Chairperson, there can be no better way of celebrating 26 June, Freedom Charter Day, than by amending the Mineral and Petroleum Resources Development Act, MPRDA, to ensure that the mineral heritage of the country is equitably shared. The MPRDA is a piece of legislation that has been a significant tool in facilitating a process of redistribution of the wealth of our country, as envisaged by the Freedom Charter.
Today we proudly stand on the shoulders of the giants of our struggle who crafted the Freedom Charter, which is as relevant today as it was 53 years ago when it was conceived. We are in awe of their foresight and wisdom.
Although we are not yet where we should be in terms of changing patterns of ownership, we have made significant strides in creating an enabling environment for the participation of the previously excluded majority of our people in the mainstream of the growing economy. The amendment of this Bill and therefore the review of the Mining Charter scheduled for next year will further enhance the capacity of this ANC-led government to increase the pace of transformation in this very important sector. It is only then that we can truly say that "The people shall share in the country's wealth".
It has taken a long time to get to this point in terms of the Bill, but it was all to ensure a strong, clear and streamlined regulatory process. We believe that to a great extent we have managed to do just that. This will further enhance the economic development drive, but most importantly, it will economically empower our people.
Since the promulgation of the Act and the four years of implementation to date, the Department identified a number of provisions that required amendments in order to facilitate the smooth regulation of the industry and enhance the process of transformation in the sector.
The Bill thus had, as its main objective, the technical improvement of the principal Act to allow for a more efficient and effective management of the country's mineral resources. As a result, a number of definitions have either been brought in or clarified, for example, the definition of "beneficiation", which indicates the levels of beneficiation currently possible with our mineral commodities. This clarification is important in order to guide the industry and all of us on this important step that South Africa has taken to develop its minerals further and thereby create new jobs and develop new skills.
The Department of Minerals and Energy, DME, sees this as a major way of reducing the high levels of poverty and proposes that we create sustainable beneficiation industries, and as the DME we are leading in this process.
Section 2 of the principal Act has been improved upon to include communities and their active participation in the mineral and petroleum industries. The latter is being reinforced in the Bill by a new provision relating to a proactive administrative action where an application for a mining right covers an area occupied by a community.
Further, the separation of powers between the Minister of Finance and the Minister of Minerals and Energy has been catered for in the Bill, and the Minister of Finance will thus determine and levy state royalties in terms of an Act of Parliament, hence the Mineral and Petroleum Resources Royalty Bill that is currently going through the parliamentary process. The Minister of Minerals and Energy will prescribe levies and fees in consultation with the Minister of Finance.
The need for co-operative governance was re-emphasised through the parliamentary process, when the DME and the Department of Environmental Affairs and Tourism, DEAT, were tasked to find a solution regarding the environmental provisions in both the principal Act and the Bill. The location of such provisions in the principal Act and the Bill was an issue.
After much debate and constructive arguments, and most importantly, with the guidance of and the interaction with the Deputy President, we finally agreed on a resolution thereof and tabled the agreement before the two portfolio committees. I must thank both the chairpersons, but most importantly, both study groups of the DME and DEAT for their contribution and leadership in this regard. The agreement includes the three main broad areas that follow. Firstly, we are saying there should be one environmental impact assessment system that should be used and that is the one that is prescribed in the National Environmental Management Act, NEMA, under the Department of Environmental Affairs and Tourism.
The second one is that the Minister of Minerals and Energy is the authority responsible for implementing environmental management legislation and regulations, as set out by the Minister of Environmental Affairs and Tourism, in all prospecting, exploration, mining and production areas, and so on. Thirdly, the Minister of Environmental Affairs and Tourism is the responsible authority for appeals relating to environmental matters.
Those are the three main broad areas that constitute the agreement between the two departments; and that agreement now forms the basis of the two committees' decision to remove the environmental provisions from the Act and the Bill and place them within the ambit of the NEMA amendment process. This is a negotiated settlement between state departments and has taught us a lot in terms of co-operative governance.
