Constitution 16th Amendment Bill & Cross Boundary Municipalities Laws Repeal Bill (Merafong): public hearings

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Justice and Correctional Services

08 February 2009
Chairperson: Mr S Tsenoli (ANC) and Mr Y Carrim (ANC)
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Meeting Summary

Parliament held public hearings on the Cross Boundary Municipalities Laws Repeal Bill and the Constitution Sixteenth Amendment Bill. The Repeal Bill re-determined the boundaries of the district municipalities (Dr Kenneth Kaunda and West Rand) to allow Merafong City Local Municipality, that includes Khutsong, to be moved from North West back to Gauteng province. The constitutional amendment was required to re-determine the boundaries of the Gauteng and North West provinces as a result of the re-incorporation.

The Independent Electoral Commission cautioned that if the Bills were passed close to the election date, it might have an adverse impact on its operations. It was critical that the Bill be passed by the time the calculation of regional seats and submission of candidates lists were done. This was only determined after the election date had been proclaimed. In determining the regional seats, the Commission used the number of registered voters in a particular province. It indicated that it would begin printing ballot papers after the election date had been proclaimed and after the political parties had submitted their candidate lists. The Committee was therefore urged to reach finality on this matter before these processes began. The Committee discussed whether the residents of Merafong would be able to vote as part of Gauteng.

The National Treasury explained that it would not be able to implement the financial aspect of the demarcation from 1 April 2009. It would have to be deferred to the following budget year. The Division of Revenue Bill that would be tabled on 11 February outlined the equitable share for each province. The formula to determine the equitable share was based on the current boundaries before changes. The same applied for municipalities. As a result, it would only be possible to implement the financial aspects of the Bill as of 1 April 2010. National Treasury had inserted provisions in the Division of Revenue Bill, which provided that protocols must be entered into between two premiers and their respective provinces. Such a measure was necessary to ensure that spending took place within a particular area and that that area was not short-changed. Currently, Gauteng received 17.4% of the equitable share, whilst the North West received 7.1%. The shift affected at least 100 000 households resulting in a decrease of the equitable share of the North West to 6.4%. Members sought clarity about the implementation of the protocol between the two premiers and their respective provinces.

The Merafong Construction Forum spoke about the opposition of the citizenry of Merafong to the move of Merafong from Gauteng to the North West province when the decision was taken in 2005. The Forum was therefore encouraged by government’s intention to correct this decision. In reply to a question about whether all residents wanted to return to Gauteng, he assured them that this was so.

The South African Local Government Association explained that the process of moving Merafong City Local Municipality from Dr Kenneth Kaunda District Municipality (DM) (North West Province) to the West Rand District Municipality (Gauteng Province) resulted in three municipal and provincial boundary implications. Firstly, the boundary of Dr Kenneth Kaunda DM would be reduced in that Merafong City LMwould no longer form part of it. Secondly, the boundary of West Rand DM would expand in that Merafong City LM would be incorporated into its jurisdiction. Thirdly, the fact that the two district municipalities fell within two different provinces gave rise to changes in the boundaries of North West province and Gauteng alike. The process of re-incorporating Merafong City LM from Dr Kennth Kaunda DM to West Rand DM would have serious planning and consequent financial implications for all three municipalities as well as the two affected provinces. To ensure that service delivery remained sustainable and uninterrupted, SALGA proposed that the necessary financial assistance, in the form of a transitional grant, be provided by Treasury. Members discussed whether councillors were welcomed in Merafong and what assistance SALGA was providing to councillors that came under attack. It was also confirmed that irrespective of the outcome of the particular process, an agreement had been reached with the affected municipalities that the community of Merafong would continue to receive basic services.

The Black Sash viewed the re-incorporation as a positive move and argued that public participation on a continual basis in deciding their future was vital to representative democracy. Black Sash believed that there were still critical areas that remained deficient, one of these was insufficient consultation, and practical implications such as how far residents of affected areas would be from basic services. Based on the Khutsong experience, it was imperative that participatory processes were established and negotiated with communities well in advance. It was essential that prior to any future proposed demarcation, all government grants must be effected.

The Municipal Demarcation Board showed that IEC compliance with Section 23 of the Demarcation Act might be superfluous. Section 23 required the IEC to express a view as to whether the voter representation in the council would be affected. If the IEC view was that representation would be affected, the re-determination took effect only from the date of the next local elections. If not, it took effect from the start of the next municipal financial year. He advised the Committee to engage its legal advisors, the IEC and relevant departments on the need for the IEC to comply with Section 23.

