Further Education and Training Colleges Amendment Bill [B13-2011] and Higher Education Laws Amendment Bill [B14-2011]: public hearings

Meeting report

Higher Education South Africa (HESA) Submission
Dr Hugh Amoore, Registrar, University of Cape Town (UCT), presented Higher Education South Africa’s (HESA) submission on the Higher Education Laws Amendment Bill 2011, [proposed amendments to] the National Financial Aid Scheme Act, Act 56 of 1999, and the Further Education and Training Colleges Amendment Bill, 2011. [Note: the content of the document, and the submission as given, differed in two respects from the document title – inclusion of  [proposed amendments to] the National Financial Aid Scheme Act, Act 56 of 1999, and omission of  the Skills Development Amendment Bill 2011.]

Dr Amoore apologised for appearing before the Committee again as he had appeared before them previously to present the comments on the proposed Bills for UCT. He explained to them that HESA was an umbrella organisation representing public universities, comprehensive universities and universities of technology in South Africa.

Higher Education Laws Amendment Bill 2011

Dr Amoore said that HESA supported submissions made to the Committee the previous week by UCT. Thus, the following was merely a repeat of his previous presentation in relation to the Higher Education Laws Amendment Bill 2011. HESA supported the object of the amendments to the Bill but believed that some of the amendments would have damaging and unintended consequences. Attention was drawn to Clauses 1 and 2 of the Bill which sought to amend Sections 27 and 34 of the Higher Education Act 1997. These dealt with the issue of ensuring that there was no inappropriate conflict of interest by people who took decisions for the university in question.

⚫Section 27 of Act 101 of 1997
HESA did not support the proposed sub-sub-section 27(7) (e)(i) on the grounds that it would not be possible to enact. The Section, as proposed, would make it impossible for a member of another university or higher education institution to serve on the Council. It would also make it impossible for many qualified and employed people, whose services were invaluable to Councils, to serve on them. Conflicts of interest did arise and the proper procedure was to require disclosure and recusal where necessary. The Bill should make it explicit that a contravention of the provisions was an offence. These provisions should apply to members of a council and members of a committee of a council. 

⚫Section 34 of Act 101 of 1997
HESA did not support the proposed sub-sections 34(4) and 34(5) because they would have unintended and damaging consequences in two respects. First, a university may be precluded from using a patented product in which a staff member had a financial interest as this could involve indirect conduct of business. Second, it would discourage key individuals from taking employment in higher education institutions, especially if the proposed sub-section was interpreted to include the interest of spouses. A member of staff of a public higher education institute must declare any direct or indirect interest in any entity that tendered to contract with that public higher education institution in writing.

[Proposed amendments to the] National Student Financial Aid Scheme Act 1999 (Act 56 of 1999), as per the Higher Education Laws Amendment Bill [B14-2011]
HESA supported  the power of the Minister to appoint and remove Board members but noted that the powers ascribed to the Minister would virtually usurp the function of the board. This might be seen as compromising the independence of the board and integrity of the board. The Higher Education sector was of the opinion that the Minister should have the power to appoint and remove Board members but provision should be made for due process to be followed. The due process would include guidelines pertaining to conduct and expectations which is documented and Board members would be evaluated against these guidelines. In addition, HESA also recommended that the provision in Section 7A (1)(c) be revised to reflect that the Minister may consider dissolution of the Board even if the resignations were less than 75%. Finally, the term of Administrator should also be limited as Section 4A (5) does not limit the term of the Administrator. HESA recommended that this term be no more than two years.

The Further Education and Training Colleges Amendment Bill 2011
Dr Amoore said that in essence the Bill was a good thing as it provided the support to the provincial Ministers of Executive Council (MEC). However, the Higher Education sector did have some reservations primarily in relation to the capacity of the further education and training (FET) sector. Generally, HESA was concerned that this Bill might not be aligned with the current Green Paper on Post-Secondary Education. HESA recommended that both the processes be closely aligned. The Bill was also silent on the mechanisms for initial and continuing professional staff development at FET colleges. Although the Bill did empower FET colleges to perform a wide array of governance, financial, human resources, planning, student support and other functions, HESA questioned the institutional capacity. HESA cautioned that FET colleges should not take on too many of these functions without carefully designed institutional capacity development programmes.

Discussion
The Chairperson commented that there were complex ways in which people might circumvent rules and regulations on the issue of conflict of interest. People would then sit on councils and decision making bodies and protect their own business interests. He asked how “conflict of interest” could be defined. The Chairperson said that conflict of interest was the actual issue which needed to be addressed.

Dr Amoore replied that annual disclosure in writing about his/her family financial and fiduciary interests must be submitted by any person serving on any council and decision making body. There must also be provisions for Council and Committee Members to be recused. There was also the issue of decisions being taken by delegated authority within institutions. In addition to this Councils must also be satisfied with business, e.g. a professor invented a device and the university bought it from him. This transaction was completely above board as full disclosure was needed. UCT had express provision in its institutional statutes.

Dr J Kloppers-Lourens (DA) asked what HESA’s approach was to proposals for repeal, as per the Higher Education Laws Amendment Bill [B14-2011], of Section 23 of the National Student Financial Aid Scheme (NSFAS) Act 1999 (Act 56 of 1999).