This was not an easy task, but here we are. It is to a very great extent a win-win solution. The challenge now is to ensure that all those who are impacted upon, such as the mining industry, are not negatively affected by the transition, which is set to take place over 18 months. I am therefore happy to introduce new definitions, environmental authorisations, and so on.
The Bill also seeks to improve the handling of residue stock piles and residue deposits. This area of the Bill has also been contested by our stakeholders, some holding the view that the clarification of these definitions as done as a response to a court decision. I must then try to clarify that we did this only to provide clarity, the same clarity that the court should have given.
Table 3 of Schedule 2 to the principal Act already covers any common law right that either had or did not have a prospecting or mining authorisation during the repealed Minerals Act era. Therefore, the addition of "or old order right" to the two definitions seeks to clarify once and for all the legal position on mine dumps.
Again I want to assure the stakeholders that the Bill has no intention of expropriating any dump. The state is paying enough for mining legacies already as it is now paying for the rehabilitation of derelict and ownerless mines. What I want to clarify with them is that even though the provisions of the Mine Health and Safety Act are used in "works" areas, as defined in that Act, using the same provisions pertaining to operations winning minerals from dumps is more of an exception, and is merely to ensure that some authority will look after the health and safety of employees in such operations.
Order! Hon Minister, you have run out of time. I'm putting you on the reserve you have for your response times, so if you want to finish your point I'll allow you to do so.
Thank you very much, Chairperson. The NEMA will be applicable to all operations affecting the environment, including those winning minerals from dumps. This would be in the same vein as it would be for all prospecting and mining rights.
The department also has a major duty of collecting mineral production and sales statistics for the calculations used in economic indices such as the CPIX, GDP and the others. If, therefore, for any reason it happens that the DME cannot account for any minerals produced and sold from the mines in this country, the world will regard our indices with disdain and as having no integrity, because there could be no integrity attributed to our numbers. How can we even think of doing that when there is the Kimberly process certification that we initiated ourselves? So it is important that we should be allowed to regulate this area also. Thank you very much. [Applause.]
Chairperson, hon Ministers and Deputy Ministers, hon Members of Parliament and guests, before I read this Bill, which is very important for our people, I would like to make some observations on what has happened in terms of some misprints, so that at least we capture their essence and do not pass on the Bill to the NCOP without having noted these misprints.
They are nothing but printing errors because, as the Minister has just said, the Portfolio Committee on Minerals and Energy together with the Portfolio Committee on Environmental Affairs and Tourism and the two Ministries have had long-term interactions, during which we agreed on all of these matters. I am sure that there must have been some misprints because of the pressure of this week.
I will read the misprints, but since the Bill is still within the precincts of Parliament, this is no train smash. It will undergo the interactions of the Members of the NCOP and they will make the necessary corrections.
On Page 3, line 33, we have to substitute the definition of "environmental authorisation" with the following definition:
"'Environmental authorisation' means as defined in section 1 of the National Environmental Management Act, Act 107 of 1998. ..."
Secondly, on page 14 line 13 we have to substitute section 38A with the following:
Environmental authorisations
38A (1) The Minister is the responsible authority for implementing environmental provisions in terms of the National Environmental Management Act, 1998 (Act No 107 of 1998) ... as it relates to prospecting, mining, exploration, production or activities incidental thereto on a prospecting, mining, exploration or production area.
1) An environmental authorisation issued by the Minister shall be a condition prior to the issuing of a permit or the granting of a right in terms of this Act.
Furthermore, we have to insert a new clause on page 26 after line 44. It reads as follows:
The principal Act as amended by this Act is amended with effect from a date 18 months after the date on which the provisions relating to prospecting, mining, exploration and production and related activities come into operation in terms of section 14(2) of the National Environmental Management Amendment Act of 2007 in order to revert the powers of the Minister in so far as the issuing of environmental authorisations, the submissions of application for such authorisation and the submission of environmental reports are concerned to the Minister of Environmental Affairs and Tourism.
