Judicial Matters Second Amendment Bill; Prevention of Corrupt Activities Bill: deliberations

This premium content has been made freely available

Justice and Correctional Services

13 October 2003
Share this page:

Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
14 October 2003
JUDICIAL MATTERS SECOND AMENDMENT BILL; PREVENTION OF CORRUPT ACTIVITIES BILL: DELIBERATIONS

Chairperson
: Adv J H de Lange (ANC)

Relevant document
Working draft of Judicial Matters Second Amendment Bill - 13 October 2003
Working draft of Prevention of Corrupt Activities Bill - 14 October 2003
Option A & B: Proposed Amendments to Clause 3 (see Appendix)

SUMMARY
Morning session
The Banking Council of South Africa presented two versions of the clause dealing with the termination and netting of obligations upon insolvency in the Judicial Matters Second Amendment Bill. The Committee felt that the redraft had significantly improved the clause. Clauses 1 and 2. Further amendments were suggested for other clauses.

Afternoon session
The Department presented a new working draft of the Prevention of Corrupt Activities Bill to the Committee and provided an overview of what changes had been made - as requested by the Committee in August.

MINUTES
.
Morning session
Clause 3 : Substitution of section 35B of Act 24 of 1936, as amended by section 1 of Act 32 of 1995
"Agreements providing for termination and netting"
The Chair noted that the Banking Council of South Africa had been asked to redraft the clause dealing with the termination and netting of obligations upon sequestration.

Mr Kevin Daly (Banking Council) read out two options of the redrafted clause. The clause provides that upon sequestration of the estate of a party to a Master Agreement, all unperformed obligations between the parties to the Master Agreement arising out of that agreement and other Master Agreements shall terminate automatically at the date of sequestration. The values of the unperformed obligations shall be calculated at the market value as at that date, and the net amount shall be payable.

Mr Daly said that a Master Agreement is defined as:
an agreement in accordance with standard terms published by the International Swaps and Derivatives Association, the International Securities Lenders Association, the Bond Market Association or the International Securities Market Association, or any similar agreement, which provides that only a net amount is payable upon the sequestration of either party in respect of unperformed obligations arising from financial transactions concluded under that agreement;
or any agreement declared by the Minister after consultation with the Minister of Finance, by notice in the Gazette to be an agreement for the purposes of this section.

Mr K Daly stated that an "unperformed obligation" was defined as including an obligation to return assets in which ownership has been transferred as security for a party's prospective liability for transactions concluded under a Master Agreement.

Members questioned the necessity of this clause.

Ms F Chohan-Kota (ANC) observed that banks would be allowed to contract within the ambit of the clause or outside it. She said that if this is true, then there is no need to have this clause.

The Chair said that no problems have occurred that necessitated this clause, but it seems that banks would still insist on its inclusion in the Act.

Ms S Camerer (DA) noted that the definition of "unperformed obligations" refers to the transfer of ownership, but does not specify the party to whom ownership has been transferred.

Mr Daly replied that it is implied that ownership would be transferred to the other party to the contract. He said that he had no problems with clarifying that ownership would be transferred to the other party to the agreement.

The Chair said that that should be spelt out, rather than implying it.

Ms Chohan-Kota wondered if an "unperformed obligation" should include the return of security for prospective liability. She asked if without this clause, the return of security for prospective liability would fall outside unperformed obligation.

Mr Daly responded that there would be uncertainty without this clause. Foreign banks are very concerned by uncertainty, and this clause should thus be included.

The Chair noted that the definition of a "Master Agreement" includes "agreements in accordance with standard terms published by the listed associations or any similar agreement". He asked the presenter to explain the meaning of 'any similar agreement'.

Mr T Cronje, South African Law Commission (SALC), replied that the intention is to cover such similar agreements that might be established in future.

The Chair said that the legislation would have to be amended when such agreements were concluded, rather than legislating for them in advance.

Mr Daly indicated that "any similar agreement" would fall under this provision, as it only referred to those agreements that are substantially similar to a Master Agreement. The genus of the agreement is well known in the industry. He proposed that the clause reads 'any similar association' instead of 'any similar agreement'.

The Chair said that he was not implying that the words have to be deleted. He said that he only wanted to flag some issues that might arise from the use of those words.

Clause 5: Amendment of section 60 of Act 51 of 1977, as substituted by section 3 of Act 75 of 1995 and amended by section 4 of Act 85 of 1997, section 5 of Act 34 of 1998 and section 9 of Act 62 of 2000
Mr L Basset, Legal Drafter: Department, said that the clause obliges the court, in the absence of reliable or sufficient information to reach a decision on bail application, to take any pre-trial services report which is available into consideration regarding the desirability of releasing such person on bail.

