Infrastructure Development Bill [B49-2013]: Clause 9 to Schedule 3 deliberations and proposed amendments

Economic Development

04 February 2014
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The Committee met with the Economic Development Department (EDD) for a second day of clause-by-clause deliberations with proposed amendments from the EDD with the Director-General in attendance.

The meeting opened with a revisiting of flagged issues not resolved in the previous meeting, which included specifically referencing women in the Bill. Besides questions seeking clarification, the majority of the discourse was about accountability, responsibility, and checks and balances regarding projects. Few alterations were made, most of these simple grammatical preferences the members wanted.

Meeting report

The Chairperson opened by asking if there were any proposals from the Committee members. As there were initially none, she put forward her own question about including women in Clause 4(g)(iii), which was suggested the previous day when the Committee went over the first half of the Bill. Clause 4(g)(iii) reads “The functions of the Council are to (g) identify (iii) the direct and indirect impact of any strategic integrated project on job creation, youth employment and economic inclusive.”

The Director-General, Ms Jenny Schreiner, acknowledged this request from the previous day. it would be better implemented under Clause 21(1)(b): “The Minister, in consultation with the Council, make regulations regarding (b) the criteria that must be applied in the implementation of a strategic integrated project relating to (new subpoint) women” alongside the other relations such as youth employment and green economy.

The Chairperson said Clause 4(g)(iii) should be like 4(l), as 4(l) has women and 4(g)(iii) does not. Her reasons for this were that women, in general, have a difficult time being included, but that it was especially true for business environments. She referenced the South African historical significance and placement regarding women and insisted that it not be left out. Clause 4(l) reads “The functions of the Council are to (l) promote the creation of decent employment opportunities and skills development, training and education, especially for historically disadvantaged persons and communities, women and persons with disabilities, in so far as it relates to infrastructure and any strategic integrated project.”

The DG responded that the proposal for Clause 4(g)(iii) would add “including in relation to women and persons with disabilities” after “youth employment and economic inclusiveness.”

Mr X Mabasa (ANC) agreed with the DG’s proposal.

The Chairperson asked if everyone was satisfied then asked the DA members of the Committee about their concern about Clause 5(2).

Mr Motau (DA) responded that a grammatical change in Clause 5(2), changing “or” to “and”. It originally read “The Commission may only expropriate land or any right in, over or in respect of land after consultation with the organ of state in whose favour the expropriation is to be made.”

Adv Herman Smuts (Principal State Law Advisor) proposed to direct Mr Motau’s concern to 5(3)(a), which reads “Notwithstanding the provisions of the Expropriation Act, 1975, an expropriation in terms of subsection (1), may be effected – (a) in the public interest.” Mr Smuts proposed that (a) instead read “for a public purpose or in the public interest.”

Mr Motau thanked Mr Smuts.

The Chairperson asked Mr Smuts to restate his proposal.

Mr Smuts restated 5(3)(a) would read “for a public purpose or in the public interest.”

Part 4: Implementing structures of the Commission

Clause 9: Secretariat of Commission

The Committee had no comments.

Clause 10: Functions of Secretariat
The Committee had no comments.

Clause 11: Main purposes of steering committees
Mr Motau was concerned on how funding projects would occur. He acknowledged that every department with a strategic integrated project (SIP) would be funded but wanted clarification on how that would happen.

 The Chairperson asked where in Clause 11 his concern derived from.

Mr Motau responded that it was where it talks about funding.

Mr A van der Westhuizen (DA) stated that while they were visiting the Construction Industry Development Board (CIDB) the previous week, there was mention of a R50 million project.

The Chairperson interjected that it was R3 to R5 million.

Mr van der Westhuizen was relieved he was wrong. He went back to his point that even R5 million for a project is quite much. He was concerned with how it was to develop and manage. With that big of a project it would be easy to lose track of the budget and ask for more money. He wanted people to be held accountable for performance.

Mr Mabasa proposed they maintain their method of conduct, going clause-by-clause. He stated that addressing these indirect financial issues were important but not the purpose of the meeting and that they should address them at another time.

The Chairperson moved to the next clause.

Clause 12: Appointment and composition of multidisciplinary steering committees
Mr Motau was concerned that in 12(3) the SIP coordinator could be anybody and the clause lacks specifications and criteria.

The Chairperson responded that SIP coordinator was specified in another section.

Mr F Beukman (ANC) stated that “SIP coordinator” is defined in Clause 1.

