REPUBLIC OF SOUTH AFRICA
DIAMONDS AMENDMENT BILL
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(As introduced in the National Assembly as a section 75 Bill; explanatory summary of Bill published in Government Gazette No. of ) (The English text is the official text of the Bill)
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(MINISTER OF MINERALS AND ENERGY)
[B - 2005]
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020205se
GENERAL EXPLANATORY NOTE:
[ ] Words in bold type in square brackets indicate omissions from existing enactments.
___________ Words underlined with a solid line indicate insertions in existing enactments.
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B I L L
To amend the Diamonds Act, 1986, so as to define certain words and expressions and to amend and delete certain definitions; …
BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:—
Amendment of section 1 of the Diamonds Act 56 of 1986, as amended by section 1 of Act 28 of 1988, section 1 of Act 22 of 1989 and section 1 of Act 10 of 1991
1. Section 1 of the Diamonds Act, 1986 is hereby amended—
(a) by the deletion of the definition of "Board";
(b) by the insertion before the definition of "business premises" of the following definition:
" 'beneficiation' means the polishing of a diamond or the setting of a diamond in a tool or in jewellery;";
(c) by the insertion after the definition of "business premises" of the following definition:
" 'Chief Executive Officer' means the Chief Executive Officer of the Trader and Exchange appointed in terms of section 7(1) or the Chief Executive Officer appointed in terms of section 17A(1);"; [Unnecessary – only used in provisions dealing with Trader and Exchange and Regulator].
(d) by the deletion of the definition of "cutter";
(e) by the insertion after the definition of "dealer" of the following definitions:
" 'diamond beneficiation licence' means a licence for the cutting, polishing or setting in tools, or setting in jewellery of an unpolished diamond; [Only used in section 26 – unnecessary to define; can be explained in that section]
'diamond beneficiator' means a person who holds a licence contemplated in section 26(a) or (b);";
(f) by the deletion of the definition of "diamond exchange";
(g) by the insertion before the definition of "diamond powder" of the following definitions:
" 'Diamond Exchange and Export Centre' means a Diamond Exchange and Export Centre contemplated in section 13C(h); [Incorrect reference]
'Diamond Industry' includes any person involved in the buying of, selling of, dealing in, importation of and export of diamonds and production, jewellery making and tool-setting involving diamonds, locally or internationally.";
(h) by the deletion of the definition of "executive officer";
(i) by the insertion after the definition of 'inspector' of the following definition:
" 'Kimberly Process' means the international understanding among participants that was recognised by Resolution 55/56 adopted by the General Assembly of the United Nations on 1 December 2000 and published in Government Notice No. R.1361 of 1 November 2002.";
(j) by the deletion of the definitions of "licence";
(k) by the substitution of the definition of "licensee" of the following definition:
" 'licensee' means a dealer, [cutter, tool-maker] diamond beneficiator or researcher;";
(l) by the insertion before the definition of "Minister" of the following definition:
" 'Mineral and Petroleum Resources Development Act' means the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002);";
(m) by the substitution for the definition of Minister of the following definition:
" 'Minister' means the Minister of Minerals and Energy [Affairs and Public Enterprises];";
(n) by the substitution for the definition of "polished diamond" of the following definition:
" 'polished diamond' means a diamond which has, in accordance with the requisites of its class or form, been subjected to so many processes of polishing that it is in the opinion of the [Board] Regulator a polished diamond;";
(l) by the substitution for the definition of "producer" of the following definition:
" 'producer' means any person entitled to win or recover [remove and dispose of diamonds as contemplated in section 5(3)(c)?] diamonds in terms of sections 17 and 21 of the Mineral and Petroleum Resources Development Act;";
(m) by the substitution for the definition of "registering officer" of the following definition:
" 'registering officer' means any person in the service of the [Board] Regulator or any person referred to in section 13(c) [incorrect reference?] assisting in the administration of a provision of [Chapter VI] this Act;";
(n) by the insertion after the definition of "researcher" of the following definition:
" 'run-of-mine' means the entire unscreened output of a mine;";
(o) by the substitution for the definition of "synthetic diamond" of the following definition:
" 'synthetic diamond' means a diamond [produced] fabricated by any artificial means [of any synthetic, mechanical or chemical process];";
(p) by the insertion after the definition of "this Act" of the following definition:
" 'Trader and Exchange' means the State Diamond Trader and Exchange established by section 3;"; and
(q) by the deletion of the definition of "toolmaker".