Clause 6: Amendment of section 276 of Act 51 of 1977, as amended by section 3 of Act 107 of 1990, section 41 of Act 122 of 1991, section 18 of Act 139 of 1992, section 20 of Act 116 of 1993, section 2 of Act 33 of 1997 and section 34 of Act 105 of 1997
Mr Basset said that the amendment was necessitated by the fact that some courts feel that correctional supervision is not a competent sentence when a court has convicted a person of any offence, whether under common law or statutory provision. This clause stipulates that correctional supervision is a competent sentence, and decided by the Supreme Court of Appeal in the case of S v R 1993 (1) SACR 209 (A).

Mr J Jeffery (ANC) said that there is no need to amend the law if the Supreme Court of Appeal has already made a ruling on the issue. He asked whether this meant the law would have to be amended every time a court decision is disagreed with.

Mr Basset said that the National Prosecuting Authority (NPA) is also of the opinion that there is no need to amend the law because the Supreme Court of Appeal has already laid down a binding decision.

The Chair said that by amending the law one would create instant certainty. He also said that it might sometimes be too costly to wait for a matter to be decided by the courts. The amendment of the law is really a matter of convenience.

Clause 8: Amendment of s 342A of Act 51 of 1977
The Chair said that the one year period for regional courts seems too long. He expressed concern with the fact that the Table referred to does not indicate whether the person was granted bail or not.

Mr Jeffrey said that it would be helpful to inform the Committee as to how long it would take for the trial to take place.

Ms Chohan-Kota indicated that it took a year for the "Washington Sniper" case to commence, and suggested that South Africa was therefore not doing badly.

Clause 9: Certain attorneys to complete training in legal practice management
It was noted that no changes had been needed in this clause.

Clause 12: Amendment of section 7 of Act 70 of 1979, as amended by section 36 of Act 88 of 1984, sect. 2 of Act 3 of 1988, sect. 2 of Act 7 of 1989, sect. 9 of Act 44 of 1992
The clause obliges the registrar of a court to notify the pension fund that an endorsement be made in the records of that fund and that the administrator of the pension fund furnish proof of such endorsement to the registrar in writing within three months of the receipt of notification.

The Chair suggested that proof of such endorsement should be furnished within one month.

The drafter noted that Clauses 13 to 15 were not problematic, and dealt with name changes.

Clause 17: Amendment of section 10 of Act 99 of 1998
The drafter indicated that the Committee had been concerned with the extension of the role of the Family Advocate while there is no money in the budget for it. He said that additional funds have been secured and additional staff have been employed.

Clause 23: Amendment of section 79 of Act 2 of 2000
The Chair requested the drafter to inform the Committee as to when the section referred to in the clause came into effect, so that the Committee could decide if the period is long enough.

Clause 24: Substitution of section 90 of Act 2 of 2000
The clause stipulates that an information officer who wilfully or in a grossly negligent manner fails to comply with the provisions of Section 14 commits an offence and is liable on conviction to a fine, or to imprisonment for a period not exceeding two years.

The Chair said that one should also criminalise failure to make manuals or reports available.

Clause 25: Amendment of section 7 of Act 3 of 2000
The Chair requested the presenter to inform the Committee as to when the section referred to in the clause came into effect so that the committee could decide if the period is long enough.

Clause 27: Amendment of section 17 of Act 4 of 2000
The drafter said that this clause extends the power to the Director-General to delegate any power conferred on him or her by this section to an officer employed by the Department. The clause goes on to say that the Director-General shall not be divested of any such power so delegated and that he or she may amend or set aside any decision of the delegate in the exercise of such power.

Afternoon session

 

Clause 1: Amendment of section 10 of Act 9 of 1929, as amended by section 5 of Act 42 of 1942, section 27 of Act 56 of 1949, section 26 of Act 54 of 1952, section 2 of Act 34 of 1986, sect. 1 of Act 51 of 1991, sect. 1 of Act 65 of 1997, sect. 1 of Act 42 of 2001
The Chair said his interpretation of Section10(3)(b) was that the type of appointment was not stipulated. There was thus no reason why it could not be a permanent or acting appointment, as long as the right procedures were followed. If this was indeed the case then the proposed Section 10(3A) could be amended to provide for acting and temporary appointments. He stated that if this was done, the proposed subsection 3(b) would have to stipulate that it was for permanent appointments. The proposed Section 10(a) in Clause 2 would become the back-up clause. He said that his concern was that this was unconstitutional.

