Mr. Speaker, I move—

Mr. Speaker, we on this side of the House have supported this legislation. We supported the Second Reading, and at the Committee Stage yesterday we supported all the clauses except clause 17, which provides for non-liability in respect of publication in the dictionary. After yesterday’s thorough discussion we were not convinced by the hon. the Minister of the necessity for this measure. The hon. the Minister had to confess yesterday that at this stage, even after publication of volumes of the dictionary covering the letters “A” to “K”, he was still unaware of any publication requiring this protective measure. In respect of this privilege of the dictionary we can only suggest to the Minister that the compilers of this dictionary should address a warning in one way or another—perhaps they could do so in brackets after a word—to the student of the Afrikaans language and to the public who may consult the Afrikaanse Woordeboek, in respect of any word or proverb which could possibly be used defamatorily. We on this side of the House also support the Third Reading of the Bill, but as an Afrikaans-speaking person who in the Second Reading debate expressed my sentiments in respect of this Bill, and also our support on behalf of this side of the House, I have no choice this morning but to reject certain charges by the hon. member for Rissik with the contempt they deserve. Sir, I have a great deal of respect for that hon. member, because he is a self-confessed “verkrampte” in the Nationalist Party; at least he is honest about it, and we accept him as such, but I do not think that the charges the hon. member made in the Second Reading debate are worthy of him. Sir, I would just like to quote, for the sake of the record, what the hon. member said in the Second Reading debate; he said—

Sir, I would like to know whether that is the attitude of all the members on that side of the House. He went on to say, referring to the hon. member for Durban Central and myself—

Sir, I now want to know whether those sentiments are shared by all hon. members on that side of the House.

Are you ashamed of being an Afrikaner?

He went on to say—

He ought to be ashamed of himself.

He ought to have a heart transplant.

Sir, I want to tell the House today that I do not support this Bill with the object of impressing anyone. The hon. member need not be impressed by the fact that I support the Bill; I did not ask him to be impressed by it. We on this side of the House do not support this Bill because we want to impress anyone. I need not profess in this House that I am an Afrikaner, because if I look at the definition or the explanation of the word “Afrikaner” as it appears in this dictionary under discussion here, then I find the following—

Sir, in this way every Afrikaans-speaking person in South Africa qualifies, whether he sits on this or on that side of the House—

If that hon. member happens to have any suggestion to make, then he had better fill in a card and send it to the compilers of the dictionary so that it may be published in the dictionary that being an Afrikaner Nationalist is a prerequisite for one to qualify as an Afrikaner.

One may just as well be an English Nationalist; then one is also an Afrikaner.

Or a member of the Broederbond.

Sir, the hon. member amazes me, because he comes from a good U.P. home.

Black sheep.

That hon. member must rise and tell us whether the remarks he made about the hon. member for Durban Central and myself and the hon. members for Bezuidenhout and Orange Grove are also applicable to the people where he comes from. He must tell us that.

What has that to do with the dictionary?

Drink your medicine there.

As I have said, the hon. member comes from a good home; he comes from a good U.P. Afrikaner home, and the remarks he made about us on this side of the House are not worthy of him. Sir, I just want to say to the hon. member that neither he nor any Nationalist in this House or outside it, can take away from me my language, Afrikaans, my sentiments in respect of this Afrikaanse Woordeboek and this Bill which is before the House at present, and I shall say this when I like and how I like. After all, Sir, Afrikaans or the dictionary of the Afrikaans language does not belong to the Nationalist Party; it belongs to South Africa and to everyone who lives in this country. The sentiments of the hon. members for Orange Grove and Bezuidenhout and their support of the Bill and their congratulations in respect of this Bill on the Afrikaans language, were rejected with contempt by the hon. member for Rissik.

What is Boet van den Heever’s definition of “Afrikaner”?

The question is why the hon. member for Rissik does not accept the sound sentiments and the sound approach of these two hon. members in respect of the dictionary. I want to tell him why not; he does not accept them because they no longer support the Nationalist Party, but are now sitting on this side of the House. Instead of the hon. member welcoming the support of this side of the House …

Order! The hon. member must come back to the Bill.

I am reacting to what that hon. member said, Sir.

Order! The hon. member has now replied to him adequately.

On a point of order, Sir, the hon. member is reacting to a previous speech.

Yes, but the hon. member’s whole speech is nothing but a reaction to what the hon. member for Rissik said. He must deal now with the Bill, too.

Sir, just as everyone accepted our sentiments on this side of the House in the Second Reading debate, I think that the hon. member for Rissik must consider rising in this debate and saying that he shares our sentiments. The hon. member must accept, whether he likes it or not, that the dictionary of the Afrikaans language …

Order! I have asked the hon. member to come back to the Bill. He has now had sufficient opportunity to reply to that hon. member. His whole speech may not merely consist of a reply to the speech made by another hon. member.

Sir, I accept your standpoint, and in that case I want to conclude and convey, on behalf of this side of the House and on behalf of Afrikaans-speaking people, sitting on this side of the house, our congratulations to the hon. the Minister on this Bill. We want to extend our best wishes to the administrator and the staff of the dictionary of the Afrikaans language, and we want to express confidence that the work done by these people will go from strength to strength in the interests of every South African living in South Africa.

Mr. Speaker, I do not consider it to be necessary for me to react to the minor and sometimes petty feuds which have developed between certain hon. members in the course of this debate. [Interjection.] Sir, I just want to say this to that hon. member who is protesting so noisily over there, namely the hon. member for Simonstown: While the debate was in progress, an hon. member opposite asked by way of interjection, “What does the Minister say?” I want to say very emphatically that the hon. member need only read my reply to the second reading debate to find the answer he is looking for. On that occasion I said, and I am prepared to say it at any time, that the Afrikaanse Woordeboek is our common heritage, it is not a heritage for any one section, and I stand by that.

Sir, after all the discussions that have taken place here, the hon. member for Turffontein still does not have clarity on the reason for this clause. I just want to emphasize again that this is a preventive measure. It would be unwise for us—having taken cognisance of what had happened in England and Holland to compilers of dictionaries, who, in spite of all their judiciousness and their scientific approach and care, nevertheless landed in court—to disregard the possibility of such action being taken and to fail to take precautionary measures to prevent the compilers of our dictionary being exposed to the same dangers. I think that it is unreasonable of the hon. member for Turffontein to expect us to place on the compilers of the dictionary the onus warning the users of the dictionary that they could land in court if they used a particular word or expression. This is a risk which every person must run if he does not guard his speech. I do not think that this is the function of the compiler of the dictionary.

I want to conclude with that, and I would just like to express once again my sincere thanks to hon. members on both sides of the House for the discussion we have had on this very important matter.

Motion agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

Although it is not expressly laid down in the Bill, the intention of it is to ensure that the deliberations in this Parliament may take place without any disturbance from outside or in the vicinity of the Parliamentary building. As hon. members will notice, only open air gatherings or demonstrations within the defined area are being prohibited and similar assemblies which take place inside halls or buildings are not affected at all.

These measures are no new phenomenon among Western parliamentary institutions. In regard to the British House of Commons, from which we inherited our system, a sessional order is made at the beginning of each session in which certain instructions are issued to the Commissioner of Police of the Metropolis. In short, these instructions are to the effect that streets leading to the House of Commons shall be kept open and free of obstructions and that no disorder nor disturbance shall be allowed in Westminster Hall while Parliament is in session. The Commissioner in turn then issues, in terms of the provisions of the Metropolitan Police Act, 1839, a sessional order in which he instructs all constables—

Then follow the names of the streets including an area within a radius of one mile from the parliamentary building.

As far as Belgium is concerned, there is legislation which prohibits open air gatherings or demonstrations within a defined area around the parliamentary building. The long title of this Act of 1954 reads as follows (translation)—

It will be noticed that this Bill proposes to prohibit certain gatherings and demonstrations irrespective of whether Parliament is in session or not. After proper consultation had taken place, it was decided to have this prohibition apply at all times, principally because of the vulnerability of Parliament and all those employed therein. In addition, Ministers and other hon. members often commence their activities at Parliament weeks before the official opening while some of them stay on here after Parliament has prorogued.

In short, the provisions of the Bill amount to the following: Clause 1 contains the definitions and requires no explanation.

Clause 2: This clause contains the prohibitory provisions relating to certain gatherings and demonstrations. Certain gatherings of a religious or official nature are excluded from the prohibitory provisions and, in addition, the chief magistrate of Cape Town is empowered to grant permission for a gathering or demonstration on application.

Clause 3: This clause defines the offences and penalties.

Clause 4 contains the short title.

The Schedule defines the area in which the prohibition is to apply.

I rise to support this Bill on behalf of the Opposition. I think one speaks here today not as a member of an Opposition party, not as a member of the United Party, but as a member of Parliament, as a parliamentarian. Sir, I would have thought that everyone in this House would be at one on certain principles relating to Parliament. That is, first of all, the right of Parliament, the sovereign body in the country, to deliberate undisturbed; the right to the protection of the buildings of Parliament; the right of members not to be disturbed: going to and from the Houses of Parliament; the right of its members and officers to move freely to and from Parliament—an ancient right of Parliament, a right which, in so far as this House is concerned, has existed since 1911. Likewise there is the right of every other person to move unmolested to and from the Houses of Parliament for whatever purposes they have in mind. There is therefore also a responsibility to ensure that this sovereign body will be able to conduct its affairs without interference in the spheres of its undoubted competence.

I do not believe that there is anything sinister in this Bill. It is normal practice that Parliament and the conduct of Parliament’s affairs, should be protected, and protected by unusual laws, as they are in other parts of the world. Indeed, the Mother of Parliaments, the House of Commons, goes much further. At the beginning of each session of Parliament a sessional order is made by the House and that order goes much further. It starts like this—

In Brussels, as the hon. the Deputy Minister has indicated, they have a similar provision, but they go much further than they do in respect of Westminster. There they even provide for compulsory sentences for a breach of the provisions of their Act. It is surprising indeed, the only surprise I have about this Bill, that we have not had provisions like this before, especially considering the experience we have had in this country in respect of our Parliament. What have we found? We have found a lot of opposition to the provisions of this Bill from outside. We found that the Press has tried to prejudge the issue and has tried to determine beforehand what the attitude of people should be. Let us look at the criticisms and take as an example the Rand Daily Mail which says—

We find other newspapers in the Transvaal saying—

Sir, what kind of propagation is this: Is it propagation of street democracy? And there are many who do propagate street democracy, and they fly into wild hysteria about the right to protest. That very situation which these newspapers wish to bring about, it would seem, is the very situation which is the most undesirable situation which could occur, one which every Parliament in the world, and ours since its inception, has sought to prevent.

We have had wild allegations about the right of protests. There are many ways of protesting, Sir. The most important way of protest is through the ballot-box, a method which is eschewed by those who favour street democracy, who are always speaking for the right of protests in public places. Now, let us get one thing clear. This Bill deals with open-air meetings, and only with open-air meetings, in a defined area around Parliament. It does not affect the right of protests. In terms of this Bill you can go into the City Hall or the Drill Hall and harangue 3 000 people there. You can have your meetings and you can have your protests, but with the exception of the area contained in the schedule to this Bill, with the exception of the St. George’s Cathedral steps and perhaps the Hiddingh Hall campus of the university at the top of the Avenue, almost all the other open spaces are in public streets or public places, places to which the public has the right of access. When one talks about the right to protest, I want to say that you have no right to protest in a public place if your protest might interfere with the rights of any single individual. I think it is time that one realized that the public streets are not the place to have public protests, to practise street democracy, if you may interfere with the rights of anyone else. I think it is time that we must appreciate what we are talking about when we talk about the right of protest. Never mind about members of Parliament, but if any single individual, for instance my African messenger boy, going about his lawful business in the public places and streets is interfered with or obstructed by anyone having a demonstration, then his inalienable right to move about public places is affected. Such demonstration should therefore not take place. A fortiori that should apply in respect of the conduct of the proceedings of Parliament.

The area is considered to be large. I am not an expert on security, but I have seldom seen a Parliament which is so exposed as ours is on the Gardens side. Security-wise I cannot see how you can have the line any further away than it is now, namely Long Street.

You cannot have it any closer.

You cannot have it any closer, yes. You cannot have it in Queen Victoria Street. The next street is Long Street. One takes it on the other side. You go down Long Street to Strand Street and from Long Street, taking in the Grand Parade, you go to Buitenkant Street. Again, by the same token, Plein Street is far too close if you are considering the security of Parliament. The next big thoroughfare, security-wise, is Buitenkant Street as provided for in the Bill. From Buitenkant Street you take it back to Timoney’s garage in Long Street. [Interjections.]

