2010 FIFA World Cup South Africa Special Measures Bill [B13-2006]: submissions from Department of Health & ABSA

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Meeting Summary

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Meeting report

Date of Meeting:  13 Jul 2006



13 July 2006

Chairpersons: Mr B Komphela (ANC) [National Assembly]; Mr B Tolo (ANC) [Mpumalanga] 

Documents handed out
2010 FIFA World Cup South Africa Special Measures Bill [B13-2006] (reintroduced)
Second 2010 FIFA World Cup South Africa Special Measures Bill [B16-2006]
ABSA written submission

During the morning session the State Law Advisor addressed outstanding issues on the search and seizure powers of volunteers, the declaration as a stadium or venue and the issue of concurrent jurisdiction on sport. The Department of Health then briefed the Committee on its role in Clauses 4 to 6 of the Second 2010 FIFA World Cup Special Measures Bill. 

The Committee asked whether the Department of Health would be waiving its prohibition on tobacco products as well, especially smoking in public areas, and whether Clause 4 created scope for illegal substances such as marijuana to be used by a foreign medical contingent. The State Law Advisor cautioned against a Committee proposal that the terms ‘import’ and ‘export’ be given a special meaning for the purposes of the Bill, as the Medicines Act already laid down very specific meanings. The Department of Health was asked to explain how it would monitor the importing of the drugs to guard against drug smuggling.

The Committee discussed ABSA’s submission on the 2010 FIFA World Cup South Africa Special Measures Bill. The debate focused on the issue of compensation for loss of stadia naming rights and access to its hospitality suites at stadia during the 2010 World Cup. ABSA believed that someone should be held financially accountable for any temporary financial loss in relation to these rights. Members believed the matter could be resolved in negotiations and would not require legislating within the 2010 FIFA World Cup South Africa Special Measures Bill. Questions were raised about the constitutional status of suspending naming rights.

Mr Tolo requested the State Law Advisor to respond to the outstanding issues that arose at the meeting of the previous day. 

Search and seizure powers of volunteers
Mr M Ncolo, Senior State Law Advisor, stated that Section 334 of the Criminal Procedure Act of 1977 stipulated that the ‘Minister of Justice may declare certain persons as peace officers for specific purposes’. For the present purpose that meant for the 2010 FIFA Soccer World Cup. Thus the Minister of Justice was able to make a declaration declaring volunteers as peace officers. He stated that the very recent Constitutional Court case ofMagajane v Chairperson North West Gambling Board and Others CCT 49/05 dealt precisely with the search and seizure powers of volunteers.

Declaration as a stadium or venue
He explained that the stadia to be used for matches at the 2010 FIFA World Cup were already declared by the Minister of Sport and Recreation (the Minister) in March 2006. There was therefore slight difference in the 2010 FIFA World Cup South Africa Special Measures Bill (the Section 75 Bill) between stadia and venues. During previous deliberations it was indicated that even hotels could be designated as ‘venues’ for the purposes of the 2010 FIFA Soccer World Cup, but the reality of the matter was that the Minister has not yet declared the venues, only the stadia. He stated that Adv G Hoon, Principal State Law Advisor, informed him that since the stadia had already declared, Clause 2 might have to be redrafted to perhaps stipulate "the following stadia have been declared as stadia for the purposes of the 2010 FIFA Soccer World Cup". An alternate proposal was the deletion of the portion of the clause that referred to ‘stadia’, and for it to refer only to ‘venues’. The Committee would have to decide on the matter.

Concurrent jurisdiction on sport 
Mr Ncolo stated that while the Schedules to the Constitution referred to provincial sports, the 2010 FIFA World Cup was a national sporting event. The State Law Advisors were thus of the opinion that for that reason the national government had the power to make decisions and thus, by implication, the Minister was the official authorised to make declarations on the 2010 FIFA World Cup in South Africa.

Ms M Ntuli (ANC) [National Assembly] was of the view that the removal of any reference to ‘stadium’ would confine the ambit of the clause to specific sites only. Her concern was that if natural disasters struck and destroyed one of the designated stadia, it meant that no other venue or site could take its place. She called for the provision to reflect a flexible and accommodating approach.