Dr Amoore replied that HESA was perfectly happy with the repeal of Section 23.

Mr G Radebe (ANC), asked what was meant by the last line of the document with regard to NSFAS, “The broad nature of intervention by the Minister.”

Dr Amoore replied that HESA believed that the Minister was accountable for NSFAS and therefore he must have the necessary powers to act. However, if he appointed a board, due process must be followed.

Mr S Makhubele (ANC) asked if there were no other bodies which would propagate understanding of issues of governance beyond the Council or Student Representative Council (SRC).

Dr Amoore replied that this was precisely why certain clauses needed to be amended. He said that in most institutions established committees did this. He noted that most public institutions were largely democratised and students were involved in these committees.

Mr A van der Westhuizen (DA) asked if HESA was willing to amend clauses where they were to be scrapped as the final wording did not effectively communicate what it was meant to achieve.

Dr Amoore replied that provisions must be inserted for Ministers to have power for interventions. He noted that HESA did not necessarily have all the skills necessary for drafting this.

The Chairperson said that Parliament had help available in the form of legal advisors who would be competent to draft and amend clauses.

Further Education and Training College Employers' Organisation (FETCEO) Submission
Mr Mike Masuluke, Chairperson, Further Education and Training College Employers' Organisation (FETCEO), presented the comments to the Committee. FETCEO welcomed the effort by Government to put legislation in place which would relieve the organisation and allow it to focus on key governance issues. The Bill was welcome as it would discourage the quest for “tenderpreneurism” in colleges as well as uproot corruption.  FETCEO recommended that the Bill compel colleges to bargain together as this would centralise everything. The insertion of reference to the Public Finance Management Act would assist in holding management accountable.

The FETCEO did however, note a few challenges within the Bill. Appointments and/or transfers of staff would be dealt with according to the Public Service Act (PSA). This may mean that the PSA itself would need to be amended in order to provide for Minister of Higher Education and Training (MHET) to determine Conditions of Service of staff appointed by the MHET. The Bill was not clear on how the Minister would have jurisdiction over appointed staff without the consent of the Minister of Public Service and Administration (MPSA). Section 20 (2) (b) changed the current sectoral bargaining arrangements of both the lecturers and support staff.

FETCEO noted some possible resolutions for the challenges tabled. FETCEO suggested that the Bill could be passed and later the MHET and the MPSA would allow for deviation in a similar fashion as to the Department of Education. Alternatively, a section in the Bill could be inserted that empowered the MHET, the FETCEO and other stakeholders to determine their conditions of service for their own appointees. Finally, a Service Act could be introduced for the sole purpose of the Further Education and Training Colleges (FETC) sector where both the the Department and the FETCEO were recognised employers.

Discussion
The Chairperson said that he had a concern over dualism. He asked if the Department of Higher Education and Training was happy with two employers, i.e. the MHET and the MPSA. Secondly, where would the bargaining structures be located? The Labour and Economic Research Committee (LERC) issues must be clarified as well as conditions of service.

Mr Van der Westhuizen noted that Colleges were not employed to act as employers. The Council would still be the employer but, it had to be asked, in what capacity. The transitional arrangement with new service appointees was that they would work forty hours per week on campus. The reality was that there would be one organisation with different conditions of service and employment.

Mr Masuluke replied, that the current Act instructed colleges to bargain separately. There was a bargaining chamber solely dedicated to FET colleges and in that bargaining chamber one would find the Department and the College Council. He agreed that the colleges had two sets of employers in colleges and that a legitimate expectation was created by equalising.

Mr Makhubele asked if FETCEO was satisfied with the merging of colleges or if FETCEO wanted it to stay as proposed.

Mr N Manyobe, National Executive Council (NEC) Member, FETCEO, replied that the Minister envisaged a twenty four hour seven day week college to skill people.

The Chairperson agreed that the employment conditions of the sector must be harmonised within the bargaining sector. He noted that these were issues beyond Parliament and that they were executive decisions.

Mr Makhubele asked if FETCEO felt that there was a need for a new structure or if it had other thinking.

Mr Masuluke replied, that there was no bargaining for ELRC and that the conditions of service in the sector needed improvement as there was conflict of interest.

National Student Financial Aid Scheme (NSFAS) Submission
Mr Paul Benjamin, Legal Advisor, National Student Financial Aid Scheme (NSFAS) presented comments on the proposed amendments. NSFAS supported the proposed amendments to empower the Minister to intervene in the case of poor or non-performance or maladministration by the Board. These amendments would contribute to the achievement of good governance at NSFAS.

NSFAS accepted that Section 23 was unconstitutional and therefore welcomed the repeal of the provisions. The obligation on an employer to make deductions from the latter’s remuneration without the borrower's consent was inconsistent with Section 34 of the Constitution. NSFAS therefore no longer applied Section 23.

NSFAS believed that the Act should make allowances for the recovery of loans in an efficient, constitutional and legally compliant manner. NSFAS proposed amendments to Chapter Four of the Act which dealt with recovery loans. The amended Section 23 (2) no longer placed an obligation on the employer to make deductions. The obligation was to request the consent of the borrower to make deductions.

