The Department of Science and Technology (DST) in collaboration with the Parliamentary Legal Services had effected amendments to the Science and Technology Laws Amendment Bill. The Portfolio Committee met to deliberate on these amendments. The Department’s objective was to harmonize the provision of the Act so that the appointment processes for Chief Executive Officers (CEOs) and Board Members could be a standardised process across all entities. It was also stated that the Bill would remove the Committee’s recommending process, even though its constitutionally-mandated oversight would not be affected.
The Parliamentary Legal Advisory team mentioned the importance of the harmonisation of the laws relating to Chief Executive Officers of all the entities. The team had prepared the amendments to the processes for the appointment of Chairpersons of the Board and this was to ensure that the process was harmonised. The team also indicated that according to Clause 3(10) (i), the team had to make sure that all the entities were the same, as was tabled before the Committee and that the person to be appointed as a CEO was suitably skilled and qualified. The Committee also deliberated on Clause 3(5) where the Committee asked for clarity on what happened if the CEO was absent for a period of two months or less. It was agreed that in such an instance, there was supposed to be consultation with the Board about the absence of the CEO and a senior employee of the organisation should automatically take over.
The Parliamentary Legal Advisory team also admitted that there was a need to include other criminal activities that involved elements of dishonesty into the standard for disqualification during appointments. Clause 1(10)( A) (a) indicated that “if a person has been convicted of a crime and sentenced to imprisonment without the option of a fine”. The team explained that this meant if an individual was convicted but with an option of a fine, then it was not sufficient for exclusion from appointment. However, if a person was convicted without an option of a fine, then that could be construed to be good for automatic exclusion. With crimes like fraud and corruption, even if there was a fine involved, were regarded as good for exclusion.
The Members of the Committee were satisfied with the proposed changes to be included in the redrafted Bill. The Bill would be finalised on the 05 February 2014 and all the changes would be effected and the Committee would then take a decision on its oversight role with regard to the amendments.
Opening remarks by Chairperson
The Chairperson welcomed Members and participants and apologized for the late starting of the meeting which was caused by an unexpected power outage. Apologies were received from Ms S Plaatjie (COPE) and Ms P Mocumi (ANC). The Chairperson then called on the Parliamentary Legal Adviser, Dr Barbara Loots, to take the Committee through the relevant sections of the Bill.
Deliberations on the Science and Technology Laws Amendment Bill
Dr Loots said the amendment on sanctioning of the oversight role and the oversight power of the Committee was highlighted in green on the Draft Bill as in the provided document. She said Mr Brian Muthwa, Chief Director of Legal Service in the Department of Science and Technology was to take the Committee through the proposed amendments. Mr Muthwa was also going to respond to the issues on public submission that the Committee had received and the Committee’s role in terms of regulations.
The Chairperson thanked Dr Loots and handed over to Mr Muthwa.
Mr Muthwa said the Parliamentary Legal Advisers were tasked to look at the harmonisation of the issue relating to the Chief Executive Officers of all the entities, so the team had prepared the amendment relating to the appointment of the Chairperson of the board to ensure that the process was harmonised. He indicated that the team had to make sure that all the entities were the same, as was tabled before the Committee and that the person to be appointed as a CEO was suitably skilled and qualified and more importantly, the appointment had to be done after following a transparent and competitive process. The CEO was responsible for the management of the affairs of the entity and should report to the Board on those affairs that the board required him or her to report on across all the boards. Mr Muthwa also emphasized that the CEO was eligible for re-appointment for further periods and the conditions of service, including the remuneration and allowances were mainly done in consultation with the Minister of Science and Technology. The next issue was that CEOs had to sign performance agreements with the Boards within three months of taking up the post and if the CEO was absent for a period of more than two months, the Board may, in consultation with the Minster appoint an employee of the Council of Scientific and Industrial Research (CSIR) to act as CEO during that period.
The Chairperson asked whether the person who could be appointed should not come from within the Board.
Mr Muthwa replied that the person should come from the organisation, as he/she would be an employee of the organisation. The Board could not appoint someone from outside the organisation to act as CEO and this was consistent throughout all entities. The person to act as CEO was to be given all the powers and privileges of the CEO for the period of appointment.
The Chairperson asked about the remuneration to be given to the acting CEO.
