DTIC Budget: Committee Report; National Lotteries Commission Legal Opinion

Meeting report

Opening Remarks
The Chairperson greeted everyone and warned that there was a great deal of loadshedding which might impact on the meeting. He indicated that the meeting would commence with the draft Revised Budget Vote Report, the National Lotteries Commission (NLC) legal opinion and then Members would deal with several sets of minutes.

The Committee Secretary confirmed that the meeting was quorated.

First Draft of Revised Budget Vote Report
The Committee Secretary informed the Chairperson that the first draft of the Revised Budget Report had been sent to the Members the previous day and he had received input from the ANC only.

The Chairperson asked Members whether they wished to go through the entire report, or only the conclusions and final remarks.

Mr D Macpherson (DA) requested that the Committee go through the entire report and then address the conclusion and recommendations as had been done in the Fifth Parliament.

The Chairperson called for any objections to the proposal.

Ms J Hermans (ANC) noted that it would be good for the members of the public to hear the full report but as it was a revision of a previous report, the focus should be on the highlights and changes.

Ms Y Yako (EFF) agreed with the full report being read out so that everyone could be on the same page.

The Chairperson determined that the Committee would follow the process of reading through the report before debating the conclusions and recommendations.

The Content Advisor began presenting the draft report but handed over to the Committee Secretary.

The Committee Secretary read extracts from the report. The report listed the Programmes of the DTIC, noting that all Programmes had been affected by the R1.77 billion reduction in the budget. The report included questions by the Committee Members and the extensive responses provided by the Minister of Trade, Industry and Competition and the Director-General of the Department of Trade, Industry and Competition (DTIC).

Mr Macpherson stated that he might have missed a meeting because all the responses noted in the report had not been provided in the meeting that he had attended. For example, he had asked a question on Industrial Parks but had not received an answer in the meeting. The report, however, referred to answers by the Minister and the Department. Another example was his question on the 12L tax incentive that had not been answered in the meeting, yet answers appeared in the report. None of his questions had, in fact, been answered in the meeting. The report presented the responses as if they had been given in the meetings, so it was not a true and accurate report of the meeting. It was borderline fantasy.

He added that the report also did not show what legislation would be submitted to Parliament by the Department this year. There was no such performance indicator. He had asked directly about the credit, liquor and gambling legislation but there was no answer to that, nor was there an answer to his question about policy changes. He was deeply concerned and quite disturbed about a report that had been put together on things that had not happened. It was difficult to provide conclusions and recommendations when the report was not factual. He asked that someone clarify the matter for him.

Ms Yako registered the intention of the EFF to reject the report outright. The questions that she had asked had not been captured or answered correctly, not by the secretariat, but by the Minister and the Department. For example, her question on why there was not a state-owned enterprise that was manufacturing quality personal protective equipment had not been satisfactorily addressed. DTIC should be the driver of the economy. She did not believe that the Minister, the DTIC or the Committee had come up with ideas about how to drastically change the economic situation of the country, especially in the light of the crisis. She did not believe that the Minister had listened to the constituency. He was plugging holes and creating new ones. Success would not come from yielding to the panic of various industries. The Department was not coming up with new strategies for sustaining the economy without frustrating the new and upcoming entrepreneurs, nor was it retaining the infrastructure that the country had at the time. She was disappointed that there were no new, radical ideas that would make changes to the economy. The report did not put her at ease that the budget in the coming financial year would be making real changes so that there were no job losses but the economy retained jobs.

The Chairperson asked if any other Members wished to comment.

Mr Macpherson said that he really wanted an answer as to how the report was put together. Ms Yako’s question was another example. He did not necessarily agree with her point but she had not received an answer in the meeting and yet there was a response in the report. The questions raised by colleagues had answers that had not been responded to in the meeting.

The Committee Secretary explained that at the end of that particular meeting, he had been requested to submit questions to the Minister and the DTIC for written responses. He had received the responses in writing and he had captured those responses in the report. The answers would be tabled for the information of the Committee.

Mr Macpherson asked when the answers had been submitted to the Members.

The Chairperson told Mr Macpherson that the report had been circulated and there had been no complaints about it. The intention of the agenda that day was for the Committee to consider the conclusion and recommendations and not to discuss the details of the report. He asked the secretariat to note the gaps but the report had been circulated and no comments had been received.

