Bulk Infrastructure: Department of Cooperative Governance update; Consideration of Local Government: Municipal Systems Amendment Bill [B22-2010] in presence of Deputy Minister

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Cooperative Governance and Traditional Affairs

07 March 2011
Chairperson: Ms D Nlhengethwa (ANC)
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Meeting Summary

The Department of Cooperative Governance updated the Portfolio Committee on the delivery of bulk infrastructure and basic services. Municipalities were facing challenges that related to informal settlements and dilapidated bulk infrastructure in rural areas. While money and engineering expertise were possible solutions, a further challenge was the municipalities’ ability to plan and spend accurately with the given Municipal Infrastructure Grant.

A Special Purpose Vehicle for urgent intervention on funding and capacity for infrastructure delivery, especially at rural municipalities, involved integrating the Development Bank of South Africa’s Siyenza Manje Programme into it and this new Government component was expected to be operational by 01 April 2011.

Members asked what coordinating structures were in place for implementation of Outcome 9; which entities had been consulted with on Siyenza Manje; whether the Special Purpose Vehicle was an agreement or proposal; whether the budget would allow for the Special Purpose Vehicle to coordinate some of the transversal functions across departments; how the Special Purpose Vehicle expertise would be sourced; if capacity was in place to ensure utilization of the municipal budget and whether programmes were already in place. They also asked if an audit had been done on the status of infrastructure; if the infrastructure targets to be met by 2014 included the informal settlements; what the rural infrastructure strategy was to address the problem of wasteful spending; and if the backlog target for 2014 meant that all basic needs would be met by 2014.

Members asked for more information on employment targets and on the criteria for engineering bursaries; how the Department of Cooperative Governance would ensure that municipalities would minimise outsourcing; how the quality of programmes on municipal level were monitored; how the figures on the Total National Access to Basic Services were obtained;  and if the Department of Cooperative Governance  was engaging with the Human Sciences Research Council and Council for Scientific and Industrial Research. A member of the South African Local Government Association asked if the Special Purpose Vehicle would be a municipal entity and how it would be procured by the Municipal Finance Management Act.

The Deputy Minister of Cooperative Governance and Traditional Affairs attended the consideration of the  Local Government: Municipal Systems Amendment Bill [B22-2010]. The main issue discussed was section 71 (1) the role of the Minister in the Bargaining Council. After deliberation, the South African Local Government Association’s perspective was that the current clause was adequate. Each sphere would embark on what it was constitutionally mandated to do and there was nothing that prevented the Association from consulting from the Minister. However, the debate on amendments in the meeting appeared to introduce a process to determine a particular outcome. The Deputy Minister and Department clarified that, while in fulfilment of the requirements of the Constitution whereby the Department was required to interact with other spheres of government, it did not intend to take over the roles and responsibilities of the Association. The Department was legally responsible for managing the sector and for the implications of the Association’s decisions down the line, the consequences of which affected the macro-economic stability of the country. The manner in which legislation was formulated had to adequate expression the interests of both parties. In Section 57 A (3) on re-employment after financial misconduct there was brief debate on the terminology of ‘may not re-employ’ and ‘must not re-employ’ as well as the fact that there could be re-employment in exceptional circumstances.

Meeting report

The Chairperson said that the meeting would include an update on delivery of bulk infrastructure and basic services as well as consideration of the Municipal Systems Amendment Bill [B22-2010] which the Department of Cooperative Governance had been working on for some time. Part of the reason for the meeting was that the House Chairperson of Committees had drawn the Committee’s attention to the fact that Committees responsible for meeting the Millennium Development Goals (MDGs) should continually interact with relevant Departments to ensure that, should they attend international meetings, comprehensive parliamentary reports on performance and implementation of MDGs could be provided to the United Nations (UN) system.

Mr Elroy Africa, Director General: Department of Cooperative Governance (the Department), said that the Department had issued a formal press statement to the media the previous day stating that the Minister of Cooperative Governance and Traditional Affairs (Minister of COGTA) was on sick leave and that the President had appointed an Acting Minister, until further notice. Mr Nathi Mthethwa had assumed the position on 24 February 2011.

