Mineral & Petroleum Resources Amendment Bill [B15D-2013]: negotiating mandates

NCOP Land Reform, Environment, Mineral Resources and Energy

24 April 2018
Chairperson: Mr O Sefako (ANC, North West)
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Meeting Summary

The meeting to consider the negotiating mandates of KwaZulu-Natal and Gauteng on the Mineral and Petroleum Resources Development Amendment (MPRDA) Bill attracted only five of the nine provinces to participate in the voting procedure.

The KZN mandate supported the Bill, but with substantial amendments. Its proposals suggested updated definitions, conveyed concern about the apparent abolishment of the first come, first served principle for licence applications, indicated opposition to the replacement of the Petroleum Agency of South Africa (PASA) by a new regional structure within the Department, and called for a new clause for state carried interest in exploration and production, replacing the clause proposed by the Department of Mineral Resources (DMR).

None of the amendments obtained enough support to enable their inclusion in the Committee report, and generally only two to three members supported its mandate proposals.

The mandate from Gauteng contained several proposals which did not agree with the DMR’s position. Some of the opposing recommendations were strongly worded, especially those that related to free carried interest, designated minerals, the inclusion of the Mining Charter in the MPRDA and amendments that removed security of tenure for rights holders. The province was also concerned that some of the DMR’s proposals in the MPRDA were unconstitutional.

As with the mandates proposed by the EC and KZN, Gauteng received very little support from other provinces for its mandate proposals, with only one of its proposals -- to retain PASA rather than the regional structure proposed by the DMR -- receiving the support of all five delegates present.

The Chairperson advised that the mandates of the remaining provinces would be discussed in the near future, as there was substantial pressure to conclude the Committee proceedings on the MPRDA.

Meeting report

Mineral & Petroleum Resources Development Amendment (MPRDA) Bill: negotiating mandates
Mr Asgar Bawa, Committee Secretary, advised that the meeting would start late as some Committee Members were still on their way to the meeting -- only delegates from the Western Cape and North West were present at the start of the meeting.

Representatives from the State Legal Office who were attending the meeting were Mr Theo Hercules: State Law Advisor, Ms Shahiedah Bowers: NCOP Procedural Officer, and Ms Daksha Kassan: Parliamentary Legal Advisor. Representatives from the Department of Mineral Resources (DMR) included Ms Sibongile Malie, Director: Policy Development, and Mr Sibusio Kobese: Deputy Director: Mineral Policy Development. Some members from provincial legislatures, the as well representatives from the oil and gas industry --including PetroSA -- also attended, and a member from the German consulate was present.

When the Committee Members from Gauteng, Kwazulu-Natal (KZN) and Limpopo joined the meeting, a quorum was present and the discussion and voting on the MPRDA mandate could commence.

The Chairperson said that the Committee would continue with the mandate from KZN, and reminded the meeting that those provincial delegates who were absent would not have their views recorded on mandates, as discussed in the meeting. It was imperative that the Committee concluded its work on the MPRDA as soon as possible within the rules and regulations of Parliament to ensure due process was followed, but with greater priority and urgency.

KZN negotiating mandate: proposed amendments

Mr A Singh (KZN, ANC) presented the KZN mandates on the MPRDA Bill.

Clause 1 on page 4 of the Bill -- to amend the definition of “effective date” to mean the prescribed timeframe within which permits were issued.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 1 on page 4 of the Bill, before line 14 -- to insert a new definition, “existing exploration right” to mean an exploration right granted in terms of section 80 (prior to the commencement of the MPRDA B15-B2015).

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 1 on page 4 of the Bill, in lines 16 to 18 -- to delete the definition of “free carried interest.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - did not support


Clause 1, on page 4 of the Bill, line 22 to 43 -- to delete the definition of historically disadvantaged South Africans (HDSAs).

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 1, on page 5 of the Bill, after line 56 -- to insert a new definition for “pending application” to mean an application in terms of section 79 of the Act.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 1, on page 6 of Bill, after line 31 -- to insert a new definition for “right of pre-emption” to mean the right of the state “to purchase the participation interest disposed by a holder …”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - supported

Clause 1, on page 6 of the Bill, line 37 to 43 -- to replace the definition of state participation with a new definition, i.e the right of the state to participate in petroleum exploration and production via participation interest, production sharing and representation on the joint operating committee.
 
Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - did not support

Clause 5, on page 8 of the Bill, line 5 to 8 -- to delete sub-section 5.

Mr J Julius (DA, Gauteng) wanted the DMR to provide clarity on this clause in relation to the “invitation process” from the Minister.

