ATC181127: Report of the Select Committee on Co-Operative Governance and Traditional Affairs Inspection in Loco on Notice of Intervention Issued in terms of Section 139(1)(B) and (5) of the Constitution (1996), in Emfuleni Local Municipality, dated 27 November 2018

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements


1.         Background and Overview


1.1        The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP), to consider and report on the intervention notice invoked in Mfuleni Local Municipality in terms of section 139(1)(b) and (5) of the Constitution, the Select Committee reports as follows:


1.2        In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention by the Premier of the Gauteng Province, to the Select Committee for consideration and reporting. On 14 October 2018, the Multi-Party Delegation of the Select Committee conducted a loco inspection in Mfuleni Local Municipality. Lest we forget, during the previous visit to the Municipality, the MEC for Co-operative Governance, Human Settlements and Traditional Affairs could not interact with the Delegation of the Select Committee, due to a prior Cabinet meeting. 


2.         Objective of the Loco Inspection in Mfuleni Local Municipality


2.1        The main objective was to interact with the internal and external stakeholders of the Municipality in order to solicit their opinions on the constitutional, procedural and substantive matters related to the invocation of section 139(1)(b) and (5) of the Constitution.


3.         Composition of the Delegation


3.1        The Select Committee delegation was composed of the following Members of Parliament and officials: Hon J Mthethwa (ANC) KwaZulu-Natal; Hon G Mthimunye (ANC) Mpumalanga; Hon G Oliphant (ANC) Northern Cape; Hon D Ximbi (ANC) Western Cape (ANC); Hon M Chetty (DA) KwaZulu-Natal; Hon T Mokwele (EFF) North West, Mr TM Manele (Committee Secretary: Committee Section); Mr N Mfuku (Content Adviser: Committee Section); Mr M Mbebe (Procedural Officer: NCOP) and Mr P Bongco (Intern: Committee Section).  


4.         General Overview of the Loco Inspection in Mfuleni Local Municipality


4.1        On 21 November 2018, the delegation of the Select Committee interacted with MEC for Co-operative Governance, Human Settlement and Traditional Affairs. The MEC made a presentation on the constitutional, procedural and substantive reasons for the intervention.


5.         Presentation by the Department


5.1        The Emfuleni Local Municipality has been facing major economic, financial, governance, institutional and service delivery challenges over the past few years. The Gauteng Provincial Government (GPG) responded by intensifying the support in terms of section 154(1) of the Constitution. In terms of this section, the national and provincial government is expected to provide support to strengthen the capacity of the municipalities to manage their own affairs, exercise its powers and to perform its respective functions.


5.2        In November 2015, the process of section 154 support measures was up scaled. In this regard, the GPG and Emfuleni agreed to a four-pillar strategy focusing on (1) improving debt collection; (2) reducing distribution losses; (3) developing credible indigent registers and (4) implementing savings on expenditure management. These activities, still form part of the current section 139(1)(b) and (5) of the Constitution, read with section 139(1) of the Municipal Finance Management Act (MFMA), Act 56 of 2003.


5.3        To manage the above strategy, the Sedibeng District Municipality provided institutional support, through the placement of a Municipal Manager (MM) and Acting Chief Financial Officer (CFO) in Emfuleni Local Municipality.  The MM and Section 156 staff have since left the Municipality, since their contracts have expired.


5.4        In light of the findings of section 136 assessment, it was deemed necessary that the GPG upscale and intervene in the Municipality to provide dedicated support. On 13 June 2018, the Gauteng Cabinet resolved that a mandatory intervention is necessary in Emfuleni in terms of section 139 (1)(b)(i) and section 139 (5) (a) of the Constitution, read with section 139(1) of the MFMA. This intervention was to be done without dissolving the Municipal Council.


5.5        The intervention was led by the Premier, working closely with his Cabinet, the Executive Mayor and Council of Emfuleni Local Municipality. The aim of the intervention is to ensure that both the Province and the Municipality work together to proactively implement and monitor the development and rollout of a Financial Recovery and Service Delivery Plans in the Municipality.


