Constitutional Amendment Bills: hearings

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Justice and Correctional Services

18 September 2001
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

19 September 2001

Chairperson: Adv J H de Lange

Documents Handed Out:
Constitution of the Republic of South Africa Second Amendment Bill, 2001
Municipal Demarcation Board Submission (Document Awaited)
Western Cape Local Government (WECLOGO) (See Appendix)
Ministry of Community Safety Submission
UWC Community Law Centre Submission (Document Awaited)


The Municipal Demarcation Board, Ministry of Community Safety and UWC Community Law Centre presented submissions on the constitutional amendments in so far as they affected local government. These amendments dealt primarily with interventions in terms of sections 100,139 and 155(8). The submissions were not in favour of the national government enjoying concurrent jurisdiction in relation to interventions in municipalities. The consensus was that giving the national sphere of government this power would erode the principle of separation of power and would represent the first step in the complete abolition of the Provincial sphere of government.

Another of the main concerns was that the amendments would see the removal of the word 'executive' in sections relating to the usurping of power. The removal of this word would mean that the legislative power of a local government could be usurped. Solutions were considered, given that in some cases it would indeed be necessary for that sphere of government intervening to assume the legislative power as well as the executive power.

Demarcation Board

Mr Michael Sutcliffe said that the amendments relating to local government should be left out of the Bill as they were completely unnecessary. The matter was a policy issue which had been said to be a technical matter. However, he submitted, this was not true as the amendments fundamentally changed the present position (full submission available shortly)

Western Cape Local Government (WECLOGO)
Mr Michael Evans extracted the main points from their submission. [see Appendix for submission]

Joint Questions for the Demarcation Board and WECLOGO

Ms F I Chohan-Kota (ANC) asked WECLOGO whether there had been any constitutional problems encountered with regard to the Municipal Structures Act. Sections 34 and 35, relating to intervention, had not been tested yet.

Mr Sutcliffe, for the Demarcation Board, said that although he was not a Constitutional lawyer he knew that these sections had been deemed to be Constitutional.
Mr Evans, for WECLOGO, said that he too was sure that sections 34 and 354 in the Municipal Structures Act were constitutionally valid.

Ms Chohan-Kota said that on the fact of it the provisions created a situation where there was a 'first come first to intervene' mechanism. She wanted to know whether the Demarcation Board felt this was the case.

Mr Sutcliffe said he had no objection to the concurrency situation in the context of interventions. This position gave rise to a co-operative form of governance.
Mr Evans said that the concurrency of intervention worried him. Especially as provided for in section 100 of the Constitution. The Constitution outlined those areas in which the Provincial sphere of government would have the capacity to act. One of these was the ability to intervene in local government when necessary.

Mr S N Swart (ACDP) said that there was a perceived lack of capacity on the part of provinces and that this was what gave rise to the feeling that the National government should have recourse to intervene.

Mr Sutcliffe said that a certain arrogance had emerged, characterised by the view that Provincial and Local spheres of government had no capacity while the National Government did. Mr Sutcliffe contended that there were certain capacities that were found only at the provincial level. When the discussion turned to capacity the question becomes what kind of capacity is being spoken about. Mr Sutcliffe was not trying to say that either sphere had capacity to the exclusion of the other but that there needed to be co-operation between all spheres of government.

Ms Chohan-Kota said t was felt that the size of the FFC should be reduced because provinces tend to send people who do not the capacity or skills to perform their duty on this body.

Mr Sutcliffe said that this was acceptable, as it was the decision of the Province to send whomever they pleased. If this individual turned out to be inappropriate then that was a fact that the province would have to live with. However, the province could not be dictated to as far as whom they may send to the FFC.

WECLOGO was of the opinion that there was a logical reason for the initial provision for a representative for each province. Changing this position should therefore be done with a fair amount of caution.

Adv de Lange said that in his experience capacity was not the problem. The problem was instead the political will to intervene, which more often than not was lacking. The example given by Adv de Lange was of the Johannesburg municipality which found itself in great financial problems. Despite this fact the Provincial Administration saw fit not to intervene. This mechanism would thus facilitate the rectification of problems where there was an unwillingness to intervene on the part of that sphere of government who ordinarily would fulfill this function.
Adv de Lange continued; there was a comment made that the introduction of further intervention mechanisms would diminish the powers of the province. He submitted that the problem here was not the diminution of the powers of the province but that the problem related to the fact that there was now concurrency of jurisdiction in this area. The concurrency would create problems that would require comprehensive attention.

