National Development Agency Draft Bill: briefing

Social Development

22 October 2002
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SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
23 October 2002
NATIONAL DEVELOPMENT AGENCY BILL: BRIEFING
Chairperson
: Mr Saloojee (ANC)
Documents handed out:
Briefing on the National Development Agency Amendment Bill (Appendix 1)
Draft National Development Agency Amendment Bill (Appendix 2)
National Development Agency Act No.108 of 1998
SUMMARY
The National Development Agency Act established the National Development Agency to promote a partnership between the government and civil society organizations to eradicate poverty by granting funds to civil society organizations. The National Department of Social Development outlined the amendments being made to this Act via the National Development Agency Amendment Bill. These include:
- reducing its Board membership from fifteen members to eleven. There will be five instead of six members representing government and six instead of nine members representing civil society -appointed by the Minister.
- providing that the Minister and not the Board appoints the Chief Executive Officer of the NDA.
- changing the definition of Minister from Minister of Finance to Minister of Social Development.

The Committee made suggestions about staggering the Board membership so that continuity and expertise is retained. They pointed out that the ratio of government representatives to civil society representatives had been changed.
MINUTES
National Development Agency Amendment Bill - draft
Mr Pierre Du Preez, senior legal advisor: National Department of Social Development, briefed the Committee on the draft amendment bill to amend the National Development Agency Act so that the Committee could assess it while still in its draft stage. He noted that (see briefing document and draft bill).

It was noted that one issue that the department would like to avoid is a situation where all experienced members are lost simultaneously. Section 6 (2) in the principal Act states that a member of the Board is eligible for reappointment but may not serve as member of the Board for more than two consecutive terms.

Discussion
Ms Chalmers (ANC) expressed her satisfaction with the amendments but suggested that the criteria the Minister would employ in making these appointments should be concretised.
The staggering of appointments was considered as a solution to losing all experienced Board members at once.
Mr van Jaaarsveld (NNP) suggested that some board members serve two-year terms while other serve three years. Some members felt that a three-year term for Board members is too long because during that two-term period of six years, some members would have resigned. They suggested a two-year term for Board members.
Mr Da Camera (DP) suggested that the Minister could have the discretion after the second term of re-appointing up to two-thirds of the Board members in order to retain expertise.

Another proposal from members was that the chairperson of NDA should have a four-year term while members of the Board could remain at a three-year term.
Mr du Preez noted that there seemed to be agreement that this concept of continuity be included in the Bill.
The Department was asked to explain the rationale behind the reduction of the Board members from fifteen to eleven. Mr Du Preez told members that he did not have knowledge of the motive behind that but he was quick to point out that it was Cabinet that had decided to reduce the number of Board members. He noted that the reason for this may be that the government wanted to reduce costs.
It was noted that the reduction in Board members might be a cost-saving measure but it also changed the ratio of government representatives to civil society representatives from 6/9 to 5/6.
The Chair asked the Department to take this into account.
Another problem raised by the NDA was that Board members had to be excluded from an entire board meeting if there was an agenda item that represented a potential conflict of interest. The NDA wants such members excused for part of the meeting and not entirely excluded for a board meeting.
The Committee agreed that the Board could not afford to lose a member for an entire meeting and that the draft Bill should take this into account.
Mr Willcox from the NDA was asked to tell members about regional structures which are in place to make NDA more effective nationally. He mentioned that each province now has a regional manager and that provincial offices have been established in all provinces and the regional managers were appointed last week. Funding applications will come through the provincial offices though the central head office will have the final say.

The departmental delegates told members that NDA had embarked on an extensive road show to inform people about the operation of their organization. They told members that NDA was now more pro-active and that they intend to find more projects from rural areas.

Members recommend that in future NDA should involve committee members in its activities. Members felt that they were more informed about conditions in the rural areas where they have constituency offices. On the issue of the approval of projects members noted that this was still a major obstacle in the sense that funds are allocated to projects depending on the quality of application they have submitted. Members stated that this criterion disadvantages the poorest of the poor, that is, those people in the rural areas. The Committee wanted to find out how NDA plans to overcome this problem.

The NDA delegates stated that the main aim of NDA is to venture deep into the rural areas to deliver adequate services to the people. They do not intend to penalize people just because they cannot write a quality application.

Mr du Preez then went through the Bill clause by clause pointing out the changes being made to the Act (see draft Bill).