The MDB also advised that the practice of describing areas by way of reference maps in Schedule 1A of the Constitution be discontinued. Reference to municipal codes or names might be a better option and would remove the need to amend the Constitution every time a provincial boundary was changed. The Board recommended that the Structures Act, especially the sections and schedules dealing with number of councilors and ward delimitation, be reviewed. Unlike Parliament and the provincial legislatures, the number of councillors and wards in municipalities changed every five years. This had a disruptive effect on planning and service delivery.

 

Meeting report

Independent Electoral Commission (IEC) Submission
Adv Pansy Tlakula, Chief Electoral Officer, IEC, indicated that her submission would be confined to comments on how the Cross-Boundary Municipalities Laws Repeal and Related Matters Amendment Bill (CBM Bill) affected the forthcoming national and provincial elections.

She explained that Section 24 of the Electoral Act directed that the voter’s roll, or segments of the voter’s roll that must be used for an election, to remain the same as it existed on the day that the election was proclaimed. As soon as the election date had been proclaimed, the Commission must consult with the party national liaison committee as required by Section 20(1) of the Electoral Act about the Election Timetable, where-after the timetable must be published. Such a timetable must contain timelines for certain activities and the cut off dates and time for those activities.  The Chief Electoral Officer was required, as by the date set in the timetable, to certify the voters roll to be used in the election. As soon as this was done, the voters roll was submitted for printing and distribution so that it could be used at the voting stations on Election Day.

In terms of Section 2(a) of Schedule1A of the Electoral Act, the Commission must, for every election of the National assembly, determine a fixed number of seats to be reserved for each region. The Commission must determine these seats immediately after proclamation. In determining these seats, the Commission must use available information on the numbers of registered voters.  This requirement must also be read with the provisions that provide that contesting parties must submit lists of candidates for the National and nine regional lists by the cut-off date as set out in the timetable.

It was critical that political parties contesting the elections knew beforehand the number of seats for such lists. This would enable them to submit a sufficient number of candidates required for their regional list. Should a party submit fewer candidates than what it was entitled to fill as per seat calculation of the election results, the party would forfeit such seats as there was no provision for supplementation of the lists prior to designation.

Once the Commission had made the determination, it may have an impact if the Bills were passed thereafter as the voters of Merafong would then still have been part of the calculation for the North West and not Gauteng.  The Commission therefore felt that the Committee should consider making provision for transitional arrangements if the Bills were to be passed after the determination had been done. Should the Bills be passed after the process of candidate nomination, the Commission would have to make logistical arrangements to ensure that correct provincial ballot papers were distributed in Merafong. The Commission would require at least two weeks before Election Day to make the necessary logistical arrangements. The Results System used by the Commission would need to be amended to ensure that the ballots as cast in Merafong were correctly reflected for the Gauteng provincial legislature, as well as for the determination of the regional seats in the National Assembly.

The IEC confirmed that its preparations for the elections were at an advanced stage. It would begin with the process of printing ballot papers after the election date had been promulgated and after the political parties had submitted their candidate lists. The Committee was therefore urged to reach finality on this matter before these processes began.

Discussion
Mr Tsenoli asked when the election date was normally proclaimed.

Mr Michael Hendrickse, IEC Senior Manager: Electoral Operations, replied that once the President had announced the election date, the proclamation followed within the next couple of days.

Mr M Sonto (ANC) disagreed with the Commission’s assertion that the delivery of free and fair elections would be compromised if the bills were passed closer to the election date.

Mr Carrim argued that even if the citizenry of Merafong voted under the jurisdiction of the North West, this had no impact on whether the elections could be defined as free and fair. While the Committee had every intention to pass the bills, it may be unable to ensure that the residents of Merafong would vote within the province of Gauteng in the forthcoming elections.

Adv Tlakula clarified that the Commission did not have any major issues and only preferred to have advanced notice on what the Committee’s decision was going to be.

Mr S Swart (ACDP) noted that according to section 2(a) of the Electoral Act, the Commission must determine the regional seats immediately after the election date had been proclaimed. He speculated that if the President were to announce the election during the week, the IEC would have to determine regional seats immediately and would have to do it on the present status quo and not on an anticipated constitutional amendment.

Adv Tlakula explained that the determination of regional seats must be linked with the submission of candidate lists by parties because the two went hand in hand. By the time parties submitted their lists, they should know the number of seats that were available so that they could send complete lists.

