CHAMBER OF MINES OF SOUTH AFRICA

COMMENTS TO THE PARLIAMENTARY PORTFOLIO

COMMITTEE ON MINERALS AND ENERGY

ON THE

MINERAL AND PETROLEUM RESOURCES DEVELOPMENT AMENDMENT BILL [B10-2007]

ENVIRONMENTAL PROVISIONS (1)

Alignment to NEMA EIA draft Regulations

Mining remains a “listed activity”

MPRDA to be the primary legislation regulating environmental management in

the mining industry

One EIA process preferred

Renewal of environmental authorisation

-2-

ENVIRONMENTAL PROVISIONS (2)

Financial provision

- Options

- Trust funds

- Concurrent vs final rehabilitation

- Premature closure vs planned closure

REMDEC

- Time frames

Closure certificate

- Sign off

- Administrative bottlenecks

-3-

GENERAL ISSUES

1. NO DISPOSAL OF INTEREST IN A COMPANY OR CLOSE CORPORATION WITHOUT THE MINISTER’S CONSENT Clause 7(a): s11

EXISTING PROVISIONS

s11(1): controlling interest

PROPOSED IN BILL

Clause 7(a): any interest

EXAMPLE

Disposal of 15% or 26%

THE ISSUE

- Administrative burden

- Criteria for consent

CHAMBER SUBMISSION

Need to devise a materiality threshold

-4-

2. NON-ACCEPTANCE OF APPLICATIONS IF ANOTHER PERSON HOLDS A RIGHT,

PERMIT OR PERMISSION FOR ANY MINERAL Clauses 11(a), 17(a), 22(b), 59(a) & 63(a) as

applied to ss16(2)(b), 22(2)(b) & 83(2)(b) respectively

EXISTING PROVISIONS

s16(2)(b) etc: accept If no other right for the same mineral is held

PROPOSED IN BILL

Clause 11(a) etc: accept if no other right for any mineral is held

EXAMPLE

Chrome and platinum in same or separate seams

THE ISSUE

Timing: should be resolved not on acceptance/rejection but on

grant/refusal

CHAMBER SUBMISSION

Retain existing reference to same mineral

-5-

3. REQUEST (OPPORTUNITY) TO APPLICANT TO COMPLY PRIOR TO REJECTION OF AND DECISION ON APPLICATIONS

Clauses 55(c), 11(b), 17(b), 22(d), 59(c) & 63(c) as applied to ss16(3), 22(3), 27(4), 79(3) & 83(3) respectively

INTRODUCTION

s6(1) MPRDA, s3 PAJA, s33 Constitution: lawfulness, reasonableness, procedural fairness

EXISTING PROVISIONS

ss16(3) and 17(3) etc: no opportunity to remedy prior to rejection or refusal

PROPOSED IN BILL

Clause 55(c) but not clause 11(b) etc: will allow opportunity to remedy

-6-

3. REQUEST (OPPORTUNITY) TO APPLICANT TO COMPLY PRIOR TO REJECTION OF AND DECISION ON APPLICATIONS (cont…)Clauses 11(b), 17(b), 22(d), 59(c) & 63(c) as applied to ss16(3), 22(3), 27(4), 79(3) & 83(3) respectively

EXAMPLE

A page missing from application

THE ISSUE

- effect on ranking

- fair and reasonable procedure

CHAMBER SUBMISSION

Apply clause 55(c) arrangement throughout: afford opportunity to

remedy prior to all rejections and refusals

-7-

4. ACCEPTANCE OF APPLICATIONS IF THERE IS A PRIOR APPLICATION Clauses 11(c) & 22(e) as applied to ss16(4)(b) & 27(5)(b) respectively

EXISTING PROVISIONS

s16(4) etc: after application accepted, applicant notified to consult and

to submit environmental management programme

PROPOSED IN BILL

Clause 11(c) etc: retain existing provisions but amend in regard to environmental authorisations

EXAMPLE

Five successive applications

THE ISSUE

Potential unnecessary duplication in effort and cost

CHAMBER SUBMISSION

Subsequent applicants not be obliged to consult or lodge environmental authorisation until prior applications have been refused

-8-

5. RETENTION OF NEED FOR NOTICE BY APPLICANT TO ANY HOLDER OF A

RIGHTClauses 11(c) & 22(e) as applied to ss16(4)(b) & 27(5)(b) respectively

EXISTING PROVISIONS

s16(4)(b) etc: applicant must consult with landowners, occupiers and other affected parties

PROPOSED IN BILL

Clauses 11(c) and 22(e): no consultation with other affected parties

EXAMPLE

Holders of rights under the Act

THE ISSUE

s6(1) MPRDA, s3 PAJA, s33 Constitution: right to be heard

CHAMBER SUBMISSION

Retain consultation with holders of rights

-9-

6. EMPOWERMENT REQUIREMENT FOR PROSPECTING RIGHTS FOR

PRESCRIBED MINERALSClause 12(c): new s17(1)(f)

EXISTING PROVISIONS

s17(4): Minister may request applicant to give effect to empowerment

objectives by reference to mineral type and extent of project

PROPOSED IN BILL

Clause 12(c): In respect of prescribed minerals, applicant must have given effect to empowerment objectives

THE ISSUE

- Proposed project: no flexibility

- Prescribed minerals?

