Road Accident Fund Amendment Bill: Department of Transport briefing

Meeting report

Briefing by Department of Transport

Mr Chris Willemese, Senior Manager: Regulations, Road Accident Fund (RAF), an entity of the Department of Transport (DoT), took the Committee through presentation, focusing on the historical background and the amendments made to the Fund. He said that the RAF was called upon to provide a social security safety net, to indemnify, rehabilitate and compensate the injured, and promote the safe use of all South African roads. It operated on basis of statutes, common law and insurance principles. There had been amendments in 2015 aimed at improving the governance of RAF, providing for a more equitable, fair and transparent compensation system and limiting the liability of the Fund.

Mr Willemese said that certain benefits of the 2015 amendments were not realised, including the removal of the provision that entitled a claimant to a cost contribution, and the introduction of the two tariff system for the limitation of the RAF’s liability. In this regard, the court ruling had increased the RAF’s liability and had created administrative complexity. The amended Act and its regulations had been challenged on the basis of constitutionality. The attachment and removal by the sheriff of RAF assets had impacted on operations and the processing of claims.

In order to address these challenges, a Bill had been initiated to amend the principal Act in order to enable improved cash management and to enable the timely, efficient and cost effective delivery of compensation. Certain amendments were proposed and were presented to the Committee clause by clause (see attachment). Under the new dispensation, the Department of Transport would benefit, as private hospitals would treat more victims of road accidents. A market-related single medical tariff would be introduced.

Discussion

Mr C Hunsinger (DA) recalled that in March 2015, the Committee had requested a workshop on the RAF Act to review issues arising from the amendments to the RAF Act. Many matters that were covered by the previous amendment had also been included in the initiated amendment. It was quite clear that the RAF had intended to change its strategies, but the request to have a workshop was not entertained. The Committee had a desire to make inputs with regard to amendments that could be made, and acknowledged that the RAF -- as well as stakeholders -- was experiencing financial pressure which impacted on its operation. These challenges could be addressed in a face to face workshop.

The Chairperson responded that when the workshop had been proposed, the Minister had indicated that the Bill was first to be served to the Cabinet. Technically, the Committee should write to the Minister and request the workshop for the Committee to engage with critical issues arising out of the RAF Act. There were also issues arising from the elapsed Bill which needed the Committee’s attention. The letter should indicate that the elapsed Bill and the initiated Bill needed to be engaged with in a workshop.

Mr Hunsiger asked whether the Bill had been published for public comments. There was no indication that there had been contributions from the public. The Committee was not aware of any comments or contributions from the stakeholder, as well as the public. No significant changes had been made compared to the elapsed Bill. How could the Committee be asked to approve the Bill after one presentation on it? There were co-contributions from the National Economic Development and Labour Council (NEDLAC) which could have been made prior to tabling the Bill to Cabinet, and this approach left the Committee in the dark. At this point, the Committee was not in a position to approve the Bill without outside inputs. What was the position of the Bill as it pertained to its constitutionality or views of the public? The Bill was an illusion without such inputs.

The presentation indicated that there 18 sections that had been amended. These led him to raise concerns about the questions surrounding accessibility. It looked as if there would be no financial support to victims. In terms of affordability, what he saw was a new design, which could run parallel to the existing one. This system was not cheaper and could not operate under existing financial constraints. He was also concerned that there was a court ruling that noted that the tariffs needed to be clear in terms of numbers. He asked the DoT to comply with the court ruling. On what basis had the DoT determined that the new system would be cheaper if the tariffs were indeterminable and remained unknown? How would claims be made and how could calculations be made? It could not be conclude that the new system would be cheaper and affordable.

Although both private and public hospitals could be used, it was not clear how medical practitioners would be paid. It was not clear why a patient should be hospitalised for not more than 30 days. What would happen after 30 days if the patient still needed to be in hospital for medical attention? It was not clear how hospitals would be paid, because the tariffs were not clear. Why should one compel a patient to go to another hospital after 30 days if he or she could not afford the hospital to which they had initially been admitted?

He was also worried about R10 000 for funeral cover. This amount was inadequate, compared to the cost of funeral services. There might be constitutional issues around the funeral costs.

