THE South African government would struggle to meet a self-imposed year-end deadline for the promulgation of the Minerals & Petroleum Resources Development Amendment Bill (MPRDA), a process complicated by an inter-departmental “tug of war” over administrative control of the oil and gas sector.
“The government said it hopes to have the amendments passed by November, but that would be a stretch,” said Peter Leon, who is a partner and co-chairman of the Africa Practice of Herbert Smith Freehills, a firm of attorneys. “It may be pushed out until next year,” he said.
Commenting in a press briefing regarding the progress of the MPRDA, as well as issues around the recently gazetted Mining Charter, its third iteration since it was first promulgated in 2004, Leon said that the MPRDA was currently in the National Assembly where it was being studied following its hearing at the National Council of Provinces (NCOP), parliament’s upper house.
Changes to the amendments had not been made public since it was sent back to Parliament by Jacob Zuma, South African president, in January 2015 amid concerns that the amendments failed constitutionality tests. It was also feared the amendments might transgress bilateral trade agreements with important trading partners.
The MPRDA had already been aired at the Council of Traditional Leaders, which had made “a novel” proposal that an independent administrative council be tasked with adjudicating prospecting and mining licence applications among other duties.
However, there was division in government regarding whether the amendment bill should be re-structured to allow for a new bill catering to the specific requirements of the oil and gas sector. Given investment interest in exploiting South Africa’s inland and offshore gas, as well as oil, “the stakes were high” over whether the minerals or energy department should have administrative control over the sector, said Leon.
Mines minister, Mosebenzi Zwane, said at a press conference attended by Miningmx on June 1 that there were no plans to write fresh legislation for oil and gas as the priority was to have the MPRDA passed expeditiously.
“All the stakeholders are aware of the possible split, but what we have agreed upon is that certainty is a priority to the sector. Bringing certainty means to ensure that we complete this bill called MPRDA first,” he said.
“Anything that follows will be entertained after the completion of the MPRDA. That is what we know up to so far,” he added.
South Africa’s parliament was currently in recess until August when the country sets about local government elections. Only once elections had been completed would the process to review the MPRDA begin again. After the National Assembly, the MPRDA would be returned to the NCOP for public hearings, said Leon.
The MPRDA would be some four years in the making should the legislation not pass muster until next year, said Leon. “My view though is that it’s better to have uncertainty now so that better law is written for the future,” he said.