Rental Housing Amendment Bill: withdrawal; KZN Department of Human Settlements response to Committee Oversight Report recommendations

Meeting report

The Chairperson welcomed all department representatives and noted that once again Members were concerned about the late submission of documents which they obtained on Monday 28 May instead of the previous Thursday as per their agreement with the Department.

Mr Neville Chainee, Chief Operations Officer, National Department of Human Settlement (NDHS), said he had notified the provinces and municipalities about the Committee’s concern and the documents were supposed to reach the Committee on Monday morning.

The Chairperson said it was advisable that presenters should send documents five days before the meeting to allow Members ample time to familiarise themselves with the presentation. If documents came in on Monday, a constituency day, Members would not have time to read them and prepare for meaningful engagement. Presentations were supposed to be submitted to the Committee Secretary on Thursday, unless there were mitigating factors. The Committee was taking a firm stance following the realisation that it was being taken advantage, He added that the same incident had happened the previous week.

Ms M Borman (ANC) was concerned that the NDHS had instructed its provincial departments to submit documents on Monday instead of Thursday as was agreed. She asked for an explanation from NDHS.

Mr Mokgalapa (DA) said late submission of documents had become routine. The fact that the provinces had submitted presentations on Monday, which was earlier than last week presenters, did not justify the lateness. He sought an explanation from the provinces.

Ms P Duncan (DA) urged the Department and the provinces to take the Committee seriously as time was wasted on discussing late submission of documents. The early submission of documents allowed the Committee to exercise proper oversight over the stakeholders.

Ms J Sosibo (ANC) could not understand why the Department and provinces needed to be constantly reminded about the matter. Did this defaulting amount to undermining the Committee?

[A closed meeting was convened with the Department and the provinces to decide on the way forward. It was decided that the Western Cape could not table its presentation but the KwaZulu Natal province’ presentation was heard].

Rental Housing Amendment Bill B21B-2011)
The Chairperson informed Members that she had received a letter from the Speaker of Parliament to the effect that the Minister of Human Settlement had decided to withdraw the Rental Housing Amendment Bill (B21B-2011).

Adv Charmaine van der Merwe read the letter to the Committee. The letter gave the following reasons for withdrawal:
"- The Bill makes certain propositions which may become impossible for the Department to implement and enforce in the light of judicial activism that is being displayed by our courts
 
- The Bill seeks to introduce an appeal mechanism which will contribute to the disinterest and disinvestment into the rental housing market as parties to a rental housing dispute will be expected to undergo a protracted dispute resolution mechanism thereby defeating the main purpose of the Rental Housing Act which is to provide a simple and speedy resolution process."

Ms Borman said the sentiments that were expressed in the letter had not come to the fore during the deliberation process. It was disappointing that after the long process of drafting, the Committee had received a letter like that. The intention of the Bill was to ensure it was going to impact on the people on the ground. The Committee had been very careful to conform to that requirement. Legal counsel was sought to give guidance. The Bill had been submitted by the Minister through the Department. However, once the Committee had begun the amendment process; there were substantial sections that needed to be re-looked at. She asked for a legal opinion on the status of the Bill, so that the Committee could map the way forward.

A visibly enraged Ms Duncan said such a move was tantamount to a slap in the face for the Committee. The Committee had a great meeting with the Minister on the Bill but why at the end had he decided to explain his decision to the Committee through a letter to the Speaker of Parliament when he could have come in person.

Ms Njobe wanted to know why the Department and the Minister had not met with them to discuss the matter. The Department attended the Committee meetings regularly, and should have advised it on the Minister’s dissatisfaction with some sections of the Bill. There were alternatives that could have been used if the Minister felt that the Committee was not taking cognisance of his concerns. One alternative was to raise the matter with the study group of the ruling party (ANC) if here were sections of the Bill that would have burdened the Department. A lot of time had been wasted on the drafting of the Bill.

Mr J Matshoba (ANC) said it was not the first Bill that had drawn controversy between the Department and the Committee. How were the two going to relate? Who was undermining whom?      

