National Credit Amendment Bill [PMB1-2012]: Committee Report; Lotteries Amendment Bill: proposed amendments

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Trade, Industry and Competition

11 September 2013
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The meeting began with a brief discussion on the Private Member's Bill, the National Credit Amendment Bill.  The Chairperson read the Committee Report on this Bill which presented a review of the process the Committee had taken with this Bill to date. The Department of Trade and Industry had informed the Committee that it had embarked on a comprehensive review of the consumer credit policy to amend the Act. The Minister intended to introduce its own National Credit Amendment Bill within in 2013 into Parliament. Due to the introduction of dti's Amendment Bill, which would comprehensively address the challenges of the Act, the Committee rejected the Private Member's Bill.  The Democratic Alliance was adamantly opposed to the rejection of the Private Member's Bill as its view was that it was possible to make piecemeal improvements to an Act in the interim. This was especially as the Department had earlier indicated that it would not be able to bring a 'comprehensive review' Bill to Parliament before the end of this Fourth Parliament.

The Committee reviewed the Committee's Proposed Amendments (A-list) to the Lotteries Amendment Bill:
- There was much debate about whether the board (as stated in the introduced Bill) or the Minister should appoint the Commissioner. It was noted that the Commissioner after his appointment would be accountable to the Board. 
- Concern was raised about what qualified as serious misconduct when it came to the dismissal of the Commissioner.
- There was discussion on the role of the labour laws and the Constitution within the Lotteries Bill.
- There was much debate about the unexpected amendment proposing a large increase in the length of time - from two to eight years - that an organ of state could run the National Lottery if a private licensee failed. 

Meeting report

There was a brief update on Mr M Oriani-Ambrosini’s health status, his return date was uncertain and as such, the Chief Whip of the IFP was approached and Mr M Hlengwa was provided as a temporary alternate.

Committee Report on National Credit Amendment Bill (Private Member's Bill)
The Chairperson read the Committee Report on the National Credit Amendment Bill (Private Member's Bill  by Mr Mario Oriani-Ambrosini of the IFP).

The Committee Report provided a record of the process the Committee had followed with this Bill since it was introduced in 2012. The Department of Trade and Industry (dti) had informed the Committee that it had embarked on a review of the consumer credit policy to amend the Act. The Minister on 8 May 2013 informed the Committee of his intention to introduce the National Credit Amendment Bill in 2013 for consideration by Parliament. Due to the introduction of dti's Amendment Bill, which would comprehensively address the challenges of the Act, the Committee thus rejected the Private Member's Bill

The report was adopted by Mr B Radebe and seconded by Mr N Gcwabaza.

Mr M Hlengwa (IFP) noted that he had to relay what had happened during this meeting to Mr Oriani-Ambrosini first, before any comments were provided by the IFP.

Mr G Hill-Lewis (DA) noted the objection of the DA to the Committee's report as its view all along was that it was possible to make piecemeal improvements to a piece of legislation and that a comprehensive review was not always necessary. Secondly, earlier this year, the Department had stated that it was not possible to bring a 'comprehensive review' Bill to Parliament before the end of this Fourth Parliament. The presence of this Private Member’s Bill had hurried up the Department somewhat.

The Chairperson said that the Minister had said it was to be ready. Once Mr Oriani-Ambrosini had introduced his Bill, it did appear to expedite the process. 

Mr Hill-Lewis argued that the Committee Report suggested that the Department earlier in the year in March had stated that a long process was required. The Department had to conduct a comprehensive review, followed by a draft Bill being sent to Cabinet and then to the National Assembly. He said it was unlikely the Bill would arrive in the National Assembly before the end of the year. 

The Chairperson replied that there were two clauses in the Private Member's Bill; one clause they agreed to dismiss. The Committee agreed that they did not want to adopt piecemeal legislation. Equally, there was an agreement amongst the Committee for a comprehensive piece of legislation. There was also a need for speed and an early resolution around credit. There were mixed opinions amongst Members that the Private Member's Bill did accelerate the processes of the Department. 

The Chairperson addressed IFP alternate member, Mr Hlengwa, and stated that the Committee had regular communications with Mr Oriani-Ambrosini, and perhaps there was a lack of familiarity with the process by the IFP.

