Agrément South Africa Bill [B3-2015]: deliberations, with Deputy Minister in attendance

Meeting report

The Chairperson said the Committee’s responsibility for the meeting was to go through the Agrément Bill clause by clause. The first page dealt with provisions to provide for the establishment of Agrément South Africa as a juristic person.

Clause 1: Definitions

Mr Jeremy Cronin, Deputy Minister of Public Works, said some work had been done to consider a name change or a double-barrelled approach, but the State Laws Adviser had advised that it would create a wP parliamentary stage by creating a name change or an additional name. The Department  suggested looking for an alternative route of getting the legislation through, as there had been a long delay.

The Chairperson thanked the Deputy Minister and said the suggestion was fairly reasonable. He did not foresee anyone objecting to it.

Mr S Masango (DA) said he did not have a problem with the suggestion. He said other platforms to effect the name change should be considered.

The Chairperson said the Deputy Minister had just pointed the Committee to a proclamation possibility in the future.

The Deputy Minister said that he had just been informed by the technical staff that proclamation would be a way of proceeding. A recommendation could be made in Parliament during the debate to assist the process, rather than trying to change the name. The Committee’s report to the National Assembly should also make a proposal in that direction. This would also assist the process and proclamation could be done.

Mr K Mubu (DA) asked what processes would be undertaken for the name change. Would there be public consultations or suggestions?

The Deputy Minister asked if that bridge could be crossed when they got to it. as the Department  was not completely sure how the matter should be handled. The main point was that the name change should not be done in the legislature, as it would complicate the process. He asked if the house could agree on that point, and work out how to go about it.

Mr Mubu said he was seeking a point of clarity on the process which would be followed for the name change.

The Deputy Minister said the question was in order, but he was not in a position to answer with confidence on the matter, and he would rather not guess. He believed there was agreement that the name was not changed now, but all parties would like to see some change. If all could rest on that agreement, then perhaps the issue of the name change could be addressed later.

The Chairperson said that in regard to Mr Mubu’s suggestions, Members should start thinking about them and also informing stakeholders of the Committee’s intentions in order for them to start thinking as well. It was agreed that this would be done at a later stage, but for now the Committee was looking at the legislation clause by clause.

Mr Devan Pillay, Chief Director: Construction Policy, Department  of Public Works (DPW) proposed that where Board means the Board contemplated in section 10, it should read section 9.

Clause 5: Powers and Duties

Mr Pillay proposed that a comma should be added after “any services rendered before and” in Clause 5 (3) (e).

Mr K Sithole (ANC) proposed that “may” in 5 (3) (a) should be replaced with “must.”

Mr Pillay responded that the word “may” had been used because Agrément may decide to rent property, so the clause applied only to individuals who may wish to purchase property or dispose of a property that it owned. Therefore it was discretionary in terms of “have to own” and “may choose to rent.”

The Chairperson said “may” was covered by “discretionary.”

Mr Sithole asked whether judges say “may” or “must.”

The Deputy Minister said the clause contained two “mays.” Clause 5 (3) stipulated that Agrément South Africa “may” acquire or dispose of property. That was where the point Mr Pillay was making was correct in that it was not obliged to buy property or may acquire property and if it did. then it must.

Mr Sithole asked, in relation to clauses 5 (2) (g) and (h), what would happen to Agrément’s account if opening and operating an account was under the CSIR.

The Deputy Minister said the whole point of the legislation was to establish Agrément as a proper entity rather than as a problematic organisation, and was complying with an audit finding directed at the DPW.

Clause 6: Certification

 Mr Pillay proposed that 6 (1) should read in terms of section 27, and not section 28.

Mr Pillay also proposed that the word “or” should be inserted after the semi-colon in 6 (3) (b).

Mr Alan Small, Senior State Law Adviser said he was just making sure, and that he agreed with the Department  on the proposal.

Clause 7: Renewal of Certificate

Mr Sithole asked what informed the period of three months in 7 (1). It could be two months or six months.

Mr Pillay responded that the three months were allowed so that the certificate could not expire before renewal. In discussion with Agrément South Africa, the three months period was felt to be sufficient for continuation, subject to changes in the regulations.

The Chairperson asked whether Members were happy with the three months period.

Ms E Masehela (ANC) said she was satisfied with the three months but when she looked at 7 (2), where it said Agrément South Africa may condone the late application, she thought the clause was too open -- and what was meant by “late”? How many months or days was the clause referring to? Would it not be better if a grace period was specified in the clause, otherwise it became subjective? For instance, one could condone three months after the certificate had expired, or one could condone six months after the certificate had already expired. She asked if the period could be closed, so it was not open ended.

The Chairperson said Members were seeking certainty about the timeframes. He asked what other Members thought about this and what they suggested. He asked the CEO of Agrément South Africa what his experience in the had field taught him about the matter.

