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IN THE wake of the downward spiral of the country in the latest Corruption Perceptions Index (CPI), concern has been raised over the “lack of transparency and unlimited powers” that will be granted to the Mineral Resources minister should the Upstream Petroleum Resources Development (UPRD) Bill come to pass.
As per the explanation provided by the Department of Mineral Resources by Ntokozo Ngcwabe, deputy director-general for mineral policy and promotions, the objectives of the UPRD Bill were to recognise the internationally accepted right of the state to exercise sovereignty over all the petroleum resources within the country.
It will also give effect to the principle of the state’s custodianship of the nation’s petroleum resources, as well as to promote equitable access to the nation’s petroleum resources to all the people of South Africa.
Lastly it would, according to the department, expand opportunities substantially and meaningfully for black people to enter and actively participate in the upstream petroleum sector and to benefit from the exploitation of the nation’s petroleum resources.
However, a number of civil society organisations and environmental rights groups have raised alarm bells at the continued push for the promulgation of the bill despite numerous concerns being raised about it.
Marais de Vaal, an environmental adviser with AfriForum, stressed that the organisation was seriously concerned about unlimited powers that would be granted to the Minister of Mineral Resources and Energy if the bill were to be accepted by Parliament.
De Vaal said the group's biggest concern stemmed from the fact that, as it stood, the bill would allocate a 20% share in all petroleum rights to the state, something they believed would open the door to corruption, especially given how the CPI index had shown that the country was battling with combating public sector corruption.
Similarly, he said the minister would also have the unlimited power to reserve certain areas for petroleum development exclusively for black investors, with nothing standing in his way to exercise this discretion for the benefit of his “cadres”.
Furthermore, he explained that the bill also intended to remove the development of the upstream oil and gas industry from the scope of the existing Mineral and Petroleum Resources Development Act (Act 28 of 2002) and have it regulated separately from other mining activities.
Although this regulatory separation in itself was not necessarily a problem, according to AfriForum, the bill would have far more consequences than just creating further policy uncertainty in the minerals and energy sector.
“As a result, investor confidence, which has already reached an unprecedented low, will simply weaken further. This is detrimental to the development of the country’s petroleum resources and further hurts the struggling South African economy, as in the end, the majority of the country’s residents will be the innocent victims of the government’s greed,” De Vaal said.
While the civil society organisation has expressed concerns about its opposition to the bill since it first appeared in 2019, they have not been the only voices who raised numerous concerns about the implementation of the bill as it was.
The Centre for Environmental Rights also raised and submitted its concerns, stating that the bill should not be promulgated in its current form due to several fundamental flaws.
According to the environmental centre, one of the issues with the bill was that it disregarded the fact of the climate emergency and would cause South Africa to fall foul of its climate change commitments, due to the administrative justice shortcomings and the bills conflicting with the one environmental system.
Similarly, concerns that the bill seemed to favour secrecy were also raised, as the organisation detailed how Section 79 and 80 (1), which dealt with the submission of information, including geological, geophysical, technical, financial and economic, as well as progress reports, supplied to the South African Agency for the Promotion of Petroleum Exploration and Exploitation (PASA); provided that the information should be kept confidential.
“It is our submission that, in order to create a framework for meaningful consultation, adequate provision is made to facilitate access to information in terms of the bill. The bill must require rights holders to publish copies of those rights on the holders’ websites and where holders do not operate websites, to make those rights publicly available swiftly on request.
“We also note, with concern, that there is no social and labour plan framework in the bill. There is absolutely no reference to local economic development, an omission aggravated by the fact that the extractives industry brings an enormous burden to bear on local communities who find their environment compromised, their access to water and water quality compromised, their air quality compromised, their health compromised, their access to land worsened by resettlement, inter alia, and as a result of all of this, their circumstances worsened.”