Economic Regulation of Transport Bill, National Road Traffic A/B & National Land Transport A/B: Negotiating Mandates

Meeting report

National Land Transport Amendment Bill

Ms Phumelele Ngema, Parliamentary Legal Advisor, said that Joint Rules 209 and 210 circumscribed what the Committee could do with the Bill as the President had remitted it to Parliament, where the Portfolio Committee on Transport had produced the F- version of the Bill. The Select Committee was therefore restricted to dealing with only Clause 7 of the Bill. The Committee had to report whether it agreed with the amended Bill from the National Assembly (NA), or recommended the rejection of the Bill.

She spoke to the document the Content Advisor had collated on all the mandate proposals. There would not be any changes beyond what the F-Bill provided. She then moved to Clause 7 on the amendment of section 11 of the Act, where issues had been raised on the definitions. She said there had been some improvements and changes in the National Land Act over the years, and the Department was trying to keep up with these changes. The main issue was the definition of ‘State Owned Rail Operator’, ‘Other State Rail Operator’ and ‘Private Rail Operator’. If one looked at the definitions within their context, there was no point in defining the terms as it was clear who was being referenced, so there was no need for a new definition.

On the issue of usurpation of power, she said this was a competency that was a concurrent competency between the provincial and local governments. It provided for contracts to be kept up to date and reviewed and changed. The proposal that Clause 7(g) should be removed had already been addressed and was sufficient.

The Chairperson wanted confirmation that there was no need for more definitions regarding state and private rail operators.

Ms Ngema said what she had provided was just a general summary of matters discussed and contained in previous documents.

Mr M Rayi (ANC, Eastern Cape) said he would like to hear the Department’s views on what Ms Ngema had said.

Mr Muzi Simelane, Director: Policy, Legislation & Planning Coordination, Department of Transport (DoT), said the Department concurred with what Ms Ngema had said.

Ms Ngema clarified that everything she had spoken to was related to Clause 7. The amendments in the F- Bill took into account the concerns of the President. It was true that the provinces still had to give their final and voting mandates, but the Committee could adopt Clause 7.

The Chairperson put forward Clause 7 for adoption. The Eastern Cape, Free State, Gauteng, Limpopo, Northern Cape, North West, KwaZulu-Natal, and Western Cape voted in favour of adoption. He said the clause would be referred to the provinces for their final mandates.

National Road Traffic Amendment Bill

Ms Ngema said that after looking at proposed amendments based on the negotiating mandates, the Department, the State Law Advisor and the Parliamentary Legal Advisor had met to check the issues raised and had done a matrix document with their inputs. She presented the amended draft C–list. She said the changes were mainly technical correction changes on drafting style and preferences.

In Clause 2 there was wrong numbering, which would be corrected.

Clause 6 dealt with appointment requirements, and a proposed amendment recommended listing all the schedules of the Criminal Procedures Act. This clause was amended to allow for the removal of officers found guilty of offences listed in these schedules.

Clause 11 dealt with the manufacturing and supply of microdots, and the clause provided for a number of insertions which were mostly technical changes to ensure no misconstruction or misinterpretation of the original Bill. The proposed amendment was to add the suppliers and operators of fitment centres to the clause.

Clause 17 amended section 11 to enable the Minister to appoint suitably qualified inspectors for driving centres. The proposed amendment was to constrain and curtail the power of the Minister by indicating the type of person that must be appointed as inspector.

Clause 18, which dealt with the Member of the Executive Council's (MEC’s) power to appoint an inspectorate, was similarly crafted as Clause 17, as it was a concurrent competency, so there would be a consequential change in Clause 18 to include that appointees had to be suitably qualified.

Clause 21 amended section 17 on the application and issuance of learners' licences. A proposed amendment was to insert the word ‘fraudulently,’ together with the two other prohibited acts in this clause. This would mean that fraudulently issuing licences would also become a criminal act. This had been done and inserted.

In Clause 32, a misprint was corrected by adding a missing word to clarify that the licence being referred to was a learner's licence.