Mr Joe Odhiambo, CEO, Agrément South Africa, suggested that the period be limited to a maximum period of six months after the certificate expired, so that it did not put out anybody.

The Chairperson asked Members if they were in agreement with the suggestion.

Mr Pillay asked how the clause should read.

The Chairperson asked about the formulation of 7 (2) to accommodate the six months.

Mr Welcome Mokoena, DPW Assistant Director, said the reason it had been drafted as such was to look at the merits themselves, as these would inform whether the application for renewal was warranted or not. That was why the Bill had been drafted in the manner that it was. There had to be a rationale as to why individuals failed to apply within the required time period.

The Chairperson said that based on that premise, there would be some discretion to take into consideration certain circumstances, such as illness.

Ms Masehala said that a timeframe would be better, and should take into consideration reasons for applying late. If the clause were left as it was, people would be allowed to apply a year later if the reasons for the delay were deemed valid.

Mr Cronin agreed with his colleagues from the Department, because essentially what the Bill was saying was that there must be an application at least three months before expiry of the certificate. However, when such a tight deadline was set, there might be certain circumstances which would require an escape clause. For instance, there might not have been enough time to test a product, and there could also be other exceptional reasons. The Department requested the indulgence of the Committee to keep the clause as it stood, as it offered the option of some flexibility to Agrément in their judgment. The clause was not open-ended as such, as it would be at the discretion of Agrément. The Department preferred to keep the clause, rather than be over-prescribed.

Mr Mubu asked if provisions for penalties had been made in case of the late renewal of a certificate, as was the case with late renewal of a motor vehicle licence.

Mr Sithole said he had no problem with considering late applications, but was concerned that it would open Agrément to challenges by those who were affected, because without timeframes or specific times people could challenge Agrément.

Mr Small said what would automatically kick into place was the Promotion of Administrative Justice Act (PAJA), and members of the public would be protected under it. In essence, both sides were covered by PAJA.

Mr Mubu asked whether there were any enforcement mechanisms for compliance to renew at a particular time.

Mr Masango said he had no problems with the time frames, but he had a problem with the State Law Adviser saying this should be left to the courts. Why could the issues not be resolved before going to court, to avoid everybody rushing to the court? Moreover, in court one could either win or lose.

The Chairperson said the Committee had the responsibility to draft laws that were as sound as possible under the circumstances.

Mr Cronin said, in relation to the question about Agrément being taken to court, the issue was covered in the way in which the drafting of the Bill was carried out. He sought clarity if the question asked had been “if we are allowing the condoning of late submissions, and if this did not happen in some cases, did that not open up Agrément to some challenges?” He agreed with the State Law Adviser that ultimately any state action or state agent could be challenged in court in terms of PAJA. The Department  was going as far as it could by saying that renewal must be three months prior, as per requirement. However, there was a possibility, but not a legal requirement, that Agrément must consider every late renewal application. That would be an administrative decision, as per the State Law Adviser’s advice, which was not entirely wrong. If an application was submitted six months late and it was turned down, the applicant could still go to court. The Department  would provide guidance to the courts through legislation, indicating that the applicant was obliged to apply within three months and not six months after the certificate expired, but was late. Agrément could administratively condone the application, but was not obliged to do so. The government could not prevent individuals from taking it to court in terms of PAJA, as that recourse was provided by the Constitution.

Mr Mokeana agreed with the sentiments of the Deputy Minister. He added that penalties could be regulated, and there was no need to put them in the legislation.

Mr F Adams (ANC) proposed that the clause be kept as it was.

Mr S Jafta (AIC) said he had a problem with the proposed six months period, as it was more than the prescribed three months. Opening up the time frame to six months would make the clause more open. He also envisaged that if the clause was left as open as it was, leaving Agrément the discretion to consider late applications, this could possibly be opening up a gap for corruption. People could be paying Agrément bribes to have their late applications considered.

Mr Pillay said 7 (3) allowed for the prescription of late application submissions. It would prescribe a fee for late renewals, and there would also be a prescribed process as well as the merits for considering the late submission. The clause was not open-ended to the extent that one could apply at any point in time with any excuse. All the processes would be regulated once the Bill had been passed.

The Chairperson said it seemed that 7 (3) eliminated the open-ended aspect of clause 7.

Clause 9: Board of Agrément South Africa

Mr Sithole asked for clarity on 9 (2) (a) as it read “the Board should consist of a minimum of seven members,” and went on to talk about a maximum of 11 members appointed by the Minister.

Mr Cronin said the intention was that the Board members were appointed by the Minister; they should not be less than seven but not more than eleven. He asked whether Mr Sithole’s concern was that there was a missing comma.

The Chairperson said it could be over and above the seven.

