ATC180815: Report of the Select Committee on Petitions and Executive Undertakings on the Executive Undertakings made by the Minister of Mineral Resources During The House Sitting of 27 October 2015, dated 15 August 2018

NCOP Petitions and Executive Undertakings

REPORT OF THE SELECT COMMITTEE ON PETITIONS AND EXECUTIVE UNDERTAKINGS ON THE EXECUTIVE UNDERTAKINGS MADE BY THE MINISTER OF MINERAL RESOURCES DURING THE HOUSE SITTING OF 27 OCTOBER 2015, DATED 15 AUGUST 2018
 

1. BACKGROUND

 

On 27 October 2015, the Honourable Minister of Mineral Resources (Minister) made or gave the following executive undertaking during the question and answer session in the National Council of Provinces (House):

 

The board the member is talking about belongs to the Department of Mineral Resources as far as I know but we’ll look into the issue of our representation as we also take keen interest in beneficiation of the minerals that we are directly responsible for”.

 

1. PROCEDURE OF THE COMMITTEE

 

The concerned executive undertaking was referred to the Select Committee on Petitions and Executive Undertakings (Committee) by the Chairperson of the National Council of Provinces and for it to scrutinise and subsequently report to the House on its implementation. After its referral to the Committee, the Committee proceeded to extend an invitation to the Minister to appear before it and report on the progress the Department of Mineral Resources (Department) has made in implementing the concerned executive undertaking, which falls under its respective portfolio.

 

1. MEETING OF THE COMMITTEE

 

On 21 February 2018, the Minister, together with the relevant officials of the Department, appeared before the Committee to report on the progress made in implementing the executive undertakings under consideration.

 

The following Committee Members were present at the meeting with the Minister:

 

3.1       Hon D L Ximbi, ANC, Western Cape (Chairperson);

3.2       Hon T Wana, ANC, Eastern Cape;

3.3       Hon G G Oliphant, ANC, Northern Cape;

3.4       Hon M Chetty, DA, Kwa-Zulu Natal;

3.5       Hon B A Engelbrecht, DA, Gauteng; and

3.6       Hon T J Mokwele, EFF, North West.

 

The Committee Members present, at the meeting, were supported by the following Committee officials:

 

3.7       Dr M Gondwe, Content Advisor;

3.8       Adv. T Sterris, Committee Researcher;

3.9       Mr N Mkhize, Committee Secretary; and

3.10    Ms N Fakier, Executive Secretary to the Committee Chairperson.

 

The following representatives of the Department attended the meeting:

 

3.11      Hon M Zwane, Minister of Mineral Resources (Minister Zwane);

3.12      Adv T S Mokeona, Director General; and

3.13    Mr K W Mhloweni, Office of the Director General.

1. PROGRESS REPORT BY THE MINISTER OF MINERAL RESOURCES

In his progress report to the Committee on the executive undertaking under review, Minister Zwane first outlined the steps undertaken by the Department to appoint a new board of directors (Board) for the the South African Diamond and Precious Metals Regulator (SADMRA), a state owned entity reporting to the Department. According to Minister Zwane the Department together with the SADMRA undertook the following steps to appoint a new Board:

1. Following the House plenary on 27 October 2015, the Department underwent a process of filling the positions for the Board of the SADPMR.
2. Public notices calling for nominations of suitable to persons to serve on the Board were advertised in leading newspapers with a national coverage including the Sunday Times.
3. The Department opened the nomination period for two weeks from the date it was published in leading newspapers to allow sufficient time for the industry respond
4. A total of 84 nominations were received by the Department.
5. As provided for in terms of section 17 (4) of the Diamonds Act (Act 56 of 1986) as amended, Minister Zwane appointed an independent selection panel consisting of five persons with knowledge and understanding of the diamond industry and with legal and corporate governance experience to assist in the shortlisting of candidates to be considered for appointment.
6. The outcomes of this process resulted in the appointment of a Board for a period of three years, with effect from 01 November 2016 expiring on 31 October 2019, consisting of the following Board sub-committees (Licensing Committee, Technical Committee, Finance Committee, Audit and Risk Committee)

Further in his progress report, Minister Zwane informed the Committee that following the appointment of the Board it was brought to his attention that organised formations representing the beneficiation industry had not responded to the call for nominations through the media advertisement. And, out of his own accord, he requested that the Chairperson of the Board to develop a workable proposal aimed at ensuring that industry stakeholders, as an interim measure until the next appointment process, can find a voice on the Board, particularly, in the Technical Committee where decisions affecting the industry are discussed and recommended to the Board. He added that he did this in an effort to not only ensure inclusivity but to also encourage organised formations to contribute positively towards developing and transforming the industry. 

Minister Zwane also reported that because the Department is committed to achieving transformation in the diamond industry it has ensured through the guidance of an independent selection penal that competent men and women with requisite expert industry skills were shortlisted and appointed from the pool of 84 nominations. Minister Zwane further informed the Committee that he has impressed upon the Chairperson of the Board to ensure that all relevant stakeholders contribute positively towards the development and transformation of the industry. Also according to Minister Zwane, the Board is working towards addressing the challenges facing the industry which include the barriers to entering the jewellery manufacturing industry as well as the declining beneficiation in the sector

In concluding his report to the Committee, Minister Zwane reported that the Department has contributed positively towards beneficiation and has been working collaboratively with the Department of Trade and Industry (DTI) and the Department of Science and Technology (DST) in contributing towards beneficiation and this collaborative work has resulted in a project called “Fuel Cell Energy”.

Further in concluding his report, Minister Zwane revealed that the Department is planning to designate other minerals so as to ensure beneficiation takes places across the board and is also currently in talks with a number of countries including China, Russia, Australia and Canada aimed at encouraging them to invest and beneficiate in South Africa.

      

1. OBSERVATIONS AND KEY FINDINGS

 

In noting the progress report given by Minister Zwane in relation to the implementation of the executive undertaking under review, the Committee made the following observations and findings:

 

1. The Department appointed an independent selection panel consisting of five persons with the requisite knowledge and understanding of the diamond industry and legal and corporate governance experience to assist in the shortlisting of candidates to be considered for appointment to the Board of the SADPMR.

 

1. The Board of the SADPMR is working towards addressing the challenges facing the industry including the barriers to entering the jewellery manufacturing industry as well as the declining beneficiation in the sector.

 

1. The Department has been working collaboratively with others departments such as the Department of Trade Industry and the Department of Science and Technology in contributing towards beneficiation.

 

1. The Department is currently engaged in talks with a number of countries including China, Russia, Australia and Canada aimed at convincing investors to come and beneficiate in South Africa.  

RECOMMENDATIONS

 

Further, in noting the progress report made by the Minister of Mineral Resources, the Committee, lastly, observes that the executive undertakings have been adequately implemented and therefore recommends that they be closed.

 

Report to be tabled for consideration.