Constitutional Matters Amendment Bill: finalisation

Meeting report

SECURITY AND CONSTITUTIONAL AFFAIRS SELECT COMMITTEE
24 August 2005
CONSTITUTIONAL MATTERS AMENDMENT BILL: FINALISATION

Chairperson: Kgoshi L Mokoena (ANC)

Documents handed out:
Constitutional Matters Amendment Bill [B22B-05] as amended by Portfolio Committee

SUMMARY
The Committee adopted the Bill as passed by the National Assembly. Mr F van Heerden (FFP) voted against the Bill. The IFP supported the Bill because it was dealing with party funding only and not floor-crossing. A person who had lost his or her position as a permanent delegate to the National Council of Provinces (NCOP) would not necessarily go back to the provincial legislature. It would be up to his or her political party to decide where to deploy him or her.

MINUTES
Mr J Labuschagne (Department legal drafter) took the Committee through the Bill.

Clause 1 Amendment of section 1 of Act 103 of 1997
Mr Labuschagne said that the principal Act contained one reference to the Constitution. The proposed Section 6A contained numerous references to the Constitution. It was desirable to include the definition of the ‘Constitution’ in the principal Act.

Clause 2 Amendment of section 5 of Act 103 of 1997
Clause 2(a) was a consequential amendment. There were two cases in which political parties had to repay their unspent balances: when they ceased to qualify for allocation after an election and upon the dissolution of Parliament or provincial legislature. The Bill was aimed at providing for a third scenario: after the crossing of the floor. Clause 2(b) provided a link with Section 6A.

Clause 3 Amendment of section 6 of Act 103 of 1997
Mr Labuschagne said that the Act provided that the accounting officer of a Party should prepare a financial statement within two months after the end of a normal financial year. It did not provide for the period within which such a statement had to be submitted to the auditors to be audited. What could happen in practice was that the accounting officer could submit the statement on the last day making it impossible for the auditor to comply with the Act. In terms of the Act the auditor had to submit the audit report within three months after the end of a financial year. The amendment provided that the accounting officer must prepare the financial statement and submit it to the auditors within two months after the end of the financial year.

Clause 4 Insertion of section 6A in Act 103 of 1997
Mr Labuschagne said that the principle was that the nominating/original political party did not have to repay its unspent balances should its Members cross the floor. This was possible provided that the nominating Party continued to qualify for funding it terms of the Act. A political party which immediately prior to the period referred to in item 4(1)(a) or (b) of Schedule 6A to the Constitution qualified for the allocation of monies from the Fund did not have to repay to the Commission the unspent monies if it subdivided in a manner contemplated in item 3(1)(b) of Schedule 6A to the Constitution. The subdivision of that Party had to continue to represent that party in that legislature after the date on which the Speaker of the legislature had published the notice contemplated in item 5(3) of Schedule 6A to the Constitution. It qualified for the allocation of monies from the Fund, whether or not the subdivision of that Party had changed the name of that Party.

In terms of subsection (3)(a) a political party must repay its unspent balances should it cease to qualify for funding as a result of its Member or Members changing Party Membership contemplated in item 2(1); or merger with another political party in terms of item 3(1)(a); or subdivision in a manner contemplated in item 3(1)(b), of Schedule 6A to the Constitution.

Subsection (4) provided that the person who last held the office of accounting officer (or if not available, the leader of that Party) must close the books and records of account of the party on the last day of September of the financial year in question. There was a need for an alternative person because the accounting officer could disappear or be unavailable for some reason. A Party would know if it still qualified for funding immediately after the Speaker had published the lists of Parties that were still represented in Parliament or provincial legislatures. The latest date would be 22 September.

The accounting officer must within one month prepare a statement showing all allocations received by the Party in the financial year and how such monies were used. It must also show the unspent balances as at the date on which its books were closed and all the existing legal financial obligations of the Party until the end of the financial year in question.

The financial statement and books and records of account should be submitted to an auditor within the very same one-month. The auditor should express an opinion as to whether or not the allocated monies were spent for purposes authorised by the Act and confirm the unspent balances and existing legal obligations. The auditor should submit the report and audited statement, as well as all statements for the financial year in question of the banking account of the political Party to the Commission within two months after the date on which the books and records of account of the Party were closed.