Mr Muthwa replied that the issue of remuneration was not provided for. Instead it was left to the Board since it appointed the acting CEO in consultation with the Minister. If the CEO was absent for the period of more than two months or if there was a vacancy. If the absence of the CEO was less than two months, then the Board did not require the concurrence of the Minister to appoint as it was for a short period of time. He explained that these were the requirements and processes that needed to be followed in the appointment of CEOs in all the entities and all these processes were harmonised.
Dr J Kloppers-Lourens (DA) asked why the Board could only appoint a suitable employee if the CEO was absent for two months. Why was it specifically two months? Was this period the same in all other government positions?
Mr Muthwa responded that the team had to make sure that what applied in one entity also applied in the other entities and in most of the agencies, the requirements were already in place and the agreement was that two months was the standard period. However, the team did not get into questioning the issue of the reason behind two months or less than two months period.
Mr M Nonkonyane (ANC) asked why the team deleted Clause 3(2), which stated that “the CEO shall be the Chairperson of the Executive Management Committee and in collaboration with the Executive Management Committee” as this was a principle that was so appealing and progressive thinking in his opinion. As in any corporate environment, the CEO worked and coordinated the management, as he/she was the one who appointed potential employees. He was confused by the fact that the CEO was not allowed to act with the Executive Management. He questioned the rationale behind the two months and less than two periods, specifically the reason for the involvement of the Board in the first place if the absence of the CEO was less than two months, as he assumed that the most senior employee should take over automatically.
Mr Muthwa replied that the reason for the deletion of Clause 3(2) was that in a normal corporate and government environment, there would be a CEO accountable to the Board in the management of the entity, and the CEO will have the powers to appoint the management structures to assist him/her.
The Chairperson agreed that it was normally acceptable in a corporate and government environment that the Executive Committee should be responsible for the management of the CSIR and should report on those affairs to the Board as may be required of him/her by the Board. He indicated that this was acceptable as it was evidence that the CEO was still acting with the management in accordance to the Board.
Mr Muthwa said with regard to the question on remuneration and allowances for the acting CEO, there were established Committees such as remuneration committees and such Committees developed a remuneration policy which applied to the organisation. The understanding here was that the remuneration and conditions of employment whether acting or not will be determined in accordance with the remuneration policy of the organisation. He did not see a need to indicate in the Act that the Board will determine the remuneration and allowances.
The Chairperson said he supported Mr Nonkonyane’s question, as he believed that in case the CEO was absent for a period of two months or less the most senior employee should indeed take over automatically or the CEO could appoint someone to act in the period of absence.
Dr Kloppers-Lourens said she was also baffled by the two months period and noted that it was important to be aware of the rationale behind the two months process, and whether this was accepted without any questioning.
The Chairperson noted that the Committee had a right to change the two months period to make it suitable for everyone. Therefore, the questions did not necessarily have to be answered by the team of Parliamentary Legal Advisers. He indicated that if the CEO was indeed absent for a period of two months or less, there was no need for the involvement of the Board as the most senior employee should automatically take over.
Mr Marhia Mulealy, Adviser to the Minister of Science and Technology argued that in standard corporate management, if the CEO of an organisation was away for a period of time, the CEO will not just disappear without the Board knowing about. Therefore, in this case the CEO will notify the Board about his/her absence for a period of time and they can appoint a suitable candidate to act as CEO. This was not a major Board process, but to make sure the Board was informed that whoever was acting in an organisation during that period was nominated by the CEO. He also felt that a month’s absence of the CEO was not a major issue, but two months was getting into a major concern for the organisation.
The Chairperson agreed with Mr Mulealy’s statement as this was different from saying the Board must sit down and appoint a CEO if the duration of absence was two months. There was supposed to be a consultation with the Minister if the absence was six months. In essence, the Chairperson also agreed that if the CEO was going to be away for a period of time then the Board needed to be notified.
Ms Nombuyiselo Mokoena, Department of Science and Technology Deputy Director General said there was supposed to be consultation with the Board about the absence of the CEO under any circumstance.
Mr Nonkonyane questioned the reason for consultation with the Board.
Ms Mokoena responded that this was a standard principle.
Mr Nonkonyane questioned who was responsible when things go wrong in the organisation. He also wanted to ascertain whether the person who was had been acting as a CEO for a given period of time was offered any remuneration or allowances.
