Civil Aviation Amendment Bill: Department response to submissions; Second Term Programme

Meeting report

Mr Alec Moemi, Director General: Department of Transport (DoT), took the Committee through the presentation on the Department’s responses on the Civil Aviation Amendment Bill.

Clause 1

The Airlines Association of Southern Africa (AASA) had said the definition of ‘air service,’ making reference to the Air Services Licensing Act, would be replaced by the Air Services Act when it was promulgated.  The Department responded that the definition of “air services,” as it was in the Air Services Licensing Act, should be incorporated in the current Civil Aviation Amendment Bill in the light of the Air Services Bill, which repealed the Air Services Licensing Act.

Clause 15

AASA had commented that Article 15 – the appointment of the members of the Aviation Safety Investigation Board –specifically mentioned that the appointment was made by the Minister. The Department proposed that the words ‘by the Minister’ should be added in subsection (1).

AASA had commented that it was not clear on what basis an amendment to a regulation could be made in respect of user fees. The Department responded that the user fees were contained in the civil aviation regulations. Before increasing any fees or charges, the South African Civil Aviation Authority (SACAA) had to request permission from the National Treasury. The percentage increase was approved by the National Treasury on a three-year basis. SACAA therefore had to adjust the actual figures in line with the Treasury’s approval. The revised figures were submitted to the Minister for approval. Since the Minister of Finance had already approved the percentage increase, it was no longer necessary to seek the concurrence again.

Mr Rennie van Zyl, an independent aviation consultant, had been of the view that the splitting of the position of the Commissioner and the Chief Executive Officer (CEO) could result in findings being raised against South Africa by the International Civil Aviation Organisation (ICAO) and the Federal Aviation Administration (FAA).  The Department responded that there was no splitting of the two positions. It was just the name that was being changed, from ‘Director of Civil Aviation’ to ‘Commissioner for Civil Aviation’. This was meant to address the confusion created by the title ‘Director,’ which was normally related to the first Senior Management Service (SMS) level in a government department. The Commissioner and CEO were now changing from ‘Director’ to ‘Commissioner.’

Dr Joachim Vermooten, an aviation economist, had commented that the Bill should reflect South Africa’s implementation of liberalisation matters, like the Single African Air Transport Market (SAATM).  The DoT responded that the comments were general, and the SAATM issues were being addressed by the Air Services Bill. The SACAA’s regulatory capacity was always informed by the size of the industry. There was a process to determine the number and experience of inspectors in relation to what they were required to oversee. The implementation of the SAATM was more of an economic regulation issue than a safety and security regulation issue.

Dr Brian Suckling, SACAA board member, had stated that the definition of “aircraft in flight,” as contained in the Bill, was not in  line with the accepted definition and intent as contained in the American FAA Regulations (14 CFR 1.1), the ICAO Annex 1 definition or the Joint Aviation Requirements-Flight Crew Licence (JAR-FCL) 1.001 definition. The Department responded that the Annex 1 to the Chicago Convention did not contain a definition of ‘aircraft in flight’. This was an aviation security-related definition. The relevant ICAO document that contained the definition of ‘aircraft in flight’ was the protocol to amend the Convention on Offences and Certain other acts Committed on board Aircraft, done at Montreal on 4 April 2014. The definition had been taken verbatim from the protocol, and it was desirable to keep it that way for consistency. 

The SACAA board had proposed an amendment to be incorporated in the Civil Aviation Amendment Bill, for the SACAA to:

• be regarded as a preferential creditor, in cases of liquidation, business administration or business rescued; and
• empower the Minister to make regulations regarding administrative measures to be taken for any failure by a licence holder/person to pay over to the SACAA any money fees, charges or levies collected on behalf of the Civil Aviation Authority. In that regard, the SACAA Board suggested the insertion of subsection 74(4).

The Department responded that the Bill currently had subsection (4). A new insertion should therefore be subsection (5). It agreed to the following suggested formulation:

“(5) in instances where a person who had collected any money, fee, charge or levy on behalf of the Civil Aviation Authority was liquidated, placed under business rescue or was placed under administration, the Civil Aviation Authority was entitled, as a preferential creditor, to recover any such money, fee, charge or levy so collected by such a person.”

