COGTA, SALGA, MDB & CRL Rights Commission 2019/20 Annual Performance Plans, with Minister & Deputy Ministers

Meeting report

Opening remarks
The Chairperson welcomed everyone and thanked the Minister of Cooperative Governance and Traditional Affairs for kindly making her boardroom available to the Committee when it had been unable to secure a suitable venue.

The Chairperson welcomed the Minister, Dr Nkosazana Dlamini-Zuma, and the two Deputy Ministers for Cooperative Governance and Traditional Affairs: Deputy Minister Obed Bapela and Deputy Minister Mpho Tau.

The Chairperson noted that the challenges that the Municipal Demarcation Board (MDB) had highlighted during its previous engagements with the Committee remained problematic issues. The main challenge was the capacitation of the Board as it had a direct impact on the implementation of the mandate and the strategy, especially the establishment of a regional footprint. The MDB did not have a presence in the provinces. She was also concerned about the outstanding finalisation of the Demarcation Amendment Bill.

Presentation by Municipal Demarcation Board
Introduction by the Chairperson
Mr Thabo Manyoni, Chairperson of the Municipal Demarcation Board (MDC), introduced the board’s presentation. He indicated that the details of the Annual Performance Plan (APP) would be made by Mr Muthotho Sigidi, Chief Executive Officer of the board and that Ms Tintswalo Baadjie, Chief Financial Officer, would present the budget. Ms Mbali Myeni, Deputy Chairperson of the MDC, and Mr Aluwani Ramagadza, Chief Operating Officer, were also in attendance.

Mr Manyoni informed the Committee that the President had appointed the new board on 1 March 2019. The Chairperson was the only full-time board member. Each board member was responsible for one province.

The new Board came in after the finalisation of the current Strategic Plan and the 2019/20 Annual Performance Plan. The Board was crafting a new Strategic Plan which would span the next five years, starting in the financial year 2020/21. The new Strategic Plan would incorporate three of the State of the Nation Address (SONA) priorities: spatial integration, human settlements and communities; social cohesion and safe communities; a capable, ethical and developmental state.

The MDC had achieved its 2018/19 deliverables, including the finalisation of municipal outer boundaries which had been handed to the Independent Electoral Commission (IEC) in August 2018; finalisation of descriptions of the spatial boundaries for 57 municipalities, which was an ongoing task; completion of an assessment of the capacity of municipalities (Bs and Cs) to perform their powers and functions.

The MDC had received funding for consultations and had conducted outreach programmes to strengthen public and stakeholder awareness of demarcation processes. Consequently, there had not been a single objection to changes in demarcations.

The Chairperson announced that MDC had attained 96% of its 2018/19 objectives with only one objective outstanding.

The CEO presented the targets contained in the 2019/20 Annual Performance Plan. Deliverables planned for the 2019/20 financial year included: preparation of draft wards and public consultation on draft wards; spatial boundary descriptions to be completed for 57 municipalities; conduct outreach programmes to strengthen public and stakeholder awareness and education of demarcation processes.

The CFO stated that the revenue over the medium term was R181 million with R57.4 million for the current financial year, 2019/20. R11 million had been budgeted in the current financial year for the core business of demarcation and only R2.4 million was available for research. The MDB was still grossly underfunded and had had discussions with the Department and National Treasury for more funding to effectively institute its constitutional engagement. MDB was not able to do effective and efficient public awareness owing to financial constraints. MDB was grossly underpaying employees and constantly losing skilled workers who had to be specifically trained for the work that they were required to do.

The CFO concluded the presentation by stating that the new board was looking forward to interacting with the Committee and would remain in full support of the Committee in its endeavour to take local government to greater heights.

Discussion
The Chairperson invited questions and comments from the Members.

Ms P Xaba-Ntshaba (ANC) asked about the boundaries. When MDC adjusted boundaries to demarcate wards, did it not think that its decisions would have a negative impact and would make the community cross so that community members burnt tyres and  things. Noting the unrest in places like Vuwani, Ms Xaba-Ntshaba asked if the MDB could not go to the areas before they demarcated. She saw that the MDB had researchers. What did they do if they had not researched the area and spoken to the community before demarcating? Why had the researchers not informed the MDB that it would cause trouble and asked the Board to demarcate somewhere else? The MDB was costing SA because people were burning schools and roads, etc. It was costing kids who could not go to school whereas the MDB members had already been to school. What was the MDB doing when libraries and schools were burning and costing South Africans? The MDB had to check thoroughly. The country needed a Demarcation Board that would help and not cost the country.

Ms Xaba-Ntshaba asked the CEO for a clarification of the meaning of an unaudited performance. She was not in his Department and did not understand what it meant.

Mr G Mpumza (ANC) said that the mission of the entity was “to deepen democracy and to facilitate the socio-economic transformation of the country for the benefit of its citizens” but the demarcation process, as the Chairperson had indicated, was with a Demarcation Board that was located at national level. It did not have a provincial or local footprint and that might have unintended consequences. A key strategic purpose of the MDB was to de-racialise and de-tribalise the local communities to ensure a non-racial state but at the national level the approach was that of a desktop study and the outcome achieved was not the desired outcome. Looking at where MDB determined the outer boundaries of a municipality, he asked what studies it used to reconfigure boundaries.

Mr Mpumza noted that some stable municipalities had been destabilised by the demarcation process and at least two of such municipalities had been put under administration. The demarcation tool or study had been flawed from the beginning. Municipalities were struggling and were destabilised, and were now financially unsound institutions. There should be a proper way of demarcating boundaries.

Mr Mpumza asked to what extent, when assessing the municipalities, was the MDB ensuring that it was not impacting on the assigned powers and functions of the municipality which would negate section 154 of the Constitution to provide support and stability. The MEC might then take away the powers and functions of the municipalities and give them to districts and then stability would not exist.

Mr Mpumza suggested that perhaps the five-year review period was too short and one should look at extending it to ten years. MDB had indicated that it had a capacity problem and challenges as a result of the capacity problem. What was it doing about the challenges relating to internal capacity so that MDB was capable of carrying out its mandate?

