The Committee continued with its informal deliberations on the SA Postbank Bill. The Committee invited the Department of Communications, the National Treasury, the South African Post Office and the Office of the State Law Advisor to address some of the outstanding issues that had emanated from the previous discussions on the Bill.
Members debated whether to omit Clause 2(g) from the Objects of the Bill. The Department and National Treasury were in favour of withdrawal, citing the view that the Objects needed to provide for a general vision of what the Bill was trying to achieve. Clause 2(g) went beyond what the Objects of the Bill intended to do. Some Members took the opposite view and argued that Clause 2(g) should be included in the Objects, as it was the key factor in determining whether or not the Postbank would be serving the poor. Members pointed out that there should be agreement about what type of bank would be established. It was unclear if the Postbank would be a dedicated bank or a commercial bank. The Committee could not resolve this matter and flagged it for future discussion.
In respect of Clause 3, the Committee discussed who the shareholder would be and what powers the Government had. Currently, the Postbank was a subsidiary of the South African Post Office. The Committee’s difficulty was that a bank with a board of directors was being incorporated. This board would have to report to the board of the Post Office as the shareholder. The Post Office reported to the Minister of Communications, who was the shareholder of the Post Office. This meant that the Minister was an indirect shareholder of the Postbank and would have limited powers concerning the policies of the bank. Members asked questions concerning the possibility that ordinary members of the community could be shareholders but the opinion was that the bank would be unlikely to distribute profits in the form of dividends to shareholders.
In respect of Clause 11, the National Treasury informed the Committee that the provisions of the Public Finance Management Act (PFMA) should not be duplicated in the Bill. If there was any conflict between the PFMA and any provisions in the Bill, the PFMA would prevail. The Committee resolved that this issue would be flagged and addressed at a later meeting.
Members examined issues relating to the size of the board, conflict of interests of board members and what legislation the Postbank would be subjected to. The Committee agreed with the proposal that the entire Schedule 1 was deleted as the Labour Relations Act dealt with the transfer of personnel.
The Committee held closed deliberations on the adoption of candidates for appointment as ICASA Councillors.SA Postbank Bill [B 14-2009]
Informal Deliberations on the SA Postbank Bill
The Chairperson recalled that it was decided during a prior meeting of the Committee that the Department of Communications (DoC), the National Treasury (NT) and the South African Post Office (SAPO) needed to clarify certain outstanding issues. Certain delegates were unprepared and were unable to respond to questions from the Members of the Committee. He proposed that the Committee discussed the Bill clause by clause. He assumed that there had been some discussions between the DoC and the NT since the last meeting. He hoped that consensus had been reached on the outstanding issues.
Clause 2: Objects of Bill
Mr Willie Vukela, Director: Legal Services, DoC, noted that many of COSATUs proposed amendments were directed at the objects of the Bill. The Postbank had to address the needs of the people. The DoC had considred the proposed amendments as well as the objects of the Bill and provided for four additional objects. Clause 2(d) spoke to affordable access to banking services. Clause 2(e) addressed historical disparities in access and distribution of banking services, especially in rural areas. Clause 2(f) expanded the range of banking services to rural and lower income markets that had little or no access to commercial bank services. In terms of Clause 2(g), the DoC had held discussions with the NT. The DoCs submission, which stemmed from COSATUs submission, proposed that Clause 2(g) was inserted to ensure that the Postbank had to account or accommodate people in rural or low income markets in terms of rates offered for services. In later discussions with the NT, it was agreed that this requirement was prescribed as part of the offering by the Postbank. It was therefore not feasible to include the provision in the Objects.
The Chairperson clarified that the proposal was to omit Clause 2(g).
Ms J Killian (COPE) was of the opinion that the objects stated requirements of a more general nature. Once the power, functions and activities were considered, the Objects of the Bill could be reviewed. She wondered if it was wiser to provide for the incorporation of the Postbank division of the Post Office as a legal entity tasked with expanding banking services to under-serviced communities. If the proposed amendment was included, the Committee would have to define low income markets. She wondered if it was wiser to have a broader approach that would encapsulate the notion of what the Bill needed to do. The Objects did not have to go into detail.
