Municipal Systems Amendment Act draft Regulations: SALGA submission & Minister's response

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Cooperative Governance and Traditional Affairs

15 May 2012
Chairperson: Ms D Nlhengethwa (ANC)
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Meeting Summary

The South African Local Government Association (SALGA) made its submissions on the draft Regulations for appointment of municipal managers and section 56 managers, framed under the Municipal Systems Amendment Act (the Act). This Act was part of the Local Government Turnaround Strategy, and aimed to set standards for municipal managers that would result in more professional local government. SALGA’s objections to the draft Regulations were grouped under four main categories. Firstly, it suggested that it was unconstitutional to provide that all section 56 managers should, on expiry of the current arrangements, be appointed full time. This was tantamount to an attempt to amend the Act via the regulations, and any uncertainty about their employment could be corrected only by amending the Act,  failing which municipal councils would retain their discretion whether to appoint senior managers permanently or for a fixed term. The second objection was to perceived over-regulation, since these Regulations covered substantially the same ground as the National Treasury competency requirements for senior local government managers, framed under the Municipal Finance Management Act, which would apply from January 2013. It was claimed that this also encroached on the institutional integrity of local government and was therefore unconstitutional. SALGA believed a single, comprehensive competency framework must be drawn for the local government sphere. Its third objection was to the determination, by the Minister, of local government managers. SALGA questioned whether this was legally competent, pointed out that the public outcry related to managers’ perceived lack of competence and if this was corrected, then remuneration would not be an issue. It was suggested that this could be construed as an attempt to pre-empt the single public service, without proper consultation. Finally, SALGA objected strenuously to Chapter 6, which it saw as an attempt to regulate SALGA’s collective bargaining process, which did not cover salaries and conditions of service of senior managers. Draft Regulation 47 was considered unconstitutional. In general, the draft Regulations were criticised as overly prescriptive and not reflective of the intention of the Act, and the principles needed to be corrected before detailed comments were made on the content. SALGA noted that meetings had been held with the Minister to try to address the concerns.

The Minister of Cooperative Governance and Traditional Affairs confirmed that SALGA and the unions had both raised concerns  that were not only limited to the Regulations, but to the Act itself, despite the fact that they had participated in the process of drawing that Act. There was some urgency to the matter, but he urged that the process that had been started at political level be allowed to continue, to try to reach agreement on the issues. If there were gaps in the Act, they clearly could not be corrected by the Regulations, and if it was clear that the only way in which the matter would be solved would be to amend the Act, then this route would be followed. He urged that the parties not point fingers, nor try to delay, as there was room to reach agreement. The Department could not afford to engage in never ending debates on a matter that could be resolved, but would do its best and report back to the Committee.

Members noted these comments and noted also that the original deadlines would not be met but that it was hoped to resolve the matter by July. They commented that in the meantime appointments were being made that were not in line with the intention of the Regulations so there was a need to finalise the matters as soon as possible. They suggested that in future the Bills and regulations should be attended to simultaneously Members then questioned SALGA as to why, despite the directive given at the last meeting, the Chairs or executive officials still had not attended this meeting. They noted that the explanation tendered by the official was the same as one given previously, and commented that it seemed that the SALGA executives were taking their own political party commitments more seriously than Parliament.

Meeting report

Draft regulations on appointment of Municipal Managers and Section 56 Managers:
Briefing by South African Local Government Association (SALGA

Mr Reuben Baatjies, Chief Director: Inter Governmental Relations, South African Local Government Association, gave input from his Association (SALGA) on the draft regulations (on appointment of municipal managers and section 56 managers) under the Municipal Systems Amendment Act.

Mr Baatjies informed the Committee that Version 18 was made available to SALGA officials only on 3 May 2012. SALGA had developed a preliminary set of comments for consultation with its members, but the formal consultation process would begin in earnest when the regulations were published for comment, as these may differ from the draft.

He noted that in 2009 the Local Government Turn Around Strategy (LGTAS) recommended that Local Government (LG) could be professionalised and stabilised by appointing qualified and skilled personnel to execute the LG mandate, and key aspects were addressed in the Municipal Systems Amendment Act (the Act). These draft regulations now set out standards, and they must be seen together with National Treasury (NT) 2007 Minimum Competency Regulations for senior managers in local government, which were to take effect on 1 January 2013.

