1. MPRDA Amendment Bill [B15D-2013]
Dr Anthea Jeffery, IRR
NCOP Select Committee
Parliament, 28 June 2017

2. About the IRR
A non-profit organisation formed in 1929 to oppose racial discrimination and to promote racial goodwill and non-racial democracy
Objects now: to promote democracy, development, human rights
It’s mainly a think tank covering all key policy areas, but it also runs a bursary programme
Key aim to help expand opportunities for poor

3. Public involvement in law-making
Constitution requires provincial legislatures, plus NCOP, to ‘facilitate public involvement in their legislative processes’
They must act ‘reasonably’ and give the public a ‘meaningful opportunity to be heard’
Must give adequate notice re submissions/ hearings, help ‘build awareness’ of what a bill proposes, allow people time to ‘study the bill’

4. NCOP has failed to comply
Notice period for submissions was too short
Bill is 47 pages long and very complex
Has to be read together with the MPRDA itself, which is even longer, more complicated
Description of the Bill provided is short, often misleading, and difficult to understand
Silent on the unconstitutionality of the Bill
Silent on the Bill’s likely economic damage

5. No notice of 57 further changes
President’s referral mandate does not extend to DMR’s Table of Proposed Amendments, with some 57 further changes
NCOP notice does not refer to these changes
Gauteng notice did not either (presumably the same in other provinces)
NCOP/provincial legislatures have failed to facilitate public involvement in these changes

6. Gauteng process fatally flawed
Notice of hearing was too short (7 days)
Bill handed out at door, but not MPRDA itself
Table handed out at door, no time to study
Chairman of portfolio committee admitted many failures, blamed these on ‘short time frame’ allowed
ConCourt: legislative timetables cannot trump constitutional rights

7. President’s constitutional concerns
President Jacob Zuma decided not to sign an earlier, virtually identical, version of the Bill
Unconstitutional to make the mining charter part of the MPRDA and still give the mining minister the power to amend the charter
Only Parliament has the power to amend a statute; a minister cannot do so
It goes against the separation of powers

8. President’s constitutional concerns
Minister will control the export of minerals he ‘designates’ for beneficiation (adding value)
These controls contradict an international trade agreement, which is binding on SA
Minister’s export controls will be ‘unlawful’ and thus in breach of the Constitution’s guarantee of ‘lawful’ administrative action
There are other constitutional objections too

9. Other clauses also unconstitutional
Legislation must be certain and clear, so that
people know what is allowed and what is forbidden, and
everyone is treated the same way: ie there is equality before the law
Many clauses in the Bill are too vague
There are too few guidelines for the minister to follow in making his decisions

10. Examples of overly vague clauses
The minister has too much discretion in deciding:
What minerals should be ‘designated’
What minerals are ‘strategic’
What percentage of platinum, say, a company must supply locally (50%, 75%, 100%?)
The prices to be set for all strategic minerals, from coal to platinum, manganese, copper

11. More overly vague clauses
A mining company which stops mining and gets a closure certificate will be liable for ANY environmental damage ‘which may become known in the future’
To get a closure certificate, it must first fix all known environmental problems
If water pollution is found 50 years later, is it the mining company’s fault? How can it budget for what might happen in 50 years’ time?

12. More overly vague clauses
A mining company might have to pay a fine of up to 10% of annual turnover, and its directors might be imprisoned for up to 4 years, if the company fails:
‘to promote optimal economic growth’, or
‘to promote the development of downstream beneficiation industries’
These new ‘offences’ conflict with rule of law

13. Risks in state-controlled beneficiation
SA already beneficiates, ie processes and adds value, to many minerals (companies refine, smelt, make steel, make oil from coal, etc)
Firms can’t easily beneficiate more because of:
electricity costs and supply concerns
shortages of skills and direct investment
high input costs and uncompetitiveness
NDP warns of these problems, so too does IDC

14. Risks in state-controlled beneficiation
SA can’t increase local beneficiation without first solving these problems
Bill ignores this economic reality
Bill is already choking off development of new coal mines (R100bn needed for new mines to supply Eskom, but no company wants to risk its money if minister is to control its sales)
Coal still in the ground is likely to remain there

15. Risks in state-controlled beneficiation
New exploration for other minerals is already a quarter of what it was in 2007
Major mining companies looking outside SA
Small companies will battle to raise funds, will also lack economies of scale
State mining company unlikely to do better: will lack necessary funds (public debt is already high) plus necessary efficiency (think of Eskom, Transnet, Prasa, SAA, etc)

16. Economic damage from the Bill
Even in boom years, 2001 to 2008, SA’s mining industry shrank by 1% a year (NDP)
Mining industries in other countries grew by 5% a year in that period (NDP)
According to NDP, MPRDA is much to blame
NDP urges changes to MPRDA to make it ‘predictable, stable, competitive’
Bill makes the MPRDA much worse, not better

17. Economic damage from the Bill
“In 20 years’ time, SA might not have a mining industry” (former mining CEO)
But mining industry provides 1.5m jobs, supports some 15 million people
Adds to GDP, export earnings, value of rand
Is particularly crucial to 5 provinces, 6 towns, 2 ports, plus Eskom and Transnet
Spends R245bn a year on procurement

18. Economic damage from the Bill
Mining industry is already in deep trouble
Not just because of lower commodity prices, but also because of bad laws
Industry lost R50bn from 2014 to mid 2016
It has lost jobs since late in 2015
SA needs mining sector to grow by 5% a year
Everyone would then be much better off (more jobs, revenue, procurement by mines)

19. Way forward NCOP must start again, with proper public consultation
Must be backed by proper SEIAS assessment
NCOP process is flawed; so too was process in Gauteng (and probably other provinces)
Table with 57 changes cannot be adopted
All unconstitutional provisions must be removed (NCOP has duty to do so)