Road Traffic Management Corporation on its 2012 Strategic Plan

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17 April 2012
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Road Traffic Infringement Agency (RTIA) tabled and presented its strategic plan and Annual Performance Plan (APP) for the 2012/13 financial year. It was noted that the RTIA was created by the Administrative Adjudication of Road Traffic Offences (AARTO) Act, and it had a mandate to try to change the poor behaviour of road users. Tables were shown to explain the process, from the time that a person committed a road traffic offence. It was noted that issuing authorities, which included the Road Traffic Management Corporation (RTMC) and metro police, would issue a notice for the infringer to pay within 32 days. If this was done, the RTIA did not become involved. However, the assumption (which was later challenged) was that more infringers would not pay their fines, or pay them on time, in which case a larger fine became payable, and the RTIA would follow up on recovery of the fine, being paid part of the fine, whilst other commissions or portions would compensate other stakeholders, including the issuing authorities. The RTIA had been listed in the schedules to the Public Finance Management Act in December 2010, but until it was able to become operative, the RTMC had assumed some of its functions, except for those functions requiring the exercise of discretion. The main challenges that the RTIA faced related to the fact that it was currently operating with no budget, had received an inadequate budget in the previous year, had received an audit disclaimer, and did not have a fully-constituted Board.

RTIA’s specific strategic objectives were outlined, and were overall in line with the Department of Transport mandate to provide a safe and secure transport sector. It aimed, in 2012/13, to increase the agency revenue share from the outstanding road traffic infringement penalties, to implement effective governance processes to achieve an unqualified audit opinion, to implement AARTO communication campaigns, to implement effective adjudication processes, to develop a comprehensive review of the legislation so that it could operate properly, and to achieve full transfer of AARTO functions to itself. Once RTIA had implemented the Point demerit system, all stakeholders would be able to identify consistent violators, which would lead to suspension or cancellation of their licences.  RTIA tabled its budget of R242.3 million, and noted that urgent interventions were required to increase this allocation, political interventions were required with the Johannesburg municipality, and support was needed for legislative amendments and the enforcement of the mandate, and to finalise the transfer of certain AARTO functions from RTMC.

Members acknowledged the problems posed by the current Act, asked how RTIA generated revenue and commented that the model was perhaps based on incorrect assumptions. Fewer infringers were paying fines, and the cost of sending out the letters in fact was more than the revenue gained. Members were not in agreement with the assertion that RTIA should ensure that people did not violate traffic laws, and one Member said that there seemed to be a contradiction, because if it aimed to improve road user behaviour, its own revenue would drop. Members also asked how revenue was obtained from municipalities, whether all parties received the amounts to which they were entitled, and heard how the e-Natis system new module would implement the systems. A few Members commented that there was a need to look again at all the agencies and their mandates, because there seemed to be blurring and overlapping of functions, and expressed their concerns about the lack of an approved budget.

Meeting report

Road Traffic Infringement Agency Strategic Plan and Annual Performance Plan 2012
Mr Japh Chuwe, Registrar, Road Traffic Infringement Agency, noted that this agency (RTIA) had a very specific mandate. He apologised that none of the Board members were able to be present, due to other engagements.

The Chairperson interjected to ask why the Chairperson of the Board was not present at the meeting, noting that the RTIA only appeared before the Committee once per year.

Mr L Suka (ANC) asked if there was a formal written apology from the Chairperson of the Board.

Mr Chuwe responded that there was no written apology. He assured the committee that the Chairperson of the Board realised the importance of this meeting and had ensured that another Board member, who was the Chairperson of one of the RTIA’s standing committees, was present. He undertook to convey the Committee’s comments to the Chairperson.

Mr Chuwe noted that RTIA was established by section 3 of the Administrative Adjudication of Road Traffic Offences Act (AARTO) of 1998. RTIA’s main challenge was to change the poor behaviour of road users, inculcated over many years, and noted that this could not be achieved in a short period of time. RTIA also faced the challenge of ensuring that road users understood the rules and responsibilities, as well as the objectives, of not only AARTO but also RTIA, and accept that RTIA existed to provide security for all road users.

Mr Chuwe noted the six strategic priorities of the RTIA for 2012/13. the agency had committed itself in achieving in the current financial year 2012/13. RTIA aimed to increase the agency revenue share from the outstanding road traffic infringement penalties, to implement effective governance processes to achieve an unqualified audit opinion, to implement AARTO communication campaigns, to implement effective adjudication processes, to develop a comprehensive review of the legislation and to achieve full transfer of AARTO functions to RTIA.

The AARTO process was divided into four phases, after a traffic violation. A traffic infringer would be issued with a notice to pay a fine to the issuing authorities within a period of 32 days. After this date,  the enforcement mandate was carried by RTIA, and the issuing authorities, who, in terms of section 9 of the AARTO, comprised local traffic departments, provincial administration and the Road Traffic Management Corporation (RTMC) played no further part. However, the RTMC Act, in section 18(1)(j) indicated that the RTMC could establish an AARTO function as well as its baseline functions. When the AARTO Act came into operation in 2010, RTMC was already in existence, but RTIA had not yet been established. Until RTIA had been established, and capacitated and institutionalised, RTMC was to undertake the administrative support functions on behalf of the RTIA, but would never have the discretion that the Act provided for the RTIA. In order that the AARTO pilots be implemented, RTIA must first be legitimated as the authority to deal with infringements, whilst RTMC would continue with its functions as an issuing authority.

Stakeholders of the RTIA comprised the issuing authorities, Parliament, the Department of Transport and other transport entities, courts, in respect of traffic violations, banks, insurance companies, businesses, road users (including drivers, passengers and pedestrians), and community organisations, social formations and the media.

