Industry holds its breath over MPRDA

No clear resolution in sight for critical minerals and petroleum resources bill.

The reasons given for President Jacob Zuma’s (pictured) return of the Mining and Petroleum Resources Development Amendment Bill (MPRDA) have done nothing to still the beating hearts of those in the industries affected.

Members of the oil and gas sector, for one, had prematurely hoped that their concerns would be addressed when the President refused to the sign the bill into law on the grounds that it did not pass constitutional muster. 

Reasons for that decision have been given, and their qualms remain, as rules of parliament clearly dictate that the national assembly review the bill only in relation to the President’s specific reservations.

Zuma’s concerns around the Bill were largely technical. There is a concern, for instance, that the unconstitutional definition of ‘This Act’ elevates guidelines (like the Housing and Living Condition Standards for the Minerals Industry) to national legislation.

He is also concerned that the bill grants excessive discretionary powers to the mineral resources minister by making it possible for him to bypass the ‘constitutionally mandated procedures for the amendment of legislation’.

Other concerns include the fact that it may conflict with SA’s international trade obligations; that insufficient public hearings were held in the drafting of the bill; and that it should have been referred to the National House of Traditional Leaders because it impacts upon customary law or the customs of traditional communities.

The mineral resources parliamentary committee will now tackle these elements of the MPRDA before making recommendations to the national assembly. That process is by no means predictable.

Parliament and its rules

If the committee agrees with the President’s reservations it could recommend ways to correct the problems. However, if it regards the bill as being so procedurally or substantively defective that it cannot be corrected, then the MPRDA in its entirety will fall by the wayside.

Webber Wentzel partner Peter Leon says it is more likely that the national assembly will engage with the substantive issues in the referral.

Specifically those which relate to “the definition of ‘This Act’; the trade law issues, and thirdly the traditional leadership/community land issue,” says Leon. He reiterates the point that any review must be limited to matters outlined by the President. A potential quagmire arises, however, with the procedural matter of insufficient public participation facilitated by the National Council of Provinces when passing the Amendment Act, in that the consultation period was highly compressed and there appears to have been insufficient notice of the public hearings held by the provincial legislatures’.

Procedural concern of the NCOP hearings

Addressing this issue will require the NCOP to reopen public consultation, the results of which may be beyond the scope of the president’s referral.

“It’s possible for the NCOP to, upon holding public hearings, propose amendments to the bill, which are outside the scope of the referral. However, the national assembly would still have to agree with those amendments before they’re put into the bill,” says Leon. This, therefore, implies that the review is not entirely restricted to aspects raised in the referral alone, unless the national assembly plans to veto all other proposed amendments to the bill arising from the NCOP public hearings. Furthermore, the time it will take before there is an amended bill before the president, if the public hearings are opened, will undoubtedly be longer.

Leon says, however, that the national assembly can ignore Zuma’s points of contention if it disagrees on its constitutionality. In that case, the bill can be sent back to the President without addressing either or all of his concerns and leave it up to the President, who can then send it to be assessed by the constitutional court.

Oil and gas will still battle

Mike Davies, director of Kigoda Consulting, says it is unlikely that there will be any substantive amendments arising from the public consultations because it is an ineffective strategy for introducing significant changes.

“Because of the procedural dynamics and complications around it, I don’t think changes like, for example, separating oil and gas from the bill, would be raised by the NCOP after hearings, ” says Davies “For those concerns to result in the types of concessions and changes that the oil and gas sector would hope for, will also require a substantial political shift…because there are still constituents within the ANC that still believe that the mineral sector as a whole, all the way from petroleum to coal and gold, be grouped with the same spectrum.”  

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