National Land Transport Amendment Bill: legal opinion on constitutionality; Department response to Negotiating Mandates

Meeting report

The Chairperson pointed out that the South African Local Government Association (SALGA) had raised constitutional concerns about the Bill to which Parliament’s Constitutional and Legal Advice Office would respond to. On the way forward he stated that if the Committee agreed to the proposed amendments to the Bill then the new Bill would have to go back to the provinces. Thereafter the Committee would expect final mandates on the Bill from the provinces. The Committee would deal with final mandates on the Bill on 26 February 2019. The Committee should have completed the negotiating mandates at the end of 2018 but there had been delays. SALGA was part of the National Council of Provinces (NCOP). It formed part of NCOP Committees and plenaries but unfortunately could not vote. SALGA could raise its concerns over the Bill by taking part alongside members in deliberations on the Bill.

National Land Transport Amendment Bill: legal opinion on constitutionality
Ms Noluthando Mpikashe Parliamentary Legal Adviser, stated that SALGA believed that the approach taken in the Bill fundamentally changed the existing National Land Transport Act in ways which were inconsistent with both the Constitution and sound public transport management. SALGA felt that sections 11(1)(b)(viiA), 11(1)(c)(xxvi) and 11(10) of the Bill proposed that the province be the default sphere of government for concluding subsidised service contracts, commercial service contracts, negotiated contracts and stopgap contracts. For a municipality to take on these functions, it would need to receive written confirmation from the Minister of Transport that it had complied with criteria which the Minister had set out. SALGA’s concern was also that the Bill in section 11(1)(a)(xi) allowed for the national sphere to enter into these contracts. SALGA was of the belief that the Bill was not aligned with the Constitution as the Bill required the Minister to set out criteria which municipalities had to comply with even though this was a function assigned to municipalities in the Constitution. The Bill making the province the default sphere of government for concluding these contracts was also problematic.

She explained that section 44 of the Constitution provided the national legislative authority as vested in Parliament to confer on the National Assembly the power to pass legislation with regard to any matter, including a matter within a functional area listed in Schedule 4. She also referred to sections 154 and 155 of the Constitution and said it was evident from its provisions that national and provincial governments were tasked with the responsibility to supervise local government. This supervision had to take into account the status of municipalities as provided in section 151 of the Constitution. What sections 154 and 155 had in mind was legislation or measures of general application, forward looking, by which municipalities in general in the province may be supported and strengthened and this was what the Bill sought to achieve. The Bill puts in place legislative measures to enable the municipality to perform its function. This was part of the monitoring and support envisaged by the Constitution. Municipalities could enter into contracts, the Bill just provided for criteria to be met. Section 151(3) of the Constitution provided that a municipality had a right to govern, on its own, initiative, the local government affairs of its community, subject to national and provincial legislation, as provided for in the Constitution. It was thus evident that local government did not have a comparable authority to what the national and provincial spheres had. Municipalities in terms of section 151(3) were still subject to national and provincial legislation. She reiterated that the Bill allowed municipalities to enter into contracts, it just required of them to comply with regulations passed by the Minister. The Bill was a legislative measure envisaged in the Constitution which national government would use to monitor and support provinces and municipalities. She concluded that the Bill was constitutionally sound and that the legislative scheme permitted its introduction.

Discussion
The Chairperson asked the Office of the Chief State Law Adviser what its stance over the matter was.

Mr Mongomeli Kweta, State Law Adviser, replied that he was in agreement with what Ms Mpikashe had said. The Bill would pass constitutional muster.

The Chairperson asked that the legal opinion of the Parliamentary Legal Advice Office be attached to the minutes of the Committee. When the Committee had dealt with the labour law bills in 2018 President Cyril Ramaphosa had not signed off on them immediately. Minutes of the Committee on those bills had been perused to get an idea of the process around them. He noted that SALGA had asked the Committee to obtain an independent legal opinion on the Bill. The Committee however was of the view that its Parliamentary Legal Advisers were competent to interpret the Constitution and were able to provide the Committee with the legal advice that it needed. If there was anyone who wished to challenge the process followed or the Bill itself, they should feel free to do so.