Ms M Tlou (ANC) stated  she was covered by Mr Mpumza but she wanted to know what MDB had done to make sure that the municipalities were performing well? MDB had indicated that it was going to invite mayors and councillors to meet so that it could develop a strategic plan going forward. SA was their own country and they needed to think about what would take the country forward. MDB and SALGA should go to a university and ask lecturers and others what they should do. Otherwise, MDB would always come back and say that it was having challenges in certain municipalities where things did not go well.

She added that the municipalities had not performed well but it might be that the MDB could come up with some answers as to why the municipalities did not do well. The municipalities should always attend demarcation meetings.

Ms D Direko (ANC) asked, especially in relation to the communities in Limpopo, what the possibility was of the MDB reversing decisions that were now costing SA? Community members had decided not to vote because they were unhappy with the demarcation. Another challenge was that some municipalities were not viable. What were the possibilities of amalgamation of municipalities to assist in dealing with dysfunctional municipalities?

The Chairperson referred to Slide 12 which showed that there were not enough funds for the outreach programme. The CFO had remarked that there was insufficient funds for outreach programmes but people did not understand how demarcation worked. She  did not think that the MDB was doing enough to educate the public. The Minister, Deputy Minister and the DDGs from Cooperative Governance were at the meeting and could see the problem.

The Chairperson noted that sometimes a traditional authority was divided into three different municipalities and that created division as some municipalities delivered and others within the same locality did not. She agreed that the demarcations were desktop demarcations and the MDB had to stop that practice. People made submissions to the MDB but at the end of the day, those boundaries remained unchanged and it seemed that there had been no consideration of the submission. The consultation by MDB was often only malicious compliance. MDB had to re-prioritise and allocate money for the outreach programme.

The Chairperson agreed with Ms Direko that there was an issue of dysfunctional municipalities. SALGA and MDB had to complement each other. It had to become mandatory for all municipalities to respond as the stakeholders had to read and utilise the reports. That was a consequence of operating in silos. It became fruitless expenditure if MDB produced reports and people did not use them.

Regarding the question by Ms Tlou on the issue of unaudited statements, the Chairperson noted that MDB was optimistic about the coming audit report but had the audit action plan from the previous financial year been implemented? She was asking because a lot of matters had been raised. The Committee would have to look at the issues at the end of each quarter and not only at the end of the year. However, MDB had projected a good audit and the Committee would hold them to it.

Finally, the Chairperson noted that the Board had produced a very beautiful book. It was good report on the conference that it had held. She asked the board to prepare a presentation on the highlights in the report for the Committee and to show the recommendations.

Response by MDB
The Chairperson of MDB began by acknowledging that much needed to be done. The Board had also written to the Minister so that it could brief the ministry on critical issues already raised by the Committee. If the Committee allowed, the MDB could have a session to explain the issues of the dissatisfied municipalities. There were more than just those that made a lot of noise.

The Chairperson stated that the problem in the country was not the determination of boundaries, it was that the grass was greener on the other side and people wanted to be part of a functional municipality, but if the functional municipalities were increased too much, those municipalities could not cope and they became dysfunctional. The specifics could be discussed in the special meeting that he had suggested. The new Board had written to Members of the Executive Councils at provincial level asking to address the mayors’ forum so that the Board could raise some of the matters pertaining to the community requests, instability, etc. He wanted to lobby colleagues in provinces to allow MDB, after it had issued reports, to engage with the Municipal Managers. Board members had been allocated to provinces and if each one met on quarterly basis with his or her relevant province, the members could address issue.

MDB was not going to change outer boundaries every five years because it destabilised the municipalities. MDB wanted to have smooth elections. It was not going to redetermine outer boundaries until after 2021 elections because if MDB started with one area, there were many people who were unhappy with the service delivery who would also want boundary changes. The problem lay with the functionality of the municipality, not the boundaries themselves. From the following week, MDB would be meeting with MECs, starting with the Eastern Cape.

The Chairperson of MDB said that his intention was to show that MDB was attempting to deal with the issues raised by Members. He said that it was true that he might have a sit-in in the Minister’s office as he was an activist and the shortage of funds had been a problem for a long time.

He added that people saw the board as a problem creator, not a problem solver. That was why MDB wanted a presence in each province and it was something that MDB would propose to the Minister, even if it began only with the provinces where MDB urgently needed a footprint. The main thing was that those in the country who made much noise also instigated more instability. There were issues that could not be addressed by the MDB. MDB would not reverse the progress towards the democratic principle of an integrated and non-racial municipality. One could not, for example, have a Shangaan municipality, or a single gender municipality as that was against the ideal of non-racialism. It was more important for the municipalities to provide the conditions for making a livelihood in a municipal area.

The Chairperson said that the weakness of not having a provincial presence had cost a lot in terms of understanding of and support for demarcation. The board was trying to deepen democracy. He requested support from the Committee in not disturbing outer boundaries at that time. MDB would deal with the ward limitations as that was important and that would be done as soon as the Minister had gazetted the criteria.

The CEO explained that the outcomes that he had spoken of related to pre-determined objectives against performance outcomes and were not related to financials. When MDB presented the report to the Committee in September 2019, the performance might be maintained or lower, which was why he had said that it was unaudited. Regarding the clean audit, he emphasised that he had been referring to the current year, not the 2018/19 financial year as there had been issues in the past that would affect the audit opinion for 2018/19.

The CEO informed Ms Xaba-Ntshaba that the research issue had been raised by the previous Committee which had requested MDB to set up a research unit. A sub-unit of three researchers had been set up but two out of the three had resigned as MDB was not paying adequate salaries and now there was only one researcher to cope with 257 municipalities and more than 4 000 wards. What could one person do? That was why the researcher had to address issues at a desktop level. Those were the issues of capacitation and regionalisation. He pointed out that in the Eastern Cape, one had to have a historical knowledge of the area that went beyond language to understand issues relating to boundary demarcations. He spoke about the complexities of areas in Limpopo. There was an integration of Venda-speaking and Shangaan-speaking people and inter-marriages between the people but there were still barriers between language groups.

The CEO said that it was necessary to share with the Committee the issues that went into outer boundary demarcation and ward delimitations. He wanted to explain how traditional authorities fell into different municipalities. Since the new chairperson had been appointed to the MDB, he had received a number of requests for changes to outer boundaries and so people needed to know that only ward demarcation would be taking place. The outer boundary demarcations would only be opened up for consideration after the 2021 elections. If a workshop were held with the Committee, the MDB could make presentations on the ward delimitation process, the outer boundary delimitation process, and the capacity assessment results.