The Deputy Minister suggested that a comma be added after eleven members just to make the point clearer. Perhaps this was an issue of drafting.

Ms Masehela said she understood that the minimum was seven and the maximum was 11. She asked if the Minister could appoint ten or eight members. Was it supposed to be an odd number like seven and 11?

Mr Mubu said he understood the Deputy Minister’s explanation. However, it could be simpler to say the Minister may appoint seven to 11 members.

Mr Cronin responded that there were many ways to make the statement simpler but the Department  was sticking to the South African standards, with legislation being drafted with the exception of adding a comma. That was why the State Law Adviser had been consulted when the suggestion to add a comma was made.

Mr Adams said now he could see Mr Sithole’s confusion, because the seven could be there and the Minister might decide to add another four. The drafting of the sentence could change to perhaps just say the Board appointed by the Minister, as the accounting officer, must consist of a minimum of seven members and a maximum of 11 members. After all, the Minister appointed the Board, whether seven or 11.

Mr Masango agreed with Mr Adams, and said perhaps the Department was just afraid of saying the Minister appointed the Board. Then the Department could say “minimum” and “including” and whatever else, with the last sentence saying “appointed by the Minister.”

The Deputy Minister thought a mountain was being made out of a mole hill in this instance. Mr Sithole was right that the clause could be open to misinterpretation, but if the comma was added in 7 (3) after “members,” then it would be quite clear.

Mr Masango said he was sticking to his suggestion that the Board must be appointed by the Minister (a), and then minimum seven up to 11(b), and then come to (c).

The Chairperson said all points were clear that the Minister would appoint the Board. Whether the clause started with “the Minister will appoint” or ended, with it the Minister would still appoint. He asked if legal drafting would give guidance.

Adv Gary Rhoda, Parliamentary Legal Adviser, said this was a standard way of drafting such a clause and if one started tampering with it, then reformulation of the clause might open the Minister to unnecessary litigation. The way in which the clause had been drafted had been tested. There were many ways in which the clause could be drafted and a lot of time could be spent redrafting, but that was how the drafting had always been done.

The Chairperson asked if the Parliamentary Legal Adviser agreed with the addition of the second comma.

Mr Rhoda said he was.

The Chairperson asked for the State Law Adviser’s views.

Mr Small said apart from the language part, it was correct to leavet the clause as it was. He would not mess with the standard drafting process.

Mr Mokoena agreed that this was standard drafting and tampering with it would not add anything.

Mr Masango said he was not sure about the State Law Adviser’s response that if the clause was drafted any other way, it would open the Minister to litigation. That was just opening another can of worms -- that if the clause was drafted any differently it would lead to litigation. If it meant the same thing, it would not be subject to litigation but if it meant something else, then he had a problem with it.

The Chairperson suggested sticking to the two commas, however the clause was drafted, and whoever wanted to litigate against the Minister had the right to do so. There was no phraseology which would make the Minister immune from any challenge.

Mr Masango said the reason behind sticking to the drafting standards was the problem. Accepting the clause because it was correct was fine, but not changing it for fear of opening the Minister to litigation was problematic and he did not understand it.

The Chairperson said the Committee understood the point he was trying to make. Three legal opinions had been provided on drafting, and that was one view that had been articulated. If Mr Masango had an issue, it was granted. The other views were not motivating on the basis of the same point.

Mr Masongo said the legal advisers were present to provide legal guidance, as Members were laymen. If the legal advisers were going to provide advice, such as amending clauses would end up opening the Minister to litigation, then it was worrisome that Members could not change clauses because of it.

The Chairperson said with due respect, Mr Masango had made his point more than three times and it was accepted at all times. He did not think Mr Masango could change what the Parliamentary lawyers had said. The point articulated had been taken.

Mr Adams retracted his suggestions, and supported the commas suggested by the Deputy Minister.

Clause 10: Appointment of Board Members

Mr Pillay said clause 10 (1) (a) (iii) standardization should be spelt standardisation.

Mr Mubu asked who would compose the selection committee as stipulated in clause 10 (2). The clause did not speak of how the selection committee would be constituted and what criteria would be used for the selection committee.

The Deputy Minister responded that it had been agreed provisionally that it was the Minister’s discretion to appoint the selection committee. What was being dealt with was that the Minister did not select members of the Board on his own. There would be a selection committee. The Department did not want legislation to prescribe how the Minister selected the selection committee. It was just agreed in the previous clause that selection of the selection committee would be at the Minister’s discretion. The Minister would not appoint the Board as a single individual. There would be a selection committee. The procedures for selecting a selection committee were outlined on page six of the Bill, under clause 3. The Minister would chair the selection committee. This was standard for the selection of Boards in South Africa.

