Constitution Twelfth Amendment Bill: deliberations

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT; PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEES; LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE: JOINT MEETING
25 October 2005
CONSTITUTION TWELFTH AMENDMENT BILL: DELIBERATIONS

Chairpersons: Ms F Chohan-Kota (ANC); Mr L Tsenoli (ANC) [Portfolio Committee on Provincial and Local Government]

Document handed out
Constitution Twelfth Amendment Bill [B33–2005]
Proposed Amendment to transitional arrangements in Clause 4

SUMMARY
The State Law Advisors explained that Sections 74(8) of the Constitution stipulated the provincial legislatures had the ultimate say in approving those provisions of the Bill that altered their provincial boundaries, and if those provincial legislature decided not to approve a provision of the Bill that altered its provincial boundaries that specific provision would lapse. The remaining provisions of the Bill would however remain unaffected, and could be deliberated upon by Parliament.

The Department of Provincial and Local Government presented three different options on the transitional arrangements regarding provincial assets and liabilities. The provisions general in nature and formulated broadly as the findings of the provincial co-ordinating committees were still awaited. The Committee asked whether civil litigation claim instituted against the releasing province would be transferred to the receiving province, whether the civil servants employed in the releasing province would all be transferred to the receiving province and whether National Treasury was of the view that the Bill had possible financial implications on the provincial sphere.

MINUTES
The Chair informed Members that the State Law Advisors were requested to indicate the process that would be followed by Parliament in passing the Bill, and the powers of the provinces in approving or rejecting the Bill..

Powers of Provincial Legislatures to approve the Bill
Ms Razak, State Law Advisor, stated that the Bill fell squarely within Section 74(3)(b)(ii) of the Constitution as it related to the alteration of provincial boundaries. Sections 74(8) was important because it stipulated that the NCOP may not pass the Bill unless those provisions of the Bill that altered the boundaries of the provinces concerned were actually approved by the legislatures of the provinces concerned. Those provincial legislatures thus had the ultimate say in approving those provisions that altered their provincial boundaries. Section 74(8) clearly stipulated that, despite Section 74(3)(b), the NCOP would not be able to approve the Bill if those provisions concerned were not approved by even one of the affected provincial legislatures. Thus if the provincial legislature decided not to approve a provision of the Bill that altered its provincial boundaries, that specific provision would lapse. No further deliberations on that specific provision could then take place, and it would effectively be removed from the Bill. The remaining provisions of the Bill would however remain unaffected, and could be deliberated on by the NCOP and National Assembly. This was the effect of Section 74(8).

The procedure that was just outlined was replicated in Joint Rule 74(2) and (3), and gave effect to the process stipulated in Section 74(8). Joint Rule 174(4) outlined the procedure to be followed by the National Assembly in deliberating on those provisions that had not lapsed, and Joint Rule 176 outlined the corresponding process in the NCOP.

She concluded by stating that Section 74 thus made it clear that the affected provincial legislatures had the power of vito over the NCOP and the National Assembly, and Section 74(3) did not apply at all.

Discussion
Dr P Bouwer, Department of Provincial and Local Government Manager: Legal Services, stated that the provisions in the Bill were so intricately interlinked that he was of the view that if one of the provisions were not approved by the provinces, then the entire Bill would lapse.

The Chair disagreed with Dr Bouwer, as she was under the impression that the schedules would accommodate those provinces.

Dr Bouwer replied that it would not make sense to insert a schedule to the Constitution that dealt with only two or three provinces that objected to the provisions. It was also not possible to allow for two or three cross-boundary municipalities (CBMs) to remain. The result would be areas which were not covered by municipalities, and that was not in line with government’s policy on wall-to-wall municipalities throughout the country.

The Chair stated that she did not agree with Dr Bouwer. She contended that those areas that would not fall under a municipal district could revert to the old order and fall under the requisite magisterial district. That would still give effect to government’s policy on wall-to-wall municipalities. She admitted that that arrangement was not desirable, but it was also not impossible.

