Lotteries Amendment Bill [B21-2013]: deliberations

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Trade, Industry and Competition

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

The Committee reviewed changes made to the Lotteries Amendment Bill. After discussion, Members accepted the definition of 'life partner' as contained in other legislation. A restraint had been placed on employees of the Lottery from taking up employment with beneficiary organisations, and from applying for a licence or grant. Members proposed a change imposing more stringent conditions on the Commissioner than on ordinary employees.

The Department of Trade and Industry had added a provision that a grant could be stopped if it had been obtained in a fraudulent or misleading manner. There was some discussion over clause 12, which provided for the possibility that the licence could be given to an organ of state, and the implications of sub-licensing. The Department requested some time to consider the questions posed by Members in this regard.

On clause 24, there was some discussion as to what a good cause would be for an application to be made by a third party. It was agreed to leave this open to interpretation and verification by the board should such an occasion arise.

Clause 31, a proposal to delete section 33 of the Act, had been rejected. An alternative clause was proposed which would empower the Minister to take action to recover any grant that had been obtained under misleading or fraudulent circumstances. While the powers of the Minister to take administrative action were not defined in the Bill, it was accepted that these would be exercised in accordance with the guidelines of the Constitution.

A new clause 32 was put forward, enabling the Minister to make regulations. Members queried the lack of a fixed time period for this to be done, as regulations were essential to the functioning of the Act. Only an aggrieved applicant could ask for a review of a decision, and there was no appeal process.

Meeting report

Lotteries Amendment Bill: deliberations
The Chairperson asked Mr Hill-Lewis if he still wanted to put forward his amendment.

Mr G Hill-Lewis (DA) did wish to proceed with the amendment, despite the majority of the Committee not being present.

Mr G McIntosh (COPE) had to leave early and wished to be part of the decision making process.

The Committee Secretary explained that the Committee would meet the following day again. That would be an another opportunity for Members to bring amendments.

Ms Zodwa Ntuli, dti Deputy Director General (DDG): Consumer and Corporate Regulation,  introduced the presentation.

Adv Strydom said that they had been busy with the A list for a while, and had dealt with the essence of what was on the list. There was an incorrect impression from the colour usage that there was still a lot to be debated, but this was not really the case. There was agreement on most of these issues. He asked the Chairperson for guidance.

Clause 1
Adv Johan Strydom, Law Adviser, Department of Trade and Industry (dti), said that the definition of the agency had been discussed. The definition had been amended to describe a 'distributing agency'. This could not be any government department whether national or provincial.

The Chairperson noted the agreement of Members. There were no changes to be discussed in clauses 2 and 3.

Clause 4
The Chairperson noted that clause 4 had been cleaned up as suggested by Members.

Adv Strydom referred to the flow chart between the Minister, the dti and the Board. These amendments were all consequential to that discussion.

The Chairperson read through the remaining changes to clause 4. The words 'life partner' would be deleted from page 6 line 32.

Adv Strydom said that a life partner of someone who had received a grant would be precluded from future benefits. The basis for distinction between a spouse and a life partner had to be investigated. In the Pension Funds Act, a spouse was defined as including permanent life partners, and those united in civil unions, customary marriages and other forms of marriage.

The Chairperson had not seen the document to which Adv Strydom referred. This had been distributed some time previously and had not been referred to during the meeting in question. The failure to send a copy of a document to her had led to a report having to be recalled from the ATC process. The definition of spouse covered a life partner. She asked if a life partner was defined anywhere.

Adv Strydom had referred to other Acts. It was a matter of fact and circumstance. A woman wishing to claim a benefit under this provision of the Pension Funds Act would have to prove a relationship.

The Chairperson found this disturbing. Many spouses did not live together, and their marriages were often matters of tax avoidance.

Mr McIntosh had received correspondence from his bank about persons co-habiting. The bank suggested that such relationships be regulated in some manner in order to avoid future complications.

The Chairperson said that even Members found it difficult to live together with their spouses because of their work commitments.

Mr Hill-Lewis said that this matter had recently been the centre of an ethics hearing. He proposed that 'life partner' be replaced by 'co-habitant'.

The Chairperson did not want to touch on the nature of relationships. As life partner was already defined elsewhere in law, that should be sufficient.

Rev W Thring (ACDP) asked if the legal experts would fine tune the clause, or if this would be left broad.

Mr Theo Hercules, State Law Adviser (SLA), agreed with Adv Strydom that 'life partner' was a recognised term. The courts had determined a time span. There were various other areas of law applicable.

The Chairperson was assured on this matter.

Mr Hill-Lewis asked if the reference to the payment of a grant occurred elsewhere in the Bill.

Adv Strydom read from the clause. This sub-clause read that any person such as a life partner or immediate family member could not accept employment from anybody receiving a grant or other benefit for a minimum of 24 months.