The Chairperson said that the Bill was introduced into Parliament by the Minister and the Committee undertook the process of redrafting the Bill but it had now been withdrawn. As a Member of the Committee, the Minister was supposed to have met the Committee in person and raised his concerns before taking such a drastic step. The Committee would accept the direction from the Speaker of Parliament. She sought guidance from the Parliament Legal Unit and the State Law Advisor on whether the Minister had the power to withdraw the Bill, and what other options were available because the legislation was needed.

Ms Bongiwe Lufundo, State Law Advisor (SLA), explained to the Committee that the main challenge regarding the status of the Bill was that the Committee could not claim ownership of the Bill since it had been introduced by the Minister and had not been initiated by the Committee.

Adv Charmaine van der Merwe, Parliamentary Law Advisor, said the Minister had the right to withdraw the Bill before the second reading. However, there was nothing to stop the Committee from initiating its own Bill, because the Bill had been withdrawn. The Bill would be redrafted, the Committee would have to conduct public consultation because it would be a completely new Bill with a new number but the only advantage was that the Bill would not need to be redrafted.

Ms Njobe wanted to know if the legal team had anticipated the withdrawal of the Bill. If not, why, and were the Minister’s assessment and reasons for the withdrawal of the Bill correct?

Ms Duncan said the Minister had indicated that the Bill would not be implementable – as if the costing of the Act had been done already.

Ms D Dlakude (ANC) asked the reasons that made the Bill impossible to implement. The Committee had made sure that the Bill was going to protect tenants, landlords and the private rental market. In that regard, the Bill had not been designed for the housing market only, but for the greater benefit of all South Africans.

Ms Sosibo asked if the housing market which would be threatened if the Bill was passed, catered for vulnerable people or not?

Ms Borman observed that the underlying concern in the letter referred to the appeal mechanism but she did not see how that could make people uninterested in investment in rental property. The only concern that the Department had raised was that some sections of the Bill were onerous, but that had been ironed out.

Mr Mokgalapa agreed with the other Members that there was no reasonable explanation as to what could make the Bill impractical or legally imperfect unless the bone of contention was the appeal process. The drama showed signs of a conflict of interests.

The Chairperson said it was not the first legislation where the appeal process had been incorporated. She referred to the Community Schemes Ombud Services Act and Sectional Title Schemes Management Act, which were both passed during the Minister’s reign.

Adv van der Merwe said she was equally shocked by the Minister’s resolution. This was because the appeal mechanism had been proposed by the Department’s legal team. The drafting of the Bill had been done by the SLA and circulated to the Parliament Legal Unit and the Department for comment, and finally the Bill was presented as agreed upon by all three parties. Section 2 and 3 of the Bill which placed certain obligations on the Minister could have been the contributing factor to his decision. Despite being interpreted as onerous, it was not unreasonable. The Department had not at any time expressed displeasure about obligations placed on it. There was absolute consultation throughout the process, yet none of the concerns in the letter had been raised.

The Chairperson said the Department was taking advantage of the Committee. Parliament had considered the public submissions. The Department had received submissions through its own consultation process earlier but had not considered a single one of them and same had been done with the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) Amendment Bill. The Committee would recommend to the Speaker that it wanted to initiate the Bill instead.

Mr Mokgalapa said relations between the Department and the Committee were now strained. He wondered about the process of the Committee initiating the Bill as well as the timeframes.

The Members unanimously moved for adoption of the decision.

Mr Mokgalapa asked what would happen to the current Bill.

The Chairperson said it would no longer be in existence.

Ms Njobe wondered whether the Minister had the power to prevent the implementation of the Committee Bill once it had been passed.

KwaZulu Natal Department of Human Settlements response to Committee recommendations
Mr Mduduzi Zungu, Chief Operations Officer, KwaZulu Natal Department of Human Settlements, presented the response to the Committee’s oversight report. Following the visit by the Portfolio Committee, the provincial Department had engaged with district municipalities and local municipalities and progress was registered with various projects that had been visited by the Committee in particular, Incotshane and Imbali.

