Housing Development Agency Regulations: consideration with Parliament's Legal Unit

Meeting report

Opening remarks
The Chairperson said the Committee would consider the Housing Development Agency (HDA) regulations. Members had received a first briefing on them on 4 June. This would not be the last meeting on the regulations.

Housing Development Agency Regulations: Parliamentary Legal Unit (PLU) presentation
Ms Vuyo Ngcobozi, PLU Researcher, Parliament, indicated that she had gone through the regulations and that no concerns were picked up in terms of legalities. The most important thing was to ensure that the regulations were within the principles and the scope of the Act that empowered the Minister to make the regulations.

She pointed out that usually definitions as contained in Chapter 1, especially if they were the same as the ones in the Act, need not be included in the regulations. This was a matter of style and would be corrected when the document was being considered.

The regulations were read out in their entirety and Members commented as follows:

Chapter 2
Section 3(1) – Preliminary declaration of a priority housing area
Mr S Mokgalapa (DA) sought clarity on when the process of consulting MinMec happened as elaborated on in this section. Did this happen prior to or after consultation with the local and provincial authorities.

The Chairperson commented that the declaration of a priority housing development area should be clear that it comes from the business plan. The Minister could not just come and claim to be developing a particular area. The consultation with MinMec seemed to be "just a formality". Whatever had to be developed, had to be approved according to the development plan of the province. This matter needed to be noted so that when the Committee met the HDA this matter was clarified.

Section 4(1)(a) – Actions to finalise the priority housing development plan
The Chairperson sought clarity on whether this subsection needed to be specific and accommodate the clause on the Minister coming together with other ministers. She said the wording: “relevant participating organs of state and other housing institutions to ensure their commitment” did not appear sufficient.

Mr Mokgalapa agreed and said the “participating organs of state” might not necessarily be other ministries. This had to be clear in order to get the Intergovernmental Relations (IRG) right. Participating organs of state might be provinces or local government, to the exclusion of other affected ministries.

Ms Ngcobozi requested that she be allowed to do work on the drafting style issues. The Committee would not want a situation of provisions in the regulations being subject to different interpretations. But the concerns were more about style than legal substance.

Section 4(2)
Mr Mokgalapa sought clarity on who was the accounting authority that this section required written reasons to be forwarded to. Was it the Minister or the Agency; who was responsible? He said it could not be the Agency, as MECs would simply disregard it. It should be the Minister.

Mr Sithole noted as well that the regulations did not specify timeframes.

The Chairperson agreed and said there was a need for timeframes to be stipulated.

Section 4(3) and (4)
Ms Ngcobozi said the word “may” needed to change.

Mr Mokgalapa agreed and said the word should be replaced by “must”. He said subsection 4(4) needed to be clear and indicate who the “participating parties” were. This should be clear and not have loopholes. This section should specify the relevant authorities, or it would be open to different interpretation.

Chapter 3
Section 6 (1)(h) – Details of a priority housing development plan
The Chairperson said the issue of funding was critical and needed to be spelt out clearly in the regulations. The Agency had indicated funding for the priority housing development areas would be sourced from various grants; but this was just a general statement, as it was not anywhere in the regulations. The issue of funding should be clearly set out from the word go because it was the reason that had always led to blocked projects. Funding should be a chapter on its own. Also the research team should find out what the Act said about funding. Funding had to be there from grants and all the relevant departments’ budget votes.

Mr Mokgalapa commented that reference to grants was too open-ended. The regulations needed to indicate from which grant would funding be sourced.

The Chairperson said the Municipal Infrastructure Grant (MIG) should contribute to the projects, as 50% of that grant was meant for contribution to human settlements developments. The regulations had to be specific.

Section 7(1) – Consultative and participatory process
Mr Mokgalapa pointed out that this section still pointed to organs of state, and not other departments.

The Chairperson sought clarity on organs of state. In her understanding, organs of state would include government, parliament and the judiciary. The sentence should read either government sectors or spheres of government.

Ms Ngcobozi said the term “organs of state” was very broad and involved a lot of institutions. The section should be rephrased.

The Chairperson said extensive work needed to be done on the regulations; even universities should be accommodated. Starting a housing development needed to be a three-year phase work and all the stakeholders needed to be brought in. Universities should ensure training did not receive less emphasis. This was particularly important in ensuring that when a development started, well-trained locals received preference for employment opportunities. It would not be correct for Government to come and build houses for people, without skills transfer. The process should be developmental in approach, and that aspect was not thoroughly addressed in the regulations. When developing an area, skills should be transferred to the locals. Only the scarce skills should be outsourced. The universities and other professional bodies should get involved.

Ms Ngcobozi agreed and said “other participating” in this section would allow for a situation where projects were built using skills from outside, to the disadvantage of the locals. This was not an ideal situation. The regulation needed to be clear on criteria for deciding how the external people would be brought into projects.

Mr Mokgalapa agreed that the regulations should specify that projects had to be about development of local people.

Ms Ngcobozi commented that it appeared that there were changes from the last document that was discussed in the Committee, and that the views of the Committee were not reflected.

Section 7(2)
The Chairperson said this section was rejected before and she was not clear how it made it back into the document.

