Financial and Fiscal Commission Amendment Bill [B1-2015]: negotiating mandates; Committee reports: New Development Bank & Treaty for Establishment of BRICS Contingent Reserve arrangement

NCOP Finance

03 June 2015
Chairperson: Mr C De Beer (Northern Cape, ANC)
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Meeting Summary

The provincial legislatures read out their negotiating mandates in respect of the Financial and Fiscal Commission (FFC) Amendment Bill. This Bill received support from Eastern Cape, Gauteng, KZN, Northern Cape and Limpopo without any amendments.

Mpumalanga was generally in favour of the Bill but suggested that clause 6 be amended, to say that a Member of the Commission is to be appointed for a term of five years, which is renewable for one additional term, and must be a man or woman who is a South African citizen and is a fit and proper person to hold office as a member of the Commission. National Treasury cautioned that whilst the time period was acceptable and could be inserted, any change on the citizenship and fit and proper requirement would have to be inserted into the principal Act, section 7, and in order to do this, the Committee would have to get permission from a full plenary session of the NCOP, under rule 163.

North West Mandate also was generally in favour of the Bill but felt that clause 12(b) created the potential to transgress the ethical code if members of the FFC were allowed to apply to be Chief Executive Officer, and suggested they be excluded.  The National Treasury responded that it would be unconstitutional to insist upon this, particularly if that member was not successful, and added that this was not the position with other public servants applying for Boards. North West also suggested that the power of the FFC to make regulations was watering down the power of the Minister, but the National Treasury and Chairperson indicated that because it was a Chapter 9 institution it did not report to the Minister, but to Parliament, and there was no reason to change the Act in this regard.

Western Cape generally supported the Bill but also had suggestions. The province recommended wording changes to clauses and 10 to specify "deputy commissioner". National Treasury responded that this would mean that the deputy commissioner would then need to be employed full-time. Consultation was required, but that was not intended so that the Minister could use his power, and the scope was limited to the rules.

Members adopted Committee Reports on the Agreement on the Development Bank and the Treaty for Establishment of BRICS Contingency Reserve.

Members adopted minutes of 14 May and 21 May.
 

Meeting report

Financial and Fiscal Commission Amendment Bill BIB 2015: Presentation of Negotiating Mandates
The Chairperson noted that the Free State Provincial Negotiating Mandate was still to be submitted.

He congratulated the North West Provincial Legislature for going the extra mile and managing to hold four public hearings which were broadcasted through the radio.

He then asked the Members to present their provincial mandates.

Eastern Cape Legislature

Ms E Van Lingen (Eastern Cape, DA) read the Eastern Cape Mandate and said the province voted in favour of the Bill

Gauteng Legislature

Ms T Motara (Gauteng, ANC) read the Gauteng Mandate and said that province voted in favour of the Bill

KZN Legislature

Ms T Motara (Gauteng, ANC) read the KZN Mandate and said the province agreed to support the Bill

Limpopo Legislature

Ms T Motara (Gauteng, ANC) read the Limpopo Mandate and said the province supported the Bill

Mpumalanga Legislature

Mr S Mohai (Free State, ANC) read the Limpopo Mandate and said the province voted in favour of the Bill, but proposed that clause 6 be amended, to say that a Member of the Commission is to be appointed for a term of five years, which is renewable for one additional term, and must be a man or woman who is a South African citizen and is a fit and proper person to hold office as a member of the Commission.

Advocate Empie van Schoor, Chief Director: Legislation, National Treasury, said the Committee would have to amend section 7 of the principal Act, in order to insert the required qualifications that the person must be a South African citizen and be a fit and proper person - the proper procedures would have to be followed to do this. The .NCOP Rule 169 stated that the Committee must create a Report, in order to get permission from a plenary session to amend section 7, as that was not in the original Bill. In relation to the term of five years, that could be accepted, since it was in line.

Northern Cape Legislature

The Chairperson read the Northern Cape Mandate and said the province voted in favour of the Bill

North West Legislature

Mr T Motlashuping (North West, ANC) read the North West Mandate and said the province voted in favour of the Bill but this legislature had issues with clause 12(b) and said that it created a potent ground for transgression of the ethical code of good governance by providing a potential platform for appointment of own colleagues. For instance, a member of the Financial and Fiscal Commission (FFC) might apply to be the Chief Executive Office, and be able to influence the decision in his or her favour. This Province therefore recommended that FFC commissioners be excluded from applying for the position of CEO, in terms of section 22.

The Province was also worried that clause 18 was watering down the oversight of the Minister by allowing the FFC to make regulations. For this reason, the Province felt that section 30 of the principal Act must be retained as it ensured checks and balances by the Minister. Clauses 16 and Clause 30 should remain.

Advocate Empie van Schoor said that National Treasury took a different view on excluding members of the FFC from applying to be CEO. Forcing them to resign before applying was unconstitutional, because the person might not be successful and have no job after that .It was also pointed out that other public servants were allowed to stand for election to Boards, without being required to resign. They would rather not be part of the process if these restrictions were applied to the CEO position.

In relation to the oversight of the Minister, Adv van Schoor pointed out that in the case of IEC v Langebaan Municipality it was said the Chapter 9 institutions must be independent, as they were not part of the government. Therefore the Minister, who is a member of the executive, must not be involved in their running and how they conducted the business. The Commission must report to Parliament and the Provincial Legislatures.

The Chairperson read out section 202 of the Constitution, in support of the point that they must report to Parliament not the executive. For this reason, he suggested that sections16 and 30 must be retained since they dealt with rules and regulations.  

Western Cape Legislature

Ms C Labuschagne (DA, Western Cape) read the Western Cape mandate and said that the Province generally supported the Bill but, the Provincial Committee had suggested the following wording changes:
- to delete "of the commission is" in clause 6 line 30 and insert "deputy commissioner"
- to delete "is" and to insert "are"’ in line 31 and delete ‘after consultation’ in line 40 of clause 10.

Advocate van Schoor said that the insertion of "Deputy Director" would essentially mean that this person would have to be employed full-time, and this would have to be justified by looking at the workload of the Commission.

The Chairperson read the relevant portions of the Bill in support of this, pointing to the amendment that said that the Chairperson of the Commission must be full-time but the other commissioners must be part time.

Adv van Schoor noted that the change of "is" to "are" was not a problem. 

In relation to clause 10, she pointed out that the issue of consultation was not influential. Because the Bill had external impact there had to be consultation with the Minister.

A representative of the Legal Unit pointed out that the consultation was not for the Minister to use his power to make a decision. Also the scope of consultation is limited to the rules and not on general issues.

Mr S Mohai (ANC, Free State) pointed out that there was need for consultation because the Ministry was a beneficiary.

The Chairperson also added that the word "may" rather than "must" was also important.

The Chairperson concluded that the explanations and reasoning by the National Treasury were acceptable. The minutes would show the reasoning and they would need to be taken back to the provinces, to move to the next phase of the final mandates.

Consideration of Committee Reports

Agreement on the new BRICS Development Bank

The members adopted the report

Treaty for Establishment of BRICS Contingency Reserve

The members adopted the report.

Minute Adoption
Members adopted Minutes of 14 May, but Ms van Lingen pointed out that the situation described there, in relation to the Western Cape, would not change.

Minutes of 21 May were also adopted.

The meeting was adjourned

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