Mr M Cuthbert (DA) stated that Committee Members expected responses from Ministers and Departments to be received within seven days in a written format but how could Members trust the answers when they had been put into a report while the Members themselves had not seen the responses from the Minister or the Department. There had been a tendency over the past couple of weeks to do things differently from what the Members had come to expect. That was a very poor showing by the management of the Committee and he hoped that steps would be taken to rectify the matter so that the Committee could get back on course. The Minister had said that he would like to return to the Committee to discuss the questions. That request of the Minister had not even been considered. It was as if Members would be given answers to keep them quiet. He questioned the process flow of the document and the way in which the report had been compiled.

The Committee Secretary said that the responses had been received from the Minister on Monday evening and the responses would normally have been tabled at the next meeting, which would have been that meeting. The responses had been included in the report but he could table the responses for the Members and forward this to them.

The Chairperson accepted the explanation and noted that the responses had been included in the report. He requested that the information received after the previous meeting be circulated to Members. He requested that the Committee look at the conclusions. Only one party had provided input on the report so he would like to look at those conclusions. As the Committee was meeting the following day, Members would be able to consider the report and adopt it the following day.

The Secretary tabled the ANC’s input. The party noted the reduction in the budget and the decision by DTIC to maintain the core mandate. Recommendations included that the House adopted the Amendments to the Adjustment Bill for the Department of Trade, Industry and Competition.

The Chairperson invited comments on the first draft of the report as it stood before them.

The Committee Secretary noted that Mr Macpherson had raised the question that he had posed to the DTIC about the proposed legislation for the year. He would request DTIC to respond to that question so that he could incorporate that information in the report. Currently, the Committee was working on the first draft.

Ms Yako asked that the Committee register the EFF rejection of the report and minute the rejection.

The Committee Secretary stated that the acceptance and rejection of the report would take place the following day.  The Content Advisor would forward to Members all the responses received from DTIC.

The Chairperson noted Ms Yako’s comment and agreed that it was noted. The processes relating to the report would be concluded the following day. The first draft had been presented to the Committee and the engagement could continue and would be included in the report to be discussed the following day.

The NLC Legal Opinion and Way Forward
The Chairperson stated that the background information was that, in a number of fora, Members had requested that information about beneficiaries of the Covid-19 fund be provided by the NLC. The Chairperson had also received communication from members of the public who had requested that information on beneficiaries not be published unless legislation that governed such disclosure be adhered to.

In a response dated 8 June 2020 to a question posed during the previous Committee meeting, the Board of the NLC stated that the entity was legally obliged not to disclose beneficiaries. Based on that view, he, as Chairperson, had submitted a request for legal advice from the Office for Constitutional and Legal Services (OCLS) on whether the assertion was indeed correct in respect of the reference by the NLC, to specific legislation and regulations. He also requested guidance around the perimeters that would govern the disclosure of such information. He had submitted his request to OCLS on 15 June 2020 and on 25 June 2020, the OCLS stated that the NLC had not provided specific reasons that prevented it from sharing information, as required by law. Therefore, before disseminating the opinion to the Committee, he had requested the NLC to provide the specific grounds on which the NLC was unable to provide the requested information. He had sent the letter to the NLC on 1 July 2020. On receipt of the information the Legal Advisor was to consider the additional information to either confirm or adjust her original opinion. The item was not ready for the meeting of 8 July 2020.

The Chairperson informed the Committee that he was in receipt of a letter from the NLC dated 10 July 2020 which he had sent to the Legal Advisor and had requested her to brief the Committee.

Having presented the background and the reason that he had been unable to address the matter in the previous meeting, the Chairperson invited parliamentary Legal Advisor to address the Committee.

Presentation on legislation in respect of publishing the names of beneficiaries of the NLC
Ms Thiloshini Gangen, Legal Advisor, OCLS, stated that the response from the NLC had cited various pieces of legislation wherein it averred that it was not permitted to publish information about beneficiaries. It relied on section 67 of the Lotteries Act and section 8 of the Regulations Relating to Distributing Agencies and also on relevant legislation governing access to private information.

There had been requests by Committee Members for the list of beneficiaries, but the NLC argued that although the Commission had published information in the past, it had had complaints about extortion and harassment. However, the duty of Parliament was oversight and the statutory framework supported that view. The NLC relied on section 67 of the Lotteries Act.

