South African PostBank Limited Bill [B14B-2009]: deliberations

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30 August 2010
Chairperson: Mr I Vadi (ANC)
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Meeting Summary

The Committee deliberated on the South African PostBank Limited Bill clause-by-clause with input from the State Law Advisors. The Committee was of the view that the Minister would not delegate certain powers under clause 3(4). It was agreed that the Bill would consistently refer to the expression ‘with the concurrence of’. It was deemed vital that the powers of the company in clause 9 be subjected to the provisions in clause 4(4). The investing, borrowing and lending activities of the company would now be dealt with in clause 9(1)(g), (h) and (i) respectively. The discussion on clause 13 was that the legal expression ‘uttering a document’ was common in the legal fraternity and would remain in the Bill, as any change would create a new thing in law. It was proposed in clause 15(2) that reference to the Promotion of Administrative Justice Act should be removed. The Committee deliberated at length on clause 16 and its key decision was that there should be inclusion of a removal mechanism that went with the offence created in this clause. In clause 25, the key proposed amendment was that the Minister was empowered to seek relief from a competent court and was not bound to the exhaustive provisions of the clause. The President was deemed to be the office bearer to decide when the Act would come into effect and not the Minister of Communications as originally stated in clause 31. The Committee decided that it would pass the Bill by latest on 7 September.

Meeting report

The Chairperson indicated that the Committee would not request the Department of Communications nor the State Law Advisors to take them through the clauses as was the case in previous meetings. The proceedings would be on a page-by-page basis.

Clause 1
The Chairperson said that the only amendment was the addition of the word ‘Limited’ so that the Bill read: South African Postbank Limited Bill.

Clause 2
No Amendments

Clause 3
Ms J Killian (COPE) referred to clause 3(4) and asked if it was correct.

The Chairperson replied that this was how the clause had been worded throughout the deliberations.

Adv J De Lange (ANC) said that a more valid question would be: should the Minister be allowed to delegate. This was not the kind of power that should be delegated, even to a Director General.

The Chairperson asked if the Committee was of the view that only the powers contained in this clause should be limited to the Minister only.

The Committee responded in the affirmative.

Ms P De Lille (ID) referred to the use of the expressions ‘in consultation with’ and ‘with the concurrence of’. Would it not be better to use the term ‘in consultation with’ consistently in order to keep the Bill neat and tidy?

Mr Herman Smuts, Principal State Law Advisor, replied that the term ‘with the concurrence of’ had been used as consistently as possible in the Bill and perhaps there were a few slips here and there.

The Chairperson asked if the two expressions meant the same thing in law.

Mr Smuts replied in the affirmative.

Ms De Lille asked why the two expressions should be used inter-changeably if they meant the same thing.

Mr S Kholwane (ANC) said that the Committee had decided that only one expression would be used, this would be ‘with the concurrence of’.

Mr N Van Den Berg (DA) asked if there was a possibility that judges would differ in their interpretation of the two expressions.

Adv De Lange said that there were a lot of cases where the interpretation for both terms was deemed to be the same. It all depended on the context within which each term was used. 

Clause 4
No Amendments

Clause 5
No Amendments

Clause 6
Ms Zuraya Adhikari, Parliamentary Legal Adviser, said that the only proposed amendment was that the word ‘Government’ should be included before Gazette.

Clause 7
No Amendments

Clause 8
No Amendments

Clause 9
Ms Adhikari proposed that clause 9(1) should include ‘subject to section 4(4) and section 27’. The reason was that the powers of the company should be subject to the proposed sections.

Adv De Lange endorsed the proposal as clause 9 was at the heart of the Bill. It was absolutely vital that the powers of the company be subjected to clause 4(4). In clause 9 the Committee should also include (i) which would address the lending of the company. The rearrangement of clause 9 would be that clause 9(1)(g) would speak to investing; clause 9(1)(h) would speak to borrowing and clause 9(1)(i) would speak to lending.

The Chairperson said that in that case clause 9(4) would have to be deleted.

Adv De Lange suggested that in clause 9(1)(i) the lending and borrowing policy had to be with the concurrence of the Minister of Finance.

Mr Van Den Berg asked if there were enough checks and balances in the borrowing, lending and investment of the company.

