Municipal Systems Bill: Department's response to submissions

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Cooperative Governance and Traditional Affairs

22 May 2000
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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
23 May 2000
DEPARTMENT’S RESPONSE TO PUBLIC SUBMISSIONS ON THE MUNICIPAL SYSTEMS BILL; AUSTRALIAN STUDY GROUP REPORT-BACK

Relevant Documents:
Local Government: Municipal Systems Bill
Department’s separate responses to each of the chapters of the Bill
[if this document takes too long to down load, e-mail info@pmg.org.za for it to be e-mailed to you]

SUMMARY
The members who participated in the Study Group that went to Australia provided feedback on their visit.  They illustrated some of the differences and similarities between South Africa’s and Australia’s local government structures and practices.  A discussion followed. 

The Department presented an overview of the issues raised in the public submissions on the Municipal Systems Bill and provided detailed responses to issues raised in the submissions concerning specific chapters of the Bill.  There was very little discussion of these presentations due to time constraints.

[The presentations of Ms Manche (Overview of the Public Submissions & General Comments) and Mr Sekele (Chapter 3 - Public Participation) are summarised in these minutes because the texts of the presentations were not distributed in the meeting.  The texts of the remaining presentations were distributed.  They are therefore not summarised in these minutes and can be obtained from PMG).]

MINUTES
Committee Programme
The Chair, Mr Y Carrim (ANC), set out the programme for the following weeks:
On 6 & 7 June there would be public hearings on the Traditional Leaders Discussion Document.  The Ministers of Agriculture, Mineral and Energy Affairs, Justice and Safety and Security had been invited to the meeting on 6 June.  The budget debate will take place on 8 June.  He indicated that the report on the budget would be sent to the party leaders.

He said that he had asked for permission for the Committee to meet three times a week (Tuesday, Wednesday and Friday) as of the week beginning 12 June.  He noted that Friday meetings would extend into the afternoon.

The Chair noted that the Committee would meet each day for the whole day during the first week (26 – 30 June) of the recess period, provided there is consensus and permission is obtained.  He stated that there were a number of pieces of legislation that the Committee still had to look at.

Australian Study Group Report-Back
The Chair introduced the representatives from National Democratic Institute for International Affairs (NDI) who were involved with this tour. He said the study group had gone to Australia to look at the relationship between public participation, performance management and service delivery in that country.  He said, however, that the group’s focus had expanded once they were there.
The Chair noted that a formal report would be distributed once finalised.

The Chair remarked that Australia had been through a similar process of amalgamation about ten years previously.  He said that members had undertaken the study to broaden their political and practical horizons.  He added that the tour had also been positive in that the members had got to know each other better.

He stated that the study tour was “remarkable”.  He said that the group was well balanced, in terms of gender and party representivity.  He added that over half the delegation comprised new members and that they had conducted themselves “adroitly”.  He said that NDI had been extremely efficient in their organisation and that he was grateful to them.

The Chair said that the group had tried to do too much in the five days that they were in Australia.  They covered four cities: Brisbane, Melbourne, Sidney and Canberra.  He remarked that the Committee had worked very hard.  He said that while each of the members had stuck to their own party’s beliefs, the delegation expressed a national interest.  He added that the Australian people had been warm and welcoming.

The Chair stated that the group had met with a wide range of stakeholders.  He noted that the Australian and South African societies are very different.  He said that there is a very different division of powers:  The States are very powerful and Local Government does not have original constitutional powers.  He said that the Australian notion of Integrated Development Planning is different from South Africa’s but that there are similar problems concerning performance management.  There are similar conflicts between officials.

One of Australia’s central challenges was the establishment of national Key Performance Indicators (KPIs).  He noted that there had been tensions between national and local government KPIs.  He commented that councillors are entitled to request a performance assessment of themselves.  He said that South Africa should not be too ambitious with its performance management system – Australia is still struggling.

Regarding public participation, he said that the public is entitled to arrive thirty minutes before a council meeting to ask questions.  There is an opportunity to ask further questions after the meeting.  He urged the members to consider this possibility but remarked that there are dangers in applying this system in South Africa.

Mr M Bhabha (ANC) addressed public participation.  He said that Australia’s society and resources impact on the development of their particular legislation.  The legislation mirrors society and there is a culture of participation.

Mr Bhabha noted the particular way in which the different tiers of government work together.  He said that local government does not have specific listed powers.  Legislation conferring powers on municipalities is widely phrased and the municipalities are not permitted to act ulta vires the legislation.