Sect 67 of Lotteries Act as cited by NLC dealt with access to information. Section 67(1) says:
Subject to the Constitution any legislation which may be enacted in pursuance of sections 32(2) or 33(3) of the Constitution or any other relevant law, no person, including the Minister, a member or employee of the board or the Department or a former member or employee of the board or the Department, may
in any way disclose any information submitted by any person in connection with any application for any licence, certificate or appointment under this Act: or
publish any information obtained in contravention of paragraph (a) unless ordered to do so by a court of law or unless the person who made such application consents thereto in writing.
(2) Any person who contravenes subsection (I) shall be guilty of an offence.

Ms Gangen noted that the reference started with the words, “Subject to the Constitution…” and it was about the submission of information relating to an application for a licence, certificate or appointment, but it did not relate to fund beneficiaries. Therefore, the opinion of the NLC was, in the view of the OCLS, incorrect.

The NLC also relied on section 2 of the Protection of Personal Information Act (POPIA) which protected the right to privacy as in section 14 of the Constitution and the Promotion of Access to Information Act (PAIA). Section 32(1)(a) of the Constitution of the Republic of South Africa, 1996, determines that everyone has a right of access to any information held by the State.  Section 32(2) of the Constitution provides for the enactment of national legislation to give effect to this fundamental right.  PAIA is the national legislation contemplated in section 32(2) of the Constitution.

The opinion of the OCLS began with section 195 of the Constitution which refers to the basic values and principles governing public administration:
195. (1) Public administration must be governed by the democratic values and principles enshrined in the Constitution, including the following principles:
(2) The above principles apply to
(3) National legislation must ensure the promotion of the values and principles listed in subsection (1).

The NLC was a public entity with DTIC and the overseeing governmental body. Parliament’s power and duty of oversight in terms of section 56 of the Constitution stipulated that the National Assembly or any Committee may require any institution or person to appear before it to give evidence or affirmation or to produce documents. It may compel in terms of national legislation, rules or orders any person or institution to comply with a summons or any requirement in terms of paragraph (a) or (b). Ms Gangen read section 56 of the Constitution. Parliamentary Rule 227(1)(c) required a Committee to provide oversight and Parliament had established mechanisms to conduct oversight in terms of its rules.

PAIA allows access to information held by the state but section 9 dealt with reasonable protection of privacy, commercial confidentiality and good governance. The right of access to information was not a universal right but was directed to promoting good governance. Ms Gangen also referred to the case of Brümmer versus the Minister of Social Development. The public must have access to information held by the state. It was one of the basic principles governing transparency by the state. PAIA promoted the free flow of information and transparency whilst POPIA protected privacy. PAIA demanded openness.

A purposeful examination of the National Lotteries Act showed that a culture of openness needed to be fostered.

Ms Gangen submitted that the previous publication of beneficiaries by the NLC was not erroneous and that view would not withstand constitutional scrutiny. Whether or not the information could be dealt with confidentially could be dealt with under current rules. However, disclosure was determined by the need to root out corruption in government. The flow of information had to be in line with parliamentary oversight and in conjunction with the principles of accountability.

Discussion
The Chairperson asked Members if there was a comment.

Ms Hermans thanked the Legal Advisor for the legal opinion that clarified any legal grey areas. As parliamentarians, the Members were representatives of the people of SA who had entrusted the parliamentarians with the constitutional mandate to play an oversight role in ensuring that they built integrity in the state and ethical leadership. The Constitution obliged Members to ensure that transparency required of good governance. That obligation guided the Committee and therefore she said that, in the name of the people of SA, that the NLC must urgently provide the lists of beneficiaries as there was no legal impediment for the list to be made public.

Mr Cuthbert found that the legal opinion was largely congruent with the voluntary one that he had obtained and supplied to the Chairperson the previous week. He was heartened by the comments of Ms Hermans and her request for the public disclosure of the beneficiaries. He referred to the letter of Prof Nevhutanda which sought to use section 189 to extend the veil of secrecy over the lists. He strongly opposed to the use of the regulation as he believed that Prof Nevhutanda had misinterpreted the law.

He requested that the Legal Advisor attend to another matter. Regulation 8, which the NLC said prohibited it from disclosing information, was ultra vires to the Lotteries Act for two reasons: firstly, it would prevent the Lottery Commission from complying with its obligation to report under the Lotteries Act. Secondly, the Regulations were made by the Minister of Trade, Industry and Competition in the exercise of his regulation-making powers under section 60 of the Lotteries Act. However, it did not empower Minister to impose expansive secrecy obligations over beneficiary information. It seemed to be a last-ditch attempt by the NLC to keep the list of beneficiaries from being published. He felt that he was vindicated for the position he had taken in the matter. He felt that the public should be aware of what was going on in the NLC.

