Municipal Systems Amendment Bill: voting; Municipal Systems Act: deliberations

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Meeting report

LOCAL GOVERNMENT & ADMINISTRATION SELECT COMMITTEE

LOCAL GOVERNMENT & ADMINISTRATION SELECT COMMITTEE
9 October 2003
MUNICIPAL SYSTEMS AMENDMENT BILL: VOTING; MUNICIPAL SYSTEMS ACT: DELIBERATIONS

Chairperson: Mr B J Mkhaliphi (ANC)

Documents handed out

Municipal Systems Act of 2000
Local Government: Municipal Systems Amendment Bill [B49B-2003]
Local Government: Municipal Systems Amendment Bill [B49C-2003]
Local Government: Municipal Systems Amendment Bill [B49D-2003]
Proposed Amendments to Local Government: Municipal Systems Amendment Bill (Appendix)

SUMMARY

The Committee unanimously voted for the desirability of the Local Government Municipal Systems Bill with minor amendments. The Committee deliberated at length on section 106 of the Municipal Systems Act Investigations and what role it would play when such an exercise was undertaken by the MEC. It was decided to wait for a more detailed legal opinion before deciding on the way forward.

MINUTES
Proposed Amendments to Municipal Systems Amendment Bill
Dr. Bouwer took members through the proposed amendments, which touched on clauses; 1, 8, 26 and 30. Please refer to Appendix. The Committee approved the amendments and asked Dr. Bouwer to incorporate them in the Bill.

The Chair took members through the entire Bill clause by clause before reading the motion of desirability, which was unanimously endorsed. He indicated that debate on the Bill would take place on the 22 November 2003 and asked members to prepare themselves fully.

Briefing by Ms Jodi-Anne Borien - from the Procedural Services Offices
Ms Borien informed the House that she would assist the Committee to understand the process to follow after the MEC had instituted section 106 of the Municipal Systems Act Investigations. She reported that her office was in receipt of a draft legal opinion from external experts, which addressed the role of the NCOP in terms of oversight functions. Since the MEC was accountable to the Provincial Legislature, the Committee could only engage in a dialogue with the Provincial Government once the report came before it.

The Committee would not ask the MEC to account but rather look at whether there were adequate support systems for the particular Municipal Council to deliver its mandate. The report would act as an early warning signal for a possible intervention by the Committee. She admitted that section 106 presented a very fine line between the power of the MEC and the oversight role of the Committee. The draft legal opinion was not final and that a clear picture would unfold once the final opinion had been submitted.

The Chair expressed concern that the report clearly excluded the NCOP in a matter where the MEC had commissioned an investigation into perceived irregularities in the council. He lamented that the way matters stood the committee was rendered a mere rubber stamp. Section 151(4) of the Constitution had to be invoked to justify any intention by the Committee whilst section 105 of the Constitution cautioned against undue interference. He observed that it seemed the Constitution was not clear on the matter either.

Mr. Maloyi (ANC) said that section 106 of the MSA empowered the MEC to investigate to satisfy himself whether such allegations were true and then prepare a report which would be notified o the Committee. He posited that where the MEC was satisfied that there was nothing untoward to necessitate an intervention there was no point for the Committee to interfere. He expressed the view that contrary to what the Chair said, section 106 in no way rendered the Committee a mere rubber stamp but that it was a workable mechanism for engaging the provincial establishment.

Ms Kondlo (ANC) concurred with Mr. Maloyi's view but suggested that there should be support mechanisms that would ensure that the NCOP did not only come into the picture when matters were already out of hand. She expressed the view that the NCOP should be able to play a corrective role before matters get out of hand.
Ms Kgoali (ANC) pointed out that all spheres of government had a role and responsibility toward council affairs but that it should be noted that the provincial legislature had an oversight role over matters in the municipalities. She expressed agreement with Mr. Maloyi's view that the law as it stands provides enough checks and balances for proper accountability.
Mr. Mokoena (ANC) noted that section 69 of the Constitution empowers the Committee to intervene when systems were not running properly and that this was enough for the Committee to stamp its authority on council affairs.

Mr. Lever (DA) cautioned members to always keep in mind that there were three tiers of government that were independently interlinked and that it behoved the Committee to ensure that there was no interference from either sphere of government. He made the point that section 106 of the MSA gives the primacy of intervention to the MEC and that the Committee's role was restricted to ensuring that such an exercise was not undertaken capriciously. He noted that the MEC was obliged to write a report which had be communicated to the Committee.

