Agrément South Africa Bill [B3-2015]: deliberations on how Committee will process Bill

Meeting report

Welcome and apologies
The meeting was opened by Ms Akhona Busakwe, Secretary to the Committee, who advised that the Committee’s Chairperson, Mr B Martins (ANC), had apologised for his absence. The Committee proceeded to elect Mr F Adams (ANC) as acting Chairperson. He called on Ms Inez Stephney, Committee Researcher, to brief the Committee on the Agrément South Africa Bill.

Presentation by Committee Researcher
Ms Stephney focused on the Agrément SA establishment, its ordinary mandate and the challenges it was facing, and finally on the Agrément South Africa Bill.

Mr Stephney said that Agrément South Africa certified innovative and alternative construction materials, asphalt roads, thermal controlled buildings, Jojo water tanks, etc. It was an independent technical assessment organisation, bringing impartial judgment to the evaluation of innovative construction products and systems which were technically sound and capable of giving satisfactory performance.

Entities reporting to the Minister of Public Works included the Council for the Built Environment (CBE), Construction Industry Development Board (CIDB), Independent Development Trust (IDT) and Strategic Infrastructure Projects (SIP). The CBE had a mandate to transform the built environment professions through the promotion of women and historically disadvantaged individuals within it. The CIDB regulated the construction industry, and ensured that contactors between grades one to three received tenders, and provided opportunities for the advancement of women and the historically disadvantaged. The IDT applied an Alternative Construction Method (ACM) to build schools faster and cheaper, thereby addressing the backlog of mud schools and unsafe structures. Finally, the SIP prioritised education.

Agrément South Africa had been established 46 years ago, in 1969, and functioned under a ministerial delegation of authority reporting to the Minister of Public Works. It was neither aligned to the Constitution nor to the Public Finance Management Act (PMFA) 1 of 1999.

The challenges that were identified by Agrément SA included the lack of appropriately skilled technical staff. There was a lack of knowledge on procurement and processes in the construction industry when one standard or alternative building technology as being used, especially but not limited to:
Conditions of certification not being adhered to;
Inadequate design input and site supervision;
Unacceptable quality standard aspects; and
!nnovative non-standard aspects of the project.

With regard to aligning Agrément SA with the Constitution, the Agrément SA Bill had been initiated. It was tagged as an ordinary section 75 Bill – not affecting the provinces –because there were no implications for provinces and no need to refer it to the National House of Traditional Leaders. Though it did not affect the province, still it had to pass through the National Council of Provinces, but it did not require agreement from the nine provinces.

Ms Stephney noted that the Bill established Agrément SA as a juristic person in line with the requirement of the Constitution and the Public Finance Management Act (PFMA). The Bill consisted of the definitions and aim, preamble and 30 sections.

Issues for consideration included section 6(5) dealing with criminalisation of misrepresentation for the purpose of certification (a number of questions were asked for the sake of clarity), section 8(1) dealing with the establishment and maintenance of a register (clarity was sought on whether there was an existing register of all applicants certified or rejected), section 9 dealing with the appointment of the Chief Executive Officer (CEO) by the Board, section 21(1) dealing with the appointment of staff by the CEO after consultation of the Board, and section 24 dealing with the financial year, including financial management and reporting.

In conclusion, Ms Stephney stated that the previous Committee had suggested that Agrément SA should increase its visibility to ensure greater use of its certified products and broaden its mandate to include an enforcement aspect. In that respect, the issues that should be considered by the Committee included:
What the cost implications for broadening its mandate were?
How would the enforcement be implemented?
Would Agrément SA require satellite branches in all the provinces, and if so, how soon and what were the projected costs?

The Chairperson called upon Adv Alan Small, Senior State Law Advisor: Office of the Chief State Law Advisor (OCSLA) to clarify some of the issues arising from the Bill.

Adv Small said that the OCSLA had issued a memorandum in which it had explained in detail why the Bill had been tagged as a section 75. It was not a section 76 Ordinary Bill affecting provinces. There were two cases mentioned in the memorandum, in which the court had made it easier to distinguish whether it was a section 75 or section 76 Bill. The Bill sought to establish Agrément SA as a juristic person, and thus create its independence. It could be sued on its own. In the past, the entity had more delegation from the DPW, but from the date it became an independent entity, the Board would deal with matters of recruitment. Responsibilities were entrusted to the Board, but it was accountable to the Minister of Public Works. It had to report regularly to the Minister. The Bill was clear on certain parameters. The Board could deal with movable property independently, but with immovable property, the Minister had to sanction. The independence of Agrément SA further denoted that it would be accountable to Parliament.

Discussion
Ms P Adams (ANC) commented that the DPW should answer all questions raised by Ms Stephney in her presentation. She sought clarity on the financial liability and who would conduct investigations in relation to misrepresentation for certification, and how such investigations would be carried out. She asked what the meaning of “juristic person” entailed, and whether the Committee could approve the Bill before the financial year starting on 1 April 2015.

Ms D Mathebe (ANC) sought clarity on whether the Bill had no functional areas of concurrent national and provincial legislative competence. She commented that in Limpopo, learners were still studying in mud structures and under trees, and sought clarity on the work that had been done by the IDC.