Mr Otto Kelner, State Law Advisor, replied that if the Committee wanted to put in a back-up clause, that clause would have to be constitutional. The insertion of the new proposed section 10(3A) created the possibility that the old 3(b) did not include acting appointments.

The Chair said that if this was not done and the Committee's interpretation of Clause 3(b) was not accepted, appointments made henceforth would not be done correctly. It was therefore important that Clauses 3(a) and 3(b) be corrected with all the back up clauses. He was concerned that no legal sanction for an appointment would be a problem. If the proposed section 10(a) proved to be unconstitutional, the Chair questioned whether it was worth including the provision if the appointments would never be legitimate. The argument would then be made that the appointment was mare in terms of Clause 3(b).

Mr Kelner asked why exactly the proposed Section 10(a) would be unconstitutional.

The Chair said that it related to the Separation of Powers doctrine. Judges are either appointed by the Judicial Services Commission (JSC) or the President, whereas magistrates were appointed by the Minister. He appointed out that the proposed section 10(a) made Parliament, the legislature, the appointments authority.

Mr Kelner questioned whether it could not be argued that the appointments were made by the executive authority, and that Parliament was only indicating that the appointments were validly made.

The Chair said that the Constitution declared whether the appointments were valid or not, and Parliament did not have the right to decide this.

Mr Kelner asked what kind of timeframe would be needed to investigate this matter.

The Chair stated that he was of the opinion that the Bill could still be passed in this session of Parliament. It would probably not be passed before the 12 November 2003, but it should be passed soon after that date. He emphasised that Clause 3(b) had to amended to read "permanent appointments".

The Committee returned to consider clauses in which dates had to be entered for regulations to be completed.

Clause 21: Amendment of section 10 of Act 2 of 2000, as amended by section 24 of Act 42 of 2001
Mr Basset said that this had come into operation on 15 February 2002. The Committee decided to grant 36 months for the regulations to be completed.

Clause 23: Amendment of section 79 of Act 2 of 2000
Mr Basset stated that this clause went into operation on 9 March 2001.

The Chair suggested that four years be granted to the Rules Board, to which Members agreed. He asked what the consequences of this provision would be in during that period. He wanted to know what the Act said about the rules that would be used in the interim period.

Mr Basset responded that he was sure there was rules for that period.

The Chair asked Mr Basset to confirm this and that it was workable before the Committee decided on the four year time period. He reminded the Committee that it had decided that these cases be brought before the High Court until they had the rules.

Clause 25: Amendment of section 7 of Act 3 of 2000
Mr Basset said that this had come into operation 31 July 2002.

The Chair suggested that three years be granted.

Clause 29: Amendment of section 11 of Act 47 of 2001
Mr Johan de Lange, Legal Drafter: Department, stated that the Committee had passed the Judicial Officers (Amendment of Conditions of Service) Bill 33 of 2003. The numbering in this Bill had been incorrect, and this was addressed in the NCOP. Clause 16 substituted Sections 9 and 10 of the Judges Act. When it was printed, it stated that Clause 16 substituted Sections 9 and 17. The next clause was then called Clause 18 which should have been Clause 17. This was changed and corrected in the NCOP. In reality therefore, this Committee actually passed Clause 17 and not Clause 18. In the amendments which the Committee requested, it called for Clause 18 to be rejected and substituted with a new clause. When the Bill was printed Clause 17 was taken out incorrectly and the same clause was repeated. The aim of Clause 29 in this Bill was therefore to include what was omitted, and Clause 31 is deleting the duplication.

The Chair noted that the Committee was in favour of this amendment.

Clause 30: Amendment of section 16 of Act 47 of 2001
The Chair asked if this clause had been resolved.

Mr Basset replied that Treasury had responded that there were some widows who would receive less, but stated that he was not sure why this was so. Clause 30(b) stipulated that nobody could get less than what they should get. He explained that when salaries of judges were adjusted again, these widows would have their pensions adjusted as well.

The Chair approved of all the changes. In summary, he reminded the Department to clarify around Clauses 1 and 2. Section 10(3)3(b) had to be amended to include permanent appointments and subclause 3A would be for temporary and acting appointments. The question then still remained whether Section 10 (a) was needed and was constitutional. Clause 6 was to be redone completely. Clause 7 was to be made stronger. Section 22 was reworded and a Section 23 would be added. Regulations had to be drafted for Section 24, and the committee had to view these

Prevention of Corrupt Activities Bill
The Chair asked Adv Gerhard Nel, Deputy Director of Public Prosecutions, to give the Committee a brief overview of the work that had been done on the Bill since last they had met. Each clause would then be discussed the following day.

