Disestablishment of Local Council; Municipal Structures Act Amendment

PROVINCIAL AFFAIRS AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
9 November 1999
DISESTABLISHMENT OF THE LOCAL GOVERNMENT AFFAIRS COUNCIL BILL [B 54-99]; MUNICIPAL STRUCTURES AMENDMENT BILL [B60-99]:
DISCUSSION

Documents handed out
Municipal Structures Amendment Bill as tabled [B60-99]: this differs substantively from the draft version with regard to Clause 3 (see Appendix 1)
Proposed amendment to Municipal Structures Amendment Bill - New clause to amend section 93 of the Act (see Appendix 2)
[Note: an electronic copy of B60-99 is currently not available, the draft version is available as Appendix 3]

SUMMARY
Municipal Structures Amendment Bill
This is to be voted on tomorrow (10 November) following further discussion on section 4(2) (clause 1). This regards the possible inclusion of an explicit consultation process with SALGA, MECs and organised local government to be undertaken by the Demarcation Board prior to their determination of Metro areas. The consultation process added to the amendment to section 6 (clause 3) was supported. It was also agreed that section 93 (a new clause 6) should be amended so that it is brought into line with the amendments proposed to section 24 (clause 5) on local government terms and elections.

Disestablishment of the Local Government Affairs Council Bill
This was supported unanimously and will be voted on by the committee tomorrow. It will merely be voted in the House without debate.

MINUTES
Mr Y Carrim (chairperson) spoke of the workshop to be held on Friday 12 November. This will deal with local government finances and will be crucial in aiding the committee to make sense of the new structures of local government and the two possible Bills on local government finances that will be looked at once the Municipal Systems Bill is dealt with.

Municipal Structures Amendment Bill
Mr Carrim made it clear that there have been amendments to the Bill following the committee's discussions of 26 October. He felt that the feeling behind the Bill remains the same - the Constitutional Court judgment should be complied with. The concerns regarding the differences between executive committee and mayoral systems and the possible consequences of implementing the amendments are important but are practical considerations that cannot be dealt with within the legislation. He felt that any points raised today should be mulled over by members overnight so that the committee can vote on the amendments tomorrow, at a joint meeting with the NCOP Local Government and Administration Select Committee. This would allow time next week for the committee to meet with the IEC and the Demarcation Board to discuss elections.

Mr Fanie Louw of the Legal Section of the Department for Local Government, briefly when through the amendments with the committee.

Changes have been made to clause three of the Bill regarding section 6(2) of the Act. To comply with the constitutional court judgment the power to declare district management areas (DMAs) must be transferred from the minister to the Demarcation Board as DMAs impact on the boundaries of municipalities. An explicit consultation process had not been included in clause 3 as the Demarcation Board must already follow the investigative and consultative processes outlined in the Demarcation Act. However clause three has been amended so that the Demarcation Board must consult with the minister and the MEC for local government in the province concerned when declaring DMAs and these declarations must be published by notice in the Government Gazette. Consultation with the Minister and the MEC for local government in the province concerned must also occur if declarations are withdrawn.

Mr Louw went on to explain that a new clause (clause 6) has been proposed following legal advice taken by the Department. Section 93 of the Act deals with the expiry of municipal councils' terms as determined by the Minister. This links to section 24 of the Act, declared unconstitutional because it gave the minister - and not parliament - the power to fix the terms of municipal councils. On this basis the Department feels that it is possible section 93 may be unconstitutional so it proposes the removal of the power given to the minister in this section.

Mr Carrim felt that the amendments remained very straight forward as they simply do as the court judgement demanded. He referred to the concerns raised at the committee meeting of 26 October regarding section 4(2) (clause 1 of the amendments). Power to determine whether an area should be a Metro has been transferred from the Minister to the Demarcation Board. However the amendment also removes the consultation process with the MEC for local government in the province concerned, SALGA and organised local government in the province. Mr Carrim said that he had spoken to Dr Michael Sutcliffe, chairperson of the Demarcation Board, who had said that consultation with these bodies, especially SALGA, already occurs because of the processes laid out for the Board in the Demarcation Act. It is not explicitly written in to the section 26 notices but Dr Sutcliffe feels it is a consultation the Board automatically undertakes.

Ms R Southgate (ACDP) felt that regardless of this reassurance, consultation with SALGA should be explicitly spelt out in section 4(2). She has spoken with various representatives from the provinces and there is mush desire to see this consultation process included.

Mr J Selfe (DP) and Mr M Bhabha (ANC, committee chairperson select committee Local Government and Administration) both stated that law is more durable than a Demarcation Board chairperson. The consultation process must be written in to the Bill so that it is not dependent on the personality of the Board chairperson.

Mr Louw sought clarity on whether the committee was proposing to write in consultation with SALGA alone or with SALGA, MECs and organised local government.

