Constitutional Matters Amendment Bill: Department briefing

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE; SECURITY AND CONSTITUTIONAL AFFAIRS SELECT COMMITTEE: JOINT MEETING
1 August 2005
CONSTITUTIONAL MATTERS AMENDMENT BILL: DEPARTMENT BRIEFING

Co-Chairpersons: Ms F Chohan-Kota (ANC) and Kgoshi L Mokoena

Documents handed out:
Determination of Delegates (National Council of Provinces) Act, No 69 of 1998
Constitutional Matters Amendment Bill [B22 - 2005]
Schedule 6: Constitution of the Republic of South Africa
Regulation under Section 10(1) of the Public Funding of Represented Political Parties Act, 1997
Amendment Regulations: Public Funding of Represented Political Parties Act, 1997 (Act No 103 of 1997)
Proposed new Section 5(5)

SUMMARY
The Committee was briefed on the Constitutional Matters Amendment Bill and regulations in terms of the Public Funding of Represented Political Parties Act. The Bill and the regulations deal with the consequences of floor crossing as they relate to the funding of political parties represented in legislatures. The Bill must be fast-tracked and passed by Parliament before the start of the next floor-crossing period on 1 September.

The Bill states that, in some cases, parties that have subdivided or merged with other parties will be required to pay over their unspent balances to the Independent Electoral Commission (IEC). The amendment regulations propose an insertion of new sub-regulations that would empower the IEC, after the floor crossing, to re-determine the amounts to which political parties were entitled. The remaining two instalments (October and January) must be paid within the first 15 days of both October and January. An existing party that merges with a new party must repay the unspent balances of monies allocated to it to the IEC. The IEC would then pay over the unspent balances received from the existing party to the new party. In cases where an existing party subdivides, that party should pay the unspent balances over to the IEC if no subdivision continued to represent the original party. The unspent balances received from the original party would then become part of the total amount of funding for the next financial year and would be distributed among all qualifying political parties. An existing party that had merged with another existing party would not be expected to repay the unspent balance of monies allocated to it. The unspent balances would be carried over to the new party provided the new party qualifies for funding.

Members felt that there was a need for an objective formula to determine the unspent balances and a measure of accountability was required with regard to the unspent balances. Members were surprised that the IEC had not raised any problem about the reduction of days in which it has to make payments to political parties.

MINUTES
Ms Chohan-Kota explained that the Portfolio and Select Committees were meeting jointly to expedite the Bill. She recalled that when originally dealing with matters relating to the "crossing of the floor", a resolution had been taken that the consequential issues pertaining to the funding of political parties after the "crossing of the floor" would not be dealt with at that time. The Department had been requested to consult with various role players and then draft this Bill. The Bill dealt with the consequences of floor crossing as they related to the funding of political parties represented in legislatures. Parliament would have to pass the Bill before the next crossing-of-the-floor period.

The Chairperson of the National Council of Provinces (NCOP) and the Speaker of the National Assembly had indicated that both Committees should vote on the Bill before the 19 August 2005. The Bill would then be fast tracked and passed in both Houses by no later than 24 August 2005. In terms of the Funding of Represented Political Parties Act, the President could make regulations acting on recommendations of a joint committee of the National Assembly and the NCOP. The Parliamentary Presiding Officers had constituted the Portfolio Committee on Justice and Constitutional Development and the Select Committee on Security and Constitutional Matters as an ad hoc committee for the purposes of dealing with the regulations.

Briefing on Bill
Mr J Labuschagne (Department of Justice legal drafter) said that during June 2002, Parliament had passed four pieces of legislation which dealt with the issue of "crossing the floor". Their common objectives were to:
- enable a member of a legislature or municipal council to become a member of another party while retaining membership of that legislature or council; and
- to enable an existing party to merge with another party, to subdivide into more than one party or to subdivide and any one subdivision to merge with another party and to provide for floor crossing should a member move from one party to another.

The Constitutional Court, in the case of United Democratic Movement v President of the Republic of South Africa and Others (No. 2) 2003 (1) SA 495 (CC), had found the Loss or Retention of Membership of National and Provincial Legislatures Act, 2002, as the result of a procedural defect, to be inconsistent with the Constitution and invalid.