Given the timelines, Mr Carrim believed that it was likely that residents of Merafong would continue to vote in the North West in the forthcoming elections despite Parliament’s undertaking to process the bills expeditiously. Accordingly, he asked the National Council of Provinces to give an indication of the amount of time that it would require to process the bills.

Kgoshi L Mokoena (ANC, Limpopo) responded that in terms of its rules, the NCOP would require between four and six weeks to finalise the legislation. He explained that after a formal briefing by the Department of Provincial and Local Government, the NCOP delegates had to brief their respective provinces and thereafter conduct public hearings in each province.

Mr Tsenoli stated that the announcement of the election date remained speculation at this point. He summarised the Commission input saying that it expected Parliament to indicate as early as possibly in which province Merafong fell, so that it did not negatively impact its work. He thanked the Commission for their input.


National Treasury Submission
Mr Kenneth Brown, Acting Deputy Director-General: Inter-governmental Relations, summarised that the National Treasury (Treasury) would not be able to implement the financial aspect of the demarcation from April 1 2009. It would have to be deferred to the following year. In terms of the budget process, the Minister of Finance would be tabling the budget on 11 February together with the Division of Revenue Bill. The Division of Revenue Bill contained Schedule 2 which outlined the equitable share distributed to provinces. The formula used to determine the equitable share was based on the current boundaries before changes. The same applied for municipalities.  As a result, it would only be possible to implement the financial aspects of the Bill as of 1 April 2010. However, Treasury cautioned that due to the fact that the boundaries of other municipalities were being contested, this could result in further delays.

Provinces relied largely on national transfers. Those transfers, which constituted 97% of revenue for provinces, were made up of the equitable share and conditional grants. Treasury used a formula to determine the equitable share. Most of the data that Treasury used in the formula was collected by Statistics South Africa (Stats SA). Due to the legislation, Stats SA would have to undertake a process to reorganise all that data so that Treasury could make use of it in the formula for both the equitable share and the conditional grants. The last demarcation in 2004/05 was a cumbersome exercise and took Treasury close to 10 months just to fix that data. Provinces also relied on provincial revenue, such as hospital and motor vehicle fees. North West province may have made certain assumptions about such revenue when it determined its 2009/10 budget. In the event of demarcation, all expenditure baselines would have to be re-adjusted. This in effect would mean that North West would have to revise its baseline down. It would not be able to do this without proper information on the equitable share and conditional grants. The presenter provided an example of the structure of the provincial equitable share formula.

He stated that all components, with the exception of the Institutional Component, needed to be updated to take into account population shifts of re-demarcation. National Treasury had inserted provisions in the Division of Revenue Bill, which provided that protocols must be entered into between two Premiers and their respective provinces. Such a measure was necessary to ensure that spending took place within a particular area and that that area was not short-changed.

Currently, Gauteng received 17.4% of the equitable share, with North West only receiving 7.1%. If one considered that at least 100 000 households would be affected by the shift, this would result in the decrease of the equitable share of the North West to approximately 6.4%.

Lastly, the presenter indicated that the financial implications for local government were the same as that for provincial government.

Discussion
Adv C Johnson (ANC) asked how the protocol would work and whether such a measure ran the risk of causing under spending in a particular area.

Mr Brown clarified that in the event that the bills were passed, North West province would implement its budget based on what it had prepared. He assured the Committee that there would be detailed clauses in the Division of Revenue Bill that governed that relationship between the two Premiers and their respective provinces. The Premiers were required to monitor the process to ensure that spending took place in the affected municipality in accordance with the budget. He added that Treasury would also monitor the situation, and would also be empowered to intervene through other processes as set out in the Division of Revenue Bill.

Mr Solo expressed concern that services would be interrupted in the interim and appealed to Treasury to provide a transitional grant so that this did not arise.

Mr Brown presumed that the legislation would be finalised in March 2009. By then the Minister would have tabled his budget and the respective MECs would have tabled their budgets as well. The provincial legislatures would have already approved and started their work on their respective budgets. Once the legislation that shifted Merafong into Gauteng took effect, it meant that all those budgets needed to be re-organised so that they reflected that change. He reiterated that Treasury would only be able to the effect the financial aspect of the demarcation from 1 April 2010.

Kgoshi Mokoena explained that when Bushbuckridge Municipality was transferred to Mpumalanga, departments from Limpopo continued to render services on behalf of Mpumalanga. He was adamant that irrespective of any demarcation, service delivery remain sustainable and uninterrupted.

