Cooperative Governance Budgetary Review and Recommendations Report, Municipal Systems Amendment Act: Departmental briefing on implementation, Matatiele boundary issues

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Cooperative Governance and Traditional Affairs

22 October 2012
Chairperson: Ms D Nhlengethwa (ANC)
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Meeting Summary

The draft Budgetary Review and Recommendation Report was discussed and corrected during the course of the meeting (see attached document for full report).  

The Chairperson gave Members some background to the Matatiele Border Dispute. The community of Matatiele was currently part of the Eastern Cape (EC) province, but wanted to be part of KwaZulu Natal (KZN) and it had sent a petition to Parliament, making its wishes clear. Most of its objections had to do with service delivery and the petition had, amongst other matters, called on government to provide services such as Home Affairs offices to this community. The petition was sent to the Committee in August 2011 and the Department had conducted a testing-of-views exercise. The position was affected by the 12th and 13th Constitutional Amendment Bills and a legal challenge. The Committee now recommended to the Department that it firstly had to return to the community to explain why it was only reporting back now, and make it clear that the position could not simply be altered but was dependent on a series of processes. The Committee was recommending that Cabinet be asked to approve a Constitution 14th Amendment Bill be drafted, to deal with the challenges around the border areas. It also wanted the Department of Cooperative Governance (COGTA) and National Treasury to make specific arrangements for sufficient budgets to deal with service delivery. After some discussion, the Committee resolution was worded in stronger terms.

COGTA had been asked to report back to the Committee on the Municipal Systems Amendment Act (MSAA) implementation, particularly in relation to appointment and conditions of service of senior managers. Regulations would have to be drafted to effect these and COGTA had decided to do these in two stages, those for senior managers in 2012 and those for other staff in the following year. However, the process was lengthy and faced a number of challenges. The draft Regulations were aiming to fulfil government’s resolve to professionalise local public administration to ensure fair, efficient, effective and transparent municipal administration. Organised local government, through South African Local Government Association (SALGA) and organised labour unions, had been consulted, and there had been engagements with other stakeholders, as listed. In answer to questions from Members as to why the regulations were taking so long to finalise, a number of disputed points were highlighted. Although some had been addressed, others remained to be finalised, but this could only happen after a MinMEC meeting scheduled for 16 November. Members canvassed several issues and were particularly concerned as to what would happen to people whose re-appointments had been rushed through before the Act was passed, precisely to avoid any checking of their qualifications, what remedies were available to the MEC and Minister, in how many municipalities, and for what reasons, action was taken and when the COGTA would be addressing the severe and ongoing problems around acting appointments. Several Members expressed their frustration that the changes they had suggested did not appear to have been taken into account and said that they had still not seen a full copy of the Regulations, that the process was taking far too long, and asked that specific time frames be set. The newly-appointed Director General conceded that the COGTA could have acted more speedily, outlined the practical difficulties and assured the Committee that he would report back. It was clear that the Regulations could not be effected by the end of 2012 but it was hoped to do so by March 2013.

Meeting report

Budgetary Review and Recommendation Report of the Portfolio Committee on CoGTA
The draft report was discussed and corrected during the course of the meeting. The adapted report was adopted at the end of the meeting. (See documents)

Matatiele Border Dispute
The Chairperson noted the background to the issues of the Matatiele community. Firstly, she reminded Members that section 315 (on page 135) of the Rules of Parliament dealt with the referral of petitions to committees. Once a petition had been received and tabled in the Assembly, the Speaker must —
”(a) if it is a special petition, refer the petition to the Committee on Private Members’ Legislative Proposals and Special Petitions; or
(b) if it is a petition of a general nature, refer the petition to the relevant portfolio committee or other appropriate committee.”

The Portfolio Committee received the petition on the provincial boundary matter in Matatiele in August 2011. Matatiele was currently part of the Eastern Cape (EC) province, but wanted to be part of KwaZulu Natal (KZN) and it had sent a petition to Parliament, making its wishes clear. The Portfolio Committee waited for information on the matter and invited the Department of Cooperative Governance and Traditional Affairs (COGTA or the Department) to brief it on the matter. The Portfolio Committee then received documents from the Department on the 12th and 13th Constitutional Amendment Bills. The documents also contained a briefing on what had transpired when the Department conducted the testing-of-views exercise in Matatiele. There were also legal issues canvassed in this matter.