Ms P De Lille (ID) asked why the DoC agreed with the NT to remove Clause 2(g).
Mr Vukela stated that the DoC were of the view that the Objects needed to provide for a general vision of what the Bill was trying to achieve. The DoC felt that Clause 2(g) went beyond what the Objects of the Bill intended to do.
Ms De Lille thought that it was important to keep Clause 2(g) in the Objects of the Bill. Clause 2(a) stated that the bank would encourage and attract savings amongst the people of the Republic. Clause 2(b) looked transactional services and lending facilities. The Postbank would provide both savings and lending services. This bank was supposed to serve the poor and should not be left unprotected in the commercial arena. This was the reason why the Committee wanted to know about interest rates. They wanted to see the difference between the Postbank and a commercial bank. She thought that Clause 2(g) should be included in the Objects, as it was the key factor in determining whether or not the Postbank would be serving the poor.
Mr van den Berg (DA) concurred with Ms De Lille’s proposal. The Objects stated that the Postbank would be a bank just like any other commercial bank. However, it would deal with the poor people in rural areas. He could not understand how the Postbank would be able to lend money to poor people that did not own anything. He asked how the bank would deal with such a legal requirement.
The Chairperson noted that there was a lot of overlapping of ideas in Clauses 2(c), 2(d), 2(e) and 2(f). This seemed very repetitive. The Postbank was not a commercial bank; it was a specific type of bank. The NT called it a “second tier bank”. The Committee wanted to get the vision of the bank right in the Objects of the Bill. He wondered if the Committee could get a streamlining of the ideas contained in Clauses 2(c), 2(d), 2(e) and 2(f). He noted that Clause 2(d) could be considered a separate function. However, there was a lot of similarity with Clauses 2(c), 2(e) and 2(f). He wanted the phrasing of the clauses to be streamlined so that there was a single clear objective that encapsulated what the Committee was talking about. He did not want to use the term “second tier” because people would not know what the term meant and the term would have to be defined in the Bill. The issue of Clause 2(g) had to be discussed and it had to be decided whether or not it should be deleted.
Ms De Lille reminded the Committee that the reason why Clauses 2(d), (e) and (f) were included in the Objects was because it was recommended in the COSATU submission. Clause 2(g) was included in the Objects because it was suggested by the Eastern Cape Youth Development Board (ECYDB). The Committee had to agree whether the Postbank was going to be a dedicated bank or a commercial bank so that they could guage the Bill against other current banking legislation. In the absence of knowing what kind of “animal” the Committee was trying to create, it was a difficult process. The Committee did not want to add requirements to the Bill that was relevant to a commercial bank or a dedicated bank. Her understanding from the presentation made by the NT was that the Postbank was a hybrid between a commercial and a dedicated bank. She asked if there was any agreement on what type of bank had to be created as the Committee would consider the clauses of the Bill in accordance with the type of bank envisaged.
Mr Vukela stated that the assumption that the Postbank would be something between a commercial bank and a dedicated bank was correct. The Postbank would undertake and further develop objectives of the State in so far as access to banking services and inclusion of the poor in the financial services market was concerned. Concerning Clause 2(g), the DoC thought that the sentiment of universality of services and access for all was already covered by Clause 2(d).
Ms De Lille asked if the Bill included a guarantee that there would be a degree of flexibility concerning the linking of the Postbank to the South African Reserve Bank (SARB) with regard to interest rates. If this requirement was not stipulated in the Bill there would be no assurance that the Postbank would not follow the route of the commercial banks in determining interest rates charged to clients.
Ms Jeannine Bednar-Giyose, Director: Fiscal and Inter-Governmental Legislation (National Treasury), stated that the DoC and the NT had discussed the inclusion of clear policy-making powers for the Minister of Communications. In terms of these powers, it would be possible to address some of the issues raised by Members such as the provision of a mechanism allowing for flexibility. It was relevant to note that existing banking legislation did not address matters such as linking interest rates. The rate of interest charged was a policy decision that would be taken by the bank concerned.
Mr S Kholwane (ANC) proposed that the Committee flagged the issues concerning Clause 2(g). In the interim, the DoC could address the issue of streamlining Clause 2(c), (e) and (f).