Clause 40 amended section 58. Section 58 listed the types of emergency vehicles, while the amendment provided for a definition of an emergency vehicle, but section 58(b) gave a listing of the emergency vehicles. The proposed amendment called for the removal of the listing, because there was already a definition of an emergency vehicle.

There was a clean-up in the words of Clause 41 which dealt with section 60, where drivers were empowered to exceed the set speed limits.

The main submission of the mandates regarding section 6, which was to space out the provision on the appeal process to the Minister, was that there be more sub-paragraphs. She felt it was unnecessary to change anything, as it was an existing principal act drafted in that manner. In addition, the issues raised were clearly clarified under Clause 93 (a) on who would deal with what matters.

Adv Johannes Makgatho, Chief Director: Road Regulation, DoT, said Ms Ngema’s presentation was a true reflection of what had been received as comments and factored into the C- list.

The Chairperson put the C-list to Members for adoption, and all nine provinces supported the C- list. The C-list would be referred back to the provinces for their final mandates.

Economic Regulation of Transport Bill

The Chairperson asked Adv Shamara Ally, Parliamentary Procedural Officer, to give feedback on concerns over the posture of the legislature of the Free State in not affording Ms M Moshodi (ANC, Free State) the opportunity to brief them, which had been raised in the previous meeting.

Adv Ally said the matter was with the Chairperson of the National Council of Provinces (NCOP). There had been two stances on the matter. The first was that a letter be written to the Speaker directly to seek the Speaker’s intervention to afford the Free State delegate an opportunity to brief the legislature on the matter and encourage the legislature to conduct public hearings. The second option was to determine from the legislature what the reasons were for the Free State delegate not being allowed to brief the legislature on the Bill, and why they did not conduct public hearings. She said there were legal issues on what and how the Free State legislature had conducted the public hearings. She would update the Committee as soon as she received a response from the Chairperson of the NCOP.

The Chairperson asked her to speak to the legality and constitutionality of their actions.

Ms Ally said they had looked at case law, particularly the Mohale judgment, which required the NCOP and provincial legislatures to facilitate public hearings. Regarding the Mohale case, one did not have to call physical public hearings. The fact that the Free State legislature had placed adverts and called for inputs on the Bill would suffice. The procedural irregularity that arose was that the legislature had not used the inputs received, if any, to formulate its negotiating mandate, which could be a concern in the future. The proposal had been that rather than trying to find out the reasons for not holding public hearings; the focus should be on encouraging them to conduct public hearings. This was a concern, because the constitution and the mandating procedure required that public hearings be held to be able to submit negotiating mandates. Legal advisors had been consulted, and they awaited the response from the Chairperson of the NCOP.
 
The Chairperson said the purpose of Ms Ally’s briefing was to give feedback on the failure of the legislature to conduct public hearings and failure of the legislature to not allow a briefing by their permanent delegate.

Mr T Brauteseth (DA, Kwa-Zulu Natal) welcomed the legal advice given, but he felt the Committee could not continue with the Bill at present. The Free State situation needed to be clarified, because if the Bill was pushed through, any irregular activities could impact the Committee’s work.

Mr Rayi asked what this meant for the process. Should the process be held in abeyance until the Free State responded, or could the Committee continue?

Adv Ally said she could only advise -- the decision was with the Committee. Her concern was that if the Committee did not proceed with the Bill, it could end up not being passed by the House. Due to time limits, the Bill may not be finished in time if the Committee did not proceed. Even if the Free State did not succeed in providing a negotiating mandate and a final mandate, the Committee could still proceed with the Bill even without the Free State, but with the necessary support of the provinces. Her main concern was with the timeframes and whether enough time would be available at a later stage.

The Chairperson proposed to proceed with the current process and deal with legal challenges, and at the same time, let the Chairperson of the NCOP fast-track the matter. He said it was critical to get the support from the House.

Mr M Dangor (ANC, Gauteng) said there were five provinces in favour, and therefore they should go ahead.

