Repeal of Space Affairs Act; Debt Relief Committee Bill framework

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Trade and Industry

20 June 2017
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Committee met to consider the repeal of the Space Affairs Act No. 84 of 1993, and was informed that after a new Space Council had been appointed by the Minister and Cabinet in 2016, various processes of consultation had been undertaken, and had culminated in the drafting of the South African Outer Space Bill.

The objects of the Act included:

  • The establishment of the South African Space Regulatory Council (SASREC) as a national competent authority to regulate all space affairs in the country;
  • The establishment of a chief directorate that would provide secretarial functions to SASREC, as well as implement the national space policy (NSP);
  • To determine and review the NSP;
  • To promote and develop a clear and transparent regulatory framework;
  • To disseminate information and benefits emanating from space regulation in a bid to create awareness on the use of space for socio-economic benefits, such as using space for data communication, navigation, agriculture, natural resources, drought and so on;
  • To promote the development of space capabilities for socioeconomic development; and
  • To develop and enforce technical and safety standards for the space sector;

The Act obliged the Council and the Department of Trade and Industry (DTI) to continuously monitor compliance with space activity regulations. The Council was now required to receive information regarding the placement of space objects in orbit and post-launch orbital changes; the operational status of the satellite; loss of operating control of a satellite; end of life disposal; planned re-entry into the atmosphere; as well as deviations and other changes with respect to conditions of the licence.

The Department was prepared to table the legislation before the Cabinet cluster in order to request permission for the draft legislation to be taken through a wider public consultation. Once the permission had been granted, the legislation would be published in the Government Gazette. Public consultation on the draft Bill would be held in October 2017.

The Chairperson of the South African Council for Space Affairs (SACSA) made a presentation on the activities of the Council, which had commenced its tenure in February 2017 and had been able to support the DTI in reviewing the new Outer Space draft Bill. Planned priorities for 2017/18 were outlined, which included two international events.

Questions arising from the presentation focused on the international model upon which the new regulatory model had been predicated; whether the Act would regulate other matters beside those in relation to the orbit; means by which cost parameters of licence fees would be established and would not discourage new entrants from the space industry; reasons behind the exemption of the insurance clause for the government when undertaking space activities; submission of the certificate on the socio-economic impact assessment carried out, for further scrutiny by the Committee; existence of penalty provisions to address issues of non-compliance with Council registration requirements; and the availability of sufficient resources to monitor and ensure proper implementation and compliance with the Act. Members also wanted to know how the development of space capabilities would address criminal activities as part of the socio-economic needs of the country; the effectiveness of the national registry; and the need for a wider range of consultation with stakeholders, especially with those in the rural areas.

The Committee was taken through a framework for the Committee Bill on Debt Relief  by a senior Parliamentary legal adviser. It was emphasized by both the Chairperson and the senior legal adviser that the document was only in the form of a Bill, but was not a Bill.

The process of drafting and finalising Committee Bills were explained before the issues around debt relief measures were pointed out. It was noted that the process for the framework began with a policy document proposed by the DTI, in which many concerns had been raised on the need for a review of the National Credit Act (NCA). Clauses and sections within the NCA that needed amendment for the purpose of providing debt relief measures, were highlighted.

Discussions around the framework raised a concern that proper engagement on the policy submitted by the Department was needed before a full consideration of the framework. The Chairperson clarified that the process had not been rushed and had been ongoing for over 18 months. The Committee secretary was asked to draw up a timeframe that would show the commencement of the issues around debt relief measures till now.

Meeting report

Repeal of Space Affairs Act by South African Outer Space Bill

Ms Nomfuneko Majaja, Chief Director: Special Economic Zones and Economic Transformation (SEZ & ET), Legal & Compliance: Space Affairs, DTI, began by formally introducing Ms Pontsho Maruping, Chairperson of the new South African Council for Space Affairs (SACSA). At the last appearance before the Committee, there had been an old Council whose term ended in 2015. The Minister and Cabinet had appointed a new Council in 2016.

Ms Majaja said she would take the Committee through the legislation itself, while Ms Maruping would present the activities of the Council since inception, as well as other activities that had been planned.

The Department had gone through the various processes of consultation for the legislation and had developed draft legislation. Key areas and areas that were different from what obtained in the old legislation would be highlighted.

The legislation began with the scope that highlighted the areas which the legislation would apply to. These included the operation of a space facility; manufacturing of space objects; the launch of space objects into outer space; the operation and control of space objects in orbit; re-entry of space objects; and space applications, through regulations, for attainment of the objects of the Act. Space applications referred to space benefits for society such as communication, disaster management, resource management, drought monitoring, agriculture and environmental management.

The first objective of the Act was to establish the South African Space Regulatory Council (SASREC – Space Council) as a national competent authority to regulate all space affairs in the country. The legislation introduced a new name for the Council, as opposed to the previous name it was known as, which was the South African Council for Space Affairs. After proper consultations, the Department was advised to craft a name that would capture the functions of the Council in totality. Hence, the new name – SASREC.

The role of the Council was to advise the Minister on all regulatory matters. It would supervise and implement matters arising from international conventions, treaties and agreements. The Department was a signatory to four treaties. The Council was therefore responsible for implementing matters arising from the treaties. It was also responsible for issuing, amending, suspending or revoking licences for the above mentioned applications.
 