The Committee asked the representatives from the department to find out why the Board was reduced to eleven members and the ratio revised.

In conclusion Mr Pierre Du Preez suggested to members that the new Bill be finalized as soon as possible because the term of the current board expires on the 31 March 2003 so the Bill must be in operation by the 01 April 2003.

Appendix 1:
BRIEFING TO PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE NATIONAL DEVELOPMENT AGENCY (NDA) AMENDMENT BILL: 23 OCTOBER 2002
INTRODUCTION
The NDA was established on 1 April 2000 in terms of the National Development Agency Act, 1998 (Act. No. 108 of 1998) with the following primary objectives:
to grant funds to civil society organisations to meet the needs of the poor; and
to strengthen the institutional capacity of such organisations involved in direct service provision to poor communities.
The NDA is currently governed by a Board representing Government and civil society. Six members represent Government and nine members represent civil society organisations.
The NDA is headed by a Chief Executive Officer (CEO) who is appointed by the Board. The CEO is the accounting officer of the NDA and is accountable to the Board for managing the affairs of the NDA.
The NDA was transferred from the Minister of Finance to the Minister of Social Development by Presidential Proclamation on 19 October 2001. The rationale for the transfer was the close link between the work of the NDA and the Department of Social Development in poverty alleviation.
THE BILL
The aim of this Bill is to give effect to the said transfer by amending the Act, by -
amending the definition of "Minister" in order to provide that the NDA is administered by the Minister of Social Development;
changing the composition of the Board of the NDA by reducing the members of the Board from 15 to 11 of which six members should represent civil society and five members should represent Government;
providing that the Minister and not the Board appoints the Chief Executive Officer of the NDA; and
providing for consequential amendments.
The term of the current Board expires in April 2003. There are vacancies on the Board, which will however not be filled for the remainder of the Board's term.
FINANCIAL IMPLICATIONS
Financial implications for the State in the current financial year will be minimal as it is envisaged that only nominations will be invited through the media for the appointment of the six members representing civil society organisations.
It is envisaged that the amendment of the Act will result in an overall reduction in personnel expenditure with effect from the 2003/04 financial year. However, due to the establishment of permanent provincial offices there may be an initial need for an investment for infrastructure.
All approved operational costs will be funded from the existing funds available in the account(s) of the NDA, grant allocations by government and donations and contributions received from other sources.
CURRENT SITUATION
The Bill was approved by Cabinet on 18 September 2002 who recommended that final approval top submit the Bill to Parliament during the 2002 session of Parliament be obtained from the Leader of Government Business. That approval is now being awaited. The explanatory memorandum of the Bill was also published in the Gazette of 4 October 2002.
The Bill was also certified on 21 October 2002 and will be introduced in Parliament soon.
Appendix 2:
Draft National Development Agency Amendment Bill

