Democratic Alliance (DA) leader Tony Leon on Tuesday strongly criticised the proposed new Mineral and Petroleum Resources Development Bill, saying it undermined the Mbeki administration’s commitment to an open economy in a globalised environment.
Such an environment was based on the rule of law, but by contradicting the principles and goals of Nepad (the New Partnership for Africa’s Development), the bill also weakened its commitment to Africa in terms of Nepad, Leon told a meeting of DA-supporting businessmen in Durban.
The bill, which was introduced to Parliament on April 22 this year –after its first draft had been published in December 2000 — was aimed at transformation in the mining industry and promoting moves to state ownership of mineral rights.
The mining industry has been guarded in its public comments on the measure, but in private many key figures in the industry have voiced concern at proposed transitional arrangements from ”old order” to ”new order” rights.
Public hearings on the bill are to start in Parliament on June 5.
Leon said on Tuesday his party supported Nepad’s aim of promoting the sustainable socio-economic development of Africa by increasing capital flows complementing bilateral and multilateral credit and aid.
”Since the mining industry is central to South Africa’s economy and continues to have enormous potential to attract large-scale local and foreign investment, we would expect this to be an area where Nepad’s theory could be put into practice.”
To maximise this investment potential, it was crucial that the mining regulatory regime was perceived to be predictable, stable and certain and that investors’ property rights were secure.
But, said Leon, the new Mineral and Petroleum Resources Development Bill, ”superficially represented” a considerable improvement to the previous bill and the Cabinet draft and apparently ”limits ministerial discretion in accordance with modern principles of administrative law”.
”But look a little closer and we see that the overall effect of many of the provisions in the bill is likely to be the opposite of their legislative intent.”
Leon said this would occur, among other ways, by making the granting of the relevant prospecting and mining rights dependent on the minister’s subjective discretion and allowing the minister to impose ”corrective measures” to ensure ”optimal mining”.
”Not only does the bill undermine the Mbeki administration’s commitment to an open economy in a globalised environment, which is based on the rule of law, but by contradicting the principles and goals of Nepad, the bill also weakens its commitment to Africa in terms of Nepad,” Leon said.
”The DA has made, and will continue to make, a fundamental political commitment to growth: not simply economic growth for those in work, but economic growth to cover, embrace and capture those who are out of work.” ? Sapa