Fundraising A/B: Negotiating Mandates & DSD response (with Minister); South Korea Study Tour Report

Meeting report

The Chairperson welcomed all Members present and proposed the adoption of the meeting agenda.  

The agenda was duly adopted by Members.

Fundraising Amendment Bill Negotiating Mandates

The Chairperson proposed that the provinces present their negotiating mandates in an alphabetical sequence as follows: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, Northwest, and lastly, the Western Cape.

Eastern Cape

Ms N Ndongeni (ANC, Eastern Cape) said the province voted in favour of the Fundraising Amendment Bill and proposed the following amendments:

Clause 2(a) of the Bill by the substitution of section 17 of Act 107 of 1978 with “A board shall consist of not more than 10 members through a process of public involvement, of whom, at least one half shall be appointed on a full-time basis.”

Ms Ndongeni added that the province’s mandate and other issues raised by stakeholders relating to the Fundraising Amendment Bill ought to be given serious consideration by the Department of Social Development.

Free State

Mr I Ntsube (ANC, Free State) said the province voted in favour of the Fundraising Amendment Bill.

Gauteng

Mr M Bara (DA, Gauteng) said the province voted in favour of the Bill subject to the below amendments being considered:

In clause 2, the composition of the board, including the requirements and its responsibilities, needs to be clarified to avoid confusion among the members of the public. Though some of these matters are stated in the existing legislation, such as the Companies Act 71 of 2008 and the Public Finance Management Amendment Act, No. 29 of 1999 which sets out the fiduciary duties and legal consequences, it will be beneficial for this section to be synchronized with the relevant section on the Companies Act 71 of 2008 to avoid any interpretation issues.

The selection of the board members must be transparent and not include government officials, or members of political parties, but community members, social workers, and knowledgeable legal practitioners. All must have no vested interest.

In clause 4, there needs to be parameters to clarify the authority of the Minister.

KwaZulu-Natal

The KwaZulu-Natal representative was not present.

Ms E Nkosi (ANC, Mpumalanga) represented the province and stated that KwaZulu-Natal is in support of the Fundraising Amendment Bill with the proposed amendments.

Limpopo

Mr E Nchabeleng (ANC, Limpopo) read out the mandate and said the province voted in favour of the Bill with the following proposed amendments:

In clause 4, the Limpopo Legislature stated that in order to ensure certainty, clause 4 must be amended to provide for a specific time frame within which displacement of funds and provision for social assistance must be done rather than ‘within a reasonable time’.

Mpumalanga

Ms Nkosi said the province voted in favour of the Fundraising Amendment Bill.

Northern Cape

Ms D Christians (DA, Northern Cape) said the province voted in favour of the Fundraising Amendment Bill. However, comments by the public were raised stating that the Bill is not clear regarding the following:

• Assistance to victims of violence in the Social Relief Fund (that was last active in 2001)
• The establishment of the Disaster Relief Fund and National Social Development Fund and the transfer of any remaining funds to the Disaster Relief Fund and National Social Development Fund to aid victims of disaster in poor communities.
• The provision of funds to organisations aiding victims of violence and natural disasters and lastly, the provision of short-term relief to members and dependents of the South African National Defence Force (SANDF) who suffer hardship.

North West

The North West province voted in favour of the Fundraising Amendment Bill.

Western Cape

The Chairperson said the Western Cape voted in favour of the Fundraising Amendment Bill.

The Chairperson concluded that in terms of the negotiating mandates, all provinces are in support of the Bill.

Department of Social Development (DSD) response

Mr Luyanda Mtshotshisa: Specialist: Legislative Drafting & Review, DSD, responded to the comments from the provinces.

In response to the Free State, the Department acknowledged that the Disaster Relief Fund must accommodate every citizen. The Department took note of the Free State’s comments.  

On the issue of timeframes, raised by Limpopo province, he clarified that the terminology used which says “within a reasonable period of time” is more appropriate because disaster takes different shapes and sizes. Furthermore, it would not be proper to say the Department must respond within two days, three days, a week or a month or so, because an assumption that the nature of disasters is the same will be made. Yet, there are disasters that need the Department to respond within a second. There are disasters that require the Department to respond within a week or within a month, depending on their nature, so the word ‘reasonable’ remains relevant under these circumstances.  

The Department took note of the fact that the board must include important stakeholders of the society and assured Members that this was going to happen because when vacancies need to be filled, they will be advertised in newspapers and the criteria will be set in terms of who is eligible to be a board member.

Mr Mtshotshisa said one of the comments from Gauteng was more of a question that there is no clear distinction between the Fundraising Amendment Bill and the Disaster Management Act. He clarified that the Fundraising Amendment Bill focuses on the role of social development and the Disaster Management Act focuses on the broader disaster management across the country and is not one of the pieces of legislation that the Department is amending. The Department is only amending the Fundraising Amendment Bill with respect to the disasters that relate to the mandate of Social Development.

