Fertilisers and Feed Bill [B41-2012]: opinion on tagging of Bill; Department's response to concerns

Meeting report

Office of the Chief Law State Advisor opinion
Ms Yolande van Aswegen from the Office of the Chief Law State Advisor briefed the Committee on the tagging process of the Fertilizer and Feeds Bill.  The Joint Tagging Mechanism (JTM) had tagged the Bill on 31 January 2013 as a Section 76 Bill that affects the provinces. The OCLSA was of the view that the Bill must be tagged as a Section 75 Bill that did not affect provinces.

She briefly explained the two procedures as set out in Section 75 and 76 in the Constitution (see document).

In tagging this Bill, the OCLSA established whether the Bill, in substantial measure, falls within a functional area listed in Schedule 4 of the Constitution (Functional Areas of Concurrent National and Provincial Legislative Competence).

Ms van Aswegen quoted case law to explain the OCSLA opinion. In Ex parte the President: In re Constitutionality of the Liquor Bill 2000 (1) BCLR 1 (CC) “the Liquor Bill case”. The Constitutional Court lay down the “substantial measure” test for tagging of Bills where any Bill whose provisions “in substantial measure” fall within a functional area listed in Schedule 4, it should be dealt with under Section 76.

In Tongoane and Others v Minister for agriculture and land Affairs and Others 2010 (the Tongoane Case), the Constitutional Court determined the proper test for the tagging of the Communal Land Rights Bill (“CLARA”). In classifying the CLARA for the purposes of tagging, Parliament had applied the incorrect test, namely, the “pith and substance” test, instead of the “substantial measure” test suggested by the Constitutional Court in the Liquor Bill case. It was noted that the test for tagging must be informed by the Bill’s purpose. The more it affects the interests, concerns and capacities of the provinces, the more say the provinces should have on its content. To apply the pith and substance test to the tagging question, therefore undermines the constitutional role of the provinces in legislation in which they should have a meaningful say, and disregards the breadth of the legislative provisions that Section 76(3) requires to be enacted in accordance with Section 76 procedure.

Ms van Aswegen said the test used by the JTM when tagging the Fertilisers and Feed Bill was similar to the “pith and substance” test and related more to the question of legislative competency than to the classification of the Bill for tagging purposes. This “undermines the constitutional role of the provinces in legislation in which they should have a meaningful say”, as stated in the Tongoane case. In other words, the constitutional role of the provinces is to legislate on matters that substantially affect them.

The fact that the Bill contains matters that are administered by the Department of Agriculture, Forestry and Fisheries, does not mean that it therefore falls squarely within the functional areas listed in Schedule 4 and must be classified as a section 76 Bill that substantially affects the provinces.

There may be some provisions in the Bill that deal with certain agricultural products (e.g. fertilizers, feeds, raw materials, etc.) and others that deal with matters of licensing, manufacturing and registration in respect of these products, but none of these provisions have a substantial impact on the provinces, since this Bill, in OCSLA’s view, merely deals with licensing, registration, prohibitions, etc. on a national level. 

OCSLA had noted the Constitutional Court’s discussion in the Liquor Bill case on the ordinary definition of “trade”, which is the “[b]uying and selling or exchange of commodities for profit, spec. between nations; commerce, trading, orig. conducted by passage or travel between trading parties”.  The Constitutional Court concluded that, in accordance with its ordinary meaning, the concurrent national legislative power with regard to “trade” includes the power not only to legislate intra-provincially in respect of the liquor trade, but to do so at all three levels of manufacturing, distribution and sale. 

OCSLA’s contention was that, although this Bill did contain elements of the regulation of registration and licensing of products and premises that may be used in agriculture, those elements did not in substantial measure, fall within in the areas of “trade” and “agriculture”, as listed in Schedule 4 to the Constitution and do not necessarily affect the provinces.

OCSLA’s view was that this Bill must be dealt with in terms of Section 75 of the Constitution and this classification of the Bill was not unconstitutional. It would be inappropriate to pass this Bill that deals with the requirements for the registration and licensing of certain agricultural products and the establishment of a Technical Advisory Council – under Section 76 of the Constitution – merely because it deals with agriculture.

Adv Gary Rhoda, the Parliamentary Legal Advisor, differed and stated that the Bill must be tagged as a Section 76 Bill as the bill dealt with "trade" which was part of Schedule 4.