Mr Motau insisted that there needs to be qualifications and requirements listed and followed.

The DG said that SIPs are far too divergent to have universal criteria to meet. They just need to be qualified for their specific task, which is determined by the Commission.

The Chairperson asked it that was ok.

Mr Motau said he would feel more confident if it was not ambiguous but it was ok.

Mr van der Westhuizen was concerned that regulations have changed for qualifications throughout government but that this Bill did not adhere to the mass reform of minimum competencies.

The Chairperson said that there should not be discrimination such as minimum competencies. People could change from being in one career to another and it would not be fair, according to her.

Mr Beukman asked that the Committee commit to the purpose of the meeting and not be so distracted.

Mr Mabasa agreed with Mr Beukman. He stated that the ANC does not employ people without qualifications.

The Chairperson determined the Committee accepted the criteria as presented by the DG.

Mr van der Westhuizen stated that applications are supposed to be treated with objectivity.

The Chairperson asked what he was proposing.

Mr van der Westhuizen responded that he did not have a proposal. He wanted clarity and interpretation from the Economic Development Department (EDD) as to how they would handle this issue. He asked that if there was any conflict of interest, they should be removed.

The DG explained that Clause 13(4) describes the procedure for conflict of interest. It reads “If, after the appointment of a member of a steering committee, it appears that the member or a family member would benefit from or has an interest in any business or organisation which is not owned by the State and which would benefit from a strategic integrated project, as contemplated in subsection (3), the member without delay (a) in writing disclose that fact to the steering committee and the Minister; and (b) resign from the steering committee.”

Mr Smuts added that the Department's draft Bill had a clause which stated that the decision-making should sit with the steering committee. Clause 12(6) described this issue and corrected it. It reads “A member of a steering committee (a) has, subject to section 20(4), the authority to take decisions on behalf of the organ of state he or she represents, excluding any decision to grant an approval, authorisation, license, permission or exemption; and (b) has direct access to the head of the organ of state he or she represents, the Management Committee and the Secretariat and any of its members.”

Mr van der Westhuizen stated that Clause 12(6)(a) says that the authority to take decisions on behalf of the organ of state is a conflict of interest.

The Chairperson said that it is subject to Clause 20(4).

A Department official said that the steering committee was comprised of officials, which was described in (1)(a). The steering committee would make decisions by process, not individually. A member represents his department. The reason for direct access in (6)(b) is that there have been issues with junior officials being sent to Parliament and they are asked key questions and they then have to refer the question to the DG. This “direct action” will stop that from being an issue, as it will require the official to make decisions and be present. No decision can be made by any given department on any matter that pertains to them. They want to insulate the individual who makes the decisions with a committee. He emphasised that this provision does not stop abuse of power, only that it ensures that there are checks and balances for decision-making.

The Chairperson wanted clarification on whether the steering committee acts on the behalf of the DG of the respective department.

A Department official responded that the person represents their respective department and puts forth its department’s mandate and is not regulated. This stops the ability of junior officials from making decisions. This person will have to report back to the department. Authority figures, the respective DG and/or Minister, deal with misbehavior.

The Chairperson asked if that presents a conflict of interest. She was concerned that auxiliary influences could be present.

Mr van der Westhuizen added that there needs to be regulation with authority and without regulation there is infringement on autonomy. He sourced Clause 20(4), stating that it does not cover this issue.

Mr Mabasa said that too many guidelines will cause inefficiencies. There needed to be a balance.

The DG explained that integrated government initiatives have the problem of junior authorities making decisions. These provisions make it necessary to have authoritisation of senior authority and department approval. The Minister and the head of the respective department or entity are there to prevent these issues being raised by the Committee.

A Department official agreed with the DG.

The Chairperson pointed out that the purpose is to have intervention in projects and implementation. She added that breaking blockages is the issue with creating infrastructure.

Mr van der Westhuizen expressed his minor frustration with having the definitions at the beginning of the Bill. These issues would be easier to understand if everything was defined in the body of the Bill.

Mr Smuts explained that certain words are only used once and thus are excluded from the definition portion of the Bill.

Clause13: Disqualification from membership of steering committees, disclosure and offences
The Chairperson has a minor query over word choice.

The DG responded that it was a legal matter.

Clause 14: Functions of steering committees
Mr van der Westhuizen thought “all appropriate persons” in (1)(f) was too vague and wanted specifications amended.

