Transport Laws and Related Matters Amendment "e-Toll" Bill: briefing

Meeting report

Transport Laws and Related Matters Amendment Bill: briefing by Department of Transport (DoT)
Mr Johannes Makgatho, DoT Director of Legal Services, explained that the South African National Roads Agency Limited (SANRAL) managed the Republic’s national roads system and ensured development, maintenance and rehabilitation of roads. When the SANRAL Act was promulgated, electronic toll collection (ETC) was not envisaged in its current form. The SANRAL Act is not broad enough to cater for some aspects of the ETC. The tabled Bill had been necessitated in light of the development of the Gauteng Freeway Improvement Project (GFIP) and any other future projects. An important aspect of the GFIP network was electronic toll collection (ETC). This Bill furthered that aspect.

The Bill seeks to provide more effectively for the collection of toll; to amend the Cross-Border Road Transport Act, 1998, to empower the Cross-Border Road Transport Agency to collect toll on behalf of SANRAL; to amend the SANRAL Act by inserting a definition; to further provide for the differentiation in respect of the amount of toll that may be levied; to provide for the Minister to make regulations on specified toll-related matters; to provide for the Minister to publish draft regulations calling for public comment; to provide for certain presumptions relating to the driving, operation and use of vehicles on a toll road and the use of electronic evidence to prove an alleged contravention of the SANRAL Act; to exclude the levying and collection of toll from the ambit of the National Credit Act; and to amend the contents of the SANRAL Act.

Clause 1 seeks to amend section 4 of the Cross-Border Road Transport Act by empowering the Cross-Border Road Transport Agency to collect toll on behalf of SANRAL.

Clause 2 seeks to insert the definition of ‘‘owner’’ in order for the owner of a vehicle to be responsible for the payment of toll. 

Clause 3 seeks to amend section 27(3)(b) of the SANRAL Act to provide a means of differentiating the amount of toll payable according to whether the toll is pre-paid depending on the use of an e-tag or some other device as compared with identification through licence number recognition. 

Clause 4 seeks to provide for the Minister to publish regulations by notice in the Gazette ; to provide for the Minister to make regulations relating to specified toll-related matters; and to provide for the Minister to publish a draft of the proposed regulations in the Gazette calling for public comment.

Clause 5 seeks to insert section 59A(3) in the SANRAL Act to provide for a presumption that any electronic evidence must be deemed to be correct in the absence of evidence to the contrary. This aims to facilitate law enforcement and assist in the prosecution relating to the non-payment of tolls. 

Clause 6 seeks to amend the heading of section 60 of the SANRAL Act and provide for the exclusion of the SANRAL Act from the ambit of the National Credit Act  in relation to the levying and collection of toll. 

Clause 7 provides for the amendment of the Contents of the Act to reflect the insertion of section 59A. 

Clause 8 provide for the short title and commencement of the Act.  

The Draft Amendment Bill had been published in the Government Gazette in December 2008 for public comment. Two draft Bills providing for transport laws and related matters which also included similar amendments to some of the amendments in the Bill were published in March 2010.

The Bill was also presented for inputs to the Shareholders Committee of the Road Traffic Management Corporation. Comments were received from the following institutions:
(a) Public Entity Oversight and Border Control;
(b) South African Chamber of Commerce; (c) South African Tourism Service Association;
(d) The South African Police Service;
(e) The Cross-Border Road Transport Agency;
(f) The Road Traffic Management Corporation; and
(g) The National Treasury   
The Bill was presented for inputs to the Shareholders Committee of the Road Traffic Management Corporation. Comments were received from a number of bodies, including National Treasury and SAPS. The Bill was developed and finalised in consultation with Treasury.

The Bill was described as being of vital importance for the collection of tolls for the GFIP. Non-collection would place the entire project at risk and would have a negative impact on the ability of other State Owned Enterprises to raise capital for their infrastructure projects. SANRAL had issued bonds to fund the project of R24 billion that needed toll revenue in order to be repaid. Failure to collect tolls and repay the bonds would have very serious financial implications for SANRAL and National Government (which had provided the guarantee). The inability to collect revenue would damage the credit reputation amongst investors and possibly the government's credit ratings. The financial implications also included future maintenance costs, road rehabilitation and operational costs, servicing of debt (interest) and other toll-related costs. Without tolling these would have to be funded from other Government resources in future, reducing Government's ability to meet its disparate demands..

