Parliament’s State Capture committees must get to work

The DA urges the committees that have been tasked to probe State Capture to begin their important work immediately. To assist in this task, the DA will be tabling the #GuptaLeaks e-mails in the relevant committees this week, on 15 and 16 August.
Tomorrow will be exactly two months since House Chairperson of Committees, Cedric Frolick, directed the chairpersons of the portfolio committees on Home Affairs, Mineral Resources, Public Enterprises and Transport to “urgently probe the [State Capture] allegations and report back to the National Assembly”. The chairpersons were also directed to “ensure immediate engagement with the concerned Ministers to ensure that Parliament gets to the bottom of the allegations”.
All these committees are scheduled to meet this week, but worryingly only the PC’s on Public Enterprises and Mineral Resources are set to busy themselves with State Capture-related matters. Even more worryingly, only one meeting for each of the four committees have so far been scheduled for the Third Term.
The DA previously warned that Frolick, acting entirely outside his powers, was limiting the scope of the State Capture inquiry and without justification. This process is now being frustrated even further by a lack of urgency and action.
Parliament is best placed to deal with State Capture and is empowered to identify perpetrators, including those in the Executive, and hold them accountable. The Legislature has an opportunity to recover from its purposeful bungling of the Nkandla matter and should never again be found wanting.
On 3 August, I wrote to both the House Chairperson and the Acting Secretary to Parliament to plead that these committees be adequately capacitated and staffed. It is now essential that each committee have evidence leaders, researchers and legal advisors appointed to assist in the process of compiling the terms of reference, witness lists and documentation lists.
Too much time has passed since the #GuptaLeaks e-mails exposed the true nature and extent of the Gupta family’s influence over President Jacob Zuma and the ANC government. During last week’s debate on the DA’s Motion of No Confidence in President Zuma, not one speaker from the ANC mentioned the Guptas, clearly showing that their project of State Capture is either wilfully being ignored or endorsed by the ANC.
The DA does not share the ANC’s selective amnesia and will not allow Parliament’s probe into State Capture to be stalled any longer. We heard the clarion call of South Africans who took to the streets countrywide on 8 August, calling for an end to the looting and demanding action.