CHAMBER SUBMISSION

- Allow possibility of exemption

- List minerals in Act-10-

7. EXCLUSIONARY ACTS, FAIR COMPETITION, AND CONCENTRATION OF RIGHTS TO THE RELEVANT MINERAL:

Clauses 12(d) and 27: ss1, 17(2)(b) and 33(c)

Exclusionary Act, Fair competition, Concentration, generally

EXISTING PROVISIONS

ss17(2)(b) and 33(c): refusal of prospecting rights and retention permits

THE ISSUE

Constitutionality

CHAMBER SUBMISSION

- Delete definition of exclusionary act

- Refer to unduly impeding objects in s2

- Delete concept of concentration

-11-

7. EXCLUSIONARY ACTS, FAIR COMPETITION, AND CONCENTRATION OF RIGHTS TO THE RELEVANT MINERAL:

Clauses 12(d) and 27: ss1, 17(2)(b) and 33(c) (cont…)

Concentration of rights

EXISTING PROVISIONS

ss17(2)(b)(iii): concentration of mineral resources

PROPOSED IN BILL

Clauses 12(d) and 27: concentration of rights granted

EXAMPLE

- workable proposition

THE ISSUE

Concentration of rights not a suitable criterion

CHAMBER SUBMISSION

- Retain reference to mineral resources

- Refer to the mineral in question-12-

8. CONFIRMATION FROM COUNCIL FOR GEOSCIENCE ON RENEWALS OF

PROSPECTING RIGHTSClause 13(b): new s18(2)(e)

EXISTING PROVISIONS

s18(2): Written application for renewal requires submission of particulars

within control of applicant

PROPOSED IN BILL

Clause 13(b): Requires confirmation by Council for Geoscience: outside control of applicant

EXAMPLE

Renewal on last day

THE ISSUE

Renewal must be lodged without confirmation from third party: continuity of tenure

CHAMBER SUBMISSION

Require confirmation before grant of rather than on application for renewal

-13-

9. MINISTERIAL PERMISSION TO RECOVER AND DISPOSE OF DIAMONDS FOUND DURING PROSPECTING Clause 15: s20(2)

EXISTING PROVISIONS

s20(2): Ministerial permission necessary for prospector to remove bulk samples of minerals

PROPOSED IN BILL

Clause 15: Ministerial permission necessary for prospector to remove

any diamonds during prospecting

THE ISSUE

- Not clear when and how permission must be sought

- Risk of mining in the guise of prospecting

CHAMBER SUBMISSION

- Provide for permission in Prospecting Right

- Permission not to extend beyond removal of bulk samples of

diamonds -14-

10. BENEFICIATIONClauses 1(a) and 21: s26

INTRODUCTION

Mining # manufacturing EXISTING PROVISIONS

s26: beneficiation generally PROPOSED IN BILL

Clause 21(b): prescribed levels of beneficiation

EXAMPLE

- Obligations beyond capacity

- Certain industries, e.g. diamond industry, already regulated

THE ISSUE

- Harm to mining sector and no benefit to manufacturing sector

- Criterion for applications for mining right

CHAMBER SUBMISSION

- Delete final stage of beneficiation in definition in clause 1(a)

- Delete clause 21(b): no prescribed levels of beneficiation

-15-

11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS

Clause 41: s49(1)

s49(1): Representations

EXISTING PROVISIONS

s49(1): representations from stakeholders

PROPOSED IN BILL

Clause 41: no representations from stakeholders

EXAMPLE

Grant of uranium rights to be prohibited, yet no representations from uranium mining industry

THE ISSUE

s6(1) MPRDA, s3 PAJA, s33 Constitution: lawfulness, reasonableness, procedural fairness

CHAMBER SUBMISSION

Retain invitation for representations from stakeholders

-16-

11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS

Clause 41: s49(1) (cont…)

s49(1): Strategic Minerals

EXISTING PROVISIONS

s49(1): reference to national interest and promotion of sustainable

development

PROPOSED IN BILL

Clause 41: add reference to strategic nature of mineral

THE ISSUE

- Meaning of “strategic”

- Broad discretionary powers

CHAMBER SUBMISSION

- Define “strategic”