He could not see how the RAF would be better off and how it would administer its finances. The Bill was based on assumptions. The Minister should be asked to conduct a proper assessment impact of the Bill on social and economic aspects prior to tabling it to the Committee.

The Chairperson said that the elapsed Bill was awaiting the Parliamentary processes. It would be fair for the Committee to wait for the said Bill to be tabled before the Committee.

Mr M de Freitas (DA) supported Mr Hunsinger’s proposal of having a workshop, and commented that he was keen to hear the views, comments and inputs from stakeholders. He asked what criteria were used to determine a victim’s injuries, what should happen after 30 days of hospitalisation, what would guarantee that a victim of a road accident would end up being hospitalised, and what would happen if a patient was hospitalised in either a public or private hospital. What criteria were used to arrive at R10 000 for funeral expenses?

Mr L Ramatlakane (ANC) commented that the briefing by the DoT worked to unlock the publication of the Bill. He had many questions that he would like to ask, but those would be reserved because the Bill was at the start of the process. Who should initiate the Bill? Was it the DoT or the RAF? He was of the view that the Minister should have meticulously looked at the Bill and thus addressed its gaps and shortcomings. He was worried about the description of serious incidents or injuries which could not be treated within 30 days. What was the definition of a serious injury, or what would constitute it? How could the funeral service be defined? On what basis was R10 000 allocated to funeral services? He stressed that the Bill should be published for comments before the Committee engaged with it.

The Chairperson sought clarity on whether the Committee should wait for the lapsed Bill first, to see whether these two Bills could be published together. She was worried about expenses with respect to compensation and funeral services.

Mr M Sibande (ANC) commented that there was a court judgment that provided guidance, and there was a legal opinion from the Law Society that could have been used to deal with the question of tariffs. The Bill did not articulate how it would respond on matters concerning a driver, an owner of a vehicle and an individual who might be a victim of a road accident. What would happen if a pedestrian were hit by a car while crossing the road? How was R10 000 for funeral cover arrived at? The DoT should bear in mind that its objectives included providing a social security safety net.

Referring to a case in which a German was a victim of road accident, in which it had been ruled that the victim be paid in foreign currency, he sought clarity on how foreign nationals would be paid. Foreigners were receiving a higher compensation compared to South Africans when the compensation was calculated in foreign currency. He was not against the payment of compensation to foreign nationals, but the Bill should it make it clear that they would be paid in local currency.

He said that public comments should be solicited because they were essential, as they would guide the Committee to contribute to the development of the Bill.

The Chairperson reiterated that Members should wait for the elapsed Bill to be dealt with, reminding them that the Minister had said that a workshop was not possible if the two Bills were not available.

Mr T Mpanza (ANC) commented that there was a need to put the two Bills together. He welcomed the work done by the DoT in developing the proposed and tabled Bill. However, there were a quite number of gaps needed to be addressed. When listening to the presentation, he could not hear something that was actually taking the Committee in the right direction. There was still room for improvement to make sure that the Bill was aligned with its objectives.

He said that the definition of medical practitioner had been provided in a Eurocentric context, because it did not include traditional healers. Not all victims sought medical attention at hospitals, as some sought such attention from traditional healers. In the South African context, the definition of medical practitioners should be amended to include them.

On the question of tariffs, he commented that a single medical tariff was not justified and should be debated on. He asked whether the tariff had been described after consultation with the Minister of Health. 

The Chairperson commented that it was wrong for the Bill to authorise the Minister of Transport to prescribe a list of injuries that were deemed serious, as the Minister had no expertise to identify serious injuries and thus list them. Lists of injuries should be listed in consultation with the Minister of Health. On the question of the social security net, the DoT should speak to the Department of Social Development to find out what really happened to people with disabilities. The DoT should not be seen as fighting with other departments, but should rather be seen working together with them as one government. When could a victim of road accident who became disabled, be handed over to the care of the Department of Social Development? In responding to questions, the similarities of the two bills should be alluded to for the Committee to consider their desirability.

DoT’s response

Mr Willemse, referring to the issue of a single medical tariff, said that an enormous work had been done in terms of tariffs, and a report on the question had been compiled. The determination of tariffs could not be dealt with in the principal Act, but rather in the regulations. The Minister would be empowered to regulate the tariffs on the basis of public comments, and the court’s ruling would be taken into consideration. The Bill allowed for traumatic injuries to be dealt with. The rehabilitation of the patient was the primary objective.

