The meeting consisted of two presentations before the Committee: the first from the South African Local Government Association (SALGA) and the second from the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL) on their 2017/18 annual performance plans.
SALGA had identified four strategic goals for the upcoming years, each with its own set of related objectives. The first strategic goal was inclusive economic growth and spatial transformation. The strategic goal aimed to foster integrated and sustainable urban development and management, regional economic growth inclusive of rural development, and social cohesion. The four objectives were 1) To implement a sustainable Urban Development Programme 2) To support regional economic strategies and effective Land Use Management approaches as drivers of economies of scale and social cohesion 3) To promote high quality and reliable service provision and infrastructure investment and 4) To strengthen the role of local government in community development and social cohesion.
Municipal debt was profiled and proposals on how to deal with the historical debt owed to municipalities were presented and lobbied for in Parliament. SALGA had continued its lobbying and participation in the National Intergovernmental Task Team sessions addressing challenges organs of state faced in settling debts owed to municipalities. Municipal debt was growing out of control. Interest payments owed were growing exponentially. Municipalities might reach debt levels of R160 billion by 2019. A discussion needs to be had on how much of this amount is realistically recoverable. SALGA had some innovative ways by which it planned to reduce some of these debts. SALGA was also investigating how to resolve issues between municipalities and Eskom.
SALGA was stabilising municipalities in terms of managing employee discipline and the resolution of workplace disputes. SALGA was engaged in a new round of wage bargaining with respect to the Local Government Service Charter. The entity was optimistic that a multi-wage agreement would be met without a strike occurring.
SALGA had identified 43 municipalities that required support which the entity provided via the Municipal Audit Support Programme. Over the year 43 were investigated, of which 18 were found to in the “red zone”. This means that the municipality was unable to produce budget statements and healthy audits. 7 had progressed out of the red zone following SALGA’s intervention. Clearly there was still much more work to be done.
Members expressed dissatisfaction at the absence of SALGA’s president, Mr Parks Tau. They indicated that it was a norm for the head of an organization to appear before Parliament, and that it would be preferable for Mr Parks Tau to be present in future meetings. Members also expressed concerns that the budget SALGA had presented was too simplistic, and also that it represented misallocation of spending, with too little going to operational expenses, which finances SALGAs programmes.
The CRL Commission said it had developed and implemented cost management and information technology strategies. Expenditure reports and financial statements were produced as per audit requirements. Asset register reconciliations and asset verifications were conducted. Policies were revised. Formal performance assessments were conducted and would be concluded by the end of the financial quarter. Performance information reports were also compiled as per our strategic plan. Audit committee meetings were held, internal audit reports were compiled and presented to the Committee. Plenary and Section 22 committees were facilitated to create a platform for CRL commissioners to provide oversight to the work of the Commission on a quarterly basis.
In the upcoming year, there would be a focus on investigations into burial land and grave access and further research, investigations and campaigns on the promotion of multilingualism. Financial constrains limited the work the CRL could do.
Members questioned the spending patterns within the CRLs budget. In particular they questioned how so much was allocated to the office of the chairperson, and the office of the Chief Financial Officer (CFO). There was some debate between members and delegates as to the role of fundraising, with Members asserting that the Commission should not only rely on the appropriation from Parliament.
Briefing by South African Local Government Association (SALGA)
Mr Xolile George, Chief Executive Officer (CEO), SALGA, explained that the presentation contained five sections. He skimmed over section one (the background of SALGA’s role) and discussed section two, matters arising from previous engagements. He updated members on five of SALGA’s capacity building programmes and listed the funding they were allocated by the Local Government Sector Education Training Authority (LGSETA) for the period 2017-2022. First was the Generic Councillor Induction Programme (CIP) which trained a total of 8174 councillors and 243 traditional leaders during phase one. 8078 certificates of attendance were issued. This covered almost 89% of all councillors. The programme was allocated R10 million for 2017-2022. The programme also included “portfolio-based inductions” which were tailor-made to each type of councillor.
Mr George continued. 130 out 270 delegates have been trained in the Leadership in Municipal Governance Programme (LMGP). This was a formalised programme running on an ongoing basis. This training programme was credit-bearing. It was allocated R7.5 million. Another programme was the Municipal Leaders Media and Stakeholder Engagement Programme (LMGP), which aimed to expose councillors to media and media instruments. Currently, 412 of 1400 delegates had been trained. It received R6.5 million. This programme was still in progress.
Mr George explained that the conceptual framework of the Local Links Leadership Conversations (LLLC) programme was being re-examined to create alignment between SALGA’s strategic goals and the programme. The LLLC was provincially situated and it encouraged shared-learning and peer-review. It was allocated R600 000. He added that separate feedback would be provided on the Municipal Leadership Competency Assessment Centre, which was a SALGA initiative.
Mr George discussed international programmes. SALGA plays a prominent role in the Southern African Development Community (SADC) but also in the African and global community. SALGA secures funds and is entrusted with collaborative projects based on its standing in the international community. There are collaborative programmes with the European Union and “the Commonwealth”. SALGA was implementing a four-year programme in collaboration with the Canadian government that aimed to create green [environmentally friendly] local governments. This programme benefitted about six municipalities in the Eastern Cape. This was an exciting programme which involved around R58 million. Another partnership was the “R20” climate project which provided finance for climate change responses at the city level. This involved 34 sub-projects in 16 municipalities. SALGA was also in partnership with the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women).
