained that the decision to amalgamate was designed to streamline the responsibilities and not to interfere with the work of the MHSC.

The Chairperson countered that the MHSC functioned smoothly because it was cost effective as well as time effective. It performed its functions when it was supposed to, and at relevant times, it receded to committee work.

The Chairperson and Mr Mahlaba examined whether the proposed fine was adequate to induce companies to comply with the safety regulations.

Mr Gazi reckoned that the Department’s principal aim was to secure compliance. In that regard, he was satisfied that the penalty was sufficient to act as a deterrent for would be violators. Also, he cautioned that the Department did not have the capacity to deal with the anticipated legal and administrative challenges that would arise if the fine was increased any more than what was proposed.

Mr C Molefe (ANC) expressed concern about the objectivity of the proposed employer investigations system.  In light of that, he asked whether provision could be made to include organised labour in such a process.

Mr Gazi explained that the aim of the amendment was to ensure that accident investigations were conducted as soon as possible so as to prevent similar accidents in the future. In addition, he clarified that employers would only be obliged to investigate minor accidents, and that the State had a responsibility to investigate all major incidents.

Mr Molefe noted the authority conferred on the Minister to enter mines at any time for health and safety reasons. For that reason, he questioned whether such capacity should also be extended to other relevant individuals, like parliamentarians, given the large number of mines that existed in the country.

Mr Gazi commended the Minister for her interest and leadership in dealing with health and safety issues at mines. Also, he added that the amendment emanated from a recommendation made by the Leon Commission of Inquiry (1995).

Mr S Vundisa (ANC) asked which entity would be responsible for developing and approving the course content for the mandatory training prescribed in the Bill.

Mr Gazi indicated that the provision of proper and regular training to employees was an important driver in improving health and safety in the sector. Consequently, the Department had already initiated a curriculum together with the Mining Qualifications Authority (MQA) to develop and improve standards in the industry.

Mr Vundisa asked the Department to shed some light on how it intended to enforce compliance.

Mr Gazi declared that it was necessary to have a deterrent to discourage non-compliance. He admitted that the current system of fines had not worked. As a result, the Inspectorate had decided (last year) to take a tough stance, and stop operations where accidents occurred. Such a measure was disruptive and costly to the country. However, it was the preferred route because there were no other working sanctions in the legislation.  Given that new approach, the industry had registered a significant reduction in accidents and fatality rates since the previous year. 

The Chairperson claimed that companies disregarded the safety of miners and only instituted all the necessary precautionary measures when engineers, managers and other “important people” descended down the mines.

Mr C Kekana (ANC) supported this comment. He stated that life in Africa was deemed cheap and the standards (regarding mine health and safety) applied elsewhere in the world were not applied on the continent.

Mr Gazi concurred with the observation, and affirmed that the amendments sought to rectify this unpleasant reality. Additionally, he highlighted that the Constitution articulated the value of human life and that the legislation sought to reflect that.

Mr Molefe asked whether the vacancies in the Inspectorate affected its capacity and ability to monitor compliance.

Mr Gazi acknowledged that the Department had a serious problem regarding capacity. Because of the nature of the work involved, the Inspectorate required people with specialised skills in areas such as mechanical and electrical engineering. Unfortunately, the country possessed a shortage of such skills. Even in the case where such skills were available, the Department struggled to compete with the incentives offered by the industry and often had to employ recent graduates with no practical experience.

 The Chairperson dismissed the assertion that there was a shortage of skills in the country.

Similarly, Mr Mahlaba noted that there were constant complaints about high unemployment in the country yet there was close to one million vacancies in the public service. In addition, he accused government departments of not doing enough in respect of vocational guidance, and for failing to market themselves appropriately.

Mr Gazi reiterated that the nature of work (done by the industry) was unique and that the skills requirements were equally unique. Government was competing with companies that had huge resources and could not always attract the best talent from a small available pool. Furthermore, he divulged that there were ongoing initiatives to try and address the vacancy problems; some of which included a human resource development strategy and securing extra funding from Treasury. Finally, he disclosed that the Department was currently training 24 students so that they could be absorbed into the Inspectorate.

When assessing the Department’s presentation, Mr Molefe did not get the impression that it was serious about zero rating fatalities in the mining industry.

Mr Gazi reassured the Committee that the Department was committed to this cause.

Mr Gazi remarked that without capacity, it would be difficulty to regulate effectively. The history of the mining industry showed that a lot of non-compliance in the sector was precisely because of the fact that the Inspectorate failed to have an effective programme of inspections. Accordingly, he stressed that government needed to suitably resource the regulator. 

The Chairperson indicated that the Committee would consider the Department’s input when it deliberated on the Bill.

Afternoon Session
Briefing by the Department on the Draft Amendments to the National Energy Bill
Mr Nhlanhla Gumede, Deputy Director General: Hydrocarbons and Energy Planning, DME, presented a summary of all the changes effected to the Bill. He indicated that the amendments originated form the Department’s interaction with the various stakeholders. Notably, the following amendments were proposed:

▪ The National Energy Modelling and Information Agency (NEMIA) should no longer be established.

    - Modelling functions and activities must be retained within the Department.

▪ The renewable energy functions should no longer be given to the South African National Energy Development Institute (SANEDI)

    - The functions must be retained within the Department.

    - SANEDI should only undertake functions/activities relating to Energy Efficiency and Energy Research and Development.

▪ The SANEDI functions defined as such and not allocated under divisions.

▪ The Energy Infrastructure section was combined with the Security of Supply section.

▪ The Programmes in respect of international obligations were removed.

▪ Reference to the creation of infrastructure entities was removed.