Mr Hlengwa replied that he was not implying that he was unaware of the processes but since it was a Private Member's Bill, he was affording Mr Oriani-Ambrosini the courtesy as a colleague.

National Lotteries Amendment Bill
The Committee was presented with the Committee's proposed amendments to the Lotteries Amendment Bill.

Adv Johan Strydom, dti Legal Advisor, informed the Committee that some of the amendments were very technical in nature and some were very minor; however, not all the amendments in the document were crystal clear. He went through the proposed amendments (see document) and the following comments were made:

Clause 4 inserting Sections 2A - 2G
Section 2A(5)
Rev W Thring (ACDP) recommended that ‘shall’ be retained instead of 'may' in Section 2A(5) which originally stated: "(5) The Commission shall [may]…."

Ms S van der Merwe (ANC) agreed that ‘shall’ must be retained, as it obliged the Commission. Perhaps the terms ‘not exclusively’ or ‘amongst others’ were required in order to limit the ambiguity.

The Chairperson noted general concurrence that ‘shall’ was retained over ‘may’.

Section 2B(1)
Mr Radebe (ANC) argued that the removal of power from the Minister in Section 2B(1) to appoint the Commissioner was not a good decision. What happened if there was no agreement between the Minister and the board?

Rev Thring argued that this section would not have been amended had it been successful in the past. He stated that it was not excluding the Minister, because if the Minister was to disagree with the opinion of the board, the decision could not go ahead.

Adv Strydom replied that in the current Bill, the Minister was obliged to consult with the board and only afterwards was able to a make to a decision. The current amendment, however, stated that the Minister was required to make the decision in consultation with the board and not afterwards.

Mr X Mabasa (ANC) asked what the motivation behind the amendment was.

Ms van der Merwe pointed out that the core question was who was accountable to whom. It was imperative that this aspect was perfected, as it was capable of impacting on accountability.

Adv Strydom replied that  was indeed of high importance and the appointment of the Commissioner itself was very important. If the appointment was made by a single functionary, the Minister, then it was not a decision based on a collective basis; whereas if it was to be made by the board, there was a broader collectivity. This issue related to a greater matter of governance.

Mr G Selau (ANC) asked what the difference between the board and the Commission was in this context.

Adv Strydom outlined that the two were fully separate legal entities with different functions and distinctly different responsibilities. Clause 4 clearly indicated the functions of the Commission.

The Chairperson pointed out that Members appeared unclear and there was a sense of confusion in the room.

Ms van der Merwe attempted to clarify matters. In the principal Act, what was then referred to as the National Lotteries Board would now be called the National Lotteries Commission. The Minister was responsible for the appointment of the members of the board that governed the Commission. As such, Section 2B(1) was considering the transfer of the appointment of the Commissioner from the power of the Minister to that of the Commission's board.

Adv Strydom noted that the Commission was governed by the board and as such was automatically assigned with a different responsibility. Given that the board governed the Commission, it made sense for the board to appoint the Commissioner.

Mr Radebe stated that the ultimate executive authority was the Minister and as such, preference was that the executive authority appoint the Commissioner, which was compared to a CEO. Perhaps in a broader aspect, it should be stated that after consultation with the board, the Minister was responsible for the decision.

The Chairperson noted that there had to be a specific person that was to be held accountable for the appointment of the Commissioner.

Rev Thring pointed out that further on in Clause 4, it indicated that the Commissioner was accountable to the board.

Mr Hill-Lewis stated that in most departments, it was not the Minister who appointed the CEO as Mr Radebe had argued; rather, it was the board who made the appointment.

Adv Strydom replied that there were many examples of the board appointing the ‘CEO’ and there was no clear line of what the better choice was for who held this responsibility. The Member was quite correct in pointing out that the Commissioner was accountable to the board, not the Minister, which was in line with the argument that the board should appoint the Commissioner. This amendment fell within the jurisdiction of policy, which was not in within his responsibilities as legal advisor. Currently, this was the policy stance adopted by the dti.

The Chairperson flagged this amendment for further discussion.