He outlined the Constitutional background, which provided for government at national, provincial and local spheres, which were distinctive, interdependent and interrelated. Each sphere of government should respect the constitutional status, powers and functions of the other spheres, and not encroach on their geographical, functional or institutional integrity. He read out sections 151(3), 151(4) and 155(7) of the Constitution, and highlighted that a municipality had the right to govern its community, that national or provincial government may not compromise or impede a municipality in exercising its powers and performing its functions, but that national government may “regulate” the exercise by municipalities of their executive authority. However, he stressed that the word “regulate” had been interpreted by the Constitutional Court to mean “a broad managing or controlling rather than direct authorisation function”, and related to the framework within which local government must act, allowing it to pursue locally-appropriate solutions, but ensuring that fundamental standards and rights of citizens were maintained 

He noted that SALGA’s preliminary views on the draft Regulations fell into four main categories, as follows:

Impasse on Systems Amendment Act 2011
SALGA believed that Department of Cooperative Governance (DCOG or the Department) had essentially tried to “amend” the Act, via the regulations, by inserting a requirement that all Section 56 managers should, upon expiry of the current agreements, be appointed full time. It believed this was unconstitutional. The Constitution stated that any LG matters not specifically addressed in the Constitution could only be regulated in terms of national legislation, and he believed that this could not be dealt with in regulations, which were secondary legislation. SALGA believed that a further amendment of the Act would be required, failing which municipal councils would retain discretion whether to appoint senior managers permanently or for a fixed term.

Overregulation
SALGA was concerned with the duplication of competency requirements, as these were now set out in the draft Regulations under the Act, as well as National Treasury (NT) setting competency requirements for senior managers in LG, in terms of the Municipal Finance Management Act (MFMA). The NT regulations were not confined to financial competencies, so that with effect from 1 January 2013 two sets of secondary legislation would run concurrently. SALGA felt this was not only gross overregulation, but it also encroached on the institutional integrity of local government, and was unconstitutional. SALGA had previously proposed that a single and comprehensive competency framework should be developed for the LG sphere, regulating the competency requirements for senior managers.

Remuneration Framework
SALGA stressed that the LGTAS had not mentioned remuneration of managers in LG as a particular challenge. The public and media outcry surrounding remuneration of managers related mainly to the perceived or real lack of competences of some of the reported managers. This remuneration was not likely to be challenged if the competency framework resulted in highly qualified and competent senior managers. Furthermore, the National Treasury Budget and Expenditure Review, 2011, had stated: “The metros, and even secondary cities, are very large, complex organisations (far more complex than the average national or provincial government department.) The average salaries for municipal managers and Chief Financial Officers for these two groups of municipalities do not appear to be out of line with the level of experience, expertise and responsibility required of these positions.” SALGA believed the same comment would apply also to small municipalities, because their managers’ and section 56 managers were required to have a host of competencies in terms of the draft regulations.

SALGA submitted that until the single public service (SPS) became a reality, there was legal doubt whether the Minister could unilaterally determine the remuneration of LG managers, particularly when no scientific basis for the framework existed, and it appeared to be guided by vague and irrelevant criteria. As confirmed by NT, the position of a municipal manager was not comparable to one in the public service. This could even be construed as an attempt to pre-empt certain elements of the single public service without proper consultation with organised local government.

Regulating SALGA
SALGA was concerned that Chapter 6 of the draft Regulations attempted to regulate SALGA, as organised local government, on how the collective bargaining process should be approached and what needed to be developed. The Minister was not permitted, in terms of the Act, to regulate the functioning of SALGA. The salary structure and conditions of service of senior managers did not form part of the bargaining process in the South African Local Government Bargaining Council. It was submitted that
draft Regulation 47 was thus unconstitutional and out of place in regulations applicable to senior managers.

SALGA then made some general observations that the draft Regulations were far too prescriptive and process-orientated, and stifled the intention behind their introduction. It suggested that the draft regulations should be revised to reflect the intention, and respect the institutional integrity of LG to take decisions and appropriate action when exercising its powers or performing its functions. It was not necessary for the Regulations to attempt to prescribe every detail of the process. The principle issues raised pointed to a number of constitutional and legal deficiencies, which needed to be resolved before the content could be finalised.