In the light of the legal opinion and Members’ comments, he suggested that the Committee should reject Prof Nevhutanda’s letter and insist that he be required to report to Parliament within seven days to present the lists with no embargoes.

Ms Yako agreed with the previous comments.

Mr Macpherson said that it was a red letter day for transparency and accountability. Without any fear, the Committee could label the NLC a constitutional delinquent. Parliament’s Legal Services had declared that the NLC’s assertion that the Board had acted erroneously was incorrect. It was a critical point. It was a board that had gone rogue and put its own interests above those of transparency and accountability. The Committee had to take strong and dim view of the actions of the NLC and there should be consequences for their delinquent behaviour.

Mr Macpherson added that the matter should never ever have got to that point. The Committee had gone around in circles and put up roadblocks and was on record as saying that it was not in the public’s best interests to be informed of the beneficiaries and that behaviour by the Members was deserving of a rebuke. That behaviour had to be answered to. What had happened was that on a very basic reading of the Constitution and the Lotteries Act, the Legal Services had come to an answer that was very obvious from the beginning but one that Members had not wanted to accept. Members of the Committee had now done a complete summersault to support transparency. He found that behaviour of the Members quite reprehensible. Nevertheless, he appreciated Ms Hermans’ statement and call for the lists to be made public immediately.

He reminded the Chairperson that it was not just the Covid-19 beneficiaries list but also the 2018/19 and 2019/20 lists that the board had to present. He found the behaviour of Prof Nevhutanda in the whole drama to be quite disgusting. He had sought to demonise members of the public, members of the media and Members of the Committee who had sought to conduct oversight and demand transparency. He had made a last ditch effort to provide information in a closed meeting. That was not acceptable. It was not for him to determine how the Committee accessed and digested the information.

Mr Macpherson proposed that the information be provided, in public and in full view of anyone who wanted to access that information, within 7 days.

Mr F Mulder (FF+) stated that his question had been answered and he agreed with Mr Macpherson and Ms Hermans.

Ms R Moatshe (ANC) agreed with Ms Hermans that the list should be published. She referred to the Bill of Rights in which the privacy of individuals was protected but there was a need to balance the right to privacy with the obligations for transparency and obligations, especially for state institutions such as the NLC.  

Ms N Motaung (ANC) supported Ms Hermans. The PFMA outlined the accounting procedures of state institutions and regulated financial management in national government and provincial government to ensure that all revenues and expenditures, assets and liabilities of those state institutions were managed effectively. The NLC was subject to the PFMA and, in the current context,  the requirement of the NLC to provide information to the Committee was in the spirit of accountability and good governance and was in line with the PFMA.

The Chairperson requested the Legal Advisor to respond to the comments and questions.

Ms Gangen stated that the Members seemed to be in agreement that there was a need for transparency and accountability and a need for engagement with the NLC which should bring the lists and furnish the Committee with the information sought. She added that, regarding the allegations of victimisation and harassment of beneficiaries, there was legal recourse for such difficulties that beneficiaries allegedly had so that should not be an issue.

The Chairperson requested Mr Cuthbert to repeat his question.

Mr Cuthbert reiterated that the response sent by Prof Nevhutanda in respect of regulation 8 had to be addressed as regulation 8 was ultra vires. The regulations of the NLC were determined by the Minister and he did not have the right to prevent disclosure of information.

Ms Gangen was in agreement that regulation 8 could not allow assistance to shrouding the issue in secrecy. The fact about the Minister not having the power to prevent transparency was on point.

Mr Macpherson stated that he believed that the Annual Reports published without the lists of beneficiaries were not valid documents as they did not meet the requirements of the National Lotteries Act.

Ms Hermans was of the opinion that it was not necessary to re-publish the entire Annual Report and that the publication of an addendum would suffice.

The Chairperson stated that the secretariat would investigate whether the 2018/19 Annual Report was illegal but he was of the opinion that the publication of the list would suffice.

He informed Ms Gangen that the legal advice of Parliament was well received by the Committee and that the Legal Services might have to pick up on the processes moving forward. He thanked Ms Gangen.

The Committee Secretary stated that the process moving forward was that the NLC had to make the information available to the Committee within seven days but he pointed out that, after the meeting of 15 July 2020, the next meeting was scheduled for 28 July 2020 which went beyond seven days.

Mr Cuthbert stated that he had added the rider that the NLC had to appear before the Committee.

The Secretary said that, as per the parliamentary programme, the Committee would not be able to meet in the following week.

