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.