A number of Deputy Directors-General had been appointed late the previous year and Mr Ricardo Hansby, who would present to the Committee, was responsible for Infrastructure and Economic Development.

The Department would give an overview of the status quo, progress, challenges and key focus areas of progress and interventions going forward and welcomed advice and comments from the Committee in terms of the focus areas.

Outcome 9, which dealt with local government, was one of the 12 outcomes that government was pursuing. Within Outcome 9, at least 2 of the 7 specific outputs spoke to infrastructure and service delivery and these aspects would be addressed in the presentation.

Mr Ricardo Hansby, Deputy Director-General; Department of Cooperative Governance, introduced Ms Santhurie Naidoo, Chief Director of Infrastructure Development: Bulk services and Delivery of Basic Services, Department of Cooperative Governance, who would play a key role in interacting with stakeholders.

The Department derived its mandate from the Delivery Agreement – Outcome 9: Basic services and accelerated service delivery through the development of municipal infrastructure together with the priority of job creation during 2011 and beyond.

Bulk infrastructure investments needed to be increased significantly to ensure upgrading of existing networks and provide additional networks. Metropolitan municipalities and municipalities with secondary cities were facing challenges that related to informal settlements and dilapidated bulk infrastructure in rural areas which needed refurbishment and/or upgrading due to the lack of operations and maintenance and increasing demand pressures.

The Department had a developmental approach and collaborated with other spheres of government to establish the necessary linkages, which meant that the Department went beyond facilitation. The Department needed to ensure that funding provided support and built capacity at local level so that delivery of bulk infrastructure could effectively take place, the economy could grow and the target of attaining 5 million jobs by 2020 could be attained.

The backlog targets, as confirmed in the Outcome 9 Delivery Agreement of the Minister with the President were:
Water: from 92% to 100 % in 2014
Sanitation: from 69% to 100 % in 2014
Refuse removal: from 64% to 75% in 2014
Electrification: from 81% to 92% in 2014

The Department would use the resources available to meet - and in some cases exceed- these targets. The challenges of access to basic services were highest in Limpopo and lowest in the Western Cape. (See page 3 of the handout). The Department relied on sector departments to drive implementation of improved access to basic services and had set up a National Coordinating Task Team to ensure that implementation took place.

In addition to policy and targets, the Local Government Turnaround Strategy (LGTAS) and the Municipal Turnaround Strategies were instruments to ensure service delivery and bulk infrastructure development took place. There was a need to integrate Municipal Turnaround Strategies with Integrated Development Plans (IDPs) as these instruments could not be separated when ensuring service delivery.

The Bulk Infrastructure Fund (BIF) was being refined to augment the Municipal Infrastructure Grant (MIG) as MIG did not fully cover infrastructure development at local level. A small but significant initiative was the introduction of the Engineering Bursary Scheme for 70 students at university or tertiary level.

The Department was finalizing a Special Purpose Vehicle (SPV) for urgent intervention on funding and capacity for infrastructure delivery, especially at rural municipalities. An agreement had been reached to establish the SPV as a Government Component – a stand alone entity to fast track delivery - within the Ministry of COGTA. It was envisaged that approval from Cabinet would be concluded by the end of March and be operational by 01 April 2011. The establishment of the Government Component involved integration of Siyenza Manje, which was currently under the Development Bank of Southern Africa (DBSA), into the Government Component entity. The financial management aspect of Siyenza Manje had been transferred to National Treasury. Infrastructure and maintenance requirements backlogs stood at R400 billion.  Money was not the only solution to the challenges of the sector. Capacity was also a challenge, not only in terms of engineering expertise but municipalities’ ability to plan and spend accurately with the given MIG. Other challenges included the problem of new Government coordinating structures not focusing on the core mandate of delivery - too much coordinating not enough delivery - and there was no real plan to engage with infrastructure sector stakeholders to develop solutions. The Department was on a drive to ensure linkages with partners and to coordinate MIG funding together with solution ‘packages’ and expertise required to ensure delivery did in fact take place at local level.