The Chairperson indicated that the Committee agreed already on the absence of the CEO, however, there was no full conclusion that was reached on the issue relating to two months absence.
Ms Mokoena said the reason for the consultation with the Board about the absence of the CEO was to align it with actual procedure in the appointment of the CEO, as the CEO was appointed by the Board, therefore, the acting CEO must be either appointed by the Board or can be appointed by the CEO in consultation with the Board.
The Chairperson asked if it meant that if the CEO was absent for a period of two months or less, then the acting CEO must be appointed by the incumbent CEO in consultation with the Board.
Ms Mokoena agreed that the Chairperson had provided a proper wording which was more appropriate.
Mr Mulealy explained that if the CEO intended to be absent for a period of two months he/she must consult the Board on the appointment of a suitable candidate to act as a CEO in the period of absence and this was simply capturing what would happen in any corporate environment.
The Chairperson said this was acceptable.
Dr Kloppers-Lourens questioned the ambiguity of the wording “if the CEO intends to stay away” as the CEO cannot intend to stay away, as it might happen that the CEO was involved in an accident and he/she was unable to contact the Board.
Mr Mulealy responded that the Committee could change “intention” to whatever the reasons for the absence of the CEO. This was to avoid ambiguity.
The Chairperson said he was still worried about what happened if the CEO was involved in an emergency situation and he/she was, maybe, hospitalised and could not contact the Board under the circumstances. He said this it was of critical importance for the Committee to formulate wording that will deal with a situation where the CEO could not consult the Board due to an emergency such as hospitalisation.
Mr Mulealy responded that the matter was not to try and over specify the responsibility of the Board, as the Board was responsible for the appointment of the CEO. If the CEO was involved in a terrible accident and could not execute his/her duties for a long period of time, then an acting CEO could take the position of permanency in consultation with the Board.
The Chairperson asked if everyone was satisfied with Mr Mulealy’s suggestion.
The members of the Committee agreed with Mr Mulealy’s suggestion.
Dr Kloppers-Lourens asked for clarity with regards to Clause 3(3) of the Principal Act where the wording was “an employee” but in the Draft Bill Clause 3(4) and (5) also referred to “an employee”. She wondered if this was supposed to correspond with the Principal Act. She also asked if these entities had Deputy CEOs or not. The wording “an employee” was problematic as it could mean anybody within the entity.
Ms Mokoena replied that the structures of the organisations varied as there were organisations with Deputy CEOs and there were those with General Managers reporting to the CEO. Hence there were also organisational structures where the CEO was at the same level as the General Manager. Therefore, the wording “an employee” was to accommodate whatever structure each organisation had.
The Chairperson suggested that there was a need to insert “senior employee” instead of just any employee, as this could be vulnerable to misuse. There could be extreme cases where an organisation could take a junior employee to act over senior employees and that was unacceptable.
Mr Muthwa noted that in the harmonisation process, the wording was not harmonised and he pointed out that in some entities the wording that was used was the “person in the service of the agency” which was the same as “an employee”. Therefore, the wording in some cases might be different but meant the same thing. He also admitted that the there was a need to specify “senior employee”, instead of just “an employee”.
The Chairperson instructed the team to ensure the harmonisation of the wording to avoid ambiguity and vulnerability of the Act.
Mr Nonkonyane asked for clarity on Clause 1 (10)(c)(ii) which stated that “a person may not be appointed as a member of the Board if that person was convicted of fraud and sentenced to a fine or imprisonment within a period of 10 years preceding the date and nomination in terms of subsection (2A) (a)” He said there was ambiguity and it was problematic to restrict crimes of dishonesty to only fraud. He also wanted more clarity on Clause 1(10)(e) which stated that “a person may not be appointed as a member of the Board if, as a result of improper conduct, has been removed from a position of trust”. He especially wanted details on what a “position of trust” actually meant.
Dr Loots admitted that Clause 1(10) had taken the team a whole day to discuss as they had to be sensitive to the fact that someone who committed a crime could be rehabilitated, thus they had to emphasize about the period of ten years. She also said fraud was the idea of dishonesty and was oversimplified. There was a need to broaden the definition of dishonest to include, for example, corruption. She explained that a “position of trust” was a legal phrase and simply meant someone like a CEO or General Manager or any person who has control over a large business.