Discussion
Ms A Steyn (DA) asked if the labour that would be used to implement the Bill would come from national government or provincial government. She also asked about the error on the first page of the Fertilisers and Feed Bill which stated it was a Section 75 Bill.

Mr Rhoda said that it was a printing error but the correct position was that it was a Section 76 Bill.

Mr S Abram (ANC) wanted to know in the opinion of the legal experts was there any chance the provinces could contest the Bill. The presentation of OCSLA did not bring finality to the issue of the tagging. He acknowledged the printing error.

The Chairperson asked the implications of passing a Section 75 Bill as a Section 76 one.

Ms Aswegen pointed out that constitutional procedures would need to be followed if the Bill was wrongly tagged.

The Chairperson asked the Committee if they were satisfied with the tagging.

Mr Abram asked about the consequences of wrongful tagging and the grounds for someone challenging the Bill.

Adv Rhoda said it was difficult to assume what persons could challenge about the tagging of the Bill. The challenging of an Act could be done even five years from now. The safest route would be tagging it as a Section 76 Bill. This was a cautious approach.

Ms Aswegen said the Bill could be referred to the Constitution before assent by the President. It was difficult to know if the Bill would be challenged; the cautious route must be taken and it must be tagged as a Section 75 Bill.

The Chairperson noted the intricacy of the legal opinions given. The consultation process was critical and the Committee must identify those provinces that would be impacted on by the Bill.  The cautious approach would be taken and the Bill would be tagged as a Section 76 Bill.

Minutes from the Department of Agriculture Forestry
Mr Jonathan Mudzunga, Registrar Regulating Pesticides, Stock Remedies, Animal Feeds and Fertilisers. He operates at national level but acknowledged the debate on the impact at provincial level. Last week the Committee discussed the challenges. He wanted to talk about the benefits. DAFF believed the Bill would translate into ensuring food and environmental safety and the health of people and animals. The efficiency and effectiveness of the regulatory framework would be improved by shifting from product registration to licensing facilities. This is a challenge all over the world, not just South Africa. If a company has 500 products, DAFF does not want to register each and every product, only give the company one licence that deals with all its products. The industry keeps on growing and the needs of the people keep on changing. The regulator needs to keep pace and it aims to do this by moving to the facility registration system. There are stakeholders that support the Bill and there are stakeholders that do not support the Bill. Most in the agricultural industry supported the Bill however the definitions needed to be revised and the department was re-looking at the definition section. The Technical Advisory Council was also being reviewed and the composition of the Technical Advisory Council was being analysed. The facilities to be looked at were those within the Republic. DAFF would look at examining the requirements for facilities residing outside the country. In terms of levies, government must move towards cost recovery as implementing laws was expensive. Collection of fees through tonnage or auditing fees was one mechanism for recovering costs. DAFF would consult with Treasury on cost recovery. RMIF was against the Bill as it believed home mixers should be excluded from the Bill; hence farmers should be exempted from the Bill. The biggest challenge of ensuring food safety was that farmers were allowed to do/mix  what they wanted in relation to feeds. DAFF believed that there needed to be control measures at that level. DAFF wanted jurisdiction to regulate the operations of farmers and control measures were necessary to trace harmful food. The Fertilizer Society of South Africa was consulted and even wrote a letter supporting the Bill. 

The review of legislation was vital because the current laws were outdated. The concern about unintended consequences in relation to competition had been clarified by the Competition Commission which stated that the Bill would not result in anti-competitive measures taking effect. The question of fair consultation was critical and the Department would look into this. DAFF said that it can be advised on how consultation would be seen as being sufficient and adequate. A regulatory impact assessment would be done to prevent any unintended consequences.

Dr Julian Jaftha, DAFF Acting Deputy Director: Genetic Resources, said that guidance from the Committee was welcomed especially with regards to the provinces. The opportunity to present to the Committee a clear implementation plan would be done in the future.

Discussion
Ms N Twala (ANC) asked about control and how the lack of capacity and expertise within DAFF would be dealt with. There was a discord over the control of unregistered products.

