National Development Agency Amendment Bill: briefing

Meeting report

SOCIAL SERVICES SELECT COMMITTEE
18 March 2003
NATIONAL DEVELOPMENT AGENCY AMENDMENT BILL: BRIEFING

Chair: Ms L Jacobus (ANC)

Document handed out:
National Development Agency Amendment Bill [B70B-2002]
National Development Agency Act 108 of 1998

Relevant documents:
Briefing on NDA Bill to Portfolio Committee (Appendix)

SUMMARY
The Department briefed Members on the National Development Agency Amendment Bill, which has already been passed by the Portfolio Committee. The objective of the Bill is to affect the transfer of the administration of the National Development Agency (NDA) from the Minister of Finance to the Minister of Social Development.
Members raised questions on the representation on the NDA Board. In terms of the Amendment Bill Board membership is reduced from fifteen to eleven members. A consequent change is that there will be five instead of six members representing government and six instead of nine members representing civil society. The Department explained that since the Minister administered the Act, it was his prerogative to make the decision. This did not mean that the Minister was acting in an autocratic manner, as he still had restrictions on his decision-making, having to act on the recommendation of the NDA.

The Committee would also try to meet with the NDA at a later stage.

MINUTES
The Department of Social Development was represented by Mr P Du Preez: Legal Advisor: Department of Social Development and Ms L Pietersen, Parliamentary Officer.

Ms Jacobus informed the Committee that the Bill had passed through the National Assembly and had been debated. The Amendment Bill was a section 75 Bill and therefore did not have to pass through the provinces. The Committee would vote on the Bill the following week. Ms Jacobus suggested that they did not have a debate on the Bill, but should rather issue a statement.

Mr Du Preez briefed the Committee on the amendments to the National Development Agency Act.

The objective of the Bill is to affect the transfer of the administration of the National Development Agency (NDA) from the Minister of Finance to the Minister of Social Development. The amendments to the National Development Agency Act also included:
-Reducing its Board membership from fifteen to eleven members. There will be five instead of six members representing government and six instead of nine members representing civil society -appointed by the Minister.
-A provision allowing the Minister and not the Board to appoint the Chief Executive Officer of the NDA.

Mr Du Preez presented the background to the Amendment Bill and the financial implications for the state by going through the 'Memorandum on the Objects of the National Development Agency Amendment Bill'.

Mr Du Preez said that the Chairperson would be appointed from civil society and the Deputy Chairperson from either civil society or the government.

Mr Du Preez said that the NDA was initially not happy with the Minister appointing the Chair and Deputy Chair but had accepted the decision, as the Minister could not appoint these positions without recommendations from the NDA.

Mr Du Preez referred to Clause 3(a). The quorum for a meeting would now require six members instead of eight. It would be up to the members of civil society and government to ensure that their respective representatives were part of the (minimum) six in order to have a balance between government and civil society.

The Amendment Bill had been approved by Cabinet on the 18 September 2002, gazetted in October 2002, certified on 21 October 2002, introduced in Parliament on the 15 November 2002 and had been before the Portfolio Committee of Social development in January 2003.

Discussion
Ms Jacobus asked if the term of office for the board members was specified in the Amendment Bill.

Dr P Nel (NNP) conformed that it was specified.

Mr J Thagale (UCDP) referred to Clause 2(c)(ii). He suggested that, instead of it stating that the "Minister must appoint a deputy chairperson from among the members referred to in subsection a) and b)" it should say "a) or b)". This Clause referred to the appointment of the deputy chairperson from civil society and government.

Mr du Preez said he had consulted with the State Legal Advisors and they had explained that in the context of the Clause, using "and" or "or" made no difference.

Dr Nel referred to Clause 2(c). He asked which meeting the clause referred to and whether the Minister would be present at the meeting.

Mr Du Preez said that "At the meeting" referred to the meeting in Section 5(5) in the principal Act. The Minister had indicated that he wished to attend the first meeting and would appoint the chair and deputies then.

Dr Nel referred to the establishment of permanent provincial offices in the 'Memorandum' on the Bill. He asked whether national or provincial government would be responsible for the establishment of the infrastructure. He asked if, in the past, such offices had been set up.

Mr Du Preez said that there were no provincial offices at the moment. The NDA was responsible for the infrastructure, not national or provincial government. The establishment of these offices was not specified in the Bill as it was the NDA's prerogative to spend its funds as it saw fit (approximately R90 million would be given to the NDA for this purpose).