Mr van der Westhuizen stated that under (1)(a) there has to be only one entity in charge of a project.

The Chairperson responded that multiple entities is possible but there must be filtration and communication/reporting.

The DG agreed that within integrated projects there are, by definition, multiple projects, and so in order to have success there must be synergy and no negative impacts crossing from project to project.

Clause 15: Approvals, authorisations, licences, permissions and exemptions
Mr Beukman asked for clarification on the administration reports in addition to what the budget allocations and provisions were.

The DG answered that they did not want to end up with a bloated coordination, money absorbing bureaucracy. There would be reprioritization with existing budgets along with the decision-making from Ministers.  

Mr Beukman followed up by asked if there would be a structure such as a chief director or some other body that would ensure this.

The DG was not sure she understood the question and asked if this was in reference to the EDD structure. PICC will be part of the structure as originally when this was created, the PICC did not exist. The implementation of the legal team allowed the Department to know what was and was not included in the 2009 Mandate.

Mr Mabasa asked if the departments would have dual planning, especially with determining who finances what. He asked if accounting issues are in the context of PICC and the respective department – he was unsure of that relationship.

The DG said the allocation for the actual building of infrastructure is done through departmental votes. The accountability for the spending of infrastructure is part of Parliament’s accountability over department budget votes. But at the same time, part of what the PICC does is track infrastructure spending. Not in the sense that the accounting officer is responsible to the PICC in the same way they are responsible to their direct authority for where they spend their budget. It is rather in the sense that infrastructure spend gives the PICC an indication as to where the infrastructure is in fact moving forward. So within the PICC construction report, the budget spent is one of the elements that attracts job creation. The responsibility of the spending in the steering committee is the chairperson. The Minister ensures that there are resources for the steering committee.

The Chairperson asked if the budget was within the ministry - some sort of administrational fund which would be utilized. Would there be a mechanism which will stop the abuse of exploiting employees. Where does additional funding come from?

The DG answered that it was the responsibility of the sub-chairperson to provide that if it is not possible for the Minister to do so.

The Chairperson asked how that would be managed and if it was covered in the regulations.

The DG referred to Clause 21(1)

The Chairperson asked why the word “may” was used.

Mr van der Westhuizen was concerned with discretion and would like to implement the term “empowerment” rather than the Minister “must make.”

The Chairperson suggested leaving this issue till they reached the appropriate clause.

Ms Tsotetsi was concerned with s15(1)(a) using the term “without delay.”

A Department official explained that it was difficult to have a direct time period.

The Chairperson reassured that “without delay” was typical legal language.

Mr Smuts said that “without delay” is not precise but that it is the intention of acting quickly that mattered.

The Chairperson said that sometimes these bills have precision and sometimes bluntness.

Mr Mabasa said that he, too, was concerned with the inconsistency in the language. “Without delay” could be a week or even a month and questioned whether this language was the best approach to express what was intended.

A Department official responded that time periods are problematic and that “without delay” meant as soon as possible or quickly. He explained that Ministers and DGs are putting the pressure on to make things go quickly and that there is in fact supervision. He concluded that these tasks take two to three weeks, making exactness more of a burden than a necessity.

Ms Tsotetsi proposed that a deadline should be put in place.

The Chairperson agreed, stating that they made the completion of the FIFA World Cup Stadiums possible all around the country.

Dr Neva Makgetla, Deputy Director-General: Economic Policy in the Department of Economic Development, responded that this was in relation to informing people and cooperative governance. The issue is about flexibility and informing decisions, as every project varies. Knowing how long a project would take is what would determine the deadlines.

The DG continued, adding that communication with the applicants is vital. There are requirements, such as document submission, that must take place. Items such as these make deadlines inconsistent.

The Chairperson acknowledged that applications may take three months to be communicated after rejection.

The DG stated that s15(1) dealt with initiation under Schedule 2 timelines. She stressed that the process would not move smoothly if all documentation is not submitted at the same time.

Dr Makgetla stated that the problem is that applicants will get to the end of the process and then realise they forgot some of the documents. The best way to coordinate and get things done quickly is by having flexibility.

Mr van der Westhuizen expressed his concern About corruption. He liked s15(1)(b) because it provides checks and balances. The DA saw corruption prior to reading this section due to the approval processes. “Simultaneously” means it must happen at once. His interpretation was that two separate processes cannot allow one to take priority or allow those who are ready to move forward; they must both submit at the same time. He thought the steering committee must inform applicants of what they need, such as licences. He proposed the addition of ‘the applicants of all applications that need to be presented and the requirements that are need to implement the projects” and other items in the Bill.

