National Water Resources Infrastructure Agency Bill: proposed amendments

Meeting report

The Committee Secretariat mentioned ongoing efforts to reach the Chairperson who was late as well as some ANC members, so that the meeting could commence. The meeting was due to start at 9.00 but only commenced at 9.30.

The Chairperson apologised for the delay, explaining he had been informed that the meeting was postponed. He also mentioned challenges in logging onto the virtual platform. Moving forward, he noted the importance of finalising discussions on the Bill after two days of deliberations. He called for a moment of silence, meditation, or prayer before proceeding.

National Water Resources Infrastructure Agency SOC Limited Bill [B24 -2023]
Ms Phumelele Ngema, Parliamentary Legal Adviser, guided the Committee through the proposed amendments. She prefaced her presentation by reminding the Chairperson and Members of the previous deliberations and public submissions. She emphasized the importance of public input in shaping legislation and highlighted the power of statutory provisions.

Clause 1
The first amendment addressed a correction in the reference to a section within the Act.

Clause 3
The second amendment introduced a definition for "waterwork" in response to legal challenges and considerations raised during the public participation process. She clarified that the definition aimed to encompass water infrastructure resources and proposed specific language for the definition.

Ms Ngema sought guidance if she should pause after each proposed amendment for deliberation and adoption or to present the entire document before proceeding with their consideration and adoption.

The Chairperson inquired about the number of clauses having proposed amendments.

Ms Ngema responded promptly, listing clauses 1, 3, 7, 9, 17, 34, and 35, totalling seven clauses.

Mr S Moore (DA) addressed Clause 1(1) stating there were no issues. However, he raised a concern about Clause 1(2) highlighting a potential problem with the definition of "water work." According to Clause 37(b), the Minister has the authority to declare which government waterworks are deemed national waterworks. This declaration could include waterworks that the Minister already controls, creating a circular definition. Mr Moore argued that this change, while well-intended, could disrupt subsequent clauses.

Ms R Mohlala (EFF) initially indicated her raised hand was a mistake but proceeded to express her concern about the tardiness of ANC Members who only arrived at 9:30. She criticised this practice, stating that other Members and officials from the Department – should not be made to wait for latecomers, and emphasised the importance of starting meetings promptly at the scheduled time. She urged for proper communication if there are changes to the meeting time. Such delays are unacceptable and should not be tolerated.

The Chairperson acknowledged apologising for the delay in starting the meeting, taking responsibility for the tardiness. He clarified that it was not an organisational issue but his own lateness, for which he had apologised to the meeting.

Ms Mohlala interjected, expressing frustration that the Members who were present but left as the meeting did not start on time – had not been called to the meeting when the meeting officially resumed. That is a lack of communication. Such practices must end; she emphasised the need for respect.

The Chairperson repeated that the delay was his own fault and not due to any organisational reasons.

Ms Mohlala pointed out that it was not just the Chairperson who was late, but the entire ANC Caucus.

(disagreement continued)

Ms G Tseke (ANC) acknowledged Ms Mohlala’s point. She accepted the Chairperson's apology, understanding that such delays can occur, especially due to technical issues with connectivity. Ms Tseke then addressed the definition of "waterwork," attributing its formulation to input from the Western Cape government. She stated her comfort with the current definition as it stands.

Mr M Hendricks (Al Jama-ah) stressed the importance of the definition under discussion. Referring to the earlier comment about potential conflicts, he highlighted the fundamental right to water. Drawing from his oversight visit to Port Elizabeth, he expressed concern over water allocation, particularly the dominance of water usage by certain agricultural sectors. He advocated for state control over all water works, emphasising the need for equitable access to water for all citizens. He urged careful consideration of the definition and appealed to the Chairperson to provide guidance, invoking the wisdom of Solomon to navigate the issue effectively.

The Chairperson acknowledged the importance of considering the role of the Minister or the relevant government department in controlling water-related matters in South Africa. While the Minister may initially hold control, individuals can apply for delegated responsibilities, such as water rights and borehole usage, subject to regulation. The Chair stressed the need to avoid favouring private entities, especially farmers, in water allocation decisions.

On the definition discussed earlier, the Chairperson noted that it aimed to transfer private land ownership to government control after the Minister's approval. He underscored the importance of ensuring that the Minister does not show bias towards private entities over the interests of the general public.

