Western Cape Liquor Authority Q4 2017/18 & Q1 2018/19 performance

Meeting report

Western Cape Liquor Authority: Performance report

Dr Luzuko Mdunyelwa, Chief Executive Officer (CEO): Western Cape Liquor Authority (WCLA) said the WCLA in 2017/18 had scored an overall 85% achievement of its targets, with under-achievement reported within the liquor licensing administration and licensing tribunal sections.

In the first quarter of 2018/19, the Western Cape government’s policy decision to introduce an Alcohol Harms Reduction (AHR) campaign in the regulation of liquor had necessitated a corresponding shift of focus by the WCLA. This had entailed the identification of three main focus areas:

• Entrance of responsible unlicensed liquor outlets into the regulated space;
• Enforcement, with an emphasis on upstream prosecution;
• Education and communication of the harms caused by alcohol abuse.

To facilitate the process of bringing new players into the regulated market, the WCLA, together with the Department of Community Safety and other important stakeholders, had explored various options. The aim was to issue licences to qualifying outlets in designated “game changer” areas such as Paarl East, Khayelitsha, Gugulethu and Nyanga (Gunya), which were previously excluded from obtaining liquor licences because of zoning policies. The outcome of the pilot initiative would set the benchmark for the way forward in the Province.

With regard to finances, the WCLA would re-prioritise funds to ensure the success of the AHR initiative by, for example, addressing capacity constraints within the tribunal. The Authority was also in the process of developing a fee structure based on actual processing costs and the distribution of financial responsibility on the basis of the volume of alcohol sold by the licence holder in the community, and society at large.

Furthermore, the proposed fee structure would alleviate some of the cost burden to society by providing additional resources, such as the employment and training of more liquor enforcement officials.

Discussion

Ms P Lekker (ANC) observed that rezoning - in relation to the licensing of liquor outlets - had become a major source of conflict in Cape Town recently. She therefore asked whether the WCLA had engaged the City of Cape Town, and what the outcome of that engagement had been. She also wanted to know if the WCLA had encountered problems (“bullying”) in prosecuting the big players in liquor distribution for not complying with regulations, especially with regard to the AHR campaign. She asked if the WCLA’s approach was in any way different in areas not designated as game changers by the campaign

Mr D Mitchell (DA) said he had noted that in 2017/18, the number of circulars produced (49) and website updates made (34) was more than double the targeted figure for both performance indicators. Could the WCLA explain this? Also, why was the number of demand management reports to the Provincial Treasury (five) less than half the targeted amount (13)? Overall, as the WCLA had tripled and quadrupled some of its achievement targets in 2017/18, why had it had set the same targets for 2018/19? Did not previous over-achievement mean that it should set the bar a bit higher?

Mr D Joseph (DA) said more could be done to create awareness around the AHR campaign, and urged the WCLA to intensify its efforts in that regard. One suggestion was that the WCLA should work more closely with community health clinics (pregnant mothers) and other health-orientated structures to reach as many people as possible. Mr Joseph also asked what administrative innovations had been responsible for the WCLA’s over-achievement on some of its targets.

WCLA’s response

Dr Mdunyelwa, responding to the question on zoning, said significant moves had been initiated by the WCLA. He cited the engagement with the Drakenstein municipality, particularly Paarl East, where a multi-specialist team had been established to consider licence applications.

Furthermore, from a meeting with the City of Cape Town, the WCLA had learnt that four applications were “ready”. The applications had been earmarked as a test case for the new AHR game changer approach, but the City had also made it clear that its recommendations were on condition that the applicants also applied for what it called a “departure”. This was required for the City to either make changes to the zoning provisions relevant to a land unit without rezoning the area, or to give permission for a temporary use right that was not otherwise provided for in the zone concerned.

Regarding Ms Lekker’s question about the prosecution of big companies in the liquor distribution space, he said his personal experience was not of “bullying” as such, but rather that these companies regarded the WCLA as “stretching its mandate”. This attitude had led to the WCLA requesting its national counterpart to accredit inspectors in the province with nationwide powers in order to deal with uncooperative distributors. The WCLA was now anxious to see how effective this joint approach (provincial and national) would be against “a few big names” in the Western Cape.