Mr Muthwa said there was a need to include other criminal activities that involved elements of dishonesty. He also stressed out that Clause 1(10)(a) indicated that “if a person has been convicted of a crime and sentenced to imprisonment without the option of a fine”. This meant if an individual was convicted but with an option of a fine, then it was not exclusion. However, if a person was convicted without an option of a fine then that can be construed as an automatic exclusion. Crimes like fraud and corruption, even if there was a fine involved, would be regarded as exclusion.
Dr Loots suggested that Clause 1(10)(c)(ii) could be rephrased to say “has been convicted of a crime or fraud and sentenced to imprisonment with or without the option of a fine”.
The Chairperson asked the Committee Members if they were satisfied with the progress that had been made so far.
Mr Nonkonyane wanted clarity on whether a person could be convicted and imprisoned and still be liable to pay the fine.
The Chairperson responded that a person was usually sentenced with an option, either you pay a fine or face possible imprisonment.
Dr Kloopers-Lourens said there were cases where an individual was sentenced to imprisonment and still be liable to pay the fine. This meant that although the term of imprisonment might have been suspended, it was still there. She suggested that it was wise to cover both the fine and imprisonment to avoid any loopholes.
The Chairperson asked the team to read the comments from the members of the public.
Inputs received from members of the public
Mr Muthwa said the team received one set of comments from the public participation process that was initiated by the Portfolio Committee. The first comment related to Scientific Research Act, the National Science Proficiency Act and the Technology Inventive Act. The comment said the Bill must indicate the types of persons or institutions who will make up the Independent Panel. The Minister appointed the Independent Panel to assist him or her in the process of appointing the Board, and therefore, it was his/her discretion to choose the Independent Panel.
Mr Nonkonyane asked what usually happened if the Minister did not have expertise in a particular field, was he/she still given the discretion to choose the Independent Panel.
Mr Mulealy replied that the Minster usually appoints someone who had expertise in the field to act as his/her adviser.
Ms Mokoena said the issue was whether the panel was fixed as part of the legislation or not, and the argument was that the Minister will appoint a panel that will be relevant to that particular Board. However, it was not necessary to have it legislated as it would be different for each and every organisation.
The Chairperson said the Minster had the panel of advisors, and the Board that assisted and advised even though the Minster was supposed to be an expert in that particular field.
Ms Mokoena suggested that it should rather be a policy than a law so that a person to be appointed as an advisor to the Minister was an expert enough in that particular field.
Mr Mulealy emphasized that usually the Minister had strategic advisors who dedicated time to go through all the Curriculum Vitae of the potential candidates and these people provided strategic direction and advice to the Minister to help him/her make informed decisions.
Mr Muthwa said the second comment was in relation to the matter where changes had been effected on and the recommendation was that the Minister may appoint after consultation with the Chairperson of the Board. The Committee had already presented the amendment to say that the Minister may after consideration of a shortlist of the suitable candidates, referred to in Clause 1(2)A(b) or in a transparent manner appoint a person who missed the requirements.
The third comment was in relation to all Acts and was a proposed insertion relating to any person who was a member of the Board that was dissolved. This was a new section that dealt with the dissolution of the Board in all entities. This was in Clause 2(2) which dealt specifically with the dissolution of the Board. The suggestion was that the power to appoint the Board rested with the Minister.
The last comment dealt with all the amendments that had been enacted, and was on the proposal for the Bill to deal attentively with the appointment of the Members of the Board in a manner of transparency. For example, it was suggested that if a member of the Board was a member of a competing organisation, he/she must be excluded from the organisation, particularly, if he/she was a member of an organisation and the Board was dealing with a matter that related to that organisation. The Department’s response was that the Bill dealt adequately with all qualification and disqualification of the membership of the Board and the comment related to issues of conflict of interest.
Mr Sisa Makabane, the State Law Adviser requested that the Committee was given enough time to review the previous Committee’s report that referred to the source of that committee’s power to look at the regulation. He wished that the team could be allowed an adequate amount of time to check on what the Committee had referred to.
Mr Nonkonyane believed that it was late for the team to be allowed time to review the previous Committee’s report considering that that the Bill needed to be finalised on the 05 February 2014.
The Chairperson echoed the same sentiments to the members and officials from the Department. He thanked everyone who attended the meeting and gave special thanks to the Parliamentary Legal Services team. The finalisation of the Bill was planned for the following day, 05 February 2014.
The meeting was adjourned.
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