Those are the misprint corrections that need to be affected. I would like to thank my committee members very much for having worked very hard to get this Bill to where it is today. Indeed, I also thank the Minister for having been able to spearhead this effort of liaising with the Minister of Environmental Affairs and Tourism to align this Act so that it really is governed by all the relevant national legislation of our land.
The Mineral and Petroleum Resources Development Amendment Bill, Bill 10D- 2007, at political level, in its current form fundamentally puts into practice one of the resolutions taken at the 52nd Conference of the ANC at Polokwane at the end of last year. The latter reads as follows:
The use of natural resources of which the state is the custodian on behalf of the people, including our minerals, water and marine resources, in a manner that promotes the sustainability and development of local communities and also realises the economic and social needs of the whole nation. In this regard, we must continue to strengthen the implementation of the Mineral and Petroleum Resources Development Act, MPRDA, which seeks to realise some of these goals. Our programme must also deepen the linkages of the mineral sector to the national economy through beneficiation of these resources and creating supplier and service industries around the minerals sector.
That is how our Polokwane resolution regarding this Bill read.
What are the socioeconomic implications of this political exercise at national level? The implications are grotesque, that is, thousands of mining applications that have hitherto been delayed, especially for historically disadvantaged South Africans and small-scale miners, will now be processed much faster and in accordance with the foundations of uniform environmental regulation of the land as based on the National Environmental Management Act.
The socioeconomic implications of the Bill also mean that for the first time there is the removal of unnecessary bureaucratic red tape and this will result in a positive impact on the advancement of the economic redistribution agenda of our ANC-led government and the promotion of mineral wealth empowerment of previously disadvantaged communities in the mining industry.
In its political entirety this Bill goes to the heart of the Freedom Charter in terms of our people sharing in our country's mineral wealth that lies beneath the ground. Whoever could have imagined that, 53 years later, which is today - June 26 a very special day in the ANC history of the struggle - some of the most important national resolutions taken in Kliptown would be realised during our lifetime? Isn't it amazing? This is thanks to the unique and well-focused leadership direction of our movement, the ANC.
At a technical level the Bill seeks to facilitate the smooth implementation of a new minerals and mining dispensation, as the hon Minister has just said, with sound administrative practices as enshrined in the Promotion of Administrative Justice Act, Act No 3 of 2000. Furthermore, it seeks to address ambiguities that have existed in the principal Act with regard to certain definitions, by introducing certain new definitions such as the Minister has already highlighted.
Whilst the Bill makes provision for the Minister of Minerals and Energy to be the responsible authority for implementing environmental policy and legislative requirements if these relate to prospecting, mining, exploration, production and related activities in accordance with NEMA, it, however, provides that the Minister of Environmental affairs and Tourism be responsible at the end of the day for drafting and promulgating all environmental policy and legislation as enshrined in NEMA and its amendment Bill.
At another level, the Bill further empowers the Minister of Minerals and Energy to levy certain fees in terms of the principal Act, whilst there has been conferred upon the Minister of Finance the powers of determining state royalties in terms of the new Mining and Petroleum Resources Royalty Bill, thereby promoting co-operative governance and separation of powers between the Ministries.
At a politico-economic level, the Bill seeks to promote historically disadvantaged South Africans, including the community in the mining industry, whilst at the same time preventing the possibility of fronting, share manipulation and dilution coupled with the misuse of the black economic empowerment concept, as advocated in the policies of the ANC to empower potential and emerging black entrepreneurs.
Many submissions by participants in the recent public hearings were made to the effect that this Bill says very little, if anything, about the substantial and meaningful expansion of opportunities to historically disadvantaged South Africans including women and that there is gross limitation of consultations with communities and affected parties in the new Bill as against the principal Bill.
