Mining bill faces another hurdle

Radical overhaul of SA’s mining law in limbo, as controversial amended bill heads for review by national council of provinces

It will be several more months before the major overhaul of South Africa’s mining law is finalised, making new investment in the sector more or less impossible.

Parliament’s portfolio committee on mineral resources this week had to decide what to do with the controversial Mineral and Petroleum Resources Development Amendment Bill after President Jacob Zuma refused to sign it into law early this year.

The bill contains measures such as strategic minerals and free shares in oil finds that will fundamentally determine what mineral or oil assets are really worth to their private owners.

The strange combination of Zuma’s official objections, however, has left the committee scratching its collective head. The problem is that the president flagged “substantive” and “procedural” issues.

Usually, the president can raise a constitutional point and send a bill back. The parliamentary committee involved can then consider only that specific objection.

By adding procedural objections, however, Zuma is hypothetically allowing the whole bill to be reviewed by the national council of provinces (NCOP). It is not clear in what order things should be done.

Zuma sent the bill back to Parliament after a long process of revisions had already dragged on for more than two years.

On Wednesday, the committee decided to first send the bill to the National House of Traditional Leaders.

Only then would it consider two “substantive” objections made by Zuma with the traditional leaders’ comments. This might be before the end of April.

After that, the possibly revised bill will go to the NCOP, where provincial legislators will have to do proper public consultations. Technically, they have a free hand to demand any changes they see fit.

Optimistically, the whole process could be finalised by the end of June, said mineral resources committee chairperson Sahlulele Luzipo.

“You must understand, this is unprecedented. The joint rules [of Parliament] do not clarify what to do,” said Luzipo.

Two weeks ago, Parliament’s legal adviser Liezel Swartz rubbished Zuma’s two “substantive” objections to the bill, saying he had raised nonexistent constitutional red flags. The president can only send a bill back to Parliament on constitutional grounds.

According to Swartz, the Constitution does not say South Africa cannot break international trade agreements, as Zuma seemingly suggested.

The president was wrong to flag the planned “strategic minerals” system as potentially unconstitutional simply because it contradicted free trade agreements, she argued.

Zuma’s objection was that the system involved quantitative restrictions on export that are prohibited by the General Agreement on Tariffs and Trade – the treaty that created the World Trade Organisation – and the Trade, Development and Cooperation Agreement, which is South Africa’s trade deal with Europe.

Swartz said Zuma was correct that it contradicted the trade agreements, but said this only meant South Africa could be challenged internationally, not constitutionally.

“The country is free to abide by international agreements or not, as no constitutional obligation is created,” the minutes of the committee’s February 18 meeting recorded her as saying.

The president’s other “substantive” objection was also a nonissue, Swartz advised MPs during that meeting.

The president objected to the fact that the elevation of the Mining Charter to the status of a law would be unconstitutional.

The charter is a negotiated document setting the empowerment and social-development targets for the mining industry.

The bill redefines the charter as part of the act and, since the mineral resources minister can change the charter, he can now also change legislation, which is Parliament’s job, Zuma has argued.

Swartz said this sort of delegated “subordinate legislation” had already been dealt with and okayed by the Constitutional Court and would “endure a constitutional challenge”.

What is very likely unconstitutional is the way the bill was rushed through the NCOP in March last year after far-reaching changes were made at the last minute.

This was another issue Zuma flagged.

According to Swartz, Zuma was right to say the bill should have gone through the National House of Traditional Leaders because of the way in which it affected land rights.

The bill has been in the works since December 2012 and was completely redrafted in 2013.

In March last year, the most contentious parts were changed at the last minute after a compromise was reached with the Chamber of Mines regarding key provisions.

After that, though, the NCOP was given just a few days to review the bill and get public comment on it.

The bill that ultimately reached the NCOP was “substantially different” from the original, Swartz told MPs during the February 18 meeting.

There had been no “meaningful opportunity” for public participation at the NCOP level, she said.

The NCOP had, in effect, two weeks to process it in March last year. In most cases the best it could do was one day of public consultations organised at extremely short notice.

The Western Cape voted against it while two ANC-led provinces abstained and six voted for the bill – which is how it ended up on Zuma’s desk last year.

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