Mr van der Westhuizen started pushing for other issues he had with the Bill

The Chairperson said that they needed to address this issue first before moving on to others.

Mr Mabasa asked to have Mr van der Westhuizen restate his proposed addition.

Mr van der Westhuizen repeated that after the word “applicant,” which he wanted to be worded in plural form, in s15(1)(a) read “of all applications to be submitted and when possible for applications to run concurrently” and reiterated that the use of “simultaneously” can have negative effects.

The Chairperson asked if anyone had any questions.

Mr S Mohai (ANC) had a minor comment

The DG said that s15(4) needs to be considered when reading 15(2), explaining that one needs all that is needed at the beginning of the process and placing the responsibility on the applicant. The only exception were those who have prior authorization.

The Chairperson asked for clarification

The DDG responded that this was in respect to public applications.

The Chairperson insisted that it was relevant to both.

The DDG answered that only public infrastructure answers to the steering committee.

Mr Mohai readdressed the usage of “without delay,” saying higher structures and checks and balances should be put in place. He asked what the timeframes were for all these processes. He urged the Committee to have more pressures and expectations coming from within this Bill.

The Chairperson referenced s15(1)(a) then asked if he was ok with this.

Mr Mohai said he was.

Mr Mabasa asked if the term “applications” was needed and proposed using “submission of all documents” instead.

The DG answered that this proposal does not address other issues such as exemptions. The definition of “applicant” justifies the usage in s15 but that including the simultaneous submission of documents would be allowed.

Mr van der Westhuizen proposed adding “notwithstanding” in s15(1)(b) in reference to s15(1)(a) and still wanted to steer away from using "simultaneous".

Mr Smuts said it would not make a difference and that adding it would not cause any issues.

Mr van der Westhuizen had another proposal which was to get rid of the words after “cannot be submitted simultaneously because” and replace them with “require”. S15(1)(b) would then read “Any application which requirse prior authorization” then to have the subsection continue.

The Chairperson was confused and thought Mr van der Westhuizen had switched to discussing (1)(a) unannounced.

Mr van der Westhuizen clarified that he was on (1)(b) and that he was proposing the replacement to be “Any application which requires prior authorization be obtained”

Mr Mohai disagreed with this proposal, suggesting it was easier to understand prior to Mr van der Westhuizen’s proposal.

Mr Smuts said the “notwithstanding” proposal was fine but he disagreed with the latter proposal, as it would change the meaning of the Bill.

The Chairperson agreed that “notwithstanding” be added and that the other proposal not be added and insisted the meeting continue, as she thought there was too much time spent on this portion of the Bill.

Ms M Mohorosi (ANC) asked about the s15(5) on the steering committee’s report to the Secretariat.

The DG said the Minister addressed this issue in his presentation the previous week. The Minister indicated that this clause does not necessarily mean that there will be an intervention.

Mr van der Westhuizen asked if s15(2), where it refers to 12(1)(a), would also refer to 12(1)(c). He also wanted to include that a member of the steering committee does whatsoever is in her or his power to ensure everything complies with law.

The DG said it was important to remember that s15(2) deals with processes and legislation within that respective department whereas 12(1)(c) could be people from academia or any expert, even outside the country.

Clause 16: Steering Committees and procedure
The Committee made no comment about this clause.

Part 5: Processes

Clause 17: Processes relating to implementation of strategic integrated projects

The Committee made no comment about this clause.

Clause 18: Environmental Assessments
Mr Motau suggested the need for “environmental impact assessments” not “environmental assessment impact" alone.

The Chairperson responded that this is in reference to the environment in general.

Ms Tsotetsi agreed with Mr Motau.

The DG said it was phrased so that all environmental assessments tools are in use which were identified earlier in the Bill. It was worded to implement full capacity.

The DDG pointed out that there were more relevant assessments in the basket that need to be addressed so isolating environment is not needed.

Mr Mohai thanked the Department for making these issues clear.

Mr van der Westhuizen referred back to Clause 17(2), saying that the construction phase was absent. He was concerned that because there was no mention of construction, that it was implied there was no monitoring of it or that labor concerns were not to be addressed.

The DG responded that these were for the processes which led up to construction. Mr van der Westhuizen’s concerns are addressed within the PICC and the Secretariat.

