The Standing Committee on Community Safety met to consider the appointment of members of the Board of the Western Cape Liquor Authority (WCLA) in accordance with the Liquor Act (2008) regulations, which require the Standing Committee to make recommendations on such members' appointment. The Head of Department and the Senior Counsel from the Department of Community Safety were present to provide clarity on matters and legal aspects raised by the Committee.
Members asked how the Department was going to know if a candidate had been convicted of an offence, or if there would be a separate form for people who had been disqualified from an appointment because of convictions. They wanted to know if it was procedurally and legally correct to make a declaration instead of writing a questionnaire, and suggested that if the current incumbents were doing a proper and good job, there was no need to remove them and they should be kept for the sake of sustainability and continuity. They also sought clarification on the Minister’s discretionary prerogative to determine the length of a member’s term for a period not exceeding four years
Mr Gideon Morris, Head Of Department: Department Of Community Safety, Briefed The Members About Matters Regarding The Appointment Of New Members To The Governing Board Of The Western Cape Liquor Authority. His Presentation Centred On Eligibility And Disqualification, Eligibility For Appointment, Disqualification From Appointment, And King IV Core Competencies For Board Members.
Eligibility And Disqualification
With Regard To Eligibility And Disqualification, He Said That Section 3 (7) Of The Western Cape Liquor Authority (WCLA) Act Indicated That Before Being Appointed By The Minister As A Member Of The Board, The Candidate Must Submit An Affidavit To The Minister In Which Such Candidate Declares That He Or She Was Eligible For Such Appointment, And Was Not Disqualified From Such Appointment. When Making The Recommendation To The Minister, The Standing Committee Should Ensure Those Persons Recommended Were Eligible And Not Disqualified. Information On Disqualification Such As Insolvency, Etc. Could Best Be Obtained During The Interview Stage. A Questionnaire To Assist In This Regard Was Available.
On Eligibility For Appointment, Section 4 Of The Act States That In Order To Be Eligible For Appointment As A Member Of The Board, A Person Must Have Attained The Age Of 25 Years, Be A Citizen Of The Republic Of South Africa And Permanently Resident In The WC Province, And Not Be Disqualified Under Section 5.
Concerning disqualification from appointment, Section 51 of the Act states that the following persons were disqualified from being appointed, continuing or acting as members of the Board:
- anyone who had in the preceding ten (10) years been convicted of an offence in terms of this Act or any similar law;
- anyone who in the preceding ten years, whether in the Republic or elsewhere, had been convicted of theft, fraud, forgery, the uttering of a forged document, perjury or any offence under the Corruption Act, 1992 (Act 94 of 1992) or the Prevention and Combating of Corrupt Activities Act, 2004 (Act 12 of 2004) or any offence of which dishonesty was an element;
- an unrehabilitated insolvent or anyone who was subject to any legal disability;
- anyone who had in the preceding ten (10) years been removed from any office of trust on account of misconduct or dishonesty;
- any political office bearer; and
- anyone who, whether personally or through his or her spouse, family member, partner or business associate had or acquired a direct or an indirect financial interest in any liquor business or establishment; or had any interest in any business or enterprise that may conflict or interfere with the proper performance of his or her duties as a member of the Board or in any licence issued under this Act.
For the purposes of this section, Mr Morris said that an indirect financial interest did not include an indirect interest held through any fund or investment if the person holding such interest had no control over the investment decisions made in respect of that fund or investment.
He then took the Committee through the core competencies for Board members, as stated in King IV:
- The Board was responsible for ensuring the continued success of the entity and was guided by the charter of the Western Cape Liquor Authority (WCLA). It was the link between management and stakeholders;
- The Board should inform and approve the company’s strategy and satisfy itself that business plans were not encumbered by unexamined risks. In doing so it, identified key performance and risk areas. The Board also ensured that the strategy would result in sustainable outcomes;
- Ability to read financial reports;
- Reasonable understanding of the WCLA (charter);
- Exposure to strategic planning, risk management and development of key performance indicators;
- Ability and willingness to collaborate with key stakeholders;
- Promote ethical conduct and good corporate citizenship;
- Ensure that performance and interaction was guided by the Constitution and the Bill of Rights;
- Maintain a balance between the interests of the community as consumers and as economic active citizens.
Mr B Kivedo (DA), said it should be stipulated or stated in the recommendations that the applicant had professional qualifications, and there must be proven success that as a game changer, the person would be able to strike a balance between business and social ills. In the event of people falling prey to liquor, the applicant could be of assistance in terms of possible interventions and corrective action. He said the current Board had been elected for a term of three years. The term of office for members was not to exceed four years, but they could also serve two terms. If the current incumbents were doing a proper and good job, there was no need to remove them. They should be kept for the sake of sustainability and continuity.