The Chairperson highlighted the intricacies of differentiating between government-owned and privately-owned water works. He emphasised the need for caution to avoid contradictions within the legislation and called for further clarification from the Department or the Legal Adviser.

Ms Ngema replied cautioning against including substantial clauses within definition provisions, as this could lead to complications. The definition of "national water resources infrastructure" is already part of the Bill. The definition aligns with existing legislation, specifically Section 37 of the Bill to avoid conflicts. It was important to ensure clarity and alignment between definitions and the content of the Bill to prevent misinterpretation. She assured the Committee that the provision considered all concerns raised by Members, aiming to accurately reflect the Bill's intentions.

The Chairperson acknowledged the clarification by Ms Ngema and understood the need to avoid possible contradictions. He requested to move on to the next clause.

Clause 3
Ms Ngema noted Clause 3 was raised for attention during deliberations. The proposed amendment was to replace the term "shareholding" with "shares" to align with contracts properly. Additionally, the amendment specified that the Minister would be the sole shareholder in establishing the Agency.

Clause 5 Application of Companies Act to Agency
Ms Ngema said that concerns were raised by Members on the application of the Public Finance Management Act (PFMA) and the Companies Act. She proposed rejecting the existing Clause 5 and introducing an alternative provision to ensure alignment with both Acts and the Department's intentions.

The proposed alternative clarified that the provisions of the Companies Act would apply to the Agency unless they conflicted with the state. It also specified that any provision of the Companies Act deemed inappropriate or inapplicable would not apply to the Agency. This clarification aimed to ensure that the Agency's legislation would override any contradictory provisions and maintain clarity in its application.

Mr Moore expressed his concern with Clause 5(1), noting that during a previous meeting, the Committee had rejected this clause. He questioned the rationale for reintroducing the clause in a slightly altered form as Clause 5(2), which essentially retained the same legal meaning. He believed the Committee had been unified in removing the clause. He was confused as the proposed change seemed contradictory to the Committee's previous decision. He emphasized the need for transparency and clarity in the decision-making process.

The Chairperson sought clarity on Clause 5(2), referencing the previous debate on the matter. He questioned the logic in allowing the agency to override any disagreement with the urgency (presumably referring to the Committee's decisions) as stated in the clause. Typically, it should be the other way around, where actions inconsistent with the Act would be deemed wrong and inapplicable. He expressed the Committee's previous view that the Act should take precedence over any other matter. He requested further explanation to understand the rationale for the proposed clause.

Ms Bronwyn Naidoo, Director: Legal Services, Department of Water and Sanitation (DWS) explained that the clause had been initially inserted for ease of doing business during the previous meeting, where it was ultimately rejected. The intention for inserting the clause was to accommodate potential changes in the Companies Act without necessitating frequent amendments to the Bill. However, if the Committee deemed it necessary to reject the clause, she was in agreement with that decision. She proposed alternative wording to achieve the same goal of facilitating business operations and ensuring stability for lenders. She sought the Committee's approval to include this alternative wording in the Bill.

Ms Ngema added that as a statutory entity formed under specific legislation, the principle is that the agency must comply with applicable laws, including the Companies Act. This provision aims to address potential conflicts or confusion between different pieces of legislation. The Bill sought to establish the agency's legal standing and ensure that its provisions took precedence over conflicting laws, in line with the principle that portfolio-specific legislation should have priority. She hoped that her explanation clarified the matter for the Committee.

Mr Moore reiterated his concerns on the reinsertion of the clause despite the Committee's previous agreement to remove it. There had been extensive discussions and a decision was made in the previous meeting to remove the clause. He expressed frustration that despite the Committee's decision, the clause was reintroduced, indicating a lack of alignment between the Committee suggestions and the final document. He was concerned that if the Committee's suggestions were not being taken into account, it raised questions about the purpose of the clause-by-clause review process. It is important that the Committee's decisions are accurately reflected in the document presented to Parliament. This issue is indicative of broader concerns about the handling of the Committee's suggestions.

The Chairperson acknowledged Mr Moore's concerns and emphasized the importance of sticking to decisions made by the Committee unless convinced otherwise by a compelling explanation. Even the Department acknowledged the Committee's rejection of the clause and agreed that its removal would not adversely affect the legislation. The Committee had agreed to remove the clause based on the principle that the country's laws should take precedence. There would be no legal vacuum during the period when the existing law is being amended, as the amended law would seamlessly take its place once finalised. He agreed with Mr Moore's suggestion to remove the clause and invited other Members to share their views to ensure consensus.