Section 2C(1)(d)
On the change in this clause "he or she is found guilty of serious [any] misconduct", Rev Thring asked if there were any guidelines for what may be considered misconduct, as even "serious" misconduct was relative. Was there a code of misconduct?

Mr Hill-Lewis asked if misconduct referred to criminal misconduct.

Mr Radebe asked if there were any written documents explaining what serious misconduct entailed.

Mr Selau reinforced the notion that misconduct was relative as any act was capable of being guilty in the eyes of different people.

The Chairperson asked what organ or state of law was responsible for deeming the Commissioner guilty of misconduct.

Adv Strydom replied that misconduct was not confined to criminal definitions. There was no written information that defined what misconduct entailed; it was open to subjectivity.

The item was flagged to see if qualifications were available to prescribe the level of seriousness.

Clause 5 amending Section 3
Section 3(1)(d)
Adv Strydom read the amendments which restricted the attendance of the chairpersons of the Distributing Agencies (DA) to board meetings that only concerned strategic planning of the DA.

Mr Hill-Lewis argued that this severely curtailed their ability to attend discussions. Why was it strictly relating to the strategic planning of the DA?

Mr Radebe agreed with Mr Hill-Lewis that they should not be restricted only to strategic planning meetings.

Adv Strydom referred to the clause preventing public servants from being on the board "except the Minister’s representative". He said that "except the Minister’s representative" should be omitted as it was obvious that the Minister’s representative was likely to come from the public sector regardless.

Mr Hill-Lewis asked that if a board member received remuneration for attendance at meetings, then were they not paid by the State? As such, if they were paid to be board members. Were they not then members of the public?

Adv Strydom replied that there were many instances where board members were remunerated by the State but were not deemed members of the public service.

Clause 6
 Adv Strydom read Clause 6 to the Committee regarding the power of the Minister to suspend or terminate the board membership of a person.

Mr Selau noted that the Labour Relations Act required that there should be a fair hearing before any termination. He did not agree with Section 3(C)(3) in Clause 6 that allowed for instant dismissal.

The Chairperson agreed that the termination of a member would have to fall within the constitutional framework.

Adv Strydom replied that termination processes were under the constitutional framework and that labour laws would to play a role regardless of the situation.

Adv Theo Hercules, State Legal Advisor, also replied that any disciplinary aspects of this clause were subject to the Labour Relations Act regardless and as such, there was no need to make reference to the Constitution within the amendments.

Mr Radebe with regards to Section 3(C)(2) asked for clarity on the definition of a "life partner".

Adv Strydom replied that legal language was dry as dust and asked for the liberty to state that it must be respected that this was the terminology for living with a partner for an extended period of time. This was recognised by matrimonial laws a few years back. There was equal recognition for a spouse and a life partner if it was proven that the relationship met the requirements of a life partner.

The Chairperson asked for an explanation of what the minimum period was to be recognised as a life partner.

Rev Thring argued that perhaps the terminology should be life partner or partner as there were some cases where they were not life partners but were benefiting from the position of the other.

Clause 13
Section 13A(1)
Adv Strydom read the proposed amended insertion to replace the omitted statements for both clauses. Section 13A(1) stated: "… the Minister may, after consultation with the board, licence or authorise an organ of state to conduct the National Lottery for a period not exceeding  eight [two] years,
Mr Hill-Lewis stated that the argument made within this Committee was that the purpose of this clause was only for situations as in the past when the licensee was unable to operate their functions, and a State entity was then required to step in to fulfill those functions. However, there was no circumstance possible for this to last for eight years. He argued that the original suggestion of two years should be reinstated, as it was an appropriate period of time in which the Department could find a replacement licensee.

Adv Strydom pointed out that this was another policy matter, which fell beyond his functions. To his understanding, Section 13A(1) suggested that if the Minister was unable to find a suitable replacement licensee, then the Minister is allowed up to eight years to make the appointment.

Rev Thring agreed with Mr Hill-Lewis.

Mr Radebe stated that if the Minister appointed an organ of state and it was functioning well, then what was the issue of having an organ of state?