The State Law Advisors and the Department of Transport were of the opinion that the Bill had to be dealt with in accordance with the procedure entailed in Section 75 of the Constitution since it contained no provision to which the procedure set out in Sections 74 or 76 applied. It was not deemed necessary to refer this Bill to the National House of Traditional Leaders. The Committee was therefore asked to approve the Bill.

Discussion
Mr R Tau (Northern Cape, ANC) asked why the Director General and Minister were not present and said that if they were unable to attend, formal apologies should be made. He said that the NCOP was a House of Parliament and deserved respect.

Mr Chris Hlabisa, DoT Deputy Director General of Roads, explained that the apology had been sent in writing as the Minister was out of the country. He said that the Director General had a conflicting committee meeting and unfortunately could not be present.

The Chairperson acknowledged the apologies but stated that this was a recurring problem and requested that it not happen again.

Mr Groenewald (North West, DA) said that the NCOP should not be handled in this manner. He had lengthy questions, but he began by saying that the DA was not against e-tolling in principle. However, there had been a lack of public participation and this was unacceptable. The provinces could only object to the environmental assessment once the Bill was passed. The Cross-Border Road Transport Agency (CBRTA) was a relatively unknown entity and the allocation of this power to them was concerning. It was implied that SANRAL would be outsourcing to the CBRTA, even though the CBRTA had been unable to handle its own finances and the cross-border taxi industry in recent years. The tagging of the Bill as Section 75 was also objected to. Tolling was a provincial concern but the Bill had not been tagged as such. Provincial and local municipalities had been denied their constitutional authority over the Bill.

Mr Tau called for a point of order and said that there would be opportunities to debate the Bill in the House, but that the current forum was for the purpose of engaging with the Department on questions of clarity.

Mr M Jacobs (Free State, ANC) agreed on this point and said that it was more important to ask the Department questions at this stage.

The Chairperson said that it would be better to focus on the presentation and asked Mr Groenewald to reserve his comments for the debate on the Bill.

Mr Groenewald said that he was merely presenting the facts and that he required answers. His statement was a precursor to his questions, and he asked for patience. He asked the Department how they could ask for the Bill to be passed without proper public engagement at municipal and provincial level. He said that throughout the legislative process there had been statements made by the Department that illustrated disrespect for the NCOP and its authority over this Bill.

The Chairperson interrupted, saying that the member was out of order. This was a Section 75 Bill and the Member needed to reserve his criticism for a more appropriate forum. This meeting was specifically to dicuss the presentation by the Department.

Mr D Feldman (Gauteng, COPE) complained that the CEO of SANRAL was not present. He then referred to the list of institutions that had been consulted. There were no "living persons" on that list and he asked why there had not been public engagement with the people who would be paying the tolls. Local people in townships were not aware of the Bill or its implications. Cross-border issues would impact on rural areas, and therefore they would be of concern to the Traditional Leaders.

Mr O De Beer (Western Cape, COPE) said that it was unacceptable to say that inability to collect revenue would be passed onto citizens. CBRTA had been shown to be unable to fulfil its own mandate. They had been before the Committee before and were known to have failed in their internal affairs. He asked how the Department could justify increasing their authority and mandate in light of that. The people of South Africa were known to be against the legislation. In the new South Africa it was unacceptable to override public opinion in such a way. He noted that there were processes relating to e-tolling which were pending court judgement and asked if the fact that people felt so strongly about the tolls had been properly considered.

Mr Jacobs took issue with the tagging of the Bill. A Section 76 Bill had to be tabled before the Provinces, and he asked for clarity on why the Bill was not deemed  a provincial competence. Tolling was not a new development, and he asked for an explanation on how the proposed ‘e-tolling’ differed from standard tolling. He asked what issues had been raised by the public and whether these had been dealt with. He asked if the petrol levy was a sustainable alternative to e-tolling.

Ms L Mabija (Limpopo, ANC) said that the Bill required the Minister to submit regulations to Parliament for comment, and said that this should be a stronger requirement: asking for 'approval' rather than 'comment'.

Prince M Zulu (Kwa-Zulu Natal, IFP) agreed that ordinary people should have been consulted properly before tabling the Bill.

The Chairperson said that it was necessary to consider for what the Bill stood as the Bill was under Section 75, not 76. He noted a non-member of the Committee, Ms van Lingen, was present and said that this was permissible under Rule 108 but this was not unlimited.