Persons and authorities involved in the space industry would be obliged to register with the Council. This provision was not firmly stated in the previous legislation, as the old legislation mentioned only the need to encourage persons and authorities to register. However, this provision to encourage was insufficient as people could choose not to register. The new legislation, therefore, contained stronger wording to ensure registration. Registration was required by the Council, the Department of Trade and Industry (DTI) and the government for the purpose of staying updated about the happenings within the space industry, for compliance purposes, as well as for socioeconomic reasons.

The Council was required to provide appropriate information about its activities, as well as perform any other activity necessary for the effective achievement of the objects of the Act. The Minister may instruct the Council to perform any activity he deems fit.

The Act emphasises that all space activities shall be authorized by the Space Council through a licence. It also deals with the issues around change of ownership and surrendering of licence, as authorized by the Space Council. This refers to instances where entities, after registering their licence and space object, may require a licence to launch such a space object. However, any such entity may be required to change ownership to another entity. The Council has to be aware of this process, as well as oversee the entire process.

Unlike the previous legislation, the new legislation has introduced licence fees, processes and procedures that may be prescribed by the Minister. The rationale behind the introduction of licence fees was to assist with carrying out the numerous activities currently taking place in the country, as well as ensuring compliance and monitoring by the state. The Council had the prerogative to grant, refuse or amend these licence fees. The types of licence fees that could be issued by the Council were for space launch licences, space facility licences, and re-entry licences.

The second object of the Act was to establish a chief directorate to provide secretariat functions to SASREC, as well as implement the national space policy.

The Council was an ad hoc body that met as and when necessary, although usually four times as prescribed, but could meet more than four times where the need arises. The greater part of the work was done by the employees of the DTI.

The team was required to review and monitor the implementation of the national space policy (NSP). The NSP was developed and launched in 2008, and its monitoring and evaluation of the policy would be due by 2018. This would done as a parallel work, in addition to finalising the legislation. The NSP guided all stakeholders on how to conduct space activities. The Department was therefore saddled with the responsibility of monitoring implementation by all stakeholders.

Apart from developing and implementing regulations for space activities, the team would also be expected to develop and implement a space industry framework.
The team would serve as the secretariat for the new Council and its three committees. It would carry out other critical work necessary for the performance of the Council, including licensing, monitoring and ensuring compliance of all space activities in the country.

The third object of the Act was to determine and review the NSP. The Minister had the mandate to carry out this review, in consultation with Ministers from other relevant departments. The policy was aimed at promoting orderly development of space capabilities and activities that address the socio-economic needs of the country; providing coordination and intergovernmental cooperation; facilitating international cooperation; and ensuring that all international agreements and commitments were met.

Other objects of the Act include the promotion and development of a clear and transparent regulatory framework; and striving to disseminate information and benefits emanating from space regulation in a bid to create awareness on the use of space for socio-economic benefits, such as using space data for communication, navigation, agriculture, natural resources, drought and so on. The Act would also ensure the protection of the national interests of the Republic, and the promotion of international cooperation in conducting space activities.

Yet another object of the Act was to promote the development of space capabilities for socio-economic development. Emphasis was placed on socioe-conomic development. This would be achieved through the obligation on persons and authorities to register. In terms of registration, the Space Council would maintain a national registry that contained information of licensed space objects. All persons and authorities involved in the space industry must register with the Council through a compliance register. It had also been envisaged that the DTI would offer support to the industry through the use its industry support mechanism, such as incubation/clustering of space industries.

The Act also had an object to develop and enforce technical and safety standards for the space sector. The Council would be responsible for developing, implementing and enforcing all activities within the space sector. Inspectors may be used when deemed necessary, who may inspect any document in any space facility. Investigators may also be appointed in cases of accidents or where an unacceptable safety risk requires investigation.

The Act also introduces an insurance clause for the compensation of damage or loss resulting from the conduct of space activities. This was a completely new clause, which was a result of the ratification of the Liability Convention. The state therefore becomes liable for all space activities, regardless of whether such space activity was authorised or not. This explains the need to firm up the registration in order for the state to be aware of all activities taking place within the space environment. The provision of the new clause emphasises obligation on persons conducting space activities to obtain and maintain a liability insurance against any liability that may be incurred under the Act. It also introduces compensation payment to third parties for any damage caused by a launch operation or return. However, this obligation would not apply when government was undertaking space activities. This was based on the understanding that government had a blanket insurance for all its activities.

The provision also introduces insurance waivers that may be considered by the Council and the Minister on a case by case basis. (See slide 17 of the attached document for examples of such waivers). The waivers may include instances where space operators have already accessed certain licences from other duplicate regulatory environments. It should be noted that the DTI is also hosting the Non-Proliferation Council (NPC) that looks into the export and import of certain objects and parts that could come in and out of the country. The National Conventional Arms Control Committee (NCACC) under the Department of Defence was another regulatory authority.

The Chairperson said that interpretations of acronyms should always be included in the presentation, as there were new Committee Members who may not be familiar with the meanings of some acronyms.

Ms Majaja said corrections would be made.

She continued with the presentation by noting that the Act also obliged the Council and the DTI to continuously monitor compliance of space activities. Due to limited resources in the past, the Council and the DTI only considered licence applications and thereafter issued such licenses. However, very little had been done to monitor the operation of space objects in orbit. The Council was now required to receive information regarding the placement of space objects in orbit and post-launch orbital changes; the operational status of the satellite; loss of operating control of a satellite; end of life disposal; planned re-entry into the atmosphere; as well as deviations and other changes with respect to conditions of the licence.