Mr Mubu wished to see the role of the Portfolio Committee in the selection of Boards, and also asked to what extent Parliament was involved in the appointment of Board members. It was important for the Committee’s role to be defined.

The Deputy Minister responded that that was a political view, and it was up to the Committee to decide. The problem was a conflation of the separation of powers. One would wish for a Portfolio Committee that would remain vigorous at hearings and not be compromised by the fact that the Committee was responsible for appointing that Board. He had heard the point made, but feared it was politically problematic from the DA’s perspective, as well as from a Constitutional perspective. It removed the ability to be robust at hearings. In the event of a poor performing Board, the Minister and the Board would have to be answerable to Parliament. If the DA wished to go in that direction and proposed it to the Committee it was free to do so, but the Deputy Minister would advise against it. That was one of the reasons why the Department was generally very clear about not conflating roles of the Executive in appointing Board members.

The Chairperson said from his experience as chairperson of several portfolio committees over the past 21 years, portfolio committees never participated in the appointment of Boards. This was to avoid getting compromised for appointing people and the very same people had to come back and report to the committee. The practice had always been to hold whoever appointed the Boards accountable when they came to Parliament. For instance, the Department had entities and the Department was held accountable for the performance of the entities.

Ms P Adams (ANC) speaking in Afrikaans (and translated by the Chairperson), advised against the Portfolio Committee being both player and referee in the appointment of Board members. In regard to clause 10 (3) (a) (ii) regarding two nationally circulated newspapers, these were not always available everywhere. Therefore electronic media should also be used to address the challenge. Relevant information should also be available on the Department’s website and be published in at least two official languages.

The Chairperson asked members for their views regarding the suggestions made by Ms Adams.

Mr Sithole thought it was probable. He said he was from KwaZulu-Natal, and the dominant language was IsiZulu. In Limpopo, the dominant language would be Venda. Perhaps the suggestion by Ms Adams could help.

Mr Cronin said as a matter of practice, information was made available on the DPW’s website in relation to appointments of Board members. It was also a matter of drafting standards to say at least two national languages -- it did not have to be only two languages. There could be cases where the kind of Board wanted would require advertising in all eleven official national languages. For instance, with the Pan-South African Language Board (PanSALB), it would be ensured that the Board represented all languages. He was not suggesting that Board members who spoke IsiZulu as a mother tongue would not qualify, but the entity was very technical and would require Board members to be competent in English, as most of the Board’s business would be carried out in English. This was a standard formulation which was the first thing for Members to bear in mind, and secondly was the nature of the Board that was being looked at. There were cases where being prescriptive about all languages would be appropriate, but in this case it was probably unnecessary. The Department asked the committee to accept the drafting in its form concerning the suggestions raised by Ms Adams.

Mr Mubu said clauses 10 (1) (b) (iii) and 10 (1) (b) (iv) should be removed, as they were too broad and vague. The clauses were too vague when talking of technical, scientific and professional institutions and NGO experience, and was too broad, which could allow people who were not qualified to become Board members.

Mr Cronin responded that Members should bear in mind was that one of the things that the government was trying to encourage through entities like Agrément was the use of indigenous knowledge in construction materials and technologies. This aspect had been neglected a great deal. For instance, for tens of thousands of years people had been constructing homes using materials which were suitable for the climate and locality in which they were found.

He agreed with Mr Mubu that the way the clause was formulated could open up an opportunity for people who could not make a contribution to the Board. However, the Department did not want to close down possibilities. The Board did not have to cover all these fields essentially, but the Department was looking for people who might come in through the selection process by having very strong knowledge through NGO activity, or have indigenous knowledge on the construction of homes or schools. The Department did not wish to clamp down on such knowledge, which was why the clause had been formulated as such. He agreed this could lead to inappropriate people being appointed, but at the same time did not wish indigenous knowledge to become westernised. The Department wished to prevent the thinking that scientific knowledge was something that could be imported only from the western world. Also, the clause would prevent future questions as to why people with certain knowledge had not been appointed.

Ms Adams said she was encouraged by the Deputy Minister’s contribution, mainly because knowledge was the key word. Unfortunately in most instances, when knowledge was talked about, it referred to certificated knowledge and not informal knowledge. There should be a way of utilising both types of knowledge.

Mr Sithole said the Committee’s perspectives as politicians had been put forward. However, those who were supposed to advise the Committee had been very quiet.

The Chairperson called for the legal advisers to assist where it was deemed necessary to do so. Members were politicians who expressed their views freely, but which might not always be correct. The legal advisers had the responsibility to articulate and point the Committee in the right direction in legal terms.

Mr Adams said the Committee could proceed because if the clause was looked at properly, it was included for a purpose.

Clause 11: Term of Office of Members of Board

Mr Mubu asked whether, for the sake of continuity, or a person’s institutional memory, once an individual had served two consecutive terms could it be possible for such persons to continue serving on the Board?