Ms E van Lingen (Eastern Cape, DA) thanked the Chairperson for permitting her presence. She asked why there appeared to be an aversion to public participation. The status of the Bill as a Section 75 Bill did not preclude it from being subject to public engagement. It was necessary for the NCOP to assert its authority and not merely become a rubber stamp-wielding body.

Mr Tau asked firstly what would happen if the Committee did not approve the Bill. He noted that the Bill had a number of implications, not merely authorising CBRTA but also amending various pieces of legislation. He asked what systems were going to be put in place to strengthen the CBRTA. He realised that the Bill would not cover this, but the Committee needed to be satisfied as to the intentions of the Department in capacitating the CBRTA which would be acting on its behalf. He asked what the implications were for the NCOP if it had been tagged a Section 76, as opposed to a Section 75, Bill.

The Chairperson noted the draft Bills gazetted in 2008 and 2010. He asked for clarification on the distinction between standard tolling and the proposed e-tolling.

Mr Hlabisa said that the Members' comments were noted and that the Department would seek to clarify areas of concern. He referred to the previous consultations and gazetted Bills, saying that the Department was not attempting to bypass public awareness. The gazetting in 2008 and 2010 had been for this very purpose, and he believed the Department had done its level best to consult with the public. DoT would never set up someone to fail, and the employment of the CBRTA would be accompanied by capacity building.

Adv Adam Masombuka, Chief Director of Legal Services at the Department of Transport, said that the tagging had been the subject of debate and after DoT's consultation with the state law advisors, it had been decided that the Bill should be tabled under Section 75.

Ms Suraya Williams, Principal Law Advisor from the Office of the State Law Advisors, explained that the Constitution prescribed how Bills should be tagged in reference to Schedules Four and Five of the Constitution. These schedules listed the areas of competence. The pith and substance of the Bill was compared to these lists in the past, but in Tongoane v Minister of Agriculture, the Constitutional Court had ruled that a 'substantial measure' test had to be applied. This test looked at the listed items in the Schedules and whether or not any provisions in the Bill related to them. The current Bill had no provisions dealt with in Schedule Five, and therefore was not subject to concurrent competence of the NCOP. According to the established constitutional process, the Bill was a Section 75 Bill. With regards to the House of Traditional Leaders, they were referred to when there was subject matter dealing with customs or traditions, of which there were none.

Adv Gary Rhoda, Parliamentary Legal Advisor, added that the Legal Advisors merely gave legal opinions to the Joint Tagging Mechanism where a final decision would be made. In this case there was consensus that the Bill fell within the ambit of Section 75. This did not preclude the NCOP from requesting public participation. The NCOP was entitled to make amendments. If the NCOP chose to reject the Bill, it could still be passed in the National Assembly, due to its Section 75 status. The NCOP was able to request public participation.

Mr Alex van Niekerk, Manager of the Gauteng Freeway Project for SANRAL, said that the previously tabled Bills had been subject to public participation. When tolls had been declared in 2007 there had also been public participation for the declaration process. This had been reviewed but the outcome had been favourable to SANRAL. He gave some background to the Cross-Border Agency, saying that there had been instances of vehicles entering the country and travelling on roads which had not been tolled, causing wear and tear but without contributing revenue. E-tolling made it far easier to collect payments from international vehicles.

In terms of the difference between e-tolling and normal tolling, the SANRAL Act had always authorised tolling. However, with the development of new technology that enabled electronic toll collection, there were new ways in which tolling could be conducted in an open road environment which had not been invented at the time of the SANRAL Act. The current physical toll-gates cause congestion and were inefficient. The ability of SANRAL to declare toll roads had existed for some time; the Bill merely facilitated this with new technology. There was an existing fuel levy and revenue from this was distributed to the appropriate municipalities and provinces. However, the revenue from this was not sufficient to cover costs of road maintenance. Fuel levies were not as appropriate for road maintenance as they did not target the people who used those specific roads. The number of vehicles in South Africa had dramatically increased over the past few decades and the number of kilometres covered per vehicle had also increased. Modern problems required modern solutions. He added that there had been a number of amendments and developments already, such as caps on tolls, discounts for the time of day travelled and exemptions for public transport vehicles.

With respect to the costs of collection, Mr van Niekerk said that there were compliant toll transactions and non-compliant transactions. These were kept separate so as to ensure that the compliant participants were not subsidizing the non-compliant participants.