Substitution of section 2 of Act 56 of 1986, as substituted by section 2 of Act 10 of 1991
2. The following section is hereby substituted for section 2 of the principal Act:
"Provisions of this Act may be applied in respect of other minerals
2. The Minister may by notice in the Gazette declare that a provision of this Act shall apply in respect of any other substance referred to in the definition "mineral" in section 1 of the [Minerals Act, 1991] Mineral and Petroleum Resources Development Act.".
Insertion of section 2A in Act 56 of 1986
3. The following section is hereby inserted in the principal Act after section 2:
"Consideration of applications
2A. In considering an application for any of the licences or permits provided for in this Act, the Regulator—
(a) must have regard to the promotion of, equitable access to and local beneficiation of the Republic’s diamonds; and
(b) may have regard to the broad based socio-economic empowerment Charter contemplated in section 100 of the Minerals and Petroleum Resources Development Act.".
Substitution of Chapter II of Act 56 of 1986
4. The following Chapter is hereby substituted for Chapter II of the principal Act:
"CHAPTER II
PART 1
THE STATE DIAMOND TRADER AND EXCHANGE
Establishment of State Diamond Trader and Exchange
3. There is hereby established a trader and exchange to be known as the State Diamond Trader and Exchange and which is a juristic person.
Objects of Trader and Exchange
4. The object of the Trader and Exchange is to promote equitable access to and local beneficiation of the Republic’s diamonds.".
Functions of Trader and Exchange
5. (1) The Trader and Exchange shall—
(a) acquire and supply unpolished diamonds to local diamond beneficiators and to licensees;
(b) ensure that unpolished diamonds have been handled in a manner that meets the minimum requirements of the Kimberley Process;
(c) arrange for the provision of insurance cover for itself against any loss, damage, risk or liability which it may suffer or incur;
(d) promote the industry through the necessary research, support and development as deemed necessary from time; and
(e) establish, maintain and expand a client base of diamond beneficiators.
(2) The Trader and Exchange may—
(a) purchase such percentage of the Republic's unpolished diamond production as may be determined by the Minister in the Gazette from time to time;
(b) subject to paragraph (a), exercise the right of first refusal to purchase any run-of-mine;
(c) purchase and sell the total unpolished diamond production from diamond producing mines in which the state has a direct interest to diamond beneficiators;
(d) acquire diamonds from other diamond producing countries; and
(e) enter into any agreement with any person, including the State, for the performance of any particular act or particular work or the rendering of particular services.
Executive committee of Trader and Exchange
6. (1) The Executive Committee of the Trader and Exchange consists of the Chief Executive Officer of the Trader and Exchange and such number of senior officials in the service of the Trader and Exchange as the Chief Executive Officer, in conjunction with the Board, may deem necessary.
(2) The Chief Executive Officer of the Trader and Exchange is the Chairperson of the Executive Committee.
(3) The Executive Committee shall ensure—
(a) performance of the functions of the Trader and Exchange as provided for in the Act; and
(b) that regulations and guidelines are developed and implemented.
Persons in service of Trader and Exchange
7. (1) The Minister shall appoint the Chief Executive Officer of the Trader and Exchange on such conditions of service and at such remuneration and service benefits as the Minister may determine.
(2) The Chief Executive Officer shall be assisted in the performance of his or her functions by—
(a) persons appointed by the Trader and Exchange on such conditions of service and at such remuneration, allowances, bonuses, subsidies, pension and other service benefits as the Trader and Exchange may, after having obtained such professional advice as it may deem fit and with the concurrence of the Minister determine; and
(b) officers or employees placed at the disposal of the Trader and Exchange in terms of section 14(3)(a) of the Public Service Act, 1994 (Proclamation No.103 of 1994)
(3) For the purposes of this Act, an officer or employee referred to in subsection (2)(b) shall be deemed to be a person in the service of the Trader and Exchange.
(4) Whenever the Chief Executive Officer is for any reason unable to perform his or her functions, the Minister may designate a person (any person?) to act as Chief Executive Officer until the Chief Executive Officer is able to resume his or her functions.
Funds of Trader and Exchange
8. (1) The funds of the Trader and Exchange shall consist of money—
(a) appropriated by Parliament in terms of the Public Finance Management Act, 1999(Act No.1 of 1999); and
(b) that may accrue from any other source.
(2) The Trader and Exchange shall utilise its funds to defray any expenses incurred by it in the performance of its functions under this Act, but shall utilise money and other property donated or bequeathed to it in accordance with the conditions of the donation or bequest in question.
(3) The Trader and Exchange shall open an account with any institution registered as a bank in terms of the Banks Act, 1965 (Act No. 23 of 1965), and shall deposit in that account all the money received by it in terms of subsection (1).