The Commission should determine the amount of the unspent balances to be repaid to the Commission; the date on which that amount of unspent balances of monies must be repaid and inform the accounting officer of the amount and date. In order to be able to determine the amount of the unspent balance to be repaid, the Commission could direct the accounting officer to provide further information as it might deem necessary. It might also appoint its own auditor to verify the auditor’s report and audited statement or audit the statement and the books and records of account kept in terms of section 6.

In terms of subsection 9, the accounting officer or the leader of the Party should repay to the Commission the amount of the unspent balances of monies contemplated in subsection (7)(a) on or before the date determined by the Commission. This could be any date before the end of the financial year in which the crossing of the floor had taken place. The unspent balances once repaid, would go into a pool and be distributed amongst all qualifying political parties in the next financial year.

In terms of subsection 11, the Commission would have the power to deal with any matter not provided for in this section in a matter it would deem appropriate as long as it would be in accordance with the objectives and principles of the Act.

Clause 5 Amendment of section 8 of Act 103 of 1997
Section 8 of Act required the Commission to submit a report to Parliament once a year, indicating the amounts of money received by the Fund. In terms of the amendment, the Commission would be required to also indicate the amounts of the unspent balances of monies repaid it, if applicable, during that financial year. This would ensure that there was transparency.

Clause 6 Amendment of section 9 of Act 103 of 1997
This was a consequential amendment that emanated from Clause 1. Clause 1 had inserted the definition of ‘Constitution’.

Clause 7 Insertion of section 9A in Act 103 of 1997
This clause was intended to provide for offences in instances where the accounting officer or leader of the Party (that had failed to qualify for funding) had failed to comply with the requirements of the Act. For instance, failure to prepare financial statements or failure to comply with a request by the Commission would be an offence.

Clause 10 Amendment of section 10 of Act 103 of 1997
This clause empowered the President to make regulations to regulate certain matters. At present the President could make regulations prescribing the procedure in terms of which payments had to be made to Parties. The Commission would re-determine monies that Parties were entitled to after the crossing of the floor. The clause would empower the President to make regulations prescribing the procedure according to which and manner in which payments from, and to, the Fund are to be made after any election of Parliament or a provincial legislature or after the floor-crossing period.

Clause 9 Amendment of Preamble of Act 103 of 1997
This clause amended the Preamble of the Funding Act so that it would refer to the repayment of unspent balances. At present the preamble only referred to the fact that Section 236 of the Constitution provided that national legislation should provide for the manner in which Parties would be funded. The preamble contained no reference to the repayment of money because the Funding Act was passed before crossing of the floor was allowed. There was no need at that point in time to refer to the repayment of unspent balances.

Clause 10 Substitution of Long Title of Act 103 of 1997
The Long Title of the Act was to be amended by including reference to the regulation of the repayment of unspent balances.

Amendment of section 2 of Act 69 of 1998
This clause would deal with the determination of delegates to the National Council of Provinces. The Bill would not change the formula provided in the Constitution.

Motion of Desirability
The Chairperson read the motion of desirability of the Bill. Dr van Heerden said that his party, the Freedom Front Plus, was against defections. He said that he would not vote for the desirability of the Bill and would vote against the Bill.

Mr S Shiceka (ANC) (Gauteng) moved for the desirability of the Bill. Mr Ntuli seconded this.

Discussion
Mr J le Roux (DA) (Eastern Cape) said that the DA had changed its stance on the whole issue of floor-crossing and would vote in favour of the Bill. He asked if a Party would have to repay its unspent balances should one of its Members defect to another Party.

Mr Labuschagne replied that the original or nominating Party would not have to repay provided it still qualified for funding.

The Chairperson said that the Party would still receive funding but it would be adversely affected in terms of amount of funding.

Mr M Sulliman (ANC) (Northern Cape) asked if a permanent delegate who had become a special delegate would become a Member of the Legislature or if that Member would fall off the wagon.

