Mineral & Petroleum Resources Development Amendment Bill, Mine Health & Safety Amendment Bill & National Radioactive Waste Disposal Institute Bill: adoption of NCOP amendments & Department of Minerals & Energy Annual Report presentation

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Mineral Resources and Energy

19 November 2008
Chairperson: Mr E Ngcobo (ANC)
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Meeting Summary

The Committee discussed the amendments that had been proposed by the Select Committee on Economic and Foreign Affairs to the three Bills now being referred back to the Committee. The Department took the Committee through the various amendments. In respect of the Minerals and Petroleum Resources Development Amendment Bill, there had been amendments proposed to Clauses 1, 18, 23, 32, 34 and 57, 61 and 72 and 94. None were contentious in nature. Members adopted the amendments and the revised Bill. In respect of the Mine Health and Safety Amendment Bill, it was noted that the amendments were again fairly straightforward. Clause 14 was being amended by removal of two paragraphs, Clause 15 would omit the word “fund” and Clause 16 would substituted the word “must” with “may” in relation to sites. The Bill was to be aligned with the Promotion of Administrative Justice Act, and the references to the labour court were to be re-inserted in place of the more loose “appropriate court”. Clause 27 was to have new wording added to define the scope of employment and there were technical changes to Clause 29. It was pointed out and agreed that the numbering of the subparagraphs of the revised Section 94 would have to be altered. Members agreed with the amendments and adopted the revised Bill, with the further amendment proposed by the Committee. The Committee finally considered the National Radioactive Waste Disposal Institute Bill. The requirement for forwarding the report to the Minister was taken from the CEO and put as an obligation of the Board, by amendments to clauses 7 and 17. References to the Public Finance Management Act were tightened up to remove duplications and in Clause 21 there was a proposal that the Institute must be audited on an annual basis. The remainder of the changes were of a technical nature. Members asked the Department to ensure that all the numbering was rectified and that the cross references to other pieces of legislation should also be checked, but agreed to adopt these amendments and to adopt the revised Bill.

The Department then presented on the Annual Report for 2007/08. It was noted that there had been strategic planning sessions to anchor the work of the Department to broad imperatives. The strategic objectives were based upon services that would regulate and promote the sector, actively contribute to sustainable growth and redress past imbalances. The Department was determined to have effective industry-regulating processes and had to be clear about its own priorities. The Department then proceeded to give a description of what was happening in its main areas of focus, and set out the developments in respect of the energy supply, the National Energy Bill, the power conservation programmes and the Energy Security Master plan (ESM). It explained that it was seeking to achieve a balance between profitability and the interests of the public in relation to petrol prices. The Department described some of its work on biofuels, noting that maize was excluded because of concerns around food security and that feedstock would be derived from underutilised areas.  The Nuclear Energy Policy and strategy had been released for public comment. There was a continuing need to conserve electricity to ensure that the shortage did not develop into a crisis. The notable developments in the areas of mining were described, together with the challenges arising from declining gold production.  The poor safety health track record of mining continued to be of concern, and a Presidential Audit should release its results shortly. There was better participation by historically disadvantaged individuals and small enterprises.  Details of the projects were contained in the Annual Report. A further challenge was identified of the high staff turnover rates, particularly in the Mine Health and Safety Inspectorate. The progress of the State Owned Entities was described. Finally a detailed description was given of the financial statements, showing that there had been small under expenditure but there had been a clean audit report with no matters of emphasis. Members questioned the spending on the national electricification programme, noting that there would need to be something done about the municipalities that were not ready to spend. Others members commented that there were many areas still needing electricity and it was unacceptable that funds should be rolled over. Further questions related to legal fees, the exclusion of the State Mining Company from certain regulatory regimes, how the funding for ESM would be dealt with, the progress on the Mining Charter, the difficulties that small businesses were suffering as a result of the Black Economic Empowerment requirements, the targets for renewable energy and the progress in diversifying household energy consumption. Members also asked about the universal access targets, the progress of the beneficiation strategy, the high staff turnover, how women were being promoted, the challenges in the Nuclear Energy Corporation, use of electricity by municipalities, and correspondence with AngloPlats that was of concern, as also concerns around the number of consultants at the Pebble Bed Modular Reactor.

