Road Accident Benefit Scheme Bill: deliberations

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05 September 2018
Chairperson: Mr L Ramatlakane (ANC) Acting
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Meeting Summary

The Committee continued going through the RABS Bill clause by clause. In Clause 20 the Committee agreed that the Minister would not get involved in the appointment of the CEO and the CEO cannot be in office for more than two terms. Clause 21 was flagged. In Clause 24 the Committee agreed that the Board decides on the organisational structure and positions which constitute executive management.

Clause 26 on the Funding of Administrator, there was no clear indication or resolution on this clause. Clause 27 and 28 the DA objected to the clause but the rest of the Committee were satisfied. Clause 31 was flagged for further engagement on the medical tariffs with the relevant departments. Clause 32 and 33 were flagged for further drafting. In Clause 34, the Department was asked to refine resident and citizenship.

Meeting report

Road Accident Benefit Scheme Bill: clause by clause deliberations
The Chairperson, Ms Magadzi, said the Department of Transport (DoT) was present to respond to comments and queries about the Bill during the clause by clause deliberations. She requested that Mr Ramatlakane to chair the meeting on her behalf even though she was present. Discussion was held on the following clauses:

Clause 20 Appointment
Mr N Seabi (ANC) was comfortable with the way the clause was crafted. He suggested that after the process has been conducted by the Board, the Board can then present its recommendation to the Minister.

Mr L Ramatlakane (ANC), Acting Chairperson, reminded Members that there was a suggestion about consulting the King IV on how institutions such as RABS are managed.

Mr C Hunsinger (DA) said the three year cycle of the Board, the five year cycle of the Chief Executive Officer plus the five year cycle of political heads would mathematically amount to 15 years where these offices are at the function at the same time. Basically, the same Board, Chief Executive Officer and Minister would only be in office at the same time once every 15 years.

The Committee agreed that the Board has the responsibility to appoint the CEO, and then present its decision to the Minister.

Mr T Mpanza (ANC) asked about the role of the Minister in this instance.

The Acting Chair said the Minister would only sign the approval, this can be seen as concurrence by the Minister. Even if the Minister does not agree, he cannot fire the person or rescind the decision of the Board.

DoT Acting Director General, Mr Chris Hlabisa, pointed out that the Minister would only receive recommendations from the Board, and approve the decision of the Board. Therefore, it should be worded clearly that way. The Board cannot approve the appointment of the CEO; that is the decision of the Minister. The King IV Code says that the Board appoints the CEO and the Minister signs off on the appointment in the form of concurrence.

Mr Mpanza wanted more clarity on this. He cited the PRASA example where the Board appointed the CEO, and wanted to know whether the Board would be the appointing authority. The Minister’s role should be restricted to concurrence with the decision of the Board.

Ms Noluthando Mpikashe, Parliamentary Legal Advisor, advised that the Board, with the concurrence of the Minister, would appoint the CEO.

Members agreed with this.

Mr M Sibande (ANC) said that King IV was not a policy, and even though Members have agreed to the clause, he suggested that it be flagged for further deliberation.

Mr Seabi said that with the SABC case, it was made clear in the court ruling that the Minister must not get involved in the appointment of the Executive.

Members agreed to the spirit of this precedent that the Minister should not get involved in the appointment of the Executive.

Mr Mpanza agreed with the five year appointment period of the Chief Executive Officer in clause 20(2).

Mr Seabi agreed. He said that the term of the Board and of the CEO cannot run concurrently. However, it must be made clear that the CEO cannot be there for more than two terms.

Members conceded.

Clause 21 Acting Chief Executive Officer
Mr Hunsinger asked what the phrase ‘legally incapacitated’ meant, or whether it was a disqualification. He appealed for specificity on the period of the Acting CEO which period must be very clear. He suggested that there must be a procedure for appointing an Acting CEO and this needed to be clearly outlined in the Bill.

Mr Mpanza said that the wording for the appointment of the Acting CEO must be aligned with the provision for the appointment of the CEO.