Western Cape Provincial Government

Mr E Pretorius represented the Western Cape Local Government (WCPG). He said the WCPG did not agree with amendments, as they were not needed. Firstly, because there were more than enough mechanisms providing for intervention in the Constitution at present. Secondly, he submitted that the Constitution was being amended to accommodate other Bills. Mr Pretorius said that the Municipal Finance Management Bill would not pass the Constitutional test as the Constitution stood. For this reason the Constitution was being amended to make this Bill constitutional. Mr Pretorius said that the Bill should be changed to meet Constitutional requirements and not the other way around.

Mr Pretorius then pointed out that parallel interventions, which would be made possible in terms of the amendment, were not favourable. He said that if this were to be so, then there would have to be greater clarity around the relationship between sections 100 and 139. Furthermore, the new provisions would result in the legal powers of the province being diminished.

Adv de Lange said that he was unable to see how the province's powers were diminished if there were the two powers, namely that of the province and that of the National Government, that ran along side each other with neither of them excluding the other. Adv de Lange asked how there could be a diminution of the legal powers of a province as opposed to the diminution of the political powers of a province.

Mr Pretorius pointed out that this could occur in the context of the oversight role played by the province. If there was a perceived crisis the provincial government may decide, for its own reasons, that it would not intervene. If the National sphere comes in and intervenes instead, then this is an undermining of the provincial sphere of government's choice not to intervene. This would mean that the oversight role traditionally played by the province would be overrun.

Mr Pretorius said that the proposed amendment to section 100 was unacceptable as it provided for direct intervention by National Government in local government. The amendment blatantly disregarded the province's role, which was provided for in the Constitution itself. Furthermore the amendment ignores the cascading design of the Constitution which provides that the provincial sphere of government has the capacity to intervene in local government. Mr Pretorius then said that WCPG took issue with the statement that provincial government lacked the capacity to intervene if necessary. He submitted that the WCPG had the capacity to fulfill its mandate and that it had yet to fail on any front.

Adv de Lange asked whether the WCPG had experienced any problems and had ever needed to intervene. Mr Pretorius said that there had been only minor problems which required support from the Provincial Government rather than full-scale intervention. Mr Pretorius then added that the amendment marked a radical departure from the Constitution as it stood. Adv de Lange asked whether by this Mr Pretorius meant that the Constitution could not be changed. Mr Pretorius replied that the Constitution could be changed but that there was something to be said for provincial autonomy. The issue he raised was not one of legality but simply a word of caution.

The other matter which the WCPG took issue with was the amendment dealing with the composition of the Financial and Fiscal Commission (FFC). The proposed amendment seeks to reduce the amount of representatives from 22 to nine. Mr Pretorius told the Committee that here it should be remembered that each province had differing interests and for this reason each province should have its own representative. Other considerations would be the fact that different provinces had different demographics, differing financial indicators, differing agricultural situations and other dynamic social and financial variables. Another issue raised here was the economic disparity between provinces. Mr Pretorius said that these were all reasons why each province should have their own representative on the FFC.

The next major point raised by the WCPG was the proposed amendment of section 228 of the Constitution. Mr Pretorius said that the WCPG was in favor of the present wording of that section. He pointed out that the amendment sought to remove the concept of tax base from this provision in the Constitution, while this concept would continue to exist in other legislation.

Adv de Lange reminded Mr Pretorius that he had said that each Province needed a representative on the FFC representing that province. Adv de Lange told the Committee that the FFC was an independent body and for this reason a province could not strictly speaking have a representative in this body as the FFC would then not be an independent body.
Mr Pretorius agreed but said that if one looked at the Constitution Certification judgement it is obvious that each province is to have a representative on the FFC. This representative would not strictly speaking represent "their" province but would instead supply the province with information and make known at the FFC the specific circumstances within that province.