The Chairperson noted that Members asked why the Department did not just go to Matatiele and announce the outcome of the view-testing exercise. Mr Peter Smith (DA) insisted that it was a Constitutional matter. Legal advisers, when their views were canvassed about the interpretation of the 12th and 13th Constitutional Amendments, and the judgement, also gave an opinion that this provincial boundary matter could be finalised  with a 14th Constitutional Amendment Bill. Initially, the Portfolio Committee had met with the Deputy Speaker on the point, and had then made some recommendations.

Essentially, these were to the effect that the Department must visit Matatiele to explain why the report-back had happened so long after the testing of views. The Department also had to decide on the next steps in this regard in consultation with the people.  The communities in Matatiele were not getting service from the EC province. The Department and National Treasury had to make sure that that particular area was budgeted for in the next financial year. It was unconstitutional for government to fail to provide services to the communities in those areas. The Memorandum from the communities, setting out their grievances, had included a request to government to provide services, such as Home Affairs offices, closer to the people.

The Portfolio Committee also recommended that the Department and Ministry had to take the matter back to the Cabinet for discussions on the 14th Constitutional Amendment Bill. The Portfolio Committee expected that the Department must report back to it on this matter within 90 days.

Discussion
Mr J Steenhuizen (DA) said that in principle he had no problem with this wording, but felt the Portfolio Committee had to be more resolute. He disagreed that the matter should be sent back to Cabinet. He felt that the will of the people had to be respected, and that Matatiele had to be re-incorporated into KZN. A stronger resolution on that was needed from the Portfolio Committee.

Mr J Matshoba (ANC) agreed that a team from the Department, including the Director General, had to go to Matatiele to explain to the community that the Department, and now Parliament, had received the Memorandum, but that the process required a change in the Constitution.

The Chairperson said the statement of the Portfolio Committee would be adjusted, to insist upon a response within 90 days of the current meeting. The testing- of-views process showed that the people of Matatiele wanted to be re-incorporated into KZN, and as public representatives, the Portfolio Committee wished the interest of the people to be served.

Municipal Systems Amendment Act implementation: COGTA briefing
Mr Vusi Madonsela, Director General, Department of Cooperative Governance, noted that he had been in his new position for only 23 days.

He noted that draft regulations had been drawn, in relation to the
Municipal Systems Amendment Act (MSAA) relating to the appointment and conditions of service of Senior Managers (SM). He wanted to outline how the regulations would be finalised and promulgated.

Mr Madonsela presented a background on the MSSA (see attached presentation for full details) and noted that, now that the Act had been promulgated, regulations had to be made. There was a huge amount of work and extensive consultations involved. For this reason, a two-pronged approach was taken to the development of regulations. It was intended to deal with the
Regulations for senior managers during the 2012/13 financial year, and those applicable to all other staff members during the 2013/14 financial year. Both sets of regulations aimed to fulfil government’s resolve to professionalise local public administration, to ensure fair, efficient, effective and transparent municipal administration.

Organised local government, the South African Local Government Association (SALGA) and organised labour (IMATU and SAMWU) had raised some issues for consideration. In respect of the SALGA concerns, there was now consensus.
Bargaining Council Arrangements had been addressed through relocation, and the concerns about “Over-regulation” on competency requirements were to be discussed with the National Treasury. The remuneration framework was also to be addressed through further engagement with key stakeholders, including National Treasury, Financial and Fiscal Commission, SALGA, Department of Public Service and Administration (DPSA).

There had been some difficulty over the interpretation of the deletion of section 57(7) in the Municipal Systems Act, and so a clause had been included in the draft Regulations which provided for municipal councils to have a regulated discretion to appoint senior managers on a permanent basis or on a fixed-term contract.  The provision now read as follows:
Staff Establishment: A municipal manager must develop the staff establishment of a municipality having regard to the functions and powers assigned to a municipality in terms of Chapter 5 of the Municipal Structures Act, and based on  a municipality’s strategic objectives, a municipality’s core and support functions, and information flow and processes.
A municipality must, within 14 days of the consideration of the draft staff establishment, submit the municipal council report and the draft staff establishment to the MEC for local government.
The MEC for local government must, within 14 days of receipt of the draft staff establishment, submit comments to the municipal council, which must be formally considered by the municipal council before the staff establishment is approved.
If the MEC does not provide the comments within 14 days of receipt of the draft staff establishment, it is deemed that the MEC for local government is in agreement with the draft staff establishment”.

