Mineral resources counts on provinces
• Department looks to provincial legislatures to give the nod to 56 new changes after Zuma refers draft back to Parliament
The Department of Mineral Resources is relying on the support of provincial legislatures to be able to introduce 56 new amendments to the Mineral Resources and Petroleum Development Amendment Bill, which was referred back to Parliament by President Jacob Zuma at the beginning of 2016.
The Department of Mineral Resources is relying on the support of provincial legislatures to be able to introduce 56 new amendments to the Mineral Resources and Petroleum Development Amendment Bill, which was referred back to Parliament by President Jacob Zuma at the beginning of 2016.
The amendments tackle the concerns of the offshore petroleum industry and deal with carried interest and state participation in ventures.
Whereas the bill adopted by Parliament granted the state a 20% free carried interest in all new exploration and production rights, the department’s proposed amendment is that the 20% carried interest is not free.
The proposals also stipulate that future mining permits will be granted only to majority black-owned South African companies and that the breach of any provision of the mining charter or the housing and living conditions standard would constitute a breach of the act and thus allow the minister to suspend or cancel a mining company’s rights.
It is understood the department is having to use the provincial route to introduce the new amendments because a joint rule of Parliament stipulates that parliamentary committees can tackle only those matters raised by the president in his referral of bills back to the legislature.
This same issue arose with Zuma’s recent referral of the Financial Intelligence Centre Amendment Bill, which some lobby groups wanted to open up for a fuller debate.
Zuma sent the Mineral Resources and Petroleum Development Amendment Bill back to Parliament because of the lack of public consultation with the National Council of Provinces (NCOP), including with the National House of Traditional Leaders. The president was concerned over the constitutionality of the bill’s provisions imposing export restrictions on strategic or designated minerals, which he said could violate international agreements.
Another constitutional concern was the inclusion of the mining charter into the act, elevating its status to that of a law.
The portfolio committee on mineral resources rejected the president’s reservations and sent the bill to the NCOP’s select committee on land and mineral resources, which will get mandates from all the provinces on the bill and the proposed amendments in May.
The select committee itself will not consider the department’s amendments, which will be tackled via the provincial mandates. The select committee believes this process will circumvent the restrictions placed by the joint rules of Parliament on what can be considered in cases of presidential referrals.
Provinces have been briefed by the department and will be holding public hearings on the bill and the proposed amendments. Public hearings have started in KwaZulu-Natal and are due to be held in the Western Cape and Gauteng shortly.
The Legal Resources Centre is contesting the department’s introduction of the new amendments, saying the NCOP could not entertain new amendments within the limited terms defined by Zuma in his referral.
Herbert Smith Freehills partner Peter Leon agreed with this view, saying the department should withdraw the bill and introduce a new one.