University of the Western Cape, Community Law Centre

Mr Johan Metler presented on behalf of the UWC Community Law Centre (CLC). He argued that interventions were needed for two reasons. They were needed in situations involving financial problems or political problems. The current intervention mechanisms were provided for in the Constitution and the so-called Municipal Structures Act. The Constitution provided that, subject to monitoring and support, a province could issue a directive to assume responsibility for certain functions which cannot be properly performed by a municipality. The Structures Act on the other hand, through sections 34 and 35, provide that if a section 139 intervention is unsuccessful then the municipal council may be dissolved and a new one elected. These procedures are, however, limited in that they are restricted to instances where there has been a failure to fulfill an executive obligation. The National sphere of Government also has no powers of intervention.

The problems experienced with this system included its failure to address financial difficulties and the resultant political impasse.

Mr Metler then identified some points in terms of which the Bill could be criticised. Firstly, the Bill would harm the status of local government. The deletion of the word 'executive' would enable the Administrator to adopt by-laws. In effect if a municipality failed to fulfill a legislative obligation, for example not enacting legislation which it needed, this would enable the National sphere of Government to intervene and assume this power.

The second problem was that the proposed form of intervention would undermine the system of intergovernmental relations. The amendment ignores the framework of supervision which provides for mechanisms of monitoring and support. It would also result in the diminution of the NCOP review currently provided for, as it would not be needed. The amendment ignores the checks and balances provided for in section 139 of the Constitution and would result in the fragmentation of intervention powers. The intervention powers would be found in various sections of a number of acts. Furthermore there would be concurrent jurisdiction enjoyed by both the Provincial and National spheres of government.

The Community Law Centre proposed solutions to the problems they had illustrated above. The first suggestion was to retain legislative autonomy. Secondly, they proposed a new section 100A that would provide for national intervention in local government. Thirdly they suggested that the Province be enabled to dissolve in the case of political impasse. They also suggested the retention of the NCOP's power to review the intervention. Finally, they submitted that financial emergencies would have to fit into the current supervision framework, and intervention on this basis should only be allowed where it was appropriate.

CLC also submitted that the word 'executive' in sections 100 and 139 be retained. In relation to financial emergencies Mr Metler added that they should be made a part of the national intervention framework with the role of the court being entrenched in the Constitution. The text would provide that appropriate steps might be taken in the case of an intervention. These appropriate steps would include the assumption of 'executive authority' on behalf of a Municipal Council to the extent necessary to resolve a serious and persistent financial emergency in the municipality as determined by a court of law.
Here Adv de Lange asked if he was to understand that Mr Metler envisaged a position where financial emergencies would always have to be confirmed by the court. Mr Metler said that this was correct.

Mr P Smith (ANC) said that there seemed to be an assumption on the part of CLC that the passing of a budget was necessarily a legislative act. Mr Smith said that not every action taken by a municipal council would be a by-law and thus a legislative act. Mr Metler said that in the Fedsure case certain acts regarded as legislative acts were listed. One of these was the passing of a budget. As a result the passing of a budget was clearly a legislative function which could not be delegated or alienated. Mr Metler said that because of this it was important that the assumption of legislative power be dealt with in the Constitution itself, as providing for it in legislation would not pass the constitutional test.

Adv de Lange commented that when a financial crisis existed it would be impossible to assume the executive function without assuming the legislative one as well. Once there was a breakdown in governance then how would one transfer the one power without transferring the other? Adv de Lange said that surely there was a way in which interested parties could come together and discuss the situation to establish what measures could be taken co-operatively. This mechanism should be able to take cognisance of the degree of any emergency and provide for intervention no more severe that the circumstances require. He said that surely there was a position somewhere in the middle providing for various forms of intervention and not just the extreme.

The meeting was adjourned.



Clause 9 : The addition of subsection 155(8)

The proposed subsection 155(8) permits national legislation to "provide for the exercise of executive and legislative authority on behalf of a municipal council, to the extent necessary -

to govern the municipality when the council for any reason cannot function, or

to resolve a serious and persistent financial emergency in the municipality".

While appropriate mechanisms for dealing with financial emergencies in municipalities may be desirable, this subsection - which adds yet another power of intervention to those already permitted in the Constitution, and in the Local Government: Municipal Structures Act, No. 117 of 1998 ("the Structures Act") - has a number of problems.