The Department recommended there was a need to determine bulk investment requirements from an institutional and funding perspective and for a dynamic supportive National Integrated Municipal Services and Bulk Infrastructure Plan; the current support mechanisms with regard to capacity building at local level needed to be evaluated; support of local authorities required understanding of the different requirements; enhanced coordination needed to take place within the sector and funding at local level for optimal impact; water, sanitation, refuse removal and electrification sectors were unique and had to be treated accordingly to ensure optimal support and resources. Clear programmes and projects were needed to use infrastructure development as a tool for employment creation at local level. Reducing the number of structures and programmes would reduce institutional confusion, duplication and wasteful spending.

Discussion

The Chairperson said that it appeared that while there was proliferation of coordinating structures, the relevant stakeholders had not been optimally pulled together. Infrastructure played an important role in the vision the Committee had for municipalities. He asked what coordinating structures were in place for meeting the outcomes.

Mr Africa said the most important coordinating structure in place was the Implementation Forum for Outcome 9. Members of the Executive Council (MECs) responsible for local government and the Department met on a quarterly basis together with the relevant national Ministers to coordinate delivery of all outcomes at national and provincial level. This forum was the central point of accountability, coordination and oversight. The previous year, a Joint Ministers and Members of Executive Council [MINMEC] meeting had convened to address the need for special focus on basic service and infrastructure delivery and to set up a Joint Programme of Action, with special focus on human settlements. The structures and integrated functions of the plan were being streamlined and would be finalized in the following few weeks.

The Chairperson said that in the past one of the problems at municipalities was the poor management of contracts and quality of work done and that these issues were key to the MIG becoming legacy.

Mr Africa said that in the Inter-Ministerial meeting the previous week it was recognized that damages to housing, roads, bridges and schools were caused by poor workmanship and that there were differences in quality of workmanship between provinces.  The poor management of contracts and infrastructure was realized in the recent disasters and there was a need for basic minimum building standards across provinces.

The Chairperson asked which entities had been consulted with on Siyenza Manje and whether it was an agreement or proposal that it be incorporated into the SPV.

Mr Africa replied that the SPV proposal had been shared at MINMEC meetings, the relevant national department meetings and with MECs (of which the South African Local Government Association (SALGA) was a full member) and National Treasury. National Treasury was the most important stakeholder and had debated at length on the SPV before reaching a consensus in December 2010.

Mr T Botha (COPE) said that he understood that the SPV was supposed to play an integrating role both vertically and horizontally between departments and that the money lay in one department and the function lay in another. He asked for clarity on whether the budget would allow for the SPV to coordinate some of the transversal functions across departments.

Ms M Wenger (DA) asked how the SPV expertise would be sourced given the current situation where shortcomings were as a result of lack of expertise.

Mr Africa replied that the Department had been allocated R196 million for the 2011/12 budget from National Treasury to support the operations of the SPV. The majority of the funds would be used to mobilize resources and technical skills deployed to municipalities. The SPV was closely reliant on what Siyenza Manje had been doing in the past and a number of professionals, engineers and planners currently contracted by the DBSA would be transferred to work under the SPV.

Ms D Nlhengethwa (ANC) asked if capacity was in place to ensure utilization of the municipal budget.

Mr Africa said that in past the Department had used the MIG programme to send officials to support municipalities which were struggling with expenditure. The aim of the programme with Siyenza Manje and DBSA deployees was directly to ensure capacity building and that municipalities on the ground had the necessary capability.

Mr J Matshoba (ANC) asked how the Department ensured that municipalities did not outsource work as in the past but rather created jobs for the people in the local community.

Mr Africa said that the MIG contract was managed by municipalities on the ground and the Department always proposed that they worked through local communities and ward committees to identify people to work on the projects. Sometimes it was necessary to employ professionals from other parts of the country.

Ms Nlhengethwa asked for clarity on whether programmes were already in place or would be in place in the approaching financial year.

Mr Africa replied that the Department was prioritizing that the matter be taken to cabinet for approval in the following weeks but the major decisions in terms of allocation of funding and merger areas of work had already been taken.

The Chairperson asked what the nature of the work was that the World Bank was doing and what the Department  involvement was with National Treasury’s reference to work it was doing with the World Bank (as stated in the budget review).

