Decision means the unsigned MPRDA, Private Security Industry Regulation Amendment Bill, and Expropriation Bill require full and fair ventilation in a meaningful public participation process

10 August 20-16

On 28 July 2016, the Constitutional Court issued a timely reminder to South Africa’s legislators that meaningful public participation is vital to the democratic law-making process.  Finding that this was lacking in the accelerated adoption of the Restitution of Land Rights Amendment Bill (“Restitution Bill”) by Parliament’s National Council of Provinces (“NCOP”) in March 2014, the Court struck down the resulting Act, in a unanimous judgment with significant implications for several other pending laws affecting property rights.

Other Bills criticised as having been rushed through the NCOP without adequate public input include the Private Security Industry Regulation Amendment Bill, 2012 (“Private Security Bill”) and the Mineral and Petroleum Resources Development Amendment Bill, 2013 (“MPRDA Amendment Bill”), both passed shortly before the May 2014 elections, as well as the Expropriation Bill, 2015 (“Expropriation Bill”), passed in May this year.

Like the Restitution Bill, these Bills each have significant and complex economic implications, but they have not yet become law as President Jacob Zuma has hesitated in signing them into law.  In order to avoid the fate of the Restitution Bill, these three important Bills require full and fair ventilation in a meaningful public participation process. 

To this end, it is significant that the President has a constitutional prerogative to refer Bills back to Parliament for reconsideration, which he exercised in respect of the MPRDA Amendment Bill early last year and the Performing Animals Protection Bill just yesterday (also citing deficiencies in the NCOP’s processes).

The MPRDA Amendment Bill is expected to be forwarded to the NCOP shortly after Parliament resumes later this month.  If the Constitutional Court’s recent judgment is heeded, the NCOP will afford the public, including affected businesses, “an opportunity of capably influencing” the final form of the amendments.

The Restitution Bill decision

The Restitution Bill aimed to resolve concerns that the original opportunity for people dispossessed under apartheid to lodge land restitution claims had been too short.  That window closed in 1998, after some 80,000 claims were lodged, most of which have still not been resolved.  The Restitution Bill would open a second window to lodge claims, expiring at the end of 2018.  This was criticised on various grounds, including that it would prejudice original claimants who, whether already awarded or still awaiting restitution, would be exposed to competing claims on the same land and would have to wait even longer for finality and security of tenure.

Despite these complexities, the NCOP resolved that the Restitution Bill had to be passed before the national and provincial elections in May 2014, and thus imposed a truncated timetable on the provincial legislatures for their public hearings.  As the Court noted, “the provinces had less than one calendar month to process fully a complex piece of legislation with profound social, economic and legal consequences for the public.”  In the absence of objective urgency, the Court found that rushing the process in this way was “inherently unreasonable” and made it impossible “to afford the public a meaningful opportunity to participate”.[1]

Background on the Private Security Bill, MPRDA Amendment Bill, and Expropriation Bill

The judgment speaks to a fundamental flaw in the way some far-reaching economic reforms have been legislated in recent years.

The Private Security Bill contains an indigenisation clause which would require all private security companies to be more than half-owned by South African citizens.  This clause, if enacted, would place South Africa in breach of its international obligations as a member of the World Trade Organisation (“WTO”), exposing South Africa to sanctions in trade sectors well beyond private security.  The President has not explained his reluctance to sign this Bill, four years after it was passed by Parliament, but it may stem from concerns about WTO obligations, lack of public consultation or both.

The MPRDA Amendment Bill substantially widens the discretionary powers of the Minister of Mineral Resources (“Minister”) and specifically empowers him to “designate” minerals which must be offered at discounted prices to local manufacturers, failing which they may not be exported without his prior consent.  It also gives the state a twenty per cent “free carry” stake in upstream petroleum production companies, worsening regulatory uncertainty in a sector which, despite promising discoveries, has failed to attract sustainable investment.  In January 2015, the President referred the MPRDA Amendment Bill back to Parliament for reconsideration, saying it would not pass constitutional muster.  His reasons included that the beneficiation clauses contravened South Africa’s trade agreements with the WTO and the European Union, as well as that the NCOP’s “highly compressed” period of public consultation “did not sufficiently facilitate public participation”.[2]

The Expropriation Bill, which aims to create a uniform and fair procedure for the acquisition of land by the state, has been criticised for failing to define key concepts clearly, such as “property”, “public purpose” and even “expropriation”.  Stopping short of invoking his prerogative to refer it back, President Zuma last month requested Parliament to elucidate the processes followed in adopting in the Expropriation Bill, as he had received complaints that “the NCOP failed to facilitate sufficient consultation with the public”, among other procedural issues.

Peter Leon is Co-Chair Africa and Partner, Herbert Smith Freehills South Africa, 10 August 2016  

[1] The Constitutional Court's judgment, Land Access Movement of South Africa and Others v Chairperson of the National Council of Provinces and Others (CCT40/15) [2016] ZACC 22, can be accessed here. 

[2] The letter from the President to the Speaker of the National Assembly referring the MPRDA Amendment Bill back to Parliament for reconsideration, published on page three of Parliament'sAnnouncements, Tablings and Committee Reports, No 1 – 2015, can be accessed here.