Cross-Boundary Municipalities Laws Repeal Bill: Department briefing

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
20 October 2005
CROSS-BOUNDARY MUNICIPALITIES LAWS REPEAL BILL: DEPARTMENT BRIEFING

Chairperson: Ms F Chohan-Kota (ANC)

Document handed out
Cross-boundary Municipalities Laws Repeal Bill [B36-2005]
Category 1 Metros and District Municipalities moved as a whole

SUMMARY
The Department of Provincial and Local Government explained that the Bill was aimed at eradicating cross-boundary municipalities (CBM). Clause 2 of the Bill allowed for all transitional or consequential arrangements needed as a result of the re-alignment, which included any arrangements that needed to be fast-tracked by the Local Government Members of Executive Committee (MECs) in preparation for local government elections. Clause 3 outlined all the legislation on cross-boundary municipalities that would need to be repealed. Clause 4 was aimed at addressing the impact that the realignment of municipalities would have on the local government dispensation, and allowed the MEC to take steps to regulate any legal, practical or other consequence that could arise as a result of the transition.

The provisions that allowed the MECs to make preparations for the local government elections would immediately come into effect upon promulgation of the Bill. The remainder of the provisions in the Bill would only come into effect upon a date determined by the President, and the Bill would come into operation on the same date as the Constitution Twelfth Amendment Bill because the latter needed to be enacted first in order to give effect to the new provincial demarcations contained in that Amendment Bill.

MINUTES

Department briefing
Dr P Bouwer, Department of Provincial and Local Government Manager: Legal Services, continued the briefing from the previous day. He directed Members to the second and third columns reflected in Schedule 2 of the Bill and informed them that the Notice 1179 of 2005 referred to the Government Gazette of 18 July 2005. The third column referred to Notice 1594 of 2005, the Government Gazette of 19 August 2005 that reflected the new maps which contained the new provincial boundaries. It would greatly assist Members if they bore those two different notices in mind when considering the Bill.

As explained at the previous day’s meeting, the 18 July 2005 Government Gazette reflected official demarcations of municipalities as they currently existed. The 19 August 2005 Government Gazette only reflected the areas in which changes were proposed.

The Chairperson asked whether Schedule 2 referred only to those Cross Boundary Municipalities (CBMs) which were being transferred in toto to a single province.

Dr Bouwer answered in the affirmative, and stated that the document entitled "Category 1 Metro’s and District Municipalities moved as a whole" would be of importance here. He clarified that the Bill essentially dealt with three categories of municipalities: the first was existing CBMs that would be relocated into a single province, without changing the current municipal boundaries. An example would be the Tswane Metro, as illustrated in the "Category 1 Metro’s and District Municipalities moved as a whole" document, which has a small portion currently in the North West province. The proposal was that the entire Tswane Metro, as currently demarcated, would now fall within the Gauteng province. The arrangements for the first category of municipalities were contained in Schedules 2 and 3 of the Bill.

The second category dealt with the KwaZulu-Natal and Eastern Cape situation, where existing municipalities were being relocated into another province. A good example was the Umzimkulu Local Municipality which currently fell within the Eastern Cape, but which would be disestablished and a completely new municipality would then be established in the KwaZulu-Natal province by its MEC for Local Government.

The third category was existing CBMs which, because of technical reasons, the local municipalities within the district municipality needed to be ‘cut up" and redistributed within that district municipality. The same scheme as followed in the KwaZulu-Natal situation would be followed here, and were dealt with in Schedules 4 and 5 of the Bill.

Mr Bouwer and the Chairperson then took the Committee through the Bill clause by clause.
Long title
Dr Bouwer indicated that this reflected the aims and contents of the Bill.

Preamble
Dr Bouwer explained that this had been was inserted on the advice of the State Law Advisors, and clarified the approach to the legislation. It aimed to clarify that Section 74(4) of the Constitution stipulated that any constitutional amendment was limited only to the specific provision and amendment required, and was not allowed to provide for any consequential and transitional arrangements. It was thus the purpose of the Bill to provide for those consequential and transitional arrangements needed for the Constitution Twelfth Amendment Bill.

Clause 1: Definitions
’cross-boundary municipality’
Dr Bouwer stated that this referred to a municipality that straddled a provincial boundary.

’MEC for local government’
Dr Bouwer informed Members that these terms had been copied from the Municipal Systems Act.