The Chairperson noted that the DoC would be “cleaning up” the phrasing of Clause 2 and would submit a revised version to the Committee for consideration.
The Chairperson said that the issue was who the shareholder was and what powers the Government had over the Postbank. Currently, the Postbank was a subsidiary of the South African Post Office. The difficulty was that a bank was being incorporated with a board. The board of the Postbank reported to the board of the Post Office as the shareholder. The Post Office reported to the Minister as the shareholder of the Post Office. This meant that the Minister was in fact an indirect shareholder of the Postbank and would have limited powers to set up policies within the bank. The Committee and the DoC had to consider the powers of the Minister in Chapter 3 of the Bill.
Mr Vukela replied that many factors had to be taken into account. A few issues had been flagged, including the shareholding. The DoC did not have the mandate to respond to four other issues that had been flagged, which placed the Department in a very difficult position. Further discussion was necessary and he asked if the response of the DoC to the issue of shareholding and governance could be postponed.
Mr Kholwane conceded that the issue was a difficult one to resolve and that the Committee had no choice but to allow the DoC more time.
Ms De Lille requested that the DoC considered making allowance in Clause 3 for members of the community to become shareholders in the Postbank.
Mr Kholwane felt that the current shareholding configuration of the Postbank would not work and had to be reviewed.
The Chairperson stated that he understood the DoCs position but the Bill was no longer with the Department and the Committee had to start telling the DoC what was required. A State bank was being created rather than a commercial bank and the Committee needed clarity on whether this bank would offer shares to the community and if the members of the community could become shareholders.
Mr Omega Shelembe, Acting Chief Director: Financial Sector Development (National Development) replied that the idea that members of the community could be shareholders had not yet been considered at the policy level. The issuing of shares in State-owned entities to members of the public was tantamount to privatising a State-owned enterprise (SOE). A SOE did not seek profit and its activities were cross-subsidised. As a result, there might not be any profits that could be distributed to shareholders. SOE’s paid social dividends instead of monetary dividends. If members of the community were brought in to become shareholders, it would result in a new pressure point on Government.
Ms De Lille stated that she was starting to understand what the Bill was trying to create. It was the first time that the bank was referred to as a State-owned entity.
The Chairperson added that the Committee wanted the Postbank to be a stand-alone entity that reported to Government rather than the Post Office.
Mr Kholwane asked if the Postbank Board would report to the DoC.
The Chairperson answered that this was correct. However, there could be members of the Post Office Board who would be qualified to serve on the Postbank Board. This was necessary for operational purposes. There could not be two boards to manage the same functions, but here would have to be some coordination between the two entities. The Chairperson asked for more information on the Dedicated Banks Draft Bill.
Ms Bednar-Giyose replied that the NT had been working on the Dedicated Banks Draft Bill throughout the year. The process had been a lengthy one, commencing five years earlier. The NT anticipated that the Bill would be presented to Parliament in early 2011. It was important that the Objects of the Bill were appropriately framed. The Dedicated Banks Draft Bill would be the appropriate Bill to give the proper framework for the Postbank. The purpose of other banking legislation and the Dedicated Banks Bill was not to provide a policy framework, but to provide a regulatory framework for banking institutions. Dedicated banks were seen as second tier banking institutions that would provide a wider range of access and services. The scope of activities that these banks would be able to conduct would be carefully limited and lending activities and requirements for holdings would differ from the requirements applicable to regular banks.
Ms L Mazibuko (DA) wondered what would prevent the DoC and the Postbank from simply declaring that the bank wished to remain within the framework of commercial or regular bank legislation once the Dedicated Banks Bill was passed. Once the Postbank Bill was enacted, the Committee would not be able to have any influence on what the purpose of the Postbank would be.
Ms Bednar-Giyose replied that she recognised the difficult situation of the Committee concerning the need to regulate the Postbank in line with the original objectives and functions. The Dedicated Banks Draft Bill was currently at the drafting stage but the DoC and the NT had recognised this issue and significant discussions in this regard were being held. The DoC and the NT wanted to propose some specific amendments to Clause 4 of the Bill, which would provide for flexibility and allow the Postbank to be registered in terms of appropriate legislation.
