Economic Regulation of Transport Bill: deliberations

Meeting report

The Chairperson accepted apologies from Mr K Sithole (IFP), Ms N Nolutshungu (EFF) and Minister of Transport, Mr Fikile Mbalula.

Deliberations on the Economic Regulation of Transport (ERT) Bill

Adv Alma Nel, content advisor, Portfolio Committee on Transport, explained that the parliamentary legal advisor would go through some of the Committee’s concerns about the Bill that had not yet been incorporated into the A-list. The state law advisor would then take the Committee through the draft A-list.

Mr C Hunsinger (DA) asked when a further round of public engagement would be arranged, given that the Bill had changed considerably since the last round.

Adv Nel replied that if changes to the Bill were not material, such as changes to consequential amendments, then a further round of public engagement was not required. If on the other hand the scope of the Bill was extended, as had recently happened with the Civil Aviation Amendment Bill, then it might be necessary to request permission from the House for another round of public engagement.

Committee decisions on outstanding concerns

Ms Thiloshini Gangen, parliamentary legal advisor, explained that the state law advisor had incorporated the Committee’s decisions on changes to the Bill into the draft A-list, as mandated. There were however a few issues that the Committee had raised but not made a decision on, and which had therefore not yet been incorporated into the A-list. She asked the Committee to provide clarity about its decision on these concerns.

Concern 1: Involvement of Parliament in appointments and regulations

Adv Nel recalled that the Committee had decided to leave the appointment of the board and the setting of regulations to the Minister. However, the appointment of the council, which was intended to oversee some of the regulator’s decisions and handle appeals, had not been discussed, and members had indicated that the council needed to be independent of the regulator. Was the Committee happy for the Minister to appoint the council as well as the regulator or did it want Parliament to be involved?

Mr Moeketsi Sikhudo, Project Manager: Single Transport Economic Regulator, Department of Transport (DoT), explained that the Department agreed in principle that the council needed to be independent from the regulator. The situation that currently existed at the Ports Regulator of South Africa (PRSA), where the board both made regulations and handled disputes, was not ideal. However, the Department maintained that the Minister should appoint both the council and the regulator, while being open to other suggestions.

Mr Hunsinger was concerned that the council should operate at arm’s length from the regulator. He proposed that Parliament should conduct interviews of candidates for the council and make recommendations to the Minister, who would make the final appointments from the list of recommended candidates.

Mr L McDonald (ANC) agreed that the Minister should appoint both the board of the regulator and the council. He did not object to the involvement of Parliament in recommending candidates for the council.

Ms M Ramadwa (ANC) understood that the Committee had decided not to make any changes to the board appointment procedures. She did not support the involvement of Parliament in the appointment of any boards. She did agree however that the council should operate independently of the regulator.

Ms Raksha Haricharan, state law advisor, asked if the National Assembly (NA) and the National Council of Provinces (NCOP) would both be involved in the interview process.

Mr Hunsinger replied that it would be a combined panel of the NA and NCOP.

The Chairperson confirmed that the Committee’s decision was that Parliament would be involved in the appointment of the council but not the board of the regulator.

Concern 2: Application of the Promotion of Access to Information Act (PAIA)and the Protection of Personal Information Act (POPIA)

Ms Gangen said that the state law advisor had responded to this concern with reference to section 32 of the Constitution and she was herself satisfied with the explanation. She had however drafted a clause dealing with these Acts which could be included if the Committee decided it was necessary.

Mr McDonald proposed that the new Clause be incorporated. It was better to include more rather than less.

Ms Haricharan replied that she did not think it was necessary to add the Clause because the application of PAIA and POPIA were governed by section 32 of the Constitution. She did not foresee any harm in including it but it was not necessary.

The Chairperson confirmed that the Committee’s decision was to insert the Clause.

Concern 3: Inclusion of a definition of “railway infrastructure”

Ms Gangen asked for confirmation of the Committee’s decision on the inclusion of this definition.

Ms Haricharan explained that the definition was not included because the Bill was taken to apply to the entire transport sector, making it redundant.

Mr Hunsinger suggested that the definition be included and that it refer to the entire rail network as well as signal equipment, coaches and all other infrastructure related to rail.

Mr McDonald agreed that the definition should include all facets of rail infrastructure.

Mr Sikhudo explained that the Department would prefer not to include an explicit definition of “rail infrastructure” because it would raise the question of why other transport mode infrastructure was not similarly defined within the Bill. These forms of infrastructure were already defined in the relevant legislation.

Mr Hunsinger understood the Department’s concern but did not think it was a problem. Definitions of other forms of transport infrastructure could be introduced as and when it became necessary and it was important to have a definition of “rail infrastructure” from the outset.

Adv Nel recalled that the reason an explicit definition of “railway infrastructure” had been considered was that the title of Chapter 2 of the Bill was “Access to Rail Infrastructure.” She observed that the Bill did include a definition of “transport sector” as “shipping and ports, aviation, rail or road transport” which should include rail infrastructure. The Committee’s concern had been that a whole chapter was devoted to rail infrastructure without a definition.

Ms Ramadwa agreed with the Department’s position.

Mr Hunsinger proposed that the definition of “transport sector” be changed to read “shipping and ports, aviation, rail or road transport and infrastructure.”

Mr Sikhudo supported this proposal.

Ms Gangen foresaw no problem with this change.

Ms Ramadwa seconded Mr Hunsinger’s proposal.

Ms Haricharan said that “railway infrastructure” was used in its ordinary sense in the title of Chapter 2. She did not think the proposed change fitted into the definition of “transport sector,” as this definition referred to modes of transport.

Mr Hunsinger appreciated the point but maintained that the definition could be broadened.