Mr C Frolick (ANC) [National Assembly] requested Mr Gideon Boschoff, Legal Advisor from the Department of Sport and Recreation, to provide full details of the declarations made with regard to the stadia, or to indicate whether it was only an announcement.

Mr T Louw (ANC) [National Assembly] asked whether there were other venues that still had to be declared as designated venues by the Minister.

Mr Boschoff replied that Dr Pahla would be able to answer the question in greater detail on the following day. He indicated however that he was not sure whether the MECs were involved in the process in Clause 2, and the legislation might have to be clarified to spell out the nature of that consultation. The reference to ‘stadium’ might then have to be deleted because the MECs were not consulted on that designation process. The provisions relating to the venues would be retained and amended to stipulate "the Minister, after consultation with the relevant MEC".

Mr Tolo ruled that the Committee would make its decision at a later date during formal deliberation stage. 

The Chair agreed.

Department of Health on Second 2010 FIFA World Cup Special Measures Bill
Mr Cornelius Malivhadza, Department of Health: Legal Services, stated that his input would focus on Clause 4 to 6 of the Bill.

Clause 4: Accreditation of foreign medical contingents and approval of medicines, Scheduled substances and medical devices
He explained that the clause granted approval for a foreign medical contingent (FMC) that would be providing medical treatment to a participating team. The clause granted that FMC approval to provide medical treatment for the duration of the 2010 FIFA Soccer World Cup. Accreditation would be granted by the Minister of Health, on application in writing by FIFA. The application should mention the full names and passport number of every member of the FMC concerned.

Clause 5: Scope of authority of accredited foreign medical contingent
He indicated that the clause limited the scope of the accreditation by allowing the particular FMC to provide medical treatment to their specific team alone, and only for the entire period of the 2010 FIFA World Cup.

Clause 6: Suspension of prohibition on sale of unregistered medicines, registration of and community service for certain health care providers 
Mr Malivhadza explained that the clause waived the requirement in the South African Medicines Act which stipulated that a medicine must first be registered before it could be used in South Africa. It thus allowed a FMC to use a medicine that was not registered under the Medicines Act. That was reflected in Clause 6(1)(c).

Furthermore, the Pharmacy Act required all pharmacists practicing within South Africa to be registered, and that they must have completed a period of community service in South Africa. Clause 6(2)(b)(i) waived that requirement and now allowed any member of an FMC to dispense pharmaceuticals to their team for the period of the 2010 FIFA Soccer World Cup, even though those members had not registered as pharmacists in South Africa not had they completed community service within South Africa. The same waiver applied to doctors and nurses in that FMC, as reflected in Clause 6(2)(ii) and (iii).

He wished to bring it to the Committee’s attention that the Nursing Bill was in the Department of Health’s pipeline, and had not yet been passed by Parliament. It required a person, before being allowed to practice as a registered nurse, to first complete a course of community service within South Africa. This must be borne in mind by the Committee when it eventually dealt with that piece of legislation, as the Second 2010 FIFA World Cup Special Measures Bill might have to be amended accordingly. 

There was a technical amendment to Clause 6(1)(c) (iv). The reference to Section 22A of the Medicines and Related Substances Act of 1965 should properly read Section 22C. 

He was concerned with the use of ‘must’ in Clause 4(1), as it required the Minister of Health to accredit every single member of an FMC, even if such accreditation was not deserving. The provision as it stood thus required the Minister of Health to grant accreditation to a member of an FMC who had, for example, been found guilty of doping. That was clearly undesirable. It should be replaced with ‘may’ in order to give the Minister of Health the discretionary power to consider each application, and to grant accreditation on the merits of each case. 

With regard to Clause 3, the Department of Health had initially provided the guarantee. An agreement was then reached with the Department of Trade and Industry that it would take over that guarantee, as the matter was regulated by that department. The Department of Health thus played no role in any provision in the Second 2010 FIFA World Cup Special Measures Bill that dealt with liquor.

He concluded by informing the Committee that the Department of Health was pleased with the manner in which the Second 2010 FIFA World Cup Special Measures Bill was drafted, and it reflected all its guarantees.

