Regulations on Judges Registrable Interests: finalisation

Ad Hoc Committee on Code of Judicial Conduct on Disclosure of Interests (NCOP)

12 June 2013
Chairperson: Mr A Matila (ANC; Gauteng)
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Meeting Summary

Parliament had originally established a joint ad hoc committee (comprised of members from the NA and NCOP) to consider the Code of Judicial Conduct and Regulations on Judges’ Registrable Interests framed under the Judicial Service Commission Act. However, in view of the difficulties in arranging meetings, it was decided that the joint committee would be split and each House would consider the regulations separately. The Department of Justice and Constitutional Development presented the latest version of the regulations. Originally, the regulations had been framed so that all judges, serving on active service, discharged from active service and acting appointments, would have to declare their interests. However, as a result of changes made by the NA, the regulations currently required serving judges to declare their own interests and those of their immediate family members, whilst those discharged from active service had a choice in relation to interests of family members (subject to certain conditions) but acting judges did not have to declare at all. This change was effected after representations from the judiciary that it would be extremely difficult to get any practitioner to agree to an acting appointment if the declaration was made compulsory, and it was pointed out further that there was a distinction between permanent and acting judges in that a permanent judge would have to be impeached for any improper conduct, whereas an acting judge who acted incorrectly would simply not be asked to act again and would not be finally appointed. Some Members of the Committee accepted this argument and pointed out that there was in any event a safeguard in respect of acting judges, since a party to litigation before an acting judge had the ability to approach the head of the court and ask for a full declaration by the acting judge. Others, however, were concerned that this was, firstly, discriminatory (but it was pointed out that the Act actually allowed for differential treatment in the regulations), but more importantly, created a loophole that seemed to be in contradiction to the purpose of the regulations, to ensure the highest integrity, willingness to be subject to scrutiny and maintenance of ethics in judicial office. After substantial discussion on this point, it was noted that the majority of the Members agreed to amend the regulations back to the original form, so that acting judges would be required to declare. The Western Cape and Northern Cape Members indicated that they had no mandate to agree and asked that their positions be recorded. It was also noted that in the event that the NA persisted in its view that acting judges should not declare, Parliament would have to take the necessary steps to mediate. Only one member of the Committee felt that there was still uncertainty in relation to the judges discharged from active service, whilst others felt that the wording on this point was acceptable.

Members also debated what interests would have to be declared, and agreed, finally, that financial interests in trusts must also be declared, in view of the growing tendency to use trusts as a vehicle to do business. The wording accepted by the Committee in relation to Part 2, on pages 6 and 7, would change to read ‘directorships, business or financial interests in any business enterprise or other legal entity’. Consequential changes would be made by the Department, where necessary, including the Declaration Form on page 10.

Both amendments were agreed to in principle by the Committee, but an updated and cleaned version of the Regulations, reflecting the necessary wording, would be formally adopted, together with the Committee Report, at the next meeting.

Meeting report

Judges Registrable Interests: Regulations under Judicial Service Commission Act
The Chairperson noted that a number of issues had been raised in the last meeting, to which the Department of Justice and Constitutional Development (the DOJ&CD or the Department) had responded. He asked for clarification on these.

Mr Johan de Lange, Principal State Law Adviser, Department of Justice and Constitutional Development, firstly pointed out a typographical error, and noted a correction of the reference to section 13(7) of the Judicial Service Commission (JSC) Act with section 13(8). This had been corrected in the electronic draft.

He said that there was little in the regulations that allowed for any discretion whether to declare interests. Once these regulations were passed, judges in active service must declare their own and the interests of their family members. The only choice was in relation to acting judges, who did not have to declare their assets.

The question was also raised whether the registrar had sufficient powers. He pointed out that the registrar differed from an ordinary public servant, as s/he derived powers directly from the Judicial Service Commission Act. It was a strong position and if the Registrar called upon a judge, the latter had no option but to comply with the request, failing which a complaint would be lodged and disciplinary procedures would follow.

He reminded Members that this was set in motion in the development of judicial ethics jurisprudence by the JSC Amendment Act of 2008, five years ago. It was necessary to get the ball rolling, and this process would be the beginning. Once approved by Parliament, the process would continue to unfold and he was sure that there would have to be improvements and additions down the line.

The Chairperson noted that the amendments proposed by the National Assembly (NA) had been considered already and he suggested that if any Members had issues to raise, they should deal with them now.