He emphasised that Australians have the view that if there is no infrastructure, everything falls apart and that there is therefore a heavy emphasis on roads.  He mentioned the experience of Victoria during amalgamation.  Councillors were expelled and were replaced by administers during the transitional period.  He said that Australia had introduced a concept of “best-value” rather than “economic imperatives”.  He stated that a difficulty with outsourcing is that the municipality is in a position of economic dependence for a number of years after a tender is awarded.  It is expensive to set up a service again if a contract fails –the municipality’s resources initially used for these services prior to outsourcing will have been allocated elsewhere.  He said that a high degree of monitoring is required to ensure that contracts do not fail.

He said a common database should be set up.  It should provide detailed information concerning transitional arrangement and the procedures and provisions of the Bill.  Local governments would be able to refer to this information instead of consulting different lawyers who have different opinions.

He said that he did not agree with the power that Australian CEOs have over their staff.  He remarked that there is insufficient accountability for the finances they receive.  He added that there is little consultation and discussion between municipalities.

Ms G Borman (DP) commented that Mr Carrim had been an excellent leader and said that NDI’s organisation had been outstanding.  She noted that some of the differences between Australia and South Africa had been discussed.  She said that Australian municipalities have more flexibility and are therefore able to be more creative and innovative.  She stated that after having been to numerous places it was clear that, because municipalities are so different, legislation could not operate uniformly.  She stated that South African legislation should similarly recognise the differences between municipalities.  She stated that she was grateful to have been a member of the study group.

Mr P Smith (IFP) said that he was also very grateful.  He remarked that the delegation had been well lead by Mr Carrim and said that the study had been well organised by NDI.  He commented that the notion of “best value” had been discussed.  He also noted the degree of flexibility accorded to Australian municipalities and remarked that they have very different outlooks.  He said that individual municipalities are left to do their own thing and that most are successful.

Mr Smith remarked that the difference between rural and urban municipalities in South Africa is very clear.  Urban municipalities have access to significantly greater resources.  However, in Australia the rural municipalities usually have a higher budget expenditure per capita than urban municipalities – rural municipalities are better resourced.

He remarked that the physical infrastructure and facilities are impressive: the offices are very well equipped and municipalities are generally very well resourced.  He noted that the relationship between the CEO and the Council in Australia is crucial.

Mr Smith said that in South Africa there is a system of listing the specific powers and functions of each local government body.  He noted that Australia had used this system until ten years previously but the current position involves the notion of competency: local government can do anything in the interests of the people it serves as long as it is not in conflict with national and state programmes.

Ms M Lobe (ANC) noted that public participation had been looked at.  In Australia there are annual electoral meetings.  These encourage better performance.  She said that municipalities have different strategies regarding public participation.  For example, different newsletters are distributed to wards within municipalities.  It is recognised that each ward has different needs.  An important issue is that of the collection of rates.  She noted that the Australians had been asked to come back to the Committee with information in this regard.

Mr Schuller (NDI) noted that leadership and local government management is crucial.  He said that the Australians have a number of staff training programmes.  Concerning public participation, he indicated that municipalities conduct customer surveys to gauge the response to the quality of service provided.  He added that the results of these surveys are published and this allows for comparison between municipalities.  He noted that where mayors appraise CEOs there is openness.

Ms N Patel emphasised that contextualising was important – Australian concepts and activities must be clearly understood in their context if they are to be properly applied in South Africa.  Ms E Martin thanked the Chair for his leadership.

Discussion
Mr S Pheko (PAC) said that he was interested in the position of municipalities in rural areas.  He asked Mr Smith to elaborate.  He noted that the lack of resources in aboriginal areas had been mentioned.  A member asked about the level of participation of indigenous people.  Attention was drawn to Mrs Borman and Mr Smith’s points concerning the flexibility of municipalities to do “their own thing” and there was concern that this could be disastrous in South Africa.

Mr M Nonkonyana (ANC) asked whether the system of municipalities in Australia is similar to the system of counties in Canada.  He also asked about the level of participation of indigenous people.  It was commented that the different newsletters for each ward furthers accountability – it can be seen which councillors are doing better than others.  This also furthers public participation.

Mr Smith said that the groups’ agenda had been too packed to do everything that they had wanted to do.  He noted that the group had not been able to establish in detail how the Australian financing system works.  He stated that 30% of revenue comes from rates.  The large proportion of revenue raised from rates would not necessarily be possible in South Africa.  He said that in Brisbane the group had not had the opportunity to visit what the Australians regarded as “problematic rural municipalities”.  He repeated that rural municipalities often have a higher per capita expenditure than urban municipalities – people who live in rural areas are not “thrown in the rubbish”.