I think one should bear in mind that one is dealing with the institution of Parliament and with its members. I know that the hon. member for Houghton is going to object to the Bill, but, of course, I am not surprised. She must object to it. Certain of the newspapers which support her have objected to it and so she must object too.

“Follow my leader.”

The attitude of these people, as I have indicated, is irresponsible. It reminds me of Mr. Stanley Baldwin when he was the Leader of the Opposition in Great Britain in 1931. With general elections in the offing the Press lords, Beaverbrook and Rothermere, sought to pursuade him that they would give him support if he would put certain people in his Cabinet. What he said, I think is very apposite …

It sounds like Joel Mervis.

Well, it is very apposite. He said—

No street democracy, no pressurizing will persuade us that the principle involved in this Bill is anything but the protection of Parliament, of the institution of Parliament. We stand behind no one in our respect for the individual and his liberties, for law and order and for the proper functioning of the sovereign body of Parliament in the Republic.

Mr. Speaker, I have listened to a number of silly speeches by the hon. member for Durban North in my day, but I must say that this is about the silliest of all. The hon. member has been here for a number of years. I did not know that he was so terrified of entering the precincts of Parliament, that he felt himself so threatened over all these years. I wonder why he had not submitted a plea before now to the Standing Orders Committee or to the Minister to introduce a Bill to make him feel more secure when he comes to Parliament and has to debate the affairs of the State.

Unlike the hon. member for Durban North—and I have been here rather longer than he has—I have never once felt myself threatened when coming into or leaving Parliament, or while being inside these hallowed walls. I have felt perfectly secure; I have not been suffering from this attack of nerves that has apparently been bothering the hon. member for Durban North for all these years. Sir, even he must admit that if, within the terms of this Bill, it is Parliament itself that one wants to protect, the area that has been defined, is enormously wide; for it includes not only Parliament and its precincts, but the entire city centre of Cape Town, including the city campus of the University of Cape Town.

But let me leave that aside because I have no compunction whatsoever about differing from the hon. shadow Minister of Justice of the United Party. I have found his legal opinion lacking in the past. He has already given incorrect interpretations of the law and I am not worried, therefore, about opposing him now. Certainly I am not worried about opposing the Government in this respect. Let me say that I cannot recollect any disturbances around or about Parliament which have in any way interfered with our work in this House. In fact, when the demonstrations took place last year on the Cathedral steps somebody had to call here and ask me whether I would come round to the Cathedral to see what was happening, so unaware was I and other members in this House that anything was going on outside of it. That is the actual position.

But your party helped to organize it.

I will ignore your nonsensical interjection. I want to know exactly what it is that has been worrying hon. members in this House. Has it been the handful of Black Sash ladies standing at the foot of the Avenue in peaceful protest, never numbering more than 25 or 30? Has it been little old Miss Lee with her placard parading up and down outside Parliament? Or has it been the handful of students, perhaps numbering 50, who were in Parliament Street last year and, without any such law being on the Statute Book, were unceremoniously bundled into police vans and taken off to the police station where they were charged with obstructing the messenger boy that the hon. member for Durban North is so concerned about? Indeed, they were charged with obstruction and fined under a municipal by-law. There is already on the Statute Book, or certainly in the municipal by-laws, plenty of legislation under which actual obstruction of the streets around Parliament can be prevented. I have no doubt that the police will not hesitate to act, should anybody find himself obstructed in any way, and unable to reach the precincts of Parliament. I do not, as I say, feel this impending danger that other members appear to have felt.

What about Britain and Belgium?

I am coming to the position in Britain and Belgium. Of course, there are other countries in the world other than Britain and Belgium—I notice not one of them has been mentioned—which do not have any such protective laws. Even the British law is very different, as I shall show in a moment, from the Bill which we are considering today. But I am quite certain that there are plenty of these laws behind the Iron Curtain that prevent public demonstrations, processions and meetings— indoors and outdoors, let me add. So one could find examples other than Britain and Belgium.

But let me turn to the example of Britain. What have been mentioned have been the British Acts of 1817 and of 1839. I would like to point out that there are very considerable differences between these Acts and the Bill we are considering today. What does the Seditious Meetings Act of 1817 say? Where does it differ from the Bill that we are considering today? First of all, the Seditious Meetings Gatherings Act of 1817 specifies that not more than 50 persons shall gather. In this Bill, if one looks at the definitions clause, one sees that a demonstration or a gathering by one or more persons is prohibited. So, Miss Lee with her placard takes on the same importance as a large gathering. The 25 ladies of the Black Sash take on the same dangerous importance as a gathering. One single person demonstrating takes on the same importance. The British Act lays down “more than 50 persons”. That in itself is therefore quite a considerable difference. Then the British Act, as the hon. the Deputy Minister pointed out, applies only to the days on which Parliament is actually in session. And indeed it goes further and provides that during session it applies only on the days that Parliament is actually sitting. Therefore, on Saturdays and Sundays the British public are free to exercise their street democracy, as the hon. member for Durban North describes public meetings and they can protest as much as they like in Trafalgar Square, outside Westminster and anywhere they like. And when Parliament is not in session they can protest on any single day of the week. There is therefore a very considerable difference.

The hon. the Deputy Minister says that weeks before Parliament meets members are going backwards and forwards about their business and that after Parliament is prorogued members are also around. But what about the intervening months when there is not a member to be seen within miles of Parliament, when the buildings are closed and there is obviously no activity here? Even then the entire city area of Cape Town is closed to meetings. On Saturdays and Sundays when one does not find many members of Parliament eagerly rushing to their desks, no meetings are allowed in this enormous area surrounding Parliament.

There are other differences. Under the British Act of 1817 the meetings must actually have the purpose of presenting petitions to Ministers and Members of Parliament. It is very circumscribed indeed. I might say that there is no ban on giving any publicity to such meetings as is contained in clause 3 of this Bill, in terms of which nobody may give any publicity even to the fact that a meeting has been called, that a meeting has been held or anything else to do with a meeting. Severe penalties apply when they do so. There are therefore very considerable differences indeed. I do not believe therefore that the 1817 Act is relevant to this Bill at all. Not at all. And as to the 1839 Act, if one looks at it together with the orders that are issued under it, they deal mainly with obstructing access of members to the House. By no stretch of the imagination can one really construe anything that has happened in the past here, including the Langa march about which I will say something in a moment, as obstructing Members of Parliament in coming to or going from the House. Furthermore, there would be nothing at all to prevent yourself, Mr. Speaker, from issuing instructions to the police to see that the immediate precincts of Parliament are kept clear. I therefore see no necessity for this Bill at all. It goes very much further than the reasons that have been presented to this House so far.

Let me just say a word or two about the Langa meeting. The hon. member who is always so coy about going to the Press, unlike me of course, gave an interview where he pronounced that he thought there was nothing sinister about this Bill. Well, of course, there has been nothing sinister about a lot of other measures which he and his party have supported.

Like what?

Like what! You were still in your cradle, [Interjections.] Many Acts which have been passed the hon. member found not sinister, such as the detention clauses under the Terrorism Act, the 90-days provision and various other measures. You supported them in principle. [Interjections.] Yes, in principle. [Interjections.] That is an old argument. Just look at Hansard and you will see how you voted on Second Reading. And then there was the Processions Act which the U.P. supported a couple of years ago, I think it was in 1970 or 1971. In connection with this Act the hon. member for Durban North actually told this House that the penalties involved were no worse than the penalties of municipal by-laws. I who am not legally trained was able to discover immediately that the penalties were far greater, that they were in fact those under the Criminal Laws Act of 1953, which includes a whipping, imprisonment and a severe fine.

Order! The hon. member must come back to the Bill.

I am coming back, Sir; as a matter of fact, the penalties of that Act apply here too and I will come back to that in a moment.

But let me deal with Langa. Apart from saying there was nothing sinister in this Bill, the hon. member said also: “Remember Langa”; remember the Langa march on the De Waal Drive. I remember it, probably very much better than he does and if it had taken all those years from 1960 to 1973, everybody has been terribly asleep about the very great dangers that are threatening us. It has taken them 13 years to do something about the Langa march. Interestingly enough, the Langa march ended short of the area which is being proclaimed sacrosanct in this Bill. The Langa march did not go beyond the magistrate’s courts in Caledon Square.

They were stopped.

They were not stopped. That is where they went; they went to see the magistrate and that is where they stopped. They were not stopped there; they voluntarily stopped there.

I just want to prove another little point of inaccuracy in what the hon. member had said. What I have been saying is that neither the 1817 nor the 1839 Acts, as far as I am concerned, is relevant to this particular Bill and I may add that it does not seem to me that what happens in Great Britain is apposite in this country. It is not apposite because Great Britain does not have laws on the Statute Book such as we have which give ministerial power to Ministers to detain and to abrogate the rule of law in all sorts of ways. Great Britain has a very much greater respect for the rule of law and for civil liberties than we have displayed over the years. The powers which people are therefore prepared to give to the authorities in Britain are not powers that I would like to give to the authorities in this country. These onslaughts that we have had in this country on basic rights have not been experienced in Great Britain.

The argument has and will no doubt be used that gatherings and demonstrations are not prevented, except within a one mile radius of Parliament. Outdoor meetings only are prohibited. For such meetings, namely those within the one mile radius, permission may be given by the Chief Magistrate. The hon. the Minister Justice did not give me any reply to the question I put to him this morning how many applications for processions had been granted by the Chief Magistrate since the Processions Bill was passed. He said it would involve a great deal of work.

Your question concerned every magistrate.

I admit that that was a silly way of doing it. I should not have put the question that way. I should have restricted my question to Johannesburg, Cape Town and Durban and maybe he could have given me the answers then. He might even have them in his head right now. Perhaps the hon. the Minister would like to tell me. In case he does not, I do not believe there have been any processions since then.

There is one I can remember, namely the students at Grahamstown.

Well, all right, there has been one. But certainly in Johannesburg and Cape Town, as far as I know, no applications have been granted. I am prepared to wager that no applications for open air meetings within this one mile radius will be granted by the Chief Magistrate of Cape Town for the same reason that the procession applications are turned down. The Chief Magistrate will consult the police; the police will say that they do not want any of these demonstrations.

Why should they not?

No Chief Magistrate is likely to go against any such ruling by the police.

So what!

The interesting thing is that our attitude differs. Members ask why should permission be given for these meetings? “Why”, said the hon. member for Potchefstroom, “should they give such permission for meetings?” My attitude on what our ordinary civil rights are and the attitude of members on both sides of the House, differ very considerably. I have one attitude. I believe that protest meetings, processions, outdoor meetings and indoor meetings, are part and parcel and form an integral part of the process of democracy.

What sort of democracy?

It is an integral part of the process of democracy. The only violence that we had was caused by police baton charges. All those demonstrations were non-violent protests. I may say that what I say has been borne out by the courts of law. During the demonstrations last year throughout South Africa something like 618 people were charged. They were charged under the Riotous Assemblies Act and various other Acts, and only two were found guilty. One was found guilty of addressing a meeting without permission, and all the others were discharged except those who paid fines on admission of guilt in respect of a municipal by-law, for obstructing the traffic. This does not seem to me to be a very dangerous position. And, indeed, what I say is borne out by judges, for whose views, I must say, I have much more respect than the views of hon. counsel in this House. I would like to give the view that was given by Judge Van Zyl, the acting Judge-President of the Cape Provincial Division. When he was summing up in the case against the students last year, those who were charged with infringing the Riotous Assemblies Act, he had this to say—

This is what the learned judge said. He may of course have occasion to change his mind now about Parliament jealously guarding this right, but in those days he said—

Absolute tripe!

I am quoting the judge, and of course that hon. member who is so wise, Sir, is just the sort of person to comment on the remarks of a judge. He continued—

Which brings me, Sir, to this great business of the ballot-box. Sir, how do you persuade people to change their minds at election time if you do not have the right of great gatherings and assemblies? And there is no hall in this country which is large enough to hold the numbers of people that could meet at an outdoor gathering, and everybody knows that that is why these outdoor gatherings are being prohibited. [Interjections.]

Order!