On Northern Cape’s request that the Bill make provision for the prioritisation of Non-profit Organisations (NPOs), the Department’s response was that the Board will have the powers in terms of its fiduciary duties. Therefore, there was no need to amend any clauses in the Bill.

On the composition of the Board, and that its requirements and responsibilities must be included, the Department’s response was that the functions and fiduciary duties of any board are outlined in existing legislation such as the Public Finance Management Act, 1999 (PFMA).  It is not the intention of the Department to rewrite the existing laws or to duplicate what already exists in the PFMA, the King Report on Cooperative Governance, and all such other instruments which determine what or how the board should operate or govern itself.

On the parameters of the authority of the Minister, the Bill was very clear. Clause 4 was being amended because the powers of the Minister as an Executive were not clear. It is the purpose of the Bill to provide clarity.

On comments from Mpumalanga indicating that there should be no nepotism, the Board must work collectively with the Department. The Department took note of the comments and was hopeful that every board member would understand that they must act in a responsible way as per their oath.

On the issue of discrimination in receiving assistance, the Department firmly confirmed there is no discrimination because if the Bill would provide for discrimination, then it would not be in compliance with the Constitution of the Republic of South Africa, 1996. Therefore, there is no possibility of unfair discrimination in terms of the Bill.

On the comments made by the North West province indicating the Bill must enhance transparency by including provisions that require regular and transparent reporting of the allocation and utilization of funds, the Department’s response was that this is what the fiduciary duties are all about in terms of the PFMA. The King Report also speaks about the issues of transparency among members of the Board.

On the length of the term of office for the Board and the required number of board members, it is outlined in the Bill that there must be 10 board members as opposed to 15 (which is the current scenario). The length and term of office could not be indicated as these will be covered by the Regulations upon the operationalisation of the Bill.

Mr Mtshotshisa noted KwaZulu-Natal’s comment that the Broad-Based Black Economic Empowerment Amendment Act 46 of 2013 must be taken into account when the board is dealing with the disbursement of funds. The Department agreed and said that it was not a matter that could necessarily be part of the clauses of the Bill, because the members of the Board know they have to comply with section 217 of the Constitution when dealing with issues of procurement.

Clause 2 indicates that there must be the inclusion of the youth and members of NPOs as part of the Board. There is a criterion board members must comply with in order to be appointed as members and it is not a different criterion from the one that is currently used to appoint board members in the rest of the Boards that the country already has.

The Department took note of the comments made by the Northern Cape about the assistance to victims of violence, the establishment of the Disaster Relief Fund and the transfer of any related remaining funds. The Department’s response was the Bill does speak to the transfer of funds and the issue of assistance to victims. The Bill does differentiate between victims of violence and other victims because that is another territory governed by other pieces of legislation that the Department is busy with. 

The Department took note of the comments made by Limpopo province that there must be certainty, and the clause must be amended to provide for a specific time frame. The Department’s response was that it is not easy to say the turnaround time will be one day, two days, three days, or four days because this would depend on the nature of the disaster itself.  Other disasters may necessitate a quick turnaround time, a minute or two minutes an hour a day or so. The word “reasonable” is most ideal.

The comments from the Western Cape were noted by the Department. The Department’s response was that the comments were indeed taken into account when developing the Bill. The latest comments were more or less the same as the comments that were received when the Department first published the Bill.

The Department took note of the comments raised by Eastern Cape that clause 2(a) of the Bill be amended to say the Board shall consist of not more than 10 members through the process of public involvement. The Department’s response was “Yes, the process is indeed inclusive of the public.” The Board shall consist of 10 members. When the Minister advertises the board member positions, this will be done via a public newspaper. The advert will spell out who exactly is expected to be a board member and they will be nominated by members of the public. The whole process will be transparent and will take care of this particular concern that the Eastern Cape suggested.

The proposals by the provinces will not impact the Bill. As important as the proposals raised by the provinces were, they had been taken care of by either other pieces of existing legislation, by operation of law or the issues that have already been built into the provisions in the proposed Bill. 

(See Presentation)

Discussion

The Chairperson thanked the Department for a comprehensive and detailed explanation of the comments of the provinces. He welcomed the Minister of Social Development.

Minister Lindiwe Zulu greeted Members and offered apologies as she was not present at the beginning of the meeting. She said that, given disasters were happening so often; be it man-made disasters or due to climate change, the disaster management system needs to be strengthened. She reiterated what Mr Mtshotshisa had already mentioned that as Social Development, it is important that they respond promptly to disasters. The Department’s responses must have a greater impact on ensuring that those affected by the pain and the loss; whether it is of human lives or material, must be assisted without delay.

The Chairperson said the provinces will have their final mandates within the next two weeks. The Committee will come back and have the reports from the mandates. He thanked the Minister and the Department and excused them.

Study Tour Report

The Chairperson proposed the adoption of the report of the South Korea Study Tour.

The report was duly adopted. 

Members unanimously decided to hold the next committee meeting on Tuesday, 19 September 2023 with final mandates.

The Chairperson duly adjourned the meeting.