On administration, Mr Mdunyelwa said the automation of previously manual tasks had resulted in significant efficiencies and less need for staff.

Mr Philip Prinsloo, Director: Communication, Education and Stakeholder Relations, WCLA, said the increase in the website and circular updates had been due to changes in the liquor licensing legislation (prices, application processes, etc.). In expectation of increased demand for information, the Authority would also increase its targets in the new 2018/19 annual performance plan (APP).

Other communicative activities had included a road show across the Province to educate stakeholders on changes in the regulations, and a campaign in partnership with the Department of Community Safety, targeting Community Police Forums.

 Although the WCLA had partnerships with the provincial Department of Health and other departments, such as Social Development, it had no working relationship as such with health institutions at the local municipal level, and Mr Prinsloo admitted that Mr Joseph’s idea of approaching grass roots health institutions could prove a good one.

Ms Victoria Letswalo, Chief Financial Officer: WCLA, responding to Mr Mitchell’s question on demand management reporting, said in the last financial year the National Treasury had changed the reporting requirement from monthly to quarterly, hence the variance between the target and the achievement.

Further disucssion

Ms Lekker asked for the number of liquor licences approved so far in the Drakenstein Municipality, as well as in the Town 2 area (Khayelitsha).

The Chairperson asked whether the Prevention of Organised Crime Act (POCA) applied with regard to the confiscation of property involved in the illegal sale of liquor and if so, whether any property had been sold off.

He commented that a Western Cape Cabinet decision had expressed the view that the WCLA should become financially self sufficient. He wanted to know how close the WCLA was to that objective, and whether it had a business plan to give effect to it.

Referring to the entry titled, “Report on the number of compliance notices issued” for the first quarter of 2018/19, he asked the WCLA to explain why the output had been only one against a target of four -- in an industry where “a lot of illegality” took place.

The Chairperson asked if “peace officers” -- persons who were not police officers, but were given policing functions by virtue of their “good standing” in the community -- had been appointed at all to carry out inspections, as provided for by the Western Cape Liquor Act. How would it describe its working relationship with the South African Police Service (SAPS)?

WCLA’s response

Mr Johan Dreyer, Secretary: Liquor Licensing Tribunal (LLT), WCLA, said no licences had been issued yet in the areas mentioned by Ms Lekker, as the applications were still at the “departures” stage. In addition, the Tribunal was also considering three applications from the Gunya (Gugulethu and Nyanga) area, which did not require a “departure” component, but again no final decision had been made. The City of Cape Town had indicated that by end of July 2018, the four Town 2 applications still at the “departures” stage should be finalised.

Mr Martell van Lill, Director: Compliance and Enforcement, WCLA, explained that the POCA dealt with criminal matters, while the WCLA dealt with non-compliant licence holders. The investigation of illegal shebeens and confiscation of illegally sold liquor was a police matter, and the WCLA had no powers of forfeiture.

Ms Letswalo said the biggest obstacle to the financial self-sufficiency of the WCLA was the funding model under which the Authority operated. Currently, the bulk of revenue collected by the WCLA had to go back to the state and then be allocated back in the form of a grant. Given the equivalence achieved by the WCLA between its collected revenue and the grant amount in the last financial year, she was confident that with a change to the funding model and a different fee structure, the Authority would have no problem operating without state funding. These changes were part of the proposals tabled before the Treasury in this regard.

Dr Mdunyelwa said all WCLA officials were in effect “peace officers,” and the Authority’s relationship with the SAPS was “very, very good”.

The Chairperson remarked that at some point in the recent past the WCLA, especially the Tribunal, had been undergoing significant capacity challenges, particularly with regard to the database of licence applications, and asked if this had been overcome.

Mr Dreyer replied that the database problem was not as serious as before, and automation had ensured that the challenge was fast becoming a thing of the past. The other major concern – of not having enough members to constitute the Tribunal itself - was expected to have been resolved by the end of August 2018.

Adoption of Minutes and Report

Minutes of the meeting of 6 June 2018, and the report on the Committee’s oversight visit to the ShotSpotter facility on 13 June 2018, were approved and adopted.

The meeting was adjourned.