Mr B Mashile (ANC; Mpumalanga) said that there was a suggestion from the Department that if there were future challenges this could come back to Parliament. He asked who would initiate this process. He repeated his concerns, as expressed in the previous week that the current distinction between judges in active service and acting judges amounted to discrimination on the basis of their terms of employment, rather than on material conditions. He believed that all judges should, as a starting point, declare their interests, as long as they were receiving public funds and discharging responsibilities as a judge. This should, in his view, extend to a judge working even for two days, in exactly the same way as a judge working for a longer period. Both were discharging the same responsibilities. All had to be encouraged to preserve the dignity of the judicial system.

He also commented that the Registrar had substantial powers but if the provisions did not allow him/her to take action, but merely to complain to another structure, which was not sufficient. He believed that the powers should be further amplified and that person should be able to demand compliance, and then act himself, not merely complain to another body whom he then could not force to act.

Mr K Sinclair (COPE; Northern Cape) did not fully agree with Mr Mashile, but he was concerned that there was a grey area for the acting judges. The document before the Members set out the notes and categories, but it was not clear why acting judges were not required to declare their interests. Judges discharged from active service also did not have to disclose, and this remained a bone of contention.

Mr Sinclair also requested that business entities and trusts be specifically covered in part 2. Many people were using trusts to do business and it was important to add this in. Whilst he believed that the Committee had already come quite far, he would like to see this added for greater clarity.

Mr D Joseph (DA; Western Cape) said that the NCOP had to send a clear message to all people that no organisation or institution was above the law and that all institutions using public money, even if, like the judges, they acted independently, still had to show accountability. He was satisfied with progress on this point.

The Chairperson pointed out that for the last two years the Committee had been seized with the matter, and the explanations now provided were more or less consistent with those presented when this Committee had been sitting jointly with the NA Committee. The point was raised, in relation to acting judges, that an insistence upon them declaring their interests would result in many being unwilling to act, which meant that there would be problems in training future judges.  At the end of the day, if there were too many restrictions, there may be too limited a pool. He also noted that this was the first set of regulations of this kind in South Africa, that there were few countries with these kinds of codes, and he confirmed that this was the beginning of a process. He urged Members to come up with proposals rather than asking questions. He summarised that Members seemed to have no problem with judges in active service.

The Chairperson also noted that no Parliamentary Legal Advisers were present.

Mr Mashile reiterated that he believed that all judges must declare, once they accepted responsibility under the appointment. If they were not wiling to do so, this in itself was a problem and he believed that those individuals were then not needed. Currently, he had no doubt that there were good and honest judges in active service. However, he was concerned that the exception for acting judges could create a loophole for judges with “incorrect tendencies” to accept service. He believed that the regulations were needed to uphold the integrity of the judicial system and keep it clean. He was worried that if an acting judge was willing to accept the position, but not willing to declare, this was in direct contradiction to the purpose of the regulations. He did not know exactly how many judges there were, but in principle, willingness to act must be linked also to willingness to declare. The State had to uphold the integrity of and ensure confidence in the judicial system. If a person was asked to declare, and refused to do so, then this should be a pointer that something was wrong. He believed strongly in insisting that everyone must declare.

Mr Mashile fully concurred with the point that Mr Sinclair had raised on trusts.

Mr Sinclair noted that the issues had been raised before. Whilst he did not want to attempt to respond on behalf of the Department, he noted that there was another quite strong provision in relation to acting judges. If there was any suspicion that anything was wrong, any party involved in litigation could approach the Head of the Court and ask that the acting judge be ordered to declare. He pointed out that there was a further reason for the distinction, namely, that acting judges would not accrue the same benefits as permanent judges. The feeder for appointment of judges finally tended to be the acting appointments of senior practitioners and he accepted the concerns that this be encouraged. However, he was also still concerned about the non-declaration of judges discharged from active service.

Mr Mashile suggested that a possible alternative was to make rules for all serving judges. When acting judges were appointed, the issue could then simply be covered in their contracts of service. He was still concerned about differential treatment, and thought this would be one way to avoid differentiation in the regulations.

The Chairperson answered that the Code of Conduct also spoke to acting judges, and that was why the regulations were worded also to take them into consideration. Both must be read together and speak to each other. This Parliament had passed the Code in that form, and, having done so, it was desirable to try to achieve consistency.

