Communities out of loop on mining law changes

By Time of article published Apr 7, 2011

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A turf battle four years ago between the departments of mineral resources and environmental affairs ended in a deal that would subject the mining industry to environmental impact assessment processes under the National Environmental Management Act (Nema).

The implementing authority would be the Department of Mineral Resources, but the Department of Environmental Affairs would hear the appeals.

Legislation was amended in Parliament in 2008 and 2009. The transitional period for the transfer was to be over 18 months from the date of the enactment of the laws.

However, the mineral resources ministry has since then been accused of holding up the transfer of this authority by not bringing about amendments to the Mineral and Petroleum Resources Development Act (MPRDA).

Last year Mineral Resources Minister Susan Shabangu said in Parliament that commencement of the amendment act had been delayed because of concerns raised by “mining sector stakeholders and government departments”.

President Jacob Zuma’s administration clearly has a different take on a suitable outcome to the one previously agreed to. Since then Shabangu has been cleaning up the Department of Mineral Resources, and promising changes to the MPRDA, including the environmental management dispensation. The department says it is working with the Department of Water and Environmental Affairs to finalise the issue around environmental laws for mines.

While the Mineral Resources Department has consulted business and labour in drafting its proposed amendments via an internal task team, it has not yet done the same for civil society groups, saying this will occur in the public stage of consultation.

Some of these civil society groups note that they have expertise to offer in the early drafting stages, but the department – insisting it is committed to consultation – says they will be heard later during the public hearings. There is something wrong with a consultation process that gives mines – parties with a vested interest in the outcome of this debate – a say in setting policy ahead of the communities that their activities affect. page 3

Consumer act

The drive to turn South Africa into a nation of consumer activists all demanding, and hopefully getting, the best of everything money can buy, has been enthusiastically embraced since the Consumer Act became law on April Fools Day, according to Mamodupi Mohlala, the commissioner for the National Consumer Commission.

The commission has already received 250 complaints and the commissioner expects that to settle down to about 2 000 a month. It is a mightily dissatisfied country that can sustain a serious whinge rate of 100 complaints a day, every working day.

And apparently it is not only people who are keen to complain. Mohlala informed worthies and scribes at the Telkom Classic Business Journalist of the Year Awards – which was won by Marc Ashton of Fin24 – that the commission was considering a request that animals be considered as consumers, so that they too could complain.

Insensitive folks laughed out loud at this, but one wit suggested that every dog should have its day, provided they made their complaints in writing.

But Mohlala, who made headlines last year as the director-general of the Department of Communications when she complained so much about the goings on around then minister Siphiwe Nyanda that he gave her her marching orders, and opened the way for her to take her current job, is taking her role seriously.

Mohlala says her commission will be proactive in looking for complaints. Three broad sectors – manufacturing and retail, information and communication technology, as well as medical and pharmaceutical – have been chosen to be investigated for compliance with the new act in the coming year. The commissioner said there was already a scramble for exemptions but few were likely to be granted.

Rand correction

Investors should start factoring into their investment theses the prospect of a correction in the rand as the currency now looks particularly vulnerable. This is the view of market strategists at Bank of America-Merrill Lynch.

They reckon that the rand has been the biggest beneficiary of the latest round of global quantitative easing – such as the short-hand of printing dollars. The US’s so-called QE2 programme has made the market very long in euro/dollar, meaning that it is only a matter of time before those that have been selling the dollar short are forced to cover their positions.

That move will see the rand hitting the skids, particularly if the debate about the possible US tightening of interest rates starts to gain traction. In the second quarter, the end of QE2 may be the key theme, and in Europe, the European Central Bank seems intent on hiking substantially this year.

The Bank of America-Merrill Lynch strategists say the recent payrolls data have increased speculation about a first Federal Reserve hike. But while they consider this premature, as first-quarter US gross domestic product growth was probably only about 1.5 percent, they say the debate has clearly moved towards tightening. Rand weakness is seen as even more likely if industrial commodities weaken.

Industrial commodities would likely weaken on easing concerns about a debasement of the dollar, a lower euro/dollar and a topping-out of the manufacturing cycle, the strategists say.

Their commodity team is forecasting that most commodity prices will peak in the second or third quarter, including Brent crude, which it sees peaking at $122 (R820) a barrel at the end of this quarter.

Edited by Peter DeIonno. With contributions from Ingi Salgado, Peter DeIonno and Ellis Mnyandu.

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