(4) The Trader and Exchange may invest such amount of money received in terms of subsection (1)(b) not required for immediate use with any banking institution registered as a bank in terms of the Banks Act, 1965 (Act No. 23 of 1965), as the Minister may determine.
Accounting responsibility
9. (1) The Chief Executive Officer shall be the accounting officer of the Trader and Exchange [PFMA?] and, as such, shall be charged with the responsibility of accounting for moneys received by the Trader and Exchange and payments made by the Trader and Exchange.
(2) The financial year of the Trader and Exchange shall terminate on the 31 March in each year.
(3) The accounting officer shall—
(a) keep records of—
(i) money received or expended by the Trader and Exchange;
(ii) the assets and liabilities of the Trader and Exchange; and
(iii) the financial transactions of the Trader and Exchange; and
(b) prepare annual financial statements showing, with the appropriate particulars—
(i) money received by the Trader and Exchange and expenditure incurred by the Trader and Exchange during such financial year; and
(ii) assets and liabilities of the Trader and Exchange at the end of such financial year.
Establishment of Board of Directors of Trader and Exchange
10. The Minister shall appoint as directors on the Board of Directors of the Trader and Exchange—
(a) a chairperson after consultation with the Trader and Exchange; [doesn't the Board represent the Trader and Exchange?]
(b) two officers of the Department of Minerals and Energy;
(c) two officers of the Department of Trade and Industry nominated by the Minister of Trade and Industry;
(d) two officers of the National Treasury nominated by the Minister of Finance;
(e) one officer from the South African Reserve Bank nominated by the Governor of the South African Reserve Bank;
(f) one member of the South African Police Services nominated by the Minister of Safety and Security;
(g) three other persons determined by the Minister; and
(h) the Chief Executive Officer, who shall serve on the Trader and Exchange by virtue of his or her office.
Term of office of members of Board of Directors of Trader and Exchange
11. (1) A member of the Board of Directors of the Trader and Exchange appointed in terms of section 10 holds office for such period, but not exceeding five years, as the Minister may determine at the time of his or her appointment.
(2) If a member of the Board of Directors of the Trader and Exchange for any reason ceases to hold office the Minister may, subject to section 10, appoint a person in his or her place for the unexpired period of his or her term of office.
(3) A person whose term of office as a member of the Board of Directors of the Trader and Exchange has expired shall be eligible for re-appointment.
Vacating of office by members of Board of Directors of Trader and Exchange
12. A member of the Board of Directors of the Trader and Exchange shall vacate his or her office if he or she—
(a) becomes subject to any disqualification mentioned in this Act;
(b) becomes of unsound mind;
(c) has been absent from more than two consecutive meetings of the Board of Directors of the Trader and Exchange without leave of the chairperson ;
(d) is removed from office by the Minister in the public interest.
Diamond producing mine to offer run-of-mine diamonds to Trader and Exchange
13. (1) Every diamond producing mine with a monthly total production that exceeds 1000 carats run-of-mine shall offer all the diamonds produced in that month to the Trader and Exchange.
(2) (a) The production contemplated in subsection (1) shall be acquired at market related prices from the producers concerned.
(b) Price verification or negotiations shall be done through the single Government Diamond Valuator channel or through regular tender process [What are these things?].
(3) Preferential client on supply of unpolished diamonds will be done in accordance with this Act [What does this mean?].
PART 2
THE SOUTH AFRICAN DIAMOND AND PRECIOUS METAL REGULATOR
Establishment of South African Diamond and Precious Metals Regulator
14. There is hereby established a regulator to be known as the South African Diamond and Precious Metals Regulator and which shall be a juristic person.
Objects of Regulator
15. The objects of the Regulator are to—
(a) promote equitable access to, and local beneficiation of, the Republic’s diamonds and the sound development thereof; and
(b) ensure compliance with the Kimberly Process Certification Scheme.
Functions of Regulator
16. (1) The Regulator shall—
(a) implement, administer and control all matters relating to the purchase, sale, local beneficiation, import and export of diamonds;
(b) develop and implement strategies and guidelines for the strategic issues or matters provided for in this Act;
(c) implement and control all strategies and guidelines;
(d) ensure the performance of the core functions of the Regulator as provided for in this Act;
(e) administer the Kimberley Process Certification ;
(f) provide insurance cover for the Regulator against any loss, damage, risk or liability the Regulator may suffer or incur;
(g) establish a Diamond Exchange and Export Centre; and
(h) in general, perform such acts or establish such structures or legal entities as may be necessary or expedient for the achievement of its objects and the provisions of this Act.