Mr Seabi said that labour laws needed to be considered when deeming the CEO was incapacitated because he could be incapacitated due to health reasons. If someone was unable to discharge duties due to health would they be automatically disqualified?

Mr Hlabisa referred to clause 21(1) and said it would be ideal to have someone acting in that capacity during that period.

Mr Johannes Makgotho, DoT Director: Corporate Services, said the provision referred to temporarily or permanently impaired or mentally impaired to the extent that the individual cannot appreciate the consequences of their actions or their poor judgment.

Mr Ramatlakane said that it was not a summary dismissal.

Mr Seabi suggested that the labour laws were consulted. If the Acting CEO is away on leave or away on business for a long time, there must be someone who in the interim can execute the duties of the office.

Mr Hunsinger said that he was of the opinion that Members should strike out ‘incapacitated’.

Members agreed that ‘vacancy’ in clause 21(1), ‘legally incapacitated’ and "exceeding one month" should be struck out.

The Parliamentary Law Advisor suggested a clause from the Tourism Act that may be useful to the Committee, and she read it out.

The Acting Chairperson said that the provision was indeed useful, and perhaps Members should flag this clause and discuss it later when that suggested provision has been perused by the Members.

Clause 24 Employees at executive management level
Mr Seabi suggested that 24(1) should be the other way round - that “the CEO in consultation with the Board appoints and dismisses executive managers”. He suggested that the way it was phrased in the Bill was not normal practice.

Members agreed to the suggestion as well as to clause 24(2) that the Board decides on the organisational structure and positions which constitute executive management.

Clause 25 Dismissal
Members agreed to the provision.

Clause 26 Funding of Administrator
Mr Hunsinger said the fuel levy would be used as the source to supply funding but there is a reference to accumulated reserves which uses the build up of funds rather than month to month revenue of funds. Is there going to be a fund other than the fuel levy that RABS will be receiving money from? And is the fuel levy going to be used as the source of funds? If so, the Fund should be the central source.

Mr Seabi suggested that the funding of the Administrator should directly come from the fiscus so that there is no reliance on the fuel levy.

Mr Sibande aligned himself to support the ideal that the payment of the Fund must come from the fiscus. The fuel levy fluctuates, so it is much safer to focus on the fiscus.

Mr Sithole wanted to know about the logic behind where the funds should be coming from on the fiscus and what would then happen to the fuel levy?

The Acting Chairperson said that the understanding is that the current source of funds of the RAF is the fuel levy. The intention is that going forward there should be other options of raising revenue to ensure that the benefits of the beneficiaries are paid because the fuel levy was not enough. He drew Member’s attention to page 8 of the Department and Treasury responses – the recommendations presented outlined that the section on funding needed to be enlarged including the creation of a number of accounts. As Members discuss this further, the provision should take into account everything that has been presented so far in terms of the source of funding.

Mr Mpanza agreed and said that it would be better if Members focused on the items presented – the accounts as presented from page 8 to 11 of the Response document.

Ms Magadzi, the Chairperson, suggested that perhaps the Committee needed to look at each account separately and how the money would be appropriated to each account. The Administrator’s account should be a separate account so that in the event that something happens to that account, it does not affect the monies appropriated for benefits.

Mr Sibande supported the responses. The whole idea of separating the accounts was to address the concerns raised by Treasury.

The Chairperson asked for clarity about money loaned to the Administrator, she did not agree with this.

Mr Chris Willemse, RAF Senior Manager, replied that for the Administrator to borrow money, it has to be dealt with through the relevant provisions and National Treasury.

Clause 27 Limitation of Administrator’s liability
The Acting Chairperson asked about the details of the discussion with Treasury on this clause.

Mr Sibande said the main concern with this clause was the matter of the Bill of Rights. Treasury argued that if a person is in South Africa, the Bill of Rights also applied to them. He asked the Legal Advisor to assist on this provision.

Mr Mpanza said that there is legislation that speaks to this matter and he was comfortable with respect to emergency services – these services were available to assist foreigners, immigrants and refugees in emergencies. Therefore, the concern about constitutionality with respect to foreigners and immigrants did not hold.