The Chairperson quipped that life partners were leading Members in the wrong direction.

Mr Hill-Lewis said that the clause was in fact referring to any person who had applied for a licence rather than a grant. He proposed that the reference to a grant should be included.

Adv Strydom agreed but was not authorised to pronounce on this. He might have made a mistake in reading the clause.

Mr Hill-Lewis proposed that the word 'grant' should be included in the exclusions.

Mr B Radebe (ANC) said that there had been a case of a person who had worked for the Lottery subsequently taking up employment with a beneficiary. The commissioner could be treated differently to ordinary employees.

Mr McIntosh said that restraint of trade was a standard thing. It would be juristic person who applied for a grant. He likened Mr Hill-Lewis to a rabbit running off in a different direction.

Mr Radebe said that there should be a certain stipulation on the matter of restraint of trade regarding a commissioner.

Ms S van der Merwe (ANC) said the restraint of trade proposal was to prevent employees of the Lottery and their immediate families from applying for a licence for a 24 month period after ending their employment. It was going too far to suggest that such persons should be disqualified from, or being associated with, applying for a grant.

The Chairperson proposed that this clause should remain as it was, but a new clause should be imposed on a commissioner including a disqualification from applying for a grant.

Ms van der Merwe raised the example of a bad commissioner who could use his wife to apply for a grant to which he was not entitled. Government wanted to prevent people from doing the wrong thing.

Mr Radebe said that a commissioner should not be allowed to go directly into the employment of a beneficiary.

The Chairperson said that a real crook would always beat the system.

Dr W James (DA) supported the proposal. The constraint was limited, but it would be wise to place it.

The Chairperson instructed the dti to draft such a clause.

Mr Hill-Lewis said that there had been a phrasing amendment on page 4 line 10. He asked what 'agreed' meant in this context. It might refer to a shorter team.

Adv Strydom said that 'agreed' would be in terms of a contractual agreement.

Mr Hercules proposed a wording change to 2C(1)(a).

Adv Strydom apologised. The suggestion of Adv Hercules had already been adopted but not reflected on the document. This was in item 10 of the A List.

The Chairperson noted that there were no matters to discuss under clauses 5 and 6.

Clause 10
Adv Strydom said that page 9 lines 37 to 48, paragraphs (q), ( r ) and (s) had been deleted. These were not functions of the Board, and were included elsewhere in the Bill. The power conferred to in (s) was in fact a Ministerial power.

Mr Hill-Lewis remembered the deliberations differently. The recommendation had been to change the power to fulfil the function to being a recommendation to the Minister.

Adv Strydom said that the power was described in the proposed section 33. The Board could only make recommendations on this matter. From line 51 on page 9, paragraph (u) had been removed for the same reason as these were functions of the Commission. A new sub-section (5) would be introduced to provide that a grant might be stopped if it was obtained in a misleading or fraudulent manner. This had not been part of the previous day's discussion.

Clause 12
Mr Hill-Lewis had submitted a question on section 13 (4). The question was on the way a third party could be licensed to function as an organ of state. He had four questions. He wanted to know what process was to be followed. There might be a need to set out the processes to be followed and how the organ would be funded, as there did not seem to be any difference to similar processes described elsewhere in the Bill. Secondly, he wanted to know what would happen to the revenue if a state organ was used, and what would happen if this function was sub-licensed to a third party. Finally, he asked how this state organ would be created and the head appointed. They were complex questions and he was happy to let the dti consider them overnight.

The Chairperson noted that the question had been raised and the dti should have applied their mind to it. A lot of time had been spent on the issue. Some of his questions were new. The second and third questions were new.

Ms Zodwa Ntuli, Deputy Director-General (DDG), the dti, replied that the same conditions would be applicable. The delegation would need some time to consider these questions. The matter had not been considered beforehand. They would respond the following day.

The Chairperson said there were no issues under clause 13.

Clause 22
Adv Strydom did not want to raise any issues under clause 22. The only matter was the sequence of words, which had been dealt with.

Clause 24
The Chairperson said that section 26B would be substituted.

Adv Strydom read the proposed clause. This dealt with the responsibilities of the distributing agency. The only other thing was the proviso in (2) that the maximum number of agency members would not exceed nine. The Minister would determine the actual number.

Adv Strydom said that on page 16 lines 3 to 11 paragraphs (b), ( c ) and (d) would be omitted. These covered aspects of concerning the process of grants. These matters would be better placed in the Regulations. The same applied to paragraph (I) in line 23.

Rev Thring asked if the numbering regarding page 14 was correct.

Adv Strydom said that there was no correlation in the numbers of clauses and sections.

The Chairperson accepted that the numbering could be confusing.