Mr Abrams took said the implementation of the Bill would cost more than R4 million, the cost of employing staff to manage the Bill would be more than just R4 million. Why was DAFF given a budget from fiscus yet it was trying to recover costs via the promulgation of Bills. The South African farmer was already burdened by taxes. It was important to improve the current animal health sector but over-regulation was unhealthy. The meat imported from South America needed to be regulated. Regulations were available but the implementation on the ground was lacking. The Department must provide a list of stakeholders consulted. Sufficient and proper consultation was needed. Portfolio Committee must go out on consultation drive.

Ms M Pilusa-Mosoane(ANC) asked about the organizations consulted since the Department’s list in the Memorandum for organisations it had consulted was just five. This Bill was “critical” and thus needed much consultation. The matter of staff turnover was worrying. Home mixers should be included in Bill

Ms Steyn wanted the inputs from all the bodies that DAFF had consulted.

Ms N Phaliso (ANC) asked about the tagging  of the Bill as Section 75. She wanted clarity on the facilities outside the country and legislation to deal with this. All relevant inputs from the submissions were needed. The lack of jurisdiction on animal feeds was worrying. Were the ordinary home mixers consulted? Clarity was needed on the collection of fees.

The Chairperson noted that the Committee also had a responsibility in conducting public consultation and this job could not be left squarely to the DAFF. The subject matter related to trade and the tagging of the Bill needed to be dealt with. Members of Parliament must be proactive in making the law.

Dr Jafta said the unintended consequences of the Bill would be covered by the regulatory assessment that would be done. There was ongoing work with the National Consumer Commission to investigate the donkey meat saga and other such claims

Mr Mudzunga said Bill was not concerned with small scale farmers. Small scale farmers would not be affected and the Bill’s consequence did not touch on their operations. Dogs had died from poisonous food. DAFF had been doing these functions for many years and institutional structures existed to govern Bill. The point that was very important was that the Bill also proposes measures where capacity could be outsourced from the private sector. Government would play an oversight role while industry had self-regulatory mechanisms. Capacity within government could not meet the growing needs of industry. The process of producing product must be correct. The manufacturing process should be in line with regulations. The products produced must meet the requirement agreed upon. Such facilities must be licensed. This was a worldwide phenomenon.

Products that were not safe to animals and the environment must be identified. DAFF could collect administrative fees. A different system or model could be used to allow DAFF to collect fees. Administrative costs were expensive. Thus the cost of implementation of the legislation must be recovered. The issue of cost did not require massive resources for implementation. Institutional set-up already existed so there were no huge funding challenges. The list of people who attended workshops and were consulted were available. The number was more than 30.

The Chairperson thanked the Department and asked the Committee if they wanted to continue questioning the department or go through the submissions.  The Committee agreed to deliberate on the submissions.

Ms Pilusa-Mosoanae asked why DAFF did not have inputs from the poultry sector.

Mr Abram said mapping the way forward was critical. DAFF saying there was a misconception by the Committee about the Bill was incorrect. It was worrying that small scale farmer sector had not been informed because small scale farmers were a key input to the agricultural sector. The outsourcing of consultancy services was a major concern. The real reasons behind this Bill need to be clarified. The cost of implementation of this Bill would be at great cost and the budget envisaged was way too low.  There must be a real need and desirability for the Bill.

Mr R Cebekhulu (IFP) asked about the feeding of chickens which were then sold to the market without checking their condition.

Ms Phaliso asked about the research done in determining the Bill to be a Section 76 Bill. The tagging needed to be clarified. She believed that the Bill was a Section 76 Bill.

Ms Pilusa Mosoane was not satisfied with DAFF’s responses about the public consultation done by the Department. This Bill would harm the ordinary citizen.

The Chairperson said that the Committee needed to interact with the submissions raised by the industry and conduct its own consultations. The Chair noted the advertisements placed in the press regarding public hearings on the Bill. He asked the Committee for the way forward.

Mr Abrams said that the Committee needed to take the Bill to the people in accordance with the Constitution.

Ms Twala asked about the time frames for the advertisements calling for public comment.

Ms Phaliso was concerned about the advertisements reaching people in rural areas.

Mr Abrams said that the entire value chain must be taken into account and a strait jacket approach was futile if the process was to be successful.

The Chairperson concluded that the advertisements had been placed for the first part and more must be done. They would need to decide which provinces needed to be heard.

The Committee agreed to conduct public hearings in the relevant provinces.

Meeting adjourned.