Africa-Press – Namibia. NAMIBIA’S PRESIDENT has been quoted as saying that legally oil recently discovered off the coast of Namibia does not belong to her people. This is because the majority shareholders of oil rights are not Namibian. This is apparently backed up by contractual agreements. This statement has caused confusion and consternation.
In terms of Article 100 of the Namibian Constitution, all natural resources – including minerals above and below the surface of the continental shelf and within Namibia’s territorial waters and exclusive economic zone – belong to the state if they are not otherwise lawfully owned.
The legal framework governing the exploration for, and development and production of oil and gas in Namibia is set out in the Petroleum (Exploration and Production) Act, 1991 (the ‘petroleum act’), and the Petroleum (Taxation) Act, 1991 (both as amended principally by the Petroleum Laws Amendment Act, 1998).
The Petroleum Act provides for the reconnaissance, exploration, production and disposal of petroleum as well as control over petroleum. It provides that all rights in respect of petroleum are vested in the state, notwithstanding any right regarding ownership of the land where the petroleum is found. And no person may carry on any operations in respect of petroleum without the necessary licence issued by the Ministry of Mines and Energy.
In addition, mining in Namibia is regulated by the Minerals (Prospecting and Mining) Act 33, 1992 (‘minerals act’), which vests all rights in respect of minerals in the state.
It further provides for the administration of the minerals industry and access to mineral resources through various types of authorities. As such, the state grants permission for mining, known as mineral concessions, for all minerals within state boundaries.
THE EQUITY ISSUE All rights in respect of mineral resources are vested in the state, which may grant these rights to applicants. In general, the state does not have any right to equity (to be a joint holder) in mining projects, save possibly for Epangelo Mining (Pty) Ltd.
There are also statutory consents required to dispose of rights to explore and mine, such as reconnaissance licences, and non-exclusive prospecting licences are not transferable and not disposable. This is also in terms of the Namibia Investment Promotion Act, 2016.
Namibia is well endowed with natural resources, such as diamonds, uranium, oil (and possibly natural gas), lead, copper, zinc and a diversity of wild fauna (including fisheries) and flora.
The conundrum is not whether the state has absolute power and control over its natural resources or not. Surely Article 100 of the Constitution and relevant provisions of the Petroleum Act and the Minerals Act vest all rights in respect of minerals and petroleum products in the state.
The state imposes and enforces rules and laws over a population within a territory and remains the main custodian of the country’s heritage for the benefit of inhabitants. So, what is that which is not legally ours?
As regards contractual agreements between the state and those who extract or beneficiate resources, a legally enforceable agreement determines what the parties can or cannot do. This is not the bone of contention per se.
Conversely, if a contractual agreement is not favourable to the state, the state, on behalf of its people, may simply disagree and decline to sign – depending on further developments – or terminate the contract and explore alternatives. Full stop! It is not obligatory for the government to sign a contract or live under unfavourable circumstances, or blame anyone else for its shortcomings.
Importantly, the term “vest” is significant in law because it means the state has an absolute right to some present or future interest in something of value, and is legally entitled to what has been promised and may seek relief in court if the benefit is not given.
‘GOVT MUST STEP UP’
It is therefore imperative for the government to improve its image in the eyes of the public and avoid being perceived as implementing weak and or non-beneficial contracts for its people. To do so, it must come up with a comprehensive ‘beneficiation strategy’ to develop secondary economic opportunities from primary industries, for example in respect of oil and gas exploration and production projects.
The government should explore the Norwegian Statoil model of state regulation and participation in industrial and economic activities before it was privatised in 2001. Oil, gas and minerals are strategic commodities too important to be left to the open market.
Minerals, oil and natural gas have the potential to drive economic growth in our country. However, ownership of natural resources wealth does not always translate into sustainable development.
Resource-rich developing countries such as Namibia face a range of challenges such as institutional corruption and gender inequality, to mention a few. It is incumbent on the government to give special attention to the governance of our natural resources so that they are managed and used sustainably and transparently to reduce poverty and boost sustainable economic growth.
In summary, under the Constitution and various laws, all natural resources below or above the surface of the Land of the Brave and within our territorial waters and exclusive economic zone belong to the state, the Republic of Namibia, and thus to her people.
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