’section 12 notice’
Dr Bouwer explained that once an area was demarcated by the Municipal Demarcation Board (MDB) as requiring a municipality, the process to be followed was that the MEC of that province would have to establish a municipality for that particular area. This had been effected by the notice required by Section 12 of the Municipal Structures Act, which was referred to as a section 12 notice. It contained all the institutional arrangements of that municipality, such as its name, the number of councilors and wards, whether it would be a mayoral or executive municipality, and the category of municipality.

Two different approaches to implementing these section 12 notices had been introduced in 2000. Some provinces published separate section 12 notices for each municipality established. Dr Bouwer digressed with an explanation of the three categories of municipalities established by the Constitution. The Category A municipalities were ‘stand-alone municipalities’, which meant that in a particular geographical area there was only one municipality that had any government power. Those were the metropolitan municipalities, and there were currently six in the country. The Category B and C municipalities were the district municipalities that consisted of local municipalities within that particular area.

In 2000, the government had realised that there were cases which did not warrant the exercise of the full extent of municipal powers. Typical examples were the Kalahari National Gemsbok Park or Kruger National Park. The Portfolio Committee for Provincial and Local Government had at that stage introduced the concept of a district management area which meant that only the district municipality would exercise its powers in that particular area. There would thus be cases in which district municipalities would not contain smaller local municipalities that covered the entire geographic area, but would instead consist of a single district municipality. This would give effect to the constitutional requirement that the country had ‘wall-to-wall coverage’ with either metro municipalities or district municipalities.

Dr Bouwer explained that this was important because there were certain provinces that had created a Section 12 Notice for the district municipality as well as for each local municipality within that district municipality. Other provinces had however opted for a single Sction 12 Notice for the entire district municipality, and that same notice would then also provide for the establishment of local municipalities. It was for that reason that some of the schedules reflected a repeat of the same notice for different municipalities.

Mr M Malahlela (ANC) sought clarity on the reason for the lack of uniformity with regard to the Section 12 Notices.

Dr Bouwer responded that it was a matter of provincial autonomy, as the MECs had been allowed to decide how the Section 12 Notice would be constructed. Both the Municipal Structures Act and the Municipal Systems Act had been the subject of constitutional litigation when the issue of the Section 12 Notices was being considered, and the balance of power between the national and provincial spheres of government had to be taken into account. It was for that reason that provincial autonomy had been accommodated as far as possible.

Clause 2: Consequential amendments
Subclause 1
Dr Bouwer explained that the transitional arrangements for the existing CBMs required a Section 12 Notice from each of the two MECs, because a joint administration approach had been decided on in 2000. Thus, in the case of the Tswane Municipality, both the Gauteng MEC and the North West MEC would have to issue a Section 12 Establishment Notice. The two notices would be identical, save that one would be issued by the North West MEC whereas the other would be issued by the Gauteng MEC. Consequently, there would be a single demarcation but with two maps published, because the MDB would publish the same map in each of the provinces concerned.

Using the Tswane example again, the purpose of Clause 2(1) would be to deem the demarcation in the Gauteng provincial gazette to be the demarcation of the future Tswane Municipality, with the same municipal boundaries, which would then only fall within the Gauteng province. This provision thus fast-tracked the demarcation process. All those demarcations were listed in Schedule 2 of the Bill. The second column reflected the current demarcation, which was the 18 July 2005 Government Gazette notice. The third column indicated the new designation of the new Tswane Metro, which was reflected in the 19 August 2005 Government Gazette notice. The last column stipulated that the new Tswane Metro would only fall within the Gauteng province.

The Chairperson contended that the third column was technically not needed, because the demarcation in the second column remained unchanged.

Dr Bouwer answered in the affirmative, and stated that the decision was taken to include the last column in the interests of clarity. Furthermore, it was technically a new municipality because the CBM Tswane had to be disestablished and a new Tswane Metro had to be established in a single province. The Department of Provincial and Local Government had decided to include the third column to make it clear that the new Tswane Metro in Gauteng should be regarded as the successor in law of the old CBM Tswane. Such clarity should also avoid potential litigation.

The Chairperson asked whether the Bill specifically referred to the disestablishment and re-establishment of the municipality concerned.

Dr Bouwer answered in the negative, as that was dealt with in the Section 12 Notice. In the Tswane example, the North West MEC would simply repeal his Section 12 Notice in respect of Tswane.