Finally, NSFAS proposed a new Section 23A. It would allow NSFAS to obtain a judgement against a borrower without having to issue a summons and incur legal costs. This judgement could only be obtained after compliance with the National Credit Act 2005 (Act 34 of 2005).

Discussion
Dr Kloppers-Lourens asked for an explanation of Section 34 of the Constitution.

Mr Benjamin replied that Section 23 in unamended form was used to issue legal action against an employee. NSFAS had accepted that this was unacceptable. The result came from a report, “Lets Adapt Procedure to be Constitutional”

Ms N Gina (ANC) asked, if the debtor was listed on a debtors list by default, what the reasonable time frame would be given to the person to correct it.

Mr Benjamin replied that he would have to follow procedure and the National Credit Act. It would take at least two months and this was in line with the National Credit Act.

South African Students Congress (SASCO) Submission
Mr Mbulelo Mandlana, President, South African Students Congress (SASCO), presented SASCO’s submission on the Bill. SASCO accepted and welcomed the amendments efforts at transformation in broad terms. It was proposed that conduct of council members and staff members be regulated if they engaged in business with the higher education institution concerned. The adjustment of the period within which an independent assessor appointed by the Minister must finalise investigation was also proposed. It was proposed that the NSFAS Act be amended to empower the Minister to intervene in the case of poor performance or maladministration by the board of NSFAS as well as the provision for procedure for dissolution of the board. The provision for an administrator to take over governance, administration and management temporarily was also proposed. The repeal of provisions which obligated an employer to make deductions from an employee’s remuneration was also proposed (NSFAS Act).

Discussion
Dr Kloppers-Lourens commented on the period of one year for administrators and pointed out that legislation stated that it must not exceed two years.

Mr Mandlana replied that the term of administrators should not exceed one year. He noted that administrators were a “one man show”.  He noted that a good administrator would be able to do the work within one year.

The Chairperson asked if the same rules applied to the Student Representative Council (SRC).

Mr Mandlana  replied that the SRC was also subject to the same rules.

Dr Kloppers-Lourens asked if SASCO was satisfied with the repeal of Section 23

Mr Mandlana replied that SASCO unconditionally accepted the repeal.

Stellenbosch University (SU). Submission
Mr Gerhard Lipp, Director: Legal Services, University of Stellenbosch (US) presented submissions on behalf of Stellenbosch University. Mr Lipp provided general comments regarding conflict of interest as used in the amended Section 27(7) and Section 34. He explained that conflict of interest could have a variety of meanings and that clarification was needed. He said that, “Conflict of Interest can be described as any situation where a council member has an interest including but not limited to financial interest, non-financial interest, personal relationship or commercial interest that precludes or may be perceived to preclude that member from acting in the best interests of the public higher education institution.” Each of the “interests” should be defined. Conflict of interest should include both actual and potential conflicts of interest.

Given the wide scope of conflict of interest as the definition above showed, the practical way to deal with it would be through disclosure at all times.

SU proposed that the Act require of each public higher education institution to have a suitable conflict of interest policy that met certain minimum criteria which must be specified in the Act. This would be supported through stringent and well governed procurement procedures. The policy would support other broader ethical policies of the institution. Conflict of commitment was also submitted. This would address “outside” activities which should not interfere with their primary commitments to the university. The Act should include provisions which would require a proper process as well as sanctions that could include suspension, disqualification or any other sanction found in applicable legislation. A general avoidance provision was proposed that would address collusion between council members to advance the interests of the recused member.

SU broadly accepted most of the specific provisions but proposed that the definition of what should be disclosed should be broadened to be as wide as possible so as to extend beyond business, commercial or financial activities as noted in the definition of conflict of interest.

SU proposed that there be a process whereby interests were declared and recorded. Finally, SU also had a concern against the absolute prohibition of conducting business and that it should rather be addressed through a conflict of interest policy with supporting processes.

Discussion
The Chairperson asked for examples of business enterprises.

Mr Lipp replied that personal interests could include family, equity, and matter of collusion. He said that the most important matter was that of disclosure. He said that if a council member was also a supplier to the university and it was the best price and service, then everything should be fine. However, the answer, he said, would lie in disclosure at all times with a proper procurement process in place.

Mr Van der Westhuizen asked if it would be problematic for Council Members to have sanctions included in the Act.

Mr Lipp replied that if it was criminal act such as bribery it would be prosecuted under the Criminal Procedure Act. It would depend on the particular activity.

The Chairperson noted that the Council knew the rules and, although it was a complexity, it was a reality and practical.

Mr Lipp noted that there needed to be provision for strong tools and control in the form of division of powers, the integrity of the university and the system. He also noted that with the division of powers the Minister would also be able to get involved if needed. Furthermore, there were challenges when managing conflict of interest issues. He said that an absolute criterion was disclosure and all universities to have a uniform set of sanctions.

The Chairperson thanked everyone for their participation and said that Members were to reflect on the Bill and comments throughout the debates and that they would meet again.

The meeting was adjourned.