Ms Sibongile Malie, Director: Policy Development, said that that the MPRDA provided for a dual process: 
by invitation, where the state had identified some resources (e.g. drilling by the Council for Geosciences), and the Minister could then extend invitations for exploration rights; or
normal process, where applicants applied for exploration rights based on their own work on a first come, first served basis.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 8, on page 10 of the Bill, line29 -- to insert the word “prior” before the word “minister.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 12, on page 12 of the Bill, after line 34 -- to delete subsection 2, paragraph b.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained


Clause 12, on page 12 of the Bill, before line 35 -- to include section 17 (4A) of Act 49 of 2008, which related to land occupied by the community and where the Minister may impose conditions to promote the rights of the community.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 18, on page 15 of the Bill, line 23 -- to insert the word “industry” to follow the words “and the Housing and Living Conditions Standards.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 20, on page 17 of the Bill, line 10 -- the same as the above proposal, i.e. to insert the word “industry” to follow the words “and the Housing and Living Conditions Standards.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 22, on page 17 of the Bill, after line 58 -- to insert after the word “and” and paragraph (c), the following clause: “The applicant is a 50+1% Black owned SA company”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 22, on page 18 of the Bill, lines 55 to 60 -- to substitute section 9 paragraphs (a) and (b) with proposals to improve the clarity and understanding of the mining permit issued in terms of section 6 relating to timing, the appeal process and broad based black economic empowerment.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 35, on page 24 of the Bill, after line 20 -- to insert a clause to ensure that applicants comply with the black empowerment and housing and living conditions provisions in the Act.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 47, on page 29 of the Bill, lines 25 to 29 -- to omit the proposed amendments to section 70 of the Act that proposed replacing the Petroleum Agency of SA (PASA) with a regional structure within the DMR.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - did not support

Clause 48, on page 29 of the Bill, lines 32 to 48 -- to omit the insertion of section 71A, which seemed to replace PASA with the regional structure within the DMR.

Mr Julius wanted the DMR to provide clarity on the relationship, if any, between the changes to sections 70 and 71.

Ms Malie responded that the changes in sections 70 and 71 were related to a DMR process to streamline operations.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 49, on page 29 of the Bill, lines 40 to 46 -- to omit the insertion of the clause related to section 71A (PASA vs. the new regional structure proposal).

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 49, on page 30 of the Bill, lines 1 to 9 -- to omit the insertion of section 71A.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

Clause 50, on page 30 of the Bill, lines 10 to11 -- to omit the repeal of sections 72 and 73 (PASA vs. new regional structure proposal).

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

Clause 51, on page 30 of the Bill, line 21 - to omit the proposed amendment to section 74(1) (A) (PASA vs. new regional structure proposal).

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

Clause 51, on page 30 of the Bill, line 34 - to substitute the words “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 51, on page 30 of the Bill, line 43 - to substitute the words “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 51, on page 30 of the Bill, line 47 to 48 - to substitute the words “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - did not support.

Clause 52,on page 31 of the Bill, line 21 and 22 - to omit the proposed amendment to section 75(5) (c) of the Act (PASA vs new regional structure proposal).

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 53, on page 31 of the Bill, line 37 to 50 - to substitute the words “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 56, onpage 32 of the Bill, line 23 to 25 - to substitute the words “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 57, on page 33 of the Bill, line 17- to substitute the words “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - did not support
Western Cape - abstained

Clause 57, on page 33 of the Bill, after line 14 - to insert subsection 2A to propose that the Minister shall, when granting an exploration right, determine the corresponding right in terms of section 84.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - did not support

Clause 58, on page 33 of the Bill, line 41 - to omit the proposed amendment to section 81(1)(a) that seeks to replace the designated agency with a new regional structure.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 58, on page 33 of the Bill, after line 41 - to insert new subsections 2A, 2B, 2C and 2D that propose to provide clarity and better understanding of exploration right relinquishment, renewal periods, exemptions in terms of section 2A and to ensure that the equity of the state be maintained where rights were relinquished.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 59, on page 34 of the Bill, line 16 - to omit the proposed amendment to section 82 (2) (e) of the Act.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 59, page 34 of the Bill, line 20 to 24 - to substitute paragraph (g) with the following paragraph: “relinquish a contiguous portion of the area to which the rights relates as prescribed in section 81.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 59, on page 34 of the Bill, line 33 - to insert the words “ where appropriate” before the words “apply for.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 61, on page 35 of the Bill, line 9 to 22 - to substitute “Regional Manager” with “designated agency.” 