Other steps still had to be taken on the legislation. The Department was prepared to table the legislation before the Cabinet cluster in order to request permission for the draft legislation to be taken through a wider public consultation. Once the permission had been granted, the legislation would be published in the Government Gazette. Parallel to this, the Department would undertake a public consultation workshop on the draft Bill itself in October 2017. The consultation workshop and publication in the Government Gazette would be followed by a collation of inputs by the Council’s policy and legal committee. The collated document would be sent to the state law advisers by January 2018. A review and update of the draft Bill would then be carried out by the draft committee, together with the state law advisers, in February 2018.

Ms Maruping continued the presentation by highlighting the membership of the Council, which had kicked off fully only in February 2017. However, it had been able to support the DTI in reviewing the new Outer Space Draft Bill.

The Council committees had been reconstituted and the terms of references (TORs) had been reviewed. There would now be an industry support committee; a policy and legal committee; as well as a science and technical committee. A new strategy had been developed and the Council already had a draft for it. New members of the Council had been inducted. Major stakeholders in the Western Cape had been engaged with, in a bid to explain the role of the Council.

The Council had also participated at the United Nations Committee on Peace for Uses of Outer Space (UNCOPUOS). It had co-hosted the Manfred Lachs Moot Court Competition for the African region with the South African National Space Agency (SANSA), which was a capacity building programmme for space regulation. The team from the University of Pretoria hadwon the competition for this year and would be representing Africa in the finals at the International Astronautical Congress (IAC) in Australia.
The planned priorities for 2017/18 were outlined. Details of two international events that would be embarked on in the 2017/18 year were also given. These two events were the IAC 2017 and UNISPACE +50, which was a United Nations (UN) initiative targeted at marking the fiftieth anniversary of space activities. The UN would be considering a development of space strategy through this event.
The UN would also look into a review of the current regulatory environment. A high-level forum that focused on ‘space as a driver for socio-economic sustainable development’ would be held in November 2017 in Dubai.

Another high level event would be held in June 2018, and the new strategy would be presented at this event. Invitations would be sent to Heads of State for participation from 18 June to 19 June 2018, while the official opening of the UNCOPUOS meeting would be on 20 June 2018. South Africa would be hosting a symposium as part of its UNISPACE +50 activities. The symposium would focus on small satellite missions for scientific and technological advancement. It would be held at Stellenbosch between 11 and 14 December 2017. Details would be communicated to the Portfolio Committee once they had been finalised.

In developing the SPACE 2030 agenda, the focus would be placed on issues around space governance, capacity building, resilience, interoperability, and space for sustainable development. Thematic priorities had been developed, namely space economy, space society, space accessibility and space diplomacy.

Discussion

Adv A Alberts (FF+) sought clarity on the international model upon which the new regulatory model was being predicated and whether the Department had been advised by Prof Ram Jakhu, who was also a participant in the process. He asked whether the Act would only regulate matters relating to orbit. He noted that space applications were going further than orbiting the earth, and were going towards the moon and Mars. South Africa should be able to participate in this process. He asked for the means by which the cost parameters for licence fees would be established in a way that would not be inhibitory to new entrants in the space arena, and why the government would have no need for insurance during its undertaking of space activities, launching and re-entry.

Ms S van Schalkwyk (ANC) asked if the certificate issued after the completion of a socio-economic impact assessment could be made available to the Committee for further scrutiny; whether penalty provisions were made to address non-compliance with the Council registration obligations; and if sufficient resources were available to monitor proper implementation and compliance with the Act.

Ms N Louw (EFF) supported the question raised by Adv Alberts on the determination of the costs of licence fees. She also wanted to know how the development of space capabilities would address crime activities, as part of the socio-economic needs of the Republic; if a national registry was in existence at the moment, if the said registry was effectively managed or not, and who would manage the new national registry; what the determinant factor would be in appointing investigators; clarity on the obligation of government to pay insurance; where the public consultation workshop would be held in October 2017; and how the public consultation would be carried out to include people in the rural areas.

The Chairperson referred to the point made during the presentation about consultations with various stakeholders, which automatically brought to mind stakeholders in science, technology and business. However, it was expected that such engagements would not exhaust the Council’s consultation, as rural development was one of the issues discussed at the IAC in Italy. She therefore sought clarity on consultations in rural areas.

Ms Majaja responded to the issues around the benchmarking that had been done in relation to the legislation, and said that a number of legislations had been looked into, including the international model law used by many states. The Council had also been guided by some procedures and processes within the UNCOPUOS, particularly from its legal sub-committee. These issues had been discussed in UNCOPUOS and states had been encouraged to domesticate the international treaty by developing national legislation. Consideration had been given to the space policy and other elements of space legislation in Australia.

Regarding the licence fees to be prescribed by the Minister, it was pointed out that a range of regulations would be developed after the completion of the legislation to address issues such as the licence fees. The Council had plans to consult the National Treasury (NT) on the licence fees. It was also aware that the licence fees should not be insurmountable to an extent that would discourage new entrants into the space industry.

The rationale behind waiving insurance for government while undertaking space activities was based on the fact that government already had insurance for all its activities, which was over and above the space activities. The Council would therefore need only to get confirmation on the insurance before government embarked on a space activity.

The certificate for the completed socio-economic impact assessment would be made available to the Committee.

The issue around penalties for noncompliance to registration obligations was a current problem for the Council. However, the legislation provided that noncompliance to the Act would be tantamount to an act punishable by law. The Council would send the document containing penalties stipulated by the legislation to the Committee. Nevertheless, the Council would still be faced with a problem of monitoring for noncompliance, due to the fact that the Council had only one resource, which was the secretariat. However, a lot of resources were needed for the implementation of the legislation. It had been suggested that the team at the DTI should be strengthened in order to assist with implementation.