The Deputy Minister responded that was why Members could serve two consecutive terms, but not for more. He asked if Mr Mubu wanted such Board members to serve for three consecutive terms.

Mr Mubu responded that was correct, but at the discretion of the Minister. However, he was not insisting on a third term – he just wondered if there was room for members to serve more than two terms.

The Deputy Mister responded that he was glad Mr Mubu was not insisting on it, because it was good standard practice not to allow more than two consecutive terms. There was always the danger of entrenched interests, and South Africa has always had always stuck to two terms. Mr Mubu’s point was taken.

The Chairperson said that after one term or two terms, Board members would ensure that there was continuity. Board members could suggest individuals who they felt could best continue serving the Board, depending on the Minister’s discretion.

Clause 12: Disqualification from Membership

Mr Sithole asked for clarity on clause 12 (a) which said a person may not be appointed, or continue to serve, if not South African. He felt this was in contradiction with the Constitution, which called for equality of all residents.

Ms D Mathebe (ANC) said if one was not South African, one could not be appointed but there were many non-South Africans in Parliament. She sought clarity on the matter.

The Chairperson said the issue was about illegal aliens. He would not venture into the Speaker’s territory to explain why some non-South Africans were Members of Parliament.

The Deputy Minister asked for some time in order to give a legal response. The issue under discussion was not about origin, but rather about qualification as a Board member.

Mr Small said the Department could have responded to the question eloquently. In terms of continuity for the Agrément Board, if a non-South African was appointed as a member there was uncertainty regarding how long the person would stay in the country. The same applied for individuals who were not permanent residents. Continuity and certainty were important for the Boards. The Constitution stipulated that the President of the Republic of South Africa must be a South African and it was not for discriminatory reasons. He felt the clause was in order.

The Deputy Minister added that the clause also involved intellectual property. Therefore, from a South African perspective, it was important to protect and reassure those producing products for certification by Agrément that the intellectual property they were producing was not lost to the country. This was also an additional consideration.

Mr Masango said he had no problem with South African or non-South African. He did not understand why a person who would be disqualified would be appointed in the first place. It would be better to say Board members must be South Africans.

The Chairperson said Mr Masango was pointing towards a more positive formulation of the clause, to say foreigners should not be appointed in the first place rather than dealing with them at the disqualification stage.

Mr Sithole said he agreed with Mr Masango.

Mr Adams said the committee could proceed with the discussions, because clause 12 (a) read that a person may not be disqualified if he or she was not appointed in the first place. The clause was quiet self-explanatory.

Mr Masango responded that he understood that a person may not be appointed, but he had problems with the word “continue.” He felt there was some contradiction in the clause.

Ms Masehela thought the statement was talking about two issues. The first was that a person may not be appointed if not a South African. Secondly, the clause talked about not continuing to serve on the Board. This meant that a person who was not a South African could not be appointed to the Board.

Mr Jafta added that if it happened that a member was appointed, based on the documents that he or she submitted, and it was then discovered that the person was not South African, then she or he would discontinue serving on the Board.

The Deputy Minister explained further that a Board member might renounce their South African membership, for example, if appointed as Ambassador to Mongolia. Though being a South African citizen, the person may no longer be resident in South Africa. Other scenarios had also been taken into consideration when formulating the clause about appointments and disqualification. A person may be insolvent before disqualification, or might be rehabilitated. That was why the clause needed to cover both “may not be appointed” and “disqualification.”

Clause 13: Vacation of Office

Mr Pillay said section 13 (3) (a) should read in terms of section 12, and not section 14. Clause 13 (3) (c) should read “of the Board for more than two consecutive meetings of the Board” and not “of the Board from more than two consecutive meetings of the Board.”

Ms Adams asked why “two months,” and not one month.

The Deputy Minister responded that it could be because of how soon a replacement could be appointed. He said the Department would have to double check on this.

Mr Pillay responded that the Minister needed 60 days to appoint a Board member, therefore the Department had requested two months for vacating the Board, so that there were no gaps in the Board.

The Deputy Minister said section 13 (5) should be 13 (4).

 Clause 14: Dissolution of the Board

Mr Masango said in clause 14 (7), he was not sure what the Public Finance Management Act (PFMA) was saying, but was there a time frame in which the Minister could act on behalf of the Board if it was dissolved?

Mr Pillay said that in the event that there was no Board, then the Minister became the Board. It was envisaged that the vacancies would be filled within 60 days. The Minister would have to comply with the PFMA within those 60 days. In the absence of the Board, all responsibility lay with the Minister and that was what the clause spoke to.