Meeting report

Amendments proposed by NCOP Select Committee to the various Bills: Department of Minerals and Energy (DME) briefings:
Minerals and Petroleum Resources Development Amendment Bill:
Ms Lindiwe Mekwe, Chief Director: Mineral and Mining Policy, DME, tabled the amendments proposed by the NCOP Select Committee to the Minerals and Petroleum Resources Development (MPRD) Amendment Bill. In Clause 1, there had been a new definition proposed for "environmental authorisation", to the effect that it should have the meaning assigned to it in Section 1 of the National Environmental Management Act (NEMA).

In Clause 18, there had been a technical amendment, by insertion of a comma before the reference to the 180 days from the date of the notice. NEMA did not provide for this notice period; this was provided for only in terms of the MPRDA.

Clause 23 had the same principle being provided, with the same formatting changes.

In Clause 32 the NCOP suggested that the wording "and any of its related and specific environmental management legislation" be omitted. The DME had no problems with this.

In respect of Clause 34, there had been a suggestion that the reference to Section 41 be retained, so the bolding and brackets had been removed.

In Clause 57, the NCOP had proposed new wording to refer to Chapter 5 of the NEMA. This would mean that all environmental management reports must be submitted in terms of this Act. A similar insertion would be made to Clause 61.

For Clause 72 there was a proposal that the words "environmental management programme" should not be omitted, but retained. Also in respect of this clause it was proposed that in line 43 of page 35, the words "as the case may be" would be inserted.

Under Clause 94, the NCOP proposed inserting a new subsection (2) to correspond with the provisions of Section 14(2) of the NEMA. All the sections listed there must come into operation on the same date as that fixed for coming into operation of NEMA - in other words eighteen months after implementation of the rest of the MPRDA Bill.

Another new subsection (3) was to be inserted to note that any provision of the principal Act relating to prospecting, mining, exploration and production and relation activities that was in conflict with any provisions of the NEMA Amendment Act would also come into operation only after eighteen months.

Adv H Schmidt (DA) asked for clarity on Clauses 18 and 23. He asked whether these amendments were technical in nature.

Ms Mekwe confirmed this was so.

Mr M Matlala (ANC) asked if there was any controversy.

Ms Mekwe confirmed that there was nothing controversial.

Adv Schmidt referred to the revised Section 94 of the Bill, which listed subclauses (1) and (2). This document handed out this morning described the new clauses as (2) and (3). He noted that the numbering of the NCOP amendments must be altered.

Ms Mekwe confirmed that this would be done.

Members adopted the amendments proposed by the NCOP, and approved the Bill with the further amendment to the numbering of Clause 94, as suggested by Adv Schmidt.

Mine Health and Safety Amendment Bill: DME briefing
Mr Thabo Gazi, Chief Inspector of Mines, DME, noted that in respect of Clause 14, the suggestion from the NCOP had been to remove paragraphs (l) from line 5, and paragraph (d) in page 6. He said that the Department was in agreement with that amendment.

In respect of Clause 15 there was a proposal to omit the word "fund" and speak only of the financial affairs of the Mine Health and Safety Inspectorate.

On page 7, in Clause 16, he noted that the word "must" would be substituted with "may". The Department agreed with this.

The NCOP had then proposed insertion of a new clause in respect of Section 54, which would align this Bill with the Promotion of Administrative Justice Act (PAJA). Subsections (7), (8), (9) and (10) could be removed as they were already covered under PAJA.

In respect of Clause 18, he explained that the Mine Health and Safety Act required certain actions to be brought in the Labour Court and this had been the original wording. Very few cases were proceeding there, however, and the proposal was made that the references to specific courts be substituted with a description of “the appropriate Court”. However, stakeholders and the State Law Adviser had questioned this, and therefore the NCOP made the decision to revert to the original wording of “the labour Court”. The changes would therefore put the wording back to how it had originally been.

In Clauses 22 and 23 similar amendments had again been suggested, but now that the use of the “appropriate Court” was rejected these would also revert to their original wording.

Ms Mpumelela Ngema, State Law Adviser, Office of the Chief State Law Adviser, clarified that the rejection of the amendments that had been included in these clauses would essentially mean that the original wording of would be reverted to.

In Clause 27, wording would be added to define the scope of employment.

In respect of Clause 29, the reference to “subsections” needed to be corrected to the singular. There were technical amendments also relating to the moving of the Table to the Schedule and the reference to that table would also be deleted.

Adv Schmidt questioned whether the right to appeal remained.

Mr Gazi confirmed that this provision was left unaltered.

