AfriForum submits commentary on the draft Upstream Petroleum Resources Development Bill

On 21 February, the civil rights organisation AfriForum submitted its commentary to the Department of Mineral Resources, on the draft Upstream Petroleum Resources Development Bill that was published by the Minister of Mineral Resources and Energy in a notice in the Government Gazette.

AfriForum welcomes the publication of an exclusive piece of legislation for the regulation of oil and gas exploration and production in South Africa. The draft Bill is an important step in the development of a viable upstream petroleum industry in South Africa which is much needed to stimulate our economy for the benefit of all South Africans.

“However, there are several concerns that the draft Bill could deter investors since it stipulates that 10% of every company applying for mining rights need to be owned by a BEE-partner. The draft also proposes that the state has to have a further 10% representation on the company’s board and have voting rights,” says Lambert de Klerk, Manager of Environmental Affairs at AfriForum.

AfriForum has further concerns with the creation of the Petroleum Agency of South Africa as another state-owned enterprise, which among other things, will receive and assess exploration and production applications. While not controversial in itself, South Africa’s recent history with corruption associated with state-owned enterprises is very likely to discourage investment. There are, furthermore, very few provisions in the draft Bill which will ensure that the PetroSA does not become prey to the corruption which has beleaguered other state-owned entities in the recent past.

“In its commentary, AfriForum also pointed out that the draft Bill in its final form should ensure that transparency and accountability forms the basis of the legal framework,” concludes De Klerk.

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