The Select Committee on Economic and Foreign Affairs, having considered the subject of the Mineral and Petroleum Resources Development Bill [B 15B - 2002] (National Assembly - sec 75), referred to it, reports the Bill with proposed amendments, as follows:

SCHEDULE II

1. On page 53, in the second line of item 12(1), to omit "Schedule" and to substitute "Act".

2. On page 53, in item 12(4), to omit "within five years from the date of commencement of this Act" and to substitute "in the prescribed manner".

The Committee further reports as follows:

A. Committee Process

The Bill was introduced in the National Assembly on 19 April 2002. The Committee and the Portfolio Committee on Minerals and Energy of the National Assembly (the Portfolio Committee) received extensive briefings on the Bill from the Department of Minerals and Energy, both before and after its introduction in the National Assembly.

The Committee, jointly with the Portfolio Committee, then proceeded to advertise for public comment on the bill. A large number of submissions were received (a list of submissions received is attached as addendum A). Based on these submissions the Committee requested certain organisations and individuals to present oral evidence before it during the public hearings on the Bill. The public hearings were held at Parliament from 4 to 11 June.

The Committee, jointly with the Portfolio Committee, commenced its deliberations on the Bill on 12 June and has worked long hours together with the Department and the State Law Advisers in order to process the Bill. During these deliberations it became evident that due to the extensive nature of the amendments being envisaged it would be feasible to present to Parliament a redrafted bill.

In addition the Committees also conducted provincial public hearings from 8 to 9 June. Reports on these public hearings are detailed below.

B. Provincial Public Hearings

1. Northern Cape, Springbok

Mr M Moosa from the NCOP and Prof I Mohamed and Ms E Ngaleka of the National Assembly, accompanied by Ms F Sotenjwa (Committee Secretary), attended the public hearings in Springbok. The following organisations were in attendance:

* Nama Khoi District Municipality
* Pula Transformation Committee
* Namakhoi Ward Committee
* Richtersveld Municipality
* Richtersveld Transformation Committee
* Nama Khoi Diamond Fund Trust
* Richtersveld CPA
* Alexkor
* Swanson Enterprise
* Nama Khoi Klein Myn
* Groenhoekies Myn
* Black Mountain
* Trans Hex Group
* SAPD
* Provincial Department of Minerals and Energy

The delegation also received a written submission from Mr Niewoudt from the Pula Transformation Committee.

Mr B van Wyk explained the background of the Bill and its objectives. The three delegates from Parliament gave a detailed briefing of the Bill (clause by clause) to the audience. They also explained extensively the difference between prospecting rights, mining rights and mining permits, which seemed not to be clear to the communities. It was explained that the Bill intends to bring the small and big companies to work together, as well as how this should be done.

The following concerns from the communities of the region were noted:

(a) General concern from municipalities

The key concern from representatives of municipalities of the region was the benefit of municipalities from this law. The small miners indicated that the Bill lacks the financial provision for the government to support the small miners to run their mines. Also, the State should indicate the criteria it will use to differentiate between the small and the big mine. It was noted that the small miners were concerned about whether the government would make suggestions when small and big miners enter into joint ventures contracts, and about how the government would monitor corruption in those contracts. The communities felt that workers should be the shareholders in companies. The government should assist the communities of Namaqualand to add value to many different minerals available in the region.

(b) Clause 21 - application for renewal of mining right

The concern from small miners was, if the first miner mines and rehabilitates and the second miner applies for the mining right for the same mine, whether the State would consider granting the permit to the second applicant.

(c) Clause 24 - application for, issuing and duration of mining permit

The communities felt that the two-year period of the mining permit that the Bill makes provision for, is too short. Due to funding problems the small miners would not have prospered enough within two years.

The community of Namaqualand showed an interest to support the Bill.

2. Limpopo Province, Mankweng

Public hearings scheduled to take place in Mankweng on Saturday, 8 June 2002, did not materialise. It was found that communication between Parliament and the Provincial Legislature and between the Legislature and stakeholders were poor. Traditional leaders and leaders of civil society were not consulted. In addition, there was no feedback from the stakeholders as to whether they would be attending the hearings or not, and publicity in the media was not sufficient.

The delegation was deeply concerned by non-attendance of the Provincial Legislature's committee members, though the matter was communicated to the provincial chairperson and to the provincial Speaker. Provinces should note that although this piece of legislation is classified as a national competence in terms of section 75 of the Constitution, the implications still have a direct bearing on provinces.

The delegation also noted that conducting public hearings on a week-end is problematic for a number of reasons. It was also clear to the delegation that Mankweng was not a strategic place for hearings.