The learned judge went on to say this—

Indeed, South Africa, throughout its long history, has known protest, protest by Nationalists against the Smuts régime, protests by ladies at the Union Buildings against the war. We are a country of protests, and my point is that we are here insidiously eroding one of the basic rights which this country has always enjoyed. Every time another measure like this is put on the Statute Book, although other rights may be left temporarily untouched, there is a further erosion. And what is more, there is a rise in the level of tolerance of the public generally to this sort of measure. This is what we have forgotten. First there is one measure and then another; firstly, they are there temporarily, and then permanently, on the Statute Book. First no processions are allowed, and now no outdoor meetings in central Cape Town may be held. So it goes on. One can make excuses for this every time by saying that there are exceptional circumstances, and so on, but measures which are often introduced to cope with exceptional circumstances, so often simply become part and parcel of the ordinary law of this land. That is what is happening now, and hon. members are blind if they do not see that this process is going on under their very eyes. Then they sit back and make nonsensical speeches about “street democracy”, as if every great democracy in the world does not have these enormous gatherings of people protesting against what they do not approve of.

As I have said, all the demonstrations which we have had have in fact been lawful and, as I pointed out earlier, the people who were charged last year were all in fact found not guilty of unlawful protest. So, as far as I am concerned, this is simply another erosion of the rights of the citizens of this country. We have all forgotten those robust days when there were meetings on the City Hall steps in Johannesburg; then those were prohibited. There used to be meetings, labour rallies, and so on, on the Grand Parade in Cape Town; now that is out. That restriction had to be renewed every two years, but now it has become a permanent part of the law. The Grand Parade is included in the radius which is sketched out by this Bill. We have all forgotten about that; we have forgotten about these good old days when South Africans used to be able to gather and protest, and have processions without any difficulties at all.

We hear, of course, the old excuse about law and order. Everybody is, after all, in favour of law and order. But I have said before, and I say again, that having order does not mean justice. There is plenty of order behind the Iron Curtain, but there is very little justice. Especially, having law and order does not mean that ordinary civil rights enjoyed by democracies should be allowed to fall by the wayside. I say that the right of free assembly is a basic right. It is enshrined in the Declaration of Human Rights of the United Nations. It is part of the European Convention of Human Rights. It is enshrined in the United States Constitution’s Bill of Rights. For all these reasons—Sir, I have not quite finished, but just in case my time runs out—I wish to say that I intend to move the following amendment—

Now I want to say, in the words of Justice Black, of the United States Supreme Court—

Order! That has nothing to do with the Bill.

Sir, the freedom of assembly is being assailed by this Bill, and I am quoting an authority …

This Bill affects a prescribed area only.

Sir, admittedly it is a prescribed area, but nevertheless it is an infringement of the rule of assembly; it is something we have not had in this country before.

I have given the hon. member a lot of latitude; I think she must come back to the Bill now.

Very well, Sir, the famous words of Justice Black will go unquoted in the House of Assembly. I say that we must look to the real reasons underlying this Bill, and the real reasons are to be found, I believe, in the threats which were uttered last year by the Prime Minister and by other Ministers that they intended dealing with student demonstrators. I believe that is the real and basic reason for the introduction of this Bill. This is the Government’s way, or one of its ways, of carrying out that threat. It is perhaps also a way of barring peaceful protests on the steps of the Cathedral, without clashing too openly with the church. That may be another reason. Well, I am not about to help the Government to do this; I have no intention of helping the Government. I leave that to the official Opposition; let them do that, though how their actions today conform with article 6 of the noble Declaration of Principles by the Transvaal leader, Mr. Harry Schwarz, is beyond me.

Article 6 declares—

I wonder very much how the actions of the official Opposition today conform to that declaration of rights by their Transvaal Leader. I find it very hard indeed to understand this. I can understand the Old Guard, of course, going along with this inconsistency.

Order! The hon. member must come back to the Bill now.

Very well, Sir. I have indeed said all I want to say about this Bill. [Interjections.] I have always attacked the United Party when it collaborates with the Government in measures of this kind, and hon. members should get that into their thick skulls. [Interjections].

Order!

Mr. Speaker, for all these reasons, because I believe this is a further erosion of our civil rights in South Africa and the right of assembly, I have moved my amendment.

Mr. Speaker, we have once again had from the hon. member for Houghton the sort of exhibition of wild generalities and verbal extravaganza that we get from her on every possible occasion when she sees fit to indulge in debate in this House. Sir, in analyzing a little of what she has said here, one must forgive the hon. member for Houghton, since she represents a non-existent party with a non-existent policy, for fishing around in all directions and for indulging in generalities in dealing with matters which come before this House. Today the hon. member—and I must respect her longer service in this House than mine—has attempted to read into this Bill a vast amount which is non-existent in the terms of the Bill and certainly cannot be consequential upon the application of the Bill. Sir, I want to ask her where in this Bill there is any contradiction of the principle enunciated by our leader in the Transvaal that we stand for the lawful right of assembly and protest. Where is that negatived in this legislation? The legislation before us provides machinery whereby we can ensure that demonstrations or processions which take place within this defined area are under some measure of control, because the demonstrators must obtain the permission of the magistrate before these demonstrations can take place. The magistrate would certainly, as a sine qua non to approval, require to be assured that the procession, if it is going to take place, is going to be under some sort of control. Sir, does the hon. member for Houghton want a recurrence of what happened in Wale Street and then in St. George’s Street and Longmarket Street last year? Is that what she wants? Does she want that sort of situation to recur? We feel that at least within this prescribed area that sort of situation should not be permitted to occur, and for that purpose there must be a regularization of any procession that takes place. Sir, the hon. member talks of the system in Britain and suggests that it is so vastly different from the position that applies here. The position in Britain is that there is for all time the need to obtain the authority of the Commissioner of the Metropolitan Police to hold any type of demonstration or procession within a mile of Westminster; that is the law, and it is made even more stringent at the beginning of every session of the British House of Commons when the sessional order is issued by the Commissioner of the Metropolitan Police. Sir, what is more, in Britain there is a restriction placed on persons wishing to come to the House of Commons even to present a petition. There is nothing in this Bill to stop people from coming to this House legitimately to present a petition to Parliament. No, Sir, the hon. member has utilized or attempted to utilize this situation today to create the impression that we are now passing legislation to prohibit protests, to restrict the right of protest, to restrict freedom of speech. There are no provisions in this Bill to that effect. Surely the hon. member stands for—or does she not?— ordered control of large masses of people who may or may not wish to demonstrate? Sir, the hon. member also suggests that every demonstration or protest apparently must be open-air. Sir, there have been many protest meetings held recently—even addressed by the hon. member for Houghton —which have been held indoors, and the demonstrators or protestors have not filled the hall; there has still been room for other people in the hall. Why they should impede the public and interfere with the ordinary citizens of Cape Town by marching up and down Adderley Street, I do not know, if they are unable to fill a hall for the purpose of their protest.

I see in the Press this morning that the Cape Town City Council wishes to see the hon. the Minister to discuss this matter with him. I wonder whether the hon. the Minister should not give serious consideration to the question of allowing the City Council to create some place where these people can let off a little bit of steam. In Britain they do it; there they have Hyde Park corner, which has become a tourist attraction. In Britain they also allow Trafalgar Square to be used periodically. I want to suggest as a Capetonian that perhaps in the middle of the unused Golden Acre in Adderley Steet we can have a temporary rostrum erected on which people can go and let off steam and make their protests on any matter which they would like to discuss. There is this position that one must consider, and I want to mention this seriously to the hon. the Minister in the hope that he will consider it. One must always remember that there are certain sections of the community who may wish to demonstrate on a certain matter perfectly legally and in a perfectly orderly manner and to whom the expense of hiring one of the central halls of Cape Town may be a very heavy burden. I think serious consideration should be given to this, and I merely pass the matter on to the Minister for him to give consideration to it, to discuss it with the Executive Committee of the Council whether or not some sort of steam-letting area should be provided somewhere for these people who want to protest. I want to say this to him, and I hope, and in fact I am sure I am speaking for the majority of the citizens of Cape Town, that I do not want him to agree that the Grand Parade and Church Square or other squares of the city should no longer be used for the convenience of citizens for parking but should be kept vacant in case somebody wants to hold a protest meeting there. I hope he will not agree to that. The citizens of Cape Town will not appreciate any steps he takes in that direction.

In conclusion I just want to say that none of the provisions of the Bill before us will have any of the effects which the hon. member for Houghton has read into them in the extravagant language she has used in this House.

I want to thank hon. members, particularly those on the Opposite side of the House, who participated in the debate for their support, but you will appreciate, Sir, that this is not exclusively a Government measure. I am introducing this measure, but the Parliamentary Committee on Standing Rules and Orders and the Sessional Committee on Internal Arrangements decided that this measure be brought before this House. For that reason the measure is being introduced by the Government. What we are doing is simply to respect the feelings of the Committee on Standing Rules and Orders and of the Sessional Committee concerned. It is not my intention to sink to the level to which the hon. member for Houghton, in my humble opinion, has sunk by making a speech here which in fact reflects in words what the far-leftists, the new Left, the socialists, are so fond of doing, i.e. to be forever pleading for the rights of a democracy, while their real intention is to destroy that very democracy by making use of those rights. It is therefore clear to me that the hon. member wants this right to exist to allow demonstrations and protests and agitation to take place in the streets of Cape Town so that there can be complete chaos, so that the general public can be antagonized and so that there can be anarchy. When we read what has been written by the far-leftists, the socialist types, you, Sir, will recall that their first rule is to create chaos and anarchy; then you can obtain control; use the democratic institutions and the rights of democracy and in this way you are able to disrupt the bourgeoisie, and in this way the proletariat can achieve victory. Sir, I do not want to deal with all those things in detail, but I just want to tell the hon. member that she is typical of those people. She referred immediately to poor old Gladys Lee. Sir, this Bill is not before this House to deal with Gladys Lee. I want to tell the hon. member that if this poor old soul feels like demonstrating, I shall request the Police not to take any notice of what the poor old aunty is doing there. But this Bill has nothing to do with that. It concerns this, i.e. that the Committee on Standing Rules and Orders and the Sessional Committee concerned thought it fit to maintain the dignity of Parliament at all times. They do not want the Parliamentary employees who grow up and work in this atmosphere of dignity, to be disturbed by people shouting in the streets and by the long-haired fraternity wandering about, provoking the police and running into batons. [Interjection.] But of course this is aimed at the students. Whom did the hon. member think it was aimed at? Who started milling about in the streets, hurling challenges, here in the vicinity of Parliament? Is this conducive to the dignity of Parliament? No I quite agree with the Sessional Committee, and we are very glad that this Bill is serving before us today.

However, there is one aspect that worries me and that is the manner in which the English-language Press comes forward to save the powers of democracy from the Government. When notice was given of the motion for permission to introduce this Bill, The Argus published a leading article in which it tried to create the atmosphere of a last stand. That leading article was published under the heading “Under the Big Stick”. However, the Government was quite innocent because the Sessional Committee, in which the Government and the Official Opposition serve, took the decision. This has to do with something quite different, but The Argus comes along with “Under the Big Stick”. What did it say? It asked, “Why?” The newspaper dragged in Miss Gladys Lee and wanted to know what would become of her. I quote from the leading article of The Argus—

And then, I have to tell you in all honesty, there follows the understatement of the year—

What a fine city this is! We want to give effect to this point of view and the statement of the Capetonians “that we are not a demonstrating citizenry”, and we therefore say that you are not allowed to demonstrate and particularly not in the vicinity of Parliament, because we who come from the Transvaal and other parts of the country are not a “demonstrating citizenry” either and we want a stop to be put to demonstrations.

Mr. Speaker, it was necessary for you to issue a statement that this is not, in fact, a Government measure. What I should like to know now, is whether The Argus would change its attitude. I want to express the hope that the newspapers will try not to belabour the Government to such an extent about supposedly wanting to water down democracy. They must wait and first find out where something comes from before raising a hue and cry about it.

Of course, the hon. member only got carried away because the newspapers told her to raise a hue and cry. I listened to her speech very attentively. She simply rattled on and on. She is so eager to maintain the image of being the lonely fighter in Parliament. [Interjections.]

Never mind, I need say no more. I am very grateful that we have been afforded the opportunity of submitting this Bill to this House. I am also very grateful that all the parties that mean anything in this House are agreed on this score.

Question put: That the word “now” stand part of the motion, and a division demanded.

Fewer than four members (viz. Mrs. H. Suzman) having supported the demand for a division, Questions declared affirmed.

Bill accordingly read a Second Time.