Ms E Masehela (ANC) sought clarity on the issues related to the dissemination of information in order to increase visibility, the loss of key staff, the reduction of part time staff members and insufficient transformation at the technical assessment leadership level in the agency. Was it possible to have offices of Agrément SA in all provinces?

Mr S Jafta (AIC) sought clarity on why the Bill was not being sent to the National House of Traditional Leaders.

Mr Devan Pillay, Chief Director: Construction Policy, with regard to funding, said that prior to the development of the Bill there had been discussion about this issue, and it had been resolved. On the issue of investigating false representations of certification of a product or system, this would be conducted by Agrément SA itself. The DPW envisaged that there would be renovation, and therefore renewal, of certification, but it did not envisage extending certification. Agrément SA evaluated and assessed the quality of a product to determine whether it was fit for purpose. After evaluation, the product had to go through the manufacturing process. It had to give procedures to be followed when manufacturing, or using or installing or erecting the product. It was the manufacturer of the product who ought to report whether the product had been improved upon. He gave an example. There were thousands of people manufacturing the bricks, but they were not all of the same quality. Bricks that could be used to build a kennel were not the same bricks that could be used to build a house. In the regulations, the DPW had envisaged giving different certification. However, some municipalities did not have the facilities to test the quality of certain products. That was a matter that did not fall within the ambit of Agrément SA, but it was matter with which it was engaging to find a solution.

The Bill indicated that persons who committed an offence were liable on conviction to a fine or to imprisonment for a period not exceeding three years. That was the penalty that could be imposed if the person do not comply with the requirements or falsely represented a product as a certified product.

With regard to a time period for the budget, Mr Pillay said that the DPW had already budgeted for a period of three years. Agrément SA was not yet a juristic person, therefore money could not be transferred to it as it had no obligation to meet the requirements of the PFMA. Once the Bill was passed and came into effect, money would be transferred to Agrément SA. There would be an increase in the budget, but money was there to ensure that the Agrément continued its operation. The funding did not include its administrative costs, as this would remain where it had been operating.

With regard to satellite offices, he said that the demand for Agrément SA to expand was very low, but the satellite offices would be established if demand increased significantly.

On the issue of transformation, Mr Pillay said that he would come back to the Committee once he had more information from Agrément.

Ms Stephney commented that the Agrément SA had not transformed for various reasons, including the fact that it was a specialised body dealing with specialised areas and nothing significant had been done to interest young people to join it, especially women and historically disadvantaged people.

The Chairperson sought clarity on the timeline for approving the Bill, and on what the strategic plans were to attract students in acquiring the skills that were needed by Agrément SA.

Ms Masehela made a follow up on the issue related to bursaries that were designed to increase the skills needed by the Agrement SA. She commented that there was a lack of advertising of bursaries available so that interested students could apply

Ms Adams sought clarity on the inability to recruit technical staff who could undertake the complex technical assessment work, and commented that nothing could replace skills. It had to be noted that Agrément was a very specialised entity. There was a need for consultants to undertake the complex technical assessment work. Why was Agrément not looking for skills in the labour market? Why did it not have an in-house training programme? What could it do to increase its visibility? What did the Department do to promote the entity where people did not have access to the internet?

Ms Mathebe sought clarity on the impact of Agrément SA becoming a juristic person.

Adv Small reiterated that the issue of a juristic person made a legal entity independent. This meant that the entity would be liable for its actions. In other words, the board would be accountable for the actions of its employees. With regard to the question of whether the Bill should pass through the National House of Traditional Leaders (NHTL), he said that section 18(1) of the Traditional Leadership and Governance Framework Amendment Act, 2003 made it clear. A Bill could be referred to the NHTL only if it covered traditional and customary aspects, and this Bill did not.

The Chairperson commented that if the Committee approved the Bill, the Committee would be approving Agrément SA becoming a juristic person. The timeframe of the Bill to come into force depended on the Committee’s approval. The question faced by the Committee was how the Bill could be approved if there were some shortcomings. The Bill was a section 75 ordinary Bill. The Committee would be respecting its work if it respected other entities that needed to consider and approve the Bill.

Mr Pillay said that the Members should distinguish between testing the quality of products, and marketing and advancing the products. The latter should be done by the manufacturer.

The Chairperson said that Members were thinking that Agrément SA worked in the same way as the South African Bureau of Standards (SABS), and accordingly it should be represented at all provincial levels. He commented that the issue of skills was critical. There were youths who were hungry for knowledge, who should be supported to fill the gap.

Ms Stephney reiterated the importance of the issue of visibility, pointing out that this approach would allow people to know about its work. As it stood, people were not aware of the entity. For example, people needed to know how houses could be built quickly and cheaply to clear a backlog.

The Chairperson agreed. He sought further clarity on the role of the selection committee.

Mr Pillay replied that the DPW was working on how Agrément SA could be more visible. Referring to the selection committee, he said that the Minister had the prerogative power to appoint people to the selection committee. It was an area that would be regulated to clarify its parameters. The Bill covered all elements that were viewed as essential.

The Chairperson thanked Ms Stephney for her work, especially the time invested in her research, and thanked Adv Small for briefing the Committee on the legal technicalities. Finally, he thanked delegates of the DPW for their time and clarifications. He said that the Members of the Committee should look at the Bill and raise any points that might be unclear to them at the next meeting at which the Bill would be considered.

The meeting was adjourned.