Mr Baatjies expressed the hope that the final version would correct some of the principle deficiencies, as otherwise there would be lengthy, protracted legal processes and serious implementation challenges. SALGA had started drafting a position paper that would inform its formal position for consultation, and this highlighted the most glaring concerns, but did not address the content and wording in full detail. SALGA would be happy to engage the Portfolio Committee again once the Regulations were published for comment. There was a process for the Minister and SALGA office bearers to try to address some of the challenges and further meetings were planned.

Discussion
Mr J Matshoba (ANC) suggested that it would be better for the Committee to engage with the Department of Cooperative Governance before engaging again with SALGA.

The Chairperson reminded SALGA that during its last engagement, the Committee had stipulated that the Chairperson or Executive Members should attend meetings with the Committee, as it undermined this Committee and Parliament when executive members were not present.

Ms W Nelson (ANC) stated that SALGA should explain why the Chairperson or executive members were not present, and urged that SALGA acknowledge the importance of the Committee and take it seriously. There was more than one Chairperson of SALGA, and the invitation had been sent in good time, so it was expected that an executive would be available.

Ms I Ditshetelo (UCDP) asked where the executive members of SALGA were.

Mr Baatjies apologised to the Committee, and said all senior executive leadership of SALGA were out of the country. One of the Deputy Chairpersons, who was supposed to attend the meeting, had been called away on party commitments on the previous evening.

The Chairperson stated that this was the same apology that the Committee had received at the previous meeting, and the implication was that SALGA regarded political commitments as more important than Parliament. She emphasised that there was a need for SALGA and the Committee to understand each other on this point, and the Committee would write a letter setting out its dissatisfaction.

Input by Minister of Cooperative Governance and Traditional Affairs
Mr Richard Baloyi, Minister of Cooperative Governance and Traditional Affairs, gave his input on the draft Regulations and submissions of SALGA. He noted that the DCOG had to finalise Regulations in order to give effect to the implementation of the Act. However, it was contended now that the Amendment Act itself had serious challenges, and that would not be corrected by the Regulations. The reality was that DCOG, SALGA and other stakeholders had all participated in the development of the Municipal Systems Amendment Act, and some were arguing that they had not agreed to what was finally passed, and it was this that made the Regulations such a challenge. Not only SALGA, but also the unions, had raised objections to the draft Regulations, despite their involvement in the Act’s drafting. He commented that this process had now become very drawn out and protracted, and he had been avoiding the sensitive question of what exactly was stopping the DCOG from publishing of the Regulations. He stressed that the Department was not “holding back”, and it did not help for parties to point fingers at each other. He believed that there was room to reach agreement, and it was important to be cognisant of the mandate or powers of all parties, as well as to be clear on who was to do what, without delaying the process. He noted that a process had been followed to date, and the political leadership of both DCOG and SALGA had taken a decision to deal with the problems. He felt it was inappropriate to highlight differences at this point, outside of that political process. If the parties could not eventually agree on the wording of the Regulations, and an amendment would be the only solution, then DCOG would attend to that, as it could not afford to engage in never ending and unresolved debates. He noted that the parties would continue with the process, and report back. The most important issue was how the legislation, including the Regulations, could best serve South Africa

Discussion
Mr Matshoba stated that it was clear that the Minister would sit down with the political head of SALGA, and in view of this, it did not appear to be appropriate for the Committee to ask any more questions.

Mr J Steenhuizen (DA) stated that this was a lesson for the Committee. In future, he suggested that Regulations should be attended to, together with the legislation, so that the parties had to take ownership. This lacuna had caused huge problems.

The Minister said that this was an important point. Although it had not happened here, he added that if there was a change in leadership, it would be easy to claim that the new head had not agreed. He confirmed that dealing with the Bill and regulations at the same time would be preferable. 

Mr Steenhuizen asked if the Department would be able to meet the deadline for public comment, on 15 May, in light of the Minister’s comments.  

The Minister replied that DCOG would be taking this up with the executive of SALGA. It was clear that certain deadlines would not be met as planned. There would be attempts to fast-track, but this should not be done if it would pose challenges to the implementation. The Department was prepared to work to a July deadline.

The Chairperson stated that since the regulations were now being published later, there were appointments being made in municipalities that did not comply with these regulations, and he wondered how this would be resolved. He appealed to SALGA and DCOG to try to hasten the process.

Ms Nelson requested that the Minister indicate the process that would be followed, with timelines.

The Minister replied that the Department would encourage written updates or joint statements on the progress.

The meeting was adjourned.

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