Adv De Lange replied that three clause had to be read together and these were: clause 9(1) and 9(3)(a)(b) and clause 26 which dealt with policy issues. Clause 26(2) should include the following wording: ‘The Minister must make policy on matters referred to in clause 9(1)(g), (h) and (i)’  

Clause 10
No Amendments

Clause 11
No Amendments

Clause 12
Ms Adhikari said that clause 12(1) had to state up front that there would be two non-executive members from the Post Office Board and seven other members.

Adv De Lange agreed with the proposal.

Clause 13
Ms Adhikari proposed that in clause 13(d)(i) the word ‘utter’ should be replaced with ‘presenting’.

Adv De Lange said that ‘uttering a forged document’ was a legal expression and he was worried about taking out the ‘utter’ in case there would be legal implications. He suggested that presenting should be in brackets after the word ‘utter’. He noted that the courts operated in terms of precedent and the Committee would be creating something new if it left out ‘utter’ and replaced it with ‘presenting’.

Mr Smuts said that he preferred the old terminology as it had been interpreted over ages and many people had been successfully prosecuted under this terminology.

The Chairperson said that it would be left as it was.

Ms L Mazibuko (DA) said that the Committee had decided the Bill would be simple. Would it not be better to err on the side of simplicity given that clause 13 was a job description.

Mr Smuts said that the State Law Advisor’s Office had tried to draft Bills as simply as possible but in this particular instance, there would be unintended consequences if a new term were to be created.

Ms Adhikari proposed that clause 13(1)(g) should read as follows: has any direct or indirect interest in conflict with the business of the company. 

Clause 14
Ms Adhikari proposed that in clause 14(1)(a) the word ‘mentioned’ should be removed and replaced with prescribed. The word ‘Government’ did not have to be inserted before Gazette. Gazette was defined in the Interpretation Act.

The Chairperson accepted this and declared that the word ‘Government’ would not be included before Gazette.

Ms Adhikari proposed that clause 14(1)(b) should have the following addition, ‘envisaged in section 12(1)’ at the end of the comma. This was as per the Committee’s request from the last meeting.

Ms De Lille asked for an explanation concerning the use of the word ‘reasonably’ in clause 14(1)(d).

Ms Adhikari replied that the word ‘reasonably’ included a criminal and credit inquiry, it meant that basic background verification would be done.

Ms De Lille said that she understood what was said but the word ‘reasonably’ was not necessary.

Adv De Lange agreed with Ms De Lille. The Act that governed the Registrar should be referred to instead of the word ‘reasonably’ being inserted in the clause.

Clause 15
Ms Adhikari said that reference to the Promotion of Administrative Justice Act (PAJA) should be done away with in clause 15(2). The entire clause should begin as follows: The Minister must remove a member of the Board from Office if that member… Clause 15(2)(d) should read on to say ‘is no longer a fit and proper person to hold that appointment’ or that it was not in the public interest that such a member of the board continues to hold such an appointment and the Registrar of Banks has informed the Minister accordingly’ The reason for this was because there were no provisions in the Bank Act that reconciled with the concept where the Minister was the person removing a member.

Adv De Lange agreed with the removal of the reference to PAJA, which was not relevant.

Mr Alf Wiltz, Director: Legal Services for Department of Communications, referred to clause 15(2)(d) and said that he was speaking on behalf of National Treasury who had requested the inclusion of the provision. The Committee might have to refer to Section 60(6) of the Banks Act because the clause was derived from it and there was a specific process there that was important for this Bill.

The Chairperson said that the State Law Advisors should come back with a proper formulation.

Clause 16
Adv De Lange said that part of the clause was necessary as it created offences. The problem started with clause 16(a), which was wrong. It should be under clause 13 where the issue of disclosures was dealt with. The implications in clause 16(c) was problematic as it implied that once a person was appointed they could acquire interests and then just declare them afterwards.  It should be a separate clause also under clause 13. A procedure had to be created for the removal of an office bearer if they acquired their interests and disclosed them later. The possibility of tenderpreneurs should be eliminated. There should be consequences for a person if they acquired interests via a tender through the company or their family members.

Ms Adhikari said that the intention behind the clause was disclosure; it was just that the wording did not capture it accurately enough. Clause 16(a) should be retained; only the intention should be captured correctly.

