Davidson Proposal to regulate the business interests of State employees

Private Members' Legislative Proposals and Special Petitions

24 May 2011
Chairperson: Mr S Thobejane (ANC)
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Meeting Summary

A joint meeting between the Private Members’ Legislative Proposals and Special Petitions Committee, and the Standing Committee on Finance was convened, to try to obtain the comments of the latter on the proposal by Hon Ian Davidson. Essentially, this proposal was aimed at prohibiting party-political office-bearers, public representatives and political parties from contracting with the State.

Members of the Standing Committee on Finance thought that if the proposal had to do with procurement, then that would fall within procurement policy and its requirements for transparency, and noted that it was essentially a matter which this Committee would have to deal with. They disputed, initially, whether it was constitutionally correct for the proposal to have been brought by a private member. They also wondered if this proposal might not duplicate what could be introduced in the amendments to Broad Based Black Economic Empowerment, and suggested that it may be useful to wait for these proposals before making a decision on this.

It was indicated that the Parliamentary Research Unit had not foreseen any Constitutional difficulties, but one aspect that still did need to be considered was whether similar legislation might be considered by National Treasury. In addition, a Member pointed out that Mr Davidson himself had indicated that he had not done any international comparisons, and he suggested, and other Members agreed, that it might be useful to do some comparative studies on the position in other countries. It was resolved that the issue would remain for further research discussion with the Private Members Legislative Proposals Committee.

Meeting report

Davidson Legislative Proposal to regulate the business interests of State employees
The Chairperson welcomed all Members from both Committees. He noted that Hon Ian Davidson had submitted a private legislative proposal to regulate the business interests of State employees, by prohibiting party-political office-bearers, public representatives and political parties from contracting with the State. This Committee had received notification that National Treasury was not considering the introduction of legislation similar to that in the legislative proposal, and National Treasury therefore advised that the decision on the issue was solely at the discretion of the Committee.

The Chairperson outlined the principles that were used to guide this Committee, when considering a legislative proposal. The Committee would consider whether such proposal:  
a) went against the spirit, purport and object of the Constitution;
b) sought to initiate legislation beyond the legislative competence of the National Assembly;
c) duplicated existing legislation or legislation awaiting consideration by the Assembly or Council;
d) pre-empted similar legislation soon to be introduced by the national executive;
e) would result in a Money bill; or
f) was frivolous or vexatious.

Mr P Pretorius (DA) commented that the National Treasure was asked to advise whether this proposal pre-empted similar legislation soon to be introduced by the national executive.

Ms Z Dlamini-Dubazana (ANC) felt the proposal contravened a), in that it possibly went against the Constitution. She noted that the Standing Committee on Finance did not believe that the proposal of Hon Davison followed the proper criteria.

Mr Pretorius confirmed that the Parliamentary Legal Advisors had advised that the proposal was in fact not in conflict with the provisions of the Constitution. The Committee’s function was not to deliberate on the content of the proposal. If this proposal was passed by the Private Members Legislative Proposals Committee, it would then be passed over to the appropriate committee to deal with the content, which could be the Finance Committee.

Ms Dlamini-Dubazana insisted that the proposal did not meet the criteria. She disagreed with the Parliamentary Legal Advisors. She reiterated that she did not believe the correct procedures had been followed.

Ms J Kilian (COPE) said it would have been helpful if the Committee was to be made aware whether there was something else in the pipeline. The Committee had received a legal opinion; it was now for the Committee to decide if there was anything to prevent it from going forward. The details as to where it may infringe on constitutional rights would be the role of the Finance Committee. She did not think that the Finance Committee should evaluate on the same criteria as those used by the Private Members Legislative Proposals and Special Petitions Committee. She suggested that it should be established whether any legislation was likely to be placed before the Finance Committee, relating to regarding ethics and better control over tenders. If not, then this matter could be considered by this Committee.

Ms Dlamini-Dubazana agreed. The Finance Committee was linking the proposal with the Monetary Policy and the fiscal framework itself, which included procurement. If the proposal included anything around procurement, then that was in the Procurement Policy that dealt with finance and transparency. The Finance Committee had to be involved, because it dealt with the fiscal policy document, which started from the Constitution.