The CEO noted that the Chairperson had queried whether anyone used the MDB reports. He explained that when MDB had done the current capacity report, it had used a different approach. Firstly, it had invited the Extended Boundaries, Powers and Functions Committee, which included SALGA and provincial representatives to draft the capacity criteria. MDB wrote to all Municipal Managers informing them what MDB required. Not one came forward and MDB had to follow up. In those cases, where there was still no data forthcoming, MDB had to use secondary data to finalise the municipal report. Once the report had been finalised, MDB again wrote to Municipal Managers, asking them to indicate whether the information was correct, but received only four responses out of 249 municipalities. So municipalities were informed, but did not take note.

Further discussion
The Chairperson indicated that she would allow a follow-up from Ms Tlou and then finalise the discussion with the MDB.

Ms Xaba-Ntshaba wanted to put it on record that she was hoping that the board would come up with a new strategy now that it had a new chairperson. She was from KwaZulu-Natal which had a big problem. She stated that MDB had created a municipality with half the communities from one chief and half from another chief. It was a big mess. That did not work because communities would not vote for the people from another chief. They had been fighting each other forever. The board needed to place the boundaries according to the chiefs. In her ward, the people had been fighting forever for their space and could not be put together. MDB should hire researchers and pay them money so that they could do their work and go all over the country and come back with a tangible plan. She requested the new MDB Chairperson to help them in KwaZulu-Natal.

Mr C Brink (DA) said that it appeared that there was a great of reliance on Municipal Managers but they were failing the board and people in the municipalities by not providing and disseminating information. Could the board not discuss the matter with the Minister or the Department just to see if there was an escalation mechanism so that the 80% of Municipal Managers who simply did not respond to correspondence could be named and shamed, or brought to account in some other manner so that their political leaders knew that they were not doing what they were supposed to do?

Deputy Minister Bapela noted the first issue was the budget. He agreed that there need to pay researchers but there was no money available to pay researchers. The Chairperson had indicated that he would be meeting the Minister about the matter that had been pending endlessly. Could the activist Committee give the Minister the authority to negotiate for a bigger budget? The Portfolio Committee could also call the DG of Finance and tell him that the Committee wanted to see that function funded. He would be glad if the Portfolio Committee could assist the Executive.

Secondly, Deputy Minister Bapela noted that there had been an engagement with traditional leaders. Their responsibility and jurisdictions and were not the same as municipalities. Municipalities were there to provide services like water, electricity, etc. Traditional leaders were not responsible for providing such services, just like the magisterial services had different functions from a municipality, i.e. to make judgements, etc. Traditional leaders were similar to magistrates with their own area of jurisdiction. He would ask the Traditional Leaders Council whether the information had cascaded down. There might be a gap there which led to traditional leaders making statements and misunderstanding the difference in roles between them and the municipalities.

Deputy Minister Bapela invited the Demarcation Board to present its research and consultation process to the ministry.

Minister Dlamini-Zuma said that she had heard what the Members were saying, particularly about the five year change in outer boundaries. However, she would get a proper briefing from the Demarcation Board and express her own views to it and then she would come back for the workshop.

She added that the gazette for the Demarcation Board had been signed the previous Wednesday so she did not know why the MDB Chairperson was talking about ‘when the Minister signs the gazette’. However, she did not know when it would be published.

Minister Dlamini-Zuma thought that they should also talk about how everyone could work together and MDB could share some imbizos with her and the Department. She promised that she would not be compromising their independence. She apologised for being late for the meeting but she had had to deal with a memorandum for the elections. She also apologised, in advance, for not being there in the afternoon but she had to meet her other boss in Parliament.

The Chairperson told the MDB that sharing the Department budget for outreach would be a very good idea. It could cut across all the entities. The problem was that people did not understand the mandate of the MDB and so it was known as the havoc maker. That was why there had to be a strong outreach programme.

The Chairperson thanked MDB and suggested that the MDB attended the SALGA presentation.

Presentation by the South African Local Government Association SALGA
Introduction by the Deputy President of SALGA
The Deputy President of SALGA, Cllr Sebenzile Ngangelizwe, welcomed the invitation to address the Committee. He complimented the Chairperson and the Members of the Committee on their appointment as Members of Parliament and acknowledged the Minister and Deputy Ministers.
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SALGA would present its Strategic Plan and APP to the Committee and would give an overview of the SALGA planning, budgeting and reporting cycle, as well as an overview of the financial plan to support the Strategy and the Performance Plan for the 2019/20 financial year.

The Deputy President stated that SALGA was directly involved in working with DCoG to support the municipalities. However, he had to point out that after elections, political parties changed the top management of municipalities  and that was an extremely disruptive move. SALGA had five key performance areas (KPAs). The point was that some municipalities might be doing well in terms of service delivery and others were doing well on institutional development, but that was not reported by the Auditor-General and so the Auditor-General did not report on all delivery issues. He reported only on certain points of delivery and financial aspects. For example, water in everyone’s taps came from service delivery by a municipality but, in this country municipalities were assessed around five KPAs and they did not provide a good picture of the full delivery of a municipality. People needed to be educated about the assessment of municipalities. The only KPA looked at was financial management, and if that was not good, then a municipality was declared dysfunctional. He did not believe that the KPAs should be used.

The Deputy President informed the Committee that the Acting CEO of SALGA, Mr Lance Joel, would present the APP.

Presentation of the SALGA Strategic Plan and Annual Performance Plan
Mr Joel informed the new Members of the Portfolio Committee that SALGA had had a clean audit for six years in a row and was hoping for a clean audit for 2018/19. SALGA had enjoyed a performance rate above 90% for the past six years and was hoping for a 98% performance attainment for 2018/19.

Mr Joel explained that the goals of SALGA were solutions that the Association had crafted to respond to the challenges that it experienced. The key challenges in municipal capabilities and governance were:
-ineffective political and administrative leadership,
-weakened oversight due to political infighting at council level and interference in administration,
-leadership inaction or consistent inaction related to transgressions,
-inadequate support by provincial and national role-players,
-instability of vacancies in key positions,
-inadequate consequences for poor performance and transgression,
-shortage of skills for managing infrastructure life cycle,
-poorly defined and sub-optimal organisational structures in relation to the municipal mandates,
-unstable labour relations.