The delegation recommended that the hearings for the Limpopo Province be rescheduled for a later date and that the Legislature should identify two or three venues at a time or Pietersburg. Furthermore, the day for hearings should be a normal working day. The Regional Office of the Department of Minerals and Energy should also be engaged more effectively in administrative and support areas. The House of Traditional leaders in the province should also be directly consulted.

3. North West and Free State

The delegation consisted of Mr M Goniwe (Chairperson), Mr J Nash, Mr S K Louw, Ms N Cindi, Ms B Tinto, Mrs M M Ramakaba-Leseia and Mr S Mongwaketse of the National Assembly and Mr Z Kolweni of the National Council of Provinces. The delegation was accompanied by Ms N Hlasa (Committee Secretary).

Public hearings in North West were held on 8 June and in the Free State on 9 June 2002. These hearings were advertised both nationally and locally in newspapers and on radio. In addition, an invitation was also extended to the provincial governments as well as to the relevant provincial portfolio committees, to attend the hearings and to give their views on the Bill, if they deemed it necessary.

The following persons made oral presentations during the public hearings:

North West

* Bantom Digging W/Stad
* Itireleng Small Diggers Association
* Forever Diamond W/Stad
* Thapelo Korai
* Manyeli Diamond Mining CC
* SAWIMA
* Natalia Tsietso
* Ubuntu Development Consol
* Mogopa Youth Commission
* Mogopa Trust

Free State

* NUM
* Harmony Gold Mine (Me Malaola)
* COSATU Welkom (Teleko Maloka)
* Z A Twala
* Gold Fields Free State (MK Jolly)
* Oupa Khoabane (Premier's Office)
* Molapo Qhobela
* Lerato Lengau
* Branshish Brandy
* ANC Elijah Baray Branch
* Matjhabeng Municipality

The Committee also received the following written submissions:

* Manyedi Diamond Mining & Associates cc
* Simon Maroga

The organisations and members of the public who were at the public hearing recommended as follows:

* The Bill should also include a timeframe of issuing of licences

* Protect the rights of women in the mining business

* Educational capacity-building

* Health and safety of workers

* "Retrenchment Policy" - the number be reduced from 500 to maximum 200

* More clarity required on "Joint Venture", (Clear mechanism on how it should work and how people will be protected)

* "Social Plan" - a notice of at least 24 months must be given to implement the social plan. This requirement must be in the terms of reference

* "Geological Report" should be made available before signing contracts

* "Ownership" - are people not going to loose their lands?

* The bill must include more environmental issues

* Contractors should be monitored in terms of LRA and BCE

* Risk Management Programmes be developed and properly implemented

With regard to definitions:

* "Employee" should be the same as the definition in the Mining Act

* "Historically disadvantaged" should specifically mention women

* "Development" - the host towns should be developing as part of Social Plan

* "Mining area" should be clearly defined in the bill

The following concerns were also raised with the delegation:

* They received invitations to the public hearing very late and as a result they did not have enough time to go through the Bill

* The approach to the hearing in future should be that participants be grouped into three different categories: individuals, community and co-operations

* After the government has taken ownership, it must not privatise the mining industry

* The security fee is too high

Apart from all the recommendations and concerns raised, organisations and members of the public were very happy that at long last the government is going to take control of all resources of this country and therefore the wealth will be distributed equitably.

C. Majority Party view

The ANC fully supports the Bill, in the belief that it is wholly consistent with the policies of the current government, as well as in the best interests of the country as a whole.

The ANC views the Bill as a milestone in the process of transforming the economy in order to undo the destructive legacy of apartheid. Mining and related industries still form the basis of the South African economy. Any piece of legislation which attempts, as the Bill does, to significantly change the ownership and control of such a sector, will arouse significant public controversy and opposition, especially from established players. This Bill has done so, and sharply divergent views have characterised the extensive public hearings and deliberations. Nevertheless, the ANC regards the process of deliberation on the Bill as thorough and in keeping with the exercise of the duties of Parliament.

During the public hearings, various alarming allegations were raised against the Bill, including unconstitutionality, violation of bilateral and multilateral trade agreements, and undermining security of tenure. The ANC has carefully considered these potential pitfalls in the Bill, and is of the opinion that these are without substance. Where possible, amendments were made to the Bill to accommodate substantive stakeholder concerns, particularly with respect to rural communities which currently own mineral rights, and the inclusion of a labour component in the social plan. Other amendments were made to tighten up certain regulatory aspects of the Bill, and to lower barriers to entry. The fundamental principles of the Bill were not compromised in this process.

D. Minority views

1. Democratic Party

The Democratic Party cannot support this Report.

Firstly, it believes that the process for passing the Bill in the Committee has been rushed and totally inadequate contemplation has been given to the 80-odd representations to Parliament on the Bill. While some of the representations went to the principle of the Bill, many were constructive suggestions which addressed the structure and coherency of the Bill.