Ms Lobe emphasised that a rural area in South Africa is very different from a rural area in Australia – Australian rural areas have resources and skills.  She noted that there are a number of aboriginal areas that are still isolated and do not have access to the national fiscus.  She said that the group had not visited the north of Australia where most aboriginal communities are situated.  She remarked that from what the group had observed in the places it had visited, aboriginal people did not really participate in local government for political reasons.

Ms S Rajbally (MF) asked the delegation to elaborate on the issues of cross-subsidisation and different legislation for different municipalities.  Rev A Goosen requested information concerning the protection of aboriginal burial grounds and special lands.

Mr J Kgarimetsa (ANC) commented that the input from the group had been useful.  He remarked that the Committee was asking for information concerning the best practices the group had observed in Australia and what elements can be implemented in South Africa.  He said that this should be the key content of the group’s report.

Mr Smith noted that one of the reasons for the relative lack of success of local government in northern Australia was because of cultural differences.  The Chair remarked that there was not time to answer all of the members’ questions.  He said that most of the issues would be addressed in the report.  He said that the group had not gone to look at local government in general but rather at specific elements.  Therefore, some of the members’ questions could not be answered.  Regarding the questions concerning aboriginal people.  He said that these issues had been raised by the delegation in Australia.  Lessons could be drawn from Australia in this regard, but he emphasised that Australian and South African society is fundamentally different in these respects.

He said that most of the members’ questions had been answered.  He stated that South African municipalities do not have the capacity to publish different glossy magazines for each ward.  Regarding flexibility, he stated that there might be a case for greater flexibility down the line, but the ANC agrees this is not what is wanted at this stage.  Regarding legislation, he noted that each State drafts its own fairly open legislation in terms of which municipalities operate.

The Chair noted that he did not have easy answers for Rev Goosen.  Although his questions dealt with important issues, they were not germane to the Bill.  He commended the conduct of the opposition part members and said that there had been good co-operation.

Department’s Response to Public Submissions on Municipal Systems Bill
Ms J Manche introduced the representatives from the Department: Mr F Louw, Mr P Bouwer, Mr E Afrika, Mr S Sekele and Mr C Pakade. Ms Woodridge could not attend due to illness but her report would be forwarded.  She proposed that the department meet with the Australian study group to discuss the Australian experiences of issues such as performance management.

Ms Manche noted that the Department had already gathered a wealth of information for the development of policy.  This includes information from foreign countries.  She said that she was proposing a meeting to discuss matters such as performance management and IDPs in detail.

She gave a brief overview of the issues raised in the hearings while the other departmental representatives went through the individual chapters of the Bill in detail.

General Comments made about the Bill include:
· The Bill needs to be aligned with the Municipal Finance Bill: the Bills must “talk to each other”.  Ms Manche noted that the Department had hoped that the Bills would have been introduced at the same time.  The Finance Bill is, however, eight months behind.
· There are elements in the Bill that are in conflict with the Local Government Transition Act.  Ms Manche remarked that the Department must go through a process of reviewing and repealing legislation.
· When there are issues of development, the attitude should be pro-poor.
· The Commission on Gender Equality had raised the issue of “citizenship”.  Ms Manche noted that the Bill has tried to make it clear that communities, residents and ratepayers all have rights and duties.

Gender Issues:
· The Bill does not define ‘poor’.  A definition should be included that takes into account impact of socio-economic factors on women.
· The Bill lacks references to the notion of citizenship, which is racialised and gendered.
· The municipalities’ rights should include the promotion of gender equality.  (It was later pointed out that ‘rights’ should be ‘obligations’).
· Women’s issues should be a focus area.

Public Participation:
· There is a lack of explicit reference to the need to build the capacity of the public to participate.  This had been included in an earlier version of the Bill but had since been left out.  Ms Manche noted that this was omitted because it requires the municipalities to do too much.
· The Bill should provide for the direct involvement of communities in decision-making, implementation and monitoring.
· The municipal councils should not be allowed to prohibit members of the public from attending their meetings.  Ms Manche remarked that the point had been made that there are situations where council meetings must be closed.