Mr Hill-Lewis said that there was certain justification for the concern. The basis of this clause had been to this day, that an organ of state was to be appointed to ensure the continuity of the National Lottery; an aspect that was agreed with. However, the proposed amendment allowed the temporary appointment of the State to last as long as eight years. Mr Hill-Lewis argued that there was no circumstance where the Minister was unable to re-advertise and appoint a new licence within a period of two years.

The Chairperson noted that this was a policy position outside of the role of Adv Strydom and as such, this item was flagged for further discussion.

Adv Strydom presented item two of Clause 13, which omit subsection (2) which stated that the Minister was required to have justifiable grounds in not making the appointment as envisaged in terms of the Act. It substituted this:
“(2) In deciding whether justifiable grounds contemplated in subsection (1) exists, the Minister may take into consideration several factors including but not limited to:
(a) the continuous display by licensees of their inability to comply with the terms and conditions  of the licence to the satisfaction of the Minister;
(b) the continuous display by licensees of their inability to contribute  to the growth of local industries and procurement of goods from local manufacturers;
(c) the continuous display by licensees of their inability to transfer  skills and technology to the citizens of the Republic of South Africa; or
(d) the continuous display by licensees of their inability to comply with the legislative framework for the promotion of broad based black economic empowerment and transformation”.

Mr G McIntosh (COPE) expressed great concern with Clause 13, as it was perceived to give the Minister an opportunity to have a legal coup d’état. Running a National Lottery was a highly difficult function that required many skills. The National Lottery was the money of South Africans and not that of the government or taxpayers; rather it was a way for the people to indulge a sin that was then used to provide for good causes. He noted great discomfort with an organ of state running the Lottery and the amount of power allocated to the Minister. It was accepted that an intervention by the state was potentially required to avoid the collapse of the lottery. However, the proposed intervention was far too radical.

Ms van der Merwe replied that the Lotto was a game, not a sin; perhaps a game of chance but not a sin. There was an onus on the Minister to demonstrate the inability of the licensee to contribute to growth. The Minister was responsible to fully demonstrate the failure before any intervention by the State.

Mr Hill-Lewis noted that it was important to remember that the Bill had not included any of these provisions and were now supposedly included as "requirements to make the Minister more accountable rather than more powerful".

Rev Thring commented that the ACDP agreed that the lottery was a sin; however, given the good causes funded by the Lottery, they accept it.

Mr McIntosh stated that he was now convinced of the important role that the lottery played despite the sinful behaviours and compared it to the Catholic Church, in their opposition to fornication, they provided the largest number of houses for unmarried mothers.

The Chairperson pointed out that Committee at large did not support gambling but was in the position to regulate the industry.

[Following tea break, the Chairperson noted that the departure of some members led to a lack of quorum and as such, no decisions were to be taken during the duration of the meeting.]

Clause 14 (15)
Adv Strydom noted that it was not in fact clause 14 but rather clause 15. The third amendment here omitted lines 48-52. The legal consequence of this omission was that the original wording in the principal Act was to be retained as is.

Clause 24
Adv Strydom proposed that the first proposed amendment be omitted from the A-list because the term ‘agency’ was to be expressed in the singular not plural, as it was a singular institution.

Section 26B(1)
He noted that the proposed amended term ‘receiving’ in the insertion should be omitted.  

Clause 26, 27, 28, 29
All these clauses covered the topic of the Distributing agency. The function of distributing the funds was the function of, as the name says, the Distributing Agency. The amendments proposed that in future, that function was not to be performed by the Agency; rather the Agency was to adjudicate applications. The actual distribution of the funds was to be dealt with by the newly appointed Commission. The name Distributing Agency was to become redundant.

The Chairperson asked if these amendments addressed the issues that have been experienced by the Distribution Agencies in the past.

Mr McDonald Netshitenhe, dti Chief Director: Policy and Legislation, replied that the Commission was to be the right "committee" to distribute funds, which would to solve the issues of the past.

Adv Strydom noted that Clause 30 was in essence already discussed within the previous clauses and previous principles discussed.

The Chairperson outlined that some of the issues raised were by the DA and COPE who were no longer present and they would be required to be present to discuss them.

The meeting was adjourned.


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