These problems are raised below. Prior to doing so, however, we should state that WECLOGO also disagrees with the apparent rationale for this clause, as explained in the memorandum that accompanies the Bill.

The explanatory memorandum says that the amendment of section 155, to introduce the proposed subsection (8), "give[s] effect to the published 'Policy Framework for Municipal Borrowing and Financial Emergencies' and the Municipal Finance Management Bill", both of which have been endorsed by Cabinet. Later in the memorandum, it is stated that there "is uncertainty as to whether the proposed financial restructuring provisions are constitutional where these provisions provide for the exercise of municipal executive and legislative authority on behalf of the municipality". In other words, the perceived constitutional vulnerability of a new Bill has prompted a constitutional amendment.

This, with respect, is a case of the tail wagging the dog. National legislation should be brought in line with the Constitution, rather than the Constitution being tampered with in order to immunise prospective legislation from attack. The clauses in the Constitution were after all hammered out at the Constitutional Assembly in order to provide a framework of norms governing the relationships between different spheres of government. They should not be treated like sections in national legislation such as the Structures Act and amended in order to bring them into line with the most recent legislation from the National Assembly.

The proposed subsection 155(8) is also objectionable because of its vagueness and open-endedness - something that is particularly problematic in the light of the subject matter of the provision. For example, the clause does not even prescribe who may exercise executive and legislative authority on behalf of a municipal council. A statutory body or potentially even an administrative official in the national sphere of government would therefore potentially be enabled by the envisaged national legislation to usurp the executive and legislative powers of a municipal council in certain circumstances or in a particular case.

The phrase "serious and persistent financial emergency" might also be open to abuse. For example: Could the present impasse between the City of Cape Town and the National Electricity Regulator over the setting of tariffs or the supply of electricity to the areas within the jurisdiction of the City in due course be considered to result in a situation such as that covered by subsection 155(8)(b)? If so, instead of the dispute being resolved by means of an application of the relevant sections of the Constitution, the National Electricity Regulator or some other state entity or representative might seek to break the deadlock by making an executive or legislative decision "on behalf of" the City.

Up to now the Constitution has only permitted the national government to regulate or set the framework for the exercise by a municipality of its own legislative and executive powers. On the other hand, provincial government has been given limited powers of intervention - and thus a circumscribed power to assume responsibility for an obligation of a municipality - under section 139 of the Constitution. (This power is in addition to the strengthening, support and monitoring powers conferred on Provincial Governments by other sections of the Constitution.) But a provincial executive's section 139(1) powers of intervention are expressly rendered subject to a number of checks and constraints, in terms of sections 139(1)(b) and 139(2) of the Constitution. One of the checks on the provincial executives' powers to intervene in municipalities is that the national sphere of government (the National Council of Provinces) may cause such intervention to come to an end. Thus, intervention in the local sphere by another sphere of government is, in terms of section 139, capable of being monitored by the third sphere. There is no such check envisaged in the proposed section 155(8).

In addition, any assumption of responsibility by a provincial government under section 139 is limited to the extent necessary to ensure compliance with subsection (1)(b)(i) to (iii) of the Constitution. In contrast, the proposed subsection 155(8) imposes no such checks or safeguards, nor is there any in-built time clause as is currently found in section 139.

A further difficulty with the proposed subsection 155(8) is that the relationship between the subsection and sections 100 and 139 of the Constitution is not addressed - although there might be some overlap, particularly in respect of subsection (8)(a). It would appear that the envisaged subsection, by providing for national legislation to regulate the exercise of executive and legislative authority on behalf of a municipal council, primarily contemplates national intervention, rather than the assumption of responsibility by provinces, in the event of a municipal council failing to function adequately. This is not, however, spelt out and is likely to lead to confusion when a provincial executive decides to employ its section 139(1) powers.

The drafters of the Amendment Bill appear to have been ignorant of - or ignored - the provisions of sections 34 and 35 of the Structures Act which together address more than adequately the circumstances contemplated by the proposed subsection 155(8). Section 34 of the Structures Act entitles the MEC for local government, after an intervention in terms of section 139 of the Constitution has failed, and with the concurrence of the National Minister, to dissolve a municipal council and, in terms of section 35, appoint one or more administrators to ensure the continued functioning of the municipality. These are extensive powers which do not need to be supplemented by the proposed subsection 155(8).