It was noted that there had been consultation on the
draft Regulations with a number of stakeholders, named in the presentation (see attached document), which included Intergovernmental Framework structures, professional bodies, and the Chief State Law Adviser. The regulations had been presented to the Committee on 24 May 2012.

Discussion
The Chairperson said the Portfolio Committee had requested the Department to give a briefing also on the implementation of the Municipal Systems Amendment Act. She questioned how it had been implemented, after its enactment in 2011. It seemed that some municipalities ignored the requirements in sections 5-7. She set out examples of cases that had been sent to the Committee and thereafter to the COGTA offices, in regard to Motsoaledi Municipality and another municipality.

Ms Shanaaz Majiet, Deputy Director General: Provincial and Municipal Support, COGTA replied that she did not know anything about these documents. However, she would want details of cases notified to the Committee, where municipalities had contravened the Act. The Department would then follow up.

Ms M Segale-Diswai (ANC) said that the Members could bring information about the irregularities they knew about, but there must be many of which they were unaware. She felt the Department had to do a comprehensive audit of the appointment of senior municipal officials.
 
The Chairperson said the inputs of Members enriched the programme of action. She agreed that there had to be a skills audit on newly appointed managers, to check whether they had the requisite skills to be in those positions.

Mr J Matshoba (ANC) asked what would happen in cases where unqualified people were appointed, while these amendments were under way.
Ms W Nelson said clauses were being contravened and the Department was being made aware of it through SALGA. The Department had been informed both formally and informally. Municipalities could not have Acting Municipal Managers still in place, from as far back as 2009. She asked why the Department was not responding on these instances.

Mr Steenhuizen said the regulations were “great, but too late”.  Some weeks back the Portfolio Committee had a joint meeting with the Public Service Commission, which indicated that 44% of municipalities did not vet their senior appointees. Only 52% did reference checks. Only 33% did competency tests. The problem was that no Labour Court would allow these regulations to apply retrospectively, which meant that there were many appointees who, having been appointed permanently, could not be removed, at least for five years. He wanted to know what would happen to those who really should not be holding those positions. The Minister said he would personally take action. The DA was in litigation in municipalities where the legislation had been ignored entirely, and there was little reaction from the Minister. The regulations had to be properly implemented if they were to become meaningful.

Ms Marna Kok, Deputy Director General: Legal Services, COGTA, replied that the MSA, as it stood, stipulated that where there might have been irregularities in the appointment of a municipal manager, the first port of call was for the MEC to intervene. This had been the case in Oudtshoorn. The MEC had approached the High Court and the High Court made a declaratory order. The matter was on appeal, so there was no final outcome yet. If the MEC did not intervene, the Minister could step in. However, the position was slightly different with the section 56 managers, for here, the sole responsibility for intervention rested with the MEC. The Minister had no role. There was a need to focus on this area. The Department was in the process of developing a tool to track these appointments.

Mr Jackie Maepa, Senior Manager: HR, COGTA, added that by using the tool the Department was now in the process of putting together a database with the different provinces, municipalities, names, qualifications, and whether the candidate had been subjected to competence testing. He hoped that by the end of the financial year, the Department would have a better picture.

Ms Segale-Diswai questioned what organised labour-related issues had been raised, as mentioned in the background slides.

Mr Maepa replied that the issues raised by Organised Labour were split two ways. IMATU supported the Regulatory Framework, while SAMWU was against it. SAMWU wanted the remuneration of the senior managers to be left to the bargaining councils. The Department disagreed because senior managers were defining the basic conditions of employment as employers in their municipalities, and could end up bargaining for their own conditions of service in the bargaining council at one point or another.

In regard to the bargaining arrangements, SAMWU thought the Minister was given too much power and could end up taking the place of the bargaining council. The Department wanted to give the certainty that the Minister would not sit in the bargaining council, but would only be informed about developments in the bargaining council.

On regulation of medical aid and pension schemes, SAMWU wanted these to be left to the bargaining council. The Department did not agree with this view, on the basis that there were currently more than 30 pension and provident funds operating within local government, with different benefit scales. Had the bargaining councils been allowed to regulate on these, it would have created disparity amongst employees in all municipalities. The provisions in the Act were an attempt to rationalise some of these conditions.