In responding to the issue raised by Adv Alberts on participation in space activities, including Mars and the moon, Ms Maruping said that the draft Bill focused only on the space activities currently undertaken by South Africa, which excluded participation in space exploration to Mars and the moon. This was because the main focus was to utilise space activities for socio-economic development. However, there had been quite a lot of international engagement regarding the exploitation of resources in space, and there was a need to begin to focus on how it would be managed, even at the level of the UN.

The appointment of investigators would be based on cases of suspected noncompliance, such as conducting space activities without informing the Council to circumvent the requirement for licensing of activities.

The public consultation alluded to in the presentation was specifically geared towards the draft Bill. In terms of informing the broader public on space activities, it was noted that the celebration of national space week was conducted annually. A much broader engagement on space activities was usually achieved during such celebrations. However, the Council did not anticipate a broader consultation of this kind in relation the Bill.

A national registry for the registration of space objects was currently in existence. Being a signatory to the registration convention, the Council had an obligation to register space objects and submit such registrations to the UN for record purposes.

Mr Zikode, DDG: DTI, said the Department had taken some of the issues raised by Members as suggestions that should be considered, especially with regard to consultation with other departments. The Department would engage with National Treasury (NT) on the issue of the inclusion of insurance for government in the legislation. Consultations would also be made on issues regarding deep space exploration. There was nothing stopping research institutions in the country from collaborating with international organisations on matters of deep space exploration. However, such areas may not be delved into due to the current budget.

The Chairperson said that the Department could submit written responses to other issues to the Committee. One such issue was space exploration, which would involve a policy and executive decision.

Ms Louw said that her question around the means by which space capabilities would address crime activities as part of the socio-economic needs of the Republic was yet to be answered. On the issue of public consultation, she opined that the one week of space celebrations was insufficient, especially since most of the activities done during the celebrations were often held in the suburbs and not the rural areas. Broader public consultations should be carried out, and more communities should be involved.

The Chairperson suggested that the Committee should be invited to the symposium scheduled for December. She also reiterated Ms Louw’s position on the need to involve more people in the public consultation.

Ms Maruping said the questions raised and suggestions made by Members had been helpful and supportive. On the issue of consultations, she said that more than one workshop would be organised. Provincial workshops would be organised for each province, and the rural areas in the communities would be targeted.

In responding to the issue of addressing crime activities as part of the socio-economic needs, she said she had discussed with the DDG the previous day on the need for South Africa to have one or two office satellites that would help with getting cheap data for use in carrying out activities across a number of sectors, including safety and policy areas. SANSA and Denel Spaceteq were working towards the development of an earth observation satellite that would help with areas around socio-economic development, including areas related to crime. Some institutions were already accessing data for border patrolling and monitoring, as well as coastal monitoring. The information was also being used in the Kruger National Parks and other parks to combat rhino poaching. The challenge here was that each institution procured data from private satellite operators, as the Council had no satellite of its own. Space data was currently being used for socioeconomic activities, such as the monitoring of drought, agricultural crop management, natural disasters, and so on.

The Chairperson asked if the submission of responses in writing and other documents could be done by Friday 23 June.

Ms Maruping confirmed that responses and documentation would reach the Committee by Friday.

The Chairperson agreed that space was the future, and recent engagements with the UN and Parliamentarians had buttressed this fact. The sustainable development goals (SDGs) around space also put people into consideration. It also focused on ensuring peace and prosperity for the people. Achievement of these SDGs could not be done by government alone. Partnerships with the private sector and civil society were therefore necessary. An important factor that should be looked into was governance. It had become necessary for the Department to look into the development of a framework of governance in order to ensure overall success.

Debt Relief Committee Bill framework

The Chairperson said that Adv Charmaine van der Merwe, Parliamentary senior legal adviser, would take the Committee through the framework of the Bill on debt relief. She told MPs to bear in mind the fact that a decision was yet to be made on whether the framework was a reflection of previous discussions. 

Adv Van der Merwe said the document before MPs looked like a Bill. The sentiment derived from the Committee was that progress on the document was not feasible, despite the numerous amounts of information that had been received so far. It was for this reason that she had crafted the document in the format of a Bill so that a clearer picture of the document could be projected.

This process had begun with a policy document proposed by the DTI. A lot of concerns were raised over that document, including the fact that the document was broad, and it covered a total review of the National Credit Act (NCA), while the Committee wanted to focus only on a debt relief measure. Some of the beneficiaries identified by the DTI for the debt relief measures fell into categories that were doubted by the Act in a different way. Some of the beneficiaries proposed by the Committee were not included in the policy.

Adv Van der Merwe had therefore drawn up a table to highlight the targeted sections in the Act and the consequential amendments for such sections. However, she was of the view that the table may not assist the Committee in arriving at a way forward.

She repeated that the document before the Committee was simply a framework and not a draft of the Bill. The document contained text boxes which highlighted the current issues that had been identified. She had begun the process of identifying possible consequential amendments. For instance, the reason for amending Section 26 of the principal Act was because the tribunal may not be sufficiently identified as a court. The Committee may, however, decide that this amendment was unnecessary. In essence, the existence of a clause did not necessarily mean that such a clause would end up in the Bill. It only assisted by giving a sense of direction on the specific matters to be addressed in the Act in drawing up the required measure. This was also because the process was still in the information gathering stage, and more information would be given at the Thursday meeting of the Committee. The information received so far was overwhelming. It was therefore necessary to highlight the important issue to be addressed, which was the introduction of a debt relief measure through the amendment of the NCA. The framework would then be developed into a Bill.