Adv Strydom said that a new section 26G had been proposed. This would make provision for the board to review a grant should there be an application from an aggrieved applicant in the prescribed manner. This avenue would not be open to the general public.

Mr Hill-Lewis asked if the dti had applied their minds to the understanding of what a 'good cause' was.

Adv Strydom said that this had been discussed. Unlike in the other part of the Bill where there was a list of justifiable grounds for not appointing a certain person to conduct the lottery, there was a different issue here. 'Good cause' could mean many things. It would, however, be unwise to try to define what was meant. This understanding should be kept as open-ended as possible, and the agency would have to apply its mind.

The Chairperson said that the matter had been raised.

Mr Hill-Lewis was grateful for the explanation, but asked how one could show that one was incompetent to make the application and had delegated this to a third person. He found this difficult. The applicant would have to explain to the agency why he was incompetent.

Mr N Gcwabaza (ANC) said that it should be left to the applicant to show this. It would be difficult to capture the concept either in the Bill or the regulations.

The Chairperson said that this sort of thing was happening all the time.

Mr Gcwabaza said that the distribution agency might want to verify the reason offered by the person. It would do no harm to include this in the Bill.

Ms Ntuli said that there must be an assessment of the reasons provided. There could be any number of reasons, such as the size and capacity of an organisation. On the other hand, the reasons could be fraudulent.

Clause 31
Adv Strydom noted that the existing clause 31 had been rejected. This made provision for section 33 of the Principal Act to be repealed. He put forward a new clause 31 that would amend section 33 instead. The Minister would be empowered, on the recommendation of the Board or any other person, to prohibit, withdraw or reduce certain grants or impose certain conditions. This could happen at any point in time.

The Chairperson asked how this would read.

Adv Strydom said that there should not discretionary. The Minister should be compelled to act in such a circumstances.

Rev Thring asked if the 'any such conditions' were guided in terms of the law in any way. This was a very broad statement.

Adv Strydom said that no Ministerial power could be exercised in a legal vacuum. Section 32 of the Constitution stipulated what was fair and equitable administrative action.

Mr Hill-Lewis recalled the discussion. He asked if the Minister would be able to attempt to recover funds.

Adv Strydom said that the Minister could also resort to civil claims to recover grant funds.

Mr Lonwabo Sopela, Law Adviser, Parliament, said that it was also a function of the Commission to recover grants that were withdrawn or prohibited.

Clause 32
Adv Strydom introduced a new clause 32. This would make provision for the Minister to make regulations and was found on page 19 line 2 of the principal Act. The insertion was that this would be done after consultation with the board. The existing wording was 'with the concurrence of', and the board could hold the Minister to ransom. He was not suggesting that there should be no consultation. The Committee had decided that an aggrieved applicant should have the power to review but not appeal a decision. This was in line 5. In line 10, two new paragraphs ( c ) and (d) would be inserted. The first referred to the period for application being finalised and the second to any other process for the application for grants.

Mr Hill-Lewis said that a time period was sometimes stipulated in regard to the Minister making regulations. There did not seem to be a time period in this case. The principal Act also said 'may'.

Adv Strydom agreed that there was no time period stipulated in the principal Act.

Mr Hill-Lewis asked why this was the case.

Ms Ntuli replied that if there was a proposal to consider a time frame it would be considered. The standard practice was 30 days.

The Chairperson said that sometimes legislation was inoperative without the related regulations. Some of the regulations were already in place.

Ms Ntuli agreed, but there would be considerable amendments once the Bill was adopted.

Dr James commented that (d) was very clumsy. He submitted a differently worded proposal of “any other process that facilitates the efficient allocation and distribution of grants”. In clause 1 he also proposed that (f) should read “but shall exclude and national or provincial departments.”

Clause by clause consideration
The Chairperson said that there had been a few changes to the A list.

Ms Ntuli made a different proposal. In the definition of a 'distributing agency' she accepted the proposal put forward by Dr James, but it should specify that a national or provincial government department should never be appointed as a distribution agency.

The Chairperson said that the changes to clause 10 had been discussed.

Adv Strydom agreed with the proposed change to clause 32 4 (d).

The Committee Secretary explained the procedure for the meeting the following day.

The Chairperson said that the amendment proposed by Mr Hill-Lewis would be deferred until the printing process by Creda Printers was complete.

The Committee Secretary explained the proof-reading process. The Committee was due to consider the Bill on 3 October 2013.

Mr Radebe said that many matters had been referred to the regulations. He requested that the Committee have sight of the regulations before they were published.

The Chairperson agreed. Regulations would be a key part of the legislation. The Committee also needed to address the Legal Metrology Bill.

The Committee Secretary outlined the Committee's programme for October.

The meeting was adjourned.


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