Mr M Thetjeng (ANC) [Limpopo] asked whether the Department of Health would also be waiving its prohibition on tobacco products as well, especially smoking in public areas.

Mr Malivhadza answered in the negative. The Department of Health’s guarantee indicated that the Minister of Health "did not want to move an inch on tobacco". That Act thus remained as it currently stood, and all the prohibitions applied to the 2010 FIFA World Cup as well.

Mr M Netshitenzhe, Director: Department of Trade and Industry, stated that the Department of Trade and Industry and Department of Health agreed, for the following reasons: when the Department of Health initially considered the advertisement and marketing at the 2010 FIFA World Cup, the Department of Trade and Industry stood firm on the fact that the use of trademarks or advertisements of sponsors that might target minors, and would thus be banned for certain sporting codes. The Department of Trade and Industry worked with the Department of Health and demanded FIFA to provide a list of its sponsors and potential sponsors, and government informed FIFA that it would have to reconsider the matter if a tobacco company was found on the list of sponsors. FIFA however gave the undertaking that that would not be necessary.

With regard to Clause 3, the relevant government departments were consulted, and they would each be addressing the Committee on the matters.

Mr Louw asked whether Jamaica would be allowed to use marijuana under Clause 4, if they qualified for the 2010 FIFA World Cup, because that nation regarded it as a herbal remedy. 

Mr Cornelius responded that the matter was addressed in Clause 4(3)(a). If the Minister of Health was of the opinion that the substance could not be used or was not really a medicine in terms of international convention, she could attach that condition and not grant the accreditation. 

Mr Tolo agreed. FIFA was strong on its anti doping position, and would not allow the use of marijuana.

Mr Frolick agreed with the Chair. He stated that marijuana was illegal and, as such, was a banned substance. If FIFA detected it in players, they would be banned.

Mr Netshitenzhe explained that certain countries prescribed certain agreed doses of banned substances for patients, such as marijuana. The Minister of Health would thus have to apply her mind to each case.

Mr Boschoff added that South Africa was currently in the process, via the Minister of Foreign Affairs, of becoming a signatory to the United Nations anti-doping convention, which banned marijuana. Secondly, the Drug-free sport Amendment Bill was in the Parliamentary pipeline and would be dealt with by the Committee soon.

The Chair stated that marijuana would not be allowed at all, because FIFA recognised it as a banned substance.

Mr Tolo stated that the use of the term ‘export’ in Clause 4 was a cause of concern, because his understanding was that ‘export’ implied to sell a product in another country for a profit. He proposed that it refer instead to repatriation.

Mr Thetjeng proposed the terms ‘import’ and ‘export’ be specifically defined for the purposes of the Bill, because the Bill did not appear to intend the normal dictionary meaning.

Mr Ncolo cautioned against a proliferation of meanings, as the Medicines Act already laid down very specific meanings.

Mr Boschoff failed to see the problem with the use of the terms in the clause, as they were clear.

Mr Tolo agreed, and proposed that the Committee not deviate from the well-defined meanings in the Medicines Act.

Mr Louw asked how government would monitor the importing of the drugs, and how it would ensure that the FMC used the medicines for the stated purpose. He asked whether the smuggling in of illegal substances would be prevented.

Mr Cornelius responded that the approval would be granted by the Minister of Health in consultation with the Medicines Control Council (MCC). In terms of enforcement and monitoring, the work of the law enforcement officers of the MCC would not be precluded from applying to the 2010 FIFA Soccer World Cup. He thus assured the Committee that all checks had been put into place.

Mr Litho Saku, Chairperson of the Eastern Cape Portfolio Committee on Sport and Recreation, asked whether the nine MECs for Health were consulted at all.

Mr Cornelius stated that the matter was discussed at a meeting held on the Health Charter in February and March earlier this year, at which the MECs were present.

Mr Saku stated that the response did not satisfactorily answer his question. It created the impression that the Second 2010 FIFA World Cup Special Measures Bill would have to revert to a Section 75 Bill, especially as all the provisions on liquor and gambling etc. were being waived back to the jurisdiction of the national government.