The document began by considering clauses and possible amendments to be made. The main issue that dealt with debt relief measure was reflected in one clause that currently contained three or four sections. The Committee would commence its engagement on the framework from these sections. A sub-committee was currently in existence that would draw up details on the sections. Changes would be made to clauses from the details drawn by the sub-committee, before a final submission was made to the Portfolio Committee on the actual clauses. Once all the clauses had been agreed to in the draft Bill, the Bill would be published for comments.

Adv Van der Merwe went on to explain the Committee Bill process. The normal process for Committee Bills was to draw up the Bill first before introduction, unlike an executive Bill that was first introduced before the Bill was drawn up. Once the Portfolio Committee and the sub-committee had agreed on all the clauses, then a first draft of the Bill would be drawn up and published for public comments. The comments received would be dealt with in the same way comments received on executive Bills were handled. The comments would be considered; part-hearings would be held; policy issues would be raised; views would be received from the Department on the Bill itself; and further changes may be made to the Bill. At the end of the numerous participations and deliberations on the Bill, the Committee would reach a conclusion to the effect that the Bill was a reflection of the proper consultation process held with the Department; it was fit for implementation; it did not contradict any other legislation; public involvement had been facilitated; and the Committee was satisfied with the Bill.

The Bill would then be adopted by the Committee. The joint tagging mechanism would be consulted to confirm the correct process to be followed for the Bill. After the above processes had been finalised, the Bill would be introduced, and would not return to the Committee. The introduced Bill would be sent to the House for consideration before going the National Council of Provinces (NCOP) for further consideration.

The cover page of the document reflected the intention to amend the NCA, which would be called the National Credit Amendment Bill, to be initiated by the Portfolio Committee. The next page explained the process of amending the Bill. Clauses removed from the Act would be written in bold and in square brackets, while clauses inserted would be underlined.

The current ‘long title’ of the Bill was short, since it was simply inserting a measure of debt relief. Adv Van der Merwe had, however, taken the liberty to add some things on in duplum law, but the Committee would decide on the necessity for this. The two issues that were currently missing from the Act were the debt relief measure and the clarification of the in duplum law.

The process on the Bill would commence through a consideration of the Act from its first section to the end. Some of the issues identified were the need to consider a proper definition for ‘indigents’ and ‘child headed households’, as there were no dictionary definitions for those terms. Definitions would be needed for those terms if the choice to adopt them was made.

The Chairperson interjected to warn guests to refrain from taking photographs at the meeting, as she had been notified of such activity by the Committee secretary.

Adv Van der Merwe said some definitions may be added to the Bill, while some other definitions may be omitted. Issues that would be considered in defining ‘child headed households’ included the condition of residence as a requirement; whether the house could be encumbered; and whether an inclusion would be made in the absence of death. More questions may come up on this issue. A block had been included in the document to highlight these issues.

A definition had been provided for ‘indigent’. However, a decision may be made in terms of making it a substantive provision that would be included in the clause that dealt with the debt relief measure.

Consequential amendments would be made from clause 2. However, focus would be placed on the main clauses that would lead to the amendment of identified sections in the Act. It should be noted that more sections needing amendment may be identified as the process went on.

The consumer tribunal was set up by section 26. Once the process for the debt relief measure had been decided upon, it may become necessary to change the section to reflect the nature of the set target to be achieved.

Clause 3 in section 27 may also be amended for the purpose of reconsidering and confirming the functions of the tribunal in terms of acting as a court to finalise the process.

Clause 4 of section 43 deals with the record of applications. One of the proposals received so far was for the credit regulator to receive applications for debt relief. However, a record of such applications was needed. A possible solution was to refer back to the credit bureau, but it should be ensured that the bureau was empowered to keep such records. This issue was also raised in clause 6. Clarifications should also be made on what the bureau would do with the records kept in its possession.
The main questions to be asked centered on whether the records could be kept with the credit bureau or in the register provided by the Act.

Clauses 7 and 8 were consequential amendments that addressed measures to be adopted. In a case where suspension was adopted as a measure, reference would be made to section 84 that focused on suspension as a debt relief measure. Clause 8 dealt with the duration of retaining debt relief information.

The first eight clauses were dependent on clause 9. The implication of this was that the first eight clauses may or may not be retained; additions and subtractions may also be carried out depending on what was prescribed by clause 9. Clause 9 focused on a chapter that had been added to the Act. A number of options were available, but the Committee would need to decide on an option to follow.

Adv Van Der Merwe recommended that debt relief should be addressed in a separate part of the Act, as it constituted a new addition to the Act. She proposed that debt relief measures should be included in chapter 4, which dealt with consumer trade policy. The Department would process the added confidentiality, personal information and consumer credit records. It was therefore proposed that debt relief should be introduced as a standalone part in the chapter that dealt with consumer credit policy.

Two types of debt relief measures would be considered, one of which would become applicable immediately after the finalisation of the Act. A name had to be coined for the measure. It was also necessary to look into how the operations of the measure -- how it would work, what processes would be followed, the likely consequences, and so on.

The second measure would be one in which clear criteria were set by the Committee. In a circumstance where one of the criteria was missing, the Minister may prescribe a measure that could be applied in future.

Overall, there was a section of the Act that dealt with the immediate measure, and the measure put in place by the Committee. This would be the new Section 88 (a).

Adv Van Der Merwe said that she had made use of the existing process for debt review. Although the decision to follow this process was yet to be made, the process served as guidance for the Committee on issues to be focused on. These issues included whether or not the process was workable; the applicability of the process of debt relief; whether or not the process should be changed; and so on.