Members agreed to the adoption of the amendments made by the NCOP.

National Radioactive Waste Disposal Institute Bill
Ms Ditebogo Kgomo, Chief Director, DME, noted that in Clause 2, the words "and committee directors" would be omitted, so that the clause would only refer to remuneration of directors.  The Department was in agreement with that proposal.

In respect of Clause 7, the NCOP had proposed insertion of a new subsection (5), that the Board must forward the report referred to in Section 17(2)(c) to the Minister within three months of the end of the financial year. She explained that the content of this new subsection had previously appeared under the duties of the CEO in Clause 17, but was now being moved to this section. It was not replacing the old subsection (5).

Members questioned why there was not an amendment of the numbering of the remaining subsections. 

A State Law Adviser said that the numbering would automatically be renumbered.

Ms Kgomo noted that in Clause 9 the proposal was to omit the words "of directors of board", in order to align the wording with the index on page 2.

In Clause 11, the words "and committee directors" were to be omitted, and it was pointed out that this was similar to the previous amendments.

In Clause 17, there would be omission of the words “in accordance with the Public Finance Management Act". (PFMA)   These words were unnecessary because it already had been specified that the entity would be a Schedule 3 entity under that Act. Subclause (4) was omitted because of the reference there to the PFMA, and Clause 3, as described earlier, had been moved up to Clause 7. In respect of page 9, at line 12, the reference to this Act would again be omitted.

Technical amendments were being made on page 11, where the reference to "the accounting officer" would be substituted with the words "him or her"

In respect of Clause 21, the NCOP had proposed that the words "on an annual basis” be inserted to amplify how often the Auditor General must audit the Institute.

Adv Schmidt noted that there should be new numbering of the subsequent paragraphs where there had been insertions. He noted the comments of the State Law Advisers, but thought it would have been clearer to include another specific amendment for the renumbering. 

The Chairperson noted that the State Law Advisers should also go through the NEMA and check all the cross references, to ensure that any renumbering of subsections was picked up across both Acts.

Members agreed to adopt the amendments proposed by the NCOP, and therefore adopted the Bills, as amended.

The Chairperson read out each of the Reports in respect of each of the Bills. Members adopted the Reports.

The Chairperson noted that these Bills would be presented to the House on Thursday. There was no need for a debate.

Department of Minerals and Energy: Annual Report 2007/08 presentation
Adv Sandile Nogxina, Director General, Department of Minerals and Energy, introduced his team.

Ms Thandeka Zungu, Deputy Director General, Department of Minerals and Energy, noted that there had been a strategic planning session early in the year to anchor the plans to the broad imperatives of poverty eradication, transformation of the economy and reconstruction and development. The planning session came at a time when the country was experiencing electricity challenges and the increase in the petrol price.

The business plans were premised on the mission statement, which covered both regulation and promotion of the minerals and energy sectors. The strategic objectives were based upon provision of services that would regulate and promote for the benefit of the customers and the country. The strategy concentrated on actively contributing to sustaining development and growth, redressing past imbalances, regulating the sectors to be healthier, cleaner and safer, and creating an enabling environment for effective and efficient service delivery. The internal processes to achieve this would include the industry regulation, ensuring the impact of policies on recipients, monitoring the input of legislation, being clear about the priorities and having commitment to staff development.

One of the main focus areas had been the energy supply. The National Energy Bill sought to provide a legal framework that would enable the Department of Minerals and Energy (DME) to establish mechanisms to address energy research and the introduction of general energy security concerns, to understand the demand and ensure appropriate plans. The Department was leading the programme for power conservation and the National Electricity Response Team to ameliorate the negative impacts of the supply. It had conducted imbizos and had crafted the Energy Security master plan.

Soaring international crude oil prices had resulted in increases in the petrol price, but the DME was trying to maintain a balance being reasonable profit and looking after the interests of the motorists and public. The Petroleum Products Amendment Act had promoted an efficient and sustainable manufacturing, wholesaling and retail petrol industry, by facilitating the environment conducive to investment.

The introduction of biofuels was also part of the response strategy. This was approved in December 2007, and the strategy underlined the minimum development of 2% (400 million litres per annum) from biofuels industry. Due to concerns around food security, maize was excluded and the feedstock would be derived from under-utilised agricultural production areas.

The Nuclear Energy Policy and Strategy was released for public comment. This provided a framework for development of nuclear programmes and it was aimed at the expanded nuclear build programme.