Mr Joseph noted that there had been interaction with the Parliamentary Legal Advisers previously, during the process to pass the Code. He asked whether the judges were satisfied with the wording, whether there were outstanding concerns, or whether there had been agreement with the judges on the wording.

Mr de Lange said that his position was a little difficult, for the amendments that drew a distinction between serving and acting judges had not emanated from the Department, but from the NA Committee. The version of the regulations initially tabled in fact did require acting judges to make a full declaration, and during the NA deliberations, the change that was now before the Committee was tabled. He was not sure exactly what viewpoints had influenced the Committee in making the changes. He was given to believe that the judges found the current version more acceptable and less invasive of their privacy. Again, he repeated that this was the first stage of the process, and he thought there were likely to be further developments.  He noted that a Committee, in its Report on any matter, could follow the example in past legislation and include, for instance, a specific request that the Office of the Chief Justice must report back to Parliament within six months on how the implementation had progressed, what the problematic issues were, and for comment on how to take this further.

Mr de Lange added that in relation to the trusts, there was already reference, in Annexure A, Part I, Item 6 to “any other financial income not derived from the holding of judicial office” and he thought that this would cover trusts and all other income from any other business.

Mr Sinclair suggested using wording, in Part 2, making reference to “directorships or business interests in a company, close corporation partnership or trust or any other business enterprise”.

Mr de Lange understood that point, but then said this raised the question of whether “trust” was sufficient, or whether it needed to be defined. For instance, a judge may not actually be deriving income from a trust; it was possible that s/he may be appointed to take over from another deceased trustee, or to be a beneficiary of a family trust, and he asked whether Mr Sinclair thought this must be declared. If the judge derived any financial benefit it would already be covered under Item 6.

Mr Sinclair then suggested that perhaps simpler wording of “directorships or business interest in any business enterprise” be used, removing a reference to companies and other entities.

Mr de Lange agreed that this would probably be sufficient.

Mr Mashile had a problem with this. There were other pieces of legislation that excluded trusts from the forms of business. “Directorships or business interest” would therefore exclude interests in trusts. He would prefer to see “and trusts” being added at the end of the sentence, still including the wording relating to companies, close corporations and the rest. He was trying to avoid any contradiction between other legislation that might define or exclude trusts. He noted that, from his experience on the Ethics Committee, it had become apparent that people were using trusts to hide matters from scrutiny. This was not talking to the life of the person, but an interest.

Mr de Lange thought that there was not actually anything wrong with adding the words “and trust”, but his question was still whether a judge would have to declare if he became a trustee.

Members said that there would not be a problem as long as it did not involve financial interests.

The Chairperson agreed that hiding money in trusts would create problems.

Mr de Lange asked if the Members' list made provision for trusts to be declared. He suggested that the same wording be used.

Mr Joseph pointed out that that cooperatives and other organisations could also be used enable people to derive a financial benefit. He thought that the use of “business interest”, without specifying anything else, would be sufficient, as it did not exclude trusts or other structures. The key was the financial interest – if it existed, it must be declared; if not, then there was no need to declare.

Mr Mashile said that trusts had traditionally been, and continued to be problematic in relation to declarations. Trusts were not regarded as business enterprises or entities. They were also confidential. The legislation around trusts effectively excluded them from scrutiny. He agreed that cooperatives would be included, whether or not they were mentioned specifically. Although it was implicit in the Members’ Code of Conduct that trusts would be declared, there was not enforcement of this, and the Code was being reviewed to correct this. He added that the Minister of Finance had conceded that trusts were a way to hide assets, which was why National Treasury was amending its rules. He was not speaking of a person merely being a trustee, but having an interest in the trust.

Mr Sinclair said that the reality was that trusts had become a useful financial instrument in the modern world and it was necessary to contextualise and remove the uncertainty. He made another suggestion for the wording, to read: “directorships, business or financial interests in any business enterprise or other legal entity”. That would stress that the crux was the financial interest. That should cover all the different business entities.

Mr de Lange agreed that this would be sufficient. He added that item 4 at the top of page 7 would read the same.

Mr Sinclair added that the Declaration Form on page 10 would also have to reflect some consequential amendments.

The Chairperson noted that at the end of the day it would be up to the Committee to decide on the final wording that would best serve the interests of the country.

Mr Mashile was satisfied that this would take care of the issues on which he had expressed concern.