Mr Brown agreed with the Member’s recollection of events.

The Chairperson thanked Treasury for their input.

Merafong Construction Forum Submission
Mr Isaac Langa, Chairperson: Merafong Construction Forum, recalled that the citizenry of Merafong were opposed to the move of Merafong from Gauteng to the North West province when the decision was taken in 2005. The disregard of the will of the people by national, local and provincial governments brought about great dissatisfaction that culminated in the current state of Kutsong. Not surprisingly, the people of Merafong supported government’s plan to return them to Gauteng province. Lastly, Mr Langa explained that the people preferred to fall under Gauteng province because it was better resourced and provided superior services to that of the North West.

Discussion
Mr B Solo (ANC) acknowledged that mistakes were made in the past but that the ruling party was making an effort to rectify this. He believed that the input would empower the Committee to ensure that the wishes of the people were properly addressed.
           
Mr W Doman (DA) observed that there appeared to be overwhelming support for Merafong to be returned to Gauteng. He asked if this was in fact the case.

Mr Langa replied that he had not met a single resident of Merafong that wanted to be part of the North West. He claimed that residents of Merafong were so opposed to living in the North West that they often felt like vomiting when they saw a vehicle registration with the designation “NW”.

Mr A Moseki (ANC, North West) took exception with the latter remark made by Mr Langa. He stressed that such comments were unacceptable.

Mr Tsenoli thanked Mr Langa for his input.

South African Local Government Association (SALGA) submission
Mr Des Van Rooyen, Executive Mayor, Merafong City Local Municipality, explained that the CBM Bill was circulated to the relevant municipalities and a meeting was convened with the Executive Mayors, Speakers and Municipal Managers of the respective municipalities on 8 January 2009 to consider the implications of the proposed legislation. The outcome of the meeting indicated an overwhelming support for both Bills. Concerns, however, were raised about implementation, transitional arrangements and the financial implications of the bills.  

Mr Lance Joel, Chief of Operations, SALGA, stated that during 2002, the Presidential Coordinating Council had resolved that no municipality should straddle provincial boundaries. This effectively meant that the boundaries of all cross boundary municipalities had to be reviewed to ensure that they fell within one province. In implementing this, the Minister of Provincial and Local Government introduced legislation to re-determine the boundaries of certain municipalities and likewise the Minister of Justice introduced legislation to re-determine provincial boundaries. The Bills that were introduced affected 14 municipalities and 6 provinces. Accordingly, Merafong City Local Municipality was incorporated into the North West Province in its entirety and became part of the Southern District Municipality (now Dr Kenneth Kaunda District Municipality).

He continued that the process of moving Merafong City Local Municipality from Dr Kenneth Kaunda District Municipality (North West Province) to the West Rand District Municipality (Gauteng Province) resulted in three municipal and provincial boundary implications. Firstly, the boundary of Dr Kenneth Kaunda DM would be reduced in that Merafong City LM would no longer form part of it. Secondly, the boundary of West Rand DM would expand in that Merafong City LM would be incorporated into its jurisdiction. Thirdly, the fact that the two district municipalities fell within two different provinces gave rise to changes in the boundaries of North West province and Gauteng alike. This decision also effected certain consequent changes. These included an impact on the equitable share allocations, budgets and grading of both municipalities and provinces. The number of councillors in Dr Kenneth Kaunda DM would decrease whilst the number of councillors in the West Rand DM would increase. Critically, the provincial government servicing of communities within Merafong City LM, would now become the responsibility of the Gauteng province.

Currently, Merafong City LM provided a number of functions on an agency basis for the North West provincial government. Such functions included the provision of library services, health services and vehicle licences. The situation was different in Gauteng where such services were driven by the province itself. SALGA therefore believed that the implementation date should allow sufficient time to put the appropriate structures and systems in place to ensure a smooth transition from North West to Gauteng province. 

A number of lessons had been learnt in the 2005/06 re-demarcation process and central to this was agreement on the implementation of protocol to be entered into between the receiving and releasing party. In addition to ensuring the necessary implementation protocol was duly agreed to between North West and Gauteng province before the implementation date, it was proposed that structures at both technical and political level be established to further facilitate this transition, with Parliament playing the general oversight role. Local government must be directly represented as a number of functions that were subject to the transfer were performed at local government level. The central purpose was for uninterrupted service delivery of those services and functions directly affected by this exercise.