Mr Jacobs said that he still did not understand the distinction between tolling and e-tolling and asked for it to be explained. He also asked if the NCOP was entitled to force public participation or if they could merely recommend it. The NCOP website had invited comments and considered this as public participation.

Mr Groenewald asked about alternative roads, asking if all the tolled roads all had alternatives or if there were any that were compulsory. He Asked about the implications for job creation and for low income citizens who would be travelling on tolled roads. He requested financial details about e-tolls, specifically to what extent a profit would be made.

Ms van Lingen asked what effect the exclusion of the SANRAL Act from the National Credit Act would have. She asked if the technology being used was the most cost-effective. She expressed concern about public participation and noted that a precedent had been set in other Bills where public participation had been required. She added that the rail system needed to be rejuvenated as this was the cause for so much heavy traffic on the roads which then necessitated tolling.

Mr Tau observed that road use was not exclusive to those people who lived in the area. He asked what the repercussions would be if he refused to pay a toll in an area he did not live in if the Bill was excluding the SANRAL Act from the National Credit Act. He suggested that the matter of public participation should not be put to the Department but should rather be deliberated on by the Committee and a recommendation made. A model for public participation already existed. It allowed for many forms of participation and he encouraged members to familiarise themselves with them.

The Chairperson reiterated that the Bill was tabled under Section 75, not 76 or 74. It was not compulsory to take the matter to the provinces, as Section 75 dealt with matters "not under provincial competence". Section 75 spoke only to "ordinary bills not affecting provinces"’. The Committee had therefore abided by its constitutional obligations.

Mr Hlabisa commented on the possibility of using railways for heavy traffic. The rail system was very old and had absorbed a lot of capital input but it could still play a role in the transport of goods.

Mr van Niekerk explained that e-tolling would replace conventional toll plazas, and that tolls would be recorded electronically in reference to barcodes which recorded the type and status of the vehicle. He likened the proposal to prepaid airtime on cell phones. Existing toll plazas would remain, but rather than manual payments the plaza would read the tag and give access if there was credit on the account. The principle of tolling did not change at all, only the mechanism of tolling changed. In terms of enforcement, vehicle owners could register online to establish accounts or non-locals could obtain day passes for geographical areas they were visiting. Refusal to pay would result in invoicing and if these were ignored, legal processes would be instituted in terms of the Criminal Procedure Act (as already accommodated for in the Act). Non-compliance at the time of travel could therefore be remedied after the fact.

In terms of cross border travel, he explained that when vehicles left South Africa, extensive cross-border levies were charged. However, vehicles entering were not subject to these levies but continued to use the national roads. There was a low percentage of international vehicles registered on the system, but they should not be exempt. E-tolling would enable these vehicles to be charged upon arriving at the border. He explained that the benefits-to-cost ratio was approximately 8:1. There would be an internal revenue generation of approximately 33% which was very high. There would be spill-over savings such as decreased congestion, ease of upgrades and efficient traffic flow. No profit would be made by SANRAL through the collection of this money. He emphasised that SANRAL’s books were regularly audited and none of the audits had been qualified. The technology for the Gauteng Freeway Project was considered cutting edge. The Gauteng Freeway Project was the result of a joint venture, but that it was important to remember that there had been an open tender process.

Ms Alta Swanepoel, Traffic and Transport Consultant for SANRAL, said that the National Credit Act included a very wide definition for incidental credit agreements and that plaza tolling fell within this definition. However, e-tolling was prepaid and would be better suited to exclusion as there was no prior agreement. The publishing of tariffs and the collection thereof by SANRAL was not subject to the same compromises made in the National Credit Act whereby debts could be forgiven with reason. This was not consistent with the SANRAL Act. The exclusion was simply to clear up confusion between the various pieces of legislation.

The Chairperson thanked the delegations. He suggested that the Committee request a summary of all the public submissions on the Bill so that members could debate the issues and decide in which direction to move on behalf of the NCOP.

The meeting was adjourned.