In summary, WECLOGO submits that the proposed subsection 155(8) is both undesirable and unnecessary. The encroachment onto the sovereignty of local government - and the usurpation of a municipal council's legislative and executive powers - contemplated by the subsection is in conflict with the tenor of Chapters 3 and 7 of the Constitution. Moreover, there could be potential conflict with sections 100 and 139 of the Constitution, as well as sections 34 and 35 of the Structures Act.

Parliamentary Procedure : Section 74(3)(a)?

The State's Law Advisors and the Department of Justice and Constitutional Development are apparently of the opinion that the Amendment Bill must be dealt with in accordance with the procedure established by section 74(3)(a) of the Constitution, since it contains no amendment which relates to a matter that affects the National Council of Provinces, alters provincial boundaries, powers, functions or institutions, or amends a provision that deals specifically with a provincial matter.

As indicated above, we are of the view that the proposed subsection 155(8) does impact on provincial powers - as provincial executives are presently the only organs of state that may exercise powers otherwise reserved for local government.

The State's Law Advisors and the Department of Justice and Constitutional Development are, in any event, apparently of the view that the Constitution of the Republic of South Africa Second Amendment Bill, 2001 must be processed in accordance with the procedure established by section 74(3)(b) of the Constitution, i.e. through the National Assembly and the NCOP. The proposed introduction of subsection 155(8) in some respects covers similar terrain to that dealt with in the proposed amendments to sections 100 and 139 of the Constitution, which are addressed by the Second Amendment Bill. It would therefore be anomalous for the amendments to sections 100 and 139 of the Constitution to be scrutinised by the National Council of Provinces, while the introduction of subsection 155(8) goes through without the NCOP's approval.


Clauses 4 and 6 : The amendment of sections 100 and 139

Section 100 of the Constitution currently permits national supervision of a province that cannot or does not fulfil an executive obligation in terms of legislation or the Constitution. The Second Amendment Bill proposes to include the local sphere of government within the ambit of the national supervision permitted by this section, both in respect of executive and legislative functions. In addition, the Bill proposes to extend provinces' supervisory powers by sanctioning an intervention even where a legislative obligation is not fulfilled.

In the second paragraph of the section of the explanatory memorandum dealing with sections 100 and section 139 it is stated that:-

"[the] regime created by sections 100 and 139 [of the Constitution] in terms of which the national government may intervene in a defaulting province [in terms of section 100] and only a province may intervene in a defaulting municipality [in terms of section 139], is out of line with the other provisions of the Constitution which depicts government as three distinctive, inter-dependent and inter-related spheres. To the extent then that the constitutional relationships between the three spheres are generally direct and not hierarchical, sections 100 and 139 must be seen as a constitutional anomaly that should be corrected by extending the power to intervene in municipalities to the national government as well".

The proposed amendments would not, however, remedy the purported anomaly, which lies in the hierarchical nature of existing interventions. Rather, the envisaged amendments perpetuate and extend the anomaly, as it is proposed to distinguish between intervention in a province, where the intervention does not apply to an obligation to pass legislation, and intervention in a municipality, where national and provincial governments are able to usurp the municipal legislative powers.

By deleting the word "executive" in sections 100(1) and 139(1) and inserting in section 100 the phrase "excluding an obligation to pass legislation in the case of a province", the Second Amendment Bill impinges on the status of local government as an autonomous and equal, albeit inter-dependent and inter-related, sphere of government with its own legislative and executive powers. It must be borne in mind that section 40(1) of the Constitution provides that "in the Republic, government is constituted as national, provincial and local spheres of government which are distinctive, interdependent and interrelated". Also, section 43(c) of the Constitution specifically states that a local sphere has "the legislative authority … as set out in section 156". (See, too, Fedsure Life Assurance Limited and Others v Greater Johannesburg TMC 1999 (1) SA 374 (CC) at par [26]-[38]).

