Local Government Laws Amendment Bill: deliberations

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Meeting Summary

The committee considered proposed amendments to the Local Government Laws Amendment Bill. Issues discussed included who constituted a close family member of a councilor and whether such person would be allowed to benefit in procurement processes. Notice periods to the Minister of Finance in relation to boundary changes and the delegation of powers and functions were also discussed. The Committee also agreed on the formulation in respect of ward chairpersons.

The Committee commenced a clause-by clause deliberation of the Bill, but noted that certain changes had still to be effected and, in light of the fact that the Department of Provincial and Local Government still needed to consult with the Minister, the final answers could not be provided before the following week. In the meantime, however, the drafters were requested to come up with a version of the Bill reflecting changes. Clause 1 should reflect that only spouses and children were to be regarded as close family members, and therefore only sub-item (a) of this definition would be included. The drafters would try to reformulate clause 2 in relation to the notice periods. They were also asked to come up with a draft for Clause 5 that reflected that the chairperson of a ward committee should be a member, not a councillor, that he / she could be elected only by the ward committee, and that councillors should be accountable to the ward committee. Section 35 of the Act would remain in place. Under Clause 9 four options were outlined, and the Committee agreed in principle that four months notice was sufficient and the MEC should consult with the Minister of Finance. Under Clause 17 the MEC should report to the provincial legislature, not the Minister, and a 90-day time period should be specified.

Meeting report

The Chairperson welcomed representatives from the Department of Provincial and Local Government, Parliamentary Legal Advisors, the State Law Advisors, the Municipal Demarcation Board, the South African Local Government Association and National Treasury.

The Chairperson asked Ms Zuraya Adhikarie, Parliamentary Legal Advisor, to take the Committee through the amendments to the Bill, and to indicate which provisions had been supported or rejected by various stakeholders.

Ms Adhikarie said that a meeting had been held and matters were discussed between stakeholders. Reference was made to Clauses 8 and 9. She noted that the comments from the Demarcation Board had led to discussions on operational requirements. National Treasury had mapped out why the six-month notice period in the clauses was so important to them, and was open to the idea that an exception clause could be included in Clause 9. The Demarcation Board had no problems with Clause 8. They however did have a problem with Clause 9, in that they did not wish that National Treasury become the vehicle for local government. Ms Adhikarie said that the Demarcation Board felt that Clause 9 caused disconnect with reality and the interests of South Africa as a whole were not taken into consideration. National Treasury heeded the concerns of the Demarcation Board, and then said that it would be satisfied with a four month notice period. The Demarcation Board had proposed a three month notice period but National Treasury said that the period was too short. National Treasury had explained the difficulties that it faced within a financial year. Ms Adhikarie pointed out that the Department wished for provision to be made for exceptional circumstances.

Ms Adhikarie stated that the two tiers of government caused problems. Transferring of powers and functions between them was problematic. She said that no further transfers were needed. Ms Adhikarie said that the Demarcation Board felt that this provision should be suspended. The Demarcation Board and National Treasury had met and had agreed that another mechanism would make more sense.

After the discussions at the meeting three major issues were identified. The first related to whether a shorter notice period of three or four months was more acceptable. The second issue was that there were no timeframes set out for the shorter time periods. The third issue was a moratorium on further adjustments. Other issues that had surfaced were the definition of close family member, that provision be made in Clause 19 for the exclusion of family members of councillors, and that the Department had to review this as councillors were not included in the procurement process. The last issue related to Section 35 of the Act, and whether the chairperson of a ward committee could be a councillor.

Ms Adhikarie noted that after the issues had been discussed the proposed amendments now before the Committee had been drawn. She added that a rewording of Clause 17 had also been agreed upon. The MEC would report to the provincial legislature.

Dr Vuyo Mlokoti, Chairperson, Municipal Demarcation Board explained that the six month notice period had been unacceptable as it would suffocate provinces and MECs. He went further and said that the suspension of powers and functions would be an interim measure. A White Paper process was unfolding and it would be completed by June 2008. Dr Mlokoti said that MECs spent January, February and March on powers and functions. He felt that MECs should better spend this time on capacitating. Section 85 of the Act should be suspended. The Demarcation Board did not understand why the department was so opposed to this. The Demarcation Board was in favour of maintaining the status quo. The suspension of Section 85 would only be an interim measure and would not be permanent.

Dr Mlokoti said that there would be no negative effect on development as MECs did adjustments. It was felt that the national department had no role to play and there was no negative political effect. The NCOP had the interests of the provinces at heart and the proposal would not paralyse this.

Mr Myron Peter, Chief Director: Institutional and Administrative Systems, Department of Provincial and Local Government, responded that the suspension of the clause was a huge political undertaking. The Department (DPLG) was rather in favour of an exceptional clause, and could not support the suspension.

Mr Peter said that the issue of a ward councillor being the chairperson of a ward committee should be discussed by the Department with the Minister. Mr Peters said that the feeling was that perhaps it should be taken a step further in that the ward committee should elect its own Chairperson. The issue was whether a councilor who was accountable to the ward committee could be the chairperson of that ward committee.

Mr Peter then referred to the issue of close family members of a councillor taking part in procurement processes. He noted that the Public Finance Management Act (PFMA) barred a councillor from taking part in procurement processes. He felt that there was no influence on this process.

Clause by clause deliberations
The Chairperson proceeded to take the Committee through the proposed amendments, clause by clause. He said that the Committee Members should raise any points on those clauses where they disagreed.

Clause 1
The Committee considered the definition of what constituted a close family member of a councillor. The Chairperson referred to the Department’s explanation that councilors were barred from participating in procurement processes. He added that no public official must benefit from government. The Chairperson stated that councilors were not part of the adjudication process, whether the committee excluded them alone or their families.