Mining recovery conceals a gloomier picture

Mining is seeing the proverbial green shoots of recovery. Improvements in international commodity prices mean that some mines have started making money and there is some optimism in the industry.
Unfortunately though, that conceals a gloomier picture. The commodity price increases look shaky – the difficulties of running a mine are escalating and capital is extremely hard to come by. Communities are increasingly angry that they are being disregarded. Rushing down on the industry are the twin salvos of new legislation and a new mining charter, both of which will be disastrous.
We all know that despite our sumptuous mineral endowment, mining investors rate us very low on the list of places to put their money.
What does that mean?
It means our capital investment in mining is half what it was in 2007 and 31% down on 2013. Right now people involved in mine financing tell me capital investment has dried up almost completely.
Because of that, in the last four years, our industry has lost 65 thousand jobs. Remember that for every actual mining job, there’s estimated to be one other in surveying, logistics or engineering.
The problem is the same as it has been under the ANC – poor legislation, poorly administered.
This department is a hopeless loser. It can’t pass legislation, anything it does get through is bad, it can’t administer properly and it keeps taking ridiculous decisions that result in it losing in court.
Take Section 54 safety stoppages. The industry complains. I complain in this House. They are being too broadly applied and there are adverse consequences for production and employment. The ANC tries to bludgeon me into silence, claiming I don’t care about workers. Nonsense, I care about safety and jobs, because if you don’t have a job, you and your whole family are vulnerable.
We know what we’re doing, says the administration. Anglogold takes the department to court. The department loses spectacularly. Section 54 has been too tightly imposed.
I assume since that loss the department is being more careful and production is up 15%. Looks like I was right all along and the ANC was wrong.
Another one that I brought up in two previous budget speeches was the Aquila case. Double granting of rights between a company which sank hundreds of millions into exploration only to find this government has granted rights over the same land to a shady government mining company which doesn’t mine. I was assured, in two budget votes, in this House, that the Department of Mineral Resources (DMR) has this in hand. Wrong. The DMR lost that case too.
So I will take anything I hear from the ANC in this debate with a large shovelful of salt, everybody else should too. The fact is, this administration suffers from a credibility crisis.
It lost in the North Gauteng High court over the Diamond Act, and the Constitutional Court is now considering that appeal. No matter which way it goes, we can be sure that this government’s attempts to fix the diamond markets, to the advantage of a few ANC aligned cronies will enrich a few but lead to the small mining, cutting and polishing sectors not recovering from the pit of destruction where the ANC’s stewardship has thrown them.
This department even loses in court against its own staff. Officials in its own Gauteng provincial office won against it in court when there was a senseless plan to reorganise it – people think that plan was for the benefit of some favoured cronies.
And this has been the pattern of the ANC’s stewardship of the mining industry since the beginning. It has focused on transferring mine and rights ownership on a racial basis. That’s valid, given our unequal past. But only up to a point. The ANC ignoring that policy comes at a cost.
The cost is lower profitability and predictability for the investors and less investment and fewer jobs. The ANC has sacrificed the interests of the many who work or who could work in mining for the interests of the few, a handful of BEE tenderpreneurs and other cronies of the ANC leadership.
So this administration fails in court. It also fails even to get to court.
Enforcement against illegal miners is laughable.
Miners in Welkom estimate ten thousand zama-zamas are underground on any one day!
Illegal chrome miners in Limpopo take an estimated million rand a day from sites that are easily visible and accessible. Police raid, but talk about problems with enforcement capacity and the mining goes on. The same sort of thing happens in the enforcement actions against illegal sand mining. To its credit, after some nagging, the department is starting to act in this area, but the actions are mostly pathetic.
For example, at Agate terrace near Port St Johns, the authorities act against sand miners and it stops for a day. When the authorities are gone it starts up again. Where are the miners in court and the confiscated equipment? There is a lack of will to enforce on the part of the department. The department is not serious and is not credible.
When the Hawks proudly told us they had taken action in illegal mining cases worth R200 million, it had to be pointed out to them this was less than five percent of what this government tells us is mined illegally every year. That’s hardly a disincentive against a trade that costs the country R6 billion a year in lost opportunities.
Instead of concentrating on how to stop illegal mining, the department spends its days drawing up more and more legislation and regulation that will make it more complicated and less profitable to mine.
So if it is unwilling and unable to enforce its writ, how does the DMR spend its time?
That’s a good question with a depressing answer.
Ideological foolishness has combined with procedural delays to give us a Mineral and Petroleum Resources Development Act (MPRDA) which is still winding its way through the National Council of Provinces (NCOP) process, three years after first being passed by this House. The department has tried to insert some changes to make up for the flaws in its bill in a way that will probably make the whole thing unconstitutional when it is finally passed.
At least two organisations that I know of are lining up to challenge the bill in court and that’s even before we get to the two substantive issues that the President warned were problematic and which the ANC decided not to change because the President was wrong. We’ll see, but I do believe this was one of those rare occasions when the President did have good legal advice.
This compounds the credibility problem as prospective investors wonder why South Africa cannot get it together to get a new mining law in place despite having introduced it four and a half years before.
Then there’s the Mining Charter. After months of ignoring the industry, this administration is at last talking to them. And that has led to a delay in it being revealed to us. The initial version three of the charter would make legal mining a burden that is hardly worth bearing. That is aside from trying to make every BEE deal done so far retrospectively illegal and trying to make miners disobey the Companies Act. The whole Charter concept is flawed – how can you even begin to talk about legislative certainty when you change the whole way the industry is structured, every five years?
If that assault on credibility was not enough, we have a Minister who is getting ever deeper into the mire regarding his association with the Guptas. Perhaps the Minister would like to comment on the allegations today by former Minister Ramatlhodi. Ramatlhodi says he was removed as Mineral Resources Minister after he refused to take away all of Glencore’s mining licences in order to get them to pay penalties to Eskom. Minister Zwane replaced him. The question is then: did he threaten to remove Glencore’s licences in the saga which led to them selling their mine to the Guptas? Minister, you have a chance to answer here and clear this up. I hope you use the opportunity.
This makes my point eloquently: if the department and its leadership are suspected of collusion with cronies, investors are unlikely to feel they are in safe hands and will stay away.
It is for lack of time, not for lack of ammunition, that I now turn from this government’s mess to our alternative.
The DA’s focus would be on one of the positives that we believe mining delivers to South Africa. Empowerment, foreign exchange, local infrastructure development and tax revenues are all hugely important but we believe they are overshadowed by the greatest good which mining delivers which is employment. Mining jobs are no longer low-paying jobs and are one of the few places unskilled or semi-skilled people can get decent work. Mining hugely benefits those who are employed by it and thus it makes sense to grow the sector by any means possible.
That means doing the opposite of what this government does. We need to make it easier to mine rather than more difficult.
We should have fewer, clearer regulations that don’t keep changing. The simple fact is that if government makes it more expensive to mine, there will be less mining. If there is less mining, there will be fewer jobs.
If it is easier to mine, it is cheaper to mine, and if it is cheaper to mine, there will be more mining and more jobs. Get that right and the rest is detail. It is time the ANC changed direction for the sake of South Africa’s nine million unemployed.