The key challenges in fiscal and financial management included unions that were trying to bargain at municipal level, which was illegal, but municipalities were often bullied into those agreements. Added to that was weak multi-year budgeting, Supply Chain Management inefficiencies, poor asset and contract management, and weak internal controls.

The CEO noted that:
-Half the municipalities were in financial distress and some municipalities had been unable to pay salaries.
-Audit outcomes were regressing.
-Growth of national transfers were being reduced as part of the national fiscal consolidation and subdued fiscal and depressed economic environment.
- Nearly a quarter of municipalities collected less than 50% of revenue owed to them
- Growth in consumer debt, with 59% of municipalities having debtor levels higher than 30% of their own revenue.
-Audit outcomes were regressing, with increases in irregular expenditure, fruitless and wasteful expenditure, and unauthorized expenditure.

Together with National Treasury, SALGA had analysed the audit outcomes and had noted the red zone municipalities. Record management was appalling as so many entities, e.g. the Hawks, went to investigate municipal offices and simply took away boxes of documents, and there was no record of those documents having left the municipality.

SALGA was working on rolling out a diagnostic tool for Supply Chain Management and a programme on asset registers had been funded by Canada for roll-out in the Eastern Cape. SALGA had developed a framework for accountability and consequence management.

The Financial Position of SALGA
Mr Joel explained that SALGA’s budget was based on a revenue mix that included membership levies that accounted for 85% of the organisation’s finances. As an association, SALGA was heavily dependent on its members for funds. In addition there were grants from COGTA and international funders. The total revenue for 2019/20 was R680 million. Much of the money went into salaries because SALGA’s real strength was the people who assisted the municipalities.

Mr Brink noted that the leadership team of SALGA was part of the Inter-Ministerial Task Team that looked at municipal debt to Eskom. A crucial part of SALGA’s work was representing local government. Two weeks ago an Eskom spokesperson said local authorities owed Eskom R21 billion in arrear debt and about 45 out of 52 municipalities had defaulted on agreed debt repayments. The debt had grown by 35% in the past year. He asked SALGA to project that growth rate into the future. A year ahead and the members of SALGA would be in a great deal of trouble. He asked what insights SALGA could offer the Portfolio Committee from the perspective of its members - something more than a generic financial mismanagement. Was there an example of where SALGA had successfully intervened to reduce debt?

Mr Brink said that his second question was not vicious, but he was asking it for the sake of oversight. If the Committee looked at the strategic pillars or goals for finance, not audits but unfunded budgets, supply chain management, an inability to pay creditors, etc., did SALGA not think that it had failed its members? Should SALGA not account for some of the failure? He was inviting introspection on the part of SALGA.

Mr Brink said that there were several bodies such as the National Treasury City Support Network that did valuable work, and SA Cities Network which was a voluntary association doing valuable work, as well as SALGA and its programmes. Did SALGA ever ask if there was a duplication of support and hence waste of resources? Should SALGA not consult its mandate to ensure that it was giving appropriate support?

Ms G Opperman (DA) said that she had been a councillor for more than a decade. Municipalities had huge challenges in terms of the categorization of remuneration of councillors. Different grades created problems because councillors felt that they all did the same job. Was there any possibility for the amalgamation of Category B municipalities that used the plenary executive system?

Ms Opperman stated that there was very poor cooperation, if any, between Departments and municipalities in respect of the Integrated Development Plans (IDPs). Were there any plans to strengthen that? Some municipalities owed SALGA a lot of money. Was there any plan in place to assist those municipalities with high levels of debt? Municipalities were desperate for assistance from SALGA but they just could not afford to pay. The presentation stated that 60% of municipalities had debtor levels higher than 30% of their own revenue. Nearly a quarter of municipalities collected less than 50% of revenue owed to them. Apart from the financial recovery plan, were there any strategic plans to counter that?

Ms Opperman pointed out that renumeration for staff in small municipalities was not competitive and so they could not afford to retain or attract staff. Municipalities had been known to advertise four or five times but were unable to attract the necessary skills. As a result, 70% of municipal officials were unqualified. Was there any way that SALGA could provide assistance? Were there any strategic plans for luring investors to smaller municipalities to counter rapid urbanisation?

Mr S Hoosen (DA) commented on how he felt. There had been some very good presentations to the Portfolio Committee that gave a ‘feel good’ feeling and it seemed that a lot was going on and, by and large, it was acknowledged that municipalities had made good progress and many advances in supply of water and sanitation, etc. The various programmes spent billions and billions of Rand on municipalities in a single year. The Minister had, very importantly, said that people had to be asked to be patient when they toyi-toyi’d on the streets and not to destroy property. For him that was the real indicator. The people on the street did not understand all the indicators presented. There was so much support provided for municipalities, costing billions of Rand but the presentation on fiscal and financial challenges showed how bad things were. How was it possible that an official could go home with a box of documents? Mr Hoosen commented that he could probably put money on that person not being charged with theft.

The previous day, the Director-General of Cooperative Governance had said that if a Municipality passed the audit, that was fine. Mr Opperman said that a 60% pass was not fine as 40%, of the people were without. The DG would not be happy with only 60% of his car being washed at a car wash.

Mr Hoosen explained that he was reflecting on what he had heard in the presentations.  Certainly, he believed that there was good work being done, but it was not converting to better things on the ground. People could not see things getting better in municipalities. The municipalities were getting worse and the presentations made people feel better. In a year’s time, the Committee would get another document and so it would go on. He asked when it was going to change. It was a high level question and he did not know who was going to answer him. The 18 good municipalities was just not good enough. People toyi-toying destroyed public investments while presenters were saying that a 60% pass on the audit outcome was fine.

Ms Tlou was impressed by the SALGA presentation and noted that SALGA had done well. SALGA had some key challenges which led to indigent service failures in some metro municipalities. Those needed immediate attention because they affected people on the ground. Was there an effective strategic plan for dealing with ineffective and poor administrative failures? To address the issue of document management, there should be data capturers for all government documents for future reference. She noted that half of country’s municipalities were in financial distress. Maybe that led to the poor audit outcome. What could be done to stop the endemic issue of financial mismanagement? Was there an effective strategy that could be put in place in assist the municipalities?