Mr George moved on to section three of the presentation, the performance of SALGA as per its mandate. SALGA was mandated with six key tasks. The first of these tasks was strategic profiling; SALGA had organised the World Urban Forum in February 2018. SALGA had also produced a guidebook to leading urban change and copies were available.
A second task of SALGA was to “lobby, advocacy and represent”. SALGA had gone through the regulations for small scale electricity generation and identified policies that were impeding the delivery of electricity and energy. SALGA hosted a summit and created recommendations around policies impeding the efficient operations of municipalities in the energy space. Through SALGA new licensing regulations that allow small scale renewable energy for municipalities were approved.
The National Department of Human Settlements initiated a process of amending the Prevention of Illegal Eviction from and Unlawful Occupation of Land Amendment (PIE) Act, 1998. SALGA consulted municipalities and lobbied for the amendment of the Act. SALGA was also working to increase the prevalence of environmental management as a municipal service, with appropriate budgeting and performance measures. SALGA had produced a paper on the Legislative Framework for Environmental Management, which would clarify responsibilities. In addition, SALGA had developed a policy position paper on funding requirements for environmental performance, with the aim of influencing the fiscal regime to make provision.
Municipal debt was profiled and proposals on how to deal with the historical debt owed to municipalities were presented and lobbied for in Parliament. SALGA had continued its lobbying and participation in the National Intergovernmental Task Team sessions addressing challenges organs of state faced in settling debts owed to municipalities. Municipal debt was growing out of control. Interest payments owed were growing exponentially. He posited that municipalities might reach debt levels of R160 billion by 2019. A discussion needs to be had on how much of this amount is realistically recoverable. SALGA had some innovative ways by which it planned to reduce some of these debts. SALGA was also investigating how to resolve issues between municipalities and Eskom.
Mr George discussed the third task, collective bargaining. SALGA was stabilising municipalities in terms of managing employee discipline and the resolution of workplace disputes. SALGA was engaged in a new round of wage bargaining with respect to the Local Government Service Charter. The entity was optimistic that a multi-wage agreement would be met without a strike occurring.
SALGA had identified 43 municipalities that required support which the entity provided via the Municipal Audit Support Programme (MASP). Over the year 43 were investigated, of which 18 were found to in the “red zone”. This means that the municipality was unable to produce budget statements and healthy audits. 7 had progressed out of the red zone following SALGA’s intervention. Clearly there was still much more work to be done.
Mr George touched on task five: knowledge and information sharing. SALGA had increased the role of research in the institution and its research output. SALGA wanted to hold a research colloquium annually. It had produced 23 research papers over the past year. An important research question was the impact of amalgamation of municipalities and their functions. In terms of the final task, capacity building, pension fund restructuring and workplace productivity initiatives were underway. SALGA was also running several training programmes to strengthen capacity in government.
Mr George moved on to section four of the presentation: deliverables. SALGA had identified four strategic goals for the upcoming years, each with its own set of related objectives. The first strategic goal was inclusive economic growth and spatial transformation. The strategic goal aimed to foster integrated and sustainable urban development and management, regional economic growth inclusive of rural development, and social cohesion. The four objectives were 1) To implement a sustainable Urban Development Programme 2) To support regional economic strategies and effective Land Use Management approaches as drivers of economies of scale and social cohesion 3) To promote high quality and reliable service provision and infrastructure investment and 4) To strengthen the role of local government in community development and social cohesion.
There were several flagship projects working towards this strategic goal. The first project was for the effective management of space, through five initiatives: the Spatial Planning and Land Use Management Act (SPUMA), the new generation Land Use Management System (LUMS), research and support of urban land release, rural densification, and the development of a spatial transformation index. Other projects were: the regeneration of small towns and other vulnerable economies, a campaign on clean cities and villages, a lobby for broadband to become a utility, and facilitation and guidance of social cohesion programmes in municipalities.
Mr George elaborated on small town development and SALGA’s regional approach. This approach was necessary as population and socio-economic development manifested differently in various regions across the country. The regional approach would consider four attributes of a given region, being: population profile, population size and growth, unemployment and dependency, and social vulnerability. He stated that the regional approach seeks to maximize the effect SALGA’s intervention would have on these variables. He added that there was a strong case for collaboration between municipalities.
Mr George mentioned that waste management and the recent listeriosis outbreak highlighted the challenges faced by local government. There were other challenges, such as violent protests, domestic violence, xenophobia, social frustration and poor human development indicators. Discord at the household or local level escalates and aggregates to become a municipal problem.
Mr George described ten other deliverables under goal one. These were the: 1) benchmarking of water and other municipal services 2) identification and promotion of municipal trade and investment opportunities for local economic development 3) creation of an enabling policy and legislative framework for infrastructure service provision 4) optimization of institutional arrangements for sustainable infrastructure services 5) creation of an enabling fiscal framework for the capital expenditure and operational expenditure of municipal infrastructure services 6) creating of a funding model for municipal health services 7) creation of a local government response report on HIV, AIDS,TB and STIs 8) creation of a status report on the implementation of White Papers relating to public safety and security in LG 9) proposals on access and inclusion of vulnerable/designated groups and 10) proposals on sports, recreation, arts, culture and heritage.