Mr Africa replied that the Department would not be assuming responsibility for the financial management component of Siyenza Manje on 01 April 2011 and was not involved in negotiations with the World Bank. National Treasury would continue to work closely with the DBSA on that component. The Department dealt with the infrastructure component – the employees, resources and money redirected away from the DBSA to the Department.

Ms Nlhengethwa asked if an audit had been done to establish which infrastructure needed upgrading and which dilapidated infrastructure needed to be demolished.

Nkosi Z Mandela (ANC) asked if there were statistics on dilapidated bulk infrastructure and how much of it would be repaired by the end of the current financial year.

Mr Africa replied that the Department had undertaken an audit a couple years ago and that statistics were available around treatment, storage and capability at water-plants. These statistics had not been released because the Department of Water Affairs was performing an independent verification audit on the research that had been done. A preliminary report was expected to be presented at the end of the month. Virtually all water-plant infrastructure in Gauteng exceeded capability.

Mr Matshoba questioned where the figures on the Total National Access to Basic Services came from, as currently in some villages there were no basic services at all. He suggested that the Department of Cooperative Governance should visit the local communities and verify the statistics.

Mr Hansby replied that the Department commissioned reports from time to time but relied on municipalities and provinces for most of the information. At times it was not reliable and it was necessary to verify the information. The Department was building its own monitoring and evaluation capacity to ensure accuracy of data furnished to parliament.

Ms Nlhengethwa asked which department would monitor the quality of programmes on the municipal level.

Mr Africa replied that the Department received statistics once every quarter on the four basic services from the national sectors and also from municipalities and that these results were monitored and verified.

Mr Hansby added that the Department's core mandate remained the rollout of infrastructure. The Department had the opportunity to use the funding wisely to grow the construction industry nationally, to stimulate local job creation and to grow labour-intensive techniques which were sensitive to quality and expense of the construction projects.

Mr Botha said that on oversight visits to human settlements in the Eastern Cape and KwaZulu-Natal (KZN), they found that where money had been spent in the wilderness on Reconstruction and Development Programme (RDP) housing, and where factories had closed down and the beneficiaries had moved to work in the cities, 200 to 400 houses were left vacant indefinitely. He asked what the rural infrastructure strategy was to address this problem of wasteful spending when urbanization was increasing in South Africa.

Mr Africa said that the decision of the President’s Coordinating Council was that the Departments of Human Settlements and the Department should prepare proposals on options for people coming from rural areas who had no intention of setting up their home in the urban areas. A range of housing options including public rental stock in urban areas were being discussed. The Departments of Rural Development and Land Reform and Human Settlements were still looking at the best approach to housing in rural areas. The Department would refer back to the Committee on the matter. The Department was also working closely with the National Planning Commission and Department of Rural Development and Land Reform on the advanced stage of The Land Use Management Bill and planned to go to Cabinet soon with this legislation which would assist the work of the Department. The Joint Programme of Action would address many of the concerns of Members.

Ms I Ditshetelo (UCDP) commented that the cause of the waste on informal settlements should be addressed and suggested that the rural settlements infrastructure should be addressed before that of urban areas.

Mr Botha asked if the infrastructure targets to be met by 2014 included the informal settlements. He also asked how realistic the objective to meet the targets by 2014 was when targets had constantly been shifting over the past 10 years.

Mr Africa replied that the 2014 targets were national figures which covered the entire country. Siyenza Manje would provide the footprint required for the Department's strong rural focus. The Department was also in discussions with the Department of Science and Technology (DST) for rollout of scientific and innovative alternative models to service delivery specifically aimed at rural areas.

Nkosi
Mandela said that 60% of the population in South Africa resided in rural areas, without clean water, sanitation, refuse-removal, or electricity. He asked if the backlog target for 2014 meant that all those basic needs would be met by 2014.

Ms Ditshetelo asked what was really meant by 92 to 100% water delivery by 2014 – if this meant that drums or trucks would be arriving with water and if 69 to 100% delivery on sanitation included the bucket system in rural areas.