Appendix
CONSTITUTIONAL COURT OF SOUTH AFRICA
Stephen Segopotso Tongoane and Others v Minister for Agriculture and Land Affairs and Others CCT 100/09 [2010] ZACC 10 Judgment Date: 11 May 2010

MEDIA SUMMARY(from www.saflii.org.za/za/cases/ZACC/2010/10media.pdf)

On 11 May 2010 the Constitutional Court delivered judgment in a matter which arose out of a declaration of invalidity made by the  North Gauteng High Court, Pretoria (the High Court) on 30 October 2009, in respect of various provisions of the Communal Land Rights Act 11 of 2004 (CLARA).  In this Court the applicants sought confirmation of the declaration of invalidity. In addition, they sought leave to appeal against the High Court’s refusal to declare CLARA invalid for failure to enact it in accordance with the correct procedure and applied for direct access to challenge the validity of CLARA on the basis that Parliament failed to comply with its constitutional obligations to facilitate public involvement in the legislative process.

Accordingly, there were three applications before this Court: (i) the application for confirmation; (ii) the application for leave to appeal concerning the “tagging” of CLARA; and (iii) the application for direct access concerning the public participation challenge.

The four applicants  represent a community which occupies land to which CLARA applies. They act in their own interest, on behalf of the communities of which they are a part, and in the public interest. Only five of the fourteen respondents participated in these proceedings: the Minister for Agriculture and Land Affairs, now the Minister for Rural Development and Land Reform; the Minister for Provincial and Local Government, now the Minister for Cooperative Governance and Traditional Affairs; the Speaker of the National Assembly; the Chairperson of the National Council of Provinces (NCOP); and the National House of Traditional Leaders. 

CLARA was enacted in accordance with section 75 of the Constitution; the procedure for “[B]ills not affecting the provinces”. The applicants argued that the enactment in accordance with this procedure was incorrect and invalid. They argued that CLARA was incorrectly classified or “tagged” as a section 75 Bill, rather than a section 76 Bill, as a result of Parliament adopting the incorrect “tagging” test.

The Speaker of the National Assembly and the Chairperson of the NCOP opposed the application for leave to appeal and sought to defend only the procedure in terms of which CLARA was enacted. They submitted that Parliament adopted the correct “tagging” test. In their view CLARA is essentially about land tenure and reform –an area of exclusive national competence. As a result, it was an “[o]rdinary Bill not affecting the provinces” and fell to be enacted in accordance with section 75 of the Constitution.

In a unanimous judgment, Ngcobo CJ held that there is a difference between determining whether the National Assembly or NCOP has the competence to legislate in a particular field, and determining how a Bill ought properly to be tagged and ultimately enacted. These are two different processes for which two different tests are to be applied.

Ngcobo CJ reaffirmed the decision of this Court in  Liquor Bill that any Bill whose provisions substantially affect the interests of the provinces must be enacted in accordance with the procedure stipulated in section 76. While the main subject-matter of a Bill (a key factor in determining legislative competence) may not affect provinces, some of its provisions may nevertheless have a substantial impact on the interests of provinces. The test for the tagging of Bills must be informed by the need to ensure that the provinces exercise their appropriate role, fully and effectively, in the process of considering national legislation that substantially affects them.

After analysing the provisions of CLARA, Ngcobo CJ held that the inescapable conclusion is that various provisions of CLARA affect, in substantial measure, indigenous law and traditional leadership – areas of concurrent national and provincial competence. He found that CLARA replaces the living indigenous law regime which regulates the occupation, use and administration of communal land. It further replaces both the institutions that regulated these matters and their corresponding rules.

He accordingly concluded that Parliament followed an incorrect procedure in enacting CLARA.

In considering the appropriate remedy, Ngcobo CJ held that where the Constitution prescribes a legislative procedure, that procedure must ordinarily be followed. Enacting legislation that affects the provinces in accordance with the procedure prescribed in section 76 is a material part of the law-making process relating to legislation that substantially affects the provinces. He held that failure to comply with the requirements of section 76 renders the resulting legislation invalid.

He accordingly held CLARA to be unconstitutional and invalid for want of compliance with the procedures set out in section 76 of the Constitution. 2  

In the light of the finding that CLARA was unconstitutional in its entirety due to its improper enactment, no order was made on Parliament’s alleged failure to facilitate public involvement in the legislative process. In addition, Ngcobo CJ held that the conclusion that CLARA was invalid in its entirety rendered it unnecessary to consider whether its provisions were consistent with the Constitution. He did, however, emphasise that Parliament should urgently and diligently enact the constitutionally envisaged legislation that will ensure that there is restitution of land to the people and communities that were dispossessed of their land during the apartheid era, and that they will be accorded secure land tenure or comparable redress.

The application for leave to appeal was granted and the appeal was upheld with costs