Water Services Amendment Bill: Department briefing

Meeting report

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
8 September 2004
WATER SERVICES AMENDMENT BILL: DEPARTMENT BRIEFING

Chairperson: Ms C September (ANC)

Relevant Documents:
Water Services Amendment Act [No. 108 of 1997]
Water Services Amendment Bill [B17-2004]
Department PowerPoint presentation on Water Services Amendment Bill
South African Association of Water Utilities Submission on the Water Services Amendment Bill

SUMMARY
The Department of Water Affairs and Forestry (DWAF) made a presentation on the Water Services Amendment Bill to the Committee. The amendment bill had been introduced to give legal certainty to the activities of water boards outside South Africa. In the past, there had not been legal certainty and the bill was now making provision for it. Concerns were raised about retrospective activity, whether to include the Department of Foreign Affairs in the cross-border process, and the water boards' obligation to provide services in South Africa. The Department was asked to do more research on the issues raised and report back at a later stage.

MINUTES

Department briefing
Mr A Vermeulen (DWAF Manager: Policy) explained that the amendment bill sought to allow extraterritorial activities in a structure way. This could not be done by regulations because regulations only applied within South Africa. Water Boards would now have legal certainty as to whether they could go outside the borders of the country. The bill was legalising what had been illegal in the past. See presentation for more details.

Discussion
Mr P Mathebe (ANC) commented on the legality of previous outside activity. He clarified that it was clear that every Water Board had its own service area and jurisdiction and therefore outside activity was illegal.

Mr T Ramphele (ANC) asked why the Department of Foreign Affairs was not part of the discussions.

Advocate J Coetzee responded that Paragraph 6.1.2 in the Memorandum to the bill confirmed that the Department of Foreign Affairs had been consulted.

Mr Ramphele followed his question up by pointing out that he was referring to the Department of Foreign Affairs being involved in the process of concluding agreements. The Department of Foreign Affairs was not continually involved. He asked why they were not involved in the decision.

Adv. Coetzee explained that the involvement of the Department of Foreign Affairs would be up to the Committee to decide.

Mr Vermeulen added that the Minister of Finance had to concur according to the bill. It allowed for the Minister of Water Affairs and Forestry to consult with various stakeholders. The relevant utility could decide who they would wanted to consult with. They just had to get the approval from the Minister.

Mr J Arendse (ANC) asked about retrospectivity that would legalise new activities. He asked what would happen to the utilities that had ventured beyond the borders.

Ms September said that the bill would allow activities and services beyond the borders. Before the introduction of the bill there had been activities outside the country. She asked what authority had been given and what process had been followed. She warned that the bill should not be confused with other activities.

Mr Vermeulen said that currently there were no activities outside the country. Umgeni Water and Rand Water were interested in prospects outside the country. He pointed out that the bill was for the future and not for the past.

Ms September asked who was being consulted. It was self-explanatory why the Minister of Trade and Industry, the Minister of Finance and the Minister of Public Enterprise were being consulted. The Department of Foreign Affairs dealt with international agreements and therefore should be included in the process.

Advocate G Hoon said that there had been no agreements regarding retrospectivity. He explained that in order to validate what had been done a validation clause would be needed. Retrospectivity in the bill would not be helpful because the activities had already been concluded and there was no retrospectivity to address. >From now on any Water Board that wanted to do anything would have to comply with the Act. Furthermore, there was no legal basis for the inclusion or exclusion of the Department of Foreign Affairs. There was no right or wrong. He admitted that some countries could pose a problem in terms of agreements and therefore from a policy point of view the Department should be included.

Mr Mathebe wanted to know if local municipalities would not suffer from the Water Boards' 'extra-territorial' activities. The function of Water Boards was to support municipalities.

Mr Vermeulen said that the Minister had to consult with municipalities and SALGA, which would manage such an occurrence. The provision for this had been made part of the law. The bill could be amended after the consultations.

Mr Ramphele asked whether Umgeni Water's agreements were illegal. Advice was asked from the legal advisors.

Mr Vermeulen explained that currently there were no agreements in place. All precious activities had been concluded. Umgeni Water and Rand Water were interested in future opportunities and they wanted the process to be structured.

Mr Ramphele asked about municipalities and institutional reform. An element of this was the capacity of Water Boards. He asked the Department to respond.

Mr Vermeulen said as a sector, the Department had an institutional reform process based on the best structure to provide services starting with the consumer. The Department was a long way off from finalising the process. This was a 10-year reform process. The bill dealt with the interim period. An outcome of the institutional reform process was to look at this section of the bill.

Mr Ramphele said that there must be a proper interaction when two governments were involved. Foreign Affairs had to be involved because when entering into agreements these utilities may have problems and the Department could assist.

Mr Vermeulen said that the Department was reluctant to put in specific things such as legislating the Minister had to consult with the Department of Foreign Affairs.

Adv Coetzee said that if this had been an international agreement then the Department of Foreign Affairs would have to be involved. These were private companies so there was no need for the Foreign Affairs Department to be involved.

Mr M Sibuyana (IFP) said that he had no problems with the bill as long as he had the assurance that no other obligations for previous contractual agreements were being accommodated. He did not want to allow retrospectivity.

Ms September reminded the Committee that the bill did not have to be finalised today. The Department had to come back with more answers. She asked about the Umgeni Water submission that stated that the provisions of the amendment bill were already covered in the Act.

Mr Vermeulen explained that this was covered in the Public Finance Management Act. However this Act dealt with finance and they were seeking to go beyond finance matters with the amendment bill.

Ms September said that the Committee would look at the other submissions on this issue. The Department was asked to do more research and give clarity on the issue of retrospective activity, the inclusion or exclusion of the Department of Foreign Affairs and the ability of these utilities to balance the needs of the country and ensure that local needs were not neglected. SALGA would be free to attend the meetings and make submissions.

Adv Coetzee said that according to the law, Water Boards were there to provide water services in their area of jurisdiction. This was their primary activity. Any other activity was secondary.

Mr S Simmons (NNP) asked exactly what type of activities these utilities wanted to expand.

Mr Vermeulen agreed that the primary activity was to provide water. Most of the extra territorial activities were advisory and consulting roles. This was in terms of NEPAD's support to Africa.

Mr B Mosala (ANC) said this issue had to be investigated because water was a contentious issue. The political context of going into countries was important.

The meeting was adjourned.