Fundraising Amendment Bill: motion of desirability& deliberations

Social Development

02 September 2022
Chairperson: Ms N Mvana (ANC)
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Meeting Summary


Tabled Committee Reports

The Portfolio Committee on Social Development considered and adopted the motion of desirability on the Fundraising Amendment Bill. The Committee also considered inputs from the Department's legal advisors, Parliament, and Office of the State Law Advisor. The Committee deemed the Bill desirable.

The aim of the Bill is, amongst other things, to amend the Fundraising Act of 1978 to effect certain textual amendments to provide greater clarity; to amend certain definitions; to provide for the discontinuation of certain funds and dissolution of any boards responsible for those funds; and to transfer any amounts remaining in the discontinued funds to the Disaster Relief and National Social Development Fund.

The Committee looked at some of the public comments on the Bill and the regulations. 

It was agreed an A-List of the Bill (with the amendments) will be drafted for further consideration. 



Meeting report

Motion of Desirability (MOD) on the Fundraising Amendment Bill [B29-2020]

The Committee Secretary took the Members through the report. This piece of legislation was presented to Parliament and referred to the Committee for its consideration. The Committee received a briefing from the Department as part of the public participation process. The Bill was advertised in local, regional, and national newspapers for public comments. Unfortunately, the Committee received only one submission, which was analysed by the Content Advisor and presented to the Committee. The Department responded to the submission. The aim of the Bill is, amongst other things, to amend the Fundraising Act of 1978 to effect certain textual amendments to provide greater clarity; to amend certain definitions; to provide for the discontinuation of certain funds and dissolution of any boards responsible for those funds; and to transfer any amounts remaining in the discontinued funds to the Disaster Relief and National Social Development Fund.

After due deliberations, the Committee must consider a motion of desirability on the content of the Bill. If the motion of desirability is approved, the Committee must proceed to deliberate on the content of the Bill. The Committee Secretary said the Committee finds the Bill desirable and would proceed to deliberate on the details of the legislation.

The Chairperson asked for the Members' input.

Ms A Abrahams (DA) asked if the one input was from the Reserve Force Council (RFC) and if there were no responses from the provinces.

The Committee Secretary said the Bill is referred to the National Assembly, which follows a process to pass the legislation. The Bill was advertised in regional and national newspapers. Only one submission was received from the Western Cape government. The last committee meeting was the presentation of the submission. Once the National Assembly completes the process, it would refer the Bill to the National Council of Provinces (NCOP). The nine legislatures would also publicise the Bill and conduct public hearings.

Ms B Masango (DA) commented on Clause 4 of the Bill, which seeks to amend Section 20 of the principal Act. The aim is to empower the Minister to give directions to the board on disbursement of funds to ensure the board acts ethically. The clause on ethical principles is vague and the term should be defined in Section 1 of the Act, or the terms should be referred to in another piece of legislation; for example, the Public Administration Act of 2014 was enacted to promote basic values and principles governing the public administration. This would ensure the Board and the Minister are held accountable to ethical principles and definitive standards. This is why she suggested the term should be defined or referred to another piece of legislation.

The Committee Secretary said the motion of desirability is the process of agreeing on pertinent issues which need to be raised during this process. The Committee would have rejected the Bill if it was not interested in it, and then compiled a report. This platform provides Members with the opportunity to raise concerns about what the Bill should contain. The Committee agrees the Bill needs to be processed and the motion of desirability must be adopted. Afterwards, there would be deliberations and inputs on the Bill, and legal advisers would look at the proposed amendments. All the amendments that Members would like to see in the Bill would be discussed at the next meeting.

Ms P Marais (EFF) said she does not understand the Bill and would like to be informed about it because she cannot deliberate on something she does not understand. She asked why it has not been changed completely; why it was brought back from Parliament to the Committee; what the importance of the Bill is; and why the name has not been changed completely.

The Committee Secretary said the Bill has been in the making for years. The Bill is trying to revive dormant accounts into one for fundraising purposes.

The Committee Content Advisor said the Bill is trying to make one account for disaster funds. Currently, the Department is managing plus-minus four or five funds. Some of these have been dormant and the Auditor-General (AG) has always queried this. The Department has amended the Fundraising Act to put all these funds under one. This is a tactical Bill to manage all the funds under a single account held by the Department. When the Bill was tabled, a presentation was made by the Department to the Committee. The submission received from the Western Cape government was also presented to the Committee. The Department responded to the submission on the same day as the meeting. The motion of desirability process is there to signify the Committee agrees with what the Bill seeks to amend, and deliberate on it.

Mr D Stock (ANC) moved for the adoption of the Motion of Desirability on the Fundraising Amendment Bill.

Ms Masango seconded the motion.

The Committee Secretary asked Adv Nathi Mjenxane, parliamentary legal advisor, to lead the consideration of input and deliberation process of the Bill.

Adv Mjenxane said the Committee would be deliberating on what the Bill says, what the public comments are regarding the proposed changes to the Bill, and the Department's responses to the Bill. After Members deliberate on the clauses, the legal minds would provide advice on the issues and take advice from the Members about clauses which need to be amended, and processes which should be followed. He said the next step would relate to comments from the public and responses from the Department, so the Committee could decide if the changes could be implemented.