The Deputy Minister said that the PFMA was silent about a timeframe, but in the previous point about the procedure if a member was suspended or removed from the Board, then the Minister would apply the 60 days’ timeframe to appoint a replacement. In terms of the Agrément legislation, the Minister could not act as the Board indefinitely.

Mr Masango said he did realise the 60 days pertained to the filling of a vacancy of a Board member, but when talking of dissolving the Board, would the 60 days still apply? Interviewing members for the whole Board would take quite some time.

Mr Pillay responded that once the selection committee had done its job and made recommendations to the Minister, the Minister would have to appoint Board members within the specified 60 days. However, the Minister would act as the Board only for the period that there was a vacancy. Regulation might be required to address the issue of time. In the event that the Board was dissolved, a cross-reference would be added to the section which spoke to the appointment of a new Board, as well as the timelines prescribed in terms of the appointment of a new Board.

Mr Mubu raised a concern about the time available to deal with the Expropriation Bill on the agenda.

The Chairperson informed the meeting that because of time constraints, the Expropriation Bill would not be dealt with. At the next meeting, the Committee would consider submissions that had been received concerning the Expropriation Bill and how to move forward. He suggested that the Committee should continue going through the Agrément Bill clause by clause and see how that proceeded. If the task was concluded before the rising time, the legal Adviser responsible for the Expropriation Bill would provide an overview of what needed to be done. The committee would then set an appropriate time to deal with the Expropriation Bill.

Clause 14: Dissolution of Board

Mr Pillay said that the time period expected for the completion of appointment of a new Board following dissolution should be between 90 and 120 days. Once the Board was dissolved, the process allowed for the appointment of a section committee. The selection committee then needed to put out an advert and from the date of the closing of the advert, the selection committee had 60 days to make a recommendation to the Minister. Thereafter, the Minister had 30 days to make the appointments from the date of the recommendations. 90 days had been regulated for the recommendations and appointment. The Department envisaged that the advert and the process to go through the applications would normally be around 30 days. Therefore a total of 120 days would be required for filling a dissolved Board.

Mr Masango asked how many days would it take the Minister to do all that was required to appoint a new Board, if the Board was dissolved today.

Mr Pillay responded that it should be around 120 days.

Mr Sithole said that he was checking on the dissolution of Boards under section 14 (4) and was concerned with the formulation that an investigator “shall” be given access to all documentation. This lacked emphasis, rather replace “shall” with “must.”

The Deputy Minister responded that the Department had no problems replacing “shall” with “must.”

Mr Adams was of the view that “shall” in 14 (4) was covered in clause 14 (2) and proposed to leave section (4) as it was.

Ms Masehela said the section 14 (2) was talking about something different. It was about the Chief Executive Officer furnishing documents requested by the Minister. This was different from what section 14 (4) was talking about. Therefore “must” would be better than “shall.”

The Deputy Minister said Members were right. Section14 (2) was referring to Agrément documents which the CEO should provide. Section 14 (4) referred to other documents. The Department did not object to the suggestion to change the word “shall” to “must.”

Mr Masango said he would appreciate replacing “shall” with “must” just to emphasise that the documents must be given.

Clause 15: Remuneration and Allowances of Members of Board

 Ms Masehela asked the Department  for clarity on 15 (1).

The Deputy Minister said that this was the standard procedure for Boards of public entities. Any person who was a state employee was entitled to remuneration, which was normally in the form of a salary. However, there might be out of pocket expenses. For instance, where Board members used their private vehicle to travel to meetings they had to be compensated so that they were not disadvantaged by out of pocket expenses.

Clause 16: Chairperson

Ms Adams sought for clarity between section 16 (2) and 16 (3), which she felt were in contradiction.

Mr Adams said there was no contradiction, because if 16 (3) was read properly it said for whatever reason members of the Board must elect one of the members to act as chairperson until the chairperson resumed duty of office.

Ms Masehela agreed with Mr Adams that there was no contradiction because in her understanding, 16 (3) was saying that Board members could elect a member to act as Chairperson if the Chairperson did not elect a person beforehand.

Mr Sithole agreed with Ms Adams that there was a contradiction.

Clause 17: Meetings of Board

Mr Mubu asked what was meant by 17 (5).

Ms Masehela also asked what was meant by 17 (5). She further asked what the Department meant in 17(1), by saying the Board meets four times a year -- was it supposed to be quarterly. If it meant quarterly, it would be better to specify this, otherwise the Board could easily decide to meet in the first four months of the year. In that case, what would happen in the rest of the year? The special meetings should also be specified to avoid abuse.

Mr Masango made a point of correction. He said the second line in section 17 (2), “on the Board” should be replaced with “of the Board.”

