State Liability Amendment Bill: ongoing deliberations

Meeting report

State Liability Amendment Bill : Continuation of deliberations
The Chairperson noted that this meeting would allow the Committee to continue with its deliberations on the State Liability Amendment Bill (the Bill).

Dr M Oriani-Ambrosini (IFP) said that he would like to comment on the discussions of the Committee at the previous day’s meeting. One of the difficulties, when dealing with an organ of state other than a department, was that each organ had a completely separate budget with a special programme. The procedure being created in this Bill for satisfaction of a judgment debt was a sort of “surety” being offered by National Treasury, which was in fact creating a second liability for the state. 

Mr Johan Labuschagne, Principal State Law Advisor: Legislative Development, Department of Justice & Constitutional Development (DOJ&CD) informed the Committee that he had made some linguistic changes, but no changes to any of the principles discussed.

Dr Oriani-Ambrosini said that the Bill applied to the state; but the question was “What was the state?” He suggested that the Committee must work on the assumption that all organs of state were part of the state, as defined in the Constitution. The Committee should seriously consider this definition in the Constitution. It was required to respond to a judgment of the Constitutional Court. However, at the same time it must seriously consider if it wanted to include every water boards and entities such as the Johannesburg Zoo as part of “the State”. He suggested that the previous definition of “State” that was originally included in the Bill by the Committee should be re-inserted, as it set out the scope of application of the Bill.

Ms M Smuts (DA) said that it was clear that the Bill referred to the usual understanding of “government”, and not to every water board and Johannesburg Zoo. She thought that the approach that Mr J Jeffery (ANC) had suggested on the previous day, whereby a definition was provided for “department” only, would be ideal.

Mr J Jeffery (ANC) said that he was worried that attempts to restrict the application of the Bill to a list of entities would lead to unforeseen circumstances. The Bill should not contain any further definitions, for the moment. The application of the Bill should be left unclear, as it was in the original Act.

Ms D Schäfer (DA) agreed with Mr Jeffery.

Dr Oriani-Ambrosini said that the suggestion from Mr Jeffery amounted to the Committee not doing its job properly. The Committee had to eliminate the powers of National or Provincial Treasury (Treasury) under Clause 11, or limit the scope of application of the Bill.

Mr Jeffery reminded Dr Oriani-Ambrosini that if this Bill was not passed in time to meet the deadline imposed by the Constitutional Court (CC), then Parliament would have some explaining to do, and that would not be pleasant. He reiterated that the application of the Bill should be left as it had applied in the founding Act. The Committee was not dealing with the definition of the State. Instead, it was dealing with the amendment of section 3 of the State Liability Act (the Act), as required by the CC.

Ms Schäfer agreed that the point of the judgment was that section 3 must be amended, and not the entire Act. She suggested that the Department of Justice (Department) should undertake to clarify the definition of state and also come up with a list of all organs of state for this purpose.

Dr Oriani-Ambrosini reiterated that the provisions assigning powers to Treasury should be removed.

Advocate B Holomisa (ANC) said that the court was trying to correct a mischief that had emanated from a government department. The judgment pertained only to departments that had failed to fulfill their obligations. The Committee should respond to the call from the CC to deal with those recalcitrant departments.

Dr Oriani-Ambrosini said that the Committee would have to interrogate whether the State Liability Act applied to organs of state beyond those contained in a list compiled by the State Law Advisors.

The Chairperson pointed out to Dr Oriani-Ambrosini that the majority of Members of the Committee felt that the suggestion from Mr Jeffery should be followed.

Advocate Holomisa referred to Clause 16(b). He asked what happened if the accounting officer was not available.

Mr Deon Rudman, Deputy Director General: Constitutional Development, DOJ&CD, said that there would be an Acting appointment.

Mr Jeffery asked what the difference was between assignment and delegation in the context of clause 16(b). Treasury was trying to ensure that an accounting officer did not delegate his or duties. However, there might be unforeseen consequences if a Director General were to be ill, resulting in the bills not being approved for payment.

Mr Neville Gawula, Director: Office of the Chief Litigation Officer, DOJ&CD, said that the purpose of the clause was to try to address problems around the shifting of responsibility for functions that ordinarily should be carried out by an Accounting Officer. When these functions were assigned, then the accounting officer would be absolved from personal responsibility. Where there was delegation, the Accounting Officer would retain responsibility.

Mr Jeffery asked if this clause was not trying to avoid a situation where the Accounting Officer might be physically present in the office, but still was delegating functions.

Mr Freeman Nomvalo, Accountant General, National Treasury, said that Section 44 of the Public Finance Management Act (PFMA) dealt with delegation and assignment of responsibilities. Essentially, an accounting officer delegated responsibility, but not accountability. An Acting Director General assumed the responsibilities of the Director General for the department. This particular provision was seeking to prevent a situation where the permanent Director General was in office and shifted certain responsibilities.