Section 1 of the Membership Act amended the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993), while Section 2 of that Act amended the Determination of Delegates (National Council of Provinces) Act, 1998 (Act No. 69 of 1998). Shortly after the Constitutional Court gave its judgement in the UDM case, the Constitution of the Republic of South Africa Amendment Act, 2003 (Act No. 2 of 2003), had been passed by Parliament. The principal object of that Act was to re-enact the provisions of the Membership Act in a procedurally correct manner and insert a new Schedule 6A to the Constitution. However, when the provisions of the Membership Act were re-enacted, the amendments to the Determination of Delegates (National Council of Provinces) Act, as contained in Section 2 of the Membership Act, were not re-enacted.

Mr Labuschagne said that Schedule 6A allowed a member of the National Assembly (NA) or provincial legislature to become a member of another political party while retaining membership of the NA or provincial legislature. It also allowed an existing party to merge with another party, subdivide into more than one party or and for any subdivision to merge with another party. This could only happen between the 1^st and 15^th day of September of the second year following the date of the elections and in the fourth year after elections. The next floor crossing window would open on 01 September 2005.

The Public Funding of Represented Political Parties Act, 1997 (Act No. 103 of 1997) (the Funding Act) had established the Represented Political Parties’ Fund with a view to making provision for the funding of political parties participating in Parliament and provincial legislatures. It also regulated the allocation of monies from the Fund to political parties. Section 5(1)(a) of the Act provided that every political party be entitled to allocated monies from the Fund for any financial year that it is represented in the National Assembly; or in any provincial legislature; or both in the National Assembly and any provincial legislature. In terms of Section 5(2)(a) of the Act allocations from the Fund must be made and paid to each of the political parties concerned in accordance with a prescribed formula based on two considerations. These were the principles of proportionality and of equity. In terms of Section 5(4) any party that had ceased to qualify for the allocation of monies must repay the unspent money to the Independent Electoral Commission (IEC). A party ceased to qualify for allocation if it was no longer represented in the NA or provincial legislature.

To amend the Public Funding of Represented Political Parties Act, 1997, so as to provide for the allocation of moneys from the Represented Political Parties’ Fund to political parties participating in Parliament and provincial legislatures where a member of a legislature becomes a member of another party whilst retaining membership of that legislature or where an existing party merges with another party, subdivides into more than one party or subdivides and any one subdivision merges with another party; to amend the Determination of Delegates (National Council of Provinces) Act, 1998, so as to provide for the determination of certain delegates of a provincial legislature that has been reconstituted on account of changes of party membership and mergers or subdivision of parties; and to provide for matters connected therewith.

The purpose of the Bill was to amend the Public Funding of Represented Political Parties Act, 1997, to provide for the allocation of monies from the Represented Political Parties’ Fund to political parties participating in Parliament and provincial legislatures where a member of the legislature becomes a member of another party while retaining membership of that legislature, or where an existing party merges with another party, subdivides into more than one party or subdivides and any one subdivision merges with another party. It also amends the Determination of Delegates (National Council of Provinces) Act, 1998, to provide for the determination of certain delegates of a provincial legislature that have been reconstituted on account of changes of party membership and mergers or subdivision of parties; and to provide for matters connected therewith.

Clause 1: Amendment of Section 1 of Act 103 of 1997
The Public Funding of Represented Political Parties Act contained only one reference to the Constitution. The amendment to the section was designed to define the word "Constitution". The amendment was necessary because the Bill contained numerous references to the Constitution.

Clause 3: Amendment of Section 9 of Act 103 of 1997
This clause contained a consequential amendment emanating from the proposed amendment contained in Clause 1.

Clause 4: Amendment of Section 10 of Act 103 of 1997
Clause 4 was intended to amend Section 10 of the Funding Act so as to empower the President to make regulations prescribing the procedure according to which and manner in which payments to the Fund were to be made. This should be read together with the proposed regulation 5(3).

Clause 5: Amendment of Section 2 of Act 69 of 1998
Clause 5 sought to re-enact the provisions of Section 2 of the Loss or Retention Membership of National and Provincial Legislatures Act (Membership Act) into the Determination of Delegates (National Council of Provinces) Act. The principle in this clause was identical to a clause passed by Parliament in 2002 when it passed the Membership Act.

Clause 2: Amendment of Section 5 of Act 103 of 1997
Mr Labuschagne said that the proposed amendment to Section 5(5) provided that when a member crossed from one party to another, the original party did not have to repay to the IEC the unspent balances of monies allocated to it.