Mr Pillay said that “on the Board” was correct. The Department envisaged a meeting at least once every quarter. The clause had been drafted in such a way to accommodate situations where the Board might not be able to meet in a particular quarter. In such a scenario, the Board might meet early in the quarter and again later on in the quarter. The drafting was from an operational perspective, but in principle the Department envisaged a meeting every quarter. The Department could test with the drafters if the meetings were specified to be quarterly, and if this failed to take place whether it would imply holding three meetings instead of four in a year.

In relation to special meetings, Mr Pillay responded that the Department expected Agrément to meet to deal with special matters which might be technical in nature. Just to contextualise, there was quarterly reporting by entities within the DPW to ensure that there was no abuse of meetings within the government branch. Reporting was in terms of fees spent on Board members, expenditure by Board members and expenditure of an organisation against its budget. From a control mechanism, the issues of abuse or poor governance could be addressed operationally within the DPW. The issue of excessive meetings would be addressed by the particular branch which dealt with entities.

Mr Pillay said 17 (5) catered for the event that Agrément needed to invite a person with a specific skill or technical expertise to advise the Board, then such person could attend a Board meeting in an advisory role.

The Deputy Minister said that subject to drafting advice, it was not relevant to say “subject to the approval of the Chairperson”, and perhaps one should say “a person who is not a member of the Board may attend.”

The Chairperson asked if Members were in agreement with the addition.

Clause 18: Conflict of Interest of Member of Board

Mr Sithole asked whether Agrément would have an Ombudsman, or if there would be a disciplinary committee within the organisation.

Mr Mubu said he was not sure what Mr Sithole was referring to, but conflict of interest did not refer to discipline. Conflict resolution was not about resolving conflict where Board members were at each other’s throats. A conflict of interest would be if the Board was going to discuss an issue in which a member had an interest. In such a case, the Board member would have to recuse him or herself in order not to negatively influence the decision of the Board. These were two totally different things, which did not need dissolution mechanisms.

The Chairperson agreed with Mr Mubu that under normal circumstances, a person with an interest in any matter under discussion was supposed to recuse himself. The formulation of 18 (1) was not clear -- it was like a universal declaration. He asked if anybody could help the Committee with the reasoning behind the section.

Mr Mubu agreed with the Chairperson. He added that it was not possible to determine beforehand whether a member would have a conflict of interest with Agrément South Africa.

Mr Jafta said conflict of interest may arise at any time.  For instance, the clause talked about the sub-committees that the Board might establish, and a conflict of interest might arise in one of the sub-committees. In such a case, the Board member would have to recuse himself from any meeting dealing with that particular sub-committee.

The Chairperson thought there was a general agreement that at one stage or the other, it was the Board members’ responsibility to recuse themselves when there were issues that warranted them doing so. The issue that was not clear to him was the framing of clause 18 (1).

Mr Pillay responded that at the time of drafting it was very important to make a clear statement that there should be no conflict of interest between a member of the Board of Agrément and the functioning of Agrément. The conflict of interest could be from a financial perspective of the Board members themselves, or a family member. The statement that was being made was actually a declaration which sets out upfront that any kind of conflict of interest was unacceptable. That was basically what the statement was saying, and the subsequent sections were just unpacking what could happen.

The Chairperson said the explanation made the Department ’s intent clear, but the way it was framed was not.

Mr Sithole agreed with the Chairperson. He said the clause should be clear to anyone reading the section without any further explanations. He thought the framing of the clause needed to be revised.

Mr Cronin said that the Department was hearing what Members were saying. The concern was that the clause did not mean that a member of the Board may not have a potential conflict, but rather must not have an actual conflict of interest. That conflict of interest should occur only during the Board member’s term of office. An individual could not become a Board member if they already had a conflict of interest. If a conflict of interest emerged later on during tenure, then the Board member should follow the prescribed steps in dealing with conflict of interest. Perhaps the Department could work on a better formulation of the clause. However the Department maintained that there should never be a conflict of interest, but could not say there should never be a potential conflict of interest.

Mr Rhoda said that a better alternative would be that instead of re-wording sub (1), a suggestion would be to remove sub (1) to disqualification, as the clause already dealt with potential interest of conflict. Clause 18 had mechanisms for dealing with conflict of interest.

Mr Mubu agreed with Mr Rhoda that removing the section would make better sense.

Mr Pillay said the Department wished to confer with the State Law Adviser before responding.

Mr Cronin asked if 18 (1) could be flagged.

Clause 19: Committees

Ms Masehela said that in 19 (5), the first part of the sentence was cumbersome, as there obviously could not be a committee with one member. She suggested that the sentence should read, “the Board must designate a member to act as a Chairperson.”

Mr Pillay said the Department could remove the first part of the sentence in 19 (5).

The Deputy Minister agreed with Members that the section was clumsy and suggested it be dropped completely. It was obvious that a Board member would chair a committee consisting of technical specialists.