Mr. Chairman, I move as an amendment—

I just want to explain briefly that there are some misgivings about the fact that the director shall automatically be the deputy chairman of this advisory council. Hon. members are aware that the director is really concerned with research. It is my intention to bring about some separation between the supervisory responsibility and the research responsibility. I think that this can only be to the benefit of the director as far as his research work is concerned. I do not think it will make any difference in practice, because subsection (2) reads as follows—

The words “who shall be the deputy chairman” are now being deleted by this amendment. This still means that in his absence, the Secretary may nominate someone else in his department to be chairman. I therefore do not think that this will make any difference in practice.

Mr. Chairman, we agree with the hon. the Minister that the words that he is asking to be deleted, are completely redundant and should come out.

As far as subsection (5) is concerned, I just want an explanation from the hon. the Minister. Under subsection (5) the Minister may appoint certain advisers. I would just like to ask him for what purposes this will be done and what he has in mind in this regard.

Mr. Chairman, it is obvious that this could be a scientist who has specialized in a certain field. Such a person could then be appointed in an advisory capacity to provide the advisory council with professional advice in respect of a particular aspect or problem on which the council must advise the Minister.

Mr. Chairman, subsection (2) already makes for the appointment of such persons as members of the advisory council. I wonder therefore, why provision is again made in subsection (5) for appointing such persons. Is there a difference between the objectives of the two subsections?

Mr. Chairman, the hon. member will appreciate that the members of the advisory council appointed under subsection (2), are council members who are representative of various industries, as indicated in the subsection, inter alia, the Fisheries Development Corporation, the Bureau of Standards, the distributors of fish, etc. These are members of the council. Now I may appoint additional members under subsection (5). However, this is more specifically for advisory purposes. It is for that reason that the additional subclause has been inserted.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 4:

The hon. member for Cape Town Gardens yesterday referred to the possibility of space being made available in the fishing harbours for amateur fishermen. He particularly mentioned yachtsmen. In terms of this clause the hon. the Minister is given not only the right to establish fishing harbours but also to control them. I would therefore like to ask him to give very serious consideration to the situation. You have, for example, at the fishing harbours of Kalk Bay, Gordons Bay and Hermanus, a situation where traditionally over the years amateur fishermen have had the right to moor their boats. There is constant difficulty and I personally am constantly being approached by people who would like to moor boats in those harbours. There seem to be suggestions in some cases that some people get preference not only to moor their boats in those harbours but also to the use of the slipways in those harbours to the exclusion of others. There would thus appear to be inefficient administration in some of those harbours.

There is another point I should like to raise with the hon. the Minister in regard to harbours. This concerns the access to harbours. We have the situation at Kalk Bay where the Railways control the access to the harbour. There is a level crossing. In terms of the regulations applied by the Railways the level crossing opens about 9 o’clock in the morning and closes at 5 p.m.

What has that to do with clause 4?

It has to do with the control of fishing harbours. This is one of the fishing harbours under the hon. the Minister’s control. I want to ask the hon. the Minister whether he can make representations for that harbour to be opened earlier and certainly to close much later. The harbour is extensively used by amateur fishermen after hours. Once the gates have closed it is impossible for them to get their cars out of the harbour. It is a source of friction and I think the sooner the Minister arrives at some compromise with the Railways, whereby the public has greater access to the harbour and particularly for parking facilities, the better. I commend that to him for his attention.

The hon. member referred to what had been said yesterday by the hon. member for Cape Town Gardens, namely that there had to be better facilities for people and vessels in the fishing harbours. I gave the undertaking yesterday that we would give our attention to the matter. In fact, negotiations with my department have already taken place. It is envisaged that before the end of this month a meeting will take place with officials of my department, a meeting at which the various bodies will be represented, inter alia, the Department of Tourism, the S.A. Railways, Viskor, etc. They will discuss the matter to which the hon. member referred, namely facilities for the public in respect of other vessels. The hon. member must take account of the fact, however, that it is our primary task to develop these harbours as fishing harbours with a view to the fishing industry. That must remain our primary task. I myself was impressed by the idea yesterday, and it is in fact being seen to.

As regards the question of the control of these harbours which was raised by the hon. member, there is a tremendous difference from harbour to harbour. I am aware of the level crossing at Kalk Bay. The space there is particularly limited, and the level crossing affects access to the harbour to a large extent. I do not think that this is the right time for going into all the details of the harbours. We shall take into consideration the thoughts expressed by the hon. member in regard to freer access to the various harbours. If representations should be made by any bodies or persons in that respect, we shall attempt to remedy the matter on a departmental basis.

I wish to thank the hon. Minister for his reply. It is relevant at this stage. As the hon. the Minister will know Viskor has plans to expand that harbour. I think Parliament has actually passed an amount of R1 500 000 for further extensions to Kalk Bay harbour. Now, you have the problem, and I think it is appropriate that I should bring it to his attention at this moment, that the department and Viskor are willing and able to go ahead with the expansion of that harbour. The money has been voted and the plans that I have seen are first class plans. As a matter of fact, they are very close to the plans that I suggested here in this House a few years ago. But Mr. Chairman, you have that difficulty. The railway bridge access is a problem. Until the question of access is cleared up I think you will find that the department or Viskor will have great difficulty in extending the harbour. But the Cape Town Municipality is also in the picture. Until such time as the Cape Town Municipality builds its tunnel through the mountain above Kalk Bay the builders of the harbour will not be able to use the fill from the tunnel for providing the breakwater. I would therefore like to ask the Minister to please give consideration to calling together a departmental committee to deal with this matter. I would be only too pleased to discuss this with him privately if he so wished. It is a situation where Parliament has voted money and Viskor wants to go ahead and expand the harbour at Kalk Bay, but because of the City Council and the Railways there is no way of getting on with the job. It is an important matter.

Then there is a third point I should like to make. The hon. the Minister referred to the Department of Tourism being consulted in the committee to which he referred. There is no governmental body whatsoever that is able to provide the funds with which to build small-boat harbours. That is your problem. That is why most of the people that have small boats, namely private people and yachtsmen, have to use the commercial fishing harbours. There is no government agency of which I know which is able to expend funds for the building of pleasure harbours, boat harbours or tourist harbours or whatever you want to call them. I therefore ask the hon. the Minister to give this his attention.

I do not feel that I am in a position at this stage to give a definite reply, in detail, to the points raised by the hon. member. All I can say is that we shall give attention to the matter. The hon. member is quite right in saying that there is no body or government department which has funds available for constructing facilities in harbours and making them available to the general public. This may possibly be one of the matters which will be discussed, at the coming meeting.

Clause agreed to.

Clause 5:

Mr. Chairman, in respect of clause 5 I have one or two observations. The first observation is in respect of the certificates of appointment mentioned in subsection (2). This is a new subsection. It is welcomed. I think it is an excellent idea that anybody that is appointed as an inspector, officer, or honorary fisheries officer should have in fact a certificate of appointment. I want to go further and to suggest that at any rate in regard to the honorary fisheries officer, he be given a badge of appointment. We have recently discovered in the Republic as a result of a greater awareness of the necessity for conservation that there are conservation societies of one kind or another springing up. They have great pride in the work that they do; some of them have achieved an enormous amount in a short space of time. I think in this particular context of the False Bay Conservation Society which, in a period of six or seven years, has achieved a great deal in conserving the resources of False Bay of one kind or another, and, I think, is establishing a very fine liaison between itself and the Department of Sea Fisheries. I would suggest that the hon. the Minister should give consideration to badges being provided, certainly for the honorary fisheries officers, and also possibly for the inspectors and the other officers of the department who have to discharge the duties described in the following clause.

Mr. Chairman, this clause is a new provision, but the certificate of appointment is not completely new. The hon. member himself says that he is a honorary fisheries officer. If that is true, then he has received a card of appointment to that effect. The idea of a certificate or a card is therefore not completely new, although provision has not previously been made in the Act for this. As far as a visible token is concerned, the hon. member spoke about a> badge for these people. This would be a visible token signifying that such a person is an honorary official. This is something we could consider. We shall have to investigate the cost this would involve, but I see no reason why this should be excessive. In my opinion there is merit in the idea.

Clause agreed to.

Clause 6:

Mr. Chairman, I want to refer briefly to two points. The first relates to clause 6(1)(b), which states that an inspector or an officer generally or specially authorized by the Minister, and a member of the police, may—

I have in my possession regulations issued by the department concerning the implements that may be used. I refer particularly to the implements that are being used at the moment for the cutting of red-bait and for the taking of mussels from the rocks. The implements are prescribed in some detail in those regulations. I do not think that the sizes of those implements are satisfactory; I think some attention should be given to this matter. More particularly—and this comes back to the necessity of having honorary inspectors—there is not sufficient patrol work being done to see whether those people who go down to the coast to collect shells, bait and fish of one kind or another, are using implements that are prohibited in terms of the regulations. I have been horrified from time to time to see people armed with spades digging whole masses of red-bait off the rocks in front of my house. I find people armed with hammers, hammering away at rocks, trying to get mussel-worms. I find that they are not only damaging the rocks, but also damaging all the sea life-attaching to those rocks. I find that the mussel-bed in which many of the mussel-worms shelter are being completely denuded as a result of the excessive use of over-sized implements by these collectors.

I want to refer also to paragraph (f) of clause 6(1). This paragraph relates to the right to order the master of a fishing boat to remove it at a specified time from a fishing harbour or not to bring it into a fishing harbour at all. I take it that this applies to foreigners as well. I take it that this is one of the measures with which we are hoping to combat the situation regarding foreigners, those who are perhaps not signatories to the convention of the South-East Atlantic, or even those who are signatories. I take it that this is aimed at prohibiting them from transgressing our fisheries regulations with impunity. If that is so, then I welcome this provision, because it will give us some teeth with which to handle a difficult situation.

Mr. Chairman, both these provisions are existing provisions. Clause 6(1)(b) already exists in section 3(1)(c) of the Sea Fisheries Act. Similarly the provision contained in clause 6(1)(f) already exists in section 3(1)(g) of the Act. The hon. member said he was horrified from time to time to see how spades, etc., were used for digging red-bait off the rocks. I am really amazed that he said this, for the hon. member is, after all, an honorary fisheries officer; surely he acted in these cases?

Yes, I act immediately.

Be that as it may, Sir, I realize it is no easy matter to notice all these small things, for our coastline is a long and extensive one, and from time to time we shall have cases of people transgressing and exceeding the bounds of the regulations altogether. I agree with the hon. member that we must do our utmost to prevent this. I am well aware of the damage to our marine life in the past number of years, and especially in the case of bait attaching to the rocks, such as white mussels, red-bait and even black mussels. From time to time this bait is removed by people in an utterly reckless manner. They use any implement to be found under the sun, for they think that the supply of this bait is inexhaustible and sometimes their motive is one of pure selfishness. I sincerely hope that we shall succeed to a larger extent in doing something in this regard by means of this legislation.

The hon. member asked me a question with regard to paragraph (f) of subsection (1). He is quite correct; it also applies to foreign boats, and not only to our own boats.

Mr. Chairman, I want to point out to the hon. the Minister, now that he has clarified the position in regard to paragraph (f), that it is all very well to have these teeth with which to combat a very difficult situation, but I want once again to bring to his attention the necessity for having an effective patrol service. When I asked him yesterday during the course of the Second Reading what steps he was taking in regard to a patrol service, he said that he was not able to give me an answer immediately. It is all very well to have these regulations and to have these powers on the Statute Book, but unless you have an effective patrol service, like, for example, the United States Coast Guard Service, and the patrol services of other countries with fishing interests, it does not help to have these powers on the Statute Book. You have to have effective control which you are prepared to use.

Mr. Chairman, the Committee will appreciate that we have a problem in this regard owing to the length of our coastline. At this stage I can only say that we move the inspectors who are used for patrol work from place to place from time to time. When it is necessary to do patrol work along the coast of South-West Africa, they have to proceed there, and when those services are not so necessary there, in the off-season, those same inspectors are used at other places where such services are deemed necessary.

Clause agreed to.

Clause 7:

Mr. Chairman, I refer to subsections (6), (7) and (8). These are new subsections which we on this side of the House particularly welcome. These, again, provide more enforcement measures.

Clause agreed to.