Ms Mohlala expressed her support for removing the clause, echoing the decision in the previous meeting.

Ms M Matuba (ANC), although not part of the previous meeting, listened to the discussions on the clause. She raised a concern about potential consequences if the clause were to be removed, questioning whether it would affect the legislation's compliance with legal requirements. Ms Matuba suggested that if the clause aligns with existing legislation and does not pose any harm, it should be retained. She proposed that any necessary amendments could be made later if needed. However, if there were any legal risks associated with removing the clause, she would reconsider her stance. Ms Matuba emphasized the importance of ensuring that the legislation remains in accordance with legal standards.

Ms Tseke recalled the previous meeting's decision to remove the clause entirely and agreed with the Chair's suggestion to do so. Would there be any implications for its removal?

Ms Mohlala agreed with the Chairperson, emphasizing the simplicity of aligning with existing laws. She highlighted the redundancy of explaining that provisions apply unless in conflict with other legislation, as anything inconsistent would be nullified. The clause should be removed to avoid unnecessary complexity and she reiterated the importance of alignment with existing laws.

The Chairperson noted that DWS also seemed comfortable with removing the clause and there was alignment among Committee members. It was important to avoid ambiguity and substantive issues in the Bill. He agreed with the Committee's decision to remove the clause.

Ms Ngema agreed with the Committee decision to remove the clause. She highlighted two points in response to the question about potential crises resulting from the rejection of the clause.

Firstly, even the Constitution provides provisions for resolving conflicts between laws. However, it is preferable for specific legislation dealing with a particular issue to provide clarity, as it ensures precision and simplicity for all stakeholders, including laypersons.

Secondly, she addressed the potential consequences of rejecting the clause in its entirety. Removing the clause would necessitate a re-evaluation of the entire Bill to ensure consistency and clarity in all provisions and cross-references. Despite this challenge, she assured the Committee that they would strive to address all concerns raised by Members and produce a revised version of the Bill that aligns with their instructions.

Ms Ngema noted that if the clause were to remain in the Bill and be enacted into law, any disputes or litigation arising from it would be resolved based on the principle established in the Constitution. However, she acknowledged that removing the clause entirely would shift the burden of argument to the constitutional principle rather than the enacted law.

In conclusion, she assured the Committee that the law advisors would work diligently to address all issues and ensure the Bill's coherence and correctness.

Mr Hendricks expressed his view that many individuals working in agencies are criminals, citing the desire to fire ministers over the past decade as evidence. He emphasised the need for civilian oversight to prevent agencies from engaging in criminal activities that could harm people, particularly concerning water management.

The Chairperson cautioned Mr Hendricks against criminalizing entire agencies based on the actions of individuals within them, stressing the importance of upholding the rule of law and avoiding unjust accusations.

The Chairperson acknowledged Mr Hendricks' concerns about ensuring accountability and preventing criminal behaviour in agencies but reiterated that blanket criminalization of agencies is unwarranted. He reaffirmed the decision to remove Clause 2 from the Bill to uphold the supremacy of the law.

During the discussion, there were differing opinions about retaining or removing a specific clause related to the Companies Act. Some Members expressed concern about potential conflicts with other legislation, while others argued for the removal of the clause to maintain the supremacy of the law. The Chairperson and some Members were in favour of removing the clause, emphasizing the need to avoid contradictions and uphold the authority of the existing legal framework.

Ms Mohlala suggested that if there is a need to reference the Companies Act, it can be done in a more straightforward manner without the additional clause.

Ms Matuba expressed a different viewpoint, suggesting that accepting the clause could help avoid disputes and litigation.

The Chairperson clarified the contradiction in the arguments, highlighting that the clause implied that the agency could override the Companies Act, which was against the principle of legal supremacy.

Ms Ngema acknowledged the Committee's decision to remove the clause and mentioned that consequential amendments would be made to address the removal.

Ultimately, the Committee agreed to remove the clause and proceed with the discussion on the rest of the clauses in the Bill.

There was some tension between the Chairperson and Ms Ngema on the advice given by her. She had mentioned that there would be consequences that the Committee would have to deal with in removing the clause.

