Municipal Systems Amendment Bill [B22B-2010]: briefing by Department of Cooperative Governance and Traditional Affairs

Meeting report

Briefing by the Department of Cooperative Governance and Traditional Affairs (COGTA)
Mr Mohammed Bhabha, Advisor, COGTA, explained that the Municipal Systems Amendment Bill was one aspect of the Department’s turn-around strategy that had been adopted by the Cabinet.  There were two facets to the Bill.  In the first instance, the Bill was enabling legislation and made provision for the Minister to issue regulations.  Secondly, the Bill provided a legal framework for municipalities.  The Bill should not be regarded as a panacea to address all the issues concerning municipal administration but was a starting point to resolve certain areas of concern.

The salient features of the Bill were the regulation of the management systems of municipalities, which had been difficult to monitor and evaluate; an attempt to professionalise municipal management by addressing the issue of municipal officials who also held political office; dealing with the re-employment of officials who were guilty of gross misconduct by another municipality and linking municipal regulations and agreements with the impact on the fiscus.

Mr Jackey Maepa, Senior Manager, COGTA presented the briefing to the Committee (see attached document).  The presentation included an overview of the background to the Bill, the challenges the Bill seeked to address and the main objects of the Bill.

Clauses 2 and 3 dealt with the appointment of municipal managers and their subordinate managers.  Clause 5 prohibited municipal managers and subordinate managers from holding political office in a political party.  Clause 6 made provision for employment contracts and performance agreements of municipal managers and their subordinate managers.  Clause 7 dealt with the re-employment of staff who had been dismissed for serious misconduct.  Clause 8 provided for the approval of the municipal staff establishment by the municipal council.  Clauses 9 and 11 required that municipal systems and procedures complied with the national standards and regulations issued by the Minister.  Clause 10 provided for bargaining council agreements to be aligned to budgets, fiscal capacity and national economic policies.  Clause 12 made it a breach of the Code of Conduct for Councillors to approve any resolution that was in conflict with applicable legislation.

Discussion
Mr A Watson (Mpumalanga, DA) asked what process would be followed for the issuing of the regulations.  He was concerned that Parliament passed legislation in good faith, only to find that the regulations subsequently issued by the Minister imposed a different interpretation of the legislation than was intended.

Mr Maepa replied that Section 120 of the Municipal Systems Act made provision for the Minister to submit the regulations to Parliament for approval 30 days prior to the effective date.  The new regulations provided for by the Bill would be submitted to Parliament as required by the Act.

Mr A Matila (Gauteng, ANC) was not satisfied with the response as it did not address the issue of regulations interpreting the legislation differently once the law had been passed.

Mr Watson pointed out that Section 57 of the Act already made provision for the signing of employment contracts and performance agreements.  He asked how the Department would ensure that the provision was enforced.  Clause 7 dealt with the re-employment of dismissed staff and categorised offences.  In certain cases, the official concerned had resigned before disciplinary action was taken against him/her and the person was subsequently employed by another municipality.  Other officials remained in their posts and were not charged with misconduct for lengthy periods, allowing the misconduct to continue.  He suggested that provision was made to include persons charged with misconduct as well.  He asked if the standards referred to in clauses 9 and 11 had been set by the Minister.

Mr M Makhubela (COPE) observed that the Bill did not increase the authority of the South African Local Government Association (SALGA) over local government entities.

The Chairperson, COGTA, North West Province noted that clause 2 allowed a municipal council to apply to the MEC for local government for the extension of a period of appointment. He asked what would happen if the application was refused.  The municipality must report to the MEC within 14 days but no provision was made for the failure to report.  He felt that the political head of the municipality, i.e. the mayor, must be held accountable for the failure to implement the legislation.  The most common issues concerning misconduct in municipalities were instances of fraud, corruption and nepotism.  The Bill prescribed applicable periods before a person guilty of misconduct could be re-employed but it was essential that there were no loopholes.

Mr Skosana, Chairperson, COGTA, Mpumalanga Province referred to clause 8 and asked if the approval of the municipal staff establishment was necessary as the power to approve municipal staff structures rested with the municipal council in any event.  There was a current debate in local government that regulations should not be issued by the Minister if the State does not provide the funding.  The funding for the benefits provided by the municipality was provided by the local government entity rather than the fiscus.

Mr D Bloem (Free State, COPE) asked what offences were included in the definition of ‘serious misconduct’.  He wanted to know what consequences applied to cases of less serious misconduct.

Mr Watson said that the definition of ‘political office’ did not cover a case where a municipal official occupied a position that was not specified in the Bill (i.e. not a municipal manager or a subordinate manager) but who held a position with considerable power in a political party.  He asked how such a case would be dealt with.

Mr T Beyleveldt (Western Cape, DA) noted that Section 53 of the Act, which dealt with the role of municipalities, was not amended in the Bill.

Mr Bhabha conceded that the concerns of the Members concerning political influence (particularly in municipal procurement) were valid.  The Bill attempted to address these issues but the challenge was in formulating legislation that could be applied in practice.  The Bill provided for greater flexibility in the secondary legislation or regulations.  The regulations could interpret the legislation differently as the Department tried to accommodate the submissions received from stakeholders during the public participation process.  He advised that the Minister intended to enhance the authority of SALGA.