Mr George moved on to the second strategic goal: to create good governance and resilient municipal institutions. The strategic goal involved investment in good governance and the modernisation of government, strengthening community interface mechanisms, sound labour relations and professionalisation. There were four related objectives: 1) To strengthen oversight and accountability and transparent leadership practices 2) To Modernise governance systems and processes through the use of digital technology and exploration of new models of interface with communities 3) To foster sound and productive labour relations and 4) to professionalise local government.
Mr George explained the flagship projects under strategic goal two. These were: 1) establishment of a local government risk management system 2) the implementation of a peer review mechanism in local government 3) the establishment and support of an accountability and consequences framework for local government and 4) the implementation of a service charter in municipalities. The accountability framework for Local Government could establish accountability indicators, and an equitable and fair institutional performance based remunerative regime for councillors and managers.
The organisation’s strategic goals were mutually reinforcing. SALGA and the Committee had rallied behind the Back to Basics approach and the National Development Plan (NDP). SALGA lacked a data-based system that would allow it to anticipate which municipalities would or would not be able to pay for their services. SALGA needed to be able to anticipate problematic municipalities. Additionally, there were other risks that could have been better anticipated with a data-based system. For example, drought, financial distress, community protests and labour unrest could be tracked by such a system. This system would be called the municipality barometer.
Mr George moved ahead to strategic goal three: financial sustainability of local government and greater fiscal equity. The aim was to improve the financial health of municipalities through a revised local government fiscal framework, effective revenue management and enhancement, and sound financial management. There were three related objectives: 1) To develop and support the implementation of financial strategies for the long-term sustainability and viability of local government 2) To support innovative revenue enhancement strategies for local government and 3) To strengthen financial management systems and controls.
Mr George mentioned the flagship projects under the second strategic goal. SALGA was lobbying for an equitable fiscal system for local government and the establishment of a revenue collection agency. SALGA was also lobbying for the review of the preferential procurement framework to include a clause that prohibits municipalities from doing business with service providers that are in arrears with their utility bill. If companies wanted to do work with the municipality they should have a clean audit and no bills outstanding. SALGA was also lobbying to have provisions included in the Executive Ethics Code & Public Finance Management Act (PFMA) legislation to prohibit public representatives from owing municipalities for longer than three months.
Mr George closed by stressing the extent of debt servicing costs. These were the fastest growing portion of municipal budgets, growing at 10.5% per annum. More money was being spent servicing debt than was being transferred to local government.
Mr K Mileham (DA) asked why Mr Parks Tau, President of SALGA, was not present at the meeting. No apology had been received by the Committee. Mr Tau is the political head of SALGA and should be present. In the Annual Performance Plan there is only one slide devoted to budget which is insufficient. He noted that administrative costs made up as much as 60% of this budget. Operational costs, which include the costs of the programmes SALGA runs, only amounted to 19%. Over time it is apparent that administrative costs have been going up whilst programme costs had declined. He commented that the offices within which SALGA members work were some of the most luxurious in the country. He stated that SALGA needs to reconsider what its priorities were. He also noted that a large portion of the organisation’s funding was expected to come from voluntary donations. What contingency did SALGA have for the scenario that they do not receive these amounts in full, which together amount to as much as 20% of their expected income?
Mr Mileham asked Mr George what he was thinking when he proposed performance incentives for public representatives. Nowhere in the world do public representatives get performance incentives. The principle of elections is that it is re-election that provides an incentive. Public service is not about getting bonuses. Where does SALGA get this idea and why does Mr George think it is workable?
Ms B Maluleke (ANC) asked for information regarding which provinces benefitted from SALGA’s international partnerships and how. Secondly, what is SALGA doing to make sure that payments in municipalities are made timeously and do not run late?
Mr A Masondo (ANC) commented that the training of councillors proposed in the presentation was promising. Municipal audits were also a welcome intervention. He requested that SALGA provide a “sense of the future” regarding the leadership of SALGA. Where is SALGA going? How will outcomes be improved?
Mr Masondo said he had read in a media report that some Limpopo private companies “had access” to councillor’s pensions. This was concerning. Had SALGA looked into this? He commented on SALGAs capacity building and higher learning/research slides, saying that “research is research”. He asked what the practical purpose of the research was, and how it would have an impact. How will research improve conditions on the ground for citizens?
Mr Masondo noted the figure of R128 billion in consumer debt. He asked what amount could realistically be recovered from this total figure.
Councillor Ald Anton Coetsee, SALGA National Executive Committee member, responded to Mr Mileham regarding the absence of Mr Parks Tau. President Tau does not take decisions on his own on behalf of SALGA. Three members of SALGA’s National Executive Committee (NEC), the highest decision-making body in SALGA, were present. The Committee does not have the authority to determine who from SALGA is present. The CEO was also present.
Councillor Bhekumzi Stofile, SALGA National Executive Committee member, responded to Mr Mileham. If an organisation needs skilled individuals with knowledge it must be prepared to spend money in order to attract that skill. SALGA deals in the distribution of knowledge and knowledge comes at a price. This is the basis of the proposed incentives scheme. Responding to Mr Masondo’s query about pension funds, he this is a matter that the organisation is concerned about but it has dealt with it.
Mr S Nkhahle, Executive Manager, Business Planning and Organisational Performance, SALGA, stressed that MrTau did not make decisions on his own but with the leadership of SALGA. He added that Mr Tau was busy with another international matter which explained why he could not be present at the meeting. Responding to Ms Maluleke he stated that page nine of the presentation revealed which provinces benefitted from SALGA’s international funding. Six municipalities in the Eastern Cape benefit from SALGA’s international partnerships.