Councillor Bheke Stofile, SALGA National Executive Committee (NEC) Member, pointed out that SALGA had obtained legal advice on the Bill. It had asked constitutional experts for legal opinions. On the function of municipalities, he did not see how the Bill tied in with section 40 of the Constitution which spoke to the recognition of different spheres of government. He stressed that there was a misunderstanding of public transport. SALGA was of the view that the Bill usurps the power of municipalities. Section 154 of the Constitution gave national and provincial government the power to assist local government to perform its duties and to meet its mandate. What the Bill was doing was taking things back to the Ordinance of 1956. SALGA in its submission on the Bill stated that the Bill was not crafted properly. He observed that the Constitutional Court had on occasion given judgements against Parliament. There was a need to relook at the Bill. The Bill was indirectly taking away the responsibility of municipalities. SALGA believed the Bill to be unconstitutional.

Mr W Faber (DA, Northern Cape) said that much of what he had wished to raise had been covered by Councillor Stofile. He too felt that the Committee needed to obtain an independent legal opinion on the constitutionality of the Bill. In this way the Committee could satisfy itself on the constitutionality of the Bill. Legal opinions after all do differ. He agreed that national and provincial governments were supposed to supervise municipalities but the Bill was now allowing national and provincial government to enter into contracts. They were essentially taking away the role of municipalities. The three spheres of government should be independent. The Minister of Transport in the Bill was allowed to dictate to municipalities. He reiterated that the Committee needed another legal opinion other than that of the Parliamentary Legal Advisers on the Bill.

Mr L Magwebu (DA, Eastern Cape) said that it appeared as if SALGA was convinced that the Bill had unintended consequences of usurping the powers of local government. The Parliamentary Legal Advisers on the other hand did not share this view. There seemed to be a stalemate. What was the Committee to do? He cautioned against the Committee obtaining different legal opinions. Legal opinions could differ. He felt that the legal opinions as expressed by the Parliamentary Legal Adviser and the State Law Adviser were good enough.

Mr E Makue (ANC, Gauteng) stated that SA’s democracy was maturing. The need could arise that certain pieces of legislation or even the Constitution would have to be revisited. The Committee had received a submission from SALGA and had obtained a legal opinion on the assertions made in it. He was of the view that the Committee needed to accept the legal opinion by the Parliamentary Legal Advisers’ Office and the State Law Advisers’ Office. This however did not inhibit SALGA to do what it needed to do on the Bill. The Committee did have to follow the rules of the NCOP. The Committee would draft a report and submit it to the House Chairperson. The House would take a final decision on the Bill. The Committee should decide on whether it needed an independent legal opinion on the constitutionality of the Bill.

The Chairperson suggested that the Committee continue with the legislative process. However, there should be interaction between Parliamentary Legal Advisers’ Office, the State Law Advisers’ Office, the Department of Transport and SALGA to deal with this issue. Perhaps some sort of agreement could be reached. If no agreement could be reached then SALGA should follow its own processes to challenge the Bill. The Committee’s next meeting was on 19 February 2019 when Members expected to be updated on progress made.

Councillor Stofile agreed to the Chairperson’s suggestion. It was always good to exhaust intergovernmental relations. SALGA welcomed such engagement.

National Land Transport Amendment Bill: Department response to Negotiating Mandates
Mr Hament Patel, Chief Director: Regulation, Department of Transport (DoT), presented the responses.

Eastern Cape Province
The Province voted in favour of the Bill with proposed amendments.

Clause 3(e) - The Department disagreed with the Province’s suggestion that the word “timeframes” be added. Setting timeframes would mean setting targets which would have financial implications.

Ms M Dikgale (ANC, Limpopo) was not pleased with DoT’s explanation that there could be financial implications.

The Chairperson asked the Department to clarify.

Mr Patel explained that the target category referred to was disabled persons. The proposed amendment was calling on minibus taxis to be retrofitted to allow disabled persons to disembark from them. The Department in principle agreed with the proposal and was even developing guidelines. Retrofitting minibus taxis to accommodate wheelchairs could only be achieved over a period of time. The reality was that National Treasury had cut the budgets of municipalities the previous year, the current year as well as for next year. In principle the proposal made sense but could only be done over time.

Ms Dikgale was still not satisfied with the explanation. Public transport was a challenge to disabled persons and timeframes needed to be set.

The Chairperson responded that DoT in principle agreed with the proposal.

Mr O Terblanche (DA, Western Cape) understood the predicament that DoT found itself in. He was sure nothing was being done at present. Government would always experience budgetary constraints. Perhaps better drafting was needed as one had to start somewhere.

Mr Faber agreed with the sentiments expressed by members. He suggested that a rollout date be set for things to start. He also felt that a redraft was needed. Disabled persons had to be prioritised.