Subclause 2
He continued with the briefing and indicated that 2(2) stipulated that if the new demarcation was deemed, the MEC would either have to issue a new Section 12 Notice or he would have to amend the existing notice. This involved an elaborate consultation and public comment process. In order to fast-track the process, Clause 2(2) stipulated that the Section 12 Notice of the receiving province would be deemed to be the properly issued notice of the municipality that would now fall only within that receiving province. Thus in the Tswane example, the Section 12 Notice issued by Gauteng in terms of the cross-boundary Tswane would be regarded as the official Section 12 Notice of the new Tswane Metro falling only within Gauteng.

Dr Bouwer stated that there was unfortunately a complicating factor in the Tswane Metro example. The Gauteng province has seized the opportunity in this fast-tracking process by consolidating all the amendments they had effected to their Section 12 Notices since 2000 into a single Section 12 Notice under this provision. This made for ease of reference. This was reflected in the first column of Schedule 3, which indicated the very recent Gauteng Section 12 Notice 3585 of 2005. Other provinces had not done that, and it was for that reason that Schedule 3 would reflect older dates for those provinces’ Section 12 Notices.

Schedule 3 indicated that the Limpopo Province Section 12 Notice for the Sekhukhune District Municipality referred to Notice 302 of 2000, and that Notice 302 of 2000 had been repeated in the schedule for all other Limpopo municipalities that would now be altered. The was because Limpopo had opted to use a single Section 12 Notice for the Sekhukhune District Municipality and each of the local municipalities within its jurisdiction.

Subclause 3
Dr Bouwer informed Members that the Department of Provincial and Local Government had realised in anticipation of the local government elections, that the envisaged municipalities dealt with in the Bill were technically not yet in existence. Wards however needed to be demarcated for the local government elections and Subclause 2(3) allowed the MECs to take any necessary steps to prepare those municipalities for the local government elections. Subclauses 2(1)-(3) concluded all the consequential arrangements that needed to be made for the first category of CBMs.

Subclause 4
Dr Bouwer informed Members that this provision dealt with the second category of CBMs, as explained earlier. Subclause 2(4) followed the same principles as the previous portions of Clause 2, save that this provision did not deal with a finalised current municipal demarcation that could simply be transplanted. In this case, the Municipal Demarcation Board (MDB) had to arrive at proposed demarcations. Thus all the demarcation proposals for this category of CBMs would refer to the 19 August 2005 Government Gazette notice, which was reflected in the first column of Schedule 4.

The Umzimkulu Local Municipality provided a good example. Umzimkulu was the small ‘island’ in the Eastern Cape that fell within the KwaZulu-Natal province, and was completely surrounded by the KwaZulu-Natal province. The MDB could not even begin to make preliminary demarcations for the new Umzimkulu Local Municipality that would fall within KwaZulu-Natal, because its relocation into a new province was not yet supported by a Constitutional amendment. Thus subclause 2(4) employed the notion of a proposed demarcation which, when read together with the Constitution Twelfth Amendment Bill which complemented the realignment of the provincial boundaries, would then constitute the proper demarcation of the Umzimkulu Local Municipality. The wording of 2(4) was identical to that of 2(1), save that 2(4) referred to the "proposed demarcation".

The Chairperson asked to what the word "designation" in the second column of Schedule 4 referred. Dr Bouwer responded that it was the official code used by the MDB.

Dr Bouwer continued that Subclause 2(4)(b) required the assistance of the provinces because the proposed Section 12 Notice had no legal status as it was merely reflected visual representation of the proposed demarcation, for when the Constitution Twelfth Amendment Bill complemented the Bill. He emphasised that in itself, the proposed Section 12 Notices had no legal status, as it was merely a proposal that contained the map of the proposed new demarcation in the new province.

He stated that 2(4)(b) now stipulated that the proposed Section 12 Notice published by the MEC would be fast-tracked to become the proper Section 12 Notice on the day that the provincial boundaries were redrawn by the Constitution Twelfth Amendment. Clause 2(4)(b) should be read with Schedule 5.

Dr Bouwer informed the Committee that 2(4)(c) was identical to 2(2)(b), and 2(4)(d) allowed for the preliminary steps that needed to be taken in anticipation of the local government elections. These were all the consequential arrangements that the Department of Provincial and Local Government had identified as being necessary to fast-track the local government compensation changes that arose from the realigning of the provincial boundaries in the Constitution Twelfth Amendment Bill.

