Municipal Systems Amendment Bill: NCOP Amendments; COGTA BRRR

Meeting report

The Chairperson welcomed the Portfolio Committee and declared the virtual meeting officially open. He also welcomed the delegates from the Department of Cooperative Governance and Traditional Affairs (COGTA).

He requested the Committee Secretary to indicate apologies: It was said that the Minister has apologised; Deputy Minister Bapela, and the Director-General, Ms Avril Williamson, have all apologised for their absence. The DG for Traditional Affairs was present.

The agenda for the day would be the presentation of responses to provincial negotiating mandates on the Local Government Municipal Systems Amendment Bill. The second item would be the adoption of the Budgetary Review and Recommendations Report (BRRR) of the Portfolio Committee on Cooperative Governance and Traditional Affairs.

Mr C Brink (DA) moved for the adoption of the agenda, seconded by Mr G Mpumza (ANC).

COGTA responses to negotiating mandates on the Local Government: Municipal Systems Amendment Bill [B2B-2019]

Mr Tebogo Motlashuping, Deputy Director-General: Institutional Development, COGTA, said that he will be taking the Committee through the progress made on the Bill. The presentation is in relation to the responses to provincial negotiating mandates, as requested by the Committee. The National Council of Provinces (NCOP) has gone through the processes of consulting the public, discussed the provisions of the Bill and subsequently received negotiating mandates from provinces.

The objective of the Bill was to make further provision for the appointment of municipal managers and for managers to be directly accountable to municipal managers. It was also to provide for the procedures and competency criteria for appointments of senior managers in municipalities. It was also to provide consequence of appointments made in contravention of the provisions of the Act and its regulations. They were going to determine timeframes in which performance agreements will be signed and concluded between the employees, senior managers. The municipality does a lot to make further provision for the evaluation of the performance of municipal managers, to require employment contracts and performance contract to be signed. Systems and procedures are required to be consistent with policies and regulations, as regulated by the Minister. He said that he would not spend too much time on the background, because this Committee has already dealt with the processes of this Bill.

Some of the Bill’s provisions are aimed at: the prohibition of holding of a political office in a political party; to regulate the employment of dismissed staff; to empower the Minister to regulate treaties, remuneration, benefits and other terms and conditions of the employment of senior managers in municipalities; to employ the council to approve the staff establishment and prohibit employment of personal acquaintances; to empower the Minister to regulate human resource management systems in local government, and also make provision during the appointment of municipal managers from the Minister's questions into the Municipal Systems Act. This is when this Bill was first introduced to the Portfolio Committee.

After this introduction, there were amendments that were proposed by the Portfolio Committee, after having seen the positives that were achieved as a result of the prohibition of the holding of office for senior managers in municipalities. The Committee extended the prohibition for the holding of political office to all staff members in municipalities. This was the new insertion by the Committee: that staff members may not hold political office in a political party, whether in a permanent or acting capacity; a person who has been appointed as a member, before subsection one took effect, will then be given one year to comply with this particular section of the proposed Bill. This was agreed on by the Portfolio Committee and endorsed by the National Assembly, and it was referred to the NCOP Select Committee. That is the major change to the original Bill that was given by the Executive to Parliament. When this was referred to the Select Committee on 16 February, it was presented by the Department before the Select Committee and the Committee requested the Department to continue to support permanent members, as they continue to engage the public.

The NCOP made presentations to eight of the nine provinces because Northern Cape decided to have a consultation by way of advertisements in local newspapers. However, in other provinces, these were physical or via MFTs. The Department and NCOP engaged the South African Local Government Association (SALGA), municipalities, members of the public, traditional leaders and all affected legal practitioners and academia. There was a thorough consultation that was done by the NCOP, supported by the Department. As a result of this, there were some commending debates. Provincial legislatures finalised first negotiating mandates in November 2021. There were some delays, and an extension was subsequently granted, but all nine provincial legislatures supported the Bill as a section 76 with certain recommendations. All the comments that were made during the public hearings are included in a matrix form, in what is referred to as annexure of all the comments from parties in all provinces. All affected stakeholders were included for the Portfolio Committee to look at.