The Acting Chairperson referred to page 12 of the Treasury/DoT document. There were a lot of phrases about the pending status of foreign nationals that Members can deliberate on.

Mr Makgotho commented on the matter of constitutionality about foreign residents. He said that foreign residents and refugees were entitled to medical benefits but cannot claim other benefits through the scheme. Through the Bill, they would be assisted in medical emergencies.

The DA noted its objection to this clause.

The Acting Chairperson asked the DG to explain the paragraph on product liability.

Mr Willemse said that if there is a product liability, the victim cannot claim from the Scheme because that is already covered under the Consumer Protection Act. Product liability referred to an accident that occurred as a result of a faulty technical issue in the product.

Members agreed to the provision.

Clause 28 Exclusion of liability of owner, driver and employer of driver
DA objected to the clause

Clause 30 Liability of Administrator in respect of health care services
Members agreed to the provision.

Clause 31 Contracted health care service providers

Ms Magadzi asked if victims in 31(e) were expected to submit the proof of bodily harm. She also had a problem with the fee structure which may differ from the prescribed one. If it was left as it is, it is prone to manipulation.

Mr Mpanza agreed and suggested that the Administrator must follow Section 217 of the Constitution as well as the clause on the duties of the Administrator.

The Acting Chairperson said that this provision needs to be reformulated because it sends out the wrong information. If it is a contracted service, who is the custodian of information, the service provider or government? Why should the service provider provide proof that the bodily harm sustained was as the result of the accident? In addition, the service provider should not be the one determining the fee. It needs to be redrafted. There had been a long debate about the tariffs - so how is the Department going to put in a clause that speaks to the determination of the tariffs.

Mr Willemse said that the enabling provision is provided for, and the Department would determine the tariffs in consultation with the other relevant departments and stakeholders.

The Acting Chairperson asked who determines the tariffs.

Mr Willemse replied that it is the Minister in consultation with the Minister of Health.

The Acting Chairperson said that the tariffs were debated extensively and it came up that the tariffs were within the DoT to decide.

Mr Willemse said currently for the purpose of RAF and RABS the tariffs would be determined in-house which would be bespoke for RABS.

Ms Magadzi wanted clarity on whether the tariffs would be only on medical services.

The Acting DG replied that the three departments (DoT, Health and Treasury) need to come together to determine the tariffs, and he saw the CSIR coming on board to assist in developing the tariffs which would be binding throughout. At the moment the tariffs have not yet been developed.

Mr Hunsinger said that Members have been exposed to costing, modelling and projections – so how should the Committee receive this information when the very core piece of the information was not yet determined. There is a conversation that still needs to take place with the private health care sector because they will form part of the component. When is that conversation going to take place?

The Acting DG replied that the Department will tidy up that one before the Bill is wrapped up.

Mr Ramatlakane asked when that would happen.

The Acting DG said it would take three weeks to provide a concrete answer.

Mr Ramatlakane said three weeks was a long time and the Bill needs to be passed as soon as possible. However, if that was the time deemed adequate by the Department to finalise the conversation on the tariffs, then it would do.

The Acting DG said the Department at the moment was using some kind of tariff, there is some degree of base but that still needs to be engaged on with the colleagues from the other departments.

Clause 32 Non-contracted health care service providers
The Acting Chair noted that it was previously mentioned that this needed to be redrafted. The drafting of clauses 31 and 32 must be done in such a manner that it does not appear as though the authority to determine the tariff lies with the service provider.

Mr Willemse said the difference between the two clauses is that clause 31 deals with contracted service providers through tender processes by the Administrator. Clause 32 speaks to a non-contracted service provider or an unsuccessful bidder where there is no relationship between the service provider and the Administrator. If the claimant does not wish to go the contracted service provider route, they have an option to elect a non-contracted service provider, noting that there may be a co-payment.

Mr Ramatlakane asked for an explanation about the co-payment.