Secondly, areas of the Bill which have not adequately been addressed, are the following:

* The Bill's direct assault on the property rights clause of the Constitution

* Security of tenure

* The Minister's discretion

* Lack of appeal to courts

* Smooth transition from old order rights and new order rights

* Beneficiation

It must be emphasised that the Democratic Party is supportive of the broad empowerment and social objectives of the Bill, but believes that the delicate balance between these objectives and the need for the continued investment into the industry has not been achieved.

2. United Democratic Movement

The UDM supports the Bill in principle, and recognises that the Bill is in line with the transformation of the mining and petroleum industry. The UDM further recognises that the objects of the Bill are internationally accepted and that the Bill seeks to address the inequalities and imbalances of the past and to promote equitable access to the nation's mineral wealth to all people in South Africa. There is no doubt that the Bill seeks to promote economic growth and development in South Africa.

The UDM's concerns center around the following:

(a) Expansion of opportunities for previously disadvantaged persons

The UDM finds it irreconciliable that some previously disadvantaged communities or persons to whom opportunities are supposed to be expanded, are in terms of the Bill going to be dispossessed of their mineral and surface rights. The Bill does not give recognition to the rights in land, inclusive of mineral rights, of the communities who have occupied and developed their land for several generations and centuries, e.g. the Bafokeng and Mphahlele tribes.

(b) Land surface rights

Black communities were harassed, tortured and their leaders detained and dispossessed of their land by both the colonial and apartheid regimes. They were made aliens in the land of their birth. Black South Africans will never forget apartheid's forceful removals, which were intended to deprive them of their ancestral land, e.g. King Makgoba, Chief Letsoalo, King Sekhukhune, Matoks communities and Chief Machaka and Chief Ramokgopa, to name a few. It will be unfortunate if black communities will still find themselves subjected to the above evils in terms of clauses 50, 51 and 52 of the Bill. The UDM believes and proposes that the provisions of clause 50(1) should not apply to previously disadvantaged people, in particular those who were affected by the obnoxious laws of forceful removals by the colonial and apartheid regimes. Alternatively a clause could be inserted which will provide that previously disadvantaged people will not be subjected to forceful removals.

The UDM proposes further that communities which own land or who are occupiers of land where prospecting and mining operations are to be conducted, should not be affected by the provisions of clause 51(1) and (2). The communities should instead be assisted to obtain prospecting and mining rights, while the State remains the custodian of the nation's mineral rights. The Minister's powers to expropriate in the present format of the Bill will undoubtedly result in confrontation and forceful removal of a large number of communities, as was the case during the dark days of the apartheid regime. The UDM agrees with the Legal Resource Centre (LRC) that one of the primary purposes underlying the enactment of sections 25(6) to 25(8) of the Constitution is the need to redress the injustices flowing from the failure of the colonial and apartheid regimes to afford recognition and dignity to land rights held in terms of indigenous law. It further agrees with the LRC that the Land Restitution Act gives effect to the constitutional requirement (i.e. section 25(7) of the Constitution) to provide either restitution or equitable redress to people or communities dispossessed of their land after 19 June 1913 as a result of racially discriminatory laws and practices of the past. The Minister for Agriculture and Land Affairs is on course in implementing this constitutional requirement. We strongly believe that the provisions of sections 50, 51 and 52 of the Bill will defeat the object of land restitutions.

(c) Constitutionality of Bill

The UDM agrees that the Constitutional Court in one of its previous judgments found that it was extremely rare to make mention of mineral rights within a property clause in some other Constitutions, and that it could certainly not be said to be a universally accepted fundamental right. In case of Lebowa Mineral Trust Beneficiaries Forum vs. President of South Africa, the ruling by Judge J Daniels was based on the fact that mineral rights were not protected by section 25 of the Constitution. The UDM believes, however, that Judge J Daniels based, with all humility, his finding on a misunderstanding of the previous judgment of the Constitutional Court. It is true that the Constitutional Court never found that the constitutional drafters did not intend to protect mineral rights in section 25.

The UDM's information is that the Lebowa Mineral Trust Beneficiaries Forum still contend strongly that section 25(4) of the Constitution does not restrict the concept of property to land only, but that whatever the wide scope of the constitutional meaning of property may be, it would include the real rights in respect of land. It is for this reason that the Lebowa Mineral Trust Beneficiaries Forum is preparing to test the constitutionality of the Abolition of the Lebowa Mineral Trust Act in the Constitutional Court. The UDM believes that a land-owner remains owner until such time as the mineral is severed from the earth.

(d) Royalties

The UDM supports the view that provision for payment of royalties should be made in the money bill, and proposes consequently that both the Minerals and Petroleum Resources Bill and the money bill be considered by the National Assembly concommittantly. The UDM proposes, in conclusion, that royalties should be paid to communities in whose areas mining takes place.