Integrated Development Plans:
· The Bill over-regulates and over-prescribes.
· There should be alignment with other national and provincial legislation.
· There is no reference to the promotion of local economic development in the Bill.  Ms Manche commented that this is implicit in the Bill.
· There was a call for the formation of IDP forums/committees.
· The issue of land restitution and IDPs was raised.

Performance Management and Public Administration
· The objectives and scope of performance management should be fully set out.
· There should be a sanction for the failure to perform.  It was asked what happens if a municipality fails to perform or to meet its obligations.
· A central concern is how to deal with current CEOs in the move to fixed-term contracts for employees.  Ms Manche said that the Department is seeking legal opinion here.
· The constitutionality of the obligation that salaries be disclosed.  Ms Manche commented that individual salaries would not be disclosed, only the typical salaries of each level of employee.  She added that this is important for transparency.
· The powers of city managers was raised.

Partnerships:
· The transfer of staff to third party service providers should be in line with labour laws.
· Regulations on tariff increases could deter investors.
· The Bill should be aligned with the National Framework Agreement.

Tariffs and Credit Control:
· There was a call to define poor households and basic services.
The municipality as a preferred creditor should be reviewed.
· It was submitted that welfare is a function of national government and the question was raised regarding what the role of local government is in the area.
· Debit order payments should be used rather than employees’ power to deduct.
· Municipalities should not have the discretion to allocate the payment by a person into any account.

Discussion
Regarding issues of gender, the Chair noted that there is a vacuum in the bill.  He suggested that parties should prepare about a page setting out proposals of where gender matters could be included in the Bill.  Ms Lobe suggested that sexual harassment should be included as a distinct offence in the code of conduct.  The Chair noted that this is the first concrete proposal.  All the members were in agreement.

Mr Smith commented that defining ‘community’ to incorporate notions of gender sensitivity was too cumbersome.  He stated however that, politically, gender sensitivity is important.

The Chair noted that the Committee would go through the Bill clause by clause at a later stage and at that point it could be discussed at what points issues of gender should be included.

The Chair asked whether the proposed obligation on municipalities to promote gender equality should be integrated into the municipalities’ other obligations or whether it should be stated as a separate clause.  The Department indicated that it should be stated separately.  The members all agreed.

Mr Smith submitted that obligations in s 4(2) should be balanced with the notion of citizenship.  Citizenship relates to the rights in society, which include the right not to be discriminated against on the grounds of gender.

The Chair emphasised that the Committee was merely alerting the Department to the conceptual issues and said that the Committee would go through the Bill clause by clause at a later stage – only general comments should be made at this stage.  He stated that he was concerned about the lack provision for building of the capacity of the public to participate.  He requested the Department to address this.

He remarked that he was struck by the land restitution issues raised in the public submissions.  He doubted whether the issues raised were credible.  Mr Afrika (Department) remarked that this is an important issue but it does not need to be addressed specifically in the Bill.  He said that if it is included, the Bill would start to look like a shopping-list.

Mr Sithole stated that there are local government structures that are affected by land restitution.  He said that there could not be effective development until the land questions are addressed.

The Chair said that, while he did not have a mandate from the ANC here, he agreed that there should not be a shopping list.  He added, however, that land restitution is an important issue and should be mentioned specifically in a few lines within the IDP provisions.  He requested that the department investigate whether it would really be “debilitating” to include this provision in the Bill.

Regarding IDPs, Mr J Ngubeni (ANC) raised the issue of capacity.  He said councils should be required to develop procedures to facilitate participation.  He noted that a problem arises when the Bill states that people must participate but they cannot do so unless they have the capacity.  He noted that there are also difficulties in encouraging the participation of disadvantaged groups.

The Chair emphasised that the Committee should really be providing the Department with political directives.

Mr Smith raised the issue of political and executive responsibilities and who should be sanctioned for non-performance.  He said that the relationship between the executive and the council had not yet been unpacked.  The Chair noted that this is important but asked whether there was not agreement that there should be some form of sanction.  It was agreed that some form of mild sanction is required.

Ms Manche stated that she had picked this up as an issue.  The Department has looked at the option of having the MEC intervene and at the option of financial sanctions.  She noted that financial sanctions are not really an option as this involves withholding the equitable share.  Legal opinion has indicated that this is not possible.  Consequently, the Department favours the power of the MEC to intervene.  Mr Smith asked whether he could see the legal opinion concerning the equitable share.  Ms Manche said that she could make it available.

The Chair noted that the Department is sympathetic to the problem that tariff increases could deter investors.  There is a need to balance the need for tariffs, to look at the framework agreement and to consult trade unions against the need not to discourage investment.