Amendments proposed by the Select Committee were prepared by the Department and parliamentary legal services. Parliamentary legal services also continued after the deliberations and comments that were made and concluded in a deviation of the Bill. The Bill was proposed, deliberated upon and adopted for final mandates.

Amendments by the Select Committee:

After responding to the negotiating mandate, the C-List was jointly prepared by the Department of Cooperative Governance and Traditional Affairs as well as parliamentary legal services. The C-List and D version of the Bill were presented by the parliamentary legal services to the Select Committee, on 31 August 2021. The presentation focused on proposed amendments on clauses (1, 2, 3, 4, 5, 6, 10, 12, 13 and 16). After deliberations and consideration of the Bill, the Committee agreed to the Bill with proposed amendments and referred the Bill for final mandates. Substantive amendments were made on the following clauses:

Clause One:

On page three, in line 19, to insert (c)“‘Secondment’ means an employee who perform duties in terms of an agreement between their employer and the relevant official in an organ of state receiving the employee:”

Clause Five:

On page six, in line 40 to 43, to substitute the subsection with “The contract of employment of a manager directly accountable to the municipal manager must be on a permanent basis.” This is an important proposal from the NCOP. The NCOP, in its deliberation, agreed to the Portfolio Committee hybrid approach in relation to the contract of employment of managers directly accountable for managers i.e. municipalities may look into the possibility of offering to choose whether to opt for permanent or fixed-term contracts. The NCOP is of the opinion that this particular clause must read as “the employment of a manager directly accountable to the municipal manager must be on a permanent basis”. The NCOP has also opted for all managers directly accountable to senior managers be employed on a permanent basis for institutional memory and for continuation of the skill that municipalities have.

Clause Ten:

On page eight, in line 23, to omit the heading “Staff members prohibited from holding political office” and to substitute with “Limitation of political rights”. These will be members who are appointed as senior managers in municipalities; they will have their rights limited in holding political office. Changes from prohibition to limitation of political rights, which, in effect, is in line with section 36 of the Constitution.

Clause Twelve:

On page nine, after the colon, to insert the following subsection: “(1A) The MEC must table a report detailing the outcome of the investigation in the relevant provincial legislature within 90 days from the date on which the MEC designated a person or persons to investigate the matter and must simultaneously send a copy of such report to the Minister, the Minister of Finance and the National Council of Provinces”. The NCOP said these reports should be acted upon because history has shown that in instances where these investigations are done, and the focus is not on implementing the recommendations, and also to allow for consequence management. On page nine, after line 25, to insert “(c) by the insertion of the following subsection:”

 “(6) If an investigation warrants such a step, the municipality must institute disciplinary proceedings against the person or persons implicated in the report, in accordance with the systems and procedures referred to in section 67, read with Schedule 2, and report the outcome to the MEC or the Minister, as the case may be, within 14 days of finalisation.” In this case as well, the NCOP stated that there should be consequence management, and it was explicitly said that the section that ensures that, once a report has been tabled, there should be consequence management and disciplinary proceedings against people implicated in those reports.

Discussion

Mr Brink wanted to comment on one aspect of the recommendations made by the NCOP – the proposal that the contract of employment of a manager directly accountable to the municipal manager must be on a permanent basis. He said that this has been a debate that has been going on for quite some time – about whether section 56 appointees should be permanent appointees, or fixed-term contract employees. It was debated at length in the Committee, prior to the Bill going to the National Assembly, that it should be up to the municipal council concerned to decide whether the contract will be permanent or whether they will be fixed-term contracts. The NCOP has brought this Bill back and recommended they should be permanent. One of the concerns here should this recommendation be accepted is that there needs to be clarity on the implications that this will have for existing contracts. It is known, obviously, that there is a rule of interpretation that statutory changes or amendments are not retrospectively enforced. So, if senior managers who are appointed on fixed contracts were presumably finished with those fixed-term contracts, should this amendment be passed, the new appointees would be appointed on a permanent basis. There might be a need for some sort of clarification of that sort of transitional arrangement, which has not been provided for, and it is a complication. It is a complication and an issue that is already been debated in the Committee.