Mr Africa replied that the 100% water target referred to basic services level of access, meaning potable water and access to water within 100 metres of walking distance. It did not mean that every household would have a tap on a stand. Similarly, 100% sanitation did not mean that every household would have access to water-borne toilets. The bucket system was not part of the Department's vision for sanitation.

Ms W Nelson (ANC) said that on oversight visits Members were very disturbed by the massive amount of illegal electrification in the informal settlements. People were getting electrocuted and were suffering while municipalities were saying that they were unable to do anything and that it was an Eskom/Department of Minerals and Energy issue.  She asked how the Department was dealing with such an issue.

Mr Mandela asked where the connections for electrifying of 150 000 household would be done.

Mr Africa said that he Department had asked each sector to prepare a master sector plan where they indicated how they would reach the targets and this included electricity. The Departments of Energy, Rural Development and Rural Development and Public Works were involved in these processes.

Mr J Lorimer (DA) suggested that the Department concentrate on delivery and efficiency with the available budget rather than trying to create employment, which were not the mandate of the Department.

Nkosi Mandela asked for information on how many jobs per province per year would be created in the space of bulk infrastructure development so that the number of jobs created by the end of the financial year could be measured against the target.

Mr Africa said that no concrete employment targets were linked to the presentation. The new DDG had the responsibility of providing projections for employment in the MIG programme and capital and maintenance programmes. With the R10 billion allocated for the MIG programme the following financial year, it should be possible to project how many jobs could be created.

Mr Hansby added that a structure was being set up in the Bill whereby every department would indicate its job creation achievements and, based on that, also develop its own targets. Currently a methodology was being developed which would allow departments to track how many jobs were created through their programmes. The Department of Economic Development (EDD) was working together with the Department of Performance Monitoring and Evaluation in the Presidency to finalize this tool.

Ms Ditshetelo asked
how students living in the rural areas would be 100% informed on the engineering bursaries and how young women and children with disabilities would be included.

Ms Nlhengethwa suggested that the Committee Members have access to the documentation for applying for bursaries and assist with identifying candidates for bursaries in the geographical spread of their constituencies. She asked what the criteria were for accepting students for bursaries and which areas were targeted for those beneficiaries.

Nkosi Mandela asked how the Department ensured that rural people had accessed information on bursaries and that the information talked to people at grass roots level. In his home village, newspapers were not accessible.

Ms Nelson asked if Departmental bursaries would also be available for students who had completed university degrees and wanted experiential learning.

Mr Africa answered that bursaries had been advertised nationally in newspapers and that the Department would accept proposals directed to his office around proposed beneficiaries and this would include proposals for experiential learning. Ideally the Department wanted the beneficiaries to work at municipalities for the same extent of the bursary period.

Mr Hansby clarified that application date for bursaries had been closed. The selection process was thorough and started with students from rural areas and female students and students with disabilities were target groups. Engineering technicians who had not studied for professional degrees were also eligible for the bursary.

Mr Africa said that going forward the Department would ensure that bursaries were advertised in the most creative and innovative way.

Mr Johan Mettler, Executive Director: Governance, South African Local Government Association (SALGA) asked for clarification on what the legal basis was for the SPV within the constitutional framework of local government  - whether it would be a municipal entity and how it would be procured by the Municipal Finance Management Act (PFMA) and through Section 78 processes.

Mr Africa replied that the current SPV legal status was that of a Government component, an entity of the Portfolio of the Ministry and reported directly to the Minister. It had certain rights and responsibilities to contract directly with a range of parties and was given certain responsibilities in terms of the PFMA. SPV would not be imposed on or enforced on any municipality or person. It was an enabling structure which would enter into relationships with the municipality which solicited the support of the SPV. The Department wanted to add a provision to include a legal provision in the work of the SPV, whereby municipalities which received MIG funding but were under-spending and under-performing over a certain period (still to be determined) would be given mandatory intervention and support from the SPV. The Department was of the view that many municipalities which were in trouble did not admit that they were in trouble. The MIG would specifically target municipalities which were under-spending and required support.

Mr Hansby added that the SPV would operate within the view of the Ministry’s mandate. The idea was to develop it so that it could have a coordinating role and work on total solutions on bulk infrastructure.