Clause 11:

Mr. Chairman, this is the clause which refers specifically to the question of quotas. As I read this clause it means that the Minister may, after having consulted the Advisory Council, make regulations prohibiting the holders of licences in respect of fishing boats from catching or landing more than a certain quantity of fish, and prohibiting or regulating the supply of fish to certain persons. I think I am correct in saying that these are new statutory provisions. They refer to the quota system. I think it is only appropriate for me to say at this stage, in regard to these provisions, that we have read in the Press that the pilchard quotas off South-West Africa have in fact this year been increased. I just want to place on record once again my considerable doubt as to whether it is wise at this stage to increase quotas. I have already during the Second Reading referred to the fact that, elsewhere in the world, where pilchard resources have been on the decline, it has been found that once the decline has started it does not stop unless the most drastic measures are taken. As evidence of that, you have your Californian pilchard resource and you have your west coast pilchard resource. I know that there are members in this House who say that I am always playing the role of Job’s comforter, that I am looking on the black side of things, but I can only say that it was not so long ago that the west coast was producing something like ½ million tons of pilchards a year. Last year it was 60 000 tons.

Order! The hon. member must come back to this clause. That is a matter for administration; this clause does not cover it.

Sir, since the hon. member has put the question, may I just point out that clauses 11(a) and 11(b) are new clauses. These powers are already being exercised partially in terms of the control over the hold capacity of boats, which is linked to the factory quota. Subclause (c) is an existing subsection, and subclauses (d) and (e) are also new. Last night I referred, inter alia, to (e), which is a new subclause and which provides for separate control in South-West Africa and here in the Republic.

Clause agreed to.

Clause 12:

Mr. Chairman, I only wish to say that I welcome particularly the increase in the penalty from R500 or one year to R1 000 or one year contained in subclause (3). I think in the light of what has been happening in the fishing industry over some years, it was necessary to increase these penalties, and we on this side of the House, although we regard them as severe, recognize the necessity for them and welcome them.

As regard subclause (1)(m), I just wish to ask the Minister what exactly he has in mind with that subclause. I realize that it is a clause that has been taken over from the existing Act.

Order! The hon. member is now talking on clause 13. We are still dealing with clause 12.

Clause agreed to.

Clause 13:

Mr. Chairman, the remarks that I made as regards clause 12 will now apply to clause 13. I was asking the hon. the Minister precisely what was meant by subclause (1)(m). I realize that this is being taken over from the existing Act, but I am not quite sure exactly what it means in so far as it affects foreigners. Will the hon. the Minister please explain it?

As the hon. member has said, this subclause is an existing subsection. It is intended for exercising control over foreign boats in fishing harbours. That is its main purpose.

Clause agreed to.

Clause 16:

Sir, once again I want to refer to a matter mentioned by the hon. member for Omaruru in his Second Reading speech and also mentioned by me.

*To be specific, it was in connection with the matter of dumping. This is a serious situation which has developed over the years and we are totally opposed to it.

†We support the severe penalties for which provision is being made with a view to trying to stop dumping.

As regards clause 16(1)(f), there is also the question of the discharge into the sea of anything which is injurious to fish—fish food, seaweed, etc. I think this subclause is really one that is applicable to what has been happening at Saldanha Bay.

To which clause are you referring?

I am sorry, I am referring to 16(1)(j). I think this clause is relevant as regards the situation at Saldanha Bay. The Minister will recall that earlier this morning he answered certain questions on the Question Paper put to him by the hon. member for South Coast. I would bring to his attention the urgent need for something to be done about the discharge of what I can only refer to as polluted material from various factories. Then there is also the situation at Glencairn. The Minister was himself a director of Marine Products, which is the owner of the factory at Glencairn. If he goes down to Clencairn on any fine day of the week, when the sea is reasonably clear, he will see that the sea is polluted by discharge from that factory. I see no earthly reason why factories that deal with the products of the sea should with impunity be able to discharge their waste products into the sea. It cannot do anything else but have a harmful effect on the sea life in the area. I will go so far as to say—I have no evidence to substantiate it other than personal observation—that whenever that factory at Glencairn discharges its effluent into the sea it prevents the trek fishermen, who have long-established rights on that beach, from making good catches. I have never seen them make good catches from that beach when there is the discharge of effluent into the sea visible to the eye. The same applies to Saldanha Bay. A serious situation has developed there. One reads of thousands and thousands of sea creatures which have from time to time been washed up.

Order! The hon. member is now making a Second Reading speech on this clause.

I want to reply briefly to what the hon. member said here with regard to effluent from factories. Recently my department conducted negotiations with the various fish factories with regard to the so-called “pilot plant” which they are erecting so as to render this effluent harmless. We are negotiating with them and we shall do everything necessary towards the end of the year to see to it that they make the necessary arrangements so as to render the effluent, which is something unavoidable, harmless prior to discharging it into the sea. Measures of control have been inserted here and we shall now be able to take action against them in terms of these measures.

Clause agreed to.

Clause 18:

This follows on what I have just said on the previous clause but one. There is a presumption contained in the new subclause (4), that if in any prosecution for an offence in terms of the Act there has been a discharge of effluent into any area of the sea within a distance of 8 km from a factory and fish or fish food has been injured, etc., it is an offence for which that factory is held responsible. It will be presumed that the discharge emanated from that factory. I welcome this provision. I think the presumption is correct and the onus is rightly placed on the factory to discharge that presumption.

Clause agreed to.

House Resumed:

Bill reported with an amendment.

Mr. Speaker, when this debate was adjourned yesterday, I had indicated that this side of the House oppose the principle of free and unrestricted participation in party politics by members of the Public Service. We believe that it is an approach which, in any event, is adopted by most of the senior Public Service officials. In the time that is left to me, I want to deal with the provisions of the Bill and to indicate to the hon. the Deputy Minister where we have some reservations and where we shall move amendments when we come to the Committee Stage.

I want to dispose first of all of the question in regard to sections 17 and 18 the principal Act. We desire that the institution of disciplinary action should be compulsory and not permissive when the amendments in terms of the various clauses of the Bill come into effect. In other words, if a public servant contravenes the provisions which are now to be included in the Bill, then action should be taken departmentally in regard to such transgression.

Clause 4 provides for the insertion of a new section 24A. As far as subsection (a) of the proposed new section is concerned, we support the position that members of the Public Service should be permitted to be members of a political party. However, when it comes to the question as to the extent to which that membership can be exercised, we do not believe that a public manifestation of a public servant’s membership should be permitted; in other words, it must not include open, active management activities. Therefore we believe that the words “and serve on the management” should be further considered. We propose that the hon. the Deputy Minister consider the restriction of membership of the management of a political party to membership of a branch or constituency committee of a party. This will then entitle the individual member of the Public Service to play his part in discussion and formulation of policy and matters of that nature in connection with the party to which he belongs. We do not believe that a public servant should hold office in any political party, be it as chairman or secretary of anything, even of a branch organization of a political party.

We certainly welcome the provisions of subsections (b) and (c), that is that a public servant may attend a public political meeting but may not preside or speak at such meeting and furthermore that he may not draw up or publish or cause to be published any writing or deliver a public speech to promote or prejudice the interests of any political party. There are aspects which are omitted which we think should be included. First of all there is the question of canvassing. It is dealt with specifically in the rules applicable to the Public Service of other countries and particularly in Great Britain where there are special provisions dealing with canvassing. One feels that because of the particular relationship between a public servant and the public, a public servant should not be permitted to canvass. When I say “canvass” I have in mind that he should not be permitted to canvass for members, because this could be misused in departments, or for funds and at election times he should certainly not be allowed to canvass voters for a particular party. When I say “election times”, I have in mind the elections for this House, the provincial councils, and I think it should also include elections of municipal councillors where those municipal elections are fought on a party political basis. There are many local authorities where that does not occur. I believe that it is also essential that one should make sure and ensure that no party political organization operates from or use State premises for the purposes of meetings and matters of organization.

We believe that were these provisions brought into this Bill—we will submit amendments to deal with them—the public servant would have been permitted to exercise his individual right of affiliation to a political party, he would have been permitted to participate in the formulation of the policy of the party to which he belongs. But it would avoid any possibility of direct or indirect influence within State departments; that is, of one official upon another, and it would certainly eliminate any possibility of influence by the State official upon members of the public with whom he comes in contact. We will obviously debate this point more fully when we come to the Committee Stage. I hope the hon. the Deputy Minister, in replying to this debate, will indicate to what extent he will be prepared to consider in principle the amendments we put—we can discuss the details in the course of the Committee Stage; in other words, to restrict the participation in politics of a member of the Public Service to membership of a party and participation in the constituency formation so that he may not hold office or in any way publicly identify himself with a party.

At the commencement of my remarks yesterday, I made it clear that what is concerning us on this side of the House, is the different standards which apply to different sections of the Public Service. The Railways have a certain code in this matter; the Post Office has another code, and so on, right through the Public Service. Now I want to appeal to the hon. the Deputy Minister as the situation is now becoming crystallized in some form, that he should endeavour, if possible, to bring together the Public Servants Association, the artisan and other staff associations of the Railways and the Post Office Staff Association and various other associations to which public servants of various departments are attached, in order to formulate some code which can then be applied throughout the Public Service. In such a code we could well incorporate a lot of the principles which apply, for example in the Public Service of Great Britain, where there are different categories of civil servants that have different rights of participation in the political life of the country. I understand that in Britain there is a much lower strata of civil servants than in South Africa and that certain of the so-called “service personnel” enjoy complete liberty to do what they like politically, because their status in the Service is so low that it cannot bring the Civil Service as such into any disrepute. But I think the time has come that a thorough investigation should be carried out in this regard and that we should for all time formulate a code for public servants which will be acceptable to them, which will maintain the high traditions of the Public Service as a service to all sections and people of all political persuasions in the public sector of the country. That could be done if we had a uniform code without the exceptions and varying degrees of control which at present exist. I hope the hon. the Deputy Minister will give consideration to organizing an investigation to that end.

Mr. Speaker, the Bill which we have been discussing this morning, and began discussing yesterday afternoon, once again affords us the opportunity to place a little emphasis on the Public Service, the Public Service Commission, and so on, and also to give attention to a large group of people in our society who have a very important and responsible task and who are in fact performing their activities in society in a very quiet, peaceful and modest manner. Therefore it is necessary, when these people come to us, through their associations as well, that we should devote particularly thorough attention to their ideas, needs and ideals. In particular I want to devote my speech to clauses 3 and 4. I then want to begin by quoting an extract from Prof. J. J. M. Cloete’s work, Sentrale, Provinsiale en Munisipale Instellings van Suid-Afrika, and refer to certain observations which he made in respect of the central administration of the Government departments. On page 108 of the latest edition of his work he said (translation)—

I think that if we accept this as an ideal situation, the public servants in South Africa have in the course of time complied with this. These two clauses in particular are trying to reconcile two ideals: The first is to have impartial public servants and a public service who have to and want to support the Government of the day faithfully, loyally and in a responsible way; the second ideal is to afford the public servant the right to be a full citizen of his country, and as far as possible, too, in the political sphere. For various reasons this is no easy reconciliation. The one important reason is probably the weakness of the flesh which is present in most people. This reconciliation is one which can only be effected reasonably by responsible people within the democracy through the passage of time. This reconciliation attempt has had its own history within every country where democracy has had an opportunity to grow in a normal and healthy way.

I just want to mention two countries briefly, as examples of countries which contended with the same problem. The one is America, in regard to which I just want to quote briefly from a report which I have here entitled “Statement of Robert E. Hampton—chairman of the United States Civil Service Commission before the Committee on Post Office and Civil Service of the United States Senate”, of April, 1972. I should like to quote a few passages from this indicate how these people also attempted to reconcile these two ideals. On the first page of the report he stated—

Then he goes further and refer to this case, United Public Workers v. Mitchell in 1947, where the court gave the following verdict—

After having referred to that, he said the following at the end of his memorandum—

In other words, we notice here, too, the struggle of people to reconcile these two ideals. If we consider the Code of Federal Regulations in regard to Administrative Personnel, we also note here that there are certain things which are allowed, and others which they tried to counteract. As regards permissible activities the following is stated —and I am quoting a few examples—

Then he mentions a specific paragraph. There are certain things which he is in fact prohibited from doing, which are very interesting to look into. We find the same struggle in respect of the reconciliation of these two ideals in Canada. There are certain examples which I found in the treatise “Participation by Canadian Federal Civil Servants in Politics” in which public servants are on the one hand prohibited from taking an active part in politics so that their impartiality and specific instructions will suffer harm as a result, but yet on the other hand are afforded the opportunity of contributing their personal talent and knowledge to the general political activities of their specific country.