Mr Tolo hoped that that would not be the case, as Parliament could not be made to "move to and fro".

ABSA submission on Second 2010 FIFA World Cup Special Measures Bills
Mr Edwin Roberts, Absa Head 2010 FIFA Soccer World Cup initiative, thanked the Committee for the invitation to address it. He introduced his colleague, Ms Avril Moodley, Legal Advisor ABSA, working with FIFA 2010 FIFA Soccer World Cup. 

Mr Roberts explained that ABSA’s primary concerns focused on the naming rights at and around the designated stadiums, as well as the issue of hospitality privileges such as stadia suites that had been given exclusively to FIFA’s key sponsors. 

The submission from ABSA raised concerns regarding the stadia naming rights as well as hospitality privileges (suites) linked to stadia sponsorship. They were particularly concerned about the contractual agreement the Department of Sports and Recreation (SRSA) had entered into with FIFA, which gave them the right to change the name of any stadium. This could possibly strip ABSA of their naming rights and hospitality associated with the ABSA stadium, which they believed would result in ABSA losing immeasurable value in terms of exposure that may have been generated. The submission called for a reconsideration of the agreement regarding naming rights.

The Chairperson asked Mr Netshitenzhe to respond to the submission.

Department of Trade and Industry response to the ABSA Submission

Mr McDonald Netshitenzhe (Director: DTI) expressed jubilation that South African business’s were crying out for opportunities to be involved in the event. He explained that when the process of working closely with FIFA had began two years ago, there had been those who had wished to see a tender process which would enable companies to participate in the event. However the first tier of sponsorship had in effect already long been closed. This tier represented the traditional sponsors of FIFA, which numbered about six. FIFA had already sealed this in negotiations and it was therefore not open for discussion. However tiers two and three had been opened. The Department had secured 30% of the LOC budget to go towards South African businesses in tier three.

He explained that legislation had already been passed regarding ambush marketing. With regard to the naming rights,he believed ABSA would have to negotiate with the FIFA Local Organising Committee (LOC). He stressed that the fact this was a once off event should be considered when talking about loss of naming rights. ABSA needed to take the organisers to the negotiation table on the matter and there might be some scope for some agreements to be made.

The Chairperson asked the legal advisers to provide legal interpretation of the submission
Mr Boshoff (SRSA: Legal Adviser) explained that he had listened to the comments made by Mr Netshitenzhe and fully concurred that the matter was an issue of business operations and as such needed to be dealt with by way of negotiations. Naming rights had not specifically been dealt with in the Bills. 

Adv M Ncolo, (State Law Adviser) agreed that this should be a matter for negotiation at a business level. He did not believe the issue was by any means closed. However, he believed the matters raised was a serious issue, which could have Constitutional implications. 

Adv Hoon (State Law Adviser) stressed that the Constitution could not be suppressed. He believed ABSA should take a business decision on the matter and engage the LOC in negotiations.

The Chairperson opened the floor for Members to ask questions.

Mr CT Frolick (ANC) sought clarity on what were the agreed stipulations in regard to the usage of the stadiums. He believed that agreements had been concluded regarding the use of the stadiums. He believed that it was at that level that negotiations for suits and reimbursements for potential loses needed to take place. He questioned the extent to which ABSA had engaged with the various stadium owners in trying to find solutions to the problem.

He said that he was been part of the Portfolio Committee's fact finding team to Germany. The team had found that stadiums needed to be absolutely "branding clean". No non-official sponsor would be allowed and even the tiniest logo would not be permitted anywhere in the stadium. Stadiums had to be renamed in Germany. The busses that were used were supplied by Mercedes Benz but the emblem of the buses had to be covered because Hyundai were the official sponsors. This was of course what the sponsors demanded. He was confident that the same scenario would have applied had ABSA been the preferred sponsor instead of FNB. This was what money was being paid for. 