Ms Killian wanted clarity on the reporting structure of the Postbank board. The current recommendation was that there had to be two separate boards (i.e. the Postbank board and the Post Office board) and that the Postbank board would report to Government instead of the Post Office board. In a document tabled by the NT during the previous meeting with the Committee, it appeared that the NT had a different idea as to how the Postbank would function. The NT had stated that it supported the initiatives of the Bill to enable the Postbank to provide deposit-taking services in order to expand access to banking services. It was a fundamental principle that all deposit-taking institutions had to be regulated by the banking regulator. The Committee was discussing what the activities, powers or functions of the bank would be and agreement with the DoC and the NT would have to be reached regarding Clause 9. She wondered if the Committee would be able to finalise Clause 2 without having discussed what kind of bank would be created and care must be taken that the appropriate regulatory framework was in place to protect the funds of the people.
Mr Vukela explained that Clause 2 of the Bill defined the bank. The DoC was trying to design a bank that was able to achieve the vision of the Committee. The DoC was not yet in a position to comment and he reiterated the request to postpone further discussion on this particular point.
Mr van den Berg said that it did not matter if a commercial bank or a dedicated bank was created as the Postbank would be a state-owned bank. However, SOE’s had been under severe financial pressure during the previous years and many entities had to be bailed out by the State using tax-payers’ money. Tax-payers were paying for the mistakes made by SOE’s. The Postbank Bill had to contain a regulatory framework to ensure that proper financial decisions were made.
Mr Vukela replied that the underlying principle of the Bill was to corporatise an institution. The onus would be on the institution to satisfy all the applicable banking legislation and regulations. Banking security was covered by existing banking regulations.
The Chairperson understood that the NT was suggesting that the Committee should not wait for the Dedicated Banks Draft Bill to be passed. The Postbank Bill was desirable and the bank had to be established by means of the Postbank Bill. The Committee had to clarify what was required in the legislation.
Ms De Lille felt that the Committee was not getting clear answers to the questions asked by Members. If the Committee did not understand what the Bill would create, the Members would continue to resist what the DoC was putting before them. The Committee wanted to understand what was being established by the legislation.
The Chairperson reminded Members that the deliberations were still informal at the current stage. However, the Committee had to agree on what was required for the Postbank. The Committee was progressing to the point where the DoC had to be informed of what needed to be in the legislation. The DoC would have to submit further proposals.
The Chairperson noted that the NT wished to make amendments to Clause 4 and he asked if a document had been submitted to the Committee in this regard.
Ms Bednar-Giyose replied that the NT and the DoC were in the process of formulating documents concerning the proposed amendments. However, the documents had not been finalised and submitted to the Committee. The NT wanted to amend Clause 4(2) to state that “The Company must, in consultation with the Minister and the Minister of Finance, be registered in terms of the Banks Act or other banking legislation that is published by the Minister of Finance in the Gazette after consultation with the Minister of Communications as an institution to conduct banking business, after it has satisfied the requirements for registration in terms of the applicable legislation”. It was important to consider the appropriate regulation of the institution and the NT was taking account the fact that the Dedicated Banks Draft Bill had not yet been brought before Parliament. Another amendment proposed by the State Law Adviser (SLA) stated that “The Company must, in consultation with the Minister and the Minister of Finance, be registered in terms of applicable banking legislation as an institution to conduct banking business after it has satisfied the requirements for registration in terms of the applicable legislation”. This was a more open-ended type of wording. The intention of both proposals was that there would be some kind of flexibility built into the legislation concerning the registration of the bank. She undertook to provide the Committee with copies of the written amendments.
The Chairperson noted that the proposed amendments amplified what was already stipulated in the Bill.
The Committee did not raise any concerns regarding this clause.
The Committee did not raise any concerns regarding this clause.
The Chairperson stated that the labour unions were up in arms about certain labour matters. He asked the DoC to brief the Committee on the issue.
Ms Killian stated that there were ample previous examples of dissatisfaction amongst employees when new institutions were established. The staff at the Post Office would now be moved into a highly competitive banking sector, which demanded very specific and dedicated training. She asked if the Bill made provision for personnel to comply with training and skill requirements as the banking sector generally had rigorous requirements that had to be met. She asked if any assessments of the existing staff had been done and if they had the necessary qualifications.
