Municipal Systems Amendment Bill: voting on NCOP Proposed Amendments

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Cooperative Governance and Traditional Affairs

24 November 2003
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Meeting report

LOCAL GOVERNMENT AND ADMINISTRATION PORTFOLIO COMMITTEE
25 November 2003
MUNICIPAL SYSTEMS AMENDMENT BILL: VOTING ON NCOP PROPOSED AMENDMENTS

Acting Chairperson:
Mr Mshudulu (ANC)

Documents handed out
NCOP Proposed Amendments

SUMMARY
The Committee rejected two of the four proposed NCOP amendments to the Municipal Systems Amendment Bill. The Committee observed that the proposed amendment to Clauses 26 and 30 overlooks the important imperatives of corporate governance, which is critical to the efficient management of municipal entities. The Bill was then passed unanimously with these changes to the NCOP amendments.

MINUTES
Dr P Bouwer (Department legal drafter) informed the Committee that in effect there were three amendments to the Bill the rest being consequential to the first two.
- Clause 1 is a technical amendment to rectify an error.
- Clause 8 relates to the proposed approval of bonuses by the Council.
- The Clause 26 amendment deals with municipal representatives to the municipal entities. The NCOP strongly feels that the fact that these representatives have not been given voting rights renders them mere puppets in which case it is not necessary to have them there in the first place.
- Clause 30 is a consequential amendment flowing from the Clause 26 amendment on board meetings.

Mr Solo expressed concern at the proposed amendment to Clause 26 noting that their Committee had spent considerable time deliberating this matter. The whole question of the Companies' Act and the critical issue of corporate governance were factored into the discussion that led the Committee to arrive at the present decision. He asked if the NCOP was briefed on the technical aspects of corporate governance that guided the Committee during deliberations on the Bill.

Dr Bouwer replied in the affirmative. The imperatives of corporate governance were explained to the NCOP. The NCOP was of the considered view that the issue of corporate governance does not adequately explain the existing political undercurrents within the local government structures. The NCOP expressed the view that municipal representatives would in any case act as mere rubber stamps to decisions that are taken by the board without contributing in any significant way to the said corporate governance imperatives. The NCOP therefore decided to do away with this unproductive observer status.

The Chair guided members through the Bill clause by clause before putting it to the vote.
Clause 1 of the proposed amendment was unanimously passed.
Clause 8 of the propose amendment was unanimously passed
Clause 26 of the proposed amendment was unanimously rejected
Clause 30 of the proposed amendment was unanimously rejected

The whole Bill was unanimously passed with amendments.

The meeting was adjourned.

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