In South Africa where we have certain officials who serve specific institutions, we note that the Railways, for example, has up to now also placed certain restrictions over the years on its officials, but on the other hand wants to afford them the opportunity of participating here and there. So I can quote the following to you from the Railway Regulations under the paragraph “Political and Public Affairs”—

Then it continues as follows. It is also stated—

Various aspects are covered by this, and I just wanted to quote a few passages to illustrate that attention has in fact been given to this matter by the Railways. The provisions which we have here today, also have their own special history in the Public Service as such. As long ago as 1951 a draft resolution was submitted by the then Minister of the Interior in which he proposed (translation)—

According to the draft resolution participation is limited to the nomination of candidates for election purposes. In September, 1951, the Minister in question addressed a special meeting of the Public Service Joint Advisory Board on this matter. He asked the board to devote special attention to the limits which should be placed on the political activities of public servants. According to representations which were received, it appeared that public servants and members of their families at that stage comprised up to approximately 80% of certain constituencies in Pretoria. The advantages and disadvantages of this motion were stated, and the following resolution was subsequently passed (translation)—

Both the Graham as well as the Centlivres Commissions of Inquiry into the Public Service expressed themselves in favour of the maintenance of the status quo. This matter was again debated at the congresses of the Public Servants Association in the years from 1953 to 1958, and in 1962. Each time it was debated it was rejected and it appeared as if the so-called American spoils system attributed largely to the failure to reach a positive agreement in this sphere. In November, 1962 the Public Service Commission convened a special meeting of the Joint Advisory Council to discuss the following draft resolution (translation)—

However the Advisory Council resolved unanimously that the existing provision in regard to participation in politics in the Public Service should be left unaltered. The matter was then left at that until another motion was submitted to the congress of the Public Servants Association in 1969. Under the heading “Active Participation in Party Politics” a motion was introduced asking that the Government be requested to amend section 17(c) of the Public Service Act, Act No. 54 of 1957, so that (translation)—

1. (a) any officer may join a lawfully recognized political party or organization as member; and
2. (b) may actively as member or member of the management promote or propagate openly the principles and objectives of such party or organization in his free time.

In a memorandum which was submitted, the following was indicated as motivation (translation)—

I quote further:

1. (a) may join a lawfully recognized political party or organization as member; and
2. (b) may actively as member or member of the management promote or propagate openly the principles and objectives of such party or organization in his free time.

The following resolution was adopted by the congress:

This was sent to the Public Service Commission, which replied that they did not see their way clear to accenting the change proposed by the Public Servants Association. After that reply from the Public Service Commission the association again made representations in February, 1970, and requested the commission to furnish further reasons for its refusal. To this the commission replied again in April, 1970, but adhered to its old basic standpoint. The matter was left more or less at that until a change took place and it appeared that the time was ripe to give very definite attention to this matter once again. A memorandum was then drawn up by the Public Service Commission and this was discussed in August, 1970, by the Public Service Joint Advisory Council, on which the Association has representation. In view of this and in view of representations received from a number of congresses of public servants, the National Party stated the following through former Minister Dirkie Uys on 9th June (translation)—

Now I should just like to quote to you something which was said by the then Secretary of the Association. I am quoting from The Star of 10.6.1970. According to The Star Mr. Basson had the following to say—

Die Transvaler also reacted at the time in a leading article. I am quoting from Die Transvaler of 11th June, 1970, as follows (translation)—

Die Transvaler concluded this leading article by saying—

This is a brief historical sketch which I wanted to make here for the sake of completeness. Before I make my last few remarks I should like to quote again from Prof. Cloete’s work, where he states the following—

Even this learned gentleman left himself a kind of loophole by using the words “not … actively”. With the history of this entire matter we have come today to deal with clauses 3 and 4. The realization and acquisition of these two ideals which we mentioned at the beginning, by on the one hand doing justice to the activities and the obligations of a public servant as this has unfolded within the democracy which we know today, and on the other hand affording the public servant certain rights in politics, testifies to everyone involved in this, including the hon. member for Green Point and the Opposition, having tried with the greatest responsibility to bring it about. I think that both parties, striving to achieve the highest ideals of democracy, will try to help the public servant in this, quite probably with certain conditions which we as people involved in active party politics wish to see imposed. Without being didactic I want to say this morning that I hope that the Bill and so, too, the remarks and comments we want to make concerning it, will meet with approval. We want to say to the public servants that through this right which they are acquiring they are in fact receiving a privilege. As with any right and privilege which one acquires, this right and privilege of the public servants will also entail greater responsibility, and I think that these two clauses are only the beginning of a long history which also lies ahead for us. I should like to see our public servants, who have built up such good, sound traditions as public servants in the Public Service of South Africa, will exercise these political rights they are now obtaining with the same sense of responsibility and trustworthiness as they have thus far displayed in the performance of their duties. I want to request them to treasure this privilege, and to be an example in this respect to all persons in South Africa who have the right to participate in the privileges of democracy.

Sir, the hon. member for Green Point has indicated that we on this side of the House will support the general provisions of this Bill. However, I want to take this opportunity at the Second Reading to express some reservations on matters of principle which arise in clauses 1 and 2 of this Bill and which I believe could well do with some further reflection and some further attention. Sir, the first of these questions of principle which I wish to raise is the matter of the appointment of non-officers to the Public Service. Clause 1(b) of the Bill provides that if the Commission recommends the appointment of persons who are not officers of the Public Service, these appointments should be brought to the notice of this House by means of the Commission’s annual report. Sir, there are two matters which flow from this. The first, of course, is the greater delay in bringing to the attention of the House these appointments of non-officers, and I will deal with that again in a moment. But, Sir, there is a more important matter which flows from it, because the previous amending measure, Act No. 86 of 1969, provided in effect that if any person who was not an officer of the Public Service was appointed, that appointment should be brought to the attention of this House within a month of the reassembly of Parliament. Sir, this provision included the cases of appointments made with or without the recommendation of the Commission. There was no provision that only recommendations of the Commission should be brought to the attention of this House; all appointments to the Public Service of people who were not officers had to be brought to the attention of this House. The effect of this amendment, Sir, is that if the Commission recommends the appointment of a person who is not an officer to fill a post in the administrative division, then such appointment shall be brought to the attention of the House. Sir, this excludes appointments, which have not been unknown, where the Commission has in fact failed to make a recommendation, or where the Commission’s recommendation has been ignored or overridden; and it is most necessary for the protection of the Commission itself and for the protection of the Public Service that such appointments, made without the approval or consent of the Public Service Commission, should also be brought to the attention of this House. In fact, it is precisely in these cases where the Public Service Commission is overridden that it is most essential that they should be brought to the attention of this House. I believe that the difference in wording as between the amendment of 1969 and the amendment of 1973 is a most significant one and does require the further attention of this House. It cannot surely be that this House wishes to remove from the Public Service and from its guardian and watchdog, the Public Service Commission, the right to have these cases reviewed by the House; because this is what gives the Public Service Commission authority. This is what gives it some resilience against attempts to intervene and to override its authority. If this right of automatic review of such appointments is removed from the purview of this House, then the Public Service Commission itself is left defenceless and can be overridden with impunity, and then, what of the civil servants? They look upon the Public Service Commission as their defender. If the Public Service Commission has no weapons and is left defenceless, what of the public servant himself? He too then is defenceless. I believe that this is a most important principle.

The second aspect to which I have already drawn attention in connection with this subsection is that if these cases do occur and they are brought to Parliament, they should be brought to Parliament as soon as possible. The 1969 amendment provided that these cases should be brought to Parliament within one month of its reassembling. This is no longer the case. We have to wait now for the annual report of the Public Service Commission and there is no provision in this Bill as to when that annual report will appear. We have had the experience that certain departments are very prompt in the production of their annual reports. Others are more dilatory. I am not suggesting that the Public Service Commission in particular will be dilatory in this respect in regard to its reports but there is no provision in this Bill to ensure that these reports will in fact be brought to the attention of Parliament within, say, a year or within six months of Parliament reassembling. It may mean that when we assemble for 1975 we may get a report for 1973, when the harm has already been done. I believe this amendment is a retrograde step, firstly, because of the point of time, in that it allows too much time to lapse before the matter is brought before Parliament; and, secondly, and more important, because it no longer provides the Civil Service with the protection or the Public Service Commission with the means to bring to the attention of Parliament those cases in which the Public Service Commission has been obliged to acquiesce in appointments but has in fact seen appointments made against its advice.

I come now to the second principle, and that is the one relating to political activities by public servants. I am grateful to the hon. member for Rissik for covering the history of the situation very fully, because I am therefore not obliged to do the same. I believe that he has given a reasonably accurate report of what has happened over past years and that he has in fact disclosed the situation in which over a number of years the Public Service Commission, and indeed also the Public Service Association, have tried to maintain a very important principle. I will come to the principles in a moment, and the reasons underlying those principles. But they have tried to defend the immunity of the Public Service from political involvement. They have tried to maintain the impartiality of the Public Service in political matters and they have fought on correct principles over many years. It was only recently that they were overridden by certain political pressures which took place through and upon the Public Service Association and because of the intervention, amongst others, of the former Minister of Agriculture, Mr. Uys. I believe that the Public Service was forced into a wrong position and that they have taken wrong decisions because political pressures were allowed to override basic principles, the correct principles in respect of the whole situation. I believe that a grave mistake has been made. I believe that this amendment, the new section 17(g) is, as far as it goes, perhaps better than nothing but I am deeply concerned about the abandonment of a principle which the Public Service Association and the Public Service Commission have themselves shown to be a matter which is important and about which they have been extremely sensitive in past years, and for good reasons.

It has been, I think, a matter of common agreement between international experts in the field of public administration that it is desirable, if at all possible, that public servants, at least of certain categories, should abstain from direct involvement, in the political scene. It has been defined by one as desirable—

There are many reasons for this. One reason has already been made very distinct in argument in this debate and I shall therefore deal with it only very briefly. It is undesirable in the eyes of the public who look to the public servants for impartiality that they should see public servants who take decisions in regard to the citizenry to be directly associated, to be directly concerned, in political issues. The reason is not necessarily that the public servants will be seen to be acting incorrectly, or will, in fact, be acting incorrectly, but it is desirable that there should not even be suspicions, suggestions, rumours that public servants might act incorrectly in matters where partiality is in question. I believe it is most desirable that the public servant should aim at achieving that high degree of impartiality which we associate with our judges. I have heard a judge say that he took no part in politics and he was proud of it because he wished to be seen to be totally dissociated from any partiality throughout his judicial life. He saw it not as a limitation on his freedom as a person, but as a badge of pride which he wore. I believe that this high ideal is one for which public servants, particularly senior public servants, should also strive. I remember the late Dr. Eric Louw quoting with approval the old maxim about the great traditional civil servants—

This was the old tradition of the public servant. It indicates a degree of impartiality and a degree of independence of mind which was wholly admirable. I believe that this great principle is to some extent under-mined when public servants are not only permitted but are indeed encouraged to take part in the hurly-burly of domestic politics.

There is a more important reason why I believe public servants should not participate in politics. My first reason was the protection of the public; my second was the protection of the public servant himself against the implications which arise from participation in party politics. However, there is yet another reason and I should describe that as the tacit contract.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

Mr. Speaker, when the House rose I was dealing with the question of the political rights of civil servants. I dealt briefly with the case made by the hon. member for Rissik, which, I stated, had shown that the whole history of this movement towards the greater enjoyment of political rights by civil servants was in fact something that had happened against the better judgment of the Public Service Commission and the Public Service Association, and which had moved against the principles and traditions of the impartial service which we value so highly in this country. I tried to show that it was in fact a movement, a trend or a tendency which had as effect the possible loss of confidence by the public in the Public Service at a time when the Public Service had established a great tradition of loyalty in this country and a tradition of impartiality, and that this trend was in fact moving in the opposite direction, or opening the door to a movement in the opposite direction. I said then that I would deal with the opposite side of the coin, that is to say: What will this do to the Public Service itself?

There is between the public and the Public Service what might be described as a tacit contract. This tacit contract contains the requirement that public servants abstain frgm certain activities which are open to the general public. Our traditions of impartial administration demand that public servants should avoid overt political activity. They must resign their posts before they stand as political candidates; they must not hold offices which conflict with their public duties; they must not be directors of firms which have contracts with the Government. And, Sir, they must not divulge information arising from their official duties which will be in conflict with their obligations to the people they serve. All these are restraints imposed on public servants and in return for this the Public Service enjoys very special privileges. In return for the public’s confidence thus created, public servants are not held personally responsible for their acts of commission or omission; the responsibility is borne by their Ministers. They are personally protected against public censure. They have security of office and this is a most important thing. The security of office which public servants enjoy is due very largely to the fact that they are seen to be impartial administrators, to be upholders of a high tradition of impartiality and of dispassionate administration. It is because of this that when governments change in this country, there is no question of a spoils system, of a large number of public servants being driven out of office because of their political commitment and their political engagement in certain causes and their replacement by other people thought to be more loyal to the new Government coming into office. They are regarded as impartial administrators and as being entitled to the support, the trust and the confidence of a new government when it comes into office.