Ms Motshoanetsi Lefoka, Chief Executive Officer: SAPO advised that there were regulations that the staff of the Postbank had to comply with. Certain staff members would be subjected to tests to determine if they were qualified for the positions. Many of the Postbank staff would be previous Post Office staff, who would need to be trained and prepared. This was an ongoing process.
Mr Kholwane noted that Schedule 1 was excluded from the original gazetted Bill. The latest version of the Bill did contain Schedule 1 and he wanted to know if there were any legal implications.
Mr Vukela explained that Schedule 1 was inserted into the Bill after the DoC had incorporated all the input from stakeholders and interested parties. Schedule 1 dealt with the transfer of personnel from one institution to another.
The Chairperson advised that the Committee would address this issue again as the labour unions had a problem with it.
Ms De Lille wondered when the Committee would be able to consider the clauses in view of the NT’s comments concerning the Postbank.
The Chairperson said that his understanding was that the Committee had asked the NT to meet with the DoC to clarify and discuss any amendments that needed to be made. The DoC had to return with clear proposals.
Mr Vukela replied that the DoC had held a number of meetings with the NT to resolve certain issues. The Director-General (D-G) of the DoC still had to review the latest version of the proposal and the amendments proposed by the NT. Unfortunately, the D-G had disagreed with some of the issues raised by the NT.
Ms De Lille noted that this meant that the discussions and amendments agreed upon by the NT and the DoC were not incorporated in the presentation given to the Committee, as it still had to be approved by the NT and the D-G of the DoC.. She did not see a connection between the proposals of the NT and DoC that indicated that the two parties had discussed the amendments.
Mr Vukela explained that the NT and the DoC had held approximately three or four meetings to discuss the proposed amendments. The D-G of the DoC was unable to access the submission made by the NT because she was away on business. The DoC could not present proposals that did not have her approval. However, the DoC had finalised the proposal with the NT. This document was now with the D-G. The D-G wanted to meet with the NT to discuss whether the amendments were agreed upon by both parties. If it was agreed, the amended proposal would be presented to the Committee.
The Chairperson stated that the DoC and the NT should have informed the Committee that they were not ready to present the proposal. Neither the NT nor the DoC had corresponded with the Committee to advise that the proposal would be delayed. The DoC and the NT could proceed and indicate where there would be possible amendments. He did not accept that the DoC did not have the mandate to discuss certain matters, as there would have been no point in holding the meeting. These procedural matters needed to be resolved.
Ms Killian did not understand the basis on which the meeting could proceed. She proposed that the meeting was adjourned because there was no formal proposal from the NT and the DoC that could be presented.
Mr Kholwane felt that certain issues could be finalised and the the Committee could make some progress.
Ms De Lille added that the Committee had to proceed on the understanding that the NT had to present their submission to the Committee at a later stage.
Ms Bednar-Giyose replied that a draft document had been drawn up. The NT would be prepared to present a specific proposal. She apologised for not presenting a finalised document to the Committee.
The Chairperson suggested that discussions were continued as the NT and the DoC had done some work on the final proposal a formal document had not been approved by the D-G.
The Committee did not raise any concerns concerning this clause.
The Chairperson stated that the Clause had to spell out the powers and functions of the Minister and Government.
Mr Vukela explained that Clause 9 was linked to Clause 25 where the policy-making powers were included. The DoC proposed a new insertion - Clause 9(3), which stated that “The Company must comply with policy determined by the Minister in terms of Clause 25”. This meant that the heading for clause 25 would have to change.
The Chairperson asked if regulations and policy was the same thing, as Clause 25 spoke about regulations. Regulations were relevant to administrative procedures and did not involve setting policies. These were two completely different functions and he doubted if the Committee would agree with the proposal.
Ms De Lille asked if the DoC had considered the NT proposal, which stated that Clause 25 should state that the Minister should have the power to make regulations after consulting with the banking regulator. This was closer to what the Committee wanted.
Mr Vukela replied that he understood that Clause 9 was under discussion. The concomitant proposed amendments to Clause 25 were available.
The Chairperson stated that the Committee wanted Government to have the right to determine the developmental agenda of the Postbank. This was the policy-making function. This power had to be conferred on the Minister and had to be specified in the legislation. A separate clause could be created that would set out the powers of the Minister.
Mr Shelembe explained that the NT and the DoC had taken the Committee's advice concerning the powers of the Minister. A provision was made in Clause 9 that stated that the company had to comply with the Minister's policies. These powers would be promulgated in Clause 25. The DoC still had to present the proposed amendments to Clause 25.
The Chairperson stated that the NT and the DoC should have told the Committee this at the beginning of the discussion of Clause 9.
Ms Bednar-Giyose advised that the NT considered that the Postbank board should be approved by the Registrar of Banks in accordance with the requirements set out in the Banks Act or the Dedicated Banks Draft Bill, depending on the decision that would be made about what legislation the Postbank would be registered under. An insertion would be added at the end of Clause 10(2) to read “after first being approved by the Registrar of Banks”.
Ms Bednar-Giyose stated that the NT was of the opinion that the provisions of the Public Finance Management Act (PFMA) should not be duplicated in the Bill. If there was any conflict between the PFMA and the provisions specified in the Bill, then such provisions needed to be removed and the provisions in the PFMA would prevail.
The Chairperson stated that this issue would be flagged. The matter would be resolved at a later meeting.
The Chairperson commented that a board of fifteen members was too large.
Mr van den Berg wondered why the board had to be so large.
A delegate from SAPO explained that the clause had to be clear on whether the number fifteen included executive as well as non-executive board members.
Mr Alf Wiltz, Director: Legal Affairs (DoC) added that the boards of large commercial banks had approximately nineteen members. Second tier banks usually had between eight and twelve board members.
The Chairperson felt that the number had to be reduced. He suggested that the Clause be amended to say “not more than ten members...”. He stated that the issue would be flagged for later discussion.
Ms De Lille said that the Committee had been very concerned about conflict of interest issues. She asked if a provision could be included in the clause to ensure that board members' interests were verified. She wondered if it was possible to state that if a member had any interest in the banking sector, he/she would not be allowed to serve on the board.
The Chairperson wondered if members of the board also had to be South African citizens.
Mr Ismail Mamoniat, Head: Tax, Financial Sector Policy (NT), said that, according to the Banks Act, the Registrar had a lot of powers and not only conflicts of interest was of concern. People had all kinds of links to banks and other financial companies. The Registrar of Banks had disallowed the appointment of a number of people to the boards of banks. The issues went far beyond conflicts of interest. It was a fair question to ask how transparent the issue of conflict of interest should be. The discretion of the Registrar was very helpful. However, he could not operate as transparently as in other instances. He assured the Committee that the Registrar was very helpful and a very rigorous process had to be followed.
Ms De Lille said that if the Registrar had to give the final approval of the board, it was important to find a balance in the criteria applicable to the composition of the board and the requirements of the Registrar.
Mr Mamoniat replied that the provisions in the legislation contained the minimum criteria for approval of appointments. In practice, it would be better for the NT and the DoC to address the issue as a protocol. The Committee could review the protocol to see if it was adequate. His fear was that if every step of the appointment of board members was legislated, it could make the procedure very lengthy and difficult. There had to be some transparency in how the process of appointments was conducted.
Mr van den Berg said that the Committee needed to understand all aspects if it was to proceed with the Bill. He wondered if the Committee on Finance should be assisting the Committee as the Members of that Committee would have more expertise in banking and financial matters.
The Chairperson agreed to Mr Van den Berg’s suggestion. He remarked that the nomination of persons to boards of directors were public procedures. If the criteria for appointment were not spelled out, a large number of applications would be received, including people that did not necessarily qualify for appointment. Anyone could be nominated if the criteria were not stipulated in the legislation. He wondered if one of the qualifications should be that board members should be South African citizens.
Ms Lefoka agreed that the criteria should be spelled out as per the Bank Act. The DoC agreed with the NT that it might be too lengthy to include the criteria in the Bill.
The Chairperson asked that the document stipulating the criteria was circulated to Members.