Ms De Lille agreed with Ms Adhikari and added that clause 16(1)(a) and (c) should be brought in line with 13(g).

Ms Mazibuko said that she was worried about clause 16(1)(b). How could a person be compelled to recluse themselves from a board meeting where the issue under discussion was a matter in which they had an interest? They were not allowed to have such an interest in the first place. This was supposed to have been declared up front before appointment. The clause made it seem as if a person was allowed to serve on the board if one had an interest and disclosed it.

Adv De Lange said that he was glad Ms De Lille shared his sentiments. The clause created an offence but it still had to spell out the procedure for the removal of a transgressor. Ms Mazibuko had a point but there was a need for the clause, it just had to be worded properly.

Ms Adhikari said that she was unsure as to the meaning of indirect interest under clause 16(b).

Mr Smuts agreed that it was difficult to give an example now. The intention was to establish that individuals should have no interest whatsoever.

The Chairperson asked when Mr Smuts could re-work the clause.

Mr Smuts said that he was worried about the time frames.

The Chairperson said that they would be discussed later.

Mr Wiltz commented that ‘indirect interest’ would be where a person had shares in a company that had shares in another company linked to the matter under discussion. There was room for the wording ‘indirect interest’.  Clause 16(1)(a) was already linked to clause 13(2). Clause16(1)(c) was necessary to protect the proceedings of the board. Clause 16(1)(a) and (c) were already linked to disqualification of a member. Clause 15 had the removal procedures already.

Adv De Lange disagreed and said that the Committee had used the Independent Communications Authority of South Africa (ICASA) model which said that there could be a nomination process where the Minister was allowed to not appoint a person if they had interests which were not allowed. This was something that happened before appointment. Clause 16 referred to a situation where a person was already appointed and the requirements included an imposition of a higher fiduciary duty for the declaration of interests. The concern for clause 16(1)(c) was that there was no removal mechanism that went with the creation of an offence. 

Clauses 17-24
No Amendments

Clause 25
Ms Adhikari referred to clause 25(1)(d) and said that it was proposed that the following words should be included, ‘all policy envisaged in this Act’.

Ms Killian asked if ‘may’ could be changed to ‘must’.

Adv De Lange said that if ‘must’ were to be included then a very strong duty would be created. This would put the Minister in a position where every single thing would require the Minister’s intervention. The words suggested by Ms Adhikari were agreeable.

Ms Adhikari referred to clause 25(5), sayintg that there were no time periods, stipulations or further responsibilities on the Minister to review performances. The proposal was that the provision should initially read as follows, ‘The Minister must review the performance of the company regularly and within six months of appointing an administrator and table a report of his findings in the National Assembly’.

Adv De Lange agreed with the proposal and added that the review should be regularly done whilst the company was under administration.

The Chairperson asked if the proposal should not be a new clause, as it did not fit.

The Committee agreed.

Ms Adhikari referred to clause 25(6) and said that instead of ‘Notwithstanding subsection 3’ the Committee could consider  ‘Notwithstanding the provisions of this section’.

The Committee agreed.

Ms Adhikari continued that the time period in clause 25(6)(c)(ii) should be extended to six months.

The Chairperson said that six months was already there.

Ms Adhikari continued that a clause 25(8) should be created which would read as follows: ‘Notwithstanding the provisions of this section, the Minister retains the right to at any time approach a competent court for relief in any matter he considers appropriate for the furtherance of this Act.’

Adv De Lange said that this clause was vital as it said that the provisions would not allow for the process in clause 25 to be stalled, it would allow the Minister to approach the court directly.

Clause 26
Ms Adhikari suggested that clause 26(2) should read as follows: ‘The Minister must make policy on matters referred to in section 9(1)(g), (h) and (i) and may make any additional policies on matters…’

Adv De Lange said that this was a good recommendation. There should be a time frame included in clause 26(2), of six months after the Promulgation of the Act.

Ms Adhikari said that there should be a time frame stipulated in clause 25(3)(c), “30 days” before the date of publication would be appropriate.

Clauses 27 – 30
No Amendments

Clause 31
Adv De Lange said that it was not appropriate for the Minister to determine when the Act would take effect. It was always the President.

Mr Smuts agreed and said that the amendment would be made.

The Chairperson said that the Bill would be finalised by Tuesday 7 September and adjourned the meeting.


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