Mr E Makue (ANC, Gauteng) pointed out that reading Clauses 3(e) and 6 together covered the issue. Could this also be covered in the DoT Annual Performance Plans (APPs)? The question was about how the Committee would make a follow up as the Fifth Parliament was nearing its end. Members needed to be realistic. For instance in Gauteng there was no funds for the Bus Rapid System (BRT) in the East Rand. The Gautrain also had deep financial problems. Members should be cognisant of these types of things.

The Chairperson stated that perhaps reasonable timeframes could work.

Mr Terblanche continued that all government departments had responsibilities but there was never enough budget. The Department could only execute within their budget.

The Chairperson understood Members’ concerns in that if no mention was made of timeframes then nothing would happen. Having strict timeframes would also not work. He asked DoT to come up with a draft clause. Perhaps not all Members would be around to ensure that what was provided in APPs would be delivered on.

Ms Mpikashe suggested that provision for timeframes could be made in the regulations to the Bill. The Minister could place timeframes in the regulations. It would be the best option.

The Chairperson added that something was needed in the Bill to compel the Minister to provide for timeframes in regulations.

Mr Patel said that what the Chairperson was referring to was covered in Clause 6. He agreed that timeframes could be covered in the regulations.

Ms Dikgale noted that it seemed as though DoT no longer disagreed with the proposal from the Province.

Clause 6 - The Department agreed to the grammatical change proposed.

Clause 7(i) – The Department agreed to the proposed change that “may” be changed to “must”. The Department however wished for the time period specified to be changed from 60 days to 90 days. Mr Patel said that the process between the Minister and the applicant municipality needed to be taken into consideration. Complexities might arise hence the increase in the time period.

Mr Faber felt that 60 days was sufficient for the Minister to make a decision. 90 days was far too long.

Ms Dikgale agreed with Mr Faber.

The Chairperson addressing DoT said that Members were comfortable with 60 days as originally captured in the clause.

Ms Mpikashe referred to the proposed change of “may” to “must” and said it was better for it to remain “may”. She explained that all that “may” was doing was to empower the Minister. It was not about giving the Minister discretion. The Minister was being given the power to grant exemptions to municipalities. Regarding 60 or 90 days, this was a policy decision which the Committee needed to take.

Mr Magwebu was concerned with the use of “may” as some might construe its use to be giving the Minister discretion. He preferred the use of “must”. The use of “may” might lead to unintended consequences. He agreed that 60 days was good enough.

Ms Dikgale preferred the use of “may” and a 60-day timeframe.

Ms B Mathevula (EFF, Limpopo) and Mr Terblanche felt that 60 days was good enough and that the use of “must” was preferred.

Mr Makue held no position.

Mr Faber preferred the use of “must”.

The Chairperson observed that most Members were in favour of using “must”. He asked whether there was any legislation that had used “must”.

Ms Mpikashe responded that it all depended on the context. She reiterated that the use of “may” did not give the Minister discretion, all it was doing was empowering the Minister. She preferred the use of “may” but it was the Committee’s decision to make. It could be changed to “must” if the Committee so wished.

The Chairperson said that the amendments were not yet cast in stone as they still had to go to the Portfolio Committee on Transport and thereafter to the Mediation Committee.

On the other proposed amendments to the clause, the Committee agreed with DoT that there was no need to legislate as processes rested within intergovernmental relations engagements. Nor was there a need to regulate.

Clause 9 - The clause covered direct conflict of interest in the public transport space. Persons serving on regulatory authorities could not have taxi or bus businesses. Mr Patel said that the blanket ban as proposed by the Province could lead to litigation. 

The Committee agreed with DoT.

Clause 16 - The Department agreed with the proposed amendments. The Committee supported DoT’s decision.

The Province also made suggestions and comments of general application which DoT noted. The Committee was pleased that DoT heeded what the Province had said.

Free State Province
The Province voted in favour of the Bill with proposed amendments.

Clauses 3 and 5 - The Province had called for uniformity and consistency on regulations by the Minister and Provincial Members of Executive Committees (MECs). The Department gave the assurance that regulations would be uniform and consistent.
 
The Committee accepted DoT’s response.

Clause 7(b) - The Province proposed that scholar transport be issued licences to transport learners. The Department responded that scholar transport required licences in terms of section 50(1) of the Principal Act.

The Committee accepted DoT’s response.