Mr Africa said that it was important that the Committee understood that the Department had a coordinating mandate and was not legally bound, nor was always directly responsible for implementation. The Department had an active management approach in its oversight responsibility for coordinating implementation and delivery.

Mr Mandela asked what had been signed in the agreements if the service delivery agreements were not legally binding.

Mr Africa said that the sectors such as Department of Water Affairs and the Department of Energy were directly legally responsible for their mandates and that the Department, as a coordinating department, was committed and remained responsible for Outcome 9 being met.

The Chairperson asked if the Department was using the Council for Scientific and Industrial Research (CSIR) Integrated Planning System which was already assisting some municipalities

Mr Africa replied that the Department was not currently working with the Human Sciences Research Council (HSRC) and would look into that option.

The Chairperson added that state-funded research by the HSRC and CSIR should be included in the research required by the Department as these institutions performed innovative work and could assist with solutions to infrastructure problems.

The Department needed a joint meeting with the Departments of Human Settlements, Water Affairs, and Environmental Affairs to integrate issues that had been discussed in the meeting and to address important issues such as water availability, drought and degradation of infrastructure. Water was an important issue which needed urgent attention and he felt that Members’ questions on water had been ‘polite’.

A long-awaited decision by the Department of Human Settlement to address apartheid settlement geography, initiated by Mr Jeremy Cronin when he was Chairperson of the Portfolio Committee, was the decision to accredit metros when they had reached capacity for building houses. This was an important advance as it meant that the municipalities took responsibility for better integrated infrastructure components for human settlements, transport and housing.

Mr Africa added that level 2 accreditation had been awarded to eight municipalities. The urban based municipalities and secondary cities were now expected to challenge and reverse the apartheid settlement legacy. Level 3 would give financial accreditation to the municipalities and the Department was addressing the need for this component.

The Chairperson concluded that the presentation had raised a number of questions which required follow-up and that the Committee would follow up on how to use the statistics for quality oversight going forward.

The meeting was paused for a short break before resuming for consideration of the Municipal Systems Amendment Bill [B22-2010].

Local Government: Municipal Systems Amendment Bill [B22-2010]: Consideration
The Hon. Yunus Carrim, Deputy Minister of Cooperative Governance and Traditional Affairs (Deputy Minister of COGTA), said that the President had appointed an Acting Minister, Mr Nathi Mthethwa and that the Acting Minister, Deputy Minister and the Directors-General (DGs) conferred regularly with the Minister. The Minister was very aware of what was happening and the work of COGTA was fully on course.

The Chairperson conveyed the Committee's well wishes to the Minister.

Clause 3 (g)(4A) (a) and 3 (g) (4A)(b)

Mr Lorimer suggested that a time provision of ‘within seven days' should be applied to the end of both sentences.

 “(4A)    (a)        The municipal council must inform the MEC for local government of the appointment process and outcome, as may be prescribed.
            (b)        The MEC for local government must, on receipt of the information referred to in paragraph (a), submit a copy thereof to the Minister.”.
The Chairperson agreed with the suggestion and that it would be revisited to be discussed with Members.

Nkosi Mandela said it appeared that a time frame had already had been specified in 2 (c): ‘which did not exceed 3 months’.

The Chairperson agreed that it could be interpreted that way and would be revisited.

Clause 6 section 57 A (3)

Mr Lorimer suggested that in the final six words ‘for a period of five years’ should be taken out.

The Deputy Minister said that the effect of 'may not' in law would transfer ordinarily to mean ‘must not’ in the case discussed. ‘May not’ be re-employed in any municipality for a period of five years in law meant that they 'could be' re-employed and yet did not necessarily mean that they ‘would be’ employed. He added that it was not a crime in a democracy to say that the Deputy Minister agreed with the Portfolio Committee that the employee ‘must not’ be re-employed’. Presumably, the Minister could stipulate a regulation for exceptional circumstances.

Mr Lorimer said with regulations only and without legislation, a strong and wrong message would be sent out. When public money was stolen it directly impacted on poor people and he felt that second chances should not be allowed.

The Chairperson said that the issue would be revisited.