In respect of electricity, Ms Zungu commented that South Africans had played a role in ensuring that the challenge did not escalate into a crisis.  Although load shedding had not been implemented much in 2008 there was a need still to work with government and civil society to continue to conserve energy.

The electrification programme connectivity was described, and full statistics were given (see attached presentation, page 6)

The implementation of the Minerals and Petroleum Resources Development Act (MPRDA) had seen noticeable improvements in the turnaround time for mining applications and the agenda for transformation was on track. The issuing of mining permits to Small, Medium and Micro Enterprises (SMMEs) had improved, but the Mine Health and Safety inspectorate had had its regulatory capacity stretched to the limit. In respect of beneficiation, she pointed out that recent statistics showed that some Chinese gold production was exceeding South Africa. There had been a decline in gold production since 1986, and this was why there was a vigorous drive of the beneficiation strategy, that would ensure that much needed investment and jobs were created.

This Act had also resulted in better participation of historically disadvantaged people in the mining sector and it was hoped that more women would participate. Details of the projects undertaken were listed in the Annual Report.

Ms Zungu noted, in respect of safety in mines and mine rehabilitation, that the poor safety health track record continued to be of concern. In this year, 70 lives were lost. The results of the Presidential Audit would be released once the audits had been completed. The revised structure of the inspectorate was implemented from May 2007. The Department had also been tasked with responsibility of reducing the environmental liability and pollution impacts from rehabilitated derelict and ownerless mines. It would try to use local capacity and SMMEs wherever possible.

A major challenge was that the Mine Health and Safety Inspectorate had suffered a continuously high staff turnover rate. A number of interventions had been implemented. The integrated human resource plan was approved in January 2008 and it would be implemented in the current year,

Finally Ms Zungu highlighted the progress by the State Owned Entities (SOEs). The State Diamond Trader had traded for only six months. It had to purchase diamonds at market prices while maintaining acceptable prices. Due to lack of funding it was only able to access 3% of the 10% supply available from de Beers. However, it was likely to be able to carry its overhead over the next three years, and the plan was enhancing the skills and training. In relation to Mintek, she noted that its mining and beneficiation division provided assistance to small scale miners and provided training and support so that development, even if based on limited resources, could be sustainable. The CEF Group continued to be active in many areas, promoting the security of energy supply. There was planning for a power plant at Coega and there was a planned gas transportation pipeline to Mossel Bay.

Mr Edson Ragimana, Acting CFO, DME, presented the financial statements of the DME. The total budget for the year was R2.9 billion, and there had been under spending of 0.93%. He noted that all the information was in the Annual Report, but he would highlight a few points. He described the programme performance, as detailed on page 138 of the Annual Report, highlighting the minor variances between budgets and spending.
The underspending was all within the acceptable limit of 4%. The following pages contained the spending classified by economic clusters.

The Chairperson commented that there had been significant under spending on the National Electrification Programme.

Another official from DME explained that this was run by Eskom and municipalities. All the Eskom money would be spent. However, in the municipalities there was often disjuncture between the housing and the supply of electricity, which created gaps. Usually the DME would then request National Treasury to do a roll over, but there had been some cases in which there had been recall of the funding.

The Chairperson said that if these challenges were known, then the Department must develop a mechanism whereby it should only deal with those municipalities that were ready with the housing. He pointed out that there were many areas and people desperate for electrification and it was very serious that money should be returned to National Treasury for lack of spending.

Ms Nelisiwe Magubane, Deputy Director General: Electricity and Nuclear Energy, DME said that she would like to make some general comments on the electrification programme: She explained that all the projects were being consolidated at this stage - including projects to be undertaken by Eskom and municipalities. The funding involved was in excess of R3 billion. The Department would ask the municipalities to commit themselves in writing. The funding would then be diverted to each according to what they would achieve, in terms of the Division of Revenue Act. The Accounting Officer must ensure that there were transfers according to figures. The redirection of funding unfortunately was problematic at the moment, as this could only be done after 6 months, so essentially, even if the Department became aware of problems its hands were effectively tied for a while. She appealed that the DME should come up with some way to ensure that the DME, Eskom and Municipalities would give a progress report every three months and come up then with a collective solution. Administratively the Department was doing what it could so far. it

The Department continued to take the Members through the figures. It noted that there was a clean audit report, with no emphases of matter, for the second year running. The financial statements had also gone through the audit process with no material adjustments, so that there had been good implementation of controls.