Mr Rayi supported continuing with the process, but said they should also get written legal advice for the Committee to show if something happened, and this could be used in future in similar situations where a province did not participate in the law-making process.

Ms Thiloshini Gangen, Parliamentary Legal Advisor, said she had been requested to give a legal opinion. This would be ready on 29 November. Ms Ally had addressed the procedural aspects.

Mr Brauteseth said he was very concerned that the Committee was sacrificing the regular process because of time constraints. If the Committee was considering voting on all the clauses, then the DA would not want to be part of a process that could possibly be an irregular procedure, and would excuse themselves.

The Chairperson said the Committee would vote clause by clause.

Six provinces -- the Eastern Cape, Gauteng, Free State, Limpopo, Northern Cape and North West -- supported voting clause by clause, while KwaZulu-Natal and the Western Cape were against it.

Mr Brauteseth said the DA would no longer participate.

Mr Allen Chikambvi, a DoT delegate, said that the matrix document comprised matters dealt with on 6 November. These were highlighted in gold, and would therefore not be discussed that day. The matters the Department were fully in support of were highlighted in green, and matters not highlighted reflected new inputs which would be discussed that day. Amongst the clauses discussed were the following:

On Clause 1, the issues involved the definition of access, and the Department’s view was that the definition was clear.

The Department’s view on the definition of market was that it was broad, to cover the whole transport sector, and amplification of the definition would be expressed in the regulations.

Its view on the definition of confidential information was that the definition was clear.

On the definition of prohibited conduct, the Department’s view was that the proposed amendment had no material effect.

The Department’s view on the definition of regulatory authority was that the words were very important, to clarify that regulated entities were not regulatory authorities.

On Clause 2, on the addition of a subsection dealing with the conflict between the Economic Regulation of Transport Act (ERTA) and the Competition Commission, the Department’s view was that Clause 43 dealt with the proposed addition.

On Clause 2(2), and the omission of certain words, the Department’s view was that it was comfortable with the use of the words, and Clause 2 had to be read in its entirety.

On Clause 2(4), on giving the Bill precedence over any transport legislation, the Department’s view was that there was no need to accommodate the proposal, as the jurisdiction of the Bill was within the transport sector.

On Clause 3(1)(a), that the wording ‘contributing to the economic growth and development’ was unnecessary, the Department’s view was that the proposed amendment had no material effect, that no rationale was given, and that no changes should be made.

On Clause 3(1)(c), that the words ‘reliability, safety, and performance’ fell outside the objects of the Bill, the Department’s view was that the clause allowed the Regulator to take into account safety considerations when making economic regulation decisions.

On Clause 3(1)(e), on the possible enhancement of the interpretation of transparency to gain access to confidential information, the Department’s view was that the protection of confidential information was catered for in Clause 13.

On the amendment of Clause 4, the Department’s view was that Clause 4(7) and Clause 4(8) addressed the amendment.

On Clause 4(10)(a), that the regulations should include the public participation process as recommended, the Department’s view was that it was unnecessary to list the regulations. In any case, before the Minister made regulations, they had to be published for comment for at least 30 business days.

On Clause 4(2), on the Minister being able to declare that the Act applied to any entity, market or facility, whether private or state-owned, if a single operator owned more than 30% of the market, the Department’s view was that there was no rationale provided for the amendment.

On Clause 5(3), on public-private partnership (PPP) agreements being subject to comprehensive approval processes and the checks and balances of the Treasury and the Public Finance Management Act (PFMA), and that account should be taken of the processes and be aligned with them, the Department’s view was that the review of access agreements should not be in contravention of the Bill, and that the clause’s intention was not to change or interfere with the terms and conditions of existing agreements, so the concern was not warranted.

On Clause 5(3), on reviews possibly being expensive, costly and drawn out, the Department’s view was that the comment was noted, and the timeframe would be unpacked in the regulations.