Mr Lorimer suggested that in number 7 and which referred to number 8, the time frame of three months should be reduced.

The Chairperson said that the time frame would be reconsidered.

Clause 10, section 71 (1): Bargaining Council Agreements

The Deputy Minister said that the South African Local Government Association (SALGA) often had to make decisions which had consequences on the macro-economic stability of the country, where under pressure by the workers movement and unions, it had to make concessions which affected the national sphere.

The COGTA Executive would have said that SALGA should consult with the Minister ‘before negotiations began and before finalizing negotiations’ because the real effect was felt on the final decisions that SALGA, the South African Municipal Workers Union (SAMWU) or the Independent Municipal and Allied Trade Union (IMATU) secured. The Minister may suggest increasing salaries between a band of 3% or 8%, but when under pressure as a strike continued and when negotiations escalated to 12%, there was no way the Minister had a say. SALGA did not return to the Minister before finalizing a decision.

The Deputy Minister further said that he was made aware that by adding ‘before final decisions were made’, the Collective Bargaining process and Labour regulation would be undermined. COGTA Executive was aware that it may not achieve the outcome it sought to achieve, but ultimately the decision lay with Parliament.

Mr Nhlakanipho Nkontwana, Special Advisor to the Minister of COGTA, said that typically the Minister offered guidance to negotiating teams to resolve issues quickly. On the issue of strikes, the Minister was not part of the process and was merely in a position to grace the ceremony, yet had to answer to Cabinet.

The Chairperson asked if the role the Minister played was in legislation.

Mr Nkontwana said that it was not in legislation. The Public Service Act gave power to the Minister when it came to developing national norms and standards - when it came to regulations. However, COGTA had signed an agreement on an established route on how to deal with that particular process.

The Chairperson said that the reason he was enquiring was that the Committee was creating a precedence of including in legislation the role of the Minister. He asked what the implications of that would be and what form it would take if it did become legislation.

Mr Nkontwana said that COGTA was trying to formalize an arrangement with SALGA so that COGTA was not called on only when there was a crisis.

Mr Mettler said that it was important not to create a potential unintended consequence where it was unclear who should be sitting at the negotiating table. The amendment was appropriately governmental in nature but to take it beyond that may be problematic.

The Deputy Minister said that to consult with the Minister before the final decision did not mean that the Minister had to approve the decision. It meant that the Minister had been consulted and could spill out the consequences of SALGAs decision. He questioned why if SALGA could consult with the Minister before negotiations, it would not be correct to also consult with the Minister before signing off.

Ms Yolandé Van Aswegen, Principal State Law Advisor: Office of the Chief State Law Advisor, agreed with the Deputy Minister but wanted to remind Members where the process with that subsection had begun. The objective of the COGTA was to set a framework in which bargaining could take place. This did not pose a problem for the constitutionality of the Bill, as it had its own separate section. However, if something more was inserted into the Bill, it may infringe on someone’s right to bargain and may be unconstitutional. Bargaining happened within the Labour Relations Act framework, so it could not be changed to ‘in consultation with the Minister’. Bargaining would still happen, no matter what the Minister said.

The Chairperson said that SALGA and the Unions wanted clarity on what COGTA intended to do in the bargaining framework.

Mr Africa said that the principle of informing the Executive before taking a decision was important.

The Chairperson said that there was fear in SALGA that COGTA would take over their responsibility. By implication, ‘inform before negotiations and before decisions’ would lead any reasonable person to assume that COGTA wanted to encroach on the bargaining process. The language used in legislation must satisfy the constitutionality of what was intended to be achieved.

Mr Lorimer commented that no one should be afraid of the Minister’s input and that the Minister may as well be informed throughout all stages of negotiations.

Mr Nkontwana said parties themselves should deal with and negotiate their issues but the Minister had to be aware of negotiating strategies and funding required and the implications for COGTA down the line. The challenge was that when agreements were signed without the Minister’s knowledge and yet the Minister was expected to provide funding. A platform for the employer within local government and COGTA was required. There was not a need for COGTA to determine outcomes at the negotiating table.