The Chairperson asked the DG to direct the Committee to where that was in the Bill.

The DG responded that it could be found in s4(m) which reads “address in all phases of a strategic integrated project, including its planning, implementation, operation and maintenance phases, capacity constraints and blockages to infrastructure development and improve coordination and integration within strategic integrated projects.” She then quoted s14(h) “facilitate the implementation of the strategic integrated project.”

Mr van der Westhuizen said there was a lot of pressure from decision-making authorities to manage approvals, construction, etc., which can really slow down the speed of implementation. He suggested redirecting the emphasis of the planning phase to the implementation and construction phases.

The DG referenced s14(h), (i) and (j), reading s14(1) “A steering committee must, for projects that fall within the state sector but that may be built or operated by either the public or private sector—(h) facilitate the implementation of the strategic integrated project; (i) report on a monthly basis progress on all phases of the planning, development and implementation of a strategic integrated project to the Secretariat and make such other reports as the Secretariat may request; and (j) bring to the attention of the Secretariat challenges or matters that it is unable to resolve for resolution or direction, including proposed remedial actions for consideration by the Secretariat.” it was the mechanism in (j) that allows the monitoring of the entire life-cycle of that specific project.

Clause 19: Reporting by Minister
Mr van der Westhuizen proposed a third section which would require the Minister to report to the National Assembly about the activities of the Commission regarding SIPs on a quarterly basis. Parliament has an oversight role. It was difficult for him to support a bill that does not involve Parliament.

The Chairperson questioned this proposal as there are already quarterly reports required by the Minister for Parliament.

Mr Mohai was confused as to what was proposed.

The Chairperson explained that the Minister reports on a quarterly basis to the Council, Management Committee on each SIP but Mr van der Westhuizen wants to add Parliament.

Mr Mohai said that even the Public Finance Management Act (PFMA) prescribes that there is a standard for that and agreed that it is not necessary to add it.

Mr Motau emphasised that the Minister is obliged to do so in s19(1) and (2) but not to Parliament.

Mr van der Westhuizen asked if Parliament would be able to have the Minister report if requested. He was concerned about whether there were budgetary concerns about having the Minister attend.

The Chairperson reassured him that the Minister is employed to do all that they had discussed.

Mr Beukman said that the approach suggested by the Bill is completely adequate for the issues being raised by the DA members.

The Chairperson acknowledged the DA members’ concern but said that it is not necessary to include it in this Bill.

Mr van der Westhuizen reiterated his concern with the lack of not having the Minister’s oversight. He was worried that Parliament would not be aware of what is going on.

The Chairperson said that it was not true, that there are currently projects under SIPs that have done this exact thing without this Bill in place because Parliament is in direct control of these projects.

Mr Mohai commented that new committee members were not aware of what has been reviewed. The Minister had briefed them on these issues. The Committee is quite aware of these issues. Raising these issues is unnecessary.

Clause 20: Delegation and assignment
The Committee made no comment about this clause.

Clause 21: Regulations, guidelines and targets
The Chairperson wished to revisit the economic empowerment of women which was raised earlier.

The DG said that s21(1)(b)(iv) should read “Broad-Based Black Economic Empowerment, in particular in relation to women and persons with disabilities” but that it may already be included in s4(3)(g).

Mr Smuts added that “persons” is mentioned in s4(3)(g), not “people.”

Mr Mohai asked what s21(1)(b)(vii), “local industrialisation,” meant.

The DDG said it is defined in the definition section.

Mr van der Westhuizen revisited the DA’s desire to rename the Bill.

The Chairperson responded that the Committee agreed to keep the name as is and that she had already told the DA that the name stays. She moved on to Schedule 1.

Schedule 1
Mr van der Westhuizen said that infrastructure needed to tend to the aftermath of natural disasters and that natural disasters was not addressed, nor was human settlements.

The Chairperson countered that those proposals would take away the President's power.

The DG agreed with the Chairperson.

Schedule 2
The Committee made no comment about this clause.

Schedule 3
The Committee made no comment about this clause.

The Chairperson concluded that the Department would consult amongst themselves and have a finalised version ready for the meeting the next day for proofreading.

Mr Smuts asked if the format used the past two days was fine.

The Chairperson said that it was fine and that they did not need to print them out, that she wanted to be economical.

Mr Motau asked if only the changes would be discussed.

The Chairperson agreed, saying they would go page-by-page and that that was what proofreading was.

The Chairperson adjourned the meeting.

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