Mr Mpumza stated that Goal 1 in the SALGA APP was supposed to be sustainable, inclusive economic growth underpinned by spatial transformation and he agreed that it was necessary to address the skewed spatial planning which negatively affected social and economic growth in municipalities. Parliament legislated and devolved the function of spatial planning to municipalities through the Spatial Planning and Land Use Management Act (SPLUMA). The rollout of that Act had been opposed by Traditional Leaders and exposed municipalities to serious litigation by service providers around spatial development planning. It had arrested the transformation of spaces to effect inclusive economic growth. To what extent had SALGA lobbied to ensure the implementation of SPLUMA in all municipalities, including rural areas?

Mr Mpumza stated that the SALGA legacy report showed that there not been substantive progress in handing the function of electricity services to municipalities. What had been the handicap in assigning the function of electricity services to municipalities, especially in rural settings? It was a critical challenge because when Eskom switched off, people did not go to Eskom to complain and vent their anger, but to the municipalities. To what extent was SALGA working on assigning the responsibility of electricity services to municipalities? That would assist municipalities with their debt. It was not only Eskom that was owed money for electricity, municipalities were owed billions of Rand for services that they supplied. That was a measure that would enable municipalities to manage credit control which they currently were unable to do. They could not disconnect when people did not pay.

Lastly, Mr Mpumza asked about SALGA’s reliance on municipalities for 85% on its funds when many municipalities were indigent. Was the funding from DCoG sufficient?

Ms Xaba-Ntshaba acknowledged the good presentation, but said the action was not good. The Department of Cooperative Governance had many entities, all of them talking about strategic objectives and goals so what was the role of SALGA? She was asking because there was clean water in Cape Town but in Amathole in the Eastern Cape, people did not have clean water and were drinking water with animals. Were all wards getting clean water according to SALGA? Had SALGA done ward auditing? The answer had to be negative because in her ward, the pipes were there but they were not functioning. She could see that money had been spent but the results were not there. The entities were not monitoring what they had done in the municipalities. SALGA should say where it had monitored so when the Committee did oversight, it could shoot straight.

Mayors were being put in jail because they were corrupt. What was the role of SALGA in that? Why was SALGA not preventing them from being corrupt? In uThukela millions of Rand had disappeared. What had SALGA done there? People were being paid money to do work but municipalities were telling lies. Municipalities were stealing money every day because the services were not there. The re-alignment should have resulted in better service. Firemen and ambulance people should be able to get in but areas were so congested that people could not get to houses because it was so overcrowded. She thought that SALGA was the overseer of service delivery in municipalities
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The Committee would go to municipalities to see what was really happening. SALGA had to put on record about the money given to municipalities. MISA had given billions of Rand to municipalities but there was no service delivery. She wanted to see service delivery with her eyes.

Ms Direko stated that the presentations were very good and if every strategy suggested in the presentations could be implemented, municipalities would be doing well. The SALGA mandate spoke about capacity building. If municipalities were well-capacitated, there would be good financial management, good governance and municipalities would not be bloated. Were there any challenges between SALGA and the municipalities that prevented the implementation of SALGA’s strategies? If there were challenges, what could be done to ensure that the strategies could be implemented?

Ms Direko said that she was once a councillor and her ex-colleagues were in the meeting. There was very good strategy on economic development and also on land. How far was SALGA in implementing the land release strategies? There had been an increase in land grabs in her area but such matters could be dealt with if the land release strategy was implemented. In most areas, the economy was declining and there was no Plan B. How far was SALGA in dealing with issues of the economy?

Ms Direko asked about the partnership agreements between municipalities, SALGA and Eskom. Were the partnerships working? Had the agreements been honoured or should they be reviewed? Some municipalities were unable to collect revenue.  How could a revenue recovery strategy be developed? Had the previous strategy worked? She referred to the issues with labour. As a councillor, she had come across a very problematic and unhelpful agreement which showed that the municipalities and labour were co-governors and labour sat as members of the panels that hired people. Unions said that they were partners in appointing staff. SALGA should go back to municipalities and teach them about the relationship with labour and see that mistakes with unions were avoided.

Ms Direko concluded that if the strategies could be implemented, they would really help the municipalities. She asked for a detailed timeframe on the strategies so that they could be measured.

Ms Tlou asked SALGA if there was any Act that regulated businesses owned by foreign nationals in municipalities. In Gauteng the economy had declined because of the businesses run by foreign nationals. They were running all the businesses but they took the money back to their own country and did not put  the money in the bank in SA. SALGA had to look at the by-laws. In Gauteng, it was like a dumping ground.

Mr Mpumza asked a question on goal 2: Good Governance and Resilient Municipal Institutions. The challenge was the relationships between councillors and between councillors and administration. What was SALGA doing to address those relationships to ensure stability in relationships, especially between the administration and labour. If there was a framework on personnel management, the Auditor-General would not find it because it would have been deliberately removed to hide those relationships in the municipalities.

Ms Xaba-Ntshaba noted that to professionalise Local Government, SALGA continued to deliver skills development products and programmes in leadership and governance. That did not match what was happening. Which skills were being provided and to whom? It did not match what was happening. If they did have the skills, municipalities would not be doing the wrong things. What was SALGA doing? The people wanted to see the millions go back to the municipalities. SALGA was not doing what it was supposed to do.
The Chairperson understood that the mandate of SALGA was to support municipalities but employer expenditure on staff was double what it should be. SALGA said that it had a responsibility to do capacity building, etc. but in the advertisements for staff, it indicated that SALGA expected applicants to have the relevant skills. SALGA was spending way above the norm on staff. It was an area of concern to the Committee.  No one could blame SALGA as all the structure for cooperative governance were there. It came back to the issue raised by Mr Hoosen and Ms Xaba-Ntshaba: maybe SALGA officials were spending too much time in meetings instead of doing actual work on the ground. SALGA had to share best practices. Local government was at the coal face. The reality was that when people protested, they did not see that it was a co-responsibility. SALGA needed to respond to the issues together with the municipality. They should navigate together.

The Chairperson stated that SALGA would have to respond to some of the issues immediately but there were other issues where SALGA would have to sit with the Committee and gently work out the issues.
SALGA had heard the tone of the Members.

Response by SALGA
The Deputy President of SALGA said that he would share the policy questions with Cllr Bhekumzi Stofile, a
Member of the SALGA National Executive Committee. He asked the Acting CEO to start with the operational responses.