Mr George responded to Mr Mileham. Regarding the budget structure, the AG had audited SALGA’s budget and “was happy”. The programmes share of the budget was effectively 49%. SALGA’s programmes are rendered as services delivered by SALGA. The AG requires that contingency measures be in place as a mitigation of risk factors. SALGA’s framework contains these measures which is why the AG approved SALGAs APP. Mr George stated that other risk factors had been attended to and measures dealing with them are disclosed in the annual reports. Mr Mileham was correct that cancellation of voluntary payments is a risk but SALGA had accounted for this.
Mr George spoke to performance incentives. “The proposal is part of the conceptualization of a consequences and accountability framework. The issue is not bonuses of councillors; it is not more pay for councillors. It is about saying, every year there is problems in local government and generally in the entire public sector, when there is poor outcomes of audits, there is poor outcome of audits, there is return of funds to the fiscus for infrastructure, how do we ensure that there is consequence and accountability? When we say incentive based, it is not the angle of more money, it is to be able to say, when there is consistent audit issues, how do we hold public office bearers to account as well as the municipal employees together? Are you likely to offer annual increases or adjustment when there is poor audit outcomes?”
Mr George explained that municipalities rely on the equitable share funds they receive from the fiscus in order to pay their obligations on time. This was the risk factor which often led to payments being delayed. He reiterated that the “councillor pension fund issue” was being attended to by SALGA. This was old news that was raised by an investigation done two years prior. Work was being done by SALGA to secure the councillors’ pension fund.
Mr George responded to Mr Masondo. SALGA’s approach to research it funds is a practical one. SALGA intends to discover how to create better policy. The research agenda was specifically designed in a relevant way. Municipal debt is growing exponentially due to the growth of interest amounts owing. He described the recent growth of municipal debt as a “quantum leap”. He added that municipal debt was being restructured and in cases written off with the help of public works. SALGA wanted the debt to be addressed more quickly. Historical debt write-offs should be done, but with concern for the need to protect a culture of responsibility.
Ms N Mthembu (ANC) asked SALGA what it offered to municipalities to assist them in waste management. Are there skills being spread to municipalities and are these “soft” or “hard” skills? Sewers and housing are under serious pressure in South Africa. Has SALGA been working in partnership with the Department of Small Business Development?
Mr Mileham stated that the presentation used the word “incentive” – SALGA used this word. These incentives are bonuses. The slide describes an “institutional performance-based remunerative regime for councillors”. This is a bonus scheme and it is misleading to try and represent it as being otherwise.
Mr Mileham said if Mr Tau is overseas again, what business is he on, at whose expense is it, and was it worth missing today’s meeting? This question applied not just to Mr Tau but to SALGA as a whole. Do these trips produce benefits in terms of financial grants?
In response to councillor Coetsee, Mr Mileham stated that when the Committee calls an organisation there is the norm that the head of that organisation appears before the Committee. This is the top person in the organisation, and could be a CEO, chairperson, president, and so on depending on the organization in question. This is Mr Tau in the case of SALGA, yet he has only appeared once in front of the Committee in the two years since his election. In his view, this indicates that he was avoiding accountability. Mr Tau prioritises continuing international relationships and going on trips over his role in supporting local municipalities.
Mr Mileham returned to the budget. The SALGA presentation indicated that SALGA spends 59% of its budget on employee costs. Likewise it indicated that only 19% was directly spent on the programmes that do the operational work of SALGA – these figures come straight from the APP document. This represents disproportionately large administrative spending. Mr George justifies this by arguing that the spending on SALGA employees is how SALGA provides services. But these services would still require spending that must fall under programme costs. Programme costs are less than 20% of operational expenditure which is disproportionately little.
Mr Mileham had additional questions. Could anyone from SALGA say what the organisation has done to mitigate the risk municipalities faced who had banked with VBS Mutual Bank and were thus exposed to the “saga” [VBS Mutual Bank had recently been placed under curatorship and its trading license limited following liquidity challenges]. Have you advised these municipalities or given them instructions or precautions to ensure they are not putting funds into financially risky institutions? It is illegal for municipalities to put funds in mutual banks.
Mr Mileham stated that SALGA had in the past been in favour of the amalgamation of municipal districts prior to 2016. However, the Financial and Fiscal Commission (FCC) and the National Treasury (NT) often submitted arguments against amalgamation. Often these were financial concerns. SALGA has since changed its tune and does not support the same amalgamations. Would SALGA therefore admit that it was wrong to have supported the amalgamations?
Mr Mileham clarified that there are two different issues being conflated in the discussion about debt. On the one hand there is debt owed to municipalities and on the other land debt owed by municipalities – in other words there are separate questions of collection as opposed to payment. The discussion needs to make this distinction as these are opposing cases. Wasteful expenditure in municipalities is the reason payments aren’t being made and debt owed is increasing. What has SALGA done to address this cause of cashflow problems?
Mr Mileham pointed out that SALGA had proposed wanting to de-list as a schedule three public entity – why does it want to do so and what are the implications? Lastly, the APP presentation stated that the research initiative had produced 23 papers -these findings should be tabled and included as part of the annual reports. The Committee needs to see the work in order to evaluate whether it has any value; there was no point in SALGA simply saying it had been done.