Ms Nelson said that it had been more than a year since the amendment, yet the Regulations were only being processed now. She wanted an implementation plan with timelines for the regulations.

Mr Steenhuizen said the Portfolio Committee had been promised by the Minister, in May, that the Regulations would be in Parliament by July. On 24 August this promise was extended to the end of August. He was surprised that the latest draft was not available to the Portfolio Committee yet. The interventions and recommendations offered by Portfolio Committee members had not been covered in the presentation.

Ms I Ditshitelo (UCDP) also wanted to know when the draft would be finalised.

Mr Madonsela conceded that the presentation did not cover many of the issues that the Portfolio Committee expected the department to canvas. He had hoped that a special MinMEC would have been convened by now, but that was not possible. The Special MinMEC had not looked at the Draft Document yet. He did not want to bring something to Parliament that had not been considered by MinMEC. The implementation of the Act had to be a concerted effort by the national Department, provinces and everybody else involved, only after no further changes by MinMEC were likely. It was unfortunately that the timing had left the Department in this situation.

Ms Majiet agreed that the Department had been ambitious with the project plans. Promises were made which could not be kept, as timelines had shifted, as Mr Steenhuizen had pointed out. However, there were breakthroughs in the consultations with SALGA, and the distance between SALGA and Department had been reduced significantly, which was an important step. The SALGA leadership with whom the Department negotiated last year had changed, and the current leadership took a different stance that allowed gaps to be closed. The Department wanted to be ready for the Minister within the next two weeks, and was hoping to have a Special MinMEC on this matter. The MinMEC planned for 12 October 2012 had been postponed, because there had not by then been a breakthrough with SALGA. However, the time was now right for that MinMEC and it was hoped to reconcile the differences between labour unions SAMWU and IMATU and find a way forward. She noted that the Department would like to ask that the Minister, with MinMEC support, sign off the Regulations for public comment by no later that the end of November 2012. The Department was aware that not every issue would be tied up by the time of public comment. The period for public comment would run for 30 days, as was legally required. The inputs would then have to be evaluated and incorporated into the Regulations. This brought the matter to early January 2013. The last part of the formal Parliamentary process would be engaged in during the last part of this financial year. The Department was ready to support the process to ensure that it happened in this financial year.

The Chairperson said the Portfolio Committee had stretched itself beyond the requirements and the Rules of Parliament, to consult with the relevant stakeholders on this Bill. It went as far as allowing SALGA to interrogate the Department in the Portfolio Committee meeting, as if SALGA officials were Members of Parliament. SALGA had been consulted up until the final stages of the Bill. Now that the Department was in the process of formulating the Regulations, SALGA pretended that it had not been consulted and was saying that certain issues were over-regulated. 

She noted that the whole background was the identification of the need to professionalise municipalities. Some municipalities quickly re-appointed their municipal managers, before the legislation was enacted, because there was a clause in the Bill that stated that if a municipal manager’s contract had expired, that person had to reapply, with supporting documentation, rather than being appointed automatically. She felt that those particular matters had to be investigated. She was also concerned about the drawn out process of drafting. The Portfolio Committee had to discuss the reluctance of the unions and SALGA to allow the Minister to be part of the bargaining councils with those bodies.

Mr Matshoba told COGTA that SALGA had expressed its opposition to the MSAA and had suggested that it was unconstitutional, and that COGTA was proceeding against SALGA’s will. The Portfolio Committee was now caught up between SALGA, the unions and the department, which was not assisting the matter.

Mr Steenhuizen asked at what point the Minister would draw the line with the negotiations. It was not an exact science, and not everyone could be pleased all the time. Organisations like SALGA had to be held to the decisions of previous leadership. He was concerned that god governance was being compromised here by lengthy negotiations, and wondered at what point the negotiations would cease. All the reports pointed to a lack of decisive leadership, and a revolving door of negotiations. The matter was in fact urgent.

Mr Steenhuizen said he and Ms Nelson had made some recommendations on the area of sanctions and barring for sexual harassment, feeling that they were too light and had to be re-examined. These, along with some other concerns, had not been adequately addressed. The Labour Unions’ concerns had been addressed. He asked the Chairperson to facilitate another session where the Portfolio Committee could look at the regulations more thoroughly, because he had seen only excerpts, but not the full draft. He wanted the Department to commit to time-frames on when the regulations would be brought back to Parliament, gazetted and passed. He doubted that this would happen before the end of the current Parliamentary Term.