The Chairperson replied that the Member would go back to the legislature. The Party that had benefited from the floor-crossing would send another Member to the NCOP.

Mr Labuschagne shared the Chairperson’s understanding but was not sure how the process worked in the provinces.

Mr Shiceka indicated that in one of the previous meetings the drafter had indicated that the Commission had some concerns around the penalties. He asked what was the response to the concerns. Did the Commission propose any amendment or did it just agree to everything contained in the Bill? Clause 11(d) provided that the legislature should "in manner that is consistent with democracy", elect the allotted number of delegates from the delegates of Parties that had not participated in the elections to become special or permanent delegates. One could not look at the votes that the Parties had obtained since they had not participated in the election. This would make it difficult to see how much support the Parties enjoyed. What democracy was this?

Mr Labuschagne replied that the clause had been amended by deleting all offences that related to accounting officers during a normal financial year. The Portfolio Committee had adopted a resolution asking the Department to investigate certain matters. The phrase "in a manner that is consistent with democracy" was also used in the Constitution. When dealing with two existing Parties that had an equal number of votes, one might look at how long the Parties had been in existence. One did not want to prescribe the process that had to be followed.

The Chairperson said that a new Party would be given zero votes and could not be equated to an existing Party. The allocation of delegates "in a manner that is consistent with democracy" would be a last resort.

Mr Ntuli asked if the nominating Party was the Party that had lost or the one that had gained a Member. Mr Labuschagne replied that it was the one that had lost a Member.

Mr F Adams (NNP) (Western Cape) was unclear how a person who had become a special delegate would go back to the provincial legislature. He thought that the seats in legislatures were fixed.

Mr Labuschagne was of the view that a person who had become a special delegate would retain Membership of a provincial legislature.

Mr Sulliman was of the view that a person could not change from a permanent delegate to a special delegate. Such a person should lose his or her seat because the number of seats in a legislature was fixed in terms of the law. The number would increase by one if such a person were to become a member of the legislature concerned.

The Chairperson explained that there was no way that the number would increase. For instance, there were two Members representing the DA in the Limpopo legislature. The ANC would be able to send one delegate to the NCOP should one the DA members cross to the it. The DA Member who was in the NCOP would have to go back to the legislature.

Advocate B Nonyane (Parliamentary staff) said that the basic principle was that one got Membership of a provincial legislature. Parties should fill the seats in a legislature. One would then work out the formula for NCOP Members. The NCOP Members were not even drawn directly from the legislature. The Parties could draw them from anywhere. The same applied once there was a crossing of the floor in a provincial legislature. The seats would have to be filled and the formula worked out again. If it was discovered that a certain Party had lost due to its Members having crossed to another Party, the Members concerned did not necessarily have to go to the legislature because the legislature was full. It was up to the Party to decide where the Member would go.

Mr Labuschagne was unaware that one did not necessarily have to be a Member of a provincial legislature in order to be a permanent delegate.

The Chairperson wondered if the Portfolio Committee on Justice and Constitutional Development had the same understanding outlined by Advocate Nonyane.

Mr Shiceka said that Advocate Nonyane and Mr Labuschagne should sit and discuss the implications of the explanation given by Advocate Nonyane before tomorrow. The NCOP was due to pass the Bill on the following day and the Bill would have to be sent back to the National Assembly should the Committee amend it. This would mean that it might not come into effect before the floor-crossing period.

Mr M Mzizi (IFP) (Gauteng) said that there was no way that the Committee could pass the Bill if some doubts still existed around some of its provisions.

Dr van Heerden said that one could have all the lawyers in Parliament concurring but in the end one could never avoid legal issues being taken to court. It was inappropriate to delay legislation merely on the basis that there might be some legal challenges.

Mr le Roux said that the Bill provided that after the crossing of the floor period, all issues should be looked at as if there had been an election.

The Chairperson thanked the Member for reminding the Committee of this. There was nothing wrong with Clause 11. Members were only confused about its interpretation.

The Chairperson put the Bill clause by clause before the Committee. All Members except Dr van Heerden voted in favour of the Bill.

The meeting was adjourned.