National Lotteries Board appointments: final deliberations

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Trade, Industry and Competition

05 November 2009
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Committee met to finalise its recommendations for appointments to the National Lotteries Board. The Committee had, in its previous meeting, agreed on four possible appointees - Prof Nevuthanda (Chairperson), Mr Reddy, and Ms Mokoka. Legal opinion around the appointment of Mr Negota had been sought, and the Chairperson reported that the opinion stated that there was no legal impediment to the proposed appointment. The Committee then agreed that this nomination would also be formally agreed upon. There were four proposals for the remaining two positions. The ANC put forward its nominations of Ms Loyilane and Mr Shabangu. In respect of Mr Shabangu, the ANC noted that rural development was a priority, and that he had prior experience in this area. The DA objected to the ANC's proposal of Mr Shabangu, stating that the ANC's criteria of rural development had not previously been agreed on by the Committee when it set out its selection criteria for these appointments, and that the DA felt he had performed poorly in the interview process. The DA felt strongly that the inclusion of the rural development criterion, and insufficient weight being placed on performance at interview, undermined the evaluation process, and sought permission to withdraw from the process. Several Committee members noted their regret, outlined their own notes taken at the interview, and maintained that the process was open and procedurally correct. No other nominations were put forward. The DA withdrew from the process, and the IFP representative objected also to the nomination of Mr Shabangu. However, the majority decision prevailed and the names of Ms Loyilane and Mr Shabangu were agreed upon as the other two recommended candidates for appointment.

The Parliamentary Research Unit then briefed the Committee briefly on the national gambling legislation, at the request of the Committee, and preparatory to the public hearings on gambling. The Researcher listed the reasons why people gamble, which, broadly speaking, were in response to emotional stress, financial pressures or simply as it was seen as entertainment. He also listed the socio-economic effects of gambling, which included  an increase in crime, including credit card theft and illegal gambling by youth, domestic violence and increased family stress, which may lead to divorce, and child neglect, mental problems and substance abuse. He noted that advertising was misleading, and recommended that there be limits on when advertisements could be flighted, and that they carry warnings of the negative effects of gambling. Government, in regulating the issue, should weigh up social responsibilities against fiscal popularity, and, since gambling contributed very little to gross domestic product, would need to factor in tax aspects. He noted that some of the proposals had been criticised. Members suggested that the presentation was rather too general, and needed to include a broader perspective.

Meeting report

National Lotteries Board: nomination of candidates for appointment
The Committee Secretary reminded Members that at the previous meeting they had agreed on certain of the nominees for the National Lotteries Board, being Prof Nevuthanda (as Chairperson), Mr Reddy (general member), and Ms Mokoka (as the chartered accountant representative. Committee Members had agreed in principle upon the nomination of Mr Negota, as the legal practitioner representative, but noted that a legal opinion was needed on whether he was eligible to serve a further term on the Board.

The Chairperson informed the Committee that she had received written legal confirmation that there was no legal impediment to Mr Negota being considered for appointment to the Board. Copies of this confirmation would be made available to all Committee members.

Mr S Marais (DA) noted that Mr Negota's nomination had been made on the basis that a legal opinion still had to be obtained.

Mr X Mabaso (ANC) suggested that, since the legal interpretation confirmed his eligibility, the appointment should be confirmed and he formally proposed that the appointment of Mr Negota be recommended.

The Chairperson noted that then the outstanding two positions needed to be filled. The names so far proposed were Mr Shabangu, Mr Mankotswa, Ms Loyilane and Mr Badenhorst, but members could, if they wished, put forward other names as possible candidates.

Mr S Radebe (ANC) said that, as the ANC felt strongly about rural development, it wished to nominate Mr Shabangu as one of the candidates, largely due to the positive work he had done in this area. The issue of women's empowerment was also a critical focus area for the ANC and the party wished, as a result, to put forward Ms Loyilane as its other preferred candidate, as she possessed strong business acumen, and this had been proven through her past work with Small, Micro and Medium Enterprises (SMMEs)

Mr A van der Westhuizen (DA) expressed his dissatisfaction with the fact that the ANC's criteria of rural development had not previously been agreed on by the Committee when it set out its selection criteria for these appointments. He felt that the integrity of the process had been undermined. Mr Shabangu's performance during his interview had not been taken into consideration. In the circumstances, he asked for the Chairperson's permission to withdraw from the appointment process.

The Chairperson said that, although the withdrawal was regrettable, she could not prevent him from doing so. She noted that every Committee member had considered Mr Shabangu's performance during the interview process. Her notes, taken during the interview process, indicated that Mr Shabangu understood clearly the weaknesses that existed in the distribution of funds to the needy target groups. She disagreed that the integrity of the process had been undermined. She granted the opposition Members permission to caucus among themselves as to whether they did indeed wish to withdraw at that point.

Mr van der Westhuizen maintained that Mr Shabangu had appeared lowest on his ranking list and had not, to his mind, answered questions posed to him during the interview satisfactorily.