Mr Joel said that he could not avoid the question of councillor renumeration as it was raised at every Portfolio Committee meeting. The practice at Local Government was to have six grades. Metros were Grade 6 and small municipalities were Grade 1. The question was why there were different grades of renumeration when all councillors did the same work. The Independent Commission for the Remuneration of Public Office Bearers had recently done a review of the remuneration of councillors and looked at resolving that issue. It was in the November 2017 Report of the Commission.

Responding to questions on cooperation between Departments and municipalities in respect of the Integrated Development Plans (IDPs), Mr Joel lamented that there was a lack of participation from provincial and national departments which did not look at and influence Municipal IDPs.

Regarding the debt owed to SALGA, Mr Joel spoke about a meeting convened in the Eastern Cape the previous week where two municipalities present said that they were asking for help from SALGA but they had not paid membership fees for three years. The private sector would have asked them to leave, but being membership-based, SALGA had to listen to them and had asked itself the question of whether it provided sufficient support to enable the municipalities to pay their dues. It was not a new problem and SALGA was addressing the matter.

Mr Joel agreed that small rural municipalities were unable to attract people with the right skill and pay them an attractive salary. Worse still was the fact that as soon as those people had experience, they moved to bigger municipalities.

Comments by the Minister
The Chairperson announced that the Minister was leaving for another meeting invited her to address the meeting before she left.

The Minister stated that she was not responding on behalf of SALGA but wished to make a couple of points. Mr Hoosen had noted that she had urged people to be patient and not destroy property. She was not saying that the people should not protest as it was their right, but destroying property took them backwards. She thought that SALGA should also preach that point. Recently protesters had blocked a road and the ambulance could not get through even though there was a woman dying on the other side. When protesters destroyed things, the economy went down because money that should have be used to do things, now went to repair what had been destroyed. She reiterated that she was not telling people not to protest, but just not to destroy things.

The second point that the Minister wished to respond to was the question of when it was going to change. She could not answer that, but Government had to be the change that it wanted to see. She had told DCoG that it could not have an audit disclaimer and then tell municipalities not to have a disclaimer. Those at national and provincial level had to inspire municipalities. Maybe people should not sit in offices all the time. She hoped that the Committee would go out and see the people. It was difficult to manage by remote control but everyone would just have to work at it and hope that in a few years it would be better.

The Minister stressed said that SAs should not blame foreigners for the woes of the country. It was not a popular thing to say, but she was used to saying unpopular things. The economy was declining for many reasons, but foreigners was not one of the reasons for the decline. When the 2013/14 SA attacks on foreigners had occurred, she had to do a lot of work to stop people in other countries torching MTN offices and property. MTN did more work outside of the country than inside the country. In the AU, people had gone to her and asked what they could do when SAs behaved in such a way towards their people. With the African Continental Free Trade agreement, there would be more trade within Africa and SA needed to be careful not to aggravate foreigners. If foreigners did criminal things, she agreed that they should be arrested and deported, but not for earning an income.

The Minister excused herself as she had another meeting to attend. She noted that if she did not respect the Portfolio Committee, it would give her a hard time.

Response by SALGA continued
The Acting CEO responded to the question about the Eskom debt. Many municipalities had been forced into a corner by threats of cut-offs and had been obliged to conclude settlement agreements that were unsound and unaffordable. The problem was that municipalities needed to enter into an agreement that was affordable for those municipalities. An example of support being given by SALGA was in the case of the three small municipalities which had been amalgamated as the Dr Beyers Naude municipality in the Eastern Cape. The municipality had owed a huge amount to ESKOM and was forced into an unsustainable agreement. SALGA and National Treasury came up with a more affordable agreement with which both the municipality and Eskom were happy. Eskom was being repaid, even though the amount being repaid each month was largely reduced from the original agreement. The same thing should happen with other municipalities. In partnership with National Treasury, the municipalities and Eskom should decide on appropriate, affordable and sustainable repayment plans. The same principle should be applied to the debt owed to the water boards.

The Acting CEO addressed a second issue: the challenge around labour relations in municipality-level. At each municipality there was a local labour forum which allowed for a meeting between the employer and employee representatives , i.e. the municipality and the unions. Many things were subjected to negotiations that were not within the scope or jurisdiction of the local labour forum.  So what unions could not gain in central bargaining, they dealt with at local level. It created huge problems resulting in the co-governing. It had been agreed that SALGA would go to go back to train municipalities about what should be dealt with in the labour forum.

Cllr Stofile requested that SALGA be given an opportunity to share with Committee the situation in Alexandra, Sandton, which owed R21 billion to Eskom wherein SALGA  would reflect on what it had picked up about electricity provided by Eskom vis a vis the provision of electricity by the municipality in Alexandra which showed that the poor continued to subsidise the rich. The other issue that SALGA and the Committee had to have an open and frank conversation about was the corruption which was a deep problem in South Africa. They needed to discuss the point made by Mr Joel earlier about one part of the State Security Agency going to a municipality and confiscating documents and then when the Auditor General came to see those documents, they were not there. How did one account for such things? Those things had to be contemplated in order to manage the municipalities document record-keeping properly.

The Deputy President said that the quality of questions from the Committee suggested that SALGA needed a day to explain itself so that the Committee Members could represent municipalities in Parliament, knowing what was happening on the ground. SALGA had suggested to the Minister that it needed to give the Committee a list of issues that could empower the Committee when Members were representing municipalities so that the Members could respond appropriately to questions that arose about SALGA.

The Deputy President explained that the City Network Structure was not an organisation but was working under SALGA to respond to urban development as SALGA had realised that people were moving from small towns to cities. SALGA said that it would engage with National Treasury to provide funds to the Network.

The Deputy President said that to explain the impact of SALGA in supporting municipalities, he would need a day or two. On slide 8, he had tried to relate the role of SALGA. That answered Ms Xaba-Ntshaba’s question. The power relations had to be discussed at a high level. In terms of the separation of powers, the Council delegated powers to the Mayor, the Executive Manager or Municipal Manager and the CFO. Each had been assigned functions in respect of the law. The question was how to manage those assigned powers. SALGA was not promoting fighting but engaged in capacity building. The DA in the Western Cape had complained that after the 2016 election, SALGA was continuously taking mayors, executive managers and CFOs out of their offices. But SALGA was giving training so that municipal leaders had capacity and understood what it was that they were doing there. SALGA had subsequently deployed people to work permanently with provincial structures to stabilise its space. There were challenges for SALGA in not implementing some programmes. He added that the programmes rolled out at a provincial level were provincial programmes.