Mr T Mofokeng (ANC) asked that some of the spending be explained a little better. He questioned where the budget for skills was placed, as there were many instances of problems in this area. He also wanted further clarity on the transfers and subsidies.

Mr Ragimana noted that these figures related to instances where there was a SOE or private entity which, in terms of a pre-signed agreement, would then transfer money – such as a transfer to Eskom in relation to the National Electricity Programme. The figures given for each programme included a number of entities linked to programmes. For instance, Programme 2 could include transfers to the Mine Health and Safety Council, and Programme 4 could include transfers to the Water projects and the research of geoscience. It was important to note that this was all relating to work on the Department’s behalf.

Mr Mofokeng noted that certain matters discussed with the Committee in other meetings had not been mentioned.

Mr Ragimana noted that legal fees were included as part of goods and services, so they were not flagged separately on the Annual Report. However, if members wanted the figures, he could send them through.

Mr Schmidt questioned reports in the media speculating that the State Mining Company would be excluded from complying with certain regulatory regimes, which he felt would be incorrect.

Mr Jacinto Rocha, Deputy Director General: Mineral Regulation, DME, answered that in fact the allegations of exemption were not unique. There were other organs of State that were assisted – for instance the National Roads Agency and certain municipalities, from requirements. The organisation would still have to show compliance, but they might not have to fill in an application form.

Adv Schmidt noted that during his discussions with Eskom it appeared that Eskom would like to have control over National Electricity Programme funding. He asked if this was likely to happen, and under whose authority this would fall. There was a necessity for independent institutions regulating the matter.

Adv Nogxina responded that the Energy Agency would be charged with looking at this, but for the sake of convenience the money would be collected by Eskom. This institution did not bear the ultimate responsibility. 

Adv Schmidt noted that the remark had been made that transformation was going well. This raised the question of the Mining Charter. At the recent mining conference there was a suggestion that there should be another look at the Mining Charter. He asked where this was likely to be heading.

Mr Rocha noted that the report by the DME said that transformation was “on track” which essentially meant that it was ongoing. The statement was not intended to suggest that there were no challenges – indeed there were – but they were in the process of being addressed.

Adv Schmidt said that there had been much dissatisfaction expressed about the provisions relating to black economic empowerment and regulation of the industry from the small-scale diamond cutters, polishers and jewellers, who felt that one and two man practices no longer were able to make a decent livelihood and they were hindered from appointing other people. He knew that the Small Diamond Corporation in North West had apparently challenged the Department already, and he noted that the Jewellery Council were also considering action, claiming that their members were unable to get licences. He asked what was being done to regulate the issue.

Adv Nogxina said that he had some sympathy with the position in which some small business people found themselves, but Government had to apply the law as it was written. The solution in fact lay in the hands of Parliament, who could change the law, which he thought was quite possible, citing the fact that the MPRDA had been changed to accommodate small scale miners. Perhaps small operators could be excluded from certain provisions

Ms F Mathibela (ANC) asked about the renewable energy targets, which, in terms of the policy, sought to reach 10 000 kilowatts by 2030, and asked how far the Department was with reaching this.

Adv Nogxina said that in 2003 there was a Renewable Energy Policy and Strategy setting out the targets. Subsequent to that, various legislation had been promulgated. The Electricity Act, in Sections 44 and 45, said that the Minister “shall set” renewable energy targets. There was presently planning for a summit that would review the targets in the current climate, taking into consideration that there had not been much implementation of renewable energy sources. There were only 37 megawatts of hydro and wind power. However, there was considerable interest, and this would be accelerated. There had been an expression of interest for renewable energy, and the Department was considering what type of incentives should possibly apply, over and above the subsidy currently used for renewable energy. There were other instruments and the Regulator would promulgate these before the end  of the first quarter of 2009

Ms Mathibela asked how far the Department was in achieving diversified energy consumption by households.

Adv Nogxina noted that diversification of energy could include solar lighting, LP Gas, availability of electricity and a host of other matters. There was, in terms of solar water heating, a pilot project being run in 500 households to look at the potential and what the alternatives might be when there was not sufficient sunlight. Colleagues in hydro power and energy planning had developed regulations around LP gas and this presupposed that there would be issuing of concessions for various areas. The problems around supply of LP Gas had been addressed and the question was how to get these sources to the people. 