(2) The Regulator may enter into any agreement with any person, including the State, for the performance of any particular act or particular work or the rendering of particular services;
Executive Committee of Regulator
17. (1) The Executive Committee of the Regulator consists of the Chief Executive Officer of the Regulator and such number of senior officials in the service of the Regulator as the Chief Executive Officer, in conjunction with the Regulator, may deem necessary.
(2) The Executive Committee shall ensure—
(a) the performance of the functions of the Regulator as provided for in this Act; and
(b) that regulations and guidelines are developed and implemented.
(3) The Chief Executive Officer is the chairperson of the Executive Committee.
Persons in service of Regulator
17A. (1) The Minister shall appoint the Chief Executive Officer of the Regulator on such conditions of service and at such remuneration and service benefits as the Minister may determine.
(2) The Chief Executive Officer shall be assisted in the performance of his functions by—
(a) persons appointed by the Regulator on such conditions of service and at such remuneration, allowances, bonuses, subsidies, pension and other service benefits as the Regulator, after having obtained such professional advice as it may deem fit and with the concurrence of the Minister, may determine; and
(b) officers or employees placed at the disposal of the Regulator under section 14(3)(a) of the Public Service Act, 1994 (Proclamation No. 103 of 1994).
(3) For the purposes of this Act, an officer or employee referred to in subsection (2)(b) shall be deemed to be a person in the service of the Regulator.
(4) Whenever the Chief Executive Officer is for any reason unable to perform his or her functions, the Minister may designate a person (any person?) to act as Chief Executive Officer until the Chief Executive Officer is able to resume his or her functions.
Funds of Regulator
17B. (1) The funds of the Regulator consist of—
(a) money appropriated by Parliament in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999); and
(b) money that may accrue from any other source.
(2) The Regulator shall utilise its funds to defray the expenses incurred by the Regulator in the performance of its functions under this Act, but shall utilise any money or other property donated or bequeathed to it in accordance with the conditions of the donation or bequest in question.
(3) The Regulator shall open an account with any institution registered as a bank in terms of the Banks Act, 1965 (Act No. 23 of 1965), and shall deposit in that account the moneys received by it in terms of subsection (1).
(4) The Regulator may invest such amount of money received in terms of subsection (1)(b) not required for immediate use any banking institution registered as a bank in terms of the Banks Act, 1965 (Act No. 23 of 1965), as the Minister may determine.
Accounting responsibility
17C. (1) The Chief Executive Officer shall be the accounting officer of the Regulator [PFMA?] and, as such, shall be charged with the responsibility of accounting for money received by the Regulator and payments made by the Regulator.
(2) The financial year of the Regulator shall terminate on the 31 March in each year.
(3) The accounting officer shall—
(a) keep records of—
(i) money received or expended by the Regulator;
(ii) the assets and liabilities of the Regulator; and
(iii) the financial transactions of the Regulator; and
(b) prepare annual financial statements showing, with the appropriate particulars—
(i) money received by the Regulator and expenditure incurred by the Regulator during such financial year; and
(ii) assets and liabilities of the Regulator at the end of such financial year.
Establishment of Board of Directors of Regulator
17D. The Minister shall appoint as directors on the Board of Directors of the Regulator—
(a) a chairperson after consultation with the Regulator; [doesn't the Board represent the Regulator?]
(b) two officers of the Department of Minerals and Energy;
(c) one member of the South African Police Services nominated by the Minister of Safety and Security;
(d) one officer from the South African Reserve Bank appointed by the Governor of the South African Reserve Bank;
(e) three persons from the diamond industry representing producers, beneficiators and jewellery manufacturers;
(f) three other persons determined by the Minister; and
(g) the Chief Executive Officer, who shall serve on the Regulator by virtue of his or her office.
Term of office of members of Board of Directors of Regulator
17E. (1) A member of the Board of Directors of the Regulator appointed in terms of section 17D holds office for such period, but not exceeding five years, as the Minister may determine at the time of his or her appointment.
(2) If a member of the Board of Directors of the Regulator for any reason ceases to hold office the Minister may, subject to section 17D, appoint a person in his or her place for the unexpired period of his or her term of office.
(3) Any person whose term of office as a member of the Board of Directors of the Regulator has expired shall be eligible for re-appointment.
Vacating of office by members of Board of Directors of Regulator
17F. (1) A member of the Board of Directors of the Regulator shall vacate his or her office if he or she—
(a) becomes subject to any disqualification mentioned in this Act;
(b) becomes of unsound mind;
(c) has been absent from more than two consecutive meetings of the Board of Directors of the Regulator without leave of the chairperson; or
(d) is removed from office by the Minister in the public interest.