The Chairperson confirmed that the decision of the Committee was to change the definition of “transport sector” according to the suggestion of Mr Hunsinger.

Concern 4: The relationship between the regulator and the Competition Commission (CC)

Ms Gangen recalled that the Committee had been concerned about what would happen if someone brought a complaint to the regulator and the CC, and what would happen if the two bodies made a different ruling on the same matter. Was the Committee satisfied with the Department’s view that a memorandum of agreement (MoA) would be sufficient to mediate the relationship between the regulator and the CC?

Mr Hunsinger was not convinced that the MoA would adequately regulate the occurrence of a case being brought simultaneously to the regulator and the CC or the occurrence of a different ruling on the same matter.

The Chairperson requested that the Committee should not reopen matters it had already discussed. What was Mr Hunsinger’s suggestion?

Ms Ramadwa understood Mr Hunsinger’s concern but thought that the MoA would be sufficient.

Ms Haricharan drew attention to Clause 43, which directed the regulator to negotiate and conclude an agreement with the CC to coordinate and harmonise the exercise of jurisdiction over competition matters, and to ensure consistent application of the principles of the Bill. She thought that this Clause would be sufficient to mediate the relationship between them.

The Chairperson confirmed that the decision of the Committee was that no changes needed to be made with regard to this concern.

Concern 5: possible insertion of Clauses

Ms Gangen presented proposed new Clauses 16A and 16AA which would provide for arbitration in the event of a dispute between the regulator and the council which could not be settled by negotiation.

Mr Sikhudo supported the insertion of these Clauses.

Mr Hunsinger said that this was a useful suggestion but he wondered why a memorandum of understanding (MoU) had not been considered, rather than arbitration, and why arbitration had not been considered for the resolution of disputes between the regulator and the CC.

Ms Gangen replied that an MoU or MoA was the first step to dealing with disputes. Arbitration was only resorted to at a later stage.

Adv Nel observed that the insertion of 16A and 16AA would be a substantial change to the Bill that might make it necessary to republish the Bill for public comment.

Ms Haricharan said that the addition of provisions for arbitration were a procedural matter and submitted that Parliament should decide on whether Clauses 16A and 16AA were required to be republished.

Ms Gangen did not think that it would be necessary to republish the Bill, as the Clauses dealt only with internal dispute resolution, but she would confirm this at the next meeting.

The Chairperson noted that the Committee did not want to waste time on matters that it did not feel strongly about.

Concern 6: Status of electronic communications and acknowledgement of receipt of communications from the regulator

Ms Gangen requested clarity on the decision to include Clause 69, which dealt with the serving of notices by the regulator.

Mr Hunsinger said that the Committee should be sensitive to the recipient of notices from the regulator. He thought that the conditions under which a recipient could be said to have received a notice should be described more specifically. The recipient should have to register that they had received the notice, but on the other hand the regulator should not be prevented from executing its functions.

Ms Haricharan observed that the definition of “electronic communication” in the Electronic Communications and Transactions Act, to which the Bill referred, did cover email messages, and that therefore no change to Clause 69 was necessary.

Mr Hunsinger proposed accepting Clause 69 as drafted. Ms Ramadwa seconded the proposal.

Consideration of ERT Bill draft A-list

Ms Haricharan went through the draft A-list clause by clause. Various technical changes and corrections were made, and the following changes were discussed:

Clause 4

The introduction of a subsection providing for transport sub-sector regulators to be consolidated into the single regulator from time to time was proposed.

Mr Hunsinger observed that PRSA was not included in the list of sub-sector regulators.

Ms Haricharan noted that the Clause provided for “any other” regulator, in addition to those explicitly named.

Adv Nel recalled that the PRSA was planned to be the nucleus around which the single regulator would initially be established. This Clause concerned the later phases of the establishment of the single regulator.

Ms Haricharan added that the transition of the PRSA was provided for in detail in Schedule 2 of the Bill.

Clause 16

The Chairperson asked Ms Gangen to read Clauses 16A and 16AA, on arbitration between the regulator and council, which she had suggested for inclusion. He said that it would be preferable if it could be incorporated into the Bill without requiring it to be republished.

Ms Gangen read the Clauses and replied that she would see if it could be incorporated in a way that would not require republication.

Mr Hunsinger did not foresee any problem with tying it into an existing clause, adding that 16A and 16AA would definitely improve the Bill.

Mr T Mabhena (DA) asked whether there would be any legal implications of not republishing the Bill after the inclusion of 16A and 16AA. If there were none, the Clauses should be included.

Adv Nel said that the drafting team would look at the inclusion of the Clauses.

Committee business

The Committee adopted outstanding minutes.

Ms Valerie Carelse, Committee Secretary, observed that, due to upcoming local government elections, the remainder of the Committee’s third term programme would have to be rescheduled, including the planned oversight visits to Kwazulu-Natal and Gauteng/Mpumalanga and meetings with stakeholders that had requested to meet the Committee.

Mr Hunsinger acknowledged the efforts of the support staff to reconcile the demands of the Committee and the procedures and programme of Parliament. It seemed that there was no option but for the Committee to postpone its plans. He suggested that the Committee send a letter of explanation to the stakeholders who had expected to meet with the Committee.

Mr Mabhena proposed that oversight be prioritised when the Committee was able to reconvene.

Mr L Mangcu (ANC) supported the proposals but wondered how the secretary could know that the Chief Whip would not approve any oversight visits during the recess. He was concerned that the Committee might end up not doing oversight visits.

The Chairperson explained that the programme change had been a decision of the parties and that the secretary was a bearer of good and bad news. He said that the Committee would do oversight visits. He added that the Committee should pursue the issue of the Moloto rail corridor.

The meeting was adjourned.