Ms Ngema clarified that while she can provide advice, the ultimate decision rests with the Committee. She emphasized the need to ensure that the Bill remains coherent and aligned with the Committee's instructions.

The Chairperson reminded Ms Ngema of her role as the legal representative of the Committee, highlighting that she would need to defend the Committee's views when necessary.

Ms Ngema reiterated the importance of prioritizing the interests of Parliament in the legislative process.

Ms Naidoo said that DWS supported the view of the parliamentary legal team.

The Chairperson accused the Department of playing political ‘games’, stating that the Department had previously indicated acceptance regardless of whether the clause was removed or retained.

Ms Mohlala suggested moving forward with the decision, emphasising that they received confirmation that the relevant parties were in agreement with the removal of Clause 5.

The Chairperson clarified that only Clause 5(2), not the entire Clause 5, was being discussed.

Ms Ngema pointed out that Clause 3(9) already addresses the essence of Clause 5, emphasising that even if Clause 5 is removed, Clause 3(9) still ensures the application of the Companies Act and Public Finance Management. She reiterated the importance of clarity and expression in the wording of the clauses.

The Chairperson requested to move on to the next clause.

Clause 7
Ms Ngema provided an overview of Clause 7 on the functions of the agency. Clause 7(1) addresses clarification on the role of the National Assembly or Parliament. Clause 7(2), (3), (4) and (5) are consequential changes aimed at ensuring consistency in the context of the functions of the agency. These amendments encompass six changes in total. Anticipating questions or concerns from Members, she assured them that upcoming provisions would address them comprehensively. Clause 7, along with the subsequent changes, align with the issues previously raised and will be addressed in further provisions.

Mr Moore expressed his concerns on Clause 7, particularly focusing on the first bullet point on page seven. While the Department's arguments for the clause were convincing, the Committee had previously decided to remove it, and now it seems to have been reintroduced. His main issue was the insertion of "the National Assembly" after "Department," which did not align with the Committee's broader discussions and intentions. The Committee had envisioned a more significant role for itself within the new entity, aiming to mitigate the powers of the Minister and ensure stronger oversight. However, simply adding a mention of the National Assembly did not reflect the Committee's desire for a more comprehensive rework to address concerns about centralization of authority. The proposed amendment did not represent the Committee's discussions effectively.

Ms Tseke supported the insertion of "the National Assembly" in Clause 7, stating that it aligns with the Committee's discussion and agreement. The Committee had collectively agreed on the need for the National Assembly or Parliament to have a specific role in the legislation, which was not adequately reflected in the Bill. Therefore, she endorsed the Clause 7 proposed amendment, believing that it accurately represented the Committee's deliberations and decision.

The Chairperson clarified that the inclusion of National Assembly in Clause 7 aligns with the Committee's previous discussion. He reminded Mr Moore of the Committee’s initial concerns on the focus solely on the Minister and the Department's actions, without considering the role of the Committee or the National Assembly. The Committee had advocated for a more significant role in the process and the document now reflects this by stating that the Department must consult the National Assembly. As a Portfolio Committee within the National Assembly, they would play a crucial role in shaping the Bill's outcome. He explained the distinction between the National Assembly and Parliament, stating that as a Section 75 Bill, the focus is on the National Assembly rather than the broader Parliament. He urged acceptance of the proposed amendment as it accurately represents the Committee's intention.

Clause 9 Role of Board
Ms Ngema explained that the clause aims to address concerns raised by Members on how a board should conduct itself. The proposal suggests that the board must initially adopt an interim code of conduct acceptable to the Minister. Within six months of the Board's appointment, they must develop a permanent code of conduct, which also requires Ministerial approval. This approach ensures that there are guidelines in place for the board's behaviour from the outset, minimizing any gaps in governance.

The Chairperson invited Members to discuss the clause but there was no comment.

Clause 11 Appointment of non-executive Board members
The proposed amendment made changes to the composition, qualifications, and appointment process of non-executive board members, ensuring clarity and coherence in the selection criteria and appointment procedures.

Clause 17 Establishment of committees
The proposed amendment clarifies the concept of a special majority, ensuring a clear definition and understanding of voting requirements within these committees.