The Chairperson asked if the clause addressed the concerns raised by Treasury.

Mr Nomvalo replied that it did.

Mr Gawula added that even if the Director General assigned the powers in writing, he or she still remained accountable.

Mr Labuschagne asked if it was necessary to expressly exclude local government from the Bill.

Mr Jeffery said that in the first order of the CC, local government had not been excluded, but this was then changed in the second order by Judge Mokgoro. Given the confusion of this, even at the CC level, he queried whether it might not be useful to expressly exclude local government.

Ms Schäfer agreed that it would be a good idea to state expressly in the Bill that local government was being excluded.

Dr Oriani-Ambrosini asked if the Committee was in agreement that the definition of “department” would be removed.

The Chairperson said that it would stay.

Dr Oriani-Ambrosini then said that if this was the case, he did not see how this would apply to the other organs of State.

The Chairperson, and other Committee Members, pointed out that the principal Act would apply.

Dr Oriani-Ambrosini said that “departments” were mentioned throughout the Bill, and there was even a definition for “department”. However, there was nothing for “organs of state”. He questioned whether this was really what the Committee was intending to do.

The Chairperson replied in the affirmative.

Dr Oriani-Ambrosini requested that this should then be highlighted in a clause outlining the scope of application. He felt that it should be stated that the revised Act would apply to national and provincial departments only.

Mr Jeffery said that this had been debated previously. The definition that Dr Oriani-Ambrosini was referring to was included in earlier versions of the Bill. Ideally, the Committee would like to see such a clause included, but it had been specifically and deliberately removed because the Bill tabled before the Committee did not, and did not have to, deal with the application of the principal State Liability Act. One of the reasons why this Bill took so long to prepare was that the DOJ&CD had been pondering this very question. The Committee had a problem in that it did not know which entities were, through other legislation, made subject to the State Liability Act, nor did it know how many organs of state there were.

Dr Oriani-Ambrosini said that he still believed that the Committee should make it clear to whom this Bill applied, including those organs of State that had “opted in” through their own founding legislation. This was a technical point.

The Chairperson took his point, but noted that it did not find favour from other Members.

Adv Holomisa asked if the founding or controlling legislation of some organs of state expressly mentioned the State Liability Act, stated that it would be applicable, or how else the link might be made.

Mr Rudman said that a god example would be the Public Protector Act, which contained a provision that the State Liability Act could apply, with the necessary changes, in respect of the Office of the Public Protector, and that the reference to “the Minister” should be deemed a reference to “the Public Protector” in the case of that body.  Similar trends were apparent in the legislation of some other organs of state.

Mr Jeffery asked to hear the State Attorney’s views on exclusion of local government.

Mr William Wilken, Deputy State Attorney, said that his office had never acted for local government, as it tended to appoint its own attorneys and had its own regime against which property could be attached and executed.

Mr Jeffery said that the question now was whether there should be an express provision that excluded local government.

Mr Wilkins said that he believed it could be inserted.

Mr Gawula said that he held a different view. He did not believe that the order of the CC had been an oversight.

Mr Jeffery said that he was still concerned that the first Order of the CC had included local government, whereas the second Order had not. However, given contrary views, then perhaps it was not desirable to include an express provision that local government would not be subject to this Act.

The Chairperson agreed that the statement excluding local government would be deleted.

Mr Labuschagne noted that the deadline imposed by the CC was 31 August. He would therefore put in the Bill that the Bill must apply by no later than 30 August.

Ms Schäfer said that she preferred using the words “assented to prior to 30 August”.

Mr Jeffery agreed.

Mr Jeffery questioned what would happen if the Office of the State Attorney failed to notify the Executive Authority of a matter. He said that either criminal sanctions could be included, or the Office would have to pay from its own pocket.

Mr S Swart (ACDP) said that even if there was no costs award against the State Attorney, the State, and not the individual, would pay. Disciplinary action could be taken in terms of the Public Service Act.  Criminal sanctions for professional misconduct might not be ideal.

Ms Schäfer agreed with Mr Swart that there was a need to be cautious on this.

The Chairperson said that South Africa was notorious for being lax about disciplinary actions. There were many accounts that public servants had been suspended for extremely long periods, on full pay, pending such proceedings.

Mr Wilken said that if State Attorneys were to be sanctioned, then this should apply to all other members of the legal profession.

Mr Gawula agreed that punitive measures could not be imposed on one branch of the profession only.

Ms Schäfer said that it was the Department of Justice’s responsibility to ensure that it managed the Office of the State Attorney properly.

The Committee would vote on the Bill on the following Tuesday, 31 May.

The meeting was adjourned.