Now, Sir, what I am propounding here is not a new theory. This is a very old tradition. It is one which we inherited from Britain and the British system, as well as our own, is the admiration of many countries of the world. It is a fact, if one reads the American writers on public administration, that they envy the statuts which an impartial public, service of this kind enjoys. It is because in certain countries they have allowed public servants a greater licence in their participation in political disputes and political issues of the day that these public servants are in fact vulnerable and liable to dismissal when changes of government take place. This feeling and this action has a destructive effect on the efficiency, on the impartiality and on the general administration of the Public Service. We are, I think, jeopardizing a great tradition. It is a tradition which we have come to accept as part of our system in this country, and one which is highly prized and highly admired. I believe that in response to a fairly new and recent series of political pressures, the Public Service Association has been obliged to give support, to give credence, to theories which are not conducive to the maintenance of the traditions which we respect. I believe that this is retrograde and I regret it very much.

I think we must bear in mind that the provisions of section 17(g) of the Public Service Act have, in fact, been disregarded for quite a number of years. In other words, section 17(g) has been a dead letter in that it has been connived at or disregarded. This is serious in itself because it has had an undermining effect. It has decreased that kind of protection which civil servants enjoy vis-à-vis the public, and which they enjoy in respect of the permanence of their jobs. It has also created a sense of uncertainty in relation to other civil servants who have shown undue political activity and in relation to whom they feel they may now suffer a disadvantage.

Are you supporting the Bill or are you against it?

I am coming to that. I believe that this is a disadvantage to the country and a disadvantage to the Civil Service. The hon. the Deputy Minister has asked me whether I am supporting this Bill or whether I am opposing it.

Yes, I am trying to find out all the time.

I said at the outset that we were supporting this Bill because, as a whole, it contains a number of improvements to the Public Service Act. I expressed my reservations about two clauses of this Bill because I feel there are conflicts of what should be a basic principle in our approach to the whole question of public administration.

You are not supporting clauses 3 and 4, in other words?

No, clauses 1(b) and 3. I believe, in the case of clause 3, that, because section 17(g) has been disregarded and because it has not been upheld, the time has come to establish a clear principle. Section 17(g) was no longer operating as a watershed; it was no longer operating as a barrier because it was being disregarded.

Lionel, are you against these provisions too?

Listen to the speech.

Mr. Speaker, if the hon. the Deputy Minister will allow me to make my own speech, I shall make everything clear to him. Section 17(g) was not acting as that sort of barrier which is desirable in the Public Service. Now we have a new provision introduced by means of this amendment. This new clause sets a lower standard, a looser standard. If this clause were to be effectively applied, we would prefer it to a section which was not effectively applied, because at least it sets some kind of barrier; it places some kind of restraint on activities which I have said are detrimental to the country and to its administration. If the Minister is serious about this clause and he proposes to see it effectively applied, it will be better than a provision which, though better in principle, was not applied at all. If the old section 17(g) is in fact too difficult to apply and if it has become too unpopular or too unacceptable to apply, then we would prefer to see a more acceptable and more applicable clause. We want to be sure that it will in fact be enforced. I do not believe that the new clause can easily be enforced because it puts the onus on some unknown person to prove a very difficult thing. It is necessary, in terms of this new paragraph (g), to prove that a public servant engaged in political activities has made use of his position in the Public Service “to promote or to prejudice the interests of any political party”. It is necessary to prove not only that he has promoted or prejudiced the interests of a political party, but that he has made use of his position in the Public Service to do so. This is a very hard matter to put to the proof and who will bring the prosecution? I would really have preferred to see a more stringent provision, a more precise provision, and one which would operate more automatically if civil servants were to transgress in this respect or were to jeopardize their position in this respect. I am not entirely happy with this. I am considering, in conjunction with the hon. member for Green Point, whether it might be possible to suggest a provision which would improve this clause. I would sincerely urge upon the hon. the Deputy Minister, who after all is responsible for the conduct of this Bill and who bears a responsibility also for the maintenance of the high standards in the Public Service to which I have referred—an interest which I believe he shares with me to a large extent —to have another look at this Bill and to see whether it might not be possible to amend this clause in such a way that we can in fact achieve the common purpose which we on this side share with him, without opening the whole situation to the kind of abuses which I have described.

Mr. Speaker, the hon. member who has just resumed his seat, is very concerned about the implications of clauses 3 and 4. That is supposed to create the impression that that party can sit there with clean hands and talk about this matter. I want to put it to this House that whereas the hon. member is very worried about the situation “when Governments change”—that is what is really worrying him—there is nothing he can teach this side of the House. Let us go back in history and see how a leader of the United Party, which was in power at that time, acted. It is common knowledge in this country that long after the death of Gen. Smuts and the taking over of the administration of the country by the National Party, he continued to govern and dominate the Defence headquarters and various other departments through his hand-picked officials. Some of them are still sitting there today. That hon. member cannot come to this side of the House with that kind of suggestion. That party can teach this side of the House nothing about this matter.

The hon. member need not be afraid that this National Government will overstep the mark in this respect. As far as this matter is concerned, this National Party has been more than fair and more than tolerant throughout the years. Perhaps that hon. member was not in this country in those years to know what was going on; but the hon. member for North Rand and some of the other hon. members sitting there, will know what I am talking about.

What is important in considering these two clauses, is to ask oneself where these representations came from. These representations came to those of us who as M.P.s and M.P.C.s represent constituencies in which many hundreds of public servants are concentrated, but our Government waited until the representations were made via the channel of the Public Servants Association, the co-ordinated mouthpiece of all public servants, whichever party they may support. These representations, therefore, came from the Public Service as a whole and not just from the public servants who want to become members of the National Party.

The principle which is being advocated, is that of the freedom of the individual to exercise his democratic right of a say in the management of the country; not, in other words, to further the interests of a particular political party, as that hon. member fears. What have we found over the years in hard practice in the constituencies which are concerned with this matter? We have found that numbers of public servants, with firm National Party convictions or firm United Party convictions—in my constituency there are none who have Progressive Party convictions—would very much like to serve their party openly and not covertly. This has been the position for both of the big parties throughout the years. Those hon. members know it. Clauses 3 and 4 now make provision for precisely that for which the public servants asked us; the freedom to be a member of a political party openly without fear of victimization and to be able to work for one’s party in a dignified and responsible manner. We do not begrudge either our own supporters or the followers of the United Party this. What this amounts to is that this is a very large step in the right direction and we believe that no single official—Nat, U.P., Prog, or whatever the case may be—will use this concession irresponsibly. We have known throughout the years of officials who work for the United Party at election times. Everyone knows it. But what happened? If those supporters of the United Party in the public service who worked for their party on an election day, were working in the spirit as reflected in the clauses of this Bill, we simply turned a blind eye and allowed them to continue. However, where we noticed that U.P. supporters in the Public Service were abusing their positions so as to undermine this Government, we made quick work of them, and hon. members know that. But that, too, is in the spirit of this Bill. If my people were to commit an infringement, the hon. member for North Rand would be the first to run to the Minister with stories and I would not hold it against him, but then, the same goes for me as well. Things went the same way in the National Party ranks as far as public servants were concerned. As a public servant I was an enrolled member of the National Party; I was that even before I entered the Public Service. I worked for my party openly and served as an office-bearer, but I did this in such a way as not to embarrass my Minister or the Secretary of my Department or my Party. Of course there were attempts from the side of the U.P. to victimize me, but because of correct conduct they were unable to substantiate the charges they had made.

This Bill attests to great confidence being placed in the whole of the Public Service by the Government, quite apart from the question of which party is concerned. It attests to great confidence in people who, in the nature of the matter, handle matters of a highly confidential and a highly secret nature. I believe that few officials will abuse this situation. If they were to abuse this concession from the National Party side, or the United Party side, or the side of another party, I believe there would be no sympathy for them from any quarters. One cannot blame all Opposition members for the political rights which public servants had under United Party rule, but here at the beginning of a new era it is necessary to record that we remember very well how officials with National Party convictions were gagged under Gen. Smuts’s régime. Even to walk into one’s office with Die Burger or Die Transvaler under one’s arm, counted against one and was held against one when it came to promotion. Those hon. members know it.

That is nonsense.

That is not nonsense. There are members sitting in this House today who were officials under Gen. Smuts’s régime and who were told when they walked into their offices with Die Transvaler under the arm, “you get out of this office with your politics”. That is true and those hon. members know it. In that way many promising officials were simply driven out of the Public Service and the Public Service was the poorer as a result. If those hon. members do not believe me, they can go and read Mr. Wennie du Plessies’s book Die Goue Draad", then, perhaps, they will see the light.

As I have said, this National Party Government is a fair Government and after mature consideration it grants what the people ask and even runs the risk of perhaps having to put up with a few U.P. supporters in key positions in the Public Service—a calculated risk! I want to say that this is the satisfaction of the wish of officials who have been hoping for years to be able to obtain an active membership of the National Party. They appreciate this concession greatly. It is a concession to them so as to enable them to play their role also in politics in the democracy which is a characteristic of the Government of this Republic of ours.

Mr. Speaker, I shall make haste to try to reply to all the questions asked by hon. members in regard to this Bill.

The hon. member for Green Point asked whether the proposed section 11(4) in respect of the return to Parliament in regard to the appointment to the administrative division of persons from outside the service will not result in the delay of such return. In general returns are tabled in February or March. It is not anticipated that the annual report in which these particulars will be furnished will be tabled at a later stage. The report covers the 12 months preceding 30th June of every year. An annual report will therefore contain the appointments made for every preceding July to December. Such appointments will be contained in the following annual report, i.e. at least 12 months later for appointments between July and December of each year. Consequently there will only be a lapse the first year, and subsequently the rectification will be automatic.

Then there is the question why appointments in the administrative division which are recommended by the commission and rejected by the State President, are not also reported to Parliament. The hon. member for Von Brandis asked the same question. Let me put it to you like this: In terms of the Public Service Act all administrative appointments have to be approved by the Public Service Commission. That is why it is stated in the Bill: “Appointments approved by the Public Service Commission.” They must all be approved by it. There are a few exceptions where appointments are not approved directly by the Public Service Commission, but by the Cabinet, but then such an appointment, which does not meet with the approval of the Public Service Commission, has to meet with the approval of the State President. As soon as the State President has approved it, the Public Service Commission has also approved it in terms of the Act. So it is not necessary, as the hon. member for Von Brandis requested, to insert additional words in that clause, for it is only necessary to say “those approved by the Public Service Commission”, because everything is in fact approved in terms of the Act by the Public Service Commission.

May I ask the hon. the Deputy Minister a question? We always have to obtain information by way of questions to the hon. the Minister on the Order Paper in respect of those cases where appointments are made contrary to the recommendations of the Public Service Commission. What we are asking for is that that type of appointment should be reported in the report or should be tabled without our having to ask each year for this information.

That type of information must be reported in any case in terms of section 7(7) of the Public Service Act. That is the position at the moment in terms of the Act.

*It was then asked whether an amendment of section 13(7) in respect of the issuing of proclamations by the State President, the incorporation of which in the proposed Third Schedule of the Act is now being considered, does not perhaps introduce a new principle in terms of which the State President may now amend the Act by way of proclamation. The reply to that is that no new principle is being introduced. Section 27 of the present Act empowers the State President to amend only the existing First Schedule.

It was then asked why steps were not taken in the past against officers who disregarded section 17(g) of the Act. The reply there is that the onus to take steps against officers is not one which rests on the Public Service Commission, but in fact on the departmental head in question as such. The Commission only comes into the picture after officers have been found guilty of such contravention, and a penalty has to be imposed. The Commission is therefore not consulted in cases where officers are charged and acquitted, or where the charge is withdrawn.