Mr Mileham stated that the Committee needed to have consultations with NT to determine how to handle the exposure of the MCPF to VBS mutual bank. MCPF pensions should be safe. He suggested that NT and VBS should provide annual reports at same time so the committee could better determine the extent of exposure to VBS.
Mr E Mthethwa (ANC) stated that SALGA reported that it had assisting 85 municipalities. Could SALGA provide a more detailed report in terms of the capacity building work it had done? Did SALGA have any programme that targets municipalities that are not performing well financially? Do municipalities share their management reports with SALGA?
Mr Masondo felt that a bad perception of the performance of municipalities existed in the public eye. What work was SALGA doing to manage the image of municipalities? Specifically, what interventions dealt with dysfunctional municipalities? He commented that some of the municipalities that were restructured or amalgamated had performed well. SALGA and the Committee should perform a proper examination of the effects of amalgamation. He posited that sports, arts and cultural spending were a cost effective to improve communities. This was particularly true of sports. These projects should receive more attention and funding. SALGA should visit and monitor municipalities more closely, especially those that are characterized as “red zone” municipalities which are underperforming.
Ms Mthembu asked what lessons SALGA drew from the VBS Mutual Bank situation and the involvement of municipalities who had made deposits therein. What support do these municipalities require to avoid these types of problems? Perhaps legislation needs to be affected to ensure that these types of banks perform appropriately.
Mr George stated that NT had “taken the lead” in terms of dealing with VBS mutual as soon as it became aware of the difficulties in January 2018. In March, NT and SALGA established how many municipalities had been affected. Of course, many lessons had been learned. One of the weaknesses in the system was the inability of financial regulators to detect the malpractices of banks, a problem which lay outside of SALGA.
Mr Mileham echoed Ms Mthembu, asking what steps SALGA had taken to avoid further exposure of municipal funds to VBS or similar, problematic banks. What has SALGA done to assist the municipalities that were affected? The issues with VBS bank had been known since October 2015, what had SALGA done?
Mr George responded. SALGA is not provided information on which municipalities bank at which banks. This is the work of NT and SALGA does not have this information. SALGA cannot be held retrospectively accountable for information they are not supposed to have. Since the VBS crisis SALGA had requested this information and going forward it would be able to assist these municipalities.
Mr George brought up the land release programme. SALGA was working with the cities network. Part of the engagement involved the land release papers looking at urban land in cities. Part of the work aims to expedite the release of the land. The spatial transformation index and the land release frameworks were being planned. The programmes will identify pilot municipalities.
Mr George responded to Ms Mthembu. SALGA was doing a survey of waste management and the constrains faced by municipalities across the country. Sports and cultural spending were already priority areas for SALGA. In response to Mr Mileham he stated that SALGA had never been at the forefront of the call for amalgamation. This was a Section 24 regulation that the Minster of COGTA put forward prior to 2016. NT with help from SALGA managed to provide a restructuring grant. He agreed that SALGA and the Committee needed a better understanding of the effects of restructuring and whether it achieved intended outcomes. He reminded members that the demarcation board in terms of Section 4 [of the constitution] outlines municipal jurisdictions. Curators have been put in place and SALGA was satisfied that the problems [with VBS mutual bank] that originated in 2014/2015 had been dealt with. There was now a sense that the pension fund was sufficiently managed to protect councillors. He stated that SALGA could appears with the curators [of VBS mutual bank] before the committee if necessary.
Mr George responded to Mr Mileham about SALGA potentially delisting. SALGA wants to list differently as the current listing limits what SALGA can do. SALGA had engaged with NT to understand why SALGA had been listed as a Schedule 3A entity. NT indicated that this was originally done for administrative reasons and NT agreed that SALGA should delist. The Municipal Systems Act in Section 2 gives SALGA an expansive mandate and but also constrains the measures SALGA can implement. Delisting will not reduce SALGA’s accountability as SALGA will then relist in a different way.
Councillor Coetsee responded to Mr Mthethwa. He explained that there was no generic programme at SALGA to deal with badly performing municipalities. This approach did not work as each municipality in financial trouble was so for unique reasons. Each had its own reasons for poor performance. As such the one-size-fits-all approach does not work. When a municipality is categorized as “red zone” SALGA can only provide assistance once the municipality has requested it. SALGA then analyses the problems and provides a solution. Again, this was not generic support but one on one consultation to meet the municipality’s specific needs. SALGA encourages municipalities performing well to share their experience. Municipalities are also encouraged to share their resources with one another; SALGA facilitates this cooperation. He stressed that SALGA does important work with its international partners to create social cohesion in South Africa.
Mr Nkhahle stated that if the Committee wanted Mr Tau to attend they should have specified.
Mr Mileham argued that SALGA should not try to not rebuke him for asking simple questions about the attendance of Mr Tau, the costs of his travels and the principle of accountability. Councillors cannot tell Members not to ask these questions. He asked the chair to rule on this.
The Chairperson stated that it was not necessary to rule on this as the point was taken. However, he added that was the norm in Parliament for the president of the organisation to appear before a committee if the organisation is summoned. This was the norm and generally the case.
Councillor Stofile stated that the international trips and the work of Mr Tau should be considered in the context of the value these bring to South Africa. President Cyril Ramoposa had recently departed on an international trip and he himself discussed the importance of local government for economic growth. SALGA contributes to local government through its role in the international sphere. SALGA helps South Africa host the international community.
Mr Mileham stated that Councillor Stofile’s answer was unsatisfactory as it avoided answering the specific details that he had requested.