Whilst Ms Southgate thought that both SALGA and MECs should be consulted, others agreed with Mr Bhabha that SALGA alone should be sufficient as they have established links with provinces and are the definitive representatives of local government concerns.

Mr Carrim said that explicit consultation with SALGA will be included and that members must mull over the inclusion of MECs before tomorrow's vote.

On section 5 (clause 2 of the Bill) Mr Carrim felt that the committee was agreed that it must be deleted following the judgement's declaration that the Minister does not have the right to determine and declare Metros and their nodal points.

Mr Carrim felt that the concerns raised regarding section 6(2) (clause 3 of the Bill) had now been dealt with.

The repeal of section 13 (clause 4) and the changes to section 24 (clause 5) raised no comments.

On the new clause regarding section 93 Mr Carrim felt that it only made sense to amend this in line with the changes proposed to section 24.

Mr Bhabha was concerned that the time scale for local government reform is now very tight. Although it is expected that all will be ready by 1 November 2000 it is possible that some areas may slip through the Demarcation process. Ms Verwoerd (ANC) agreed that this was a concern and said that protracted legal proceedings regarding boundaries may leave areas in a vacuum and unready for elections.

Both Mr Louw and Mr Carrim accepted these concerns but felt that section 94 of the Demarcation Act makes it clear that elections can be held according to old boundaries and that the Municipal Structures Act can still apply to these areas. Further these are practical concerns that could not be legislated for in the original Act and cannot now be legislated for within the amendments.

Mr F Mulder (NNP) said that these issues should be academic as the Demarcation Board has promised its work will be finished by 15 December.

Mr Carrim said that the Bill will be voted on tomorrow following a short discussion on section 4(2). He suggested that the committee should present the Bill to the House for voting alone and not put the Bill up for debate. However Mr Mulder felt that because of the importance of the original Act, time for debate in the House should be given. This was agreed by the committee.

Disestablishment of the Local Government Affairs Council Bill
As there was unanimously consensus on this Bill it will be formally voted on tomorrow and will be passed on to the House for a vote without the need for a debate.

Appendix 1:
The tabled bill differed from the draft version with regard to the following clause:

Amendment of section 6 of Act 117 of 1998
3. Section 6 of the Principal Act is hereby amended by the substitution for subsections (2) and (3) of the following subsections, respectively

"(2) The [Minister, on the recommendation of the] Demarcation Board [and] after consulting the Minister and the MEC for local government in the province concerned, may by notice in the Government Gazette declare a part of an area that must have municipalities of both category C and category B as a district management area if the establishment of a category B municipality in that part of the area will not be conducive to fulfillment of the objectives set out in section 24 of the Demarcation Act."; and

(3) (a) The [Minister, on recommendation of the] Demarcation Board [and] after consulting the Minister and the MEC for local government in the province concerned, may by notice in the Government Gazette withdraw the declaration of an area as a district management area.

(b) When such declaration is withdrawn, the MEC for local government in the province concerned must, in accordance with any boundary determinations or re-determinations of the Demarcation Board and with effect from the date of the next election of municipal councils -

(i) establish a local municipality for that area in terms of section 12; or

(ii) include that area into another- local municipality in terms of section [16] 17".

Appendix 2:
LOCAL GOVERNMENT: MUNICIPAL STRUCTURES AMENDMENT BILL [B60-99]
PROPOSED AMENDMENTS - 9 NOVEMBER 1999

NEW CLAUSE
1. That the following be a new Clause to follow clause 5:
Amendment of section 93 of Act 117 of 1998

6. Section 93 of the principal Act is hereby amended by the substitution for subsection (3) of the following subsection:

"(3) (a) The first term of all municipal councils after the enactment of Act expires [not later than] on 1 November 2000. [as determined by Minister by notice in the Government Gazette]

(b) The Minister, after consulting the Electoral Commission, must by notice in the Government Gazette, call and set a date or dates for an election of all municipal councils, which must be held within 90 days of 1 November 2000. The notice may be published either before or after the said date.".


Appendix 3
Municipal Structures Amendment Draft Bill
Note: This is substantively as tabled except for Clause 3 - see Appendix 1 above for tabled changes)

BILL
To amend the Local Government: Municipal Structures Act, 1998, in order to vest the power to determine whether an area must have a single category A municipality or whether it must have municipalities of both category C and category B in the Municipal Demarcation Board; to vest the power to declare a part of the area of a category C municipality as a district management area in the Municipal Demarcation Board; to determine the term of municipal councils; to repeal section 13; and to provide for matters in connection therewith.

BE IT ENACTED by the Parliament of the Republic of South Africa, as follows:-

Substitution of section 4 of Act 117 of 1998
1. The following section is hereby substituted for section 4 of the Local Government: Municipal Structures Act, 1998 (hereinafter referred to as the principal Act):

"Application of criteria
4. (1) The [Minister Demarcation Board must apply the criteria set out in section 2 and determine whether an area in

terms of the criteria must have a single category A municipality or whether it must have municipalities of 1,oth category C and category B; and

(1) determine the boundaries of the area in terms of the Demarcation Act.