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 61,on page 35 of the Bill, line 26 to 27 - to substitute “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 62, on page 35 of the Bill, after line 52 - to insert a new subsection 1A to reinforce the notion of certainty of the project, by linking exploration and production rights.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - did not support

Clause 62, on page 35 of the Bill, line 55 - to substitute “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - supported

Clause 63, on page 36 of the Bill, line 14 - to omit the proposed amendment to section 85 (1) (a) of the Act relating the terms of granting exploration and production rights and the negotiation of the terms between the Minister and the applicants. 

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 63, on page 36 of the Bill, line 24 - to insert a new section after subsection 2, paragraph (d), that provides for renegotiation of the project terms when a application is made for the renewal of production rights.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 65, on pages 36 and 37 of the Bill, lines 49 to 55 and lines 1 to 9 - to substitute section 86A (state participation in exploration and exploration rights) with a new clause that provided for state carried interest in exploration and production with a cost recovery mechanism regarding the 20% state carry provision and the terms thereof.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - supported

Clause 66, on page 37 of the Bill, line 17 - to omit the proposed amendment from the Bill.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 67, on page 27 of the Bill, line 40 - to substitute “Regional Manager” with “designated agency.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Clause 68, on page 38 of the Bill, line 1 - to omit the proposed amendment to section 89 of the Act.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - supported

Clause 71, on page 38 of the Bill, line 46 - to insert the words “ subject to subsection 1A,” before the words “any person.” 

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 71, on page 39 of the Bill, line 6 - to insert a subsection after subsection 1 that provides for a special appeal process for applications relating to the Mining Company of SA.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 71, on page 39 of the Bill, line 10 - to insert after the words “subsection (1)”, following the words “or subsection (1A).”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 71, on page 39 of the Bill, line 11 - to insert after the words “the Minister”, the following words: “or the appeals panel, as the case may be.”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained
Clause 71, on page 39, line 27 - to insert after the words “ subsection (1),” the following words, “or subsection (1A)”

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Clause 74, on page 41 of the Bill, line 12 - to insert a subsection (5), to empower the Minister to develop an upstream petroleum charter and to provide for its applicability.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - abstained
Kwazulu Natal - supported
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

This concluded the MPRDA mandate of the KZN province.

The Chairperson asked Gauteng to proceed with its MPRDA mandate.
 
Gauteng negotiating mandate: proposed amendments

Mr J Julius (DA, Gauteng) advised that Gauteng supported the Bill with the following amendments:

Section 1(b) - that the definition of “beneficiation” be collapsed to mean “transformation, value addition or downstream beneficiation.” 

Dr H Mateme (ANC, Limpopo) wanted to know what was meant by the word “collapsed” 

The DMR advised that all the different stages of processing would include all the upstream and downstream activities.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - supported. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Section 1(h) - Opposed the definition proposed for “designated minerals”. The province felt the definition was vague and that it gave the Minister total discretion over the inclusion or exclusion of minerals. 

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo -abstained. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - supported

Section 1(j) - Objected to the definition of “free carried interest,” as it could be seen as a form of tax, and was therefore in the domain of the Minister of Finance. The concept of free state carried interest was not the norm in most of the oil and gas industry globally.

Mr Singh asked if the DMR could provide clarity on the issue.

Mr Sibuso Kobese, Deputy Director: Mineral Policy Development, DMR, said the government’s legal advisors had supported the opinion that it was not a form of tax.

Ms Daksha Kassan, Parliamentary Legal Advisor confirmed that “free carry” was not a form of tax.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - did not support
Limpopo -abstained. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained.

Section 1(q) - the definition of “mine gate price” was not clear and had to be revised to provide clarity so that it was not subject to legal challenge.

Dr Mateme wanted clarity on what “mine gate price,” was and if the Gauteng recommendation was a proposal to change the definition, or just a comment.

Ms Kassan said the mine gate price was the value or price of the raw mine product without the addition of other costs like transport and delivery to customers.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - abstained. 
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained

Section 1(z) - commented that the definition of a residue stockpile amounted to expropriation, and therefore did not allow for the transfer of old order rights 

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Section 1(z)(A) - as this was linked to the term “free carried interest”, it was not supported by Gauteng.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - abstained. 
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Section 1(z) (B) - Guateng province did not support the concept of strategic minerals as designated in the Bill, and objected to its inclusion due to concerns about constitutional aspects related to the clause.

Dr Mateme felt that the designation was correct if it meant that the overall intention was to safeguard South Africa’s interests vs foreign interests (e.g. exports to the detriment of local supply).

Mr Julius said that if the exports benefited the local economy, it should be allowed.