Mr. Nyakane vouched for the maintenance of the status quo arguing that there was no basis to warrant altering the existing system. She noted that from the area of acceptability the Committee was in a position to pick up early warning signals and that this was enough ground for intervention where such need arises.
Ms Borien clarified that the legal opinion in no way suggested that the Committee was a mere rubber stamp noting that in fact the Committee had a central role of facilitating processes in other tiers of government. She added that Section 66 of the MSA allows the NCOP to send representatives to attend deliberations at Council meetings.

The Chair admitted that he had exaggerated when stating that the NCOP was just a rubber stamp. He however asked members not to loose sight of the fact that there were numerous problems with regard to accountability by Councils. He cited an example where it took up to eighteen months for a MEC to submit a requisitioned report to the Committee noting that at times such a report was never submitted at all. He pointed out that the Provincial legislature was always notified whenever the NCOP intervened in a matter and that section 69 powers were relative and not absolute. He made a point of clarity that he was not suggesting that the NCOP carried out its own investigations alongside those of the MEC but that it was important to set time-frames for a report back. He reiterated that nothing could stop the Committee from getting involved where such a need arises but that the Committee should try and exhaust all avenues of securing information.

Mr Matthee (NNP) made the point that section 69 of the Constitution empowered the NCOP to require anyone to appear before it or even compel any person or institution to comply with any demand or requirement under a given legislation. He wondered whether there was such legislation that so empowered the Committee and if there was none then it should be introduced as a matter of urgency. He noted that such power would be of enormous help to the Committee.

Ms Kondlo concurred with the observations made by Mr. Matthee and suggested that the Committee hold the matter in abeyance to await the final legal opinion before a decision could be taken on the matter.
Mr. Maloyi also registered concurrence with the suggestion that the matter be flagged to await confirmation.

The meeting was adjourned.

Appendix
LOCAL GOVERNMENT: MUNICIPAL SYSTEMS AMENDMENT BILL

[B49B-2003]

PROPOSED AMENDMENTS

CLAUSE 1

1. On page 3, in line 42, to omit "86I" and to substitute "86H".

CLAUSE 8

1. On page 6, from line 39, to omit the proposed new subsection (4B) and to substitute:

(4B) Bonuses based on performance may be awarded to a municipal manager or a manager directly accountable to the municipal manager after the end of the financial year and only after an evaluation of performance and approval of such evaluation by the municipal council concerned.".

CLAUSE 26

1. On page 17, from line 34, to omit the proposed new section 93D and to substitute:

93D. (1) The council of a parent municipality must designate a councillor or an official of the parent municipality, or both, as the representative or representatives of the parent municipality to attend shareholder meetings and to exercise the parent municipality's rights and responsibilities as a shareholder, together with such other councillors or officials that the council may designate as representatives.

(2) (a) The official lines of communications between a municipal entity and the parent municipality exist between the chairperson of the board of directors of the municipal entity and the mayor or executive mayor, as the case may be, of the parent municipality.

(b) The mayor or executive mayor, as the case may be, of a parent municipality may at any time call or convene any meeting of shareholders or other general meeting comprising the board of directors of the municipal entity concerned and the representatives of the parent municipality, in order for the board of directors to give account for actions taken by it.

(3) A municipal representative referred to in subsection (1) -

(a) must represent the parent municipality faithfully at shareholder meetings, without consideration of personal interest or gain, and must keep the council informed of -

(i) how voting rights were exercised; and

(ii) all relevant actions taken on behalf of the municipality by the representative;

(b) must act in accordance with the instructions of the council ; and

(c) may be reimbursed for expenses in connection with his or her duties as a municipal representative, but may not receive any additional compensation or salary for such duties.

2. On page 19, in line 15, to omit "93L" and to substitute "93K".

3. On page 19, from line 16, to omit the proposed new section 93I.

4. On page 19, in line 23, to omit "93J." and to substitute "93I.".

5. On page 19, in line 30, to omit "93K." and to substitute "93J.".

6. On page 19, in line 43, to omit "93L." and to substitute "93K.".

CLAUSE 30

1. On page 21, in line 59, to omit "93I. Meetings of boards of directors".

2. On page 21, in line 60, to omit "93J." and to substitute "93I.".

3. On page 21, in line 62, to omit "93K." and to substitute "93J.".

4. On page 22, in line 1, to omit "93L." and to substitute "93K.".

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