However, the Portfolio Committee on Minerals and Energy feels that this is a gross manipulation of factual realities, in that this Bill empowers the Minister of Minerals and Energy to impose conditions as are deemed necessary to promote the rights and interests of the communities in the vicinity of mining activities, including conditions requiring the participation of the said communities. But furthermore, the Bill strengthens the manner of consultations with the landowner, lawful occupier, as well as interested and affected parties and communities through ministerial regulations that effect such consultations. This is referred to in clause 12(d), 18(e), 23(e), 53(d), 57(d) and clause 61(d) of the Bill as amended.
The Bill also does consider the issue of local and foreign capital investments in the country in that it makes available all geological data and mining information of the country's mineral resources at the Council for GeoScience.
In terms of beneficiation, the Bill also encourages beneficiation by empowering the Minister to set out the levels of beneficiation by regulations, whilst it also aligns itself appropriately with the definition and level of beneficiation as required for royalty and in terms of the targets as set out in the Mining Charter. Through this Bill mineworkers are also protected from possible retrenchments resulting from granting of new mining rights, in that the holder of a mining right has to inform the Minister about such possible retrenchments in which case the Minister can immediately institute corrective measures through the instruction of his or her advisory board to mitigate the impact of such retrenchments. What more can we ask of the Minister - the Minister has done enough! Thank you to the two Ministers. [Time expired.] [Applause.]
This Bill introduces tenets of both good and ill-conceived legislation. A commendable introduction, which has caused uneasiness within the Departments of Minerals and Energy and Environmental Affairs, relates to the introduction of principles as contained in the National Environmental Management Act of 1998 as the uniform standard in terms of environmental authorisations. The compromise between the two departments has led to a transitional period during which the Department of Minerals and Energy will be responsible for all the environmental authorisations. In return the department will enforce the NEMA principles. These amendments are supported.
However, the Bill seeks to subject residue deposits and residue stockpiles to the operability of the principal Act, the effect of which will clearly constitute expropriation. As stated during public hearings on the Bill, the intention of the legislature was, correctly, not to govern the mine dumps in the principal Act. This Act will expose the state to significant claims of compensation and have a negative impact on security of tenure for dumps being processed or to be processed.
The unduly wide ministerial discretion currently contained in the principal Act has been further widened by the fact that the Minister will now be granted the power to require from mining companies, which apply for a licence and duly comply with the Mining Charter and the Social and Labour Plan, to implement additional community participation of up to 10%. This unbridled discretion may be set over and above the requirement of the 26% set by the Mining Charter and other legislation requiring BEE and affirmative action. It will no doubt ensure more uncertainty in the outcome of the application process.
An important compact between government and the mining industry, which has led to the voluntary introduction and acceptance of the Mining Charter, was the security of tenure granted to the mining houses in terms of which conversions of mineral rights from old order to new order rights could not be refused. A major shift in this notion was introduced by the fact that this Bill seeks to compel the department to refuse an application if the holder does not comply with the request of the department within 60 days. This provision may be inherently unfair in instances where the mining company cannot comply with the request within a period of 60 days due to circumstances outside of its control. This will effectively lead to the mine closing with the resultant loss in jobs and production.
In terms of item 11 of Schedule 2 of the Act, a mining company must continue to pay royalties to the community whilst in terms of the Mineral and Petroleum Resources Royalty Bill the mining company will also be forced to pay royalties to the state. This is clearly a duplication of royalties as per the Royalties Bill introduced by the Minister of Finance in this House the day before yesterday.
Any denial of the double taxation of royalties on the difference between state and community royalties is artificial and less than honest, especially in the light of the fact that the MPRDA took away the mineral rights of the communities but expect the mining companies to continue paying royalty to these negatively affected communities. In reality the state has failed to pay these communities compensation for the expropriation of their mineral rights.
The most equitable solution would be for the state to require the mining companies to pay the royalties to it, and then in turn to pay a portion of the royalties to the communities. Government has basically expropriated the mineral rights of many communities without it paying them any compensation.