The Chairperson asked at what point the Section 12 Notices in 2(4)(b) would take legal effect. Dr Bouwer replied that they would become effective when the Bill became law. The Bill could not however effect those notices unilaterally because it needed the Constitution Twelfth Amendment Bill to first be enacted in order to give effect to the new provincial demarcations contained in that amendment Bill. Thus the two Bills needed to be processed and enacted simultaneously, and would have to come into operation at the same time as well. Both Bills would come into operation at midnight on the eve of the local government elections. The very same procedure had been followed in the 2000 local government elections.

Mr Malahlela asked whether the two different approaches employed by the MECs with regard to the Section 12 Notices would have any negative effect on the Bill. Dr Bouwer answered in the negative because both the Bill and the schedules accommodated both forms of the Section 12 Notice.

The Chairperson asked whether the schedules accommodated the new Gauteng Section 12 Notices. Dr Bouwer answered in the affirmative, and read out one of the Gauteng MECs newly published Section 12 Notice 3584 of 2005, which related to the Tswane Metro:
"I, K D Mahlangu, MEC for Local Government, hereby publish for general information a proposed notice as envisaged by Section 12 of the Structures Act, for the establishment of municipalities within the province of Gauteng as reflected in the proposals for new demarcations published under the government notice of 19 August 2005".

He stated that all those Section12 Notices had similar wording, which clearly indicated that it would accommodate the new demarcations in the 19 August 2005 Government Gazette.

Clause 3: Repeal of laws
Dr Bouwer indicated that this clause outlined all the legislation on cross-boundary municipalities that would need to be repealed. The list of legislation was reflected in Schedule 1 of the Bill.

Clause 4: Savings
Dr Bouwer explained that this clause had been effected when the government had realised the impact that the realignment of municipalities would have on the local government dispensation. Clause 4(1) provided, for example, that people with North West vehicle registration plates could continue to use those for the time being, and the trading licences of traders in the North West province would remain in force during the transitional period until the Gauteng province made new arrangements.

Dr Bouwer said that 4(2) stipulated that the MEC could amend the Section 12 Notice to regulate any legal, practical or other consequence that could arise as a result of the transition. This provision was aimed at accommodating any funds that needed to be transferred from one municipal area to another. This did not relate to a provincial function or the transfer of provincial funds. The clause was thus a ‘catch-all provision’ aimed at catering for any possible future eventuality.

The Chairperson proposed that the "may" in 4(2) be replaced with "should", to ensure that there was a transitional mechanism for the Section 12 Notice. Dr Bouwer disagreed. The "may" was not referring to whether the Bill granted the power to the MEC to perform the function, but instead distinguished between situations in which it would be applicable and when it would not be necessary.

The Chairperson proposed that 4(1) be amended to specifically refer to municipalities, as the current wording created the impression that the provincial sphere was being referred to.

Dr Bouwer replied that the differentiation between the local government and provincial government sphere was effected in the clause. The Section 12 Notice could not be used to usurp provincial government powers and allocate them instead to the local government sphere. The difference between this arrangement and the transitional arrangements that dealt with the transfer of provincial functions in the rest of the Bill, was that this clause addressed the relationship between the citizen and government. Thus where something was issued under provincial jurisdiction, Clause 4 safeguarded the interests of the citizen. He stated that 4(1) was thus not intended to deal with intergovernmental relations where, for example, two provinces had to contract to resolve the re-alignment of provincial demarcations. Subclause 4(2) had been taken directly from Section 12 of the Structures Act, and sought to regulate the intergovernmental relationship between municipalities.

The Chairperson reiterated her earlier proposal that "may" be replaced with "should" to add certainty that the legal, practical or other consequences would be relocated, when the need arose. As this was merely a briefing on the Bill, she requested the Department of Provincial and Local Government to bear her concern in mind.

Clause 5: Short title and commencement
Dr Bouwer indicated that the clause stipulated that the provisions that allowed the MECs to make preparations for the local government elections would immediately come into effect upon promulgation of the Bill. The remainder of the provisions in the Bill would only come into effect upon a date determined by the President, which would be the same date for the Constitution Twelfth Amendment Bill.

Concluding remarks
Mr S Mshudulu (ANC) [Provincial and Local Government Portfolio Committee] noted that there was a need for healthy consultation with the provinces to ensure that the fast-tracking took place smoothly.

The Chairperson agreed and stated that Members of the Justice Committee were slowly becoming familiar with the manner in which the intergovernmental relations mechanism operated. The briefing had clearly illustrated the relationship between the Bill and the Constitutional Twelfth Amendment Bill. A general transitional mechanism that dealt with assets, liabilities and obligations would have to be incorporated. This would require the provinces to reach agreement by a certain stage.

The meeting was adjourned.