Ms Jacobus asked if there were guidelines for the staffing of these offices.

Mr Du Preez replied that it was the NDA's responsibility to decide. Mr Du Preez said that he had suggested to the Portfolio Committee that they invite the NDA to give them a briefing on such matters.

Dr Nel asked whether the establishment of the provincial offices was mentioned in the Amendment Bill.

Mr Du Preez said that he had only mentioned the offices as their establishment had financial implications but that the NDA could establish them or not. He added that last year they had not.

Ms Pietersen added that the NDA submitted an annual report to Parliament. She suggested that the Committee examine it for details of the NDA's spending and under spending, especially with regards to the rural provinces. The Act does not dictate, however, what exactly the NDA should spend its money on. They outlined such spending in their business plan and other such documents.

Dr Nel asked what the rationale was in reducing the members of civil society on the Board from nine to six.

Mr Du Preez said that the DP had raised the same issue in the Portfolio Committee and suggested a ratio of civil society and government of seven to four. However, as the Minister administered the Act, it was his prerogative to make the decision. Mr Du Preez said that he did not want to give the impression that the Minister was acting in an autocratic manner, as he still had restrictions on his decision-making: he acted on the recommendation of the NDA.

Ms E Gouws (DP) asked why the Minister appointed the chair and deputy as she felt it was not very democratic.

Ms K Ncumisa (ANC) referred to the numbers required for a quorum. As it was not stated that a balance between civil society and government was required for a quorum, the members constituting a quorum could all be from civil society or all from government.

Mr Du Preez said that all of the questions were relevant ones and had been raised by the Portfolio Committee.

With regards to quorum, the issue of whether to dictate that the quorum should be a three: three balance between the sectors was discussed with the State Legal Advisors. They had said that it was up to the members of civil society and government to see that they were represented equally. If the relevant members were not attending meetings as they should be the Chair or CEO could take it up.

Mr Du Preez said that the only opposition to the Amendment Bill from the opposition parties in the Portfolio Committee was the ratio of nine to six versus seven to four for the civil society and government representation.

Ms Jacobus asked if the Committee had interrogated the Minister on his decision.

Mr Du Preez said they had not.

Ms Jacobus said that she felt they needed a meeting with the NDA as the present Select Committee had not yet met with them. Ms Jacobus asked the Committee members to discuss the Bill in their party study groups. They would vote on the Bill the following week.

The meeting was adjourned.

BRIEFING TO PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE NATIONAL DEVELOPMENT AGENCY (NDA) AMENDMENT BILL: 23 OCTOBER 2002

INTRODUCTION
The NDA was established on 1 April 2000 in terms of the National Development Agency Act, 1998 (Act. No. 108 of 1998) with the following primary objectives:
to grant funds to civil society organisations to meet the needs of the poor; and
to strengthen the institutional capacity of such organisations involved in direct service provision to poor communities.
The NDA is currently governed by a Board representing Government and civil society. Six members represent Government and nine members represent civil society organisations.
The NDA is headed by a Chief Executive Officer (CEO) who is appointed by the Board. The CEO is the accounting officer of the NDA and is accountable to the Board for managing the affairs of the NDA.
The NDA was transferred from the Minister of Finance to the Minister of Social Development by Presidential Proclamation on 19 October 2001. The rationale for the transfer was the close link between the work of the NDA and the Department of Social Development in poverty alleviation.

THE BILL
The aim of this Bill is to give effect to the said transfer by amending the Act, by -
amending the definition of "Minister" in order to provide that the NDA is administered by the Minister of Social Development;
changing the composition of the Board of the NDA by reducing the members of the Board from 15 to 11 of which six members should represent civil society and five members should represent Government;
providing that the Minister and not the Board appoints the Chief Executive Officer of the NDA; and
providing for consequential amendments.
The term of the current Board expires in April 2003. There are vacancies on the Board, which will however not be filled for the remainder of the Board's term.

FINANCIAL IMPLICATIONS
Financial implications for the State in the current financial year will be minimal as it is envisaged that only nominations will be invited through the media for the appointment of the six members representing civil society organisations.
It is envisaged that the amendment of the Act will result in an overall reduction in personnel expenditure with effect from the 2003/04 financial year. However, due to the establishment of permanent provincial offices there may be an initial need for an investment for infrastructure.
All approved operational costs will be funded from the existing funds available in the account(s) of the NDA, grant allocations by government and donations and contributions received from other sources.