5.6        Five Work Workstreams that embed a provincial-wide focus have also been established to support project. They are convened by the Head of Departments. They are Financial Management and Viability Works Stream; Basic Services and Urban Management Work Stream; Governance and Institutional Management Work Stream; Communications and Stakeholder Engagement Work Stream; Work Stream on Provincial and National Mega Projects and Infrastructure Projects in Emfuleni.


6.         Overview of the Intervention Progress in the Municipality


6.1        The political and administrative governance structures and Workstreams have been established and were fully operational. A communication was sent to the relevant authorities and stakeholders, including the National Minister, NCOP, and Organised Local Government (SALGA). The Financial Recovery and Service Delivery Plans have been developed by the National Treasury in terms of section 139(1) of the MFMA, and have been circulated for public comment. The next step was to consider, approve and implement the Financial Recovery and Service Delivery Plans. A Resource Plan was also being considered to support the comprehensive Financial Recovery Plan.


6.2        Ongoing support continues to be rendered through the other Work Streams. The Finance, Governance and Service Delivery Work Streams are fully functional and were making progress. The work of the Communication and Stakeholder Engagement Work Stream as well as the Provincial and National Mega Projects and Infrastructure Projects in Emfuleni needed to be up scaled. The Provincial CoGTA undertook a detailed assessment of the state of finances in Emfuleni and developed a Turn Around Plan in response to the outcomes of the assessment.


6.3        The assessment led to the implementation of section 139(1)(b) of the MFMA. In executing the section 139 intervention, the National Treasury has commenced with the development of the Municipal Financial Recovery Plan (MFRP). The first draft was publicized in the public domain for comments. In addition, the draft was presented to the Municipality and all government stakeholders on 30 October 2018. It will be re-advertised for further comments.


6.4        In addition, the established Finance Stream has developed a resource plan that incorporates resource needs for ensuring a successful implementation of the MFRP. The amount that was needed is approximately R2 billion. An agreement was made to continue implementing the turn-around plan developed by CoGTA, while the National Treasury was developing the MFRP.


6.5        The deployment of a financial expert in the form of an Acting CFO was completed. The acting CFO also reports on progress made by the Municipality in implementing the Turn Around Plan developed by CoGTA. The DBSA and Emfuleni has signed a Memorandum of Understanding (MoU) to address the leaks in households and the network.  A pilot project will be initiated in areas where there are high water losses.


7.       Opinions of Political Parties and Stakeholders of the Municipality  


7.1        During the loco-inspection, the Select Committee interacted and solicited opinions of the political parties, internal and external stakeholders of the Municipality. Their opinions are tabled below:   

8.         Opinion of the African National Congress (ANC)


8.1        The Chief Whip of the ANC tabled an opinion that supported and welcomed the intervention in terms of section 139(1)(b) and (5) of the Constitution. An emphasis was made on the sewer challenges which needed urgent address.   


9.         Opinion of the Democratic Alliance (DA)  


9.1        The DA supported the intervention.  However, concerns were raised with regard to the budget expenditure which was not related to the municipal operational responsibilities, revenue collection, low staff morale, mushrooming of squatter camps, electricity provision, water and sanitation challenges.     


10.        Opinion of the Economic Freedom Fighters (EFF)


10.1   The EFF contended that there have been problems since the intervention and that cadre deployment was failing the Municipality. Concerns were raised with regard to water, electricity, waste removal, old and poor infrastructure and general poor service delivery, irregular expenditure, misuse of funds. On the basis of the above-mentioned concerns, a recommendation was made to dissolve the Municipality in terms of section 139(1)(c) of the Constitution.


11.         Opinion of the Congress of the People (COPE)


11.1   The party supported the intervention. However, concerns were raised with regard to the poor municipal oversight, lack of support in terms of section 154 of the Constitution and concerns were raised by the Auditor-General about the poor performance of the Municipality.  