Ms E Spies (DA) questioned the use of the term 'limitation' as opposed to 'prohibition', when it comes to the holding of political office by staff: the Committee has discussed at length, and decided that they should not hold political office. What has been returned is a ‘limitation’. One needs clarify on what is meant by limitation. It is either that managers are not holding political office or they are.

Mr K Ceza (EFF) said that he supports clause five, which says that contract of the employment of managers directly accountable to municipal managers must be on a permanent basis. This is because, in a previous meeting, there was a discussion of institutional memory and the fears that are heeded, particularly in rural municipalities, and the vacancies that are experienced in those municipalities. He said all amendments in the systems must be viewed as aimed towards ensuring the day-to-day running of the municipalities done by professionals with very little chance that they could be influenced or bullied by senior politicians in political structures. There recently was a case of Mr Herman Mashaba blaming the DA for coming to his house, asking him to introduce them to municipal officials. That is point-blank corruption, and the bullying of structures politically. It is very important to tighten the ship. He said that his question was covered wherein, a limitation vs prohibition, that should be made clearer, because limitations are up to a point.

Ms H Mkhaliphi (EFF) agreed with Mr Ceza to say that there should be more clarity in the same manner Mr Brink was alluding to. The Department must comment, instead of reading what the NCOP is proposing; legal services must provide guidance because what has been debated in the Committee by Members of the political parties looks at a broader perspective of this Bill. Legal services need to take the Committee through the Bill. She expressed further agreement with Mr Ceza to say that this Bill is very important in its ploy to stop politicians to do as they please with workers. To add on Mr Ceza’s example, she made one of her own: there is a Mayor who is alleged to have quickly victimised workers right after he assumed his position. Because they [the workers] did not campaign for him, he told them that he was going to deal with them in terms of their contracts. This Bill has to be able to protect workers in such instances; there cannot be situations in South Africa where employees are ill-treated by politicians who are abusing their powers. This Bill seeks to protect the workers. That is the position of the EFF. Workers must be permanently in contracts. One cannot play with other people’s lives: people do not know how to plan their lives because their contracts are ending in five months, they do not know if it is going to be renewed or not. Workers, especially at a managerial level, must be permanent in order for them to plan their lives. They must send their children to school, they must be able to buy houses; they must be able to take decisions as workers who work every day for their kids.

This Bill has been engaged in the NCOP; this is a result of a judgment from the Constitutional Court. What is needed now is for the Committee to finalise it. For this to occur, the Department can assist - what is the Department's view? Unfortunately, SALGA was not present. From her understanding, the DDG or the Director of the Department was given the task to come and present on short notice [today]. This is important because there cannot be an expectation for the Department to lead, while they were not given the task and were just told to go and present to the Portfolio Committee. That would mean that these Bills are not being taken seriously, this will have huge implications, especially for managers at a municipal level. The reason why this has been debated by the Portfolio Committee is because of the understanding that local government is the coalface of the people. If people in municipalities and in the Department cannot be protected then the Committee is not serious about development.

She further expressed the need for clarity and the legal implications of some of the terms recommended. The Committee cannot be getting a Bill from the NCOP and be rushed to make a decision without a detailed understanding of the contents that emanate from that [NCOP] discussion. When the DDG was presenting, he mentioned the consultation process; everyone understands that this happened during COVID-19. People need to be in the ground to say how important this Bill is. It was said that the Eastern Cape did advertise the Bill. But how many people were reached in local government and how many had access to this advert? Even amongst those who are learned, some do not access advertisements. People have so many things to do in their life. There is no justice in that, but that stage [of public participation] has passed. The PC cannot take shortcuts. Many people are not doing their jobs because they are aligned with certain political parties and know that there will not be consequences for what they do.  

The Chairperson thanked Ms Mkhaliphi and corrected her that the province concerned was, in fact, the Northern Cape and not Eastern Cape.

Mr Mpumza was inaudible due to poor connectivity.

Mr Mpumza said that the contract of section 56 managers is suggested to be permanent; it is a progressive step because it will stabilise the administration. The characterisation is where local government have been rendered unstable, because managers are a necessary variable in local government for sound governance. He said he personally supports the appointment of section 56 managers on a permanent basis.