- Provide for Parliamentary supervision

-17-

11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS

Clause 41: s49(1) (cont…)s49(4) EXISTING PROVISIONS

ss16(6) and 22(5): invitations for applications

PROPOSED IN BILL

Clause 41(b): invitations for applications on terms and conditions determined by Minister

EXAMPLE

Totally different terms and conditions

THE ISSUE

- Overriding discretion

- Power for Minister to legislate

- Inequality of terms and conditions

CHAMBER SUBMISSION

- Delete the proposed provision or at least the reference to terms

and conditions

- Provide for Parliamentary supervision -18-

11. PROHIBITION OR RESTRICTION OF GRANT OF RIGHTS IN RESPECT OF STRATEGIC MINERALS AND INVITATIONS FOR APPLICATIONS

Clause 41: s49(1) (cont…)

s49(2)

THE ISSUE

Adverse effect on security and continuity of tenure of holders of existing rights: renewals and higher rights

CHAMBER SUBMISSION

Amend s49(2) to preserve rights of existing holders

-19-

12. CURTAILMENT AFFECTING EMPLOYMENT

Clause 42:s52

EXISTING PROVISIONS

- Profit to revenue ratio less than 6% for 12 months (s52(1)(a))

- Retrenchment of 10% or more than 500 employees within twelve

months (s52(1)(b))

s52(1)(a): Profit to Revenue Ratio

PROPOSED IN BILL

Clause 42: 3 months

THE ISSUE

- flow of notices

- external factors

CHAMBER SUBMISSION

Retain reference to 12 months

-20-

12. CURTAILMENT AFFECTING EMPLOYMENT

Clause 42:s52 (cont…)

s52(1)(b): Retrenchments

PROPOSED IN BILL

Clause 42: labour force likely to be retrenched

THE ISSUE

Onerous

CHAMBER SUBMISSION

Retain existing provision

-21-

13. INTERNAL APPEALS FROM DECISIONS OF DELEGATESClause 69(a): s96(1)

s96(1) EXISTING PROVISIONS

s96(1): no reference to appeals from delegates

PROPOSED IN BILL

Clause 69(a): appeals from delegates

EXAMPLE

Types of delegation:

- deconcentration: no appeal: MPRDA

- deconcentration: appeal

THE ISSUE

- appeal to DG, thence to Minister, thence judicial review: costly,

protracted, contrary to objects of Act

- applications to court to compel or to exempt

- extensive delegations of powers

CHAMBER SUBMISSION

Delete appeals from delegates and provide the opposite, namely no

appeals from delegates-22-

13. INTERNAL APPEALS FROM DECISIONS OF DELEGATESClause 69(a): s96(1) (cont…)

s96(2)

EXISTING PROVISIONS

s96(2): appeals do not suspend decisions

PROPOSED IN BILL

Clause 69(b): appeals to suspend subsequent applications

THE ISSUE

Judicial reviews also to suspend subsequent applications

EXAMPLE

Judicial review instituted but thereafter subsequent application granted

CHAMBER SUBMISSION

Expand s69(2)(b) also to provide that judicial reviews suspend subsequent applications

-23-

14. ALIGNMENT OF DEFINITION OF HISTORICALLY DISADVANTED PERSONClause 1(j): s1 and para 2 of Mining Charter

EXISTING PROVISIONS

- s1: “historically disadvantaged person”

- Mining Charter: “Historically Disadvantaged South Africans”

PROPOSED IN BILL

Amendment in regard to juristic persons

THE ISSUE

Lack of uniformity

CHAMBER SUBMISSION

Change definition in s1 to be a definition of historically disadvantaged

South Africans

-24-

15. PROPOSED NEW TRANSITIONAL PROVISION

Clause 89: Schedule II

EXISTING PROVISIONS

Schedule II: transitional provisions from old system to MPRDA

PROPOSED IN BILL

Clause 89: No transitional provisions from MPRDA to MPRDA as amended by Bill

EXAMPLE

- Appeals and reviews

- Pending applications for conversion of old order mining rights; undertaking or documentary proof?

- Existing beneficiation overseas: ministerial approval?

-25-

15. PROPOSED NEW TRANSITIONAL PROVISION (cont…)

EXAMPLE (cont.)

- Existing approved environmental management programmes to be regarded as environmental authorisations?

- Pending applications for approval of environmental management

programmes: old or new rules?

THE ISSUE AND THE CHAMBER SUBMISSION

- Transitional provision that anything done or acquired under

unamended MPRDA is deemed validly done or acquired under amended MPRDA: compare item 10(1) Sch II

- Transitional provision that pending applications be adjudicated under unamended MPRDA provisions:

compare item 3 of Sch II-26-