The requirement that the approval of the Minister be obtained for any change in interest of ownership in an unlisted mining company, close corporation or any other legal entity having an interest in mineral rights, is government interference at its worst. It is sincerely hoped that government has informed itself of the possible consequences of this draconian requirement.
Government has abused the assurances given by the Minister of Minerals and Energy that the Bill will resolve some of the concerns of the mining industry. This Bill has not done so. In view of the above the DA will definitely not be supporting this Bill. I thank you.
Chairperson, we in the IFP supported the original Mineral and Petroleum Resources Development Act which provides for equitable access and sustainable development of the nation's mineral and petroleum resources. This revolutionary piece of legislation changed the way the mining operations were conducted in this country.
The Bill before us today will complement and enhance the principal Act and align it with the National Environmental Management Act, No 1998. In the past mining activities took place with little or no consideration for the environment and the surrounding communities. The problems that are being experienced today with regard to mining rehabilitation bear testimony to this. I, therefore, cannot stress enough the importance of aligning mining activities with environmental issues. With this Bill the Minister of Minerals and Energy will be the responsible authority for implementing environmental matters in terms of NEMA and environmental legislation that relates to mining activities. The extra powers given to the Minister did create a lot of controversy, but I believe that it is in the best interests of mining activities. This will save a lot of time, cut out a lot of red tape and streamline mining activities.
I do, however, urge the Minister and other responsible authorities to use these new powers responsibly and not let the mining activities occur at the expense of the environment. Mining activities must be conducted responsibly and environmental issues must always be to the fore of our thinking. The IFP supports this Bill. I thank you.
South Africa has always been commended for its rich supply of minerals. But it is its management that most effectively promotes its success. This amending Bill clearly facilitates this and further enhances effective management through co-operative governance. Co-operative governance through all spheres of government is what drives our democracy, our economy and the social development of South Africa.
The rising cost of fuel is indeed a great worry. While public transport welcomes a large increase of persons commuting with them to escape the high petrol price, we believe that something needs to be done to subsidise the high cost of fuel. The Minority Front supports this Bill. I thank you.
Chairperson, I'm not disappointed by the hon Schmidt. There's nothing that he supports although he attends meetings all the time and agrees with us in those meetings; but he must report to his party and then his party tells him not to support anything that is going to build this country. So I was expecting that from Mr Schmidt.
Let me bow my head and join all those members of this House, particularly the SACP, in expressing our condolences to the family of Brian Bunting, a true comrade. We also express our condolences to the family of the veteran, Mama Dorothy Mfacu from Gugulethu, who will be buried on 28 June. May their souls rest in peace.
The ANC has been very consistent in its approach to serving the interests of the people, in particular the poor majority. The thrust of this Bill, the Mineral and Petroleum Resources Amendment Development Bill, the MPRDA, is to make sure that the mineral resources of our country are shared among the people of South Africa. All must be able to benefit from them; not only the rich but also the poor. As the Freedom Charter says: "The people shall share in the wealth of the country." This will be done through beneficiation.
Our history is not a history of marginalisation and exclusion of others. It is a history of empowerment of the previously disadvantaged communities and all humanity. We believe in the principle of equal opportunity. We are still committed to and steadfast in the quest to attain the ideals as contained in the Freedom Charter. The promulgation of the Mineral and Petroleum Resources Development Amendment Bill strengthens our resolve to advance the transformation agenda smoothly and efficiently, as we believe that the objective of the National Democratic Revolution will not be fulfilled without the promulgation of progressive policies and legislation.
Indeed, it has been a long road for us to adopt the Mineral and Petroleum Resources Development Amendment Bill [B 10D-2007], as we understand the mandate given to us by the Constitution of South Africa to pass laws that are credible for the benefit of the people of South Africa. I must say that enough thought and scrutiny was given to this Bill, as the process started in 2007 when the Department of Minerals and Energy presented to us the proposed amendment of the Mineral and Petroleum Resources Development Act of 2002.