Kgoshi L Mokoena (ANC, Limpopo) felt that the definition of close family member should only apply to spouses and children. Other family members, not in the first degree of relationships, such as aunts, uncles and others mentioned in the definition should not be excluded from the process.  He noted that although the Department was of the view that the proposed definition was broad, and he noted that the Committee would have the final say on the matter.

The Chairperson was concerned that the definition was too broad. In certain areas the definition as it stood would exclude almost everybody, particularly where clans often occupied entire areas.

Mr A Moseki (ANC, North West) suggested that the definition should only exclude immediate family members.

Mr Z Ntuli (ANC, KZN) supported the suggestion.

The Committee agreed in principle that the definition be amended, so that only immediate family members should be excluded. Therefore it was agreed to delete sub-clauses (b), (c) and (d) from the proposed definition of close family member.

Clause 2
The Chairperson suggested that the Committee agree in principle that there should be no dual power. He felt that often individuals disagreed and that eventually a decision needed to be taken by someone. The Chairperson noted that the two options over the clause seemed to retain the existing 6-month period and that only in exceptional cases may the Minister and the MEC agree to a different or shorter period.

Mr Peter stated that option 2 was only a rephrase of option 1.Unnecessary words had also been left out.

Ms Adhikarie said that the Committee needed to take a policy decision on the phrase “The Minister of Finance and the MEC”. She felt that option 2 was the better of the two options. Ms Adhikarie said that the MEC was no longer central in the process. Eventually the Minister of Finance was given the power.

The Chairperson asked what was the reason for removing the MEC from the central position.

Dr Mlokoti said that National Treasury insisted on the six month notice period, based on the fact that boundary changes were done on an ad hoc basis. He pointed out that for the period 1999 – 2008, when boundary changes had been made, Treasury had not required to make financial adjustments. In the last ten years adjustments had to be done once.

The Chairperson asked National Treasury to indicate why it had insisted on a six month notice period.

A National Treasury representative responded that Treasury was bound by national and local budget processes. He said that from the day the Budget Speech was delivered up until March municipalities worked on their budgets. At the end of March the Mayor tabled the municipal budget. In normal circumstances the boundary change impact upon households and allocations would have to be recalculated. Time was therefore needed to effect the changes. National Treasury had now agreed to a shorter notice period of four months.

Mr Peter said that the DPLG was also affected. The Department requested municipalities to change the Department’s financial flows. Boundary changes led to changes in finances.

The Chairperson pointed out that the MEC must be able to do his job normally, and only in exceptional cases would the four month notice period be applicable. In the exceptional case where a boundary change had financial implications, four months would be given for the MEC to consult with the Minister to effect the necessary changes.

Mr Peter said that National Treasury had said that they needed alignment.

The Chairperson asked the drafters to come up with a formulation to reflect what had been discussed.

Mr Peter stated that the National Treasury commencement date was 1 July. He asked whether the MEC would now determine a new commencement date.

Dr Mlokoti responded that no MEC could determine a new commencement date. It was out of line for an MEC to determine a commencement date for boundary changes and population movements.

The Chairperson suggested that the Committee move on and come back to the issue.

Clauses 3 and 4
No issues were raised.

Clause 5
In considering Clause 5, the Chairperson said that a ward committee chairperson should be a ward committee member, and not a councillor. The councillor should be accountable to the ward committee. The ward committee chairperson would be elected by the ward committee. He asked the drafters to come up with a formulation that reflected all these points.

Ms Adhikarie responded that Section 35 of the Act should remain as it was. She said that the drafters would consider whether it was appropriate to amend other sections to reflect the intention of the committee.

Mr Peter agreed with Ms Adhikarie.

Clauses 6 to 8
No issues were raised.

Clause 9
Ms Adhikarie stated that there were four options to be considered for Clause 9. The clause dealt with delegation of powers and functions. The first option imposed a moratorium. The South African Local Government Association (SALGA) and the Demarcation Board were in favour of this, but the DPLG was not. The second option dealt with a different or shorter notice period. National Treasury and the Demarcation Board could not agree on three or four months. The third option was to remove the period. The fourth option was to leave the clause as is but to include an exception.

The Chairperson said that the Committee agreed in principle that the notice period was to be shortened from six months to four months, and that the MEC would consult with the Minister of Finance.

Dr Mlokoti said that options 1 and 4 were the options that seemed to have the most support.

The Chairperson pointed out that the Department was in favour of option 4.

Kgoshi Mokoena asked how soon could the Department consult with the Minister on the issue. He was in favour of option 1.

The Chairperson said that the Department had up until the following week to consult with the Minister on the issue. The Committee would finalise the Bill in the week after that.

Clauses 10 to 16
No issues were raised.

Clause 17
Ms Adhikarie noted that she had two concerns over the clause. The first was that the MEC was to report to the Minister of Finance. She noted that case law suggested that there must not be interference between spheres of government. Ms Adhikarie suggested that the MEC report to the provincial legislature. A report could therefore be sent to the legislature and to the Minister. She further suggested that a time period be set, and she suggested that 90 days would be reasonable.

Kgoshi Mokoena asked why she suggested 90 days.

Mr Peter said that it was the normal period for financial matters in terms of legislation.

The Committee agreed to the suggestion.

No issues were discussed in respect of the remaining clauses.

The Chairperson said that, given that more time had been given to the Department to consult with the Minister, the Committee expected the drafters to finalise the amendments and to produce a final document reflecting all the necessary changes, so that the Bill could be finalised and adopted.

The meeting was adjourned.

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