The Chairperson felt that the tone of the discussion was degenerating unnecessarily. SALGA had attempted to answer the question. He added that members of the committee, including Mr Mileham, had also taken international trips in the past.
Mr George responded to Mr Mileham on incentives and how they were discussed. He asserted again that the angle that SALGA had in mind with the incentive scheme was a punitive one; the incentives were not going to serve as bonuses. The idea was that the rates paid to each councillor should be justifiably based on their performance. Therefore, it is punitive as it would involve paying badly performing individuals less.
Mr Nkhahle spoke to the value of knowledge sharing and the idea of ‘cost-benefit’ analysis. There had been numerous initiatives at SALGA over the years. Some initiatives do provide quantifiable benefits whereas others are merely ‘anecdotal’ or qualitative benefits. He highlighted two examples to explain this. The reduction in municipal water losses that occurs after a knowledge sharing initiative is an easily quantitative and measurable benefit. By contrast, while knowledge sharing to improve audit outcomes can improve the audit outcomes (which is observable), the qualitative effects on the rest of the performance of the organization in question is not.
Mr Nkhahle responded to Ms Mthembu. SALGA had started to address waste management by innovative repurposing of certain types of waste. Additionally, interventions had been made to determine the challenged faced by municipalities and to assist them in complying with legal minimums for waste management.
Mr J Dube (ANC) asked what support SALGA provided as per its mandate to councillors who are physically threatened. What does SALGA do to advise councillors in these situations? Councillors’ houses are targeted for example during service delivery protests. Was there any support for them? There needs to be an intervention to create cohesion between local communities and their municipal leaders. What does SALGA do to reduce financially irresponsible spending of municipal leaders?
Mr Masondo requested more explanation about slide 44.
Mr George responded that municipalities now have insurance provisions for the property and life of councillors. These interventions are outlined in the public office bearers’ gazette. Slide 44 details which municipalities were in the ‘red zone’ and it is broken down by province. Limpopo, North West, Free State, Northern Cape and Western Cape have shown an increase in red zone municipalities. This has been for several reasons. The AG issued results at end 2017 showing that the number of Red Zone municipalities has increased slightly from 38 in 2015/16 to 42 in 2016/17, for various reasons. Some are spurious reasons such as fires. However, he reminded the committee members that the number was at 69 when SALGA first introduced the programme targeting red zone municipalities.
Councillor Coetsee explained that SALGA did not have a right to intervene when a mayor spends recklessly. SALGA’s function is one of providing support and assistance. It was not the role of SALGA to direct a major. If a municipality approaches SALGA requesting an investigation, SALGA can assist by having an investigation done. SALGA itself did not receive the Section 72 financial reports that municipalities send to NT. SALGA does not have this information. SALGA responds to mandates.
The Chairperson thanked SALGA for their contribution and excused them from the rest of the meeting if they wished to leave.
Briefing by CRL Rights Commission
Mr Edward Mafadza, CEO, CRL Rights Commission, said that the organisation had completed an investigation into deaths at initiation schools. The investigation was national but focused on the most affected provinces. Reports were compiled although they had not yet been tabled.
The CRL had 13 observations and recommendations to report. The first recommendation was that ccommunities set up traditional initiation leadership structures to oversee initiation schools. Such structures could also serve as support systems and help the police to root out criminality. Police, especially in the Eastern Cape, struggle to distinguish between legitimate surgeons and practitioners and illegitimate ones; this was how criminal elements could arise.
The second recommendation was that practice guidelines be developed to specify what should and should not be done in establishing an initiation school, including support infrastructure. The third was that traditional surgeons, traditional nurses and school principals should be trained, registered and accredited, and their competences regularly evaluated by a relevant accreditation body. The fifth recommendation was that national legislation be created to enforce a minimum age for these practices to be entered into. The Children’s Act 38 of 2005 should also be amended as such. Similarly, a parent or guardian should have to provide consent for all underage boys in writing, before they enter an initiation school.
The seventh recommendation was that traditional councils and Municipalities register all initiation activities taking place in their area. These institutions should designate areas where Ulwaluko/Koma/Lebollo/Mophato could be set up, taking into cognisance the necessary infrastructure for safe practices. Prospective initiates should go through a series of prescribed medical check-ups and immunisation before they undergo initiation. This would also help to establish that a child was healthy before the (initiation) school was entered. Medical and psycho-social support should be provided to all concerned in the case of a botched circumcision, penile amputations or death of an initiate. He noted that it was common for boys to return from healthy or unhealthy initiation practices with little support.
Mr Mafadza stated the eleventh recommendation, that further research on penile transplants should be supported by the Department of Health with the aim of mainstreaming this service to all young men who had penile amputations. Further research, in partnership with other research institutions and institutions of higher learning, should be done on the issue of female initiation. At present there was little information on what the practices occur within female initiation schools. He added that there should be a special focus on the protection of initiates coming from single female headed households.
Mr Mafadza noted the issues faced and the work done by the CRL over the 2017/2018 period. The first was concerns over the role of halaal foods and their impact on other religious communities. Secondly, the CRL had become aware of a monument that had been built on ancestral graves in Aliwal North; planning was underway to investigate this matter. The CRL would meet the community to gather information and assist. The CRL wanted to check if the practice was in line with regulations. He explained another case in Ventersdop, where a graveyard had flooded. This case had been finalized and the municipality implemented the recommendation for reburial to a new site.
