Ngoako Ramatlhodi. Picture: SOWETAN
Ngoako Ramatlhodi. Picture: SOWETAN

MINERAL Resources Minister Ngoako Ramatlhodi has sent an official request to President Jacob Zuma to delay signing into law the contentious bill that will govern the mineral resources sector.

The Minerals and Petroleum Resources Development Act (MPRDA) Amendment Bill was passed by Parliament in February as part of a raft of draft laws that were rushed through the legislature ahead of the May 7 national and provincial elections.

MPRDA detractors have said the bill is flawed on constitutional grounds in that it was not processed by the legislature properly and would scare off international investors, especially in the nascent oil and gas sector.

The procedural concerns relate to the National Council of Provinces not having held public hearings on the proposed changes. Further, there were last-minute changes to the bill — rushed through without the portfolio committee on mineral resources having discussed them.

Since the beginning of this month, Mr Zuma has signed at least seven bills into law, including the Employment Equity Amendment Act, various amendments to the environmental management acts, and the Infrastructure Development Bill.

Among the bills awaiting Mr Zuma’s signature are the Private Security Industries Regulation Amendment Bill, which like the MPRDA has the potential to bring South Africa into conflict with its international obligations such those it has to the World Trade Organisation.

Mr Ramatlhodi said on Thursday he was studying the minerals bill. "I have sent a request to the Presidency via my director-general to hold onto the act.

"I am studying it."

While he had not received any formal requests to stop the bill being signed into law, he had heard that there were a lot of complaints about it, Mr Ramatlhodi said. Further, he had heard "rumours" that Parliament had not processed the bill properly.

During the MPRDA’s progress through Parliament, proposals were made by industry and both African National Congress (ANC) and Democratic Alliance (DA) MPs to separate out the oil and gas sector and have it governed under its own legislation.

Mr Ramatlhodi said separating the oil and gas sector would depend on whether the MPRDA did go back to Parliament for redrafting. "I have not made up my mind on that.

"However, I ask myself: ‘how do you separate thermal gas from coal?’."

When the bill was initially introduced last year by former mineral resources minister Susan Shabangu, now minister in the Presidency, it had two main objectives. These were to increase the beneficiation of minerals in South Africa and to make it easier for companies to apply for licences for exploration and mining.

During Parliament’s public hearings, mining and oil and gas companies raised numerous objections to the MPRDA.

Negotiations between the Chamber of Mines and the Department of Mineral Resources ironed out most of the differences by the end of January. But during the mineral resources committee deliberations in February, a proposal that was initially endorsed by ANC MPs, that the oil and gas sector should be regulated under a different bill, was rejected.

Furthermore, the ANC increased the state’s free-carry interest (the amount of oil production revenue that accrues to the government from new oil production without it contributing to exploration and development costs). The interest was hiked from 20% by a further 80%, meaning that the entire production could be handed over to the state.

This, the bill’s detractors argued, effectively meant the nationalisation of the country’s nascent oil and gas sector, before it had even started.

This issue and the wide discretionary powers that the act gave the minister of mineral resources prompted the DA and the Legal Resources Centre to petition Mr Zuma not to sign the law into effect.

The two parties also took issue with the fact that the bill did not take into account the rights and interests of those who lived on and owned communal land.

DA mineral resources spokesman James Lorimer said he could count at least eight instances where the MPRDA might be unconstitutional and it should be rewritten entirely.

Former ANC MP and mineral resources committee chairwoman Faith Bikani said last month that she believed the MPRDA should be returned to Parliament for reprocessing. "That bill was not good and it needs to be reworked," she said at the time.

Webber Wentzel partner Peter Leon said on Thursday he commended Mr Ramatlhodi for asking Mr Zuma to delay signing the bill. "There are two options here — either the president just sends the bill back on constitutional grounds, and those are fixed, or he just does not sign it at all and Mr Ramatlhodi introduces a new draft bill that has to go through a new parliamentary process.

"The latter would be far better," Mr Leon said.