The Chairperson said that the Committee appreciated the role that the Minister should have, but the challenge was the language employed to express that.

Mr Jackey Maepa, Senior Manager: Department of Cooperative Governance, said that clause 6 sought to achieve that the Minister was consulted before SALGA could finalize any collective agreements. In the past collective agreements in the Bargaining Council impacted on the fiscal circumstances of individual municipalities. Some municipalities could not afford to increase salaries with their available generated revenue and such decisions had an impact on service delivery projects that the municipality had set itself on achieving.

He was of the view that SALGA was happy with the revised clause as it was. COGTA never had the intention for the Minister to sit in on the Bargaining Council. In fulfillment of the requirements of the Constitution, COGTA was required to interact with other spheres of government but did not intend to take over the roles and responsibilities of SALGA. Executives responsible for local government were expected to consult with local government to understand what was happening in the constituencies. Failure to put clauses in place resulted in many years being wasted.

The Deputy Minister said that COGTA had no intention to substitute for collective bargaining and he apologized if such a signal was communicated to the Committee. He suggested that the Director-General consult with the Committee on the wording to be used which was consistent with the Labour Relations Act.

The Chairperson asked Members to assist with ideas for wording to be used for ’consult with the Minister and any other parties prescribed’. He asked to which other parties would be prescribed.

Mr Maepa replied that it basically referred to the three Ministries: COGTA, National Treasury and the Department of Public Service and Administration (DPSA) and that SALGA would also be brought in.

Ms Van Aswegen said the language which was used in most legislation was ‘consult’, not ‘inform’. ‘Consult’ did not pose implications in terms of constitutionality and the Minister being implicated in terms of taking over the bargaining process.

The Deputy Minister said that, if left as was, COGTA did not achieve its goal of hearing SALGA before decisions were made. Lawyers could craft wording which stipulated ‘consistent with the Labour Relations Act’ and which also clarified that the Minister was not above the law and this could be submitted to the Chairperson of the Committee within the next 24 hours.

The Chairperson suggested deleting ‘before embarking’, and write ‘as they embark on any negotiations’.

The Deputy Minister agreed that 'organized local government must in its negotiations with parties’ could replace clumsy wording.

Ms Van Aswegen agreed with use of the words 'in its negotiations' which meant before, during and in the end’. Any time they took a decision they would take their decision to the Minister.

Mr Mettler said that SALGA’s perspective was that the current clause, as it was, was adequate. A sphere would embark on what it was constitutionally mandated to do and there was nothing that prevented SALGA from consulting from the Minister. However, the amendments discussed appeared to introduce a process to determine a particular outcome.

The Chairperson said that Members were interested in what SALGA could achieve on the local level. Bargaining Relations made provisions for certain municipalities to be exempt when, as earlier described, they could not afford to adjust salaries.

Mr Nkontwana said that indeed there was provision for municipalities to apply for exemption. That was not an issue.  On provincial and national level, where decisions were made across all municipalities, applications for support remained a unique arrangement and COGTA protected those municipalities. However it was still a challenge at the local level, especially when trade unions wanted the exemption to be extended to every municipality. 

Mr Africa added that one of the reasons COGTA felt strongly that inter-governmental roles included some type of informative communication with the Minister, was that COGTA was legally responsible for managing the sector and for the implications of SALGAs decisions down the line. The reality was that urgent submissions were received by COGTA for bailout and SALGA was not managing local government in terms of the regulatory authority.

The Chairperson said that SALGA had agreed that the manner in which the consultation was conducted was adequate. However, the manner in which legislation was formulated had to be accurate. To bridge the gap, adequate expression in wording for both interests was all that was required.

Mr Mettler confirmed that the formulation of 71 (1) on the Bargaining Council Agreement as it stood, impressions aside, was acceptable.

Mr Nkontwana clarified that it was important that as a formality, the Minister and SALGA discussed what was happening and that the spheres worked together, even though the Minister may not influence the final decision.

The discussion was suspended until the following week due to time constraint. The Chairperson said that Members would give fair consideration to the issues raised in the meeting and asked COGTA to lead formulation of the clause on the Committee’s behalf.

The meeting was adjourned.



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