Mr Maepa replied that the Department had dealt with the different categories of misconduct. It made provision for different categories and time periods after which people could be appointed. As Mr Madonsela had indicated, these still had to be worked through at MinMEC, after which the Portfolio Committee would get a full report.

Mr Matshoba said according to Slide 8 there was no involvement of the Minister, only the MEC. If the MEC failed to address the problem, then what was the role of the Minister?

The Chairperson replied that the Act provided that if the MEC did not respond to the matter in 14 days, the issue could be submitted to the Minister.

Ms Ditshitelo was concerned about the 14 days the MEC had to respond to grievances, but said this had now been clarified.

Mr Steenhuizen asked how many interventions the Minister had made in terms of Section 54(a)(9), where MECs had failed to perform their duties, and asked which municipalities were involved.

Mr Tebogo Motlashuping, Deputy Director General: Local Government Intervention and Support, COGTA, replied that the Department had received a number of cases. It was in the process of assessing the information supplied to it. It would then advise the Minister on what to do. In cases where COGTA felt the appointment was irregular, it would advise the Minister to reverse the appointment. There was one case which came to the attention of the Department, the case of Babazane Municipality where the contract of the municipal manager was extended beyond one year. Once it came to the attention of the MEC in KZN, the MEC approached the court to nullify the contract. The Minister, as required by law, had intervened, and the matter was currently before Pietermaritzburg High Court, where the Minister opposed the contention by the municipality that the provisions of the MSAA were unconstitutional. The Department had argued its case and the Court reserved judgement on the issue. This was the only case that was brought to the attention of the Minister.

Mr Madonsela said that although this was only his second meeting with the Committee, and his first presentation on the subject, he agreed that the Departmental team could have achieved more, and he undertook that in future more comprehensive reports would be given. He would also make sure that information was made available well in advance so that members could prepare for meetings.

Ms Segale-Diswai said, irrespective of the Act, appointments were being made. She therefore wanted to know if the Department had established a monitoring and evaluation process on the implementation of the Act.
 
Mr Maepa replied that, as the Chairperson indicated, the Act made provision for municipalities to report the outcome of the recruitment and selection processes to the MEC, within 14 days after these had been decided. The MEC then in turn had to report this information to the Minister within 14 days for the sake of oversight. In some cases the MEC had to verify, for him/herself, the details of the appointment. Until this had happened; he/she could not inform the Minister of the appointment. This created bottlenecks.  The number of cases reported to the Minister did not reflect the number of appointments on the ground.

He added that, on the basis of reports received from provinces, the Department had developed a standardised tool, which would be used by municipalities to report on specific issues during the course of a recruitment and appointment process, such as listing the number of publications where the post was advertised, and whether the candidate had been found guilty of serious misconduct before this time.

The Department was also looking into the possibility of establishing an electronic information system in order to share and trade information speedily between municipalities, provincial and national government. Current processes were taking quite long.

With regards to appointments, in terms of Section 54 and 56 appointments, he noted that a few were received and sent back, because there was too little documentation in support of these applications. Some cases submitted were in accordance with the law. The Department was working on a circular that it would be sending to municipalities, instructing them to use the standardised tool to report on appointments. This would allow the Department to get a clearer picture of how appointments were made by municipalities.

Mr Madonsela thought that many of these questions could only be properly answered after the consultation processes had been concluded and MinMEC had had the opportunity to finalise the Regulations. MinMEC would be meeting on 16 November 2012. The Department would have to come and give a briefing on monitoring and evaluation after that, and it would, by then, be in a better position to work out a clear implementation plan, with concrete time frames, based on products finalised at MinMEC. At this stage the Department was in an awkward position, because, as said before, it was presenting only parts of draft regulations that had still to be considered. He reiterated that he was hoping for more positive results.

The Chairperson agreed that since MinMEC was only meeting on 16 November, and Parliament would rise soon after that, it was not likely that the regulations could be finalised before the end of 2012.

Ms Nelson said MSSA stated that the municipal manager could act for three months, and should the municipality require extension of this period, permission had to be obtained from the MEC. She asked how long the Department would allow the current situation to continue, where some municipal managers had been acting for three years.
 
There was no direct reply to this question.



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