Section 155

The SACAA board had suggested the addition in section 155 of sub-section (1) after paragraph (xx) of paragraph (yy), and the re-numbering of paragraph (yy) to paragraph (zz) as follows:

• “(xx) requiring any person who collects any money, fees, charges or levies on behalf of the Civil Aviation Authority to establish a trust account where such money, fees, charges or levies may be kept for onward transmittal to the Civil Aviation Authority.
• “(yy) administrative action to be taken for any failure by any person to transmit to the Civil Aviation Authority, as prescribed, any money, fees, charges or levies collected on behalf of the Civil Aviation Authority; and
• “(zz) the establishment of a structure that brings together aviation role players to pursue transformation of the aviation industry.”

The Department said that suggestion was acceptable. It suggested that the insertion be placed at the end of the subsection.

Mr M Craig had stated that the Bill seemed to be replacing the protocol with a transit agreement. The Department responded this was not correct. The transit agreement was an appendix to the Chicago Convention, and was available on the ICAO website. The SACAA and the Department would provide a copy on request.

Deliberation

Mr L McDonald (ANC) said he had two things to comment on. He asked for more information on the area in the ICEO that Mr Rennie Van Zyl had referred to, and Dr Brian Suckling’s reference to the ICEO Annex One. He had just read the annex’s definition of JAR-FCL 1.001, and agreed with him. He needed a broader answer because the ICEO Annex One definition of an aircraft was way broader. The DoT could respond in writing.

Mr C Hunsinger (DA) asked for an evaluation, from the Department’s perspective, of the replacement of s156 to s162, and the amendment of s155. The question was more about the balance between what had been there, and what was there now. A quick answer would be that the balance was adequate, but it was not the impression that the industry had. What kind of engagement or scrutiny was there to get to the point where the DoT felt that there was adequate balance in the replacement? What was the consideration in the design to the suggestion of a trust account? That was so specific, because a trust account was a very particular type of account which had many requirements, so why was it regarded as the adequate vehicle for parking funds and capital?

Section 15 dealt with the Minister’s mandate to replace people, but where did it say that the Minister made appointments?  Regarding concern over the number of committees that would be appointed to execute the functions, should the DoT not consider a communications committee that, on a permanent basis, had the obligation to report to the Minister and communicate incidents of crashes? Would it not convey a change of direction, and present an opportunity to craft a new design to include a standing committee to deal with communication? This could be part of Article 41.

He referred to the conditions under which the new Act would give execution rights, or the ability to still get paid. Those were under three specific conditions -- if a company could be placed under liquidation, business rescue or administration. All three would require the acquisition of a court order. The challenge was legal manoeuvring, and employing delaying tactics to avoid payment. Should one not be specific, and not make it conditional on what was being seen now, because all these processes could be manipulated? What they sought to achieve could be hindered, because one would need a court order.

There had been comments about public participation, and what was perceived as a move from a strictly rigid structure to a discretionary one. However, even if one went through a very formal procedure, one still ended up with an appeals process. Even with an appeals process, some form of discretion would apply, so the Department should consider some elements that would at least convey something about standards that would executed in a way that was predetermined, so that when people applied they knew what the standards were.

Mr T Mabhena (DA) said that the Department had dealt with the submissions, but some of the comments made by the Committee had not found expression in the presentation. The immediate impression was that the Department was dealing with the written submissions and the people who had made presentations at the previous meeting on 4 March.

Regarding regular updates, the Committee had spoken about a communication committee, but would it not be prudent for the Committee to be the first preference in terms of communication? The Committee had learned through the media about the aircraft calibration accident that had claimed the lives of three pilots. When the SACAA presented its performance and financial reports, they appear before the Committee, but they still had not received a presentation on that.

Another challenge involved stakeholders making payments within 21 days. Not all of them did this. When the Committee asked for a breakdown of payments, it was discovered that not all of them paid within the stipulated 21 days. This was a situation where an airline had been placed under business rescue or administration. In that situation, would it not be prudent to factor into legislation severe penalties for airlines that did not comply? In an extreme case, an airline should be slapped with a 100% charge. This should motivate them to make payment within 21 days.

On SACAA being the preferred creditor when airlines stop working, the Insolvency Act required one to canvass other departments, because they could not influence the process. The DoT gives the SACAA R30 million per year -- was it feasible to divert the entire fund to the Aviation Safety Investigation Board (ASIB). How would ASIB look in terms of its organogram and management? It should be completely independent of SACAA unless they needed to engage. There should be no overlap.