The Deputy President requested the Chairperson to relax some of the questions and allow SALGA to spend a day or two answering any questions, and then the Committee would be like them, i.e. in understanding municipalities.

He admitted that SALGA was not happy about the outcomes of its efforts. The effort put in by SALGA was bigger than the outcome. In MINMEC, SALGA had sponsored  a motion that people should be charged with sabotage or treason and not just malicious damage of property when they destroyed property during protests. Those same people could put poison in the reservoirs if there was no control.  There had to be serious charges, regardless of whether the people were friends or not. SALGA proposed that the Committee represented that view in Parliament.

Further discussion
Mr Dan Mashitisho, Director-General of the Department of Cooperative Governance (DCoG), responded to a question about whether the grant from DCoG to SALGA was adequate. He would have a discussion with SALGA but, while it might look like DCoG had a large budget of R90.5 billion, R85 billion went to municipalities and R4 billion went to Non-Profit Organisations. That meant that DCoG transferred out almost R90 billion of its budget. After transfers DCoG had a budget less than that of SALGA to do its business. The budget of the Department of Traditional Affairs (DTA) was R163 million, so the Departments had meagre budgets, way below SALGA’s budget. It had to be noted that SALGA’s salary bill at 64% of budget was above the norm of 30% - 33%.

The DG added that the Municipal Infrastructure Support Agent (MISA) had a budget of R343 million. It was not MISA’s job to build bridges but municipalities were not functional so when a community went to MISA for help, it took R11 million from its meagre budget to build a bridge for a community. The DG said that when there was a discussion about DCoG’s contribution to COGTA, the matter be looked at in that context.

Mr Brink said that it was a bit of an unfortunate statement for the Deputy President to say that because of the quality of the questions, the Committee needed more training. Many of the Committee Members might be new to Parliament but they had experience of local government, and of SALGA. The question that he had asked was whether SALGA had made a contribution to the decline of local government. It was an invitation for SALGA to introspect  so that SALGA could reflect and maybe make a better contribution. It was not an attack against which SALGA had to defend itself. The question remained unanswered: was SALGA introspecting about its failure in respect of local government?

Mr Brink was grateful to the Acting CEO for his answer about the Eskom debt. One aspect that remained unanswered was the progress that SALGA was making in the Inter-Ministerial Task Team (IMTT) meetings. If Eskom was coercing municipalities into bad repayment agreements and there was a better way as had been done in Beyers Naude, was that being raised in the IMTT meetings, and was there any progress? He added that he was not asking for details of the process – just whether there was progress.

Ms Xaba-Ntshaba said that Cllr Stofile had reminded her about her about areas in which she had canvassed where there was no mayor and no service delivery. People near the Tugela River had been crying about a bridge since 1995 because 25 people had died trying to cross the river. It was an IFP Council and it did nothing. It did not care that people were dying. The Committee could ask the IFP Member of the Committee, Inkhosi Luthuli, because he knew about it. SALGA had said it was assisting with municipalities so why could it not advise the municipality to build a bridge? There was also a DA municipality that was not providing water.

The Chairperson asked SALGA to respond.

The Deputy President of SALGA repeated that slide 8 indicated the mandate of SALGA. He said that he had not been trying to ridicule the questions but had said that SALGA needed a day to discuss the inter-relations and inter-connectedness of the three spheres of government, each of which had been allocated powers. SALGA could not assist the municipalities to default. The Council allocated powers to different offices and people decided to misuse the power given to them by the Council and then they become defaulters. There was no way that one could put SALGA in that picture. He was not being arrogant but was saying that they needed a relaxed environment in which SALGA could also ventilate in terms of the issues on the ground.

The business model of Eskom was taking more money from municipalities and there was a plan by Eskom to take over the municipalities so SALGA had approached the court and, as a result, the IMTT was created. The IMTT had appointed an advisory committee to look at the Constitution of the country and to examine that section that said that a municipality had authority in terms of distributing electricity in the area of its jurisdiction. The outcome was that municipalities were right. It had been agreed that there should be a technical team that would report to the political IMTT. The decision was that every institution had to perform in its own area. Before the elections, the President had decided to cut Eskom into three pieces and so Eskom had said that it would participate in the  technical task team only after it had information about the new institutions being created by the President. The Task Team had said that it could not wait because it had to look at the functions and responsibilities of the municipalities and local government. That was the current position: the task team was finalising a document that clarified the powers of a municipality without disturbing the cashflow of Eskom. They had to meet each other half-way.

The Acting The Chairperson, Ms Direko, thanked SALGA and adjourned for lunch.

After the break, the Chairperson welcomed the CLR Rights Commission.

Presentation by the CLR Rights Commission
Professor David Luka Mosoma, the newly appointed Chairperson of the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, led the delegation.  He was accompanied by the Deputy Chairperson, Dr Sylvia Pheto, CEO Mr Edward Mafadza and the CFO, Mr  Cornelius Smuts. Prof Mosoma congratulated the Chairperson and Committee Members on their appointment.

The newly appointed Commission had entered the office on Monday and had found the letter from the Portfolio Committee. The Commissioners would only be having their induction the following day and would then take look at the strategic plan on 23 – 25 July 2019. The vision of the Commission was to ensure mutual respect for all religions, cultures and languages and to foster rights of people to their religions, cultures and languages. The Chairperson added that the Commission, noting that virtues were above values, had committed to three virtues: selflessness, service, sacrifice.
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The CEO, Mr Mafadza, stated that the mission and vision was supported by legislation and the Constitution, in the Bill of Rights. CLRC had been actively involved in the development of the Initiation Bill and had given input to Parliament. He highlighted some recommendations arising from the involvement of CLRC in issues such as the Traditional Initiation Leadership structures and other aspects of the initiative schools

The CEO listed the projects that CLR Rights Commission had been involved in: Ukuthwala, recycling of graves, Ukuhlolwa,.  NCC 2019, Albinism, Inxeba (The Wound Film) and witchcraft.
The CEO stated that various critical pressure points had been identified for the current year:
-Religious awareness campaigns for the promotion and protection of the religious rights of communities.
-Capacity building on alternate resolution for cultural, religious and linguistic communities.
-Dialogues with young people to raise consciousness on their cultural, religious and language identities.
-Capacity building on alternative dispute resolution.
-Development of guidelines for the equitable utilization of all official languages and implementation of those language guidelines.
-Review and consolidation of the researched work on the Khoisan language, culture and religion.
-Focus on the resolution of conflict between and within cultural, religious and linguistic communities.
-Establishment and support of cultural, religious and linguistic councils.

