Hon Speaker, hon Minister Shabangu, Deputy Minister Oliphant, hon members and my fellow comrades, when the Mineral and Petroleum Resources Development Amendment Bill, MPRDA, came into existence in 2002, it was, and has remained, the central piece of legislation governing South Africa's mining and petroleum sectors. This was enhanced by the 2008 amendments to the principle Act.
Last year, further amendments were tabled by the Minister, all of which seek to take South Africa forward and the mining and petroleum sectors to its next logical and higher stage of development. This defining legislation carries with it our Mining Charter - the document that, for our social and economic responsibilities, outlines the obligations and responsibilities of stakeholders who have been granted rights to participate in these crucial sectors.
As is the case in any country that is endowed with mineral resources and petroleum manufacturing sectors, the vested interests are understandably high. Therefore, it is of no surprise that we have had such vibrant discussions both during our public hearings and in the processing of the Amendment Bill. The critical question we have to ask ourselves today, bearing in mind what both the Deputy President and Minister Manuel had to say yesterday, is: whose interests need to be served by this Amendment Bill?
The Amendment Bill covers economic, social and environmental responsibilities and has sought to create a balance between expectations, government developmental priorities, the worker's needs, and community and environmental responsibilities. The intention of the Amendment Bill is to strengthen the architecture of the mining and petroleum sectors and align it to the needs of the developmental state, and in this regard the National Development Plan.
Simultaneously, the Amendment Bill seeks to improve security of tenure while continuing to create a climate that would enhance investor interest while ensuring social responsibility, and balances the risks and expectations of interested stakeholders.
The Amendment Bill speaks to a streamlining and better integration of mining, environmental and water authorisation processing. Security of tenure will of necessity form an integral part of the regulatory framework.
Briefly, as there is not enough time, some of the key objectives of the Amendment Bill are the following: The creation of a mining and minerals regulatory regime; the promotion of the development of mineral and petroleum resources in a sustainable and equitable manner; the streamlining of administrative processes to ensure proper alignment with the National Environmental Management Act and the National Water Act; increasing the socioeconomic developmental impact through mining; making provision for an application process by invitation; providing for implementation of a beneficiation strategy and to provide for the state's active participation in the exploitation of petroleum; declaring certain minerals to be strategic, mainly to guarantee security energy supply; and, most of all, the enhancement of regulations and implementation of social and labour plans.
Before I address particular matters, it is important to understand what has influenced the orientation of this Amendment Bill, otherwise an incorrect understanding of the intention of the Amendment Bill will be reached, as has been the case during our public hearings.
The ANC's policy on mineral resources and the petroleum sector has its roots in the Freedom Charter of 1955, the Ready to Govern ANC policy document of 1992 - a policy document drafted in preparation of the first democratic government, the Reconstruction and Development Programme of 1994- 95, the 52nd national conference of the ANC in Polokwane in 2007, the national general council of 2010 and the subsequent ANC policy document on state intervention in the mineral sector, as well as the 53rd national conference resolutions of the ANC in Mangaung in 2012.
It is a precondition that anyone who is debating this Amendment Bill today must have both read and understood these documents in order to understand what the Amendment Bill seeks to achieve. These central policy documents locate the nation's mineral assets as a resource to improve the lives of our people as a whole, and that others may benefit in this process as a secondary option.
Primary is the quality of the lives of our people, where they live and their ability to economically have a decent quality of life. If this is not understood then the Amendment Bill will not be understood. In this context, we are further implementing the Freedom Charter which states that:
The national wealth of our country, the heritage of South Africans, shall be restored to the people; The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole.
This was already done in 2002 under the Mineral and Petroleum Resources Development Amendment Bill. All privately-owned mineral resources were transferred to the state. However, in the subsequent years concessioning via mining rights did not ensure that their developmental impact was maximised. Therefore, at the ANC's 52nd national conference in Polokwane, it was resolved that:
The developmental state should maintain its strategic role in shaping the key sectors of the economy, including the mineral strategy and the national transport and logistics system, and must ensure that our national resource endowments, including land, water, minerals and marine resources are exploited to effectively maximise the growth, development and employment potential embedded in such national assets and not purely for profit.
This statement must be evaluated against the strategic goal of placing the economy on a new job creation and more equitable path. The 53rd national conference of the ANC at Mangaung in 2012 took this to a higher stage when it resolved that:
State intervention with a focus on beneficiation for industrialisation is urgently required. Instruments are required to support beneficiation and the competitive pricing of these strategic minerals.
In this regard, the Amendment Bill responds to this policy directive by stating that beneficiation in relation to any mineral resource means the following: The final stage, which is the action of producing properly processed, cut, polished or manufactured products or articles from minerals accepted in the industry and trade as fully and finally processed or manufactured and value-added products or articles; and transformation, value addition or downstream beneficiation of mineral and petroleum resources or a combination of minerals to a higher value product over baselines, to be determined by the Minister, which can either be consumed locally or exported. Furthermore, section 2 of the Amendment Bill states -
... promoting economic growth and mineral petroleum resources, and development of downstream beneficiation industries through provisions of feedstock development of mining and petroleum inputs industries.
With regard to the specific issues in the Amendment Bill, other ANC speakers will address these in greater detail during their inputs. Briefly, as an overview on beneficiation, exploitation of minerals must optimise the developmental impact, especially job creation across the economy. Beneficiation and transformation in the mining sector should be linked because there cannot be transformation without beneficiation. The ANC state's intervention in the mineral sector outlines how best to leverage South Africa's mineral wealth to grow the economy and create more jobs.
With regard to free-carried interests, an aspect that has raised much debate, let us remember that this is an international practice. We are following best practices and experiences in other countries when dealing with the amount of free-carried interest that the state should be entitled to, namely 20% free-carried interest in all new exploration and production rights of oil and gas through designated organs of state. This is a portion of production that goes directly to the state as a form of tax for the initial exploration. In addition, the state under this Amendment Bill is entitled to further participation in the exploration and production of oil and gas for which it will pay a market-related price.
In conclusion, we conducted extensive public hearings over four days in September 2013, and 51 submissions were received, including several joint submissions. We dealt substantively with the submissions and the concerns that were raised. We are certain that we are providing certainty in both industries through this Amendment Bill. We have remained open even during the processing of the clauses.
Let me make it clear that as legislators we have the responsibility to include all key stakeholders in legislation that will impact upon them, and we have definitely done that. What is disappointing, therefore, is to read the alarmist statements and threats that investors will look elsewhere for their exploration, in the Business Day. [Interjections.] At its 53rd national conference, the ANC made it clear how it will work with business to build the economy.