On the point of limiting rights, he expressed the same concerned with regards to the lack of clarity on the matter, and said that he is still confused by the lack of detail in many of the proposed changes.

The rest of Mr Mpumza’s inputs were inaudible due to poor connectivity.

Ms D Direko (ANC) acknowledged the presentation that had been made. She pointed out that, however, there still need to be continuous meetings to deal with the matter. The Committee will not be able to do justice to matter because even Department indicated that it was short notice for them to come and present.

Ms Direko further expressed her agreement with Ms Mkhaliphi in that there is a need for more information. How did the NCOP arrive to some of the recommendations that it had put forward? One must also remember that this Bill was taken to court and had to come back Parliament. For the Committee to submit it back to Parliament for approval, they must do proper consultation and be sure that public participation was done appropriately.

On limitation of rights, she expressed her agreement with other Members. Even here, there is a need for more information to justify the substitution of prohibition with limitation.

Clause five: contracts of employment for manager’s directly accountable to municipal managers must be on a permanent basis. This was one of the items that was discussed extensively in the Portfolio Committee; there were even presentations from different stakeholders. The recommendation of the Committee was that it will be at the discretion of the municipality on this matter. The reason for this is because, in looking at the state of municipalities, one cannot move away from the fact that some of the managers that have been appointed in the municipalities do not meet the necessary requirements. Secondly, in other municipalities, when senior managers are permanent, they tend to render the municipal managers and CFOs useless because they know that they are permanent. These two positions are not permanent. The argument here is questioning why one would leave these permanent but the ones that they account to as not permanent. The Committee agrees that employees in the municipalities need job security and they need stability. However, there is a need to do things on a case-by-case basis for municipalities. When a municipality looks at its own case, they will make a determination as to what should happen.

The Chairperson said that the areas that need further clarity can be isolated. The Department and legal services must be ready to answer on the areas specifically raised by Members.

Responses

Mr Motlashuping said that the process of public participation and consultation was spearheaded by the NCOP and permanent Members in provinces. The Department provided what is called technical support to all the provinces and the NCOP permanent members. Further presentations were made in the venues where there was a public presentation. This why the Department’s presentation has annexed a matrix of what people raised  and the Department's responses in relation to matters that were raised by members of the communities. This has been made available to the Portfolio Committee in relation to specifically outlining what was raised i.e. what the responses were and what the Department’s responses to those issues were, from the departmental point of view. But the process was entirely conducted by the NCOP.  

With regards to the process of the Northern Cape, he said this was also informed by the NCOP, and the Department only provided technical support. The process of consultation in the Northern Cape was solely the responsibility of the legislature and delegates of the NCOP in that province.

With regards to the possible issue relating to instances where managers are accountable to municipal managers appointed on a permanent basis and how this could affect existing contracts: he explained the law does not act retrospectively. However, in the transitional trusts in this Bill, there is a clear indication that the Bill shall not affect the status of existing contracting municipalities – meaning that, in the transitional measure, existing contracts will not be affected by this by this amendment. This then implies that it has to come to an end, and there is no extension [for the contarcts]. The selection and recruitment process should be finalised and concluded on the clause, as it will be signed into law by the President. So, to give clarity on the matter in relation to this: the Bill makes it very clear that managers who are appointed cannot rely on the new amendment that is going to be made in relation to them.

The understanding, in relation to the limitation of political of rights, is that it is in line with what is in the Constitution, in terms of section 36 that prohibits certain rights of people, and that is justifiable on good cause. The understanding that the Department got from Legal Services was that it does not change the original intention of making sure that people who are out of political office should not be employed in a municipality. The inclusion of the word ‘limitation’ is so that it can be in line with what is in the Constitution. So, what does it mean? It means they may have all the rights or employees of the Council may have the rights to be actively involved politically, in any political party, and participate in taking decisions in the political party like any other citizen of this country. However, when it comes to those five positions that are clearly defined in the Act, they will be limited in participating. That means that they will be ‘prohibited' (for lack of a better word), but in this instance, the word ‘limited’ is used. So, they will continue to participate, and they will be allowed to join the political party but they will be limited for those positions. So, the understanding from legal services was that it will have the same effect; the only change was in relation to the word ‘limitation’, to make sure that the provision is in line with the Constitution.