Allocations to which political parties were entitled, had to be paid in four equal instalments with the first instalment payable within four weeks of the beginning of a financial year (between 1 to 30 April). The second instalment had to be between 1 and 31 July, the third between 1 and 31 October and the fourth between 1 and 31 January. There was a possibility that a party might have unspent monies by the time the next instalment was payable. Funds were allocated to parties on the basis of proportionality (taking into consideration the number that a party had in the legislature) and equity. The crossing of the floor might have an impact on the amount of money to be allocated to a party since it affected the number of representatives that a party had in the legislature. The proposed amendment regulations proposed an insertion of new sub-regulations which would empower the IEC, after the floor crossing, to re-determine the amounts to which political parties were entitled. The remaining two instalments (October and January) had to be paid within the first 15 days of both October and January.

Ms S Camerer (DA) pointed out that the first two instalments had to be paid within 30 days and yet the last two instalments had to be paid within 15 days. She wondered what purpose the change would serve.

Mr Labuschagne replied that he could not see any reason for the change.

Ms Chohan-Kota noted that there were times that parties did not inform the Speaker timeously of their new representation making it difficult to publish the new lists within seven days. Missing this deadline entailed cutting short the period for re-determination by the IEC. There could be problems if one was to say that the IEC had to pay monies by the 15^th day of the month. The 30 days period should not be reduced to 15 days unless there was a rationale for doing so. There would be no problems if the deadline related to the repayment of unspent balances.

Mr Labuschagne said that he would discuss the issue with the IEC.

Mr S Swart (ACDP) was surprised that the IEC had not raised any concerns with the reduction of the period. Perhaps this had been overlooked by the IEC?

Mr Labuschagne said that perhaps the 15 days period had been arrived at in order to ensure that political parties received their monies sooner.

Ms Chohan-Kota felt that the explanation given was understandable especially in the context of a party that was non-existent prior to the floor crossing period.

Mr Labuschagne said that in terms of the proposed Section 5(6)(a) an existing party that merges with a new party must repay the unspent balances of monies allocated to it to the IEC. The IEC would then pay over the unspent balances received from the existing party to the new party. The new party should comply with the Act before the unspent balances of the existing party could be paid over to it. This section should be read together with the proposed sub-regulation 3(a) and (b).

Kgoshi Mokoena asked if this meant that payment to the new party would only be done after the original party had made repayments to the IEC.

Mr Labuschagne replied that payment would be done 14 days after the IEC had received the money from the original party.

Ms Chohan-Kota felt that where there were any unspent monies, such monies should be paid over to the new party within 14 days. The reconstituted third instalment should be paid in the normal course.

Mr Labuschagne replied that this was already covered under the proposed sub-regulation 3(a) and (b).

Mr J van der Merwe (IFP) asked what was a new party. For instance, the National Party (NP) was no longer in existence and had been absorbed by the African National Congress (ANC). Was the ANC a new party? Was the definition of a new party limited to a party that was not in existence before?

Mr Labuschagne replied that a new party could be a party that had never existed before or a party that was not represented in the National Assembly or provincial legislature. The regulation did not contain a definition of a new party and was only referred to once.

Mr Labuschagne said that the proposed Section 5(6)(b) provided that in cases where an existing party subdivides into more than one subdivision, that party should pay the unspent balances over to the IEC if no subdivision continued to represent the original party. The IEC had indicated that the unspent balances received from the original party would then become part of the total amount of funding for the next financial year and would be distributed among all qualifying political parties. However, this was not regulated in either the regulation or the Bill. He proposed that there should be a clear indication in the regulation that the money would be distributed to all qualifying parties.

In terms of the proposed Section 5(7)(a) an existing party that had merged with another existing party would not be expected to repay the unspent balance of monies allocated to it. The unspent balances would be carried over to the new party. The party should continue to qualify for funding in order to be able to utilise the unspent balance.

The proposed Section 5(7)(b) provided that if an existing party had subdivided into more than one subdivision and a subdivision continued to represent that party and qualified for funding, the original party would not have to repay the unspent balances to the IEC.

Mr van der Merwe felt that the allocations that were given to Members should follow them to whichever party they crossed over. He was concerned that parties might argue that they had spent all their funds prior to floor-crossing taking place and thus would not be able to return any funds.

Mr Labuschagne replied that monies were not allocated to individual members but to parties.

Members felt that there was a need for an objective formula to determine the unspent balances and a measure of accountability was required with regard to the unspent balances. The Committee requested Mr Labuschagne to try and formulate options for the Committee to discuss.

Mr B Magwanishe (ANC) was worried that the requirement that parties should repay unspent balances to the IEC which would then have to pay the monies to a new party would create a great administrative and accountability burden for the IEC.

The meeting was adjourned.