Mr Mashile said he did, however, want to return to the point that there should not be any discrimination or differentiation between judges and no allowance for any opportunities for unscrupulous individuals to act as judges. He was very conscious of the fact that the intention of the regulations was to instil confidence in the public about the judicial system. This Committee must not act in any way that would undermine that objective. He understood the comment that those acting judges may come in from thriving practices and be unwilling to go through the process of declaring assets, but there was also a need to for the best and most honest judges to train others. He was further worried that applying different conditions to different categories could be unconstitutional.

The Chairperson reminded him that there was still a provision for parties to litigation to approach the head of the court, and asked if he did not think this would address the problem.

Mr Mashile said that he thought the original wording had been correct, requiring all judges to declare and he would have preferred that to stand.

Mr Sinclair said that he did not think the problem was so much related to discrimination as to the practicality of the application of the regulations. He was not sure that there could be any alternative to the current wording, if there were problems with the practical implementation of requiring declarations from acting judges.

The Chairperson asked if the Act was a section 75 or 76 Act. He thought that this Committee may be able to assist the NA in dealing with the matter. He understood the concerns of Mr Mashile, but said that it was not particularly helpful simply to say that everyone must declare, because the NA Committee had already indicated that it was not in favour of this.

Mr Mashile said that this did not necessarily mean that the NCOP Committee must follow suit. The NA may not agree, in which case a dispute resolution process would evolve between the houses. The question was the intention behind the regulations, and whether allowing certain categories not to declare was consistent with that intention.

Prince M Zulu (IFP, KwaZulu Natal) believed that Members of this Committee should be allowed to make suggestions and changes, whether or not it was a section 75 or 76 matter.

The Chairperson reminded Members that the matter was no longer in the hands of the Department, but with the Committee and he wanted some consensus on how to move forward. The original proposal from the Department was that all judges, whether acting or not, must declare. Public hearings were held in the NCOP, and some of these issues had been raised by affected categories of judges and communities. Some of the points reflected now in the NA amendments had been reflected by the NCOP public hearings too. All these points must be taken into consideration. He stressed that this Committee was looking for a workable solution, and must deal with this by the time the Houses rose. The fortunate part was that the NCOP was leading on the issue.

Ms R Rasmeni (ANC; North West) said that this illustrated the challenge of not having legal advisers present in this committee. She asked what issues the Portfolio Committee had raised when suggesting amendments to this wording.

Mr de Lange answered that there was a strong position from some heads of court, who said that those asked to help out for a month or two by accepting acting appointments would not respond positively if they had to make a full declaration of their interests at that point. The position was quite different with permanent positions, but it was felt that going through the whole rigmarole of having one's name on the Register of Registrable Interests and the declaration process was out of kilter with the term involved. He pointed out that some of those who acted may never be approached to become permanent judges. The most practical way to solve the concern was to build in the mechanism that parties could approach the Head of the Court, which had been done.

Mr de Lange further pointed out, in answer to Mr Mashile’s concerns about differentiation, that section 13 of the JSC Act specifically provided that the regulations may determine different criteria for different categories, so this was not a problem.

Ms Rasmeni assumed that a judge appointed to act for, say, a month per year would be subject to the conditions, but asked if new declarations would have to be signed if the person was asked to act three times in the same year.

Mr de Lange clarified that since this would be regarded as an acting appointment, no declaration would have to be signed at all by the acting judge. In respect of judges in active service, both permanent and those discharged from active service but still liable to be called in, an annual full disclosure must be made, and there was provision also for disclosure whenever the financial position changed.

Mr Joseph summarised that a declaration of interest was an achievement for Parliament and proposed that the changes made in this Committee be pursued, by submitting them to the NA. If there were other new ideas or challenges there was nothing stopping this Committee from starting another process.

Mr Sinclair thought it was necessary to dissect the concept. The acting judge would usually be an active advocate or attorney, who would be asked to serve on the bench, for a specific case or time. For the rest of the time he would still be involved in other cases. The practicality was how to make that person declare all interests. He still thought that the only solution was that already in the regulations; that an interested party to litigation may approach the head of the court to pronounce on the matter.

The meeting broke for a short caucus.

On resumption, Mr de Lange reminded the Committee that the major difference between acting judges and those holding office permanently was that a permanent judge could be impeached by Parliament. If an acting judge failed to do what s/he was asked, that person would not be asked to act again and would not be appointed to a permanent post.

