The Cape Navigator

SOUTH AFRICA – Concerns have been raised regarding the Upstream Petroleum Resources Development Bill, currently under consideration by Parliament. AfriForum, a prominent civil rights organization, asserts that the proposed legislation harbours flaws that demand urgent attention to safeguard against potential corruption and unchecked ministerial powers.

The primary issue highlighted by AfriForum is the lack of transparency within the bill, coupled with the seemingly unlimited powers that would be granted to the Minister of Mineral Resources and Energy if the legislation is accepted. Among the contentious provisions is the proposal to allocate a 20% share in all petroleum rights to the state, a move seen as opening the door to corruption.

A particularly alarming aspect of the bill is the broad discretionary power granted to the minister to reserve specific areas for petroleum development exclusively for black investors. AfriForum expresses concern that this provision could be manipulated for the benefit of political cadres, potentially exacerbating issues of cronyism within the industry.

While the bill aims to separate the regulation of upstream oil and gas activities from the existing Mineral and Petroleum Resources Development Act of 2002, AfriForum contends that the consequences go beyond mere regulatory adjustments. The organization argues that the proposed legislation could further intensify policy uncertainty in the minerals and energy sector, leading to a decline in investor confidence.

Marais de Vaal, AfriForum’s advisor for Environmental Affairs, emphasizes the detrimental impact of the bill on the development of the country’s petroleum resources and its potential to worsen the already struggling South African economy. De Vaal states, “This is detrimental to the development of the country’s petroleum resources and further hurts the struggling South African economy. In the end, the majority of the country’s residents will be the innocent victims of the government’s greed.”

AfriForum has been vocal in its opposition to the bill since its introduction in 2019 and has recently submitted comments on the current form of the legislation, which has already been approved by the National Assembly. The comments will now undergo consideration by the National Council of Provinces, with hopes that the concerns raised will be addressed to ensure a more transparent and accountable regulatory framework for the development of upstream petroleum resources.