Zwane: Mining law is constitutional | Fin24

Zwane: Mining law is constitutional

Sep 08 2017 20:46
Liesl Peyper

Cape Town – Mineral Resources Minister Mosebenzi Zwane is confident that amendments to the Mineral and Petroleum Resources Development Act (MPRDA) are in line with the Constitution, and that it will be passed by Parliament by the end of the year.

The MPRDA is the overarching legislation that regulates all other legislation and regulations relating to the mining industry. The controversial Mining Charter, for example, is a set of regulations that fall under the MPRDA. 

"The processing of the Bill is in the hands of the legislature and the Minister is providing all the necessary strategic, political and technical support with the intention of securing the requisite policy, regulatory and legislative certainty for the mining industry," the Department of Mineral Resources said in an emailed response to Fin24. 

The MPRDA, which has been in limbo since President Jacob Zuma sent it back to Parliament in January 2015, is currently before the National Council of Provinces (NCOP) which is considering amendments proposed by a number of stakeholders, including the Department of Mineral Resources.

The Department proposed 57 amendments to the Bill, but these changes were the subject of debate during the last round of public hearings into the bill.

At the hearings the Legal Resource Centre specifically pointed out that the new proposed amendments went beyond the reservations initially raised by Zuma, which rendered the consultation process flawed.

The Centre recommended that the MPRDA Bill be scrapped in its entirety, and that the department start afresh with the drafting process to allow for the DMR’s proposed amendments to be included.

Zwane, however, rejected the notion that his department’s amendments were unconstitutional.

He said the purported introduction of 57 amendments by the department was a “gross misrepresentation of constitutional reality” as they were the result of interactions with other stakeholders. 

"During the Oceans Phakisa, held last year, all critical stakeholders, particularly participants in the oil and gas industry, both onshore and offshore, were invited to make their contributions to unlock the prospects of the blue economy,” Zwane said.

“The additional amendments that were advanced by the department are a direct consequence of the stakeholder consensus that sought to not only provide the necessary stability to unlock the upstream petroleum industry but to accelerate South Africa's drive towards its main objective of energy security, enhance energy independence and significantly improve the state of the nation's balance of payments.”

As a result of the deliberations at the Oceans Phakisa, the department said it would reconsider the free carried-interest in the MPRDA, which would allow government to levy 20% interest on all new exploration and production rights and further participation interest.

Zwane maintained that the additional submissions to the MPRDA cannot be construed as being inconsistent with constitutional provisions.

His view is supported by a legal opinion from Advocate Geoff Budlender, acting on behalf of the Offshore Petroleum Association of South Africa (Opasa), who said the rules of Parliament allow the NCOP to consider amendments proposed by the DMR when such changes are as a result of consultations with stakeholders, and that recommendations emanating from a public participation process cannot be ignored. 

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