Mr M Chabangu (EFF) said he had never heard in South Africa that a person who had squandered money had to pay it back, unless this time one took drastic steps. Did the SACAA have a plan for recovering money, or would it be like the Zondo Commission? 

The Chairperson was asked about engagement with other stakeholders, and whether the Committee wait for the provinces to provide input from other stakeholders.

The Chairperson responded that he understood that only those stakeholders who had made written and oral presentations had been engaged. Now it was time to deliberate. The matter would not go to the provinces, because that stage had passed.

The Committee Secretary advised that it was not necessarily past that stage, as it depended on whether or not the bill called for further engagement in the opinion of the Committee. This bill’s amendments were mainly on a national level, so it depended on the Committee’s view and that of the legal advisor, but procedurally it was up to the Committee.

DoT’s comments

Mr Moemi said that the Committee’s comments had been noted, but in order to factor them in, they should have been received formally from the office of the Chairperson. 

On the Minister’s appointment role, the Department agreed, and the phrase ‘by the Minister’ would be inserted.

Elaborating on the three categories of intervention, he said the Department was trying to avoid this. Giving open-ended power may not be the best thing to do. Narrowing it down would allow it to pass constitutional muster easily. The fact was that under the current legislation, the remedies were still open to SACAA -- for example, the grounding of an airline, but this was the last draconian measure. Right now, SA Express owed money, and if it were to be grounded, it would never fly again because of the tight cash flow. There were other intermediate measures, like having the SACAA as the priority creditor. This did not take other remedies away.

The Promotion of Administrative Justice Act (PAJA) required that the entire jurisprudence be based on the principle of consumerism, so a case where a 100% penalty was charged would be kicked out of court because there was no way of justifying such unreasonableness. The National Credit Act (NCA) provided for this -- one had to write to debtors and remind them that they owed. They were legally protected against creditors.

He said the trust account had been purposefully chosen because trusts already had regulations, and courts were involved via the master, so there was certainty. The appointed trustees may be a board committee, or something similar. The Department did not want to create a new chapter.

With regard to a communications committee, the Minister was the official accountable to Parliament. Therefore, it would be peculiar to legislate that far. Right now, it was clear that the Minister accounted to this Committee, and it could call on him at any given time. The fact that there had been no report on the accident was testimony to how busy this Committee was.

On the recovery of money and the wastage of time, the SACAA had other remedies, such as grounding an airline.

He said that it was not true that there was inconsistent application of standards. If that happened, there were procedures for stakeholders to lodge complaints with the SACAA. Legal jurisprudence gave the aggrieved party the right to appeal. The PAJA allowed stakeholders to apply to the courts.

Regarding waiting so long for the Act, it was all about timing. There was now a need for the Act. There were too many things to deal with.

He responded to Mr Hunsinger, and asked if he had calculated the full operational costs of a projected separate investigating entity, compared to contracting an external investigation team. The DoT was now aspiring to do this with the Air Traffic and Navigation Services (ATNS), by contracting with other countries. This was much more cost effective than having a separate local entity, where investigators would be paid when there was nothing to investigate.

Further discussion

Mr McDonald said that though it was sad and unfortunate, South Africa was stuck with International Civil Aviation Organisation (ICAO) legislation regarding the calibration of international runways, which would make it illegal for international aircraft to land in South Africa if the calibrations were not done in three months. In the difficult fiscal position that South Africa found itself, was it something that it could afford? How would the Department alleviate this problem?

Mr Moemi responded that the Cabinet had considered the costs of the establishment of the Aviation Safety Investigation Board. The budget of SACAA and projected future increases were to cover the operations and the new elements that were required for ASIB. All funding was targeted from the user fees. Once Treasury finalised the nature of this initiative and the DoT saw what the costs were, the target would certainly be determined upward or downward.

Regarding a question on user fees, he said they charged for cabin crew, licences and so on. On jet fuel, the 2.8% levy was paid at the point of sale, because there was a guarantee.

Regarding calibration, although the plane had gone down, the Department was already hiring calibration aircraft to do the calibration, and it had also told SACAA to finalise tenders for a new aircraft. The target would be met.