Mr M Lekgoro (ANC) raised the issue of people who are able to pay for services but are, for example, lodgers who stay in poor households and so avoid paying for what they consume.  He asked whether there was not a better way of recovering the actual costs of services provided and consumed by these people.  Mr Pakade (Department) said that these issues that have been discussed by the Department together with the issue of credit control.  He said that a decision had been taken in consultation with relevant stakeholders that the Bill would not include everything.  He said that the Bill should provide guidelines and a policy framework within which municipalities can choose options.  He added that the details could be dealt with in the regulations.

Mr Ngubeni observed that the Bill refers to a ‘national policy on indigents’.  He asked what is being referred to.  He noted that the question of arrears is also addressed.  He asked from how far back arrears would be calculated.

Ms Manche remarked that poor household who wanted to be subsidised would have to register.  The municipalities would then conduct random checks to determine whether there are other people living in the house earning an income.  If there are, this will be taken into account when determining the subsidy to be granted.

Regarding the indigent policy, Ms Manche said that the Department had issued guidelines dealing with indigents and that municipalities could decide on a policy that is relevant to their own circumstances.  She said that there is no ‘national indigent policy’.

Regarding arrears, she noted that municipalities are to reach their own agreements.  She commented that the department was looking at limiting arrears that could be claimed to a certain number of years or the value of the house.  She stated, however, that there is a general limit of three years at the moment.  She added that each municipality has to make its own decision concerning the interest to be charged.

Mr Ngubeni drew Ms Manche’s attention to s 89(c), which speaks of ‘any national policy on indigents’.  Ms Manche stated that there is no such policy at this stage and that this is included in the Bill to make provision for if and when a policy is developed.

Mr E Magashule (ANC) raised the issue of consent.  He noted that the target is the poor who are coerced into consent.  Ms Manche stated that the recommendation is that there should be a movement towards residents being willing to enter into agreements and away from coercion.

The Chair remarked that there had been comments on the general overview.  He urged that comments on the department’s specific responses to the submissions on each chapter should be limited to questions of clarity.

Chapter 3 – Public Participation
Mr Sekele stated that the Department was working from the premise that councils should work with the community concerning service delivery.  He said that this was in line with the local government paradigm that was developing internationally.  He said that there is an attempt to look at four broad issues:
· Forms of participation:  The hearings had raised a number of issues here.  The premise is that councils are elected bodies that have the right to govern.  They do, however, have the obligation to consult, conduct comment procedures where necessary and involve the community in meetings where appropriate.  He commented that council should nevertheless be entitled to sit “on its own”.
· Who participates?  A number of submissions focussed on how to ensure that the marginalized and poor participate.  Section 8 calls for the participation of these people.
· There is a duty on councils to promote public participation.  The Department has had to deal with three issues here.  Firstly, councils have the responsibility to build the capacity of the public.  Secondly, councils need to fund community participation.  This has had to be deleted – the councils may be overburdened.  Thirdly, councils have a duty to make facilities available to the public.
· Management of participation.  There a re a number of issues here.  Firstly, the question is in which areas the council should be obliged to involve communities.  In the areas of developing IDPs and service delivery communities must be involved.  Secondly, the question is: what is enough participation?  He asked whether this could be dealt with in legislation and suggested that it would be better addressed in the regulations if it is to be addressed at all.

Mr Sekele raised the issue of the openness of council meetings.  He repeated that councils have the prerogative to govern – they must be able to make decisions.  However, if a meeting is to be closed, certain requirements must be met.  He raised a question concerning what the rights of members of the public who attend open council meetings should be – should they have observer rights or rights to participate?

Discussion
Mr Nonkonyana questioned whether the Bill made adequate provision for the participation of people in rural areas.  He asked about participation through rural structures.

Mr Smith remarked that in Australia the emphasis is on surveys.  He asked whether the Department had given any thought to this.

Mr Ngubeni noted that bylaws remain in force indefinitely.  He asked how the public could participate in these.

The Chair indicated, because of time restraints, that the Department did not have to respond to these questions.  They are constructive questions that should be borne in mind.  He said that the ANC would consider Mr Nonkonyana’s points.

The Department provided detailed responses to the public submission dealing with Chapters 5-9 of the Bill.  Owing to time constraints, the representatives read through their presentations and there was no discussion.  The texts of the presentations may be obtained from PMG.

At the end of the presentations the Chair thanked the Department for its comprehensive report and adjourned the meeting.



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