Regarding the funeral benefit, R10 000 had been set when the RAF’s funeral coverage was that amount in 2014. The necessary costs would be considered in respect of funeral services. The RAF was operating on the basis of common law, along with insurance principles, and these would determine what the claimant was entitled to. If one looked at the new system, R10 000 could be paid in situations where a claim was not possible.

With regard to serious injuries, a list of injuries could be determined by the Minister. However, injuries were subject to assessment by a medical practitioner, who could provide an injury report. Most of injuries that were prescribed by medical practitioners as serious would be listed as serious and, as a result, red tape would be reduced. It would also be cost-effective. The DoT was engaging with the Professional Health Council to determine what could be qualified as serious injuries, and this would be further determined by public comments.

On the question of tariffs, he said that it was also premature to discuss them as they should be discussed in line with the National Health Insurance (NHI) scheme. The Bill sought to prioritise the wellbeing of a person involved in a road accident. A pedestrian, for example, who was hit by a car could be taken to a public hospital, and because they were under pressure they might not provide the required attention to the victim. Yet, given that private hospitals were not sure whether they would recover the costs from the RAF, they might not admit the victim. Under the current dispensation, a victim could be offered medical treatment for a 30-day period after the accident. In a private hospital, the RAF could not afford the cost of treatment if the patient needed further health care.

Mr Wilmese noted that there would be no duplication of payment of disabled persons because the DoT was engaging with the Department of Social Development. According to the ruling of the court, it was stated that the RAF also was a social security institution. The social security net would be provided to the victims within a prescribed time.

With regard to foreign nationals, the principal Act covered a loss of income and a loss of breadwinner. Under new dispensation, the amendment would make it clear that the payment would be made in the local currency.

Mr Willemse further noted that there was a process that was still unfolding as they went forward. There was a need to streamline the two processes to see what could be drawn from the two pieces of legislation -- the elapsed Bill and the current Bill. Further inputs would be drawn from public comments. The priority for the DoT was to speed up the process in order to address the current dilemma in which the RAF found itself. Some of the processes that hampered the payments needed a swift response. The Bill should be expedited in compliance with all processes, including consultative processes.

He added that the concerns regarding a workshop had been noted, and other issues raised would be followed up on. The Bill was at a beginning point, and as it went through a number of processes, all issues raised would be addressed. However, the Committee should work together with the DoT.

Committee comments

Mr Hunsinger commented that in general he was not convinced that problems were being solved. The RAF was running out of money and was insolvent. Despite these challenges, the Bill was opening new categories of claims at a time when money was a problem. A workshop was needed to address the gaps and challenges such as these.

Mr T Mulaudzi (EFF) commented that the Bill needed to make things easier. He asked why the elapsed Bill was being pushed away, how a single medical tariff could be determined, and whether the Bill was intended to resolve the issue of the RAF’s insolvency. Why were there delays in paying out claims, and why was the RAF not adhering to its own rules? He said that if a claim was lodged, it should be paid within 60 days.

Mr De Freitas reiterated that a workshop was necessary.

Mr Ramatlakane commented that he was not convinced by the response given relating to the R10 000 funeral cover. Concerns raised by Members could well be addressed in a workshop.

The Committee Secretary said that the workshop could tentatively take place on 3 or 20 June 2017. The date of 20 June would be better, because it would allow Members to engage with the Bill and for the Department to get ready for the workshop.

The Chairperson agreed, and said that Members should choose a suitable date.

Mr Ramatlakane preferred the date of 20 June.

Mr Sibande said that the Bill had not yet been submitted to the Committee in a formal way.

The Chairperson said that a letter would be sent to the Minister to state that the Committee would like to deal with the two bills robustly, and she would communicate the tentative dates of workshops to the Minister. She thanked the delegation for its presentation.

Oversight visit

Members discussed proposals regarding which province should be visited for the purpose of oversight.  

Mr De Freitas suggested the Northern Cape.

Mr Ramatlakane seconded the proposal, and said that this time the oversight should focus on the railway, because roads had been covered previously.

The Chairperson noted the proposal.

The meeting was adjourned.