On Friday, 16 January 2015, the Presidency announced its referral of the Mineral and Petroleum Resources Development Amendment Bill (“Bill”) back to the National Assembly for reconsideration in line with section 79(1) of the Constitution of the Republic of South Africa, 1996. On Friday, 23 January 2015, the Presidency released the reasons on which President Zuma based his decision not to assent to the Bill. In this note we look at some of the reasons proffered by the President in referring the Bill back to the National Assembly.

The President noted that the extension of the definition of “this Act” being the Mineral and Petroleum Resources Development Act to include the Amended Broad-Based Socio-Economic Empowerment Charter for South African Mining and Minerals Industry (the “Charter”) as well as the Codes of Good Practice for the South African Minerals Industry was likely unconstitutional. The aforesaid extension was widely seen by many in the industry as a furtive way of empowering the Minister of Mineral Resources to cancel a mining right in circumstances were there has been noncompliance with the Charter. This leaves the question on how the Department of Mineral Resources will regulate non-compliance with the Charter fairly unclear.

The President also cited inadequate public participation at provincial level as another reason the Bill could not be said to have passed constitutional muster. In our Bulletin of April 2014, we highlighted the failure by the National Council of Provinces to facilitate meaningful public involvement during its deliberations on the Bill and the consequences that could ensue. In addition to the above, the President also advanced the following reasons in declining to assent to the Bill:

  • the local beneficiation provisions of the Bill which, according to the presidency, conflict with South Africa’s international obligations; and
  • to the extent that the Bill impacts on inter alia customs of traditional communities, it ought to have been referred to the National House of Traditional Leaders for comments.

It remains to be seen whether the National Assembly will accommodate the President’s concerns by incorporating the proposed amendments/comments and following the correct parliamentary approval procedures or whether the Bill will be abandoned. Either way, the delays in finalising the Bill further exacerbate the regulatory uncertainty in the mining industry.