Mr Mabaso said that the Committee had conducted the process correctly in terms of the law, and had adhered to the rules of Parliament. The DA's withdrawal was therefore regrettable. The Committee had not agreed to take only the candidates' scores during interview into consideration, as there were other factors which also came into play. Although he understood the DA's disappointment with the inclusion of rural development as a criteria, the need to give this issue priority had been discussed in a previous meeting.

Mr Radebe said that, as the DA representatives represented their constituencies, their withdrawal was highly regrettable. He suggested that a language barrier could have resulted in Mr van der Westhuizen not understanding Mr Shabangu fully. The ANC did not view the process as being incorrect or fraudulent in any way. Mr Shabangu had had previous Board experience, which placed him in a strong position for possible appointment.

Mr Radebe noted that as only two names had been formally nominated to fill the two posts, the Committee should take its vote.

Mr Mabaso said that it was inevitable, given the nature of the evaluation process, that different Committee members would allocate different points to different candidates. He did not think it was therefore a valid point for the DA to raise as a reason for alleging that the process was flawed.

The Chairperson asked Mr Radebe to read out the list of names the ANC wished to put forward.

Mr Radebe noted that as the Committee had previously agreed on Prof Nevuthanda, Mr Reddy, Ms Mokoka and Mr Negota, the ANC's proposals for the outstanding two positions (taken from the shortlist) were that Mr Shabangu and Ms Loyilane be nominated.
Ms H Line (ANC) seconded Mr Radebe's proposal.

The Chairperson asked whether there were any objections or other proposals.

Mr M Oriani-Ambrosini (IFP) said that he wished, following his consultation with the DA representatives, to object to the proposed appointment of Mr Shabangu.

Other Members indicated that they had no other nominations and would support those made.

The Chairperson said that, though the withdrawal of the DA Member and the absence of Ms P Lebenya (IFP) were unfortunate, the Committee had a quorum and therefore had fulfilled the necessary procedural requirements to reach a decision. She summarised that the Committee's recommendation for the appointments to the NLB would be made to the Minister as well as the Speaker, and that these were that Mr Negota, Ms Makoka, Mr Reddy, Mr Shabangu and Ms Loyilane be proposed for the board, whilst the Committee recommended that Prof Nevuthanda be appointed as Chairperson of the Board.

The Chairperson noted that the Committee’s report on the process would include the following: “On 4 November 2009 the Committee resumed deliberations on the matter on which four nominees had been recommended and two further candidates (Mr Shabangu and Ms Loyilane) had yet to be decided upon. On 6 November 2009, after vigorous deliberations by the Committee, the DA indicated that they could not continue with the process and withdrew. The nominations were duly noted and seconded. In the absence of any other motion, the motion was adopted. The IFP noted its objection.”

Briefing on the national gambling legislation

Mr L Mahlangu, Researcher, Parliamentary Research Unit, briefed the Committee on the national gambling legislation. He noted that most people gambled in response to some form of emotional stress (boredom and depression being the two main factors), or because of financial strain (since they viewed gambling as a solution to their financial troubles), or because they viewed it as entertainment. Gambling did not contribute to the Gross Domestic Product, as it merely saw the transfer of existing money. In terms of employment creation, gambling had, to a certain extent, contributed to growth in the hotel, retail and new infrastructure industries. Most of these positions were, however, low-paying, minimal-benefit positions. Gambling also served to contribute to an escalation in debt problems and bankruptcy. Child neglect, homelessness and lack of service delivery also increased as a result of gambling.

The social effects included an increase in crime, illegal gambling among the youth (which had increased in recent years, mainly due to a lack of knowledge and awareness), credit card theft, domestic violence and child neglect. It was also found to lead to an increase in family stress (including divorce), mental problems and substance abuse.

Misleading advertising played a role, as the social impacts of gambling were never depicted in advertising which promoted gambling. Predatory marketing strategies, such as hire-purchase schemes, also led people to believe that they were in a position to afford to gamble. Government could play a role in this regard by setting limitations on the promotion of gambling, for example confining advertising to adult viewing hours. Alternately, legislation could be enacted for such advertising to carry a warning of the negative effects of gambling.

The need to regulate should be borne in mind when dealing with the issue of gambling. When dealing with gambling legislation, Government would have to weigh up social responsibilities against fiscal popularity. The “four R's” of taxes -re-pricing, redistribution, revenue and representation - also needed to be taken into consideration. If, for example, gambling was generating revenue, the amount that was redistributed would also have to be factored in. A public health model could also be considered. This would create awareness and allow for early intervention. However, this model had been criticised in certain quarters, who argued that it was a long-term plan.

The Chairperson asked whether any members needed any clarification around the contents of the briefing.

Mr Oriani-Ambrosini said that the research should be less biased in order for the Committee to gain a fuller perspective on the legislation as it stood.

The meeting was adjourned.


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