EThekwini Municipality
The performance of the EThekwini Municipality was affected by the Manase and Associates Report and Mr Zungu had been deployed to help in rebuilding the institution. Some of the challenges that needed attention were bad contracting, problems with implementing agents, administrative leadership, poor beneficiary management and insufficient funding. Over the years the Municipality had managed to deliver housing units from 16 000, however the figure dropped down to 4800 in 2011/12 financial year as a result of the above mentioned challenges amongst others. EThekwini accounted for 76, 5% of all informal settlements, excluding backyard dwellers and the Department continued to provide support for the eradication of slums, land acquisition and infrastructure. The in-situ upgrading had resulted in transit camps being created to transfer households during the upgrading but some community members were complaining about that and measures would be taken to eradicate the practice.

Cornubia
Development on the site was progressing well but infrastructure challenges were still being experienced. The site was expected to yield 50 000 units and 43 had been constructed so far. There were procurement challenges especially with regards to engineering services. This was impacting on the project but efforts were being made by the City and the National Department of Human Settlements to resolve the challenge. Issues of procurement emanating out of the Manase Report were also affecting the project.

Beneficiary Management
The EThekwini Municipality was in the process of developing a policy on beneficiary list management and the Department was appointing beneficiary management teams to be deployed in each district.

Rectification
The province used 10% of its Human Settlements Development Grant (HSDG) to support the programme but was still grappling with ways of how best to address the matter. A total of 64 000 units had been assessed in areas such as KwaMashu. The Enhanced Extended Discount Benefit Scheme needed to be reviewed. A proper plan would be tabled to the Committee on how the province would deal with rectification.

Intergovernmental Relations
Poor cooperation between the three spheres of Government continued to impact on the delivery of human settlements. The KZN Department had been having problems with the district and local municipality water authorities but in February an announcement had been made that the Department of Cooperative Governance and Traditional Affairs (COGTA) and the Department of Water Affairs would intervene in solving water challenges. The districts were not promoting bulk infrastructure development in their budget allocations but service level agreements had been signed to that effect.

Infrastructure
Bulk infrastructure was a major problem in most districts. The Sisonke District Municipality had no funds to address the challenge but it was getting help from the KZN Premier. There was no alignment in the Municipal Infrastructure Grant (MIG) and Integrated Development Plans (IDPs) between District Municipalities and Local Municipalities. Lack of infrastructure had stalled a number of projects in KZN such as delivery on electrification programmes and Integrated Residential Development Programmes (IRDP).

Sanitation
Sanitation was one area that the province was still proposing ways of how to handle it, working together with the National Department and other role players such as Mvula Trust. The problem was affected by lack of bulk infrastructure and the Department was working together with COGTA and Water Affairs to resolve some of the challenges.

Stalled Projects
The Department had resolved that all the projects would only be approved after verifying that all necessary requirements had been met. This was after a number of project that had had been approved, were abandoned without being completed. The major reasons behind projects stalling were lack of capacity in municipalities, shortage of land, insufficient subsidy for densification and residents were in the way which caused slow delivery.

Land Mobilisation
The province was working well with the Housing Development Agency and an agreement had been reached that would see most of stalled projects being developed but problems still prevailed in areas that were occupied by Amakhosi. A steering committee had been established together with the Ingwenyama Trust to sensitise the traditional leaders about the housing development programme. Previously people had been resettled in sensitive areas in Msinga were disasters were common. The province was careful to ensure that land allocated for development by Izinduna were not prone to disaster but close to basic amenities such as schools and hospitals. In areas where there were farms, the farm worker project had been opened in close cooperation with farmers especially in the eDumbe and Pongola Municipal areas.

Disaster Management
The province had a serious backlog in disaster management. A tendering process had been completed for disaster management and 15 contractors had been appointed to attend to disasters since 2009. Special cases were being dealt with under a separate programme.