Section 9(1) – Amendment or withdrawal
Ms Ngcobozi said it would be ideal if the Agency could be asked to clarify the use of the term “organ of state”, as changing it to sphere of government would have a limiting effect. Entities outside of the governance structures would potentially be sidelined.

It was agreed that the regulations were badly written and the senior parliamentary researcher of this cluster was tasked with working with the Legal Unit to tighten the language in the document, making it suit Parliament’s style.

Members also agreed that in order of sequence, and for easy reading, 9(3) would become 9(1), 9(1) would become 9(2) and 9(2) would come last.

Chapter 4
Section 11 - Funding
Mr Mokgalapa sought clarity on whether Members were satisfied with how the section captured the issue of funding. These paragraphs do not speak to funding the way the Committee would want them to. Part of the make or break of these developments would be funding, and it could not be just dealt with in four paragraphs. This should be very clear, and more work was required on the Funding section.

The Chairperson agreed and said funding needed to be in place long before the plans were implemented. Government should commit funding three years prior to implementation of projects in the same way as the Medium Term Expenditure Framework (MTEF) worked.

Section 13(2) – Coordination and monitoring of a priority housing development area
Ms Ngcobozi suggested this section also use “must” in place of “may” when it came to referring matters to the Minister. She said it was not clear if providing written reasons for non-performance, and referring such to the Minister would be discretionary. The Agency could easily claim that it was given an option, once it fails to refer matters to the Minister.

Members agreed that “must” should replace “may”.

Mr Mokgalapa said this section needed to be clarified as to who the mandate holder was. He asked if it was the Agency or the Minister; this was a challenge, and should not be open to different interpretation. A contractor might claim that its contractual obligation was to the Agency and not the Minister. The Minister would be cornered, and the Agency could not do anything resulting in protracted legal battles. The issue of the implementing agent and the mandate holder becomes critical. This needed to be clarified; the Agency was an entity of the Department. Ultimately, it should be the Minister who was responsible.

The Chairperson said also another point that needed to come out clearly in the regulations was the protocol subscriber. The Minister did not do these things but the officials.

Mr Bhoola asked if it would be the Minister’s prerogative to intervene.

The Chairperson replied this was the subject of discussion and needed to come out clear in the regulations.

Section 14 (1) – Implementing agent
Ms Ngcobozi pointed out this section was not clear and needed to be written concisely.

The Chairperson said the Agency could not play the role of implementing agent, while it was the one granting the tenders.

Mr Mokgalapa said the whole subsection needed to be scrapped. This was the same challenge experienced with the Rural Household Infrastructure Grant (RHIG).

The Chairperson said the clause should be deleted; the clause appeared poisonous.

Mr Bhoola commented that the function of that particular entity - the implementing agent - was more local, and based at municipalities. It was a predicament that Parliament had to come to terms with - that municipalities would appoint entities.

Section 14(5)
Ms Berenice Paulse, Parliament’s Senior Researcher: Human Settlements, pointed out the clause appeared to contradict subsection 13(2).

The Chairperson pointed out that the confusion was around the use of “protocol subscriber” and “implementing agent”. These were different things: the protocol subscriber as contemplated in subsection 13(2), was not the same as implementing agent as contemplated in subsection 14(5). That distinction had to be understood.

Section 21(2) – Committees and support structure
Mr Mokgalapa sought clarity on whether the clause was not the same as subsection 18(5)(a). What meetings would this person represent the Agency on; was it forum meetings or any other meetings? Was this not duplication?

Mr Bhoola commented that speaking about 'who was responsible' was a difficult aspect because the regulations also spoke of a steering committee. These were two different aspects.

Section 23 – Offences and Penalties
Mr Bhoola commented that no one could dictate to the judiciary, and the manner in which this section was phrased, created an impression that this was possible. If the regulations indicate that the person who fails to comply with the regulations was guilty of an offence, the question ought to be asked: what then? Would they put the person in jail? It looked as though the section overlapped the role of the court process.

Mr Mokgalapa pointed out that people would not be acting in their personal capacity. This section could not say “any person”; a person could be acting on a mandate of a protocol subscriber, or a person could have been nominated to be part of the steering committee. This person was not liable personally; the legal ramifications of this vagueness needed to be established.

Ms Ngcobozi said in terms of the Interpretation Act, a person would include judicial person acting on behalf of the company. She asked if the issues to be looked at were things that government could be best placed to deal with. Most of these were not legal issues but related more to drafting. Most of the questions raised would best be elaborated on by people from the Department.

The Chairperson said there were issues that needed clarification from the Department. This meant that the Department would have to be part of the Committee’s next meeting, where the process would be started all over again. The Committee could meet alone before that, and decide on a reworked document with the Legal Unit.

Consideration of minutes
The Committee considered its strategic business plan for 2013, and Members voiced satisfaction with the professionalism with which the document was prepared.

Mr Mokgalapa said this was an indication that these items did not need the intervention of consultants when people performed their responsibility. This was the work of the internal staff. The strategic plan was concise and clear.

The Chairperson suggested that a note be included in the report that the research unit for the Committee did a marvellous job in producing the document and that it was advisable that all Parliamentary Committees adopt the same approach.

The Committee deliberated on the outstanding minutes but could not adopt as the Members did not form a quorum.

The meeting was adjourned.