The Chairperson recapped that Hon Davidson had said that he understood the difficulties involved and would it leave it open to whichever Committee might be responsible for taking the matter beyond his original outline. The Chairperson had interpreted that as an indication that there was a possibility that people might see it differently, so there were challenges. Hon Davidson confirmed that there could be some elements requiring amendments and redrafting. The Joint Committee was looking at how best to proceed with the proposal.

Ms Dlamini-Dubazana indicated that Hon Davidson’s proposal could well duplicate amendments to the Broad Based Black Economic Empowerment Act, and she suggested that it may be useful to wait and see what these amendments proposed by way of ensuring fairness, transparency and management of the services of the State or the organ of the State.

The Chairperson said that if this was so, then the proposal would fall under (c) of the criteria.

Ms Kilian said there might be some areas of commonality with the amendments to that Act, because the issues concerned public representatives contracting with the State. The Parliamentary Legal Advisors had indicated that Mr Davidson’s proposal was concerned with prohibition of certain contracting practices, particularly prohibiting contracting between an organ of state in the national sphere of government and companies whose directors or shareholders were political public representatives or office bearers. The Legal Advisor, having scrutinised the proposal, was satisfied that it did not conflict with the Constitution. When Hon Davidson made his presentation he had said it was a complex issue that must be thoroughly worded and the detail must be looked at, but he did not think that any of the political parties should object to the principle. Ms Kilian did not see that any revisions to the policy around broad based black economic empowerment would hinder this proposal from proceeding. If there was something in the pipeline, particularly to do with the Minister of Finance’s “Clean Up” operation, where specific legislation was to be proposed to curtail contracting between public representatives and the State, then that would align closely with this proposal.

Mr D van Rooyen (ANC) said that in a meeting of 15 March the Standing Committee on Finance had noted that this proposal could have far reaching implications for individual Members, and therefore that approval of the proposals should not be done lightly. For that reason, it was agreed that the Standing Committee would request an extension of time to enable the Finance Committee to consult broadly on the matter. These consultations were still ongoing.

The Chairperson said the proposal spoke to authorities in the South African political administration, and those consultations should have a political buy-in. He asked how much time was needed, so that this Committee could advise Parliament that its final answer was based on sufficient information.

A Member of the Standing Committee on Finance noted that this was an administrative matter.

Mr Pretorius suggested that the Committee should also be communicating with National Treasury to ensure that the proposal did not pre-empt similar legislation soon to be introduced by the National Executive.

Mr N Koornhof (COPE) asked why only the Standing Committee on Finance had been asked to comment. The proposal was not only about procurement, but also about the public representatives’ right to do business, as well as affecting other people who were not public representations. He wondered if more committees should be asked to comment on the proposal.

The Chairperson agreed that the implications were wide. He asked the Research Unit to establish which other committees might be affected.

Ms Kilian suggested that the Research Unit also be asked to find out more about the practice in other countries. She was aware that some other countries had introduced legislation to promote ethical behaviour amongst those holding public office. Some other countries’ Public Accounts Committees had introduced measures to uplift ethics in public life in politics. The Public Accounts Committee of the Gauteng Legislature went on an overseas study tour to Canada, Britain, and there was some such legislation discussed then. However, whatever measures were proposed must also be practical. She believed that good ethics should be pioneered in South Africa for the rest of the African Continent. She reiterated her request and suggested that copies of comparative legislation be provided to the Committee, to indicate what might be practical.

Mr Pretorius reminded the Committee that Mr Davidson, during his presentation, asked that Members not focus only on the actual proposal but rather consider the broader implications of political parties and their representatives being involved in contracts. He had agreed that his proposal could be worded very differently at the end, and he had mentioned that no international research had been done. For this reason, Mr Pretorius supported the suggestion to research the position in other countries.

The Chairperson concluded that much further work needed to be done. He concluded that this proposal would therefore remain for further discussion by the Committee on Private Members Legislative Proposals and Special Petitions.

The meeting was adjourned.


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