Once RTIA had implemented the Point demerit system, all the critical stakeholders would make it easier for the Agency to identify reckless motorists who continued to break the law and eventually this would lead to suspension or cancellation of their driving licences.

Mr Chuwe noted some of the highlights of the RTIA. On 31 December 2010, the RTIA was included in the schedules to the Public Finance Management Act (PFMA). The entity had continued with operations despite having no budget, had implemented debt-collection processes and was focused towards achieving a clean audit.

Mr Chuwe noted that the key challenge during the 2011/12 financial year was lack of funding, which impacted upon the RTIA’s South African Post Office obligations, IT infrastructure, human capital, office accommodation and furniture. Other challenges were the lack of objective and balanced audit process An audit disclaimer was received from the Auditor-General. Further issues involved enforcement of role players’ functions, and the limited number of Board members.

Mr Chuwe noted that the strategic outcomes for the DoT included having a transport sector that was safe and secure. He reiterated the strategic objectives outlined earlier. He tabled the budget for expenditure (see attached presentation), noting that the compensation of employees amounted to R35 million, goods and services to R187.3 million, capital expenditure to R20 million, and total expenditure to R242.3 million.

Mr Chuwe concluded by noting the interventions required by the Agency. It needed an urgent increase in budget allocation, needed to undertake political interventions with Johannesburg municipality, to get support for legislative amendments and the enforcement of the mandate, and to finalise the transfer of certain AARTO functions from RTMC.

The Chairperson acknowledged that the current AARTO Act was inhibiting RTIA from carrying out its mandate. She asked how the entity generated its revenue.

Mr Chuwe said that if RTIA managed to effect amendments to the Act, it could be in a much better position to carry out the mandate. The budget allocation was R5 million only in the previous financial year, which had to pay for everything, including the salaries of 111 employees. The South African Post Office obligations accounted for R3 million of the budget alone, and the revenue received after the 32 day notice to infringers, whether they had paid or not, amounted to nothing. If the Act could be amended, the RTIA would be in a far better position to generate more revenue.

Ms N Ngele (ANC) asked for clarity in terms of the unrealised value of RTIA, noting that the operations should be funded by collecting penalties from infringers. If there were no penalties, this meant that RTIA would be without funding and could surely not survive.

The Chairperson explained that RTIA did not generate income if an infringer paid his/her penalty, nor if the penalty was paid on time. However, RTIA was established to cater for the situation where infringers would either default altogether on payments, or would not pay on time. It was assumed that a certain number of infringers would not pay, so RTIA would have to issue a letter of demand for payment. This would generate funding, since it was then assumed that the money eventually collected would be sufficient to cover the costs of sending out the letters and sustain the entity.

She indicated however that the RTIA was now saying to the Committee that these assumptions had been incorrect, since the real world did not operate in this way. Fewer and fewer infringers were paying fines, and the cost of sending out the letters in fact was more than the revenue gained.

The Chairperson did not agree with Mr Chuwe’s assertion that the responsibility of RTIA was to ensure that people did not violate traffic laws. That responsibility rested with the RTMC. She believed that the responsibility of the RTIA related to pursuing defaulters, and ensuring that RTMC received its money.

Ms D Dlakude (ANC) asked how the RTIA was going to get revenue from the metros, and asked if these metros were issuing authorities.

Mr Chuwe confirmed that indeed metros, and RTMC, were also issuing authorities. There was a national mechanism to get the revenue from metros, via a national AARTO account opened with various banks. Infringers were able to make payments directly to these banks. Before RTIA was  established those accounts were managed and controlled by RTMC. The decision, again, was to implement all those aspects of the Act where RTIA must establish the National Contravention Register, in terms of section 6 of the AARTO Act. This register would contain the details of the infringers.

Mr Chuwe added that a strategic decision had been taken to use the e-Natis system to register all systems in the country, and a modular approach was adopted. Based on this, the National Contravention Register would be developed, with effect from the following week, as a module of e-Natis. When payment was made, at any one of the platforms, the record of this would be loaded into the e-Natis system and National Contravention Register. At month-end, whoever controlled the national AARTO account must be able to verify the details of the infringer, and from which city or metro the ticket was issued. If the fine had been paid after 32 days, the 50% discount would be waived by the infringer and would be paid to RTIA. The issuing authority would get 3% commission, and all stakeholders would, after reconciliation of the amounts, be paid what was due to them.

Ms Dlakude asked if currently everyone was getting the full amount to which they were entitled, and whether RTIA was able to back its revenue.

Mr Chuwe responded that the account was being held by RTMC, who would be able to answer that question. RTIA was getting its portion, but could not give any assurances on the other stakeholders.

Mr Suka appreciated the presentation, although he felt it was not particularly useful. There was a lack of proper sequencing on the AARTO process, and the graphs were confusing, so Members were not easily able to grasp the points. The Committee needed to look again at the whole structure and the relationship between the entities. Currently, there was blurring of functions and responsibilities. There were also various challenges around the law. The fact that the entity was currently operating without a budget being approved was also a cause for concern. He noted the targets of R242 million, rising to R351 million over the period.

Mr E Lucas (IFP) also expressed his concern that RTIA started from a zero budget, with the motivation to create funding. This was contradictory if the intention was to improve road users behaviour and actually reduce infringements. It was more important, in his view, to encourage people not to break the law. He was also worried about the apparent overlap between entities, and said that this was something the Committee must consider.

The Chairperson thanked RTIA and said that the amendment of the legislation would be further investigated, so that RTIA was able to stand on its own.

Minute adoption
The Committee adopted the minutes of the meeting on 13 March 2012.

The meeting was adjourned.


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