The current process of debt review was applied to credit. It seemed the national credit regulator (NCR) might be the appropriate body to which applications should be made. The Committee was vested with the power to determine who the applications should be made to. However, it was clear that applications could not be automatic if certainty were to be achieved. Some form of application was therefore necessary.
Also, quite a number of risks had been identified, and a lot of information had been received from the National Treasury (NT) on such risks. In the previous process where amnesty was provided, the statistics showed that 52% of people did not fall victim to the same trap a second time. This was one of the risks already identified by the Committee, using the debt relief measure as a means of identifying qualified individuals.

Subsection2 would address issues around the effect of the application on other possible debt processes; whether the application should stop those processes; and whether the processes should stop debt relief. There would be lot of discussion and consultation with regulators and the tribunal itself in order to understand the implications and impact of the application.

Subsection3 would address the outlook of the application. An example of what this section addressed could be seen in the requirement of municipalities for indigenes to produce proof that they can not afford to pay. Proof could take the form of bank statements, proof of income, a letter from an employer confirming wages, and so on.

Once applications had been received, individuals would have to notify the creditors. Creditors had to be aware of the ongoing process, and they would be given the opportunity to object where need be. This would bring up the issue of defining the most appropriate way to contact creditors. Some form of notification would be adopted. The debt review made use of the principle of cooperation for this purpose.
The Committee had to ensure that the trap of expropriation was avoided in implementing this process. Treasury had also raised this issue and had sought opinions in this regard. Adv Van Der Merwe recommended that an opinion should be obtained immediately after the Bill had been finalised to ensure that proper procedures had been complied with.

The issue of reckless and unlawful lending was addressed in subsection 6. It should be borne in mind that the Act makes provision for reckless lending. Issues that would arise from looking into compensation as one of the means of dealing with the costs of debt relief, included who such compensation should be paid to; whether the amount paid was a full amount or a portion; and so on. Costs would be reduced if the debts of applicants were reduced by excluding the factors already provided for by the Act.

Subsection 7 speaks to the rejection of unqualified applicants for debt relief. In the event that an individual did not qualify for immediate debt relief for some reason, but was seen to be having difficulty, such an individual would be assisted to apply for debt review and other measures. The issue of qualification of applicants for debt relief was one of the important issues that would be discussed, as it could be linked to who would be making the order. Part of the answer lay in whether the process carried out by the committee was expropriation or not. If the answer to the question was in the affirmative, section 25 would be referred to, as it provided for the upholding of compensation as agreed or as determined by court. It would be possible to get past section 25 if such compensation could be referred to a court. However, there was criticism about the courts and the fact that they might make the process unaffordable. One of the main issues to be grappled with was where the approval of applications would lie.

Adv Van der Merwe said she had tried to exempt courts from the process to see if the order could be acquired from the tribunal. However, there was a need to resolve issues around the tribunal being a court. This was being looked into, and discussions would be held with the tribunal itself to verify if the tribunal was a sufficient court that could comply with section 25.

In subsection 8, the Committee was yet to consider the issue raised by some people, which had been brought forward as possible options. One of the options was a suspension after debt. This raised the issue of whether a debt would be suspended after an application for debt relief had been granted. The example used in the document was from the “No Income, No Asset” (NINA) application that New Zealand uses. The application allows a debt to be suspended for 12 months once an application for debt relief has been approved. Checks would be made after 12 months to determine if the applicant could now afford to pay the debt and whether a debt review would be necessary. In other words, the applicant was given a 12-month break to get back on her/his feet again, get a job or a means to pay the debt. If no improvement was seen after the 12-month period, the debt may be extinguished.

The next section talks to measures that may be prescribed by the Minister. The information received so far from the Committee had given her the impression that it would be necessary to indicate to the Minister the type of measures that he could prescribe. These measures could be found in subsection 2 of section 88 (b). Suggestions around these measures include suspension; extinguishing; and an informal liquidation process, which would be the NINA process. Other things to be considered include the categories of people to be included in the Bill. Categories include indigent persons; persons who have suffered unforeseen loss of income in a specific sector identified by the Minister as being subject to mass retrenchment; and persons who were subject to adverse conditions in a sector identified by the Minister. Utmost care should be taken in developing the categories, especially since the future can not be predicted. Categories should not be too specific, but intentions should be clear. The wording of the suggestions made would be changed before the Bill was finalised.

The Committee also needed to know under what circumstances the Minister could prescribe measures. The sub-committee had made suggestions in this regard. However, the wording of the suggestions would be recrafted for easier understanding. The circumstances would take into account the external factors responsible for the shock in the economy.

Regional natural disasters was another suggested category. More suggestions may come in during the process and some circumstantial categories might be changed. The things that could be prescribed by the Minister included types of measures, beneficiaries of the measures, and the circumstances under which such measures could be prescribed.

The process of prescribing was yet another area that would be looked into. A discussion had been held on whether it would be necessary to consult the Committee and get an agreement from it, or whether the Minister would be given the ‘lieu’ way to consult. It should be noted that the Committee would not be mentioned in the legislation. Instead, it would be referred to as the ‘National Assembly’ (NA). Also, due to the separation of powers, the Minister and the NA would not be expected to agree on issues. One of the two would be expected to take the final decision. At the moment, the final decision was being taken by the NA. However, it had been observed that in situations where the Minister wanted to go more broadly than three requirements of measures, beneficiaries and circumstances, the NA would have to agree, otherwise the Minister could go ahead. It had therefore been proposed that the Minister must consult with the NA. In the event that a situation fell outside the criteria, the Minister would be expected to obtain the permission of the NA to proceed.  The Committee may decide to discuss the feasibility of this proposal.