Mr J Jeffrey (ANC) reminded Dr Bouwer that the maps that reflected the final demarcations had not yet been decided upon, as the Bills were still being deliberated upon. The provinces had a chance to voice their views on the Bill when the Justice Committee called for submissions, and they still had time to make submissions at any point before the National Assembly passed the Bill.

He requested both the Department of Provincial and Local Government and the State Law Advisors to assist the provincial legislatures in drafting resolutions on the Bill in a manner that clearly motivated their points of concern. That needed to be done to remove any uncertainty as to their views.

The Chair stated that the last point made by Mr Jeffrey was important, as the actual views of the provincial legislatures needed to be gained.

Mr P Smith (IFP) [Portfolio Committee on Provincial and Local Government] sought clarity on the problematic municipal areas.

The Chair replied that the Municipal Demarcation Board (MDB) received maps with the demarcations proposed by the Minister, and subsequently sought public comment on those maps. The MDB then effected changes to those maps in accordance with the public comments received, and continued to seek public comment on those new maps. This was a cause of much confusion and did not facilitate the process at all as it created a disjuncture. The MDB has been requested to indicate the progress it has made with that second process.

Transitional Arrangements
Dr Bouwer informed the Committee that the Minister had written to all nine Premiers and requested feedback on the views of the provinces on the agreements reached within each province on the proposed demarcations. Responses from those provincial co-ordinating committees were expected within the week, and they would be conveyed to this Committee. The document distributed to Members was merely a draft document and proposed options for consideration, as the Department of Provincial and Local Government was still waiting to receive those arrangements decided upon by the provinces.

The document proposed three options to amendments in Clause 4 of the Bill, which dealt with the transitional arrangements.

Option 1
This formulation suggested the insertion of a new Item 24A in Schedule 6 of the Constitution which proposed that all the immovable provincial assets would be relocated to the receiving province, and that the registrar of deeds must amend the deeds to reflect that transfer of assets. The movable assets, rights, obligations etc. would follow the immovable asset in being transferred in toto to the receiving province. The option did however allow for the provinces to reach an alternative agreement as to the vesting of the movable asset, rights etc. He stated that this option did not however cover functions, which were of a more long-term basis.

Option 2
Dr Bouwer explained that this was a more comprehensive formulation and covered every aspect relating to the provincial governments concerned, as reflected by the heading. This option also caters for functions, which Option 1 did not. This option stipulated that all the immovable property, movable property, right, obligation, duty, liability and function exercised by the releasing province would be transferred to the receiving province, thus making it clear that everything followed the relocation of the function. It also required the registrar of deeds to amend the deeds to reflect that transfer of assets, which was aimed at fast-tracking the process.

Option 3
This formulation was aimed at removing the fear that contractors would be able to use the leeway granted to the provinces in Option 1 to conclude alternate arrangements to walk away from completing a contract in the releasing province. It also prevented the releasing province from dumping its failed projects onto the receiving province. The proposed 24A(1)(b)(ii) allowed an alternate arrangement to be reached between the two provinces to ensure that contractors did not walk away from honouring their contracts in the releasing province, and could also be invoked to ensure the releasing province did not lose its flagship projects to the receiving province. Government tender contracts currently contained an "adverse government practice" clause which allowed them to walk away from contracts that were affected by a change of legislative regime. They did not have to prove that the new regime was detrimental to them, but merely that it was ‘adverse’. This option thus fell between the first and second options, and he requested the State Law Advisors to consider it.

The proposed 24A(1)(a) in this option stipulated that the immovable assets would be transferred to the receiving province, and 24A(1)(b) provided that the releasing and receiving provinces must reach agreement on how the rights, obligations, duty or liability would be allocated between the two provinces or retained by the releasing province. The proposed 24A(2) was identical to the formulation in Option 2.

Discussion
Ms S Camerer (DA) proposed that the word "necessary" be inserted before "to register" in the proposed 24A(1)(b) in Option 1, as it restricted the scope of documents to only those related to the deed.

The Chair noted that the Committee agreed to the proposal, but requested Dr Bouwer to check the wording in the Black Administrative Act in this regard.