(2) The [Minister] Demarcation Board may determine that an area must have a category A municipality only after consultation with the Minister.

[The MEC for Local government in the province concerned, SALGA and organised local government in the province].".

Repeal of section 5 of Act 117 of 1998
2. Section 5 of the principal Act is hereby repealed.

Amendment of section 6 of Act 117 of 1998
3. Section 6 of the Principal Act is hereby amt~ded by -

(a) the substitution for subsection (2) of the following subsection:

"(2) [The Minister, on the recommendation of the Demarcation Board and after consulting the MEC for local government in the province concerned] The Demarcation Board may declare a part of an area that must have municipalities of both category C and category B as a district management area if the establishment of a category B municipality in that part of the area will not be conducive to fulfillment of the objectives set out in section 24 of the Demarcation Act."; and

(b) the substitution for subsection (3) of the following subsection:

"(a) [The Minister, on recommendation of the Demarcation Board and after consulting the MEC for local government in the province concerned The Demarcation Board may by notice in the Government Gazette withdraw the declaration of an area as a district management area.

(b) When such declaration is withdrawn, the MEC for local government in the province concerned must, in accordance with any boundary determinations or re-determinations of the Demarcation Board and with effect from the date of the next election of municipal councils -

(i) establish a local municipality for that area in terms of section 12; or

(ii) include that area into another- local municipality in terms of section [16] 17".

Repeal of section 13 of Act 117 of 1998
4. Section 13 of the principal Act is hereby repealed.

Amendment of section 24 of Act 117 of 1998
5. Section 24 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection:

"(1) (a) The term of municipal councils is no more than five years as determined by [the Minister by notice in the Government Gazette], an Act of Parliament calculated from the day following the date or dates set for the previous election of all municipal councils in terms of subsection (2);

(b) The Act of Parliament contemplated in paragraph (a) shall be enacted not later than 31 August 2000.".

Short title
6. This Act is called the Local Government: Municipal Structures Amendment Act, 1999.

MEMORANDUM ON THE OBJECTS OF THE LOCAL GOVERNMENT:
MUNICIPAL STRUCTURES AMENDMENT BILL, 1999
The object of the Local Government: Municipal Structures Amendment Bill is to give effect to the judgement of the Constitutional Court in the cases:

Executive Council of the Province of Western Cape versus the Minister for

Provincial Affairs and Constitutional Development and Another (Case CCT 15 of

1999); and

Executive Council of Kwazulu-Natal versus the President of the Republic of South Africa and Others (Case 18 of 1999).

In its judgement the Court found that sections 4, 5, 6 (2), 13 and 24 (1) of the Local Government: Municipal Structures Act, 1998 (Act 117 of 1998), were unconstitutional and accordingly declared those sections invalid. The declaration of invalidity of section 6 (2) was suspended for one year.

Section 4 of the Act allowed the Minister responsible for local government to apply the criteria set out in section 2 in order to determine whether an area should have a category A municipality or whether it should have municipalities of both category C and B. The Court found that the Constitution by necessary implication vests this power in the Demarcation Board. Clause 1 of the Bill accordingly re-aligns section 3 with this constitutional requirement.

Section 5 of the Act enabled the Minister to declare an area that in terms of the criteria must have a category A municipality as a metropolitan area, and to fix nodal points within the area around which boundaries must l)e drawn. As the power to determine the category of the area and the power to determine the boundaries of the area are constitutionally both vested in the Demarcation Board which the Board must exercise as components of the process of boundary determination, there appears to be no need for the formal declaration of such areas as metropolitan areas as either before or after the determination of the outer boundaries. Clause 2 of the Bill consequently proposes the deletion of section 5.

Section 6 (2) of the Act provided for the declaration by the Minister of district management areas within category C municipalities where the establishment of a local municipality is not feasible. The Court held that the establishment of district management areas impacts on the boundaries of municipalities which is a function that constitutionally must be performed by the Demarcation Board. Clause 3 of the Bill gives effect to the Court's ruling by vesting the power to declare district management areas in the Demarcation Board.

Section 13 of the Act which allows the Minister to issue guidelines to MECs for local government to assist them in choosing the type of municipality that would be appropriate for a particular area, was declared invalid by the Court on the ground that it impinges on the power of provinces to decide on the types of municipality to be established in the province. Clause 4 of the Dill accordingly repeals this section.

Section 24 (1) of the Act allowed the Minister to determine the term of municipal councils by notice in the Government Gazette. The Court ruled that this section constituted an impermissible delegation of parliamentary power and that in terms of the Constitution only Parliament could fix the term. To rectify the matter clause 5 of the Bill amends section 24 (1) by stating that the term of municipal councils will be five years calculated from the day following the date or dates set for the previous election of all municipal councils.