Adv Nel explained that the old Clauses 3 and 4 had been collapsed

"corruptly"
Adv Nel explained what was meant by "corruptly". Option 2 of the definition of "corruptly" did not include an explanation of the term as in Option 1, but merely stated that anyone who acted corruptly would be guilty of corruption.

The Committee had to decide whether they would go with the clause with the definition or without it. With respect to the other clauses the same trend was followed.

Clause 4
Adv Nel stated that it was important to look at subclause (2) which spelt out what "to act" means.

Clause 5
The previous Clause 5 had been removed, because it dealt with corrupt activities by and against persons in the private sector, which was already included in Clause 3.

Clause 7
Adv Nel stated that it was important to note that this clause, which dealt with corrupt activities relating to members of the judicial authority, now included new Subsection 1(3)(ee) and Subsection 2.

Clause 8
Adv Nel stated that Subsection 2 was important.

Clause 9
He stated that this was a combination of the previous Clauses 11 and 25, as requested by the Committee. Subsection (b) had been added.

Clause 14
Adv Nel stated that the Committee had to decide whether the word "knowingly" had to be added or not.

Clause 16
Adv Nel stated that a new Subclause 2 had been added, as requested by the Committee.

Clause 21A
Adv Nel stated that clause was important as it ensured that a person could not be charged on the same facts or circumstances.

Clause 23
Adv Nel proposed that the heading of the clause be changed from "defences" to "invalid defences".

Chapter 6: Miscellaneous matters
Adv Nel stated that this chapter provided for the establishment of a central corruption register with a Registrar.

The meeting was adjourned.

Appendix

Proposed Amendments to Clause 3
Option A

(1) Upon the sequestration of the estate of a party to a Master Agreement, all unperformed obligations between the parties to the Master Agreement, arising out of that and other Master Agreements shall, notwithstanding any rule of the common law to the contrary, terminate automatically at the date of sequestration, the values of the unperformed obligations shall be calculated at market value as at that date, and the net amount shall be payable.

(2) For purposes of this section,

"market value" means a value determined without reference to the ability of the debtor to perform;

"Master Agreement" means-

(a) an agreement in accordance with standard terms published by the International Swaps and Derivatives Association, the International Securities Lenders Association, the Bond Market Association or the International Securities Market Association, or any similar agreement which provides that only a net amount is payable upon the sequestration of either party in respect of unperformed obligations arising from financial transactions concluded under that agreement; or

(b) any agreement declared by the Minister after consultation with the Minister of Finance, by notice in the Gazette to be an agreement for the purposes of this section;

"unperformed obligation" includes an obligation to return assets in which ownership has been transferred as security for a party's prospective liability for transactions concluded under a Master Agreement;

(3) Section 341(2) of the Companies Act, 1973 (Act No. 61 of 1-3), and sections 26, 29 and 30 of this Act shall not apply to dispositions in terms of a Master Agreement.



Option B

(1) Upon the sequestration of the estate of a party to a Master Agreement, all unperformed obligations between the parties to the Master Agreement, arising out of that and other Master Agreements shall, notwithstanding any rule of the common law to the contrary, terminate automatically at the date of sequestration, the values of the unperformed obligations shall be calculated at market value as at that date, and the net amount shall be payable.

(2) For purposes of this section,

"market value" means a value determined without reference to the ability of the debtor to perform;

"Master Agreement" means-

(a) an agreement in accordance with standard terms published by the

International Swaps and Derivatives Association, the International

Securities Lenders Association, the Bond Market Association or the

International Securities Market Association, or any similar agreement,

which provides that

(i) all unperformed obligations of the parties in terms of the agreement or agreements-(aa) terminate or may be terminated; or (bb) become or may become due immediately;

(ii) the values of the unperformed obligations are determined or may be determined; and

(iii) the values are netted or may be netted, so that only a net amount (whether in the currency of the Republic or any other currency) is payable to or by a party; or

(b) any agreement declared by the Minister after consultation with the Minister of Finance, by notice in the Gazette to be an agreement for the purposes of this section;

"unperformed obligation" includes an obligation ownership has been transferred as security for a arising from transactions under a Master Agreement;

to return assets in which party's prospective liability

(3) Section 341(2) of the Companies Act, 1973 (Act No 61 of 1973), and sections 26, 29 and 30 of this Act shall not apply to dispositions in terms of a Master Agreement.

 

 

Audio

No related

Documents

No related documents

Present

  • We don't have attendance info for this committee meeting
Share this page: