Fresh emphasis is being placed on the need for considerably more discussion on pending legal matters crucial to mining.

As Herbert Smith Freehills co-chairperson Peter Leon pointed out last week, the striking down by the Constitutional Court of the Restitution of Land Rights Amendment Bill has implications for the unsigned Amendment Bill to the Mineral and Petroleum Resources Development Act (MPRDA), along with several other Bills.

The upshot is that these Bills now require full and fair ventilation in a meaningful public participation process prior to enactment.

Finding that this was lacking in the accelerated adoption of the Restitution of Land Rights Amendment Bill by Parliament’s National Council of Provinces (NCP) in March 2014, the Constitutional Court last month struck down, in a unanimous judgement, the Act emanating from the Restitution of Land Rights Amendment Bill.

Other Bills, in addition to the MPRDA Amendment Bill, singled out for having been rushed through the NCP without adequate public input include the Private Security Industry Regulation Amendment Bill, 2012, and the Expropriation Bill, 2015.

Like the Restitution Bill, these Bills each have significant and complex economic implications, but they have not yet become law as President Jacob Zuma has hesitated in assenting to them.

To avoid a repeat of what happened to the Restitution Bill, Leon’s view is that the three Bills must be subjected to a new public participation process.

Significant is that the President has a constitutional prerogative to refer Bills back to Parliament for reconsideration, which he exercised in the case of the MPRDA Amendment Bill early last year and the Performing Animals Protection Bill last week, also on the grounds of deficiencies in the processes of the NCP.

As the MPRDA Amendment Bill is expected to be forwarded to the NCP shortly after Parliament resumes later this month, alarm bells should be sounded.

If the Constitutional Court’s recent judgment is heeded, the NCP must give mining companies as well as the public “an opportunity of capably influencing” the final form of the amendments.
As Leon points out, the MPRDA Amendment Bill widens the discretionary powers of the Minister of Mineral Resources significantly and specifically empowers him to “designate” minerals which must be offered at discounted prices to local manufacturers, failing which they may not be exported without his prior consent.

It also gives the State a 20% free shareholding in upstream petroleum production companies, worsening regulatory uncertainty in a sector which, despite promising discoveries, has failed to attract sustainable investment. In January 2015, the President referred the MPRDA Amendment Bill back to Parliament for reconsideration, saying it would not pass constitutional muster.

His reasons included that the beneficiation clauses contravened South Africa’s trade agreements with the World Trade Organisation and the European Union and the NCP’s “highly compressed” period of public consultation “did not sufficiently facilitate public participation”.

South Africa will have to be particularly vigilant, as it can ill-afford more laxness on the part of the NCP during this time of credit rating scrutiny by the global credit ratings agencies.