Ms T Dijana (ANC) wanted to know if there would be a separate form to be signed by people who had been disqualified from an appointment because of a conviction, in order to declare their conviction, otherwise how was the Department going to know if the person had been convicted?
The Chairperson said a particular form was used which worked out that the applicants confirmed that their facts complied so that they were not disqualified in terms of the criteria. The form asked questions about criminal convictions. She read the contents of the form and the questions that were asked. She also requested a legal opinion in cases where the applicant did not fill in the form or filled it in incorrectly.
Ms P Lekker (ANC) asked about the best legal advice to be given to a person who had a criminal record, but had served his time and now felt the process to be appointed to serve on the Board had been unfair to him or her because of the conviction.
Adv Romeo Maasdorp, Western Cape Provincial Parliament Legal Services, said the issue was straightforward. He noted that the form was called a “questionnaire.” A prospective Board Member would have to submit an affidavit of some sort, but he was not sure whether this would be an attachment or if it had to speak to the content of the questionnaire. If it was an affidavit, incorrect facts or information may subject one to criminal proceedings. He suggested the candidates should be warned and informed of that consequence. He also advised Members that should there be deliberate misstatements or incorrect information, the Committee would be entitled to lay or bring a criminal charge against the candidate. That should be an obvious consequence for a deliberate misstatement of factual information.
The Chairperson wanted to know if the affidavit should be submitted before the candidate appeared before the interview by the Committee, or after one had been shortlisted, or after the candidate had been considered by the Minister for appointment.
Mr Morris recommended that candidates be asked to respond to questions on the questionnaire during the interview or, alternatively, change it to a declaration where everybody had to sign and submit it during the interview. However, after they had signed the declaration, and after the recommendation of the Committee but before appointment, Adv Gerber would then get a legally binding affidavit from each of them to state the information was correct. They would then use the information to check their criminal record, but if it was discovered they had lied or misguided the Committee, they would then be disqualified.
Adv Gerber informed the Committee that according to the Act, before being appointed as a Member of the Board, the candidate had to submit to the Minister an affidavit in which the candidate would declare that he/she was eligible for the appointment and would not be disqualified from such an appointment. Therefore, before a recommendation was made and the Minister made that appointment, the candidate must be required to make an affidavit. That was why they had drafted the questionnaire, because from the curricula vitae (CVs), they would not be able to see if the candidate had a previous conviction. That was why they had to be asked during the interview to complete the questionnaire, not the affidavit. He also noted that the Act stated that the provincial cabinet or the Minister may, in consultation with the Standing Committee, call for proof to his or her satisfaction of the continued eligibility.
The issue of eligibility was covered by the Act. What this meant was that if the Minister was not satisfied or there was suspicion that the candidate or potential candidate was lying in the questionnaire or was not telling the truth, there could be an inquiry or investigation. It was therefore the responsibility of the Committee to see if the candidate had sufficient experience to do the work. He said they were providing guidance to the Committee to assist it in doing its work.
Ms Lekker wanted to know if it was procedurally and legally correct to make a declaration instead of writing a questionnaire.
Mr Morris said it was correct, because before one interviewed a person, one asked the person to declare either by means of a question or filling in a form to see if he/she complied with the requirements. Like any other appointment process, there was a deep vetting process that took place once one made it on to the shortlist. That was when the affidavit and the checks and balances would kick in, and that was the responsibility of the Minister when acting on the recommendations of the Committee.
He said the content of the Act differentiated between the six members, and the King IV Report stated that the core skill of the Board was to act in the interests of the entity. They must be appropriately qualified and experienced. The Act further made an exception to the rule. For example, one may have a particular person on the Board who had no experience in financial reports or corporate experience, but he/she was nominated to the Board on the strength of his/her ability to look at the social consequences of the Board. Ideally, one may have people who could do both. When one read the King IV Report, it said anybody in any case must act according to the principles of the Bill of Rights. However, in this case the Act states that even a person who had no corporate exposure but complied with Act could be nominated.
With regard to the term of office, Mr Morris said that the Act prescribed two terms, but it also gave the Minister the discretion to determine the length of a term not exceeding four years. The previous Board was appointed for a term of three years, but it could have been appointed for four years. Their interpretation of the Act was if one served two terms, even if the Minister decided to appoint one for a one-year term, one could serve only two consecutive terms. However, one could not say he/she served only two of the potential eight years, because that was a discretion that had already been executed. He pointed out that Section 5 (1) of the Act stated that there was no discretion if the person had been convicted, because in some cases one could condone a conviction, but the requirements in the Act stated it must not be more than 10 years. That was the only thing prescribed in that section of the Act.
Adv Maasdorp said he agreed with the idea as it was emphatic and conclusive, and indicated that this was an objective disqualifying criterion. If there had been a condonation in the previous 10 years, the person was eligible.
