Ngiyabonga nami, Sihlalo namalungu ahloniphekile ePhalamende. [Thank you, Chairperson and the Members of Parliament.]
The Bills before the House today are once again a clear and conscious commitment to the implementation of the clause in the Freedom Charter which proclaims that:
The people shall share in the country's wealth. The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole.
In pursuit of this noble injunction by the People's Charter, and subsequent resolutions from the conferences of the ANC over the past five decades, a number of pieces of legislation have been passed by this House, among them the Mineral and Petroleum Resources Development Act, MPRDA, and the Diamond Export Levy Act.
The ANC resolved, at our 52nd conference in December last year, that:
A developmental state 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 maximisation.
We further resolved that:
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, 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.
These Bills, which we are debating today, seek to give effect to the levying of royalties in order to ensure that South Africa receives just compensation for its nonrenewable resources that are extracted from underneath its soil.
In terms of this legislation, all extractors of mineral resources are liable for this royalty, whether they hold a mineral resource right under the Mineral and Petroleum Resources Development Act or illegally extract mineral resources without a right.
Provision is also made that all extractors, companies or individuals must register with the South African Revenue Services for purposes of payment of the royalty. This royalty is to be paid twice per year, with the final top- up payment being payable within six months into the following year, calculated in terms of a formula that my colleague, hon Mnguni, will outline later in the debate and that the Minister has also spoken of.
In addition to the imposition of royalties, the objectives of the Bills are outlined in the Bill as follows: It defines the refined minerals and the unrefined minerals; it also levies a rate on minerals that are refined, providing rates of royalty using a formula which I said will be explained. It clarifies the relationship between royalty payments and communities that hold rights to royalties due to mining on land owned by a community. It provides relief for marginal mines and also establishes anti-avoidance rules that prevent extractors of minerals from manipulating activities to avoid royalty payments. It also establishes administration procedures with regards to the frequency of levy payments and penalties for non-payment or underpayment of royalty.
The processing of this legislation was the most comprehensive and rigorous one, with submissions well above 30, ranging from industry to labour and civil society, even at the level of communities themselves. Of particular note here were Bapo Ba Mogale community who came by bus from the Brits/Odi magisterial districts of the North West province.
They came here with one message and they said: "Do not take away our community royalties as defined in the Mineral and Petroleum Resources Development Act 28 of 2002." We assured them that we will not allow that to happen and we kept our promise. This legislation does not take away community royalties as these are provided for in the Mineral and Petroleum Resources Development Act.
The industry also made very passionate pleas for the formula to be revised and, as my colleague Mr Mnguni will explain later and as the Minister has already explained. The originally proposed formula was revised and an amicable settlement was arrived at.
In this regard, I must indicate that the National Treasury and South African Revenue Service officials, as well as the officials from the Department of Minerals and Energy, were very accommodative as usual and were able to open the consultation process even beyond the normal bureaucratic time constraints.
On behalf of the committee I extend our appreciation to them. When the National Treasury reported to the committee on 17 June this year, we were already on the fourth draft, as has been alluded to since the first was released in 2003. Even after this draft further engagement and deliberations continued, resulting in a number of refinements to the Bill all in the interest of participatory democracy. Of course, there will never be a process that ultimately works to the total satisfaction of all parties, but I must say sufficient consensus was reached.
Udaba-ke lwaleyo miphakathi ethole amanquphana kulezo zinkampani ezimba umcebo ngaphansi kwemihlaba yawo abizwa ngama-community royalties nalo lwabhekwa kabanzi ngesikhathi sidingida lo Mthethosivivinywa. Kwavunyelwana ngokuthi lolu daba, njengoba ngike ngasho ngaphambilini ngolukaJoji, lubhekelwe ngaphansi koMthetho obizwa nge- Mineral and Petroleum Resources Development Act ka-2002, futhi-ke lo Mthethosivivinywa awuluphazamisi neze lolu hlelo.
Kuphela nje into esingayigcizelela yikho ukugqugquzela abantu bakithi ukuthi benze izivumelwano zangempela nalezi zinkampani ezimba umcebo ezindaweni zabo. Kumele benze izivumelwano ezizokwenza ukuthi babe nobunikazi kuzo kunokuthi belokhu bekhohliswa ngokunceliswa umbele ofile.
Uma ulalela isikhalo semiphakathi engaphansi kwalolu hlelo lwama-community royalties kuyacaca ukuthi imiphakathi ayizuzi njengoba kufanele. Iningi layo likhohliswa nje ngobala bebe ongxiwankulu bezitika ngenonileyo emhlabeni woyisemkhulu. Bathi uma sebesenge bakleza izaqheqhe bese besishiya nemfambele. (Translation of isiZulu paragraphs follows.)
[The issue of community royalties, which are royalties received by communities from companies mining in their land, was also looked at when we were debating this Bill. We agreed that this matter, as I said earlier on in English, should be provided for in the Mineral and Petroleum Resources Development Act of 2002, and that this Bill does not tamper with this programme.
The only thing that we need to emphasise is for our people to enter into credible agreements with these companies that are mining minerals on their land. They should strive to be shareholders instead of being given a fraction of what they should be getting.
When you listen to the plight of these communities under the community royalties programme, it is clear that these communities are not benefiting as they should. Most of them are given leftovers, whilst the capitalists take the real chunks from the people's grandfathers' land. These fat cats take huge chunks and leave us with absolutely nothing.]
In the spirit of black economic empowerment, we encourage our communities to negotiate for the conversion of these community royalties into meaningful and sustainable equity shareholding rather than their relying, on the meagre royalties that some mining companies give them. We also wish to encourage all stakeholders to be prepared to make the necessary concessions and that the issue of environmental impact is also taken into account.
The issue of the state lease payments also featured quite prominently in the public hearings, particularly from the mining industry's side. It was agreed that since most lease payments to the state were a form of mineral royalties in the absence of a more formal and comprehensive mineral and petroleum royalty regime, these would cease once this one kicks into effect. There will however be exceptional cases where particular arrangements that were unique to those cases will not be affected. Of particular note again here is the historical contractual arrangements between De Beers and the state in the Finsch mine, in which the state is entitled to a 70% undivided share ownership and the lease consideration is not necessarily royalties but payments in lieu of dividends, and therefore must be dealt with as such.
The other one would be the Ingonyama Trust in KwaZulu-Natal, and I would want to believe that these leases would have to be further engaged on, as there was no clear submission from the trust in this regard.
Chairperson, allow me to thank everybody who took part in the processing of this legislation, particularly staff from both the National Treasury and the Department of Minerals and Energy, in both the Portfolio Committees on Finance and Minerals and Energy, and all those who made submissions to the committees, and our committee staff for their administrative support while under tremendous pressure.
UKhongolose uyayeseka yomibili le Mithethosivivinywa. Ngiyabonga. [Ihlombe.] [The ANC supports these two Bills. Thank you. [Applause.]]