Airports Company Amendment Bill & ATNS Company Amendment Bill: deliberations

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Transport

05 February 2019
Chairperson: Ms D Magadzi (ANC)
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Meeting Summary

The Department of Transport briefed the Committee on the Airports Company Amendment Bill and Air Traffic and Navigation Services Company Amendment Bill.

The Department reported that the purpose of the Airports Company Amendment Bill is to amend the principal Act thereby aligning the principal Act with the Companies Act, 2008 (Act No. 71 of 2008), the Competition Act, 1998 (Act No. 89 of 1998) and the Public Finance Management Act, 1999 (Act No. 1 of 1999); to insert, delete and amend certain definitions (e.g. the inclusion of the definition of ‘‘approach document’’ in order to give legal status to the approach document); to provide for the appointment and disqualification of members of the Committee; to provide for the vacation of office of members of the Committee; to provide for the meetings of the Committee; to provide for the establishment of the Appeal Committee; to provide for the appointment and disqualification of members of the Appeal Committee; to provide for the vacation of office of members of the Appeal Committee, to provide for offences and penalties and to provide for matters connected therewith

Members asked about how the Department only introduced the Bill now when the current Act had so many shortcomings for such a long time; how the Company has been operating with these anomalies over the years; how the company operated without Members disclosing their interests; why the department waited for 13 months to bring the Bill to Parliament and whether there were any prominent challenges that caused the delay; whether during the 13 months gap there were there any cases that had financial implications that the company lost.

The Department presented that the Air Traffic and Navigation Services Company Amendment Bill, 2018 (the ‘‘Bill’’) seeks to amend the Air Traffic and Navigation Services Company Act, 1993 (Act No. 45 of 1993) (the ‘‘principal Act’’) to strengthen the current economic regulatory framework.

Members asked the drafting team to make the Bill clearer and sort out the cross-referencing.

Members resolved that the Department would come back next week Tuesday to finalise the deliberations once the cross-referencing and minor technical issues were addressed.

Meeting report

Opening remarks
The Chairperson welcomed everyone present and submitted the agenda. She requested the Acting DDG to introduce her team. Thereafter, the Air Traffic and Navigation Services (ATNS) would present its Bill.

Briefing on Airports Company Amendment Bill
Ms Mamabolo Manare, Acting DDG: Civil, Department of Transport, said the Bill sought to amend the Airports Company Act, 1993 (Act No. 44 of 1993) thereby strengthening the current economic regulatory framework. The Department of Transport under the Branch: Civil Aviation, established a Project Team consisting of the following stakeholders who are directly affected by the amendments; the Regulating Committee, Airports Company South Africa (ACSA), ATNS, Board of Airlines Representative of South Africa (BARSA) and the Airlines Association of Southern Africa (AASA).

The review of the principal Act will, among other things, (i) address the lack of an effective appeal mechanisms; (ii) give the approach document legal status; (iii) address the lack of clarity regarding the reasons for regulatory decisions (especially from the Regulating Committee); (iv) prescribe the procedure the Minister must follow when appointing members of the Committee and Appeal Committee; (v) empower the Minister to make regulations regarding matters related to economic regulation and the procedure to be followed by the Committee regarding non-compliance by the Company.

Challenges to be addressed:
-The current legislation does not provide for appeals mechanisms
-The Minister is not empowered to make regulations regarding any matter related to economic regulation

Key features of the Bill
-Give legal status to the Approach Document
-Align the Act with the Companies Act of 2008 and the Public Finance Management Act
-Prescribe the procedures the Minister must follow when appointing members of the Committee and the Appeal Committee
-Provide for the procedure for meetings and decisions of the Committee to ensure transparency, flexibility and predictability of regulatory decisions
-Provide for effective appeal mechanism
-Empower the Minister to make regulations regarding any matter relating to economic regulation and procedures to be followed the Regulating Committee on non-compliance by the Company

Proposed amendments
-Insert new sections 11A, B, C, D, E and F by empowering the Minister to appoint and disqualify the members of the Committee, dealing with disclosures of interest of the Committee Members, vacation of office and termination of appointment, and procedures for the meetings of the Committee.
- Insert new sections 12A, B, C and D to establish the Appeal Committee, empower the Minister to appoint, disqualify and terminate the membership of the office bearers of the Appeal Committee and to also provide procedures for hearing appeals and to address how the decisions of the Committee should be handled.
-Insert sections 12E, F, G and H to ensure that Appeal Committee members are required to disclose their interest and there are clear procedures relating to vacation of office and termination of appointment
-Amend section 14 by empowering any person who is aggrieved by the decision of the company to lodge a complaint against the company with the Committee
-Section 15 would be amended to empower the Minister to make regulations by notice in the Gazette after consultation with the Committee and the aviation industry.

Currently there is no dispute resolution mechanism in place, and there is no clear procedure on how the decisions of the Committee should be handled. Therefore, the proposed amendments seek to address these shortcomings. And any persons aggrieved by the decisions of the company would be empowered to lodge complaints against the company with the Committee.

The Department requested that the Committee supports the Bill.

Discussion
Mr T Mpanza (ANC) wanted to know why the Department only introduced the Bill now when the current Act had so many shortcomings for such a long time. It was quite strange that the identified areas needed to be in the Act in the first place. Secondly, how has the Company been operating with these anomalies over the years? 

Mr M Sibande (ANC) thanked the Department for the submission and echoed its sentiments about the key features of the Bill that sought to be aligned with the Company’s Act of 2008. He indicated that there were so many legislations that were outdated. With regards to the disclosure of interests by Members of the Regulatory Committee; he wondered how the company operated without them disclosing their interests because that is a significant part of the operations.