Ms Hermans stated that the matter was about the provision of the lists. She had not coupled that to the appearance of the NLC before the Committee. Her proposal was only for the information to be tabled.

The Chairperson requested that the secretariat facilitate the process.  It was an administrative issue and not for the Committee to discuss further. The appearance was another issue and they would address that at the next meeting.

Mr Macpherson was in full agreement with Ms Hermans that the information be tabled but, secondly, he supported the motion that the Board appear before the Committee to account for what had taken place. It was also critical the Board knew that the two issues outstanding were the previous year’s beneficiary list and the Covid-19 list.

The Chairperson requested that the Secretary arrange that.

Mr Cuthbert said that three documents were required: beneficiaries lists for 2018/19 and 2019/20 and the Covid-19 beneficiaries document.

Ms Hermans stated that the 2019/20 list should be in the next Annual Report. She did not want to go beyond what had been talked about: 2018/19 and Covid-19 beneficiary lists.

Mr S Mbuyane (ANC) said that next time he would behave like those who just talked.

The Chairperson apologised for not seeing his hand but he should not go rogue.

Mr Mbuyane said that the Committee had agreed on the process and he thought that the administration should arrange for the submission of the lists and not discuss other issues. It was the submission of the  lists that was important.

The Secretary stated that he would inform the Committee on the morrow which information could be made available.

The Chairperson stated that there was consensus that the Covid-19 and 2018/19 beneficiaries lists were required.

The Secretary said that he would find out whether the 2019/20 list was available.

Mr Macpherson proposed the adoption of a motion to require the NLC to provide, within seven days, the list of beneficiaries that benefited from the R150 million Covid-19 relief fund and also a list of all beneficiaries that received money from the NLC during the 2018-2019 financial year, including the names, the amounts that were disbursed, as well as the categories it was paid out from. It should also include all beneficiary lists that have not be made public up to now. Furthermore, the Committee requested that the NLC publish the names of beneficiaries in its 2019/20 Annual Report, as required by the Lotteries Act (Act No. 57 of 1997).

Mr Macpherson also requested that the Chairperson issue a media statement indicating the decision made by the Committee. He also suggested that the behaviour of the Committee and the Chairperson of the NLC board be investigated further.

Mr Cuthbert seconded the motion to require the NLC to supply the beneficiary lists within seven days. He agreed that the position of the Committee on making the beneficiary lists available publicly should be announced in a media release.

The motion was approved unanimously.

Ms Hermans noted that the name of the fund was Proactive Funding.

Mr Cuthbert responded that the Proactive Funding was part of the normal beneficiary funds. He had an advertisement issued by the NLC that stated that it had created a Relief Fund and was giving R150 million to NGOs and NPOs to enable them to stay afloat during the pandemic.

Ms Gangen concluded that she believed that she had provided the opinion as requested and her input was concluded.

The Chairperson stated that the matter relating to the NLC legal opinion was concluded.

Second and Third Term Committee Programmes
The Secretary stated that the Committee had adopted the Committee Programme on 26 June 2020 but the tabling of the Adjustments Budget had led Parliament to extend the period of the term. The constituency period would be from 3 to 24 August 2020. That had resulted in changes to the programme. He had removed all First Quarter Reports but had kept all substantive matters.

The Chairperson requested the Secretary to take the Committee through the changes effected which he did.

The Chairperson asked for comment from Members. There were no comments from Members.

The adoption of the Second and Third Term Committee Programme was proposed by Ms Moatshe and seconded by Ms Motaung. There were no objections.

The Chairperson noted that the programmes had been adopted.

Minutes
The following sets of minutes were presented by the Chairperson of the Committee, proposed and seconded by Members and all minutes were adopted with no amendments or objections:
28 April 2020; 1 May 2020; 6 May 2020; 11 May 2020; 12 May 2020; 13 May 2020; 22 May 2020;
26 May 2020; 28 May 2020; 2 June 2020.

The Chairperson stated that the Committee would need to approve minutes at the following meeting in future.

Closing remarks
The Secretary stated that he would put the questions by Mr Macpherson to the DTIC and he would find out what information could be requested from the NLC. The Committee would consider the final report the following day and he invited parties to forward any input to him. Another batch of minutes would be emailed to Members in preparation for the meeting the following day.

The Chairperson stated that the next meeting would be the following day at 15:00, not 14:00, as some caucuses went beyond lunch time. The intention of the meeting was only to finalise the Report.

The Chairperson thanked the Members for their participation.

The meeting was adjourned.