Mr Willemse explained the co-payment for a non-contracted service provider referred to a payment that would be paid by the claimant in the event that the fee paid by the Administrator was less than the service provider fee. In this instance, the difference in the amount would be incurred by the claimant. The co-payment is that difference.

Mr Ramatlakane said that we are dealing with patients at the time when they are being transported to the health care facility and they may be unable to make that decision for themselves. Now at the moment they find out that the service provider is non-contracted, what would happen?

Mr Willemse replied that the service provider would claim up to what is paid by the Administrator in terms of tariff.

Mr Hunsinger said in a scenario where location and availability of contracted service providers is not favourable to the claimant, would it still be fair for the claimant to pay the co-payment?

Mr Willemse replied that was already covered under the costs involved in the transportation of the patient to a location where those services are available. In all instances, it is going to depend on the election by the individual. The Administrator cannot oblige the person to receive treatment the person would otherwise not agree to.

Mr Ramatlakane said perhaps the Bill needs to be improved here. Where a person is conscious and the facts are laid on the table – the point is taken. However, if the person is unable to make that decision, there must be a waiver to protect someone who was unable to make that decision and due to circumstances was treated by a non-contracting service provider. Somehow we must find a way to protect those that are unable to make that decision, and the State must ensure that those that are vulnerable are protected.

Ms Mpikashe said that the Department would look at the clause to avoid unintended consequences.

Clause 33 Individual treatment and rehabilitation plan
Mr Ramatlakane said the phrase 'health care service provider’ troubled him. He asked if that could be changed, because the point of focus should be the individual who is injured and their needs are dealt with by the Administrator.

Ms Magadzi proposed that clauses 31, 32 and 33 be flagged in light of the comments by Members.

Mr Hunsinger agreed. He asked for clarity about the undertaking to compile the tariff structure. He asked if the tariff structure would include those under clause 32. He assumed that it was camouflaged under non-contracted health care service providers which suggests private health care. He proposed that the tariff structure was finalised with non-contracted health care service providers. If there is no clarity or grip on the tariffs the Committee would be getting itself into a beehive.

Mr Mpanza agreed and emphasized that for non-contracted health care service providers, it should not be left solely to the service providers but it must be within the capacity of the Administrator to discharge its duties in that regard.

The clause was flagged for drafting.

Clause 34 Liability of Administrator in respect of income support benefits
The Acting Chair asked if this clause was consistent with the new funding in clause 26 inserted earlier.

Mr Willemse confirmed that it was consistent.

Mr Sithole asked what would happen to the beneficiaries who are supposed to benefit from the injured person or the deceased.

Mr Willemse said the benefit provided was for loss of income and there are classes of claimants that are provided for. Clause 27(4) provides limitations for people who are in the country illegally, they would not qualify for this benefit. For those who are legally in the country, they would qualify for the benefit. Permanent residents or citizens would automatically qualify. What it pays for is loss of income as a result of the accident and it is separate from the medical benefit.

Mr Mpanza said he supported the clause as is.

Mr Seabi asked if 34(3) was necessary.

Mr Willemse said that illegal income was income that was against the law or earned outside the prescripts of the law. He cited some case law in support of this. Therefore, that income would not be used to calculate the benefit.

Mr Ramatlakane said that if it was known that the Scheme would not take it into account, why was the clause included in the Bill.

Mr Willemse replied that it was for the purpose of clarity.

Mr Seabi said that if he had a helper at home and that helper was not registered, would that mean her income would be considered illegal?

Mr Willemse replied that in that case it would not be the employee who was at fault but the employer would have not complied with the law.

Mr Ramatlakane indicated that the provision was based on protecting the Fund from people that would come make claims using bank statements that contain inflated incomes.

Mr Mpanza said the explanation was not satisfactory and in South Africa that there are many people that trade informally; therefore, it is not fair that proof of income should be applicable only through proof of such things as bank statements. Some people do not bank and they do not put their monies through the formal financial institutions. Therefore, there must be a further explanation of illegal income. He would have been satisfied if illegal income was earned through illegal activities as outlined in other relevant legislation.