On the Bill being silent on measures the Regulator must implement to safeguard confidential information submitted, the Department’s view was that Clause 13 and Clause 60 dealt with issues of confidential information.

On the Bill being unclear of who an infrastructure owner was, the Department’s view was that it depended on how the PPP was set up, but there would always be an infrastructure owner.

On Clause 8(4), that there be an explicit requirement for the involvement of the Railway Safety Regulator, the Department noted the comment, but s8(4)( c) stated that the Regulator had to consider whether the applicant received other regulatory approvals before the finalisation of its application.

On the Bill being silent on measures the Regulator must implement to safeguard confidential information submitted, the Department’s view was that Clause 13 and Clause 60 dealt with issues of confidential information.

On the Bill not being explicit on whether the terms of access agreement would be submitted, the Department’s view was that section 8 listed prescriptions of the approval process and considerations informing a decision of the Regulator.

On Clause 8(6), on considering how much of the infrastructure was currently in use, the Department’s view was that Clause 8(4) dealt with the matter.

On the recommendation that the re-assignment of unused capacity be in consultation with the owner, the Department’s view was that Clause 8(4) dealt with the matter.

On Clause 9(1), with no reference being made to infrastructure maintenance or expansion projects that may require reduced interim capacity, the Department’s view was that Clause 9(1) was well captured and catered to the comment.

On Clause 9(2), on reconsidering the provision based on potential unintended consequences, the Department’s view was that the clause intended to grant access approval, provided the seeker had agreed to invest in the infrastructure required.

On Clause 9(4), on the clause appearing to contradict Clause 9(2), the Department’s view was that there was no need for alignment, as Clause 9(4) qualified the granting of access approval stipulated in Clause 9(2).
On Clause 9(5), that the power of the Regulator be exercised only as the utmost last resort, the Department’s view was that the matters listed by the recommendation were issues to be considered by the infrastructure owner and access seeker, and therefore the clause was fine.

On Clause 10, on the inclusion of provisos to qualify the granting of access to an access seeker not related to transport operations, the Department’s view was that Clause 10 was fine and that these items must be considered by the infrastructure owner and access seeker when dealing with the access agreement.

On Clause 11, that an entity dissatisfied with the decision of the Regulator regarding price control may appeal to the council, the Department’s view was that Clause 22 dealt with the amendment proposal.

On Clause 11(2), that the clauses related to the limits on revenue and utilisation of returns be deleted or revised, the Department’s view was that one needed to regulate the revenue/ returns on investment, given the monopolistic nature of the entity.

On Clause 11(3) and Clause 11(8), that section 11(8) be amended to provide for the approval of each entity’s price control policy as opposed to approval of each price proposal, the Department’s view was that the determination of price control was a power of the Regulator and not the price control policy of each regulated entity, so no amendment was required.

On Clause 11(5), that the nature of the consultation be specified, including consideration by the Regulator of the impact that price control would have on the party providing a subsidy, the Department’s view was that the details of how the nature of consultation would take place and consideration of subsidised transport operators, would be in the regulations and codes of practice.

On Clause 14(1), that internationally accepted standards already exist for the preparation of financial information and their use would minimise the risk of statistical manipulation, the Department’s view was that the Regulator would provide a framework of what information should be provided, and this would form part of the regulations.

On Clause 14(3), that cognisance be taken that an independent review of information used would attract direct and indirect costs, the Department’s view was that the Regulator would provide a framework of what information should be provided, and this would form part of the regulations.

On Clause 15, that clarification be given whether complaints of uncompetitive pricing would be the competence of the Regulator or the Competition Commission, the Department’s view was that the clause should remain as it was, and the Regulator would refer it to another authority with jurisdiction over the matter under investigation. (See section 17(1)(b)).

On Clause 15(1)(a), that the provision be reviewed to make the intention behind it more explicit, taking into account section 4(1), the Department’s view was that on receiving the complaint, the Regulator would refer it to another authority with jurisdiction over the matter under investigation. (See section 17(1)(b)).