Mr Bhabha explained that the staff establishment of municipalities should be geared towards the delivery of services.  However, in many municipalities the core function positions remained vacant whilst more “soft” administrative positions were created than were necessary and were fully staffed.  Records were not kept of instances where a staff member resigned before disciplinary action could be taken for misconduct.  In such cases, there was no proof that the person concerned was guilty of misconduct and he/she could not be punished.  The categorisation of offences was intended to prevent disciplinary procedures being used to fight political battles.  The categories would be specified in the regulations.

Mr Maepa explained that the existing Act did not specify what was considered to be a ‘reasonable’ timeframe within which an employment contract and a performance agreement must be signed.  The Bill now specified the relevant time periods.  It was difficult to legislate for instances where a person resigned before disciplinary procedures could be instituted.  The Bill made provision for the Minister to keep a record of municipal employees found guilty of serious misconduct.  Currently the staff structure of a municipality was approved by the municipal manager, not the municipal council.  The provision in the Bill allowed the municipal council to consider the staffing needs of the municipality and prevents the municipal manager from using his own discretion to create posts.

Mr Maepa pointed out that the Act required the Minister to provide the necessary support to and strengthen the capacity of a municipality to allow it to operate at optimum level.  The Minister was legally required to issue regulations to give effect to the law.  The Minister was required to consult with the Ministers of Public Administration and Finance and could request additional funding from the National Treasury if necessary for the implementation of a regulation.  The Department had consulted with organised labour and business and agreed that ‘serious misconduct’ in terms of the Bill included instances of financial misconduct, corruption and fraud.

Mr Bhabha said that the provisions in the Bill allowed for appointments to be monitored, imposed minimum qualifications for officials and punitive action if the law was ignored.  For example, a Councillor would be held personally liable if a person without the minimum qualifications were appointed.  The Bill had to be read in conjunction with the regulations and standards.

Mr Bloem asked why a distinction was not made in the Bill between internal disciplinary action and criminal proceedings.  He cited an example of an instance in the Free State where a municipal employee was involved in a fraudulent cheque for R600,000 and was subsequently employed by another municipality.

Mr Bhabha pointed out that municipalities were subject to the Municipal Finance Management Act (MFMA).  The Bill would refer to the MFMA and the necessary cross-reference would be included in the regulations as well.

Mr Watson reiterated his concern that the regulations were not scrutinised by the Committee prior to their coming into effect.  He suggested that the Committee remained alert to the issuing of subsequent secondary legislation.  With regard to the Code of Conduct for Councillors, he noted that a Councillor would be dismissed if he/she owed the municipality any money for longer than 90 days.  He asked what action would be taken if a Councillor owed money to the municipality, stood in the forthcoming local government elections and was elected.

Mr Matila pointed out that the Bill was a Section 75 Bill and the oversight role of the Committee was limited.  He asked for the comment of the State Law Adviser on how the Committee should address the issue of the subsequent changes in interpretation of the legislation in the regulations.  He pointed out that the Bill does not deal with Departmental staff found guilty of misconduct.  He asked if the changes to the Code of Conduct would be presented to the Committee.  The Bill affected both local government and provincial authorities but the input of the provinces had not been heard by the Committee.  He asked if SALGA had any reservations on the Bill.  He wondered if the Bill would prevent the political in-fighting in certain municipal structures.

The Chairperson, COGTA, North West Province said that the Act must be explicit on what was considered to be ‘serious misconduct’.  The Act was silent on any consequences if instances of misconduct were not reported.

Mr Bloem agreed that the definition of ‘serious misconduct’ should be included in the Act, rather than in the regulations.

Mr Khanyiso Nabe, State Law Adviser explained that the principal Act included provisions to enable the Minister to make regulations.  Section 120 of the Act required the Minister to table the regulations in Parliament.  The Minister was not empowered to make law.  It was a legal principle that a person was presumed innocent until found guilty.  Therefore, the legislation cannot include provisions that were based on allegations of misconduct.

Mr J Mettler, Executive Director, SALGA advised that the Association was consulted during the drafting of the Bill.  SALGA had strong views concerning prohibiting party leaders from occupying any municipal position as it was possible that a person with powerful political connections could cause considerable damage even if employed at a relatively low level.  He observed that the Bill prevented miscreants from being re-employed by local government entities but made no mention of re-employment at the provincial or national government levels.  The regulations had to be in place before the Bill took effect.  The Bill referred to regulations that ‘may be prescribed’ or were ‘as prescribed’.  For example, the regulations to appoint a municipal manager must be ready in time and he urged the Committee to ensure that this was done.  Another issue was the provincial capacity to ensure that the Bill was implemented.

Mr Matila proposed that the Committee endorsed the Bill and requested the House to adopt the legislation.

Mr Watson seconded the proposal.

The Chairperson noted that the Bill created an enabling environment for local government entities.

Mr Watson repeated his earlier question concerning Councillors who owed money to a municipality for longer than 90 days.

Mr Beyleveldt remarked that the Code of Conduct was not enforced in this regard.

Mr Bhabha agreed that the issue raised by Mr Watson was important.  He conceded that it was difficult to regulate human conduct.

The meeting was adjourned.