Ms Malie said that the Minister would designate certain minerals as strategic for the good of the country

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - did not support
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Section 1 Zd (b) - objected to the inclusion of this clause, as it meant that the Mining Charter was included as part of the Bill. Gauteng did not support the inclusion of the Charter in the Bill.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - did not support
Limpopo - supported
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - supported

Section 9 - Gauteng did not support this clause as it removed the incentive of companies to discover ore deposits, because the Minister had the right to invite applications for rights to the detriment of the first come, first served principle.

Dr Mateme asked the Committee to approach the issues in the Bill without the influence of party politics, and that the broad thrust should be “ what was best for the people”. 

Ms Malie said that there was a two-pronged process for applying for licenses. In the one instance, there was the first come, first served process, and this would continue. The other option was an invitation by government, where appropriate.

Dr Mateme wanted to know if there was any assurance that this process would address the imbalances inherent in the mining industry, where the previously disadvantaged had been excluded.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - did not support
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - supported

Section 10 - Gauteng was concerned about the lack of clarity in terms of clear timelines in this clause

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - supported
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

Section 11 - a concern was raised about the impact this clause would have on mining and related operations. Some operations, according to the province, would be impossible to execute due to the nature of this clause.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - supported.

Sections 13 and 14 - the province was not comfortable with the use of the phrase “prescribed period,” as it felt too much depended on the Minister’s discretion.

Dr Mateme asked for clarity on the issue.

Ms Malie advised that with issues such as this, the MPRDA sought to advance historically disadvantaged South Africans (HDSAs), for example in terms of the Mining Charter, state targets and other opportunities, to enable blacks to participate in mining.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

Section 19 - the province had a concern with the clause, as it reduced the security of tenure of rights holders who may already have invested heavily mining projects.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - supported.

Section 23(d) - proposed that that the provisions of the old Act remained in the Bill, as it gave communities the opportunity to participate in mining.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - supported
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Section 25 - the province was opposed to any amendments that removed security of tenure for rights holders.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained

Section 26 - Gauteng supported the concept of beneficiation, but was opposed to it as currently envisaged in the Bill. All the amendments related to beneficiation in the Bill should be opposed.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - did not support
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - supported.

Section 43 (1) on Environmental Liability - the province was not in favour of the amendments that made holders liable after closure certificates were issued. The retention of rehabilitation funds, as per section 43(6), should be sufficient to ensure there was cover for subsequent damages.

Dr Mateme wanted to know if retention funds were reviewed from time to time.

The DMR responded that financial rehabilitation was reviewed between one to five years, but that the Minister was empowered to ask right holders to remedy damage to the environment as a result of mining operations.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - supported
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - abstained.

Section 70 to 81 - the province was opposed to the replacement of PASA by the regional structure within DMR.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - supported
Limpopo - supported
Mpumalanga - absent
Northern Cape - absent
North West - supported
Western Cape - supported.

Section 86 - Gauteng objected to the insertion of section 86A dealing with free carried interest. The province rejected the idea of free carried interest, as it imposed an impossible burden on the oil industry. 

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - abstained
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

Section 100 - Gauteng was not in favour of this proposal, as it felt the clause was unconstitutional (by including the Mining Charter as part of the MPRDA).

Dr Matema said it seemed as if this was a “veiled threat” by Gauteng.

Ms Kassan said that the clause was not unconstitutional, as the Minister was given only delegated powers to make secondary legislation, which was similar to Rules, Notices and Regulations.

Voting on this clause was as follows:
Eastern Cape - absent
Free State - absent
Gauteng - supported
Kwazulu Natal - abstained
Limpopo - did not support
Mpumalanga - absent
Northern Cape - absent
North West - abstained
Western Cape - abstained.

This concluded the MPRDA mandate discussion for Gauteng.

The Chairperson advised that due to other meetings, the discussion on the MPRDA mandates had to be postponed to a later date. After some discussion on alternative meeting dates, it was felt that these would probably commence in May.

Committee Members wanted clarity on whether the comments made by stakeholders with whom the provinces had engaged prior to drafting their mandates, needed to be discussed and voted upon. This was especially relevant for provinces like the North West and Limpopo, who broadly supported the MPRDA.

Ms Shahiedah Bowers, NCOP Procedural Advisor, said that provincial delegates had to have a clear mandate from their provinces on the MPRDA. The mandate from the province should guide the delegate in negotiating a mandate on the MPRDA in the Committee, whether this was broad support or subject to certain amendments, or not in favour of the Bill.

Ms E Prins (ANC, Western Cape) said that the views from the public had to be included in the provincial mandates.

Mr Julius agreed.

The meeting was adjourned.

 

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