Dreadful ANC mining policy has cost SA 65 000 jobs in 1 year

The following speech was delivered in Parliament today by the DA Shadow Deputy Minister of Mineral Resources, Adv. Hendrik Schmidt MP, during the Budget Vote on Mineral Resources.
Madame Speaker,
The Department seems to remain rudderless in the exercise of its business as mineral regulator. We recently witnessed an umpteenth new Minister but also the appointment of a new Director-General (DG).
The appointment was made after an acting DG was required to steer the Department for an extensive period of approximately a year. This situation seems to be standard practice in the management of affairs by the ruing ANC government where Ministers, and now recently DG’s, appear to be discarded more often than not after having served the ANC’s narrow purpose.
According to Stats SA, mining’s contribution to GDP has shown negative growth of -0.4% measured year-on-year. Employment in the mining industry has also fallen by approximately 65 000 workers during 2016.
Rising unemployment is detrimental to our mining economy insofar as unskilled and semi-skilled labour is concerned. Whilst the demands on the government increases with every unemployed person, it also increases the burden on mining companies and local government who have to ensure that services continue to be rendered.
It is, therefore, imperative that government adopts the correct mining policies and that regulatory compliance is ensured.
Security of tenure and a stable mineral regime are the most important factors in ensuring that the mining sector expands, thereby contributing to reducing unemployment.
Self-defeating slogans such as “Radical Economic Transformation” without any meaning being ascribed to it, need to be tempered with international best practices where mining companies are interested in investing their capital.
An ANC government with strong socialist and communist tendencies has made these objectives impossible, and ultimately responsible for many adversities. These include:
• Amendments to the MPRDA, which have been outstanding for more than 3 years after Parliament approved amendments with the DA strongly voting against it. To aggravate the situation, more amendments are currently serving before the NCOP. This will add to the legal uncertainty. The President referred amendments to the MPRDA back to parliament for reconsideration more than 2 years ago.
• Disastrous changes to the Mining Charter are expected to be promulgated soon, missing the deadline for the amendments announced by the Minister earlier this year, by more than 3 months.
• The results of the Mining Phakisa undertaken last year are still to be made public with not a single stakeholder (including parliament) knowing what the final agreed results are.
• Rehabilitation of ownerless and disbanded mining sites which require an approximate R50billion will, at the current rate of expenditure, take more than 100 years to complete.
• According to the well-known Fraser Institute, South Africa continues its disgraceful demise with regards to its favourability as a mining destination as well as its ailing legal regime in attracting investment.
These are but a few examples of the dreadful ANC leadership exposed in the mining industry which, if anything, has succeeded in leading us to junk status!
When the DA takes over national government in 2019, we will ensure that the mineral resources of our country will benefit all of our people, not just the connected elite.
I thank you.