He stressed that there were other business opportunities that would come out of the world cup, looking at the amount of money that would come into the country and would be generated by association from the event. ABSA would significantly benefit from the event. They would surely expand their customer base. He gave the example that in Germany the fact finding team had met the CEO of a certain company which was not officially associated with the event. It was very clear that the company had made significant financial gains from the World Cup. He felt that some kind of agreement could have been be made had the process of negotiations began. In terms of government business ABSA was in the forefront. There would be an increase of money that the government itself would have to handle and in that way different financial institutions associated with government would benefit because of the increased volumes of transactions.

Mr Thetjeng (ANC) concurred with other speakers that some of the issues raised by ABSA, should be dealt with at a business level. He commented that it would be difficult for government to legislate on matters that could better be resolved by business interactions. He suggested ABSA should engage in robust negotiations with the LOC.

Mr E Roberts (Head: Creative Alliance Management - ABSA) believed that the opportunities associated with the event were profound. He welcomed the constructive input from Members. He stressed that the World Cup was not just an event but a journey. Economic landscapes would be profoundly changed and there would be enormous financial value behind the event. However, not everyone would be winners and some would win more than others. He noted that a comment had been made about the impact on constitutional rights. The impact was around property and value associated with property. In this case one was dealing with fixed property to which enormous value was attributed.

He said that it would be like saying 'your house, with your number and address, would no longer be occupied by you but by someone else for the next two years'. From a business perspective, somebody should be held financially accountable for that economic loss. Where would the organisations that had less resources than ABSA go to gegotiate a fair and amicable settlement? He questioned who would assist in this process as he believed "the tide was rising". ABSA had developed a very good relationship with FIFA and they had been extremely accommodating. The basis of which the discussions had been held were indicative of an organisation that really appreciated the value of a brand. It was a testament to the quality of that negotiating ability that was indicative to why South Africa’s 2010 World Cup was already at this point probably one of the most healthy world cups investor wise that have ever been held.

Mr Solo (ANC) was concerned about the prospect of over regulating, He suggested that the committee should call the relevant bodies and the Department of Trade and Industry to assist in discussing the Bills. He felt the Committee should be cautious about taking business matters into the political arena. Surely ABSA's concerns were matters that could be resolved by a process of dialogue.

Mr R Reid (ANC) sought clarity on which other stadiums apart from the ABSA Stadium in Durban carried the ABSA name. He concurred with Mr solo that in terms of the two Bills it appeared to him that there was nothing else the Committee could do. However, he felt it would be beneficial for the Committee to here the views of FIFA representatives to enable it to resolve the situation. 

Mr Frolick recalled that when the fact-finding delegation had visited Germany they had made use of a certain airline. It was very apparent how that particular Airline had indirectly benefited from the World Cup process despite not being an official sponsor. He noted that there had been several court cases in Germany regarding naming rights but at the end day everybody had benefited from the world cup. He believed that ABSA's comments to be a natural capital over-reaction.

A Member commented that if a company was bulldozed recourse would be determined in terms of receiving compensation for that particular period. He believed property rights were constitutionally entrenched. ABSA was saying that in the event it or any other company had suffered loss of naming rights, there should be reasonable compensation. His understanding was that they were asking for a compensation mechanism which avoided going through the judicial process. 

Mr Netshitenzhe explained that South Africa had already committed itself to FIFA and if there were rights along the way that would be trampled upon, there would of course be the normal forums such as the judicial process to enable recourse. He believed there was no need for the Bill to mention compensation because the Constitution already entrenched property rights. The Bill should not mislead people on the matter of compensation because that would be wrong. 

Mr Roberts (explained the submission in context of what they requested. The submission had been a request to negotiate a compensation strategy for loss of naming rights. He stressed ABSA had an extremely good relationship which it would continue to foster with FIFA. The issue had certainly not been that ABSA lacked confidence at the negotiation table.

Ms Avril Moodley, ABSA thanked members for their Comments. She explained that they would go back to ABSA and review contracts. She stressed that there had been negotiations with the different stadiums and there might be a need to revise contracts because venues might change. 

The Chairperson thanked ABSA for the presentation and said that the input had been useful. He hoped that all outstanding issues would be resolved without going through the litigation route.

[PMG note: Minutes for the remainder of this meeting available shortly. Email info@pmg.org.za]



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