(e) Transitional arrangements

The UDM's area of concern in this regard is security of tenure over existing prospecting and mining and mineral rights, existing agreements between mining and exploration companies and holders of "old order" rights, and compensation for foreign investments made into South African minerals industry. The UDM's main concern is that ambiguity and uncertainty which may exist upon passage of the Bill may scare foreign investors and thus defeat the objects of the Bill.

The UDM suggest therefore, in conclusion, that the Bill be sent to the Constitutional Court for concurrence before it is promulgated.

E. Conclusion

The Committee wishes to express its appreciation to all those stakeholders who made submissions to and interacted with the Committee during its deliberations on the Bill.


Addendum A - List of Submissions Received (71)

NO NAME

[A] MATTEW LOTTER
SA DIAMOND PRODUCERS
ORGANISATION

[B] PETER MEAKIN
AIAVSA VALUER

[C] J KATZEFF
LIME SALES LTD

[D] L V READ
EXICO

[E] POST MOLOTO
MINERAL RIGHTS ASSOCIATION OF
INDIGENOUS PEOPLE IN SA

[F] ANTON VON BELOW

[G-G1] FOREIGN INVESTORS
PROSPECTING & MINING FORUM SA (A SAAD)

[H] RICHARDS BAY MINERALS

[I] KELGRAN AFRICA & MARLIN CORPORATION

[J,J3] NEW DIAMOND CORPORATION (NDC)
[J1] NAKA

[K] RIO TINTO

[L] PLACER DOME SA

[M-M1] TOTAL EXPLORATION SA (PTY) LIMITED

[N] FUEL RETAILERS ASSOCIATION OF SA

[O] JOHN HANDLEY

[P] ANDREAS SEEPI

[Q] BRINK, BONSMA & DE BRUYN

[R] M ROSENBERG ATTORNEYS

[S] NAMAQUALAND TRANSFORMATION COMMITTEES

[T-T3] PETROLEUM AGENCY SA

[U] PROSPECTORS & DEVELOPERS ASSOCIATION
OF CANADA (PDAC)

[V] BHP BILLITON

[W-W1] AGRISA

[X-X3] LEGAL RESOURCES CENTRE

[Y] WERKSMANS ATTORNEYS

[Z] CHAMBER OF MINES

[AA-AA1] ANGLO AMERICAN PLATINUM CORPORATION LTD

[BB] RUSTENBERG PLATINUM MINES LTD

[CC] POTGIETERSRUST PLATINUMS LTD

[DD] LEBOWA PLATINUM MINES LTD

[EE-EE4] DE BEERS

[FF] SAMREC (WEBBER, WENTZEL, BOWENS)

[GG] MAROTA MOHLALETSE TRIBAL AUTHORITY

[HH] AFC LIMITED

[II] CHIEF REGISTRAR OF DEEDS

[JJ] MICHAEL MARTINSON

[KK] PIONEER NATURAL RESOURCES SA

[LL] FOREST EXPLORATION INTERNATIONAL
(SA) (PTY) LTD

[MM] ANGLOGOLD LIMITED

[NN] AQUARIUS PLATINUM

[OO] RANGOLD & EXPLORATION

[PP] MINE HEALTH & SAFETY COUNCIL

[QQ] NORTON ROSE

[RR] ROYAL BAFOKENG NATION

[SS] ASIA MINERALS SA

[TT] JACOBA LANGLEY

[UU] FREE MARKET FOUNDATION

[VV-VV1] IMPALA PLATINUM HOLDINGS

[WW] J SCHEEPERS

[XX] F J KRUGER & G LEVIN

[YY] ENF ENVIRONMENTAL LAW DEPARTMENT

[ZZ-ZZ3] OFFSHORE PETROLEUM ASSOCIATION OF SA (OPASA)

[AAA] LISA PLIT

[BBB] ANGLO AMERICAN

[CCC] HAROLD MOTAUNG (AFICAN MINERALS ASSOCIATION)

[DDD] DIAMOND DEVELOPMENT GROUP

[EEE] SA MINING DEVELOPMENT ASSOCIATION

[FFF] RIGGERS DIGGERS MINING & EXPLORATION CO

[GGG] MMAKAU MINING

[HHH] BAKGATLA-BA-KGAFELA

[III] BAKWENA BA MOGOPA

[JJJ] MIKE BALL

[KKK] ADV BHEKI NDLOVU

[LLL] GEORGE KHUNOU

[MMM] PAT MKHIZE ATTORNEYS

[NNN-
NNN1] WEBBER, WENTZEL, BOWENS

[OOO] COSATU/NUM

[PPP] PROF THOMAS WALDE

[QQQ] CNR

[RRR] KODUMELA MINING CONSORTIUM

[SSS] PAUL JOURDAN