Legislation: Oil, gas sector Bill announcement premature?

It seems unlikely that a draft Bill regulating the oil and gas sector will be tabled in Parliament before the end of the financial year, as Department of Mineral Resources deputy DG Ntokozo Ngcwabe is reported to have predicted last Friday (Business Day). The proposed new statute must still be signed off by the Office of the State Law Adviser – before being presented to Cabinet for approval and released into the public domain for comment, as Mineral Resources & Energy Minister Gwede Mantashe confirmed in June during a debate on President Cyril Ramaphosa’s most recent State of the Nation Address. Pam Saxby, for Legalbrief Policy Watch, notes that according to a Parliamentary Monitoring Group (PMG) audio recording of the National Assembly Mineral Resources & Energy Committee meeting at which Ngcwabe made her remarks, this process could be delayed by procedural issues around last year’s in-principle withdrawal of the 2013 Mineral and Petroleum Resources Development Amendment Bill announced by the Minister but never formalised.

Further muddying the waters is that the Department of Energy’s 2019/20 annual performance plan makes no reference whatsoever to a draft Bill regulating the oil and gas sector – or to what Mantashe referred to in his speech as a ‘Petroleum Resources Development Bill’. Neither does the proposed new piece of legislation feature in the 2017/18 Department of Mineral Resources annual performance plan, which admittedly has yet to be updated and may well not be, given that the two departments are busy merging. As for Ngcwabe’s reference on Friday to a clause in the draft Bill proposing a ‘20% free-carry share’ for the state in the oil and gas ‘enterprises’ concerned: this was added to the 2013 Mineral and Petroleum Resources Development Amendment Bill during its first passage through Parliament. While clause 59(d) of the version tabled sought to entitle the state to an unspecified quantity of free carried interest in all new production rights, the 20% proposal was introduced in clause 65 of a ‘B’ version of the Bill and featured in the ‘D’ version subsequently withdrawn – at least in principle.

Although the details of Ngcwabe’s comments are difficult to hear in the PMG audio recording, committee chair Sahlulele Luzipo comes across loud and clear, as do remarks made by the DA’s Kevin Mileham. The deputy DG appears to have jumped the gun. The ‘proposals’ she rattled off are more likely to be options government could use to achieve certain policy objectives but may not necessarily introduce as a package. Ngcwabe completely overlooked the mandatory public consultation process and its influence on the Bill eventually tabled in Parliament.