12.        Select Committee Observations and Opinion


12.1      In terms of the constitutional and procedural matters, the Select Committee has observed that the National Minister for CoGTA, the NCOP, Gauteng Provincial Legislature and the Municipality were notified of the intervention.

12.2      There are structural and institutional challenges on the coordination, implementation and management of the intervention in the Municipality. Although the intervention is co-ordinated from the Office of the Premier, the Select Committee wish to stress that, in terms of the Implementation Protocols for Provincial Section 139 Interventions (June 2015) of the national Department of CoGTA, when a PEC assumes responsibility for the fulfilment of an executive obligation in terms of the Constitution or legislation, it entails the performance of the identified obligation by appointed provincial officials or any other competent person(s), conveniently called “Administrators”. In this case, the PEC can designate any competent person(s) to implement the intervention in accordance with the Terms of Reference provided by the PEC. Fundamentally, the Administrator assumes the Municipal Council’s powers as per sections 59-65 of the Local Government: Municipal Systems Act (Act 32 of 2000), which includes the power to issue instructions, review delegations, deal with appeals, etc.


12.3      The Select Committee took note of the Finance Minister’s announcement during the Medium-Term Budget Policy Statement of deploying the army engineers to the Emfuleni Local Municipality, to help restore capacity to the failing water treatment works and stop the flow of raw sewage into the Vaal River. The deployment of South African National Defence Force (SANDF) complies with the provisions in the Constitution on co-operative governance, to facilitate coordination in the implementation of effective provision of services. It further demonstrates that no sphere of government can function effectively without co-operating with the other, because of the interdependency and interrelatedness of some governmental functions. Henceforth, co-operative government is thus about partnership government, as well as the values associated with it. In this case, the intergovernmental approach to intervention into the Municipality is an issue that is worth noting.


12.4      The high number of potholes, sewer spillages, neglect of refuse collection and ageing road infrastructure in the Municipality, was a reflection of poorly managed budgets as well as staff and skills shortages and clearly negatively impacts on infrastructure condition. The long-term consequence includes, asset stripping and lower service levels that in all likelihood also negatively affect sustainability and economic investment and raises the likelihood of service delivery protests. The Municipality should make adequate provision for the long-term preventive maintenance, refurbishment and eventual replacement of its infrastructure. It is clear that if the municipal infrastructure maintenance is to be adequate at Emfuleni, a great deal needs to be done.


12.5      Young people needs support from the Municipality, particularly on local economic development and job creation. The Municipality should dedicate resources in building a competitive, diverse and innovative-driven, inclusive local economy. Noting that the youth constitute up to 71% of the unemployment rate, it should provide enterprise development and support initiatives aimed at enhancing and strengthening businesses of women, youth owned and people with disabilities.


13.        Recommendations


13.1      Having conducted the oversight visit to Emfuleni Local Municipality and interacted with internal and external stakeholders, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:   


13.1.1   The NCOP approves the intervention in Emfuleni Local Municipality in terms of section 139(1)(b) and (5) of the Constitution.


13.1.2   The Gauteng Provincial Executive Council or the MEC for Co-operative Governance, Human Settlements and Traditional Affairs should fast-track the process of appointing an Administrator to implement the intervention, in accordance with the Terms of Reference provided by the Provincial Executive or the MEC.


13.1.3   The Municipality should prioritize and accelerate the technical infrastructure support team (SANDF engineers and other professionals) to urgently address the sewer spillages, in particularly the Vaal River and fix non-functional water and waste water treatment plants in Emfuleni Local Municipality.


13.1.4   Quarterly progress reports should be tabled to the NCOP by the Gauteng Office of the Premier on the status of the intervention in the Municipality and the financial recovery plan, including challenges encountered. These quarterly reports will play an important role in assisting the NCOP review process, in deciding whether or not the continuation of the intervention is necessary.


13.1.5   The Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with the relevant Portfolio Committee in Gauteng Provincial Legislature, should in future conduct a follow-up oversight visit to the Municipality in order to evaluate the progress made in respect of the intervention in the Municipality.


Report to be considered. 



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