He brought up two comments from the public after responses from the Department were considered. The contentious issue raised by the public is around the composition of the board, including the requirements which need to be set up for the members of the board. The Committee needs to clarify this to avoid confusion among the members of the public about the composition of the board, its requirements, and its responsibilities. Some of these matters are stated in the existing legislation which sets out ethical principles for board members, and there is a need for cross-referencing to the Companies Act, especially set out under fiduciary duties. Legal consequences for board members are also set out in the Companies Act. These relate to the breach of fiduciary duties by board members. He said the most important thing to do is cross-reference the responsibilities of the Board members. The Department has considered the matter of alignment with the Public Finance Management Act (PFMA). In the A-list which would be developed, these provisions would be included, including the proposed short title.

Adv Luyanda Mtshotshisa, Legal Advisor, Department of Social Development, said what Adv Mjenxane said is in line with the thinking of the Department. Some of the steps referred to were taken care of during the first engagement. It must be remembered that Parliament presented the public's comments during the first engagement with the Committee. The Department indicated during the meeting how it planned to address these matters. The point raised by Ms Masango has been taken care of as far as the Department's responses have been given.

He flighted the Bill with comments from the Members. Some comments were around the number of Board members, the definition of social development activities and empowerment projects, disbursement of funds by the board in consultation with the Minister, ethical principles and the changing date from 2020 to 2022.

Ms Abrahams said there is no timeframe for "in consultation" in the clause, referring to the disbursement of funds by the board in consultation with the Minister. The Bill is about disaster and the funds should be released quickly. People should not wait forever.

Adv Mtshotshisa said the timeframe within which consultation has to take place would not be in the Regulations, and asked if the Member is suggesting there should be a timeframe within which consultation must take place, and if advice must come from the Members. The Regulations would contain ethical principles. It was also agreed there would be a time when decisions have to be taken instantly.

Adv Mjenxane indicated the amendments presented by Adv Mtshotshisa would be developed into an A-list and be presented to the Committee. He further advised the Committee to have resolutions on the Regulations because the Minister is delegated to make Regulations, particularly around the issue of "consultation" and "ethical principles". He suggested the Regulations from the Minister should be presented to the Committee for scrutiny before being publicised, so the Committee is satisfied and can meet as intended.

The Chairperson asked Adv Mjenxane to do the A-list so the Committee could deal with the B-list on the same day.

Ms Masango asked if there would be a timeframe for discussing what AdvMtshotshisa suggested the Committee should discuss, regarding the matter of "consultation".

Adv Mjenxane said the Department's suggestion on "ethical principles" would be set out in the Regulations. The Committee said the Regulations should be presented to the Committee before it was published. The issue of the timeframe would be taken care of in the Regulations as well. The Regulations which will be presented to the Committee must refer to the "Minister acting in a reasonable time". This is one of the ethical matters which should be considered while setting up the Regulations, especially concerning the clause dealing with "disbursement of funds by Board members, after consulting the Minister".

The Chairperson said the timeframe had been set and agreed upon and the Department said it would rephrase the line.

Mr Stock said there is consensus, listening to the presentations from the two advocates and looking at the Members' comments. The Committee only needs to agree and give the Department permission to proceed and develop the A-list. He further suggested the guidelines from the Minister, regarding the composition of the board should be discussed with the Committee.

Ms Abrahams asked the Committee Secretary to give Members a date for discussing the A-list so Members could know when to make a submission on a clause.

Mr Stock, in his capacity as Acting Chairperson, suggested the Committee should consider the legal briefing presented to it and allow the Advocate to compile an A-list which would be presented to the Committee. All Members have proposed, while the Minister is proceeding with Regulations, the Committee should be given an opportunity to have input on the Regulations.

The Committee Secretary said the next meeting would be held soon, depending on the availability of Adv Mjenxane to present the compiled A-list.

Mr Stock asked the Committee to find out when Adv Mjenxane would be available for the meeting, so Members could start preparing input.

Adv Mjenxane said he would have to discuss his schedule with senior officials in the Department and see if a colleague could stand in for him. He also noted the proposals Ms Abrahams made. The A-list is made up of items the Committee agreed on. He suggested the Members should discuss the proposals first to see if Members agree on them, so the drafting could include a list of all who agreed to the Committee amendments.

Mr Stock said the suggestion by Adv Mjenxane is a fair approach and the Committee needs to discuss when it is planning to meet to discuss the proposals from Ms Abrahams, to avoid making the work of the drafters difficult.

Ms Abrahams said it would have been much easier if the Committee had been given the proposals, inputs, and comments from the Department ahead of time so Members could scrutinise the changes the Department made. The Committee only just saw the changes for the first time. She also wanted assurance the terms "consultation" and "implementation" would be covered in the Regulations because the two legal advisors seem to say different things.

Mr Stock said the two legal advisors should provide clarity on the matter, but his understanding was before the Minister publishes the regulations, it should be shared with the Committee first for input. At this stage, the Committee is pre-empting what would be in the Regulations.

Mr Sisa Makabeni, Senior State Law Advisor, said Ms Abrahams is concerned about the proposed Section 23 when she talks about the timeframe. The "disbursement of funds" provision would not be a once-off issue. It would be difficult to put a fixed timeframe there. He suggested it should state, "the provision of funds should happen within a reasonable time." The disbursement would be done from time to time. He also pointed out Section 50 of the PFMA applies to boards of this nature, including ethical principles and fiduciary duties. He said attention should be paid to this section.

Adv Mtshotshisa said he agrees with the presentations from Adv Mjenxane and Mr Makabeni because the insertion of "within reasonable time" would assist under the circumstances.

The Committee agreed on the proposal to insert "within reasonable time" and to allow for drafting the A-list for adoption.

Committee Minutes
The Committee considered and adopted minutes dated 8 June 2022, 22 June 2022, 24 June 2022, and 6 July 2022.

The meeting was adjourned.



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