Mr Shelembe advised that the NT wanted to propose an additional sub-clause, 4(d) that stated “…must consider whether the candidate is, as far as can be reasonably ascertained, a fit and proper person to hold the office of a member of the board of the banking institution in consultation with the Registrar of Banks”. The sub-clause was intended to reinforce the final appointment of board members by the Registrar.
Ms Zuraya Adhikari, Parliamentary Legal Adviser, suggested that the proposed amendment to Clause 10(2) should be removed and worked into Clause 14.
Mr Shelembe replied that Clause 10 provided for the Minister to appoint board members. Clause 14 dealt with the process of appointing such members.
Ms De Lille stated that she had a problem with the proposed amendment, as it said that members would be appointed “in consultation with the Registrar” when in fact, the NT’s first proposal suggested that the banking Registrar had to approve the appointments.
Ms Bednar-Giyose replied that the phrase “in consultation with” required the concurrence of the Registrar. This effectively meant that the Registrar's approval was required. The intention of the amendment was to ensure that the approval of the Registrar was obtained at a stage in the process where it would not result in candidates being submitted to the Minister, only to be subsequently disapproved by the Registrar. This would create problems for the Minister.
Ms De Lille accepted this answer.
Ms Bednar-Giyose addressed Clause 14(5). The NT proposed the insertion of the wording “…and after obtaining the approval of the Registrar of Banks” after “…the Minister of Finance and the Post Office”. The NT also proposed that Clause 6(a) was amended to read “The Minister must, within thirty days after approval has been received from the Registrar of Banks and consensus has been reached with the Minister of Finance and the Post Office regarding the appointment of members, appoint the members”.
The Chairperson stated that the amendments were noted. The Committee would return to the issue.
Ms De Lille stated that since the Registrar played a role in the appointment of the board members, he should play a role in the removal of the members. She asked for clarity on Clause 15(2), which dealt with removal and resignation of board members being subject to the Promotion of Administrative Justice Act (PAJA).
Ms Bednar-Giyose advised that the NT had prepared amendments to Clause 15(2) and proposed the insertion of sub-clauses (d) and (e). Sub-clause (d) would deal with non-attendance of board members at meetings without leave of the chairperson. Sub-clause (e) would provide for the role of the Registrar of Banks to remove board members. PAJA contained the appropriate requirements for procedural and substantive fairness, which had to be applied in instances where a person’s rights were affected by his/her removal.
Ms De Lille asked if the PFMA dealt with the removal of board members.
Ms Bednar-Giyose answered that the PFMA relied on other legislation concerning the removal of members.
Ms Bednar-Giyose referred to Clause 16(1)(e)(iii). It might not be feasible for the bank to require members to attend all the meetings. She suggested that the word “all” be removed and the clause was amended to state that members should attend meetings on a regular basis. The intention was not to regulate the conduct of board members. However, it was important that a fairly substantial standard of attendance was provided for.
Ms Lefoka said that the board was responsible for managing the attendance at meetings and the operation of board meeting was the responsibility of the relevant accounting authority. The DoC wanted to review the NT’s proposal.
The Chairperson stated that the NT just wanted to delete the word “all”. It was the responsibility of the board members to regularly attend board meetings.
Ms De Lille asked if part-time board members would receive financial remuneration for attending meetings.
A delegate from SAPO answered that members of the board would serve on different sub-committees of the board. The remuneration structure would be inclusive of all the functions that members would have. There were different mechanisms applicable to remunerate part-time board members.
Ms De Lille said that she was aware of board members being paid up to R4,000 per meeting. The fee for the board members had to be stipulated as the issue should not be left open-ended.
The Chairperson noted that Ms De Lille’s concerns were not relevant to the legislation.
No amendments were proposed.
No amendments were proposed.
The Chairperson noted that the clause addressed labour issues.
Mr Shelembe stated that the NT had raised concerns regarding Clause 20(2). The determination of the conditions of service, remuneration and service benefits of personnel had to remain the responsibility of the board without the need to seek the Minister of Finance's concurrence.