GENERAL EXPLANATORY NOTE:
[ ] Words in bold type in square brackets indicate omissions from
existing enactments.
_________________ Words underlined with a solid line indicate insertions in existing
enactments.
BILL
To amend the National Development Agency Act, 1998, so as to amend the definition of Minister; to reduce the number of members on the Board; to empower the Minister to appoint the chief executive officer; to further regulate delegation; and to provide for matters connected therewith.
BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:-
Amendment of Section 1 of Act 108 of 1998
Section 1 of the National Development Agency Act, 1998 (hereinafter referred to as the
principal Act), is hereby amended by the substitution for the definition of "Minister" of the following definition:
"'Minister' means the Minister of [Finance] Social Development;".
Amendment of section 5 of Act 108 of 1998
Section 5 of the principal Act is hereby amended-
by the substitution for subsection (1) of the following subsection:
"(1) The NDA acts through a board consisting of-
[six] five members to represent the Government appointed by the Minister [ of Finance] after consultation with [the Ministers of Education, Health, Housing, Public Works, Trade and Industry, Welfare and Population Development, and Water Affairs and Forestry and such other Ministers as the Minister of Finance considers necessary to consult] Cabinet; and
[nine] six members to represent civil society [organisations] appointed by the Minister after an open and transparent process of considering a short list of candidates presented to the Minister by a panel, comprising an equal number of representatives from State Departments and of experts in the development field, established by the Minister for that purpose.".
(b) by the substitution for subsection (4) of the following subsection:
"(4)(a) In appointing members to the Board and in establishing the panel, the Minister must ensure that the Board and the panel represent a broad cross-section of the population of South Africa and comprise of persons who reflect South African society with special attention to race, gender, disability, geographical spread, rural-based organisations and faith-based organisations;
(b) The Minister must, by notice in the Gazette, within 30 days after the appointment of the members of the Board, publish the names of such members and the date of commencement of their period of office.";
by the substitution for subsection (5) of the following subsection:
"(5)(a). The first meeting of the Board must be held at such time and place and
chaired by such member as the Minister determines.
At that meeting the [members of the Board] Minister must [elect] appoint -
a chairperson from among the members referred to in subsection (1)(b); and
a deputy chairperson from among the members referred to in subsection (1)(a) and (b).".
by the substitution for subsection (7) of the following subsection:
"(7) If the office of chairperson or deputy chairperson of the Board becomes vacant,
a chairperson or deputy chairperson, as the case may be, must be [elected]
appointed in accordance with subsection (5).".
(e) by the substitution for subsection (11) of the following subsection:
"(11) A member of the Board who is not in the full-time employment of the State is paid such remuneration and allowances as the Minister in consultation with the Minister of Finance determines.".
Amendment of section 7 of Act 108 of 1998
Section 7 of the principal Act is hereby amended by the substitution for subsection (3) of the following subsection:
"(3) The quorum for a meeting of the Board is at least [eight] six members of the Board.".
Amendment of section 9 of Act 108 of 1998
Section 9 of the principal Act is hereby amended-
by the substitution for subsection (1) of the following subsection:
"(1) The [Board] Minister must, on the recommendation of the Board, appoint a chief executive officer for the NDA, who is also the accounting officer of the NDA.";
by the substitution for subsection (6) of the following subsection:
"(6) The chief executive officer is appointed -
for such period, but not exceeding five years, as the [Board] Minister determines; and
subject to such conditions as the [Board] Minister, subject to subsection (8), determines.";
by the substitution for subsection (7) of the following subsection:
"(7) On such conditions as the Board in consultation with the Director-General: Social Development, subject to subsection (8), determines, the chief executive officer may appoint such employees as are necessary to enable the NDA to perform its duties and exercise its powers.";
by the substitution for subsection (8) of the following subsection:
"(8) The NDA must pay to its chief executive officer and employees out of its funds such remuneration, allowances, subsidies and other benefits as the Minister in consultation with the Minister of Finance determines.""
Amendment of section 10 of Act 108 of 1998
Section 10 of the principal Act is hereby amended by the substitution for subsection (7) of
the following subsection:
"(7) The NDA may establish such reserve funds, and deposit therein such amounts,
as the Minister in consultation with the Minister of Finance approves.".
 
Amendment of section 12 of Act 108 of 1998
Section 12 of the principal Act is hereby amended -
by the substitution for the words preceding paragraph (a) of subsection (1) of the following words:
"(1) The Minister may delegate to the Director-General: [Finance] Social
Development
-.";
by the substitution for subsection (2) of the following subsection:
"(2) The Board may delegate to the management committee referred to in section 8(1) or the chief executive officer any power or duty conferred or imposed on the Board by this Act [, except the power to grant money as contemplated in section 4(2)(a)].".
Short title and commencement
This Act is called the National Development Agency Amendment Act, 2002 and comes into operation on 1 April 2003.
 

MEMORANDUM ON THE OBJECTS OF THE NATIONAL DEVELOPMENT AGENCY AMENDMENT BILL, 2002
OBJECTS

This Bill seeks to give effect to the transfer by Presidential Proclamation of the National Development Agency (NDA) from the Ministry of Finance to the Ministry of Social Development by amending the National Development Agency Act, 1998 (Act No. 108 of 1998), hereinafter referred to as "the Act", by-
amending the definition of "Minister" in order to provide that the NDA is administered by the Minister of Social Development;
changing the composition of the Board of the NDA by reducing the members of the Board from 15 to 11;
providing that the Minister and not the Board appoints the chief executive officer of the NDA.
CONSULTATION
The amendments to the Act were discussed with the Department of Finance. The Bill will be published for general comment in the Gazette.
FINANCIAL IMPLICATIONS FOR STATE
The effect which the revenue and expenditure flowing from the approval of the Bill will have on the State in the current financial year will be minimal as it is envisaged that only nominations will be invited through the media for the appointment of the six Board members representing civil society.

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