The Chairperson asked for the original version of the regulations to be read out.

Mr de Lange noted that it was contained on page 7, in Part 3, and was marked by the square brackets that indicated this portion was to be omitted, under the heading “ “Interests to be declared by acting judges”. The original wording for acting judges followed that of serving judges, so the declarations would be essentially the same and included property, shares, business interests, directorships, royalties and other benefits (which were not quite correct), sponsorships and gifts, other than those received from family members. 

Mr Mashile noted that after a caucus, the ANC was proposing that the original wording in relation to acting judges, as read out by Mr de Lange, be re-inserted. The Committee should not lose sight of the objectives of the regulations. Acting judges could have ambitions of being appointed permanently and it was necessary to close the loopholes. Many acting judges were being “recycled”, with repeated acting appointments, and during the public hearings it was noted that they were also keen to take longer acting appointments to get greater exposure to the bench, which would bode well for them when they were interviewed for permanent posts. For all those reasons, he believed that it would be useful to have compliance with all requirements that applied to full time judges.

The Chairperson noted that this was the original proposal that had come to Parliament.

Mr Joseph said that he had no mandate to support that view, as his party had caucused on the previous day.

Mr Sinclair noted the proposal, but repeated that his party had a problem with the practical application of the wording, and thought that it would be a serious hindrance for acting judges if they were to act for only a short time. He reiterated that there was already another safeguard.

Mr Sinclair also wished to raise another point. He was concerned at the statement of Mr Mashile about the possibility of corrupt judges. That was a serious indictment and he did not think that this Committee could proceed to discuss the regulations from that premise.

The Chairperson interrupted at this point, to say that he understood where Mr Sinclair was going with the argument, but stressed that the point was not that current judges were corrupt, but that lack of ethics might be found in those to be appointed in future. He reminded Members that originally all judges, acting or permanent, were to declare.

Mr Sinclair asked for permission to proceed. High integrity must be the point of departure. His party believed that the proposal now put by the ANC would jeopardise the possibility of senior legal counsel being willing to act, because it was impractical. There was a private register, but the majority of the declarations were public. He questioned that any legal person in good standing would want to declare all interests if that person was sitting for only one or two months. He reiterated that the original proposals, providing for an application to the head of the court was sufficient.

Mr Zulu said that the IFP would be prepared to support the views of the ANC, as it always was prepared to support the positive suggestions. He agreed that all judges should declare.

The Chairperson did not want to put the matter to a vote. It was clear, in relation to the acting judges’ declaration, that the Western Cape representative did not have a mandate, and Northern Cape was opposed to the suggestion from a practical standpoint. The majority view from the other provinces was that all judges should declare their interests.

He noted the confirmation from all Members, in relation to trusts, to confirm the amendments suggested earlier, and any other consequential interests needed for consistency, being incorporated into Part 3.

Mr Mashile wanted to try to convince Mr Sinclair on the declaration by acting judges, and pointed out that because it was in the original wording, clearly the Office of the Chief Justice and Minister were satisfied that it would be practically possible to implement the regulations.

The Chairperson noted that as far as the Code was concerned there was no problem. He summarised the process followed for the regulations, reminding Members that when it first started there was one joint committee. The NA Committee would take a final decision on the following morning. If the Houses continued to disagree, then Parliament must take the necessary steps to resolve.

The Chairperson read out the draft Committee Report, which noted that the Committee, having considered the amended regulations on judges' registrable interests, recommended that the regulations be adopted, with the changes proposed today.

Mr Sinclair asked for it to be recorded that his province and party were in full agreement with the majority of the amendments, but not the issue of the acting judges.

Mr Joseph asked that his views be noted as well.

Mr de Lange noted that the whole of item 2(1) would have to be redrafted.  Item 2(3) would fall away. There would be a new item 3. Annexure A, Part 3, would be reinserted, which would result in number of other consequential changes, which he would make.

Mr Sinclair asked that the final version must be brought back to the Committee for its confirmation.

The Chairperson agreed that the final version would be presented in the following week for formal adoption. In principle, however, the Committee had agreed that those amendments and corrections must be effected.

Mr Mashile asked if that was actually reversing the decision just made, as he thought this was a purely administrative matter.

The Chairperson agreed that whilst this was true, the Committee must meet again; past experiences had shown that all committees must be particularly cautious to avoid any inaccuracies, and the final corrected version must be seen.

The meeting was adjourned.


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