Consultation processes: in the presentation, there are about three to four slides where what had taken place was indicated, and the Portfolio Committee might want the Department to make another presentation. The Department also has to see a version of the Bill after all the public consultations and discussions ensued. The parliamentary legal services then drafted the so called D-list. As far as what is within the purview of the Department, he said, answered those questions. Perhaps Adv Jenkins [senior parliamentary legal advisor] may want to clarify some matters for Members.

The Committee was informed that Adv Jenkins is unfortunately not available, as he is in Madrid with the Inter-Parliamentary Union. Adv Jenkins could be written to if there are specific issues for him to clarify.

The Chairperson said that he suspects that the major issues that the Committee wanted responses on from the Department have been answered. He wondered whether the absence of the Advocate with his technical skills warrants postponing the decision on the matter taking into account as well, the fact that the Bill was returned to the Committee by the Constitutional Court. But equally, the Committee is serious about wanting to be sure about what is going on.

Mr Mpumza thought adequate clarity was provided by Mr Motlashuping. However, he supports the proposal by Ms Direko that there should be another meeting for the Committee to further debate and brush up some few issues.

Ms Direko proposed that that there is another meeting regarding this matter. The Committee can still try to invite the delegation from the NCOP or have a joint meeting, if Parliament allows – for them [the Select Committee] to brief the Committee on the process, especially on public participation and the amendments that have been made on the Bill.

Mr Brink supported the proposal made by Ms Direko.

The Chairperson said it is becoming clear that the Committee would be reconvening for specific areas that need to be clarified. Perhaps Adv Jenkins could be part of the meeting and possibly an engagement with the Select Committee.

Budgetary Review and Recommendations Report of the Portfolio Committee on Cooperative Governance and Traditional Affairs

Mr Brink said the Committee might need to be updated, regarding page ten, or at least have a discussion, around the new policy or overhaul of the community works programme.

Mr Andile Sokomani, Committee Researcher, agreed that the Committee proposed a complete overhaul and agreed that the community works programme is completely corruptible and corrupted. It was further agreed that monies will always be be lost and will not benefit the participants. “I remember that even the certificates they will be given will not take them any further.” There were questions around how many of those participants were actually able to lead better lives. From that the Committee was told that it is a safety net not intended to change their lives.

The Chairperson asked for the suggested inclusion of the overhaul to be noted. 

Mr I Groenewald (FF+) asked about the comprehensive list of all installation refurbishments. He wanted to check if the Committee received that report. If not, it must just be added to the Committee report. Also, the timeframe was not being adhered to as the Committee was still waiting on the report.  

Mr Brink said he noted that, in the recommendations, there is reference to resolving the legacy issues in the community works programme, which he thought is probably broad enough to deal with the model. One additional thing that the Committee might want to consider that was not noted in the recommendations is the failure of the Department to bring a Bill to Parliament, on inter-governmental support monitoring and intervention, in terms of section 139(8) of the Constitution; both are dealing with municipalities being placed under administration. That [Bill] has been lagging for quite some time, and that leads to quite a bit of difficulties. He suggested that a recommendation, stating that the Department should finalise legislation, in terms of section 139(8) of the Constitution, should be added.

The Chairperson said there is no issue with that. It should be noted.

Ms Mkhaliphi said she does not know how to put it, but the Committee, at some point, had concerns regarding MISA, especially because the COO of MISA still faced chrges. When the Committee tried to get a clarity from the Minister, there was no an explanation that was provided. So it still stands.

Mr Groenewald, on that same point, said that the Committee asked the Auditor-General to go back and look at that financials as well - that should be placed in the recommendations as well.

Mr Ceza spoke on point 6.4, saying that the Municipal Demarcation Board should develop and present to the Committee a strategy of dealing with demarcation hotspots, including the areas that have challenges going back to 2016. Some of the demarcations need to be clarified especially on amalgamated municipalities, particularly in the Eastern Cape, because some of the wards are impossible for councillors to service.

The Chairperson said he thinks that 6.4 can be readjusted to include the sentiments made by Mr Ceza.

The report was adopted by the Committee, with amendments.

The meeting was adjourned.