Adv Gerber stated it was quite correct because if a person had been convicted, that could not be condoned. If one looked at the appointment of Liquor Licensing Tribunal members, Section 17 provided a qualification for members, but not for Board members. So, if a person had a previous condonation, that person was out.
He reminded the Committee that the Minister could re-appoint a member if his/her term of office was not exceeding four years, as the Minister may re-appoint a member of the Board in a prescribed manner for one other period not exceeding four years. The re-appointment was already considered in the Committee. The new people to be appointed would be considered as new appointees. Even if they had served on the Board, they would not be re-appointed in terms of the Act. The Minister may re-appoint a member of the Board in a prescribed manner for one other period not exceeding four years, but this process now was not about re-appointment, because the Committee had considered the issue of re-appointment and it was now over and done with. The Committee had recommended not to re-appoint, so this was a new process.
The Chairperson said she understood that a member could not serve for more than two terms, but wanted to know if it was correct that a member could not be re-appointed for a second term, but could be appointed.
Adv Gerber said Section 16 stated that the Minister may re-appoint a member of the Board in a prescribed manner for one other period not exceeding four years. This meant the person was a member of the Board and his term had now ended.
The Chairperson then asked if a member could serve more than two terms.
Adv Gerber agreed, but indicated that if the Committee recommended that some members be automatically renewed, then they would not have been put through the interviewing process -- their appointment would just have carried over. However, the Committee had expressed an opinion in a letter it wrote in October 2017 to say it could consider a person for a second term, but that person must compete equally with the other nominations, go through the interview and answer the questions from the Committee, and be subjected to the recommendations of the Committee.
Mr Morris said the Committee must differentiate between the processes. The first process was the appointment, which was the one the Committee was busy with. For example, if the person was then serving his/her term which ended at the end of March 2019, Section 6 says the Minister could re-appoint that person for one period. This meant that if a person had been re-appointed in the previous term and served the term and his/her term ended at the end of March, that person could not be re-appointed.
Adv Maasdorp suggested there should be a contextual interpretation, rather than the textual interpretation, because the “terms” and “periods” had not been defined. Contextually, the Minister in his/her appointment may not want to have a situation where one member ‘hogged’ the Board. One member may conceivably have multiple appointments and that could not be the intention, and it may go against the King IV principles. Textually, the member may hold office for such period as the Minister may determine, but it may not be infinite. The Minister keeps it to four years. Within that four years there could be a re-appointment. Potentially, the member may have membership for eight years. If that was the interpretation, then a prospective candidate may objectively be disqualified, so he advised that the purpose must not be to have a member serving two periods or four years, or parts of four years. It should be potentially eight years or less, but not eight years plus.
The Chairperson said they had an applicant that had served two periods already -- one of four years and one of three years. She asked if the applicant was eligible to go through the interview process or not.
Adv Gerber said this was an appointment process, not a re-appointment one. Whether he/she was on the previous Board or he/she had taken a break, it did not matter. The Act did not say one could not be appointed more than twice. It referred only to re-appointment for one other period. It did not talk about other processes. In a period of 15 years, a person could serve three periods, but not consecutive periods. A member could be re-appointed once. One could serve two terms, but not consecutively.
Mr D Mitchell (DA) said what was important was that it was the Committee that made the recommendations, whether it was for an appointment or re-appointment. The day the Minister signed the letter, it became an appointment. Even if one had served a term and the Committee recommended one again, and the Minister signed it as a re-appointment, it did not matter because when one had served a term, one had served a term.
Mr Morris suggested the Committee should consult the provincial legal services so that it could forward its interpretation of the Act.
Ms Lekker suggested that Adv Maasdorp should forward his opinion on the matter as well.
Mr Kivedo wanted to know if a person who had an interest in a hospitality entity or ‘B n B’ would be disqualified, because these entities sold liquor.
Mr Morris said the Board had been dominated by people who had an interest in the liquor industry.
Dr Luzuko Mdunyelwa, Chief Executive Officer: Western Cape Liquor Authority, said the answer was in Section 5 (2) of the Act, which stated that the person had to be far from the decision-making process.
Adv Maasdorp suggested the Committee should interview all the candidates. The qualifications of the candidates should be thoroughly discussed in the Committee meeting.
The Chairperson indicated that one of the candidates was the owner of a liquor company, and that was a conflict of interests.
Ms Lekker suggested the candidate should not be considered.
Adv Maasdorp suggested the candidate should be disqualified, because part of what the company was doing was liquor consulting and that gave the candidate a predisposition. The preliminary engagement was there to guide the Committee about the candidates during the interview.
Mr Mitchell said the grid indicated the applicant had a liquor consultancy business. Based on the declaration of the applicant, the applicant should be interviewed for clarification.
The Chairperson then suggested that all applicants be interviewed to get clarity on some matters that had been ‘red-flagged.’
The meeting was adjourned.
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.