The next step would be to make a publication in the Gazette. This would be done after consultation had been done on the debt relief measures. After comments had been received on the gazetted document, the Minister would be expected to table a report in the NA where the comments would be discussed until a final proposal was drafted. In the event that the comments were valid, the Minister would be held accountable for not taking comments into previous consideration.

A big block had been inserted in clause 9 under section 88 (3) (c), and it was titled ‘the wording proposed by the Department.’ The reason for including this was to showcase the other side of the spectrum in terms of the Department’s stance.

The last section addressed the consequences. All issues made had been highlighted in blue because they were yet to be discussed by the Committee. The consequences included the interruption of prescription. Consequences would serve as a risk management mechanism.

Clause 10 dealt with in duplum. No provision had been made for in duplum, but it could be included in clause 10. Adv Van der Merwe was of the opinion that this could be included under section 101, but this was still subject to discussion by the Committee. Section 171 dealt with regulations, and this section would be considered in situations where the Minister could not prescribe. A short title and commencement should also be looked into.

Adv Van Der Merwe said that she was yet to work on the memorandum and objects, as they constituted part of the final processes. However, some work had been done by people in institutions, and the procedure of work done by both trade and consumer protection had been included in the document, with a focus on consumer protection only. Based on this, the Bill should be a section 76 Bill, and not one to be referred to the National House of Traditional Leaders, unless significant changes were made to the clauses that dealt with customs and customary law.

The framework described above had emanated from discussions, presentations, questions posed by Members, proposals made and so on. The framework was not definitive and it was likely that the final draft would be different from the entire framework.

Discussion

The Chairperson expressed appreciation for Adv Van der Merwe’s presentation before seeking inputs from Members, commenting that they would need to study the document in order to digest its content properly.

Mr D Macpherson (DA) said that Adv Van der Merwe had referred to the Committee as her clients. He wanted to know where the order to draw up the document had come from, and what the official communication had been in this regard. It was difficult for the Committee to discuss the document when it was yet to reach an agreement on a policy relating to this issue. It therefore seemed like the Committee was putting the cart before the horse by not having a discussion on the policy that would inform the Bill. Although the DTI had submitted a policy, the Committee was yet to reach agreement on the said policy. This should be the starting point of the discussion. Once discussions had been held around policy, terms of reference should be drawn up that would inform the format of the Committee Bill under consideration.

What was more disturbing was that the Committee had not held an engagement with the industry on the issue of debt relief measures. He was concerned by the fact that no discussion had taken place among Committee Members on the issue, in order to come up with immediate decisions that could be taken to address debt relief. It was important for the Committee to have a discussion around the functionality of the National Credit Tribunal (NCT) in carrying out the work that was expected of it.

He was also concerned that the discussions were taking place way before the Committee’s study visit to deal with this particular issue. He asked for the essence of having a study visit after the Committee had begun considering a draft framework. He maintained the view that the Committee was rushing the process, as many issues were yet to be discussed; many role players were yet to be engaged with; and a policy was yet to be agreed upon by Members.

The Chairperson replied that the issue had been discussed in 2016 and a sub-committee had been established for this purpose. A decision had been taken in June 2016 to look into the issue, as it constituted a serious matter in the country. It had become apparent to the Committee that legislation emanating from the Department took no less than two years to be finalised, regardless of how fast the process was expedited. It was on this basis that the Committee had taken a decision not to amend the powers of the National Credit Regulator (NCR), but rather to deal with the specific issues, which were centered on debt relief measures. The first phrase used had been ‘debt forgiveness’, but during the first meetings of the sub-committee working within a multiparty set-up, it became clear that the focus should be placed on debt relief instead. A policy was already available in the area, but the challenge remained the inability to deal with debt relief itself. The NCR had then been asked to conduct research on this and report back to the Committee.

Ms Nomsa Motshegare, CEO: NCR, said that the entity had been asked to conduct the research in March 2016. A research report had been presented to the Committee by the end of April 2016.

The Chairperson said that the Committee had engaged with the industry in 2016, but some Members may not have been aware of this engagement because they were not involved in the sub-committee. It would be best for Members to ask the committee secretary to draw up the timeframes from when the issue was first discussed in the Committee till date. It was unlikely that a decision had been made to develop a Committee Bill. However, all parties had agreed to the decision taken at the time. It was decided that a request be made to Parliament for a legal adviser that would assist in crafting and directing the Committee on the Bill, hence the involvement of Adv Van der Merwe. Because of the substantial amount of information that had been received so far, the Committee asked her to draw up a framework to address the issue. This explained the emphasis placed by both the Chairperson and Adv Van der Merwe at the beginning of the presentation, that the document under consideration was a framework containing issues to be addressed in terms of debt relief measures; and not a Bill.

The NCR, in its enthusiasm, had begun to consider the placement of its powers. The Committee had pointed out that the Department would address this issue, as it had committed itself to do so in due course.

It should be understood that the process at hand had been ongoing for well over 18 months. It dated back to the previous term when the issue had come up, and the NCOP had passed a moratorium on debt repayment.

The committee secretary was asked to draw up a framework which would be distributed to Members at the next meeting scheduled to be held the following day.