The CRL had completed and tabled its report on the commercialization of religion and the abuse of people’s belief systems. An investigation had been done into access to burial land and ancestral graves. There had been a case in 2005/2006 where a person was not buried for 12 months because the farm owner in question did not grant access to the preferred burial land. There was a lack of burial land in the Ethekhwini municipality and the recycling of graves was a concern. The CRL had also held a round table discussion titled “cults, sects and the church: definition and characteristics”. The outcomes of this discussion were still being debated within the CRL.
The CRL had launched a multilingualism project, and a sign language awareness campaign. A round table discussion on the resuscitation of the Khoi and San culture had been held. Capacity building workshops for religious community councils were conducted and dialogues were facilitated with these councils on the role of religious leaders and the religious rights of communities. All of the issues and cases brought to the CRL had been addresses over the previous year.
Mr Mafadza continued to describe the work done by the CRL done. It had developed and implemented cost management and information technology strategies. Expenditure reports and financial statements were produced as per audit requirements. Asset register reconciliations and asset verifications were conducted. Policies were revised. Formal performance assessments were conducted and would be concluded by the end of the financial quarter. Performance information reports were also compiled as per our strategic plan. Audit committee meetings were held, internal audit reports were compiled and presented to the Committee. Plenary and Section 22 committees were facilitated to create a platform for CRL commissioners to provide oversight to the work of the Commission on a quarterly basis.
Mr Mafadza described critical challenges for the CRL over the 2018/2019 period that was approaching. Investigations into burial land and grave access will continue in those provinces that had yet been investigated. The objective is to promote African religion but also to encourage peace between farm owners, workers and African religion communities. A lack of access and understanding of the values of African religion was a threat to peace, tolerance, humanity and nation-building.
Mr Mafadza stressed that further research, investigations and campaigns on the promotion of multilingualism would be focal. Challenges related to the use of all official languages in schools, points of service delivery and other critical areas where key. This initiative also aims to foster social cohesion and nation-building in a democratic South Africa. Further research and investigations would culminate into recommendations to assist parliament in creating national policy on the use of indigenous languages in schools, commerce, service delivery points, and institutions of learning.
Mr Mafazda closed by providing the CRL’s budget up until 2020. He highlighted that financial constrains limited the work the CRL could do. More funding would be helpful in setting up regional offices and improve service delivery.
Ms Maluleke discussed the budget. The amount of finance for the Office of the Chairperson of CRL was R11 million, roughly ten times the amount dedicated to Public Education and Engagement. Why was such a large amount necessary for the office of the chairperson; what does all this money in the office of the CP do? Why not put most of the funding into education and engagement? She reminded the CRL that education and engagement was the core of the CRL’s mandate. She asked for clarification of the units the table was in – was she correct that the office of the chairperson received as much as R11 million in salaries? She felt that this amount could not be for the chairperson alone.
Mr Mthetwa brought up Ngcobo and the case of the seven angels church which had been discussed in previous meetings. He asked the CRL to provide any information they had on problematic churches of this nature. He reminded the CRL that they had unfairly blamed the Committee for not acting sufficiently in the case of Ngcobo, when the CRL had not provided sufficient information. Therefore, he wanted them to inform the Committee so pre-emptive actions could be taken.
Mr Mileham asked the CRL to elaborate on new Bills being processed by Parliament which related to religion. He wanted to know how these related to traditional initiation practices; how would these align with new laws? The CRL presentation mentioned projects to support diversity in the languages used in education. He explained that this construed a duplication of the work done by the Pan South African Language Board.
Mr Mileham discussed the funding of the CRL’s proposed national conference. He noted that the APP did not include anything on how the CRL planned to raise funds for this conference. The commercialisation of religion report pointed out that there are several wealthy churches - perhaps the CRL should approach such churches and ask for sponsorship. This may also encourage them to take an interest and buy into CRL presence.
Mr Mthethwa stated that the investigation into the role of halaal foods in the context of other religions should be approached carefully as it was a sensitive topic.
Mr Mthetwa asked where the auditor’s report was. The CRL was supposed to get audited and to provide proof in this fashion. The budget itself alone was less credible when it was not audited.
Mr Masondo stated that in [many] churches there was no official system of succession for church leadership. This problem lay at the heart of many crises that churches have faced and can be the cause of deaths. He felt that the CRL should encourage churches to discuss the issue and to establish better succession mechanisms.
Mr Mileham stressed that CRL and the Committee were not meant to instruct or regulate the actions of private entities. He explained that court rulings have usually been based on the prevailing rules within a church organisation. As such the ruling depends on a case by case basis on the church in question - it was not the role of the Committee or the CRL to prescribe over-arching regulations or practices.
Mr Masondo pointed out that there was a tension between freedom and intervention that would remain a source of conflict in the future. Members of the committee and the CRL need to consider carefully how they can do to work together and find a middle ground.
Mr Mafadza responded to Mr Maluleke. It is correct that the amount budgeted for the office of the chair was R11 million. The CRL had twelve commissioners of which only the chairperson and the deputy-chairperson were appointed on a full-time basis. These two together were paid less than two million rand yearly. The bulk of the amount in this category went to plenary meetings (one per quarter) and Section 22 meetings. Over the year these added up to around eight meetings. The non-permanent commissioners assist the CRL by providing oversight – they are paid on a stipend basis per sitting. Their travel costs were also covered by this amount. He added that having regional offices would reduce travel costs.