In our view, it is consequently not appropriate for a municipality's status as a repository of legislative authority to be eroded by the hierarchical approach adopted in the proposed amendments to section 100(1) and 139(1). Democratic or other processes, for example through dissolution of a council and the election of a new council, would be more in keeping with the culture of democracy. We point out again that the first option (dissolution of a council) is already contemplated by sections 34 and 35 of the Structures Act.

A further reason for the proposed amendment that is given in the explanatory memorandum is a lack of capacity in provinces. The solution for a lack of capacity is evidently seen as intervention, whereas in fact national government should be supporting, building, and developing the capacity of provincial and local government so that they are effective and efficient spheres of government in their own right in a developmental environment.

The explanatory memorandum justifies the deletion of the word "executive" in sections 100 and 139 by giving, as an example of a legislative act, the annual passing of the budget. The implication is that national or provincial government may need to intervene to pass the budget on a municipality's behalf. Yet this is precisely the situation addressed by the Local Government : Finance Management Bill, in particular sections 16 and 17 thereof.

Lastly with reference to the proposed sections 100 and 139, the checks and balances built into the sections have been substantially weakened. Thus, for example, whereas the current sections oblige the NCOP to review the intervention regularly and make appropriate recommendations, the Bill proposes to remove this obligation by the substitution of the word "may" for "must" in the respective subsections 2(c). This proposed amendment is also not supported.

Clauses 8 and 12 : The amendment of sections 163 and 221

Section 163(b)(iii) of the Constitution currently permits local government to "nominate persons to the Financial and Fiscal Commission". Section 221 of the Constitution provides that the Financial and Fiscal Commission ("the FFC") consists of "two persons nominated by organised local government in terms of section 163". The Second Amendment Bill proposes to delete these sections and to replace them with a subsection, in section 221(1)(c), which states that the FFC shall consist of "two persons chosen after consulting organised local government".

The amendments effectively remove the ability on the part of local government to choose its own representatives on the FFC. It is not apparent why this is thought necessary. The explanatory memorandum does not provide any reason. Whatever the basis, the amendments are not acceptable to WECLOGO.

Parliament also proposes to change section 221(1)(b) of the Constitution, and to henceforth permit only "two persons chosen after consulting the Premiers of the provinces" rather than, as is currently the case, "nine persons each of whom is nominated by the Executive Council of a province, with each province nominating only one person". This proposed amendment is in conflict with Constitutional Principle XXVII (which requires "each province" to be represented on the FFC). The Constitution could therefore not have been certified in the form proposed to be amended. (See section 71(1)(a), read with (2) of the 1993 Constitution; In re Certification of the Constitution of the RSA, 1996 1996 (4) SA 744 (CC) at par [41]).

The proposed change is also undesirable. It effectively removes any provincial spread in the composition of the FFC. A province governed by an opposition party in national government is unlikely to have membership on the FFC and hence would be precluded from making a contribution from either a provincial or local government perspective.

Clause 15 : The amendment of section 230

Section 230(1) of the Constitution currently permits a province or a municipality to raise loans for capital or current expenditure "in accordance with reasonable conditions determined by national legislation". It is proposed to delete this subsection, and to replace it with a new subsection (2) which will provide that the "power of a province or a municipality to raise loans may be regulated by national legislation".

The explanatory memorandum states that the amendments to this section will cause the controlling mechanisms that apply to be similar to those applicable to provincial and municipal fiscal powers in terms of sections 228(2) and 229(2) of the Constitution.

There would not appear to be any great virtue in amending the Constitution purely to create consistency between sections which are not actually in conflict, particularly as there would not appear to be any other drawbacks to the existing wording. To the extent that the proposed amendment widens the power of national government to regulate municipal loans beyond only the determining of "reasonable conditions", such regulation could also be unduly restrictive and counter-productive. The amendment is therefore not supported by WECLOGO.

Parliament also proposes to amend section 230 in order to provide that loans for current expenditure must no longer be repaid within 12 months (as is presently the case), but rather within the same fiscal year. This proposed amendment may also be unduly restrictive and impractical, as it may in fact be necessary for bridging arrangements to span financial years. There would also not appear to be any particular reason why a municipality should effectively be precluded from making certain loans toward the end of a fiscal year, rather than at the beginning of a new one.

Dated : 29 August 2001


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