The B 10D-2007 version of the Bill, that is the initial version of the Bill, was adopted by us on 20 June 2007. The Bill did not proceed further than the NCOP, as it was referred back to us. The Portfolio Committee on Minerals and Energy, with the Department of Environmental Affairs and Tourism, was afforded an opportunity to make submissions on B 10D pertaining to the regulation of the environmental management system. As I have already indicated, the journey was not easy. The people of South Africa are waiting for us to make a momentous decision on what the Bill seeks to achieve at the end of the day.
Despite the fact that the initial Bill that was presented to us was in favour of promoting sound environmental management, the two departments, the Department of Minerals and Energy and the Department of Environmental Affairs and Tourism, were afforded an opportunity to reach an amicable solution pertaining to sound environmental management principles. As a result of such an extensive consultation process between these two departments, a clear separation of powers between the Minister of Environmental Affairs and Tourism and that of the Minister of Minerals and Energy was commendable.
The Bill seeks to harmonise the environmental impact assessment requirements with national norms and standards set out in the National Environmental Management Act of 1998. Since B 10D-2007 was adopted by us, and as it also allowed for consultation between the two departments, as the Portfolio Committee on Minerals and Energy, we could have decided to instruct the state law advisors to revise the Bill accordingly. However, we had to afford the people of South Africa, including the stakeholders, an opportunity to make their submissions on the Bill even if time was not on our side.
There are no fundamental changes introduced in B 10-2007D. It is actually clear that the Bill sought to achieve the improvement of the technical nature of the MPRDA, in order to promote efficient and effective administration of the country's mineral resources. In addition, the objects of the initial Bill are still maintained in the latter version of the Bill, as it seeks to enhance the promotion of the participation of the historically disadvantaged people, including the community in the mining industry, whilst, at the same time, preventing the occurrence of fronting, share manipulation and exploitation of BEE.
The Bill empowers the Minister, where the application relates to the land occupied by the community, to impose conditions as are necessary to promote the rights and interests of the community, including the conditions requiring the participation of the community. That did not go down well with most of the stakeholders in their presentations to us. The response of the Department of Minerals and Energy pertaining to this indicated that the Minister, when imposing conditions that require community participation, will take into account the existing arrangements not to exceed the requirements regarding empowerment, social and economic welfare, the Mining Charter and the social labour plans required.
Also, such participation by the community will be on a commercial basis in our sober judgement. We are agitated by the fact that the regulators of the MPRDA are still having a problem with holders of old order rights that suspend the administration process, by submitting the necessary information within a reasonable time for the Minister to make the decision. [Time expired.] The ANC supports the Bill. [Applause.]
Thank you very much, Chairperson. I only have three minutes to respond to Mr Schmidt. Thank you to all the members and the Minister in absentia. With regard to the issue of royalties, Mr Schmidt, this is a matter for the National Treasury but the MPRDA has entrenched the rights of the communities so they can continue to receive them; there is nothing to the contrary. It is also not true that the Bill sets an additional 10% as raised by you with regard to the issue of residues.
The Minister's power to set these conditions is meant to ensure that in the context of the BBBEE requirement, the communities hosting such operations will be considered therein - nothing separate from that. However, with regard to the same issue of residues, if we do not regulate, nobody will know how much minerals have been recovered even from the mine dumps. Nobody would know what profits have been made there. After all, what is in the dumps themselves is still the mineral wealth of this country and it must be shared by all the people of South Africa. So, Mr Schmidt, unfortunately, we will have to regulate the mine dumps because there are treasures in them.
I thank all the members for participating and I hope that we will all support the Bill, including Mr Schmidt, after the explanation that I have given him. [Applause.]
That concludes the debate. Are there any objections to the Bill being read a second time? Please raise your objection, hon Kaylan. I put the question: Are there any objections to the Bill being read a second time? You can put your objection, please.
Chairperson, will you please record the objection of the