Mr Mafadza elaborated on the budget. There is also a large amount of R16 million that goes to the office of the Chief Financial Officer (CFO). This category includes the amount for the office lease, salaries [of other staff members], and support and corporate services. As such there are several amounts in this row.
Mr Mafadza responded to Mr Mtethwa that the CRL did not have further information on the prevalence of problematic churches in the Eastern Cape. He added that the CRL was planning to revisit the area and survey the situation. The CRL chairperson had also been meeting with religions leaders.
Mr Mafadza responded to Mr Mileham. The CRL was working in consultation with the Committee to ensure that there was alignment between its recommendations for initiation policies and the precepts of national legislation. In some challenging cases the CRL has requested that schools stop their practices until the national policy was complete. The CRL was mindful that it should not duplicate efforts; the work to improve language in schools was shared between the CRL and the Pan South African Language Board. He added that it was work that lent itself to collaboration.
Mr Mafadza continued his response. The plan to raise funds for the national consultative conference had already been developed in a concept paper. Parliament should also provide funding for the conference. He added that being funded by the churches whose practices would be discussed by the conference risked creating a conflict of interest. This was why the CRL preferred parliamentary and governmental funding – the CRL did not want to compromise its independence.
Mr Dube agreed that halaal foods was a sensitive topic that required discretion.
Professor David Luka Mosoma, deputy-chair, CRL stated that kosher foods were similarly sensitive. The CRL wanted to mitigate conflict that could arise over the packaging and cost-sharing of religious-certified foods. These foods were certified to comply with a religion with stickers on the packaging, often with a portion of the cost going to the church.
Ms Maluleke added that these certified products were often separated into their own section in grocery stores. There was a concern that there may be competition for space between religions with some potentially being prioritized above others, which could cause tension.
Mr Mosoma agreed that it was a sensitive topic and that preventative measures were necessary to avoid a greater conflict over the costs certification incurred. He responded to Mr Masondo that succession was faith-specific and also church-specific. The CRL had been in consultation with churches to mitigate conflict from this source. Church members could see the advantages of a succession plan and had often welcomed CRL input on this matter. However, he added that questions of succession were an “age-old problem” within religious organizations. This challenge arose naturally in such a context; did the committee really expect the CRL [or anyone] to be able to solve this permanently?
Mr Mafadza stated that CRL has made a plenary resolution to work with the Pan South African Language Board. The CRL wanted to become partially amalgamated with the Pan South African Language Board. The CRL had also discussed whether an amalgamation of sorts might be possible between the CRL and the Commission for Gender Equality. He added that in terms of the CRL’s mandate, the law only states that the CRL “may” generate additional funding through fundraising. This read correctly implies that CRL is under no obligation to do so – it is voluntary. This section does not remove Parliament’s responsibility to provide appropriate funding.
Mr Mileham interjected, stressing that CRL had the authority to raise funds and that they should do so. He added that the CRL was “in a mess” and was unable to properly interpret its mandate as it had no legal advisors. Both of the CRL’s legal advisors were suspended as far as he understood. The legislation gave the permission for fundraising with the intention that the CRL would do so when it was appropriate, which it was. The money that the CRL needs beyond the usual grants provided by parliament must be garnered through fundraising. This is what the legislation said.
Mr Mafadza stated that the CRL requested additional funding for the national consultation since its inception and that the continuation of this request had nothing to do with a lack of legal advisors. He added that he did not want to labour this point.
The Chairperson stated that the conflict was unnecessary as the law was clear. There CRL should not expect “free money”. It had an amount that was prescribed by government and beyond that it had to rely on fundraising. It was up to the CRL to discover how to do so without creating a conflict of interest.
Mr Mthethwa added that he had also been curious about the large budget to the CFOs office and the chairperson’s office, however, the CRL had already made some response so he moved on. He stressed that the government was under no obligation to provide the CRL with additional funding and that this choice was at their discretion.
Mr Mileham reiterated that the legislation existed to encourage the CRL to generate funds. To simply ignore this fact was ignoring the legislation. Again, this is why the CRL needed legal advisors.
The Chairperson interjected stating that there was no fundamental disagreement as the matter was clear. Parliament had to appropriate funding for many institutions and that funding was always limited. The budget that is decided by government is the one that is final – this is the funding the CRL gets. Beyond that it is up to the CRL to raise more money however is suitable- there was no dispute on this matter. The CRL can itself take measures to avoid conflict of interest. He asked the CRL to provide information on the suspensions that had been mentioned.
Mr Mafadza responded that the term of the Commission was coming to an end. The CRL was preparing a close-up report due in 2019. The national consultative conference was needed to be held before this report could be finalised. The approach was still being discussed. It is correct that two legal advisors, the senior manager and the legal officer, were suspended. They had been suspended for as long as six months but one of the cases was now finalised. An independent court found the legal advisor guilty and the employee was fired following her trial. However, she could appeal this decision.
Mr Mafadza concluded that the CRL’s goal was to foster a healthy society with positive and significant contribution from the religion sector. He thanked the Committee for the engagement.
The Chairperson provided some concluding remarks summarising the meeting. He stated that there would always be a problematic and/or criminal portion in each sector of society. It is this that government must deal with, in a proper fashion that did not infringe on the ‘good’ portion of the society. He thanked the CRL for their input and stated that they would be in further consultation going forward.
The meeting was adjourned.
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