The process of re-incorporation would have serious planning and financial implications for all three municipalities as well as the two provinces. To ensure that service delivery remained uninterrupted, SALGA proposed that the necessary financial assistance, in the form of a transitional grant, be provided by Treasury.

SALGA noted that the two Bills addressed the concerns of only a three municipalities and two provinces. It therefore cautioned that the successful promulgation of the two Bills might give rise to similar requests from other affected areas. Should these requests not be met, it would likely give rise to violent community protests, which again would largely be directed at municipal property and councillors.

Discussion
Mr Solo questioned whether SALGA had any plans to ensure that communities continued to receive services until the matter was concluded.

Mr Joel explained that SALGA had met with the three municipalities. Out of that discussion, there was a clear commitment from all three municipalities that regardless of the outcome of this particular process, there would be no interruption of municipal services. Services would continue to be provided in the same manner.

Mr Solo asked if SALGA had any mechanisms to assist councillors that were attacked. He complained that SALGA was too vague about the financial resources that it required.

Mr Joel conceded that the Municipal Finance Management Act failed to provide assistance to councilors that have come under attack. He added that SALGA continued to engage with the relevant authorities to find solutions to this matter.

Mr Van Rooyen noted that the matter of finances was still being finalised and would be sent to the Minister for Provincial and Local Government before it was submitted to Parliament.
           
Mr Sonto was disappointed with the presentation. He had expected SALGA to provide greater insight and concrete proposals. Instead, it had simply made general comments on a whole range of issues.

Mr Z Ntuli (ANC, Kwa-Zulu Natal) sought to confirm the widely held suggestion that councillors were not welcome in Merafong.

Mr Van Rooyen replied that this perception was incorrect. Merafong City consisted of 26 wards and Khutsong comprised of 8 wards. Currently, 26 ward committee meetings were taking place in all 26 wards.

Black Sash Submission
Mr Nkosikhulule Nyembezi, National Advocacy Manager, welcomed the opportunity to make a contribution on a subject that affected the lives of ordinary people. Black Sash viewed the tabling of the CBM Bill as a positive move and argued that participation by the public on a continual basis in deciding their future was vital to the functioning of representative democracy. Black Sash believed that there were still several critical questions that remained unanswered and had to be resolved before the Bills were passed.  One of the deficient areas was public consultation, which was deemed insufficient. Many of the practical implications affecting residents on a daily basis did not appear to have been considered. It was not clear how far removed residents of affected areas would be from basic services such as primary healthcare, pension paypoints and social services. Based on the Khutsong experience, it was imperative that participatory processes were established and negotiated with communities well in advance. It was essential that prior to any future proposed demarcation, all government grants must be effected.

No questions were posed to the presenter.

Municipal Demarcation Board (MDB) Submission
At the outset, Mr Hillary Monare, Chief Executive Officer, clarified that the Board’s term of office had lapsed on the 31 January 2009, and that the appointment of a new Board was expected in the near future. This meant that his submission had not been considered or approved by the Board.

Mr Monare provided a clear history of the present re-demarcation process. He pointed out that the process to re-determine municipal boundaries was only concluded when Section 23 provision of the Demarcation Act was met. In terms of Section 23, the IEC had to express a view as to whether the representation of voters in council was affected. If the IEC view was that representation would be affected, the re-determination only took effect from the date of the next local elections, in this case 2011.

In 2008 Section 23 had been amended. The effect was that if the IEC stated that voter representation would not be affected, the re-determination would take effect from the start of the municipal financial year following the publication date of the notice effecting re-determination. The MDB pointed out Section 23 compliance might be superfluous and advised the Committee to engage its legal advisors, the IEC and relevant departments on the need for the IEC to comply with Section 23.

Furthermore, he said that the MDB advised the legislation discontinue the practice of describing geographic areas by way of reference maps in Schedule 1A of the Constitution. Reference to municipal codes or names may be a better option and would remove the need to amend the Constitution every time when a provincial boundary needed to be changed.

The Board recommended that the Structures Act, especially the sections and schedules dealing with the number of councillors and ward delimitation, be reviewed. Unlike Parliament and the provincial legislatures, the number of councillors and the number of wards in municipalities changed every 5 years. This had a disruptive effect on planning, structures, administrations and service deliveries. Finally, Mr Monare hoped that the two Bills would come into operation in good time so as to ensure that the Board’s ward delimitation process was not adversely affected.

Members did no pose any questions.

Mr Tsenoli stated that the submissions had thrown light on several issues that the Committee needed to consider. He then adjourned the meeting.

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