Implementing Agents Performance
Non-performers were being fired. A number of implementing agents had been dismissed and the number of court cases had increased dramatically. The Premier had recommended that to improve performance, each contractor was to be given not more than four projects – as some had been abandoned. Each contractor was expected to finish 40 units per month but some had surpassed the number

Hostels
Plans were being mooted to conduct a survey to establish the extent of the challenges and ownership so that a plan of action could be designed before any money was spent on hostel upgrading. Currently, the hostels were being used by unemployed people and every municipality had been notified about the Community Residential Units (CRU) model for provision of low cost rentals. EThekwini with the largest number of hostels would convene a turnaround strategy workshop on 4 and 5 June to address challenges associated with the sector.

Monitoring and Evaluation
The province conducted daily performance assessments on various programmes it was involved in, mimicking programmes of the National Monitoring and Evaluation Unit. Aligning human settlements to corridors and major nodes in line with provincial performance strategies, was still a problem and municipalities were still struggling to report properly.

Discussion
Ms Borman said the presentation was too general and had not focussed on the specific areas of concern that had been recommended by the Committee. The information in the presentation was difficult to quantify because there was no detail. She had visited Cornubia and on consultation was told that 25 000 homes and 15 000 low income subsidised houses, instead of 50 000 units as contained in the report, were to be built. She asked the criterion that would be used by the province in allocating houses to the beneficiary list. She asked the cost of 64 000 houses that had been assessed for rectification. What was KZN’s plan for housing delivery that had dropped from 16 000 to 4800, and was the Manase Report out in full.

Ms Njobe agreed that the presentation was too general particularly on page 2 where the Urban Settlement Development Grant (USDG) had been used to provide basic services but the specific amount spent was not indicated. What was the status regarding the Riverside matter. She asked what action the province was taking against developers who used community members in uMzimkhulu to dig their own toilets despite having received a budget for that purpose. She was worried about the quality of the toilets that were being built and sought explanation on what had happened to the budget allocated for digging toilets.

Ms Duncan said it was unacceptable for the province to continually refer to the turnaround strategy without delivering. The ID process was not taken seriously by the province and even by the government despite its importance. Was the NDHS not monitoring delivery of provinces? She was concerned about the lack of cooperation between the spheres of government. There was no clearly defined way of communicating with the Housing Development Agency (HDA) to release land for housing. She requested a report on the pre-1994 housing scheme.

Ms Sosibo asked what action had been taken to solve disasters that had occurred four years ago in the eDumbe area. No development was talking place in most of the poorest communities where houses and toilets were last built in the 1990s. Were the houses going to be rectified?

Mr Bhoola (MF) said the Manase Report showed a lot of challenges existed in the province, as such focus should be directed towards the identified areas of concern. He appreciated the report which represented an honest picture of the situation on the ground. What challenges were addressed by the province’s Disaster Fund. Projects that were registered since 2002 were being given priority. There was a distorted picture of how the rectification process was being done.

Mr Matshoba said there were specific areas of concern that had been indicated by the Committee, particularly on disasters, which had not been prioritised in the presentation. Some houses were built some time back and left unfinished. The Department of Cooperative Governance and Traditional Affairs (COGTA) and Department of Water Affairs were refusing responsibility.

The Chairperson suggested that since the province had a delivery agreement with COGTA, the latter should attend the next meeting to respond to questions raised. The report was too general and the province owed the Committee a report on the breakdown of how the R33-million was spent on disasters. The province was supposed to address Imbali and the toilets in Mpumelelo. Why was the KZN Department saying it was attending to oversight when issues that were raised were not being attended to? The report failed to address issues that had been raised by the Committee – as such a proper report was needed. Intergovernmental relations needed to be strengthened and a steering committee was needed. Due to time constraints, KZN province would respond to Members’ questions at the next meeting.

Mr Chainee proposed that when the province appeared next time to respond to questions, it would be joined by EThekwini Municipality and the Western Cape Department of Housing.

The meeting was adjourned.