Mr Faber asked whether scholar transport fell under the Department of Education or Department of Transport. He pointed out that Premiers of Provinces often decided under which Department scholar transport should fall. He felt it to be wrong to allow Premiers to decide.

The Chairperson responded that the Principal Act was an act of the Department of Transport. The issue of licences was under the Department of Transport. The Department of Education did not issue licences. The Committee should not deal with issues around the administration of scholar transport.

Mr Faber asked whether the licensing of scholar transport was regulated by the Department of Education or by the Department of Transport.

The Chairperson replied that it was governed by the Principal Act of 2009. It fell under the Department of Transport.

Section 87 of the Principal Act - The Province proposed that any transport vehicle faring passengers illegally should be impounded. The Department said it was already provided for in section 87.

Section 52 of the Principal Act – The Province proposed that taxi permits should be extended from 7 years to 15 years and/or indefinitely. The Department rejected the proposal. Operating licences should be for a maximum period of 7 years for planning and safety purposes. In most cases renewal of licences was automatic after lapsing.

The Committee accepted DoT’s explanation.

The Province also made general comments and suggestions which the Committee felt DoT responded adequately to.

KwaZulu Natal Province
The Province supported the Bill with proposed amendments.

Clause 1(c) - The Province proposed four provisions to be added to the definition of ‘e-hailing service’. The Department rejected the proposal as the proposed amendment fell squarely within the definition of ‘charter service’. The Department referred to section 1 on definitions in the Principal Act.

Mr Faber however agreed with the Province. He stated that e-hailing services were a different category and should be on its own. Technology changes all the time.

The Chairperson pointed out that as the Principal Act already covered things, there was no need for the proposed amendment. The Department did have a definition for e-hailing.

Mr Faber disagreed and said that e-hailing was an e-service and could not fall within the definition of a charter service.

The Chairperson pointed out that the Province was proposing a definition for e-hailing which was a definition of charter service in the Principal Act. The Bill defined e-hailing whilst maintaining what was in the Principal Act. The Province was essentially repeating the definition of charter service as a definition of e-hailing.

Mr Makue said that during public hearings the matter had been adequately consulted with stakeholders.

Members were for the most part satisfied with DoT’s explanation.

Clauses 1(c) and 40 – The Province proposed that the definition of e-hailing services should be enhanced and reinforced to avoid unintended consequences at the point of granting licences by regulatory entities. E-hailing services should also not be restricted to areas of operation and dedicated routes as they were roaming services. The Department responded that Clause 40 covered what the Province was proposing.

Mr Faber agreed with the Province and stated that Clause 40 restricted e-hailing services to an area. How could e-hailing services be bound to certain areas? E-hailing should not be restricted.
  
The Chairperson saw the point that Mr Faber was trying to make.

Mr Patel responded that yes there were restrictions but there was also flexibility.

Mr Takalani Ndanduleni, DoT Deputy Director, explained that the intention was create a level playing field between metered taxis and e-hailing. There had been many instances of violence between metered taxis and e-hailing. Allowances were made for e-hailing to pick up passengers outside designated areas.

Mr Magwebu cautioned Members to apply their minds carefully.

Ms Dikgale wanted the South African public to get affordable public transport.

Mr Terblanche agreed that reliable and affordable public transport was needed. There should not be restrictions.

The Chairperson stated that Members felt Clause 40 to be too restricting. E-hailing was being restricted to particular areas. This was notwithstanding DoT saying that e-hailing was accommodated to go beyond the restricted areas.

Ms Mpikashe said that the restriction was for e-hailing to particular areas.

The Chairperson said that everyone needed to apply their minds on the matter.

Mr Makue stated that e-hailing services had not raised the matter during consultations. He asked why Members were seeing ghosts where there were not any.

Mr Terblanche said that the Committee was not looking out for the interests of meter taxis or e-hailing. The interests of the South African public had to be looked at. He had serious concerns and felt that the Bill should go back to the National Assembly for it to revisit what had been agreed to.

Mr Patel responded that the matter had been debated by the Portfolio Committee on Transport. All the Bill was attempting to do was to create a level playing field after the conflict that had erupted.

Mr Ndanduleni explained that an e-hailing service having a licence in Cape Town would not be allowed to operate in Ekurhuleni. The restriction was to an area which was a whole city. There would be different e–hailing services in different cities. The licence was for the driver to operate in a specific area.

The Chairperson, on the way forward, stated that explanations given by DoT needed to be thorough.

The meeting was adjourned.