The CFO, Mr Smuts, indicated that the CLRC budget for 2018/19 was R45 million. Staff costs were R26 million and operational costs were R19 million. The budget for 2019/20 was just under R48 million. The CFO noted R7 million had been allocated to CLRC in 2004, and not been increased since then, except for cost of living increases each year.

The CEO concluded by remarking that there was a need for a review of the Commission’s finances. The environment in which the Commission operated had changed substantially.  Consequently, the demand for Commission’s services was high. The CRL Rights Commission was still did not have sufficient resources to establish regional offices. That constraint limited the ability of the Commission to access communities in rural areas. There were only 33 people in CLRC to serve 56 million people in the country and the Commission could not reach the deep rural communities that it was supposed to serve.

Discussion
The Chairperson asked Members to be precise in their questions and if they felt, at the end of the presentation, that the response was not adequate, CRLC would be requested to submit more detailed responses in writing. She reminded Members that the Commission had to catch a flight to Johannesburg.

Ms Opperman said that she had a number of questions as she came from a background of Pentecostalism. Apparently there was to be another consultative process where there would be an all-inclusive engagement with all religious bodies on the Commercialisation of Religion Report. Had a date been set for the conference because the pastors were up in arms and very anxious about it? There was an issue where CLRC was accused of misleading Parliament when it had said that several religious organisations had accepted its proposals. Had that issue been clarified?  FOR SA (Freedom of Religion South Africa) said that the proposed solutions were unnecessary, unconstitutional and unworkable and would make CLRC the head of religion in SA. What was CLRC’s view on that? She noted that page 42  of the Report said that CLRC would be the final arbiter in all matters with final decision powers. FOR SA said that CLRC’s powers was an infringement of rights to religion and religious freedom. What was the Commission’s opinion on that?

Ms Opperman had heard that CLRC had been allocated only R45 million. What was the cost of running and monitoring the regulatory structures?

Mr Hoosen stated that he had so many questions to raise but he was mindful of the time and hoped there would be time to raise more issues on another occasion.

The Chairperson ruled that the Members should focus on the presentation and CLRC would come back and focus on the report, etc. She asked Mr Hoosen to focus on the strategic plan.

Mr Hoosen agreed with the Chairperson but  said that the Committee should have had the opportunity to give input into the plans but that there was no time to do so.

The Chairperson stated that, in terms of the rules of Parliament, there would be time to relook at the strategic plan.

Mr Hoosen said that, taking into account that the country came from such a diverse history and had such a terrible past,  the Commission had one of the most important jobs to do in the country. He supported the notion that, at some time, the Commission should get more funding. On Facebook or social media, one saw the massive divisions between groups in SA and one asked oneself who was doing anything about it. CLRC was one of the organisations that could help to foster better relationships. He noted that it was acceptable to have nudity at a Zulu wedding but if one posted pictures of nudity from a Zulu wedding on Facebook, Facebook would drop one for three weeks. Where was the respect for cultural rights? Those were the big issues that had to be dealt with.

Mr Hoosen’s concern with the Commission’s report was that the format meant that the Committee would not be able to do oversight and evaluate the accomplishment of the objectives. The plan did not give details as in the normal format.

Mr Luthuli said that he had noted that three items in the objectives that he was in favour of  as they related to the Zulu custom. He added that Inthuwala was an accepted custom for the Zulu but that did not mean abducting a young woman or even a girl against her will. He would deal with other issues when the Commission came back.

The Chairperson promised that, in future, the time would be allocated properly. However, when CLRC met to discuss the strategic plan, it had to be re-worked and clear timeframes had to be inserted.

Ms Tlou asked who qualified to open an initiation school and who monitored the running of the initiation schools. In the old days the kings and traditional leaders had opened the initiation schools, but now who was monitoring them in the townships and cities? Were the kings and traditional leaders getting financial support from DCoG to run the initiation schools?

Ms Tlou also asked who kept the data for the young boys because wrong things were happening. She was
asking again for moral regeneration. Maybe the Chairperson of CLRC and the Department of Education could make moral regeneration part of the curriculum to help the youth because there was a lost generation.

The Chairperson reminded Members that the Initiation Bill was currently serving at the NCOP and Members would get another chance to look at the Bill when it came back from the NCOP. The Act prescribed certain things and they had to be considered.

Mr Mpumza agreed that the APP had to be reworked as it was not correctly structured. The report reflected the significance of the Commission because it was through the people’s language and culture that they had been conquered. The cultural and linguistic identity of the people had disappeared. In reversing that process, it was important that the Commission worked hard to ensure that the people realized their linguistic and cultural rights as part of realising their freedom.

Mr Mpumza had a question regarding the projects. The question of a dialogue with the young people was long overdue. That was where they would recapture their identity. Even Members of the Committee found it very difficult to express themselves. The question of Ukuthwala was important. It had been abused along the way but in English, it meant to elope with one’s bride. In Pondoland, in the Eastern Cape, the old men were grabbing 12-year old girls. That forced marriage was an abuse of the young. That abuse had to be corrected. Ukuhlolwa was currently only addressing girls and was not being applied to boys as had happened in the old days, so the practice had become sexist.

Mr Luthuli said that the practice had also taught boys how to behave towards girls. The Chairperson translated his remark into English.

Mr Mpumza said that the Committee needed the Language Status Report. He added that the language that he had spoken in the village where he had grown up was being lost.

Concluding remarks
The Chairperson announced that she was going to stop the questions and asked the Commission to respond in writing before 11:30 the following day so that the Committee had the answers before addressing their report that afternoon. The Commission had two hours in the plane which should be enough time to respond to the questions.

She noted that the Minister and Deputy Minister would address some of the points that the Members had raised in the Budget Vote.

The Chairperson apologised for the rush and promised to manage her time better in future.

The meeting was adjourned