Mr Jeffrey asked whether civil litigation claim instituted in the one province against its MEC for Health, for example, would then be transferred to the receiving province.

The Chair responded that the case could simply be amended to join the MEC of the receiving province. This was not a major problem. She asked why the courts could not simply be allowed to decide which official would be responsible.

Dr Bouwer responded that civil claims were not accommodated in the current wording, and stated that he would consider the matter further.

Mr Jeffrey stated that the response of the provincial legislatures must be sought on the transitional arrangements, as required by Section 74(8), because the new demarcations affected seven of the nine provinces. He was of the view that Option 1 was a non starter.

The Chair agreed that it was very important to gain the views of the provinces. She stated that the Bill must ensure legal certainty regarding the transfer of the assets and liabilities of the releasing province to the receiving province.

Mr Smith stated that huge problems were experienced in 2000 when the number of municipalities were reduced and amalgamated, and questioned whether the wording employed in that legislation could be used here.

The Chair proposed that a sunset clause be inserted that would stipulate that if the provinces did not reach agreement within a certain period of time, all the assets and liabilities would transfer to the receiving province.

Ms N Mahlawe (ANC) asked what would happen to the civil servants that were employed in the releasing province after the transfer to the receiving province. She believed that Option 3 was the preferred approach in order to ensure service delivery.

Dr Bouwer replied that the structure of the civil service at provincial level made the horizontal transfer of personnel much easier than it was on the national level. He proposed that the outcomes of the provincial co-ordinating councils be awaited.

Ms Camerer indicated that she was not in favour of Option 3 as it allowed the provinces time to renegotiate and take the backdoor. She proposed that the provinces instead be required to reach an agreement upfront.

Mr Jeffery asked whether these provisions on the transitional arrangements would be inserted in the Cross-Boundary Municipalities Laws Repeal Bill as well.

The Chair replied that an empowering clause could be inserted in the Constitution that would stipulated that the provincial legislatures must be empowered to deal with the transitional arrangements. A similar provision could be inserted in the Cross-Boundary Municipalities Laws Repeal Bill as well, but the matter would have to be considered further.

Dr Bouwer responded that it could be added in Section 24A. As stated earlier the provincial co-ordinating committees were still gaining the views of the provinces on the proposed changes, and it was decided that generally-formulated liability provisions would be more appropriate at this stage.

Mr Smith contended that the options indicated that the Bill might have financial implications on the provincial governments involved, and thus the National Treasury must also comment on the transitional arrangements.

Dr Bouwer replied that the Department of Provincial and Local Government and National Treasury were already working together on the possible financial implications

Ms C Johnson (ANC) asked whether Option 2 would allow for the functions to be transferred but not the accompanying funds.

Dr Bouwer replied that the funds did follow the function, but the equitable share of each province made matters a bit more complicated.

Mr S Mshudulu (ANC) [Portfolio Committee on Provincial and Local Government] asked the Department of Provincial and Local Government to indicate the lessons that have been learnt with regard to transitional arrangements since the 2000 municipal realignment process. He asked whether the backlogs in particular municipalities was being dealt with.

Dr Bouwer responded that the 2000 transition went smoothly, but there were still some municipalities that had not completed the migration. The Department of Provincial and Local Government had already identified the problematic municipalities and was currently addressing the backlogs. The Municipal Infrastructure Grant backlogs must also be dealt with.

Mr Smith sought clarity on the timeframes for passing the Cross-Boundary Municipalities Laws Repeal Bill, as he was under the impression that it would have to passed at the same time as this Bill.

Dr Bouwer explained that the two Bills complemented each other because both were needed for the local government elections. They will both exit Parliament at the same time but there was no time limit on the passing of the Cross-Boundary Municipalities Laws Repeal Bill, which meant that Parliament still had time to deliberate on that Bill after it had passed this Bill.

Concluding remarks by Chairperson
The Chair stated that more general transitional arrangements needed to be drafted that reflected the views of the provinces. This needed to be done urgently.

The meeting was adjourned