Clause 20: Chief Executive Officer

Mr Mubu asked, in relation to 20 (4) and 20 (2), that in the event that the Board was dissolved within the CEO’s tenure of office, would the CEO be required to sign another performance agreement with the new Board? Was there continuity in the performance agreement?

Ms Masehela sought clarity in regard to the tenure of office because the term of office for the CEO was five years, while for Board members it was three years. Was the CEO not part of the Board?

Mr Cronin responded that the CEO would not be part of the Board appointed by the Minister. The CEO was an ex-officio member of the Board by virtue of being CEO. The tenure for Boards was three years and five years or longer for the CEO. In relation to performance agreements and dissolution of Boards, presumably a new Board would want to sign a new performance agreement with the CEO.

Mr Mubu asked if there was room for a golden handshake for the CEO.

Clause 22: Delegation

Mr Masango said he had problems with 22(1), where the Board may delegate its powers. He said the two were not the same -- the Board was an oversight of the entity. He did not understand why the Board should delegate its powers to the CEO.

The Deputy Minister referred the Member to Clause 5. Basically the CEO’s functions were a delegated function. It was not the Board giving its powers and responsibilities.

Clause 25: Breach of Confidence

Mr Mubu said 25 (2) (1) did not apply to information disclosed for specified circumstances. He wondered whether information disclosed for the purpose of investigations should also be covered in the clause. Information given to an investigator appointed by the courts to conduct an investigation should also be included, as sections 25 (2) (c) and 25 (2) (d) spoke to that.

Discussion

Mr Small said that he had thought about clause 18 (1), which the Deputy Minister had asked to be flagged. He disagreed with the Parliamentary Law Adviser, because in terms of Clause 18 (conflict of interest) if one read subsection (5) of the clause, this said a member of the Board referred to in subsections (3) and (4) was obliged to recuse himself or herself from the meeting during the discussion and voting of the matter in which he or she had an interest. Moving section (1) to clause 12 was not proper, as clause 12 dealt with disqualification. In clause 18, a person involved in conflict of interest did not get disqualified but was removed from the conflict, so 18 (1) could not be moved to clause 12. In addition, the Deputy Minister’s explanation of 18 (1) could not apply if it was moved to clause 12.

Mr Sithole said that it was confusing for the Members if the advisers disagreed with Members, as the advisers were supposed to advise the Committee.

Mr Chairperson corrected Mr Sithole, saying that the State Law Adviser was in disagreement with the Parliamentary Legal Adviser, who had suggested that 18 (1) be moved to clause 12.

The Deputy Minister said that in defence of the Parliamentary Law Adviser, this underlined the complexity of making legislation. The advice had been offered in good faith as a potential way to resolve the problem that was being flagged. That was why the Deputy Minister had suggested flagging the section, because the shuffling of sections in legislation could be risky. The advice was to keep 18 (1) where it was, on further consideration.

Mr Adams agreed with the State Law Adviser’s advice to maintain 18 (1) where it was.

The Chairperson said that 18(1) would remain where it was. At the next meeting, the agenda would be to adopt a clean Agrément Bill, with all the amendments effected.

Mr Pillay asked to confer with the State Law Adviser as to when the Department would receive the A-List, so that it could take the process forward.

Mr Small said fortunately there was not much to amend, so the A-List could be ready by midday on Wednesday, 20 May. The amendments would be circulated to the Department and the Parliamentary Legal Adviser to double check. If everything was in order, then the Bill would be forwarded to the Committee Secretary to circulate to Members of the Committee. The Committee Secretary would then arrange to convene to adopt the A-List which would be drawn into a B-Bill to be submitted to the House again.

The Chairperson said that Members would be advised by the Committee Secretary when everything had been done to meet and adopt the Bill. He thanked Members, and said it was clear that the Committee would not be able to get inputs on the Expropriation Bill. As to what had been received, the Committee would have to fix a day to get that information. The next meeting would be on Tuesday, 26 May, and the Committee would commence with the relevant information that had been received on the Expropriation Bill.

The Deputy Minister said it was up to the Committee to decide, but the Department could be ready next week to proceed with the Agrément Bill. He agreed with the State Law Adviser that there were not many technical amendments to be made so the amendment process could move very quickly. The A-List was a text that flagged all the amendments for easy use, for everyone to ensure the technical advisers had done what had been requested. Perhaps the amendment process could be quickly dealt with so that the process of oral submissions could be commenced.

The Chairperson said the committee would seek to conclude the Bill as soon as possible. The target was to meet the following Tuesday, but the Committee Secretary would inform Members about this.

Mr Small wanted to make mention that despite what the Deputy Minister had said, once the A-List was adopted by the Committee, it had to go to the printers again and sometimes discrepancies occurred at the printers which might cause delays.

The Chairperson thanked Members and officials from the Department.

The meeting was adjourned