Lotteries Amendment Bill: Department's response to submissions

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Trade and Industry

09 September 2013
Chairperson: Mr N Gcwabaza (Acting Chair)
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Meeting Summary

The dti provided their written responses to the submissions made during the public hearings. There was a brief presentation made that covered the response of the department on a few of the main topics. It was indicated that there was much repetition within the written submissions and as such there was repetition in the responses of the Department. The main themes that emerged were regarding issues of accountability, disbursement of funds, differentiation of the National Lotteries Board as an institution and the Board as a functioning body, the role of the Board, internal review mechanism and the appointment of an organ of state.

Members asked that they hold off on the discussion until the responses were included in the final draft. This was requested in order to allow for fine tenement of the actual wording, as the process had been highly comprehensive. The final draft was to be presented at the next meeting with the Committee.

Meeting report

Mr N Gcwabaza was the acting chair for the Committee during the meeting as the Chairperson was called to another meeting with the Mozambique delegation.

DTI Written Response to Submissions
Mr MacDonald Netshitenhe, Chief Director at the dti, presented on the written responses made by the Department with regards to the submissions made during the public hearings. It was indicated that the document was to be used generally with brief explanations, as there was much repetition of themes within the submissions. The main themes that emerged were regarding issues of accountability, disbursement of funds, differentiation of the National Lotteries Board as an institution and the Board as a functioning body, the role of the Board, internal review mechanism and the appointment of an organ of state. The following were clauses that were addressed during the presentation, more detail available in the attached document.

Clause 5
Mr Netshitenhe provided the response of the dti with regards to this clause on the term of office for Board members. The South African Institute of Professional Accountants had commented that a 10 year possible term was too long and perhaps was to lead to excessive power. As such, the dti replied that the wording of the clause was to be changed from ‘shall be eligible for appointment’ to ‘may be reappointed for the last term for a further period of five years.’ This indicated that there was no automatic reappointment.

Clause 10
NEDBANK/ Private Wealth, Parliament had commented on this clause and recommended that the Lotteries appointed an appeals panel that was completely independent from the Board. Mr Netshitenhe replied on behalf of the dti that the Review and Appeals process already existed informally and the clause was only put in the Bill to formalise the process. The instilment of a separate structure was to likely to come at a high cost.

Clause 13
Mr Netshitenhe indicated that the Endangered Wildlife Trust had recommended that the appointed body to oversee the National Lottery was an independent entity. The Department clarified that an organ of state was only to be appointed as an operator if private licensees failed to comply with national objectives such as the BBBEE, localised procurement as well as skills and technology transfers. Furthermore, the Funding Practice Alliance (FPA) showed great concern with the clause 13 in the Amendment Bill as it was perceived to be leading towards a state lottery and that the distribution of funds was to become guided by Government plans and priorities. In response, the dti stated that South Africa did not operate a State run Lottery and repeated that the State was only to interfere in the event of a failure by private licensees.

Clause 24
In response to the Endangered Wildlife Trust comment that the Minister was to remain responsible for the appointment of members of the Distributing Agency (DA) but within a timeline, Mr Netshitenhe stated that it was not an issue. This comment was achievable as the amendment stated that members of the DA were to be appointed as full time members for a period up to five years. In addition, the submission by Mr Paul AH Hjul on Clause 24 indicated that the Bill did not offer clarity on whether the DA was to adjudicate funds as a group or as individual members. In response, the dti stated that the Minister in collaboration with the Board was responsible for establishing the quorum per category or size of the grant. Further details on this issue were to be provided for in the Regulations. Clause 24 also included issues of accountability. In this regard, Mr Gordon Mc Donald had commented, as a member of the Distribution Agency, that the role of the DAs required further clarification and separation from other bodies. As such, Mr Netshitenhe replied that the DAs were solely accountable on issues of administration alone. The DAs were to be independent from the Board in terms of adjudication.

Mr Netshitenhe replied on the issue of conduits. The FPA and the Chairperson raised comments regarding the role of conduits and the lack of clarity associated with it. The dti replied that the provisions made it clear on what the role of a conduit was, as it provided for those who applied on behalf of another person or organisation. The dti did however indicate that this was not a favoured practice and that ideally, all beneficiaries would become empowered to deal directly with the lottery fund.

Clause 29
Mr Netshitenhe addressed concerns from the Catalyst for Social Justice regarding the lack of clarity on the funding criteria of the Miscellaneous category. He indicated that Miscellaneous funding was to fund all good cause applications that were not covered in other categories.

General Comment
The FPA commented that the Lotteries Act lacked a clear statement of intent regarding the long-term purpose of the National Lotteries Distribution Trust Fund. The dti noted and supported this comment. It was proposed that the Purpose of the Bill must also provide that Lottery funding was intended to fund good cause projects.

The FPA had also generally commented that the call for applications should be staggered throughout the year. It was said that this would assist in the prevention of backlog and overwhelming numbers. If agreed to, the NLB was then asked to publish these respective dates at the beginning of the year, which was to allow organisations to submit their applications at a time that was aligned to the start of their project cycles. The dti responded that with the new fulltime appointment of the DAs, the application process was to be changed to an open call for continuous applications and adjudications.

Ms S van der Merwe (ANC) asked if the responses had already been included in the draft.

Advocate Johan Strydom, legal advisor for the dti, replied the redrafting had only just begun and was to be ready for the following meeting.

Mr B Radebe (ANC) noted that the dti was only prepared to discuss their responses and not the amended A-list. 

Mr Gcwabaza, acting chair stated that he wanted to afford Members the opportunity to raise any issues in relation to what had been covered by the Department during the entirety of the process.

Ms van der Merwe indicated that it was difficult to comment at that stage without looking at the final draft. The process was very comprehensive thus far and it was difficult to point out if anything was missing at that stage.

The acting chair stated that the Committee was then allowing the Department the time for preparation for the following meeting.

The meeting was adjourned.


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