▪ All “prescriptions” were removed from the body of the Bill

▪ All covered in the regulations section of the Bill

Mr Gumede highlighted the fundamental changes that were affected to certain clauses. 

Clause 3
Mr Gumede explained that chapter 3 was deleted in its entirety and that some aspects of that section were transplanted to chapter 2 of the Bill, which dealt with clauses 3 to 6.

With respect to the revised clause 3(4), the Chairperson proposed that the word “must” be substituted with “may”. He argued that the latter implied that the function performed by the Minister was discretionary.

Mr Gumede did not oppose this recommendation, and gave an undertaking that necessary change would be made.

Mr Gumede referred to the revised clause 3(5) and informed Members that in the original Bill, the Minister was required to publish annually an analysis, forecasting the energy supply and demand for 25 years.  The amendment provided that such a forecast should not be for less than 20 years.

In the same subclause, Mr Gumede identified that the Minister was now required to publish an analysis of plausible future energy scenarios.

Clause 4
Mr Gumede pointed out that the Minister of Minerals and Energy would also have to consult the Minister of Labour [clause 4(1)] when adopting measures to minimize the negative safety, health and environmental impacts of energy carriers.

Clause 5
Mr Gumede specified that clause 5(2)(i) placed a duty on government to provide free basic electricity to poor households. This amendment was done at the request of the stakeholders.

Clause 6
Due to the concerns around the establishment of international agreements that were ratified by government, it was proposed that this section be deleted.

Clauses 7-15
All the provisions relating to NEMIA were deleted. This was as a result of a decision to retain all modelling functions and activities within the Department.

Clause 17
Notably, Mr Gumede explained that the revised clause outlined the establishment of the South African National Energy Development Institute (SANEDI) as well as the functions of such an Institute.

In terms of the original drafting, the Department had created divisions of SANEDI and functions that accompanied each division. As an improvement in the drafting, the Department incorporated all the different divisions as well as their functions under one entity, namely SANEDI in clause 17(2).

Clause 18
Mr Gumede explained that the reworded clause 18(2) no longer prescribed out of which sectors the board members must be appointed from. Instead, the amended provision simply stated that the board must be filled by two suitably qualified persons.

The Chairperson enquired whether the departments that were represented on the board were sufficient.

Mr Gumede conceded that it would be useful to include the Department of Housing on the board.

The Chairperson concurred with this viewpoint, and added that housing was central to the debate on energy.

Mr Gumede informed Members that a new paragraph 18(7) was added to deal with the removal of the board members.

Mr Mahlaba enquired whether the provision catered for the removal of board members in cases where there was a conflict of interest.

Mr Gumede replied that ordinarily members of a board would have to recuse themselves when such an issues arises. Notwithstanding this, he accepted that it might be necessary to expressly provide for such a scenario.

Clause 21
Mr Gumede highlighted that clause 21(5) mandated that the Chief Executive Officer (of SANEDI) must enter into an annual performance contract with the board and that the board must assess his or her performance annually.

The Chairperson referred to the controversy surrounding the SABC board, and asked whether mechanisms had been designed to resolve potential conflicts.

Mr Gumede responded that some of safety mechanism could be established.

Mr Louw asked whether the board was accountable to two Ministers (Minerals and Energy and Science and Technology) and if that was the case, what would happen if there was a conflict between the two Ministers.

The Chairperson replied that in such a scenario, the matter must be referred to parliament.

Mr Gumede clarified that the CEO was appointed by the board and accountable to it. The board in turn is appointed by the two Ministers and was accountable to both Ministers.

Mr Mahlaba explained that the board reported to one Minister and not to both. The two Ministers would have to agree regarding the dismissal of the board but the board was only accountable to one of them.

Mr Gumede explained that the board must account to the Minister of Minerals and Energy. He referred Members to section 18(2), which stated that the Minister must act in consultation with the Minister of Science and Technology when appointing the board.

The Chairperson said that the clause should read “after consultation” instead of “in consultation”. He pointed out that latter term was problematic because it implied that the Minister of Science and Technology was indivisible in the decision making process.

 Mr Gumede agreed with this analysis. He admitted that it was an oversight and that all references to “in consultation” would be changed.

Clauses 26-31
The following clauses were deleted and some of their provisions were relocated to section 17(2).

Section 33
There was a substantial change in the way clause 33 has been reworded. In effect, sections 33 and 32 were combined.

Finally, Mr Gumede stated that he would disagree with anybody that suggested that the Bill has been redrafted. In reality, the Department had only deleted certain sections, improved on its wording and improved on the layout. The amendments were largely due to the requests made by stakeholders.

The Chairperson commented that he was very satisfied with the contents of the Bill.

Adv H Schmidt (DA) posed several questions. Firstly, he asked whether the Department had the capacity to perform all the functions that it would be required to do. Secondly, he asked whether in terms of constitutional law, it could be prescribed in an Act, that government had a duty to deliver free basic electricity to poor households.

In response to the primary question, Mr Gumede acknowledged that the Department was trying to build capacity and that it was in the process of transforming form a policy-making department to an implementation department. Such a process required a change of skill and a significant amount of restructuring. The Department hoped that the restructuring would bring about the right type of skills and the right number of people. Lastly, he stated that all of this was dependant on funding.

In response to the latter issue, Mr Gumede stated that he would verify whether the legal experts on this matter.

In addition, Adv Schmidt interrogated whether the new entity had been based on any existing structure.

 Mr Gumede confirmed that the structure had been modelled on MINTEK.

The Chairperson remarked that he was impressed with the work done by the Department.

The meeting was adjourned


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