Ms De Lille felt that the board should not make such decisions in isolation. On many occasions, the boards of SOEs had approved exorbitant salary packages for certain employees. There had been a huge outcry from the public and the practice had to be prevented. The board should make the decisions concerning remuneration of officials in consultation with the Minister of Finance and the labour unions.
The Chairperson noted that the clause referred to the remuneration of all the staff members. The Minister of Finance could not be burdened with the salaries paid to every employee of the bank every year.
Ms De Lille remarked that the review of the remuneration only occurred once a year.
The Chairperson replied that the Committee understood Ms De Lille’s concerns but the Minister of Finance should not be burdened with annual salary reviews. The Committee agreed with the NT’s proposed amendment.
Ms Bednar-Giyose said that the clause contradicted Section 55(1)(d) of the PFMA, which required that the Annual Report of the organisation was submitted within five months of the end of the financial year. The NT recommended that the clause was deleted and that Section 55(1)(d) of the PFMA would apply. The DoC disagreed and wished to retain the clause in the Bill. The DoC proposed that the clause was amended to state “within five months” instead of “not later than six moths”.
The Chairperson noted the proposed amendments.
No amendments were proposed.
No amendments were proposed.
Ms De Lille asked if there was any other banking legislation that the Postbank would be subject to.
Mr Vukela replied that other legislation would be applicable.
Ms Bednar-Giyose added that the Postbank would be subject to all the labour legislation as well as PAJA and the Promotion of Access to Information Act (PAIA). The NT proposed an additional Conflict of Laws clause to address any potential conflict that might arise between any provision in the Postbank Bill and the PFMA or the Banks Act. The PFMA and the Banks Act were very important pieces of legislation and if there was any conflict between the three Acts, the Banks Act and the PFMA would prevail. The DoC supported the proposed amendment.
Mr Wiltz advised that a Conflict of Laws clause would be unconstitutional and the SLA had cautioned the DoC and the NT against including such a provision. The proposed clause would inhibit the powers of Parliament.
The Chairperson asked if the SLA was proposing that the original clause remained unaltered.
Mr Wiltz replied that the SLA proposed that the Conflicts of Laws clause should not be inserted into the Bill.
Ms Ntombebandla Mnyikiso, State Law Adviser, remarked that the clause already made reference to the PFMA. The Bill was automatically covered by the PFMA. There were no legal consequences or Constitutional issues if the Conflict of Laws clause was inserted. The important thing was to ensure that the Bill was covered by the PFMA.
The Chairperson advised that the Committee would return to the issue.
Ms Bednar-Giyose stated that there were two possible proposed wordings for a new Clause 25(2). Both options were meant to address the policy-making powers of the Minister. The first proposed amendment for Clause 25(2) was that “The Minister may make policies on matters of national policy applicable to the Company, consistent with the objects of the Act, in consultation with the Minister of Finance”. The second proposal stated that “The Minister may make policies on matters of national policy applicable to the Company in consultation with the Minister of Finance”. In addition, the NT proposed an amendment to the heading of the clause to read “Regulations and Policy”.
Ms Bednar-Giyose advised that the reference to “under Section 25” in Clause 26(b) should be corrected to state “under Section 27”.
Ms Bednar-Giyose advised that the phrase “contemplated in Section 26” in Clause 27(4) should be corrected to read “contemplated in Section 28”.
No amendments were proposed.
No amendments were proposed.
The Chairperson noted that Clause would be amended to state “the South African Postbank Ltd Act”.
Mr John Wentzel, Chief Operating Officer: SAPO, proposed that the entire schedule was deleted as the Labour Relations Act dealt with the transfer of personnel.
Mr Wiltz explained that the schedule was not included in the original Bill. He felt that it was always preferable to have a document that spoke to the basic protection of employees.
Ms Mnyikiso noted that there was no Schedule 1 in the original Bill. The Committee could delete the insertion of the schedule and formulate a proposal that could be included in the Bill.
The Chairperson noted that the Committee agreed with this proposal. He asked the NT and the DoC to get together to discuss the proposed amendments. The DoC and the NT would have to re-submit the draft document at the next meeting with the Committee.
Report of Recommended Candidates for the Appointment as ICASA Councilors
This part of the meeting was closed to the public.
The meeting was adjourned.
No related documents
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.