Mr Ramatlakane said that there were many methods of earnings. Perhaps the Committee can ask the Department to write a definition to define this a little more clearly. Protection is always very important, so a definition should be formulated.

Ms Magadzi asked what a "reasonable period" is exactly in Section 34(2)(b). She proposed that reasonable period should be a month and it must be clearly stated as such.

Mr Hunsinger said that reasonable period was referring to ordinary citizens and it had nothing to do with the processing of a claim.

Mr Makgotho replied that if "reasonable period" was clearly stated as 30 days that would create unintended consequences for accident victims that were extremely injured and were in a coma for more than 30 days.

Mr Hunsinger suggest that the Committee needed to be careful about the legal difference between ordinarily resident and citizenship – these two are different, and it must be clear in the Bill which is which.

Mr Ramatlakane suggested that the Department refine the drafting about resident and citizenship.

Mr Hunsinger compared the open nature of clause 34 where one may approach the Administrator to provide the income support benefit, with clause 40(2)(a) which reveals that this is a discretionary decision that can be revised at any stage, so there is no guarantee for a person. He asked for an explanation and whether any of these benefits can be terminated at any stage.

Mr Willemse replied that the Administrator cannot at any time terminate the benefit. The instance where the Administrator terminates the benefit is when that person is deemed through medical processes to be no longer eligible for the benefit.

Clause 35 Temporary Income Benefit
Mr Hunsinger said 35(4)(a) to (d) is a layout of everything a road accident victim has to obtain to qualify for a claim. What financial support is provided for people to be able to obtain all these items? For him, financial assistance is still a huge concern.

Mr Willemse replied that this was a cost effective measure for the Fund because not all claims would be successful. In the event that the Administrator made the funds available for the claimant to obtain all the necessary documentation to validate their claims, if that claim is unsuccessful, will the Administrator claim back its monies from the claimant?

Mr Mpanza said that this question had already been addressed the day before.

Members agreed to move onto the next clause.

Clause 36 Long-term income support benefit
Mr Hunsinger shared his concern about 36(5) where the Administrator adjusts the income based on certain condition as laid out. How does the Administrator determine earning capacity and therefore make a deduction to what RABS should be paying out?

Mr Mpanza said that the upward and downward variation was discussed extensively, and the Committee took a decision that it would not allow any downward variation.

Mr Hunsinger said these are two different clauses. The one deals with the underlying structure and condition. This clause has a different condition which allows the Administrator to deduct based on his assessment of the benefit due to the victim.

Members agreed in previous discussions that there would be no downward variations.

Clause 38
Mr Seabi asked if the 15 years in 38(9) was adequate.

Mr Willemse replied that 15 years is for the surviving spouse, the period given for the beneficiary to re-enter the labour market. That period is to allow the surviving spouse to get re-skilled and get employment.

Mr Seabi said that practically that is not the case, and it does not assist, even with RAF data. He understood the rationale behind the principle though.

Mr Willemse replied that the scheme was designed to provide social security and not to be abused. If people can get employed or be re-skilled to enter the labour market that should be something that is encouraged.

Members agreed to the 15 years.

Clause 39
Mr Mpanza asked if the Regulations would come up with the figure for funeral expenses. This had been highly debated. He suggested that clause 39(b)(iii) should be broadened to ‘any evidence’ because in the African culture people often get assistance where no invoice involved. Therefore, it must not be confined to invoices but be broadened.

Mr Sibande agreed with Mr Mpanza.

Mr Ramatlakane asked the Department to go back to the drawing board about the funeral benefit amount because it has been raised before that it was very low.

The Acting DG said there are 14 000 fatalities per annum on average, and the current funeral amount is R10 000. The Department wants to reduce the 14 000 death toll to 10 000 because the former costs a lot of money. He did agree with the sentiments made by Members, and indicated that the Department would re-look the amount.

Mr Ramatlakane indicated that the Committee would continue with the deliberations in its next meeting.

The meeting was adjourned.


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