Mr Matlala asked for more information on the focus areas listed in the presentation. He asked whether the Department felt that it had achieved reasonable success in ensuring the security of energy supply. In respect of universal access, he had understood that there had been some reviews and that some moneys may have been shifted to different substations. He asked if the Department would still make the target date for universal access, and if not, whether it should not be reviewing the situation. He asked this question particularly in light of the current problems around electricity supply.

Ms Neliswa Magubane noted that this target had been set based on the assumption that certain funding would be made available. For example, when this was set about 4 years ago, the expectation was that an amount of between R2.5 to R3 billion should be received each year. In fact the amounts were around R1.4 to 1.8 billion. This had resulted in a shortfall and the universal access target would therefore not be met. It might be possible to put this differently, and the Department could also indicate what it had done so far.

Adv Nogxina added that there was indeed a challenge with this. The Department could make a commitment to give universal access to all established dwellings. Informal settlements kept springing up, and these shifted the goalposts continuously. There was probably a need to redefine the definition of a “household”. It was possible to plan for fixed dwellings. Whilst it was desirable to get electricity to those in informal settlements the question remained how to account for them. He could revert to the Committee with some further comments on this.

Ms Magubane added that one of the arguments around the multi sector response was that all residential projects would go ahead, if this was a funded scheme. However for any projects above a certain level of 20MVA, certain criteria would have to be applied to determine whether the priorities were correct. This was still under discussion at the New Economic Development and Labour Council (NEDLAC) discussions. 

Mr Matlala asked whether the road shows mentioned had taken place and whether they had been successful.

Mr Matlala asked for a progress report in respect of the beneficiation strategy mentioned on page 7 of the Report.
Mr Matlala noted that the Presidential Audit would be completed and asked if the Committee would be getting the report, and if there had been any gaps identified in it.

Adv Ngoxina noted that this had been initiated by the President and the DME had already submitted its report, and essentially finished its work in connection with this matter. He was not sure whether that report would be shared with the Committee. However, because the Committee had to deal with these recommendations, it was likely that the report could be shared.

The Chairperson noted that there was a Constitutional power to request that report, but this could only be done when deemed appropriate. He asked if that report would be helpful.

Adv Nogxina said that this was a difficult question to answer. He had not seen the full report, but he thought, based purely on the terms of reference, that it would be useful. The Committee had previously shown itself committed to issues of mine health and safety.  

Ms B Tinto (ANC) asked what had been done about promotion of women.

Ms Tinto commented on the staff turnover and the shortage of technical skills. She said that this was a recurring problem and she asked what programmes were in place to skill the present staff of the Department.

Ms Tinto also expressed her concern about the under spending. In Eastern Cape there were many places without infrastructure and electricity, that were desperately in need of having money spent on them, and it was extremely frustrating to see money allocated, not used and returned.

Adv Nogxina commented that it was not possible for any department to achieve absolutely correct spending by the end of the financial year. There were certain acceptable deviations, and he pointed out that the DME had fallen well within the acceptable 4% deviation, with most of its under spend within the department being less than 1%.

Mr Mofokeng also commented again on the under spending, saying that there should be a number of stakeholders making input to try to ensure that there was development. He urged that there be concentration on the rural areas. He also commented that the petrol price increases were not, in his view, reasonable, but it was likely that the industry was gaining too much to the detriment of the consumers. He was not sure that the correct balance had always been struck.

Ms Magubane noted that she could provide information about the rural and urban areas; she had not been aware that this sort of detail would be required in this presentation.

Ms Tshilidzi Ramuedzisi, Chief Director, DME commented, in relation to the petrol price, that there must be some compensation going back to industry. The Minister had made it possible to use tax on the petrol price to alleviate the impact of the price on the consumer.

The Chairperson added that the skills development issues were very important and he had still not managed to determine exactly what was being done by the DME. The Department needed to concentrate on engineering and related fields.

Adv Nogxina responded, in relation to the questions asked by several members around skills, that the major challenge was that employment in the public service was regulated in a set way that did not take into account the prescripts or needs of individual departments, nor of the nature of their work. One department might be able to source a person with any degree and give them management training, whereas the DME would first have to find a person with a very specialised expertise in one particular field – which was in itself a difficult task - and then add management training. The DME needed a combination of very high and very specialised expertise. The salaries were a further problem. The scientists who were needed at DME, if they were to be attracted to the Department, needed to be offered salaries equivalent to at least a Director-General level. The present salaries were simply not competitive. 