Mr Macpherson said that the Chairperson had misunderstood his input. His concern was that the Committee was rushing into a process without agreeing to a policy. The policy had been given to Members only a couple of weeks ago, and no discussion had been held on it, nor an agreement reached on it either. It was important to have a discussion on the policy itself before delving into the draft framework. Also, the Committee had not had the opportunity to discuss the measures that could be taken in the immediate term, to start the process of debt relief. The Committee should discuss how the issue of African Bank would be resolved, as there was a R3 million credit agreement that could be sourced immediately. Issues around the restructuring of entities should be discussed.

He also mentioned that no big financial institution had appeared before the Committee to explain their views on the unfolding of the process. Pertinent issues to be discussed included who would be responsible for paying the debts, and how the debts would be written off. He reminded the Chairperson that only three MPs had started as Members of the Committee from inception. It was therefore necessary for this discussion to take place in order to provide the new Members with a proper understanding and involvement on the issues under consideration. The issues should be discussed in order to ensure that the study trip would not amount to a waste.

The Chairperson remarked that she would avoid turning the discussion into a dialogue between one Member and the Chairperson. As indicated earlier, the Committee had placed the responsibility of drafting a framework on Adv Van der Merwe. The Committee was in no need for a Bill yet, but the issues needing attention had been highlighted and discussed in the sub-committee. Several engagements had been held in the sub-committee and ideas had been brought forward. The sub-committee had also engaged with the Standing Committee on Finance. The Committee did not consider itself to be overextending or rushing into the process. Instead, the decision had been taken because of the urgency of the issue. The reason for engaging with the Standing Committee on Finance, NT and the Judiciary was because of the issues identified by the sub-committee, which required urgent attention. When the unanimous decision was taken to look into a Committee Bill, the goal was to expedite the process by involving the Minister and the Department to assist with the process. Addressing all the issues would not take the same length of time.

She agreed with Mr Macpherson that most of the Members of the Committee were quite new, but it would be unnecessary to use that as an excuse to go over every issue from scratch. This was because at the time of the Chairperson’s reappointment to the Portfolio Committee, she had been the only ANC member with continuity. This was about all parties, and not the ANC only. One of the things the DA and FF+ had maintained over and above the ANC in the Committee, was to ensure continuity. She expressed hope that more ANC members were retained in the Committee.

She mentioned a problem with the Committee programme for Thursday, which had been drawn up before the Committee had been informed of caucuses that would take place on Thursday. The Committee would be unable to continue with the meeting on Thursday, and its engagement with Adv Van der Merwe on the debt relief policy. Two options were available for the rescheduling of the meeting, which were Friday, 23 June, or next week, when a double-day workshop would be held on Tuesday, 27 June and Thursday, 28 June.
MPs agreed on the programme for the coming week. Timeframes for debt relief measures would be circulated the following day or on Thursday afternoon at the latest.

Committee business

The Chairperson explained the reason behind the scheduling of a Wednesday meeting for 08h00, noting that a different kind of meeting would be held. The Committee had been asked by the Speaker to engage with a delegation of MPs from Uganda on procurement issues. The Committee would, however, elaborate on challenges faced in the process, in order to assist the Ugandan delegation in learning from the mistakes made. Members were asked to bring documents on procurement, including the colloquiums held on this issue. At the last budget vote of the Committee, the issue of procurement had been addressed in the light of how it hampered progress in manufacturing and industrialisation. South Africa would address issues of procurement through the Standing Committee on Finance. The Committee on Trade and Industry had, however, engaged the Auditor General on the issue. The senior economist would present a document that would assist in refreshing the minds of Members on the issue.

The Chairperson referred to the programme of the Committee, which included the workshop on the copyright and performers’ protection Bill, scheduled for 27 and 28 June. The workshop on industrialisation and its linkages with trade, procurement, investment and localisation would be held on 29 June. Procurement was also being discussed in the space environment. This supported the fact that procurement cuts across all sectors, just like investment and trade.

Mr Zikode was asked about his awareness of the aerospace village at Centurion, and he confirmed his awareness. He also said that the sector was developing, despite being a difficult sector requiring high technologies. The Chairperson said that a photograph of what obtained in the sector should be tabled at the next engagement of the DTI with the Committee.

Consideration of outstanding minutes

The Chairperson coordinated the consideration of outstanding minutes on a page by page basis, starting with the minutes of 28 February 2017. On page 2, the word ‘national’ in the interpretation of the State Of the Nation Address (SONA) was corrected to be ‘nation,’ as in “state of the nation address”. Ms Van Schalkwyk proposed the adoption of the minutes and was seconded by Mr Macpherson.

Mr Macpherson proposed the adoption of the minutes of 2 May, and was seconded by Ms Van Schalkwyk.

Ms C Theko (ANC) proposed the adoption of the minutes of 12 May, and was seconded by Ms Van Schalkwyk.

The minutes of 17 May 2017 were set aside, because they did not reflect the apology sent in by Ms Louw, and also because none of the Members who attended the meeting were at the current meeting to adopt it.

The minutes of 19 May  were also set aside for various reasons, including a debate on the actual venue where the meeting held as opposed to the venue stated in the minutes. Mr Macpherson said he was certain that the meeting took place in room G26, and not G249. The Chairperson asked the secretary to confirm the venue. Mr Macpherson also said that his request for the tabling of the full list of the applicants for the National Lotteries Commission (NLC) was not reflected in the minutes.

The minutes of 30 May were adopted after the Chairperson said that the register for the Department of Arts and Culture officials who had attended should be attached to the main register. Ms Theko proposed the adoption of the minutes, and was seconded by Ms Louw.

The meeting was adjourned.

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