On Clause 15(1)(d), the Department noted the comment that the provision should be tightened concerning the comparability of access terms given to associated entities with those given to other entities. The Bill intended to ensure fair competition within a market.

On Clause 16(1)(a), that this provision be reviewed so that complaints that fall outside of the ambit of the Act were complete non-referrals, the Department’s view was that they could not declare all complaints outside of the ambit of the Act as complete non-referrals.

On Clause 38(g), read with Clause 43(2)(b), that the clause stipulates whether the Economic Regulation of Transport Act or the Competition Commission Act would prevail on matters relating to market inquiries. The Department’s view was that this was addressed by Clause 43(1), and the Regulator had to negotiate and conclude an agreement with the Competition Commission to coordinate and harmonise jurisdiction over competition matters.

The Chairperson said the clauses highlighted in green were where there was total agreement with provinces. while the clauses highlighted in white gave clarity on the proposals.

Ms Moshodi said the communication between her and her level officer was that they would get the final mandate for voting in favour of the Bill.

The Chairperson said the key concern was the province's ability to process inputs they had received from the adverts they made, inviting public comments. The advice received was that the province had to process these comments. She should continue to impress on them the legal bind they were creating in the Committee ’s legislative process.

Ms Moshodi said she had tried her best to communicate and get any information from the legislature.

The Chairperson said she should leave the matter now for the Chairperson of the NCOP to follow up.

Ms Gangen indicated that the C-list was a draft, as the State Law Advisor had not given input to this list. She had drafted the A-list, which had been circulated to the Department and the State Law Advisor. The Department had given input, which was now in the C-list, but the State Law Advisor’s input had not yet been received.

Mr Rayi asked if there might be amendments to the C-list by the State Law Advisor; the final C-list had to be sent to the provinces so one needed to await the input of the State Law Advisor.

Ms Raksha Haricharan, State Law Advisor, said they had received the C-list document the day before, but had not yet discussed it with the Parliamentary Legal Advisor and the Department, and needed time to liaise and consult.

The Chairperson gave her till the next Wednesday.

Ms Gangen said she needed clarity on whether she still needed to draft a legal opinion on the public participation issue.

The Chairperson said she definitely needed to do that. He said that while adverts had been placed, and while there had been interaction between the Chairperson of the NCOP and the Speaker who would push for the mandating procedure to be followed, the Committee wanted a legal opinion on what the implications in law were regarding the failure to process or give a mandate. He said the Committee would allow the Economic Regulation of Transport Bill process to unfold.

Mr Hlupheka Mtileni, the Committee Secretary, said the Committee programme would then have to be adjusted, and the final mandate meeting for the Economic Regulation of Transport Bill would be in two weeks’ time. 

Challenges when processing bills

The Chairperson said the Eastern Cape Legislature Speaker had written a letter regarding bills referred to them which were creating a conundrum. This was the third time the Speaker had requested an extension. Two had previously been granted.

Mr Rayi said these challenges should be addressed in the Speakers' Forum. Today, it was the Eastern Cape, while last time, it was the Western Cape. The late processing of bills by the executives of the Department put pressure on the committees and the provinces, and this needed to be part of the recommendation in the Committee’s report to the House on these bills. He suggested that the Chairperson write back to the province to tell them to deal with the matter at the Speaker's level.

The Chairperson said the letter from the Speaker sought deferral beyond April 2024.

Ms Ally said it was not the first request made by the Speaker. It had been given an extension in February, and was then granted an extension at the end of September. The Committee would not be able to finalise the Bill, given that it had several other bills before it and if a further extension was granted, the Bill would not be processed.

The Chairperson proposed that the Committee write back to say that in view of the extensions previously granted, it was reluctant to give a further extension, and see what the Speaker allowed. The NCOP Chairperson should be encouraged to have a one-on-one discussion with the Speaker for more convergence on synergising the work of executives, to rescue the legislative process.

Committee minutes

The minutes of 15 November dealing with the Railway Safety Bill were amended and adopted.

The meeting was adjourned