Mr L Ramatlakane (ANC) said that what has been identified as challenges were indeed challenges; therefore, all the identified areas that would be incorporated in the Bill were vitally important. He wanted to know why the Department waited for 13 months to bring the Bill to Parliament and whether there were any prominent challenges that caused the delay. 

The Acting DDG said this was an old project that started in 2010, but in 2011 there was a steering committee that identified all the challenges with the current Act. Subsequently there were engagements from the Steering Committee and there was a legal case that brought forward some of the issues and a committee was then established to manage those issues.

On the issues that were raised, particularly the declaration of interest, the Regulatory Committee members are compelled to disclose their interests but that was not a legislative requirement, and that will be rectified under the Amendment Bill.

Ms Charmaine Mathonsi, Deputy Director: DoT, addressed the question on alignment and said that  the 1973 Company’s Act was repealed and replaced by the 2008 Company’s Act which had new provisions. The Bill would also be aligned to the new Company’s Act. After the Cabinet approved the Bill, the Department needed to undertake further consultations and internal processes.

Mr Ramatlakane said after the Cabinet approved the Bill, it took the Department 13 months together with the State Law Advisor to finalise everything that was presented to the Cabinet. He wanted to know whether that was an adequate explanation submitted to the Committee. He did not understand why it took so long to bring the Bill to Parliament, because the matter of declaration of interest was a significant one. Once Cabinet has approved, there should be no major constructions on the Bill; hence, it was a conundrum why it took so long for the Bill to come to Parliament.

Mr Sibande wanted to understand whether during the 13 month gap there were there any cases that had financial implications that the Company lost.

Mr N Seabi (ANC) said he had a problem with the fact that the Minister previously had no powers to dismiss or disqualify Committee Members.  He asked for clarity under s11B(a), and s11E(4).

The Acting DDG said the company did not lose any court cases that had financial implications. On the declaration of interest, when Members are appointed, they are required to declare their interest and even before attending meetings. So this measure was available but it was not in the Act, and the current Bill will address that anomaly.

The Chairperson felt that the Members were not getting clear and concise answers to the effect of why the Department took so long to bring the Bill to Parliament. Members would like to understand whether there were any challenges that the Committee needs to be aware of in relation to the longevity of the gap because it was too long.

Ms Phumelele Ngema, Parliamentary Legal Advisor, said the presentation does not match with the presentation that was handed out to the delegation. It appeared that Members were asking questions from the wrong document because the ATNS and ACSA presentations were very similar, and both sought to address the same matters. 

The Acting DDG acknowledged that the Department did take a long time but it was six months.

An official from the Department said that after the approval by Cabinet, the Department consulted with the State Law Advisor and it was proposed that it should establish a Review Committee to review the decisions of the Appeal Committee. As the Department engaged, it realised that it could not have another Committee that would review the decision of the Appeal Committee because the Appeal Committee reviews and deal with complaints laid by any aggrieved persons against the Regulating Committee. Any person would first engage the Regulator if they were not happy about tariffs or had any complaints, and if the complainant is not happy about the decision of the Regulating Committee, then they can approach the Appeal Committee.

Mr Ramatlakane said that the more the Department explained itself, the more complicated it became. The Department failed to act expeditiously; it’s as simple as that because the State Law Advisor would not have taken six months to deal with this matter. He suggested that the Committee should disengage the question and the Department acknowledge that it failed to deliver the Bill expeditiously.

The Acting DDG said, in response to Mr Seabi’s clarity seeking questions, that the Bill must be read with the principal Act in order to understand some of the definitions.

The Chairperson acknowledged the clarification. She then asked how long the legal advisory team would take to peruse and rectify some of the technical issues in the Bill.

Ms Ngema said that it would probably take about three days because the team would have to consult the Constitution and other relevant pieces of legislation, and ensure that the cross referencing was done properly and corrected.

The Chairperson welcomed the submission and stated the deliberations should then be finalised by next week Tuesday.

Briefing on ATNS (Air Traffic and Navigation Services) Amendment Bill
Ms Manare said that the Bill seeks to amend the Air Traffic and Navigation Services Company Act, 1993 (Act No. 45 of 1993) (the ‘‘principal Act’’) to strengthen the current economic regulatory framework.

The Acting DDG stated that the two bills have a lot of similarities and indicated where the differences were:
-The Act did not cover the mandate of the Company to conduct business outside the Republic
-The current legislation did not provide for appeals mechanisms, and
-The Minister was not empowered to make regulations regarding any matter related to economic regulation

Proposed amendments
-Amend S4 by amending the object of company to extend its business to the outside of the Republic
-Amend s11 to ensure that permission is valid for a period of five years without interruption, with options to reapply within the validity period only under material circumstances
-Insert S11A that provides for the appeals mechanisms
-Amend s13 by prescribing the forms that an aggrieved person of company may use in lodging and appeal
-Insert new Section 13A by prescribing the procedures relating to the conduct of any persons attending proceedings of the Appeal Committee
-Amend s14 by empowering the Minister to make regulations by notice in the Gazette, after consultation with the Committee and the aviation industry

The Department also formally requested the Committee to support the Bill.

Discussion
Mr Mpanza suggested that the Department look carefully at how the Bill was written because some of the issues were not clear enough. However, he supported the Bill.

The Chairperson asked whether the Board was satisfied with the Bill in its current form.

Mr Simphiwe Thobela, Board Chairperson, ATNS, appealed to the legal advisory team to make the cross-referencing very clear but the Board felt that the Bill fits into the strategic direction that it is responsible for; notwithstanding the proposed referencing changes.

The Chairperson acknowledged the input of the Board.

Members resolved that the Department would come back next week Tuesday to finalise the deliberations once the cross-referencing and minor technical issues were addressed.

The Chairperson thanked the Members and the delegation for the inputs.

The meeting was adjourned.
 

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