Clause 34 Submission of quarterly reports and corporate plans
This proposes the submission of annual corporate plan and quarterly reports to Parliament, emphasizing the role of the parliamentary committee in reviewing and engaging with these.

Clause 35 Financial statements and annual report
Similar to Clause 34, this clause proposes the tabling of the agency's annual report in Parliament for consideration, enhancing parliamentary oversight and involvement in agency activities.

There were no comments from Members on the proposed amendments to these four clauses.

The Chairperson expressed gratitude for everyone's time and emphasized the seriousness of dealing with the Bill and the urgency of finalizing the Bill by 12 March 2024, acknowledging the tight timeline.

Ms Ngema mentioned the need to proceed to adopt the A-list so as to move to the B-Bill adoption.

The Chairperson asked if a Bill's adoption occurs in the National Assembly or Portfolio Committee.

Ms Mohlala raised concerns about adopting the B-Bill before certain changes, particularly clause 5, had been addressed. She suggested waiting until the next meeting to adopt the Bill after the necessary revisions had been made.

The Chairperson affirmed her point, acknowledging that the adoption should not be rushed.

Ms Tseke agreed with this understanding.

The Committee Secretariat inquired about the adoption of the A-list. Would it be completed before proceeding further?

The Chairperson confirmed that the adoption of the A-list should be done at that moment.

Mr Thomani Manungufala, Committee Researcher, highlighted concerns about moving forward with the Bill, particularly on Clause 5. He emphasized the importance of adhering to legal practice. It would be remiss of him as part of the Committee support staff to allow the Committee to proceed with a potentially fatal flaw in the Bill, especially Clause 5. Other state owned entities (SOEs) have clauses on the applicability of the Companies Act, as Ms Ngema mentioned. It is common legal practice that needs to be there. He wanted to bring this to the Committee's attention even if the Committee chose to proceed, as removing such a clause is uncommon and not standard practice.

The Chairperson questioned the researcher's earlier silence during the discussion on Clause 5.

The Researcher admitted to being present but not contributing at the time.

The Chairperson rebuked the researcher for waiting until the end of the meeting to speak up and stressed the importance of active participation throughout. He advised the Researcher not to repeat this and emphasized the necessity for being engaged during meetings.

The Chairperson called for adoption of the A-list, signalling the need to progress with the agenda.

Mr A Tseki (ANC) moved and Ms Tseke seconded.

The A-List was adopted.

Mr Moore apologised for abstaining from voting but he intended to discuss the A-list with the Democratic Alliance caucus, as he believed there was a misunderstanding about the proposed amendments. Based on his understanding, the DA could not support the Bill in its current form.

The Chairperson reassured him that there would be another formal meeting where all inputs would be considered before voting, allowing for the document to be rewritten if necessary, before being sent to the National Assembly for finalisation.

Mr Moore thanked the Chairperson for the clarification.

Ms Mohlala said that the Economic Freedom Fighters (EFF) would also need to consult its caucus before making a decision. She needed to address certain concerns before reconvening for further discussion.

Committee Minutes
Ms Mohlala said that the discussion on the nomination committee's appointment and recommendation process was not adequately reflected in the minutes dated 06 February 2024. It was important to address this issue for good governance.

The Chairperson explained that the minutes provide a summary of proceedings rather than detailed resolutions. He acknowledged the discomfort some members felt with this format but noted that it reflects standard parliamentary practice.

Mr Hendricks objected, asserting that the nomination process was crucial and should be prominently featured in the minutes to ensure accuracy.

Ms Mohlala argued that critical discussions should not be omitted from the summary and insisted that the nomination committee matter was extensively discussed during the meeting.

The Chairperson countered by suggesting that including every detail in the minutes would be impractical and that the current format adequately captures the essence of the discussions.

Ms Tseke attempted to move for the adoption of the minutes, but objections were raised by Mr Hendricks and Ms Mohlala, who argued that the minutes did not accurately reflect the meeting's proceedings.

Noting the absence of further objections, Ms Tseke speculated that some Committee members might have left the meeting.

Ms Matuba confirmed her presence in the meeting but declined to second the adoption of the minutes.

The Chairperson angrily asked Ms Matuba to remain quiet and allow those who were present to speak.

Despite hesitancy, Mr Tseki moved for the adoption of the minutes, with the Chairperson clarifying that no one was being coerced into doing so.

Meeting adjourned.