Ms M Ramadwa (ANC) said that the Department was making policies and speaking about forms of transport that did not belong in the Department. There should be discussions with other departments which would be affected by such policies.

The state law advisor commented on the trust fund, saying there was a process in Parliament where permission had to be solicited from the House for that type of amendment. If it did not affect tagging, it was not an issue, or the classification and inputs from other departments.

Another state advisor said that in terms of rule 306, there had to be permission from the House to expand the scope of the bill if the Committee wanted to accept that particular amendment.

Mr Hunsinger said that if the scope expanded on an Act and there was an amendment, this would require permission. This was a whole new bill, so why would there be an extension, because nothing had existed prior to the bill?

The state law advisor responded that the rule said that if there was a new amendment that was different from the subject matter of the bill, one needed permission from the House. The rationale behind this was, when the first reading was done in the House, the House was actually mandating the Committee, within the ambit of the long title of the bill, to consider it and report back. It was saying, do not go beyond the mandate.

The DG said that he agreed with what had been said. The Department had to go back and bring in other clusters. The new clause affected other departments, and when the DoT returned it may not be happy with the clause, but inputs that had been made would be considered.

Consideration of Committee programme

The Chairperson said there would be briefing by the DoT and other entities of the Department on the annual performance plan on 14 April at 14h00. The following week, the Road Traffic Infringement Agency would appear before the Committee at 10 am. At 2pm there would be Road Accident Fund (RAF), and on the Thursday there would be consideration of draft Committee reports. The Committee must agree with the entities, or did it want to add more. If so, the sitting hours would be extended.

Mr Hunsinger said there were two reports that the Committee should consider. One was a report by the Public Protector submitted in March last year, with particular conditions that the Department had been instructed to adhere to. The other was on the Competition Commission, and how commuters perceived the different services in transport. Maybe these could be included in the programme.

Mr L Mangcu (ANC) agreed with Mr Hunsinger. His concern was that the Committee had spoken about meeting with the Passenger Rail Agency of SA’s (PRASA’s) acting group CEO to get an appreciation of what was happening there, but it did not appear in the programme. Further, the Committee had made a request to be briefed on accidents over the festive season, and on plans for Easter, as well as the issuing of licences. These matters were not dealt with in the programme.

Mr Modise said that he was serving on two committees, and would not be able to attend all the meetings.

Ms Ramadwa concurred that the Committee needed to see other entities, and should make use of Fridays.

Mr Mabhena said that the Committee and SACAA had to give a report on the accident. What was said in the Committee had to take precedence, and what Members want must be in the programme.

Mr McDonald said that more time needed to be spent on annual performance plans and the budget of the Department. Spending one day on the budget would not do justice to it. He agreed that the Committee was not taken seriously by the Department. There were more than five instances where the Department was required to respond in writing to the Committee, but that had not happened, and it had been more than six months. This behaviour should be condemned. There was no oversight in this programme.

The Chairperson said that that the Committee had taken a decision last week to bring a programme into the meeting to see what it would look like. Whatever they agreed on would be the order of the day. Their interactions may not be fruitful, because some Members served on other committees. Could they carry on without the other Members? If they did that, they may disintegrate as a Committee. They had to allow other Members to attend, but if they took all the entities, they would have to be available even on Fridays.

Mr Chabangu said that some Members would not be available, taking into account the local government elections. Decisions taken without the Members would not be binding.

The Committee Secretary said that in drawing up the programme, Parliament had said that from 14 to 24 April 2020, Committees had to allow for joint engagements. Those Committees also had issues with their membership and the entities that they had to see. The secretaries had been able to agree on the meeting on 14 April 20202 in the afternoon, because the same Committee had a meeting in the morning. Further, the Committee’s budget reports had to be finalised before Parliament started with the votes.

It was very important for Members to indicate which days they could not attend, because if there were not six Members, the Committee could not sit at all. The meeting for the finalisation of the programme was next week, so they could still make changes. Programmes were dependent on the programming committee, but they were flexible because committees could change them.

Mr Hunsinger said that on average, the Committee got three hours for two entities. As a solution, they could have combined sessions with the National Council of Provinces (NCOP).

Minutes of 3 and 4 March 2020 were adopted with amendments.

The meeting was adjourned.