The Chairperson asked if these concerns had been raised at the Director-Generals’ Forum.

Adv Nogxina said that this had been done.

The Chairperson noted that time frames should be set to deal with the problem.

Adv Nogxina said that part of the problem lay in the architecture of the Government Cluster structures, where none of the participants was more senior to others.

The Chairperson noted that this had been discussed and the clusters would be transformed to have a more meaningful role

The Chairperson commented that he had expected to hear more significant emphasis on renewable energy, and to have been told where the Department was in developing the renewable energy strategy. He was not sure that there was a rigorous enough drive in that direction.

The Chairperson noted that there were some significant challenges in the Nuclear Energy Corporation of South African (NECSA) but he heard nothing about these in the presentation. He noted that the Department should be keeping the Committee directly informed, so that it was not hearing the information second hand.  The Committee would be needing to visit those institutions with serious challenges.

Adv Nogxina said that some of the problems between Pebble Bed Modular Reactor (PBMR) and NECSA had to do with human resources. This sector had a very small pool of candidates and because of the salaries that PBMR were offering they were attracting candidates from NECSA. 

The Chairperson also said he had heard nothing in the report about the municipalities, who were the greatest consumers of electricity, nor about any innovative methods to try to monitor or regulate careless usage by them of electricity. They consumed 37% of electricity, and were allegedly even subsidising big industries in their localities. The burden of this was falling on the taxpayers.

Ms Magubane agreed that the municipalities did consume between 35 and 40% of electricity. However, she did not agree with the statement that they were subsidising businesses in their areas. She reminded Members that anyone buying in bulk would be entitled to certain discounts, and she noted that many industries did precisely this with electricity, to take advantage of the discounts. She added, however, that the electricity pricing policy stated that there should not be discrimination between consumers falling into the same categories. A consumer paying an amount for kilowatt hours from Eskom should be able to get electricity at the same price from a municipality.

The Chairperson reiterated that experts had showed how municipalities were manipulating matters to get manufacturers in their localities to do favours.

The Chairperson also asked what was the strategy on the Regional Electricity Distributors (REDs). He asked whether the Bill would come before the Committee before the end of the Parliament, noting that this seemed unlikely.

Adv Nogxina said that the memorandum had been submitted to Cabinet about two months ago, and had from there been referred to a Committee of Ministers; the Departments of Provincial and Local Government, Justice, Public Enterprises and the South African Local Government Association were all involved. It was hoped that the matter would proceed as the issue of the municipalities was germane to the type of solutions that the restructuring of the electricity distribution industry should produce. The power granted to municipalities to distribute electricity was problematic, as the industry must be integrated.

The Chairperson noted the damning report from the equity group of the Pebble Bed Modular Reactor, suggesting that 70% of their money was used for salaries for white consultants. Although he knew that PBMR fell under the Department of Public Enterprises, it was still an energy company, and he called for comment.

Adv Nogxina said that the only responsibility that DME had over the PBMR was only in relation to policy. The budget matters fell outside the DME, and resided in the shareholder department.

The Chairperson also noted that he had received other disturbing communication in relation to the Committee’s suggestion that an expert in social beneficiation should lecture to Angloplats, who had essentially turned down the offer and alleged that it had been told by the Departmental officials that energy or mining companies were accountable only to the Department, and not to the Committee.

Adv Nogxina said that it was clearly incorrect that the mining companies were answerable only to DME. Parliament had powers vested in it to deal with any matter falling under their mandate. Players in the sector should not interact with Parliament via the DME and he was not sure why this allegation was being made.

Mr Rocha indicated that he had been extremely upset by these allegations as they attacked his integrity. He had been a public servant for most of his life. His blunt answer was that the allegations were lies. He had never had any discussions of this nature with anyone in Angloplats where he had given “legal advice” and even if he had, he would never have advised this organisation to ignore Parliament. He was intending to write to it, asking where this was allegedly said, to whom, and in what manner. He would copy this letter to the Chairperson. He was affronted by this attack on his personal integrity.

Adv Nogxina said that public servants should serve the public in a manner that was beyond reproach. If there had been aspersions cast on the integrity of the regulator this was a matter that he felt should be investigated fully by the Committee and the Department.

The meeting was adjourned.

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