I was then asked why the concession is only being made in respect of a relatively small group of officials, and whether it should not also include the service staff such as teachers and other provincial staff members. The reply is of course that we are here dealing with something which falls under the Public Service Commission in terms of the Public Service Act. We are not dealing now with provincial teachers who already have the right to participate in politics, and other services such as police services which do not yet have this right. The hon. member for Von Brandis, I think, or the hon. member for Green Point, came forward with the suggestion that we should do something to obtain some or other form of co-ordination between the services. I agree with the hon. member that this would be an ideal position, but I also think that this debate, in which the hon. member raised this question, will already serve as a stimulus to the other services to feel that there ought to be co-ordination, and that their administrations should, in some way or another, be brought together so that a joint decision can be taken in respect of the politics of the persons concerned.

Are you prepared to take the initiative?

No, I do not think it is necessary to take the initiative. I think the various staff associations are completely capable of organizing their own affairs. They will in fact take cognizance of the fact that the provincial administrations are allowing their people to participate in certain political activities, while the police in their turn do not allow this. They then have to decide among themselves whether there should be some or other form of co-ordinated action. I do not think that we should interfere with the various persons. I have now dealt with the question put by the hon. member for Green Point and the hon. member for Von Brandis. I shall deal in a moment with their argument concerning clauses 3 and 4. Before doing so, I want to thank the hon. member for Rissik sincerely for a very good, intelligent and thoroughly studied speech. Not only did it show that the hon. member represents public servants, but also that he took trouble to elucidate to us the entire historical background to this matter, in such a way that I was also able to understand it, and I appreciate this. The hon. member for Pretoria District also thanked us for this concession on behalf of the public servants. The hon. member for Von Brandis made a very interesting speech. He made a speech from an old-world public servants’ point of view, dating back to the old British tradition.

A South African tradition.

He advocated that public servants should be entirely separate from any politics. I think the hon. member has already conceded in his speech that times have changed tremendously, and that there are many people with many responsibilities. I think he will admit that a balance has to be struck between certain actions or modes of action in one’s life, and certain obligations which one has to one’s service. This applies to everyone, whether public servants, bank clerks or a person working for the Stock Exchange. For example, a person working on the Stock Exchange has to exercise a measure of discretion when purchasing shares, and then has to be able to decide for himself whether he is not taking advantage of the knowledge he acquired in that specific office and is not in that way giving himself an improper advantage. When I as a Deputy Minister appear before a political meeting, I must always bear in mind that I can never rid myself of the cloak of my responsibility. A balance has to be struck between how far a person can go under certain circumstances, and how far one must come back again to one’s responsibility in respect of one’s office. This is simply the responsibility all people have. The public servants have it too.

Let us consider the present position of the public servants. Is the hon. member aware that a public servant is entitled to be nominated as a candidate of a political party? He may even pursue that nomination within the party to the point where he is either nominated or not nominated. Should he be nominated for the House of Assembly or for the Provincial Council, he has to resign immediately in terms of his regulations. Should he fail to be elected, no one will take any notice of it, and he will be able to continue with his service. That is the present position. In terms of public service regulation 13(2) an officer may at the moment become a member of a divisional council, city council, municipal council, village management board, etc., with the consent of his Minister. That is the present position. In other words, to a certain extent the public servant has already achieved a major breakthrough concerning his political activities, or his right to participate as individual in public life. Sir, I am very grateful that, as a representative of a constituency consisting to the extent of approximately 90% of public servants, I am today able to honour the promise made by the National Party to public servants that we would open the door to political activities to them. Ever since I can remember public servants have through the existing political organizations been making representations to political congresses to be allowed to be full-fledged citizens in this sense that they may also participate in political activities.

May I ask a question? The hon. the Deputy Minister said that it was recently possible for a public servant to accept nomination in a constituency or to stand as candidate.

Yes.

Until recently the existing section 17(g) applied, and that section provides that a public servant may not become a member of a political organization or participate actively in political activities. How can he accept nomination if he may not do that?

He does not participate in political activities; he makes himself available as candidate. He is not promoting or prejudicing anything, or doing anything of that nature. There were such cases in the past where this came to the attention of the Public Service Commission and was allowed. In the two cases in question which I am thinking of at the moment—and I do not want to mention any names here—the two gentlemen both accepted nomination, but lost. No one took any notice of it, and they returned to their respective posts. Another, the hon. member for Wonderboom, is in this Parliament today. He had to wage a nomination struggle.

That was wrong in terms of the existing Act.

No, it was not wrong in terms of the Act. Sir, I say that I am very grateful that I, as a representative of a constituency in which the voters consist mainly of public servants, can bring them this great red-letter day in their lives. Sir, you heard what the hon. member for Rissik said. He depicted the history of this matter for us very well. For 25 years the National Party has cherished the ideal that the public servant should be exempted from certain restrictions and that he should be able to live the life of a full-fledged citizen. Sir, we did not proceed in a haphazard way. When the Public Service Association did not agree with us, we did not press the matter. We waited until the time was ripe; we waited until the association itself requested that its members be allowed to participate in politics; we waited until the Public Service Commission was satisfied with this; we waited until the time was ripe and now we have come forward with this Bill, and I say that it is a glad day for us. I am grateful that the Minister has afforded me this opportunity of piloting this Bill through its Second Reading, because it is a great day for public servants, particularly in Pretoria. Sir, we have stated unequivocally in clause 4 that an officer or employee may be a member of and may serve on the management of a lawful political party; that he may attend a public political meeting but may not preside or speak at such a meeting; that he may not draw up or publish or cause to be published any writing, or deliver a public speech to promote or prejudice the interests of any political party. Sir, is there in any way a restriction? There is a restriction in section 17(g) (clause 3) which provides that he may not make use of his position in the public service to promote or prejudice the interests of a political party. The hon. member for Von Brandis said that this was very vague. Sir, it is vague, and the reason for its being vague, is because it depends on the discretion of the public servant. This will be proved, just as all facts are proved. The facts will indicate whether the person is promoting or prejudicing a political party. The facts will indicate this in the inquiry. But we believe that the public servant is mature enough to know that he may not use his position in the public service to promote or prejudice the interests of a political party. We also know that he is now a full-fledged citizen. He can be a member of the management of a lawful political party. He may attend public political meetings. He may not preside at these. He may not speak at such meetings. He may not draw up or publish or cause to be published any writings, or deliver a public speech. What more does he want, Sir? I say this is a glad day for the public servant and a matter of great pride that the National Party has eventually been able to realize one of its ideals, with peace among all and with the consent of the hon. members on the opposite side, so that the public servant may now again practise his politics.

Motion agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

This Bill is a bulky piece of legislation, and it is also a very important Bill, and for that reason I can only do justice to it if I take up a considerable amount of the time of this House in dealing with it.

In 1963 a Commission of Inquiry into the Companies Act, 1926 (Act 46 of 1926) was appointed under the chairmanship of Mr. Justice van Wyk de Vries to investigate all aspects of the present companies legislation and to draw up a draft Bill on the basis of this investigation. Two reports and a draft Bill were submitted to the State President by the commission. These two reports and the draft Bill were tabled in the House of Assembly. They were also published for general information as documents R.P. 45/1970 and R.P. 31/1972. Therefore, hon. members already have copies of the draft Bill.

Volume II of the report, published as document R.P. 31/1972, contains an explanatory memorandum in which the various clauses of the Bill are explained, with suitable reference to the recommendations of the commission as contained in the two reports.

After publication of the report of the commission, various interested bodies, which included the National Council of Chartered Accountants and the Association of Law Societies of the Republic of South Africa, commented on the draft Bill.

A great number of the proposals submitted by the Council of Accountants, the Law Society and other interested parties were included in the Bill now before the House. The deviations which occur between the draft Bill of the commission and the Bill now before this House, owe their origin chiefly to the proposals received from the various interested bodies. Other amendments to the Bill proposed by the Commission were effected to facilitiate the administrative arrangements in the office of the Registrar of Companies, and in the offices of companies. Examples of these include, inter alia, the provisions in the amended Bill prescribing the forms which have to form part of the register in the Companies Registration Office in order to ensure that the information contained therein may be used by every company for writing up its registers. Furthermore it is provided in the amended Bill that directors who hold more than one directorship are given the choice, in respect of the furnishing of particulars of other directorships in the annual return, to indicate one of the companies in whose records the information concerning his various directorships is furnished, and provisions are also included which simplify the methods for the payment of fees upon the incorporation of a company.

The general approach of the Commission to the existing Companies Act was to regard it as a statute which was aimed primarily at achieving a harmonious balance between the interests of a company, its directors, its shareholders and its creditors. Consequently the Commission, in considering the amendments to and the incorporation of new provisions in the Bill, set about its task with circumspection.

However, the Commission expressed its concern at the failure to uphold the provisions of the present Companies Act and, in particular, at the numerous less important contraventions in regard to which provision had been made in the Act. In respect of these offences, which are important from the point of view of the administration of the Act, provision has also been made in the amended draft Bill, apart from the penalties which may be imposed by the courts upon conviction, for automatic sanctions on companies and company officials.

Furthermore the Commission found that in its present form the Act manifested a lack of logical and orderly arrangement: that it, in addition, gave the impression of being especially complicated; and that, in many cases, it created conditions of uncertainty. These deficiencies are attributable to the fact that for the past 60 years there has been no consolidation of the Companies Act in South Africa. The 60year-long process of piecemeal adaptation of the Companies Act consequently resulted in an unsatisfactory Afrikaans version, with the result that the terminology is in numerous respects archaic, indefensible and at variance with the language of the Afrikaans business community. Consequently it was decided to rearrange the Companies Act in its entirety with the object of arranging its provisions properly; of supplementing it at the same time by means of new principles; and of bringing the texts in both official languages into line with each other.

With regard to the possible problems which may be experienced in practice as a result of any alterations of the legal principles included in the Bill, the Commission recommended the appointment of a standing advisory committee with the object of investigating, considering, and reporting on the desirability of future amendments to the new Act.

This means therefore that where radical amendments affecting the principle are included in the new legislation, there will be a body which will, on a permanent basis, maintain supervision over, and be able to make recommendations concerning the solving of any practical problems which may manifest themselves in the application of the Act in question.

The Registrar of Companies will be responsible for the administration of the standing advisory committee. I envisage appointing this standing advisory committee as soon as possible after the promulgation of the Act, so that the committee may immediately commence its task of considering, as these may be necessary, further adjustments to the Act, and of supervising the drafting of the numerous regulations arising from the Act.

Furthermore the standing committee will have to give consideration to certain proposals made by the Council of Accountants and the Law Society and other interested parties which could not be included in the Bill owing to the fact that a further investigation of these proposals was deemed necessary. I want to emphasize once again that the committee will give its attention forthwith to any representations in this regard so that, if necessary, the appropriate amendment of the Act may be submitted to Parliament for consideration at the earliest possible opportunity.

I should now like to furnish a brief explanation of the most important new principles included in the Bill. Unless it is necessary, I shall not deal with any provisions of the existing Act which have also been included in the Bill.

Mr. Speaker, I want to congratulate the hon. the Minister on his speech this afternoon. He has summarized in about an hour and a quarter a Bill which took me some seven days to read and understand and I think it is quite an achievement. Today we come to the end of an era which began in 1909, for it was in 1909 that the Transvaal Act came into being. It was an Act that was based almost entirely on the English consolidation of 1908. In 1926 the present Companies Act was enacted, differing little from the Transvaal Act. It is this Act of 1926, amended no less than 15 times between 1926 and now, with which we have lived and with which many of us have worked during a lifetime, that we are finally laying to rest today. During these 47 years many commissions have considered company legislation both in this country and in England. We had the Lansdown Commission of 1937 and the Millin Commission of 1948. In England they had the Cohen and Jenkins committees, both of which have proved very useful to us. Finally, we have now had the report of the Van Wyk de Vries commission which was appointed in 1963 and which completed its work in February, 1972. That commission sat for a long time. I would like to add my personal tribute and the tribute of this side of the House to the chairman and the members of that commission, the culmination of whose labours is found in the Bill before us.

I want to refer immediately to paragraph 6.03 of the main report, and I quote—

I hope that the Government will take cognizance of these remarks. One of the weaknesses of our commissions, and for that matter of our select committees, is that we seldom have adequately trained staff put at our disposal. Departmental officials do a magnificent task, but full-time experts at the disposal of a commission would not only expedite the work of the commission, but would also enable appropriate studies in greater depth to be undertaken, which we believe to be essential to the findings of any Select Committee or commission. It is interesting to note, Mr. Speaker, what happened in the case of the Royal Canadian Commission on Income Tax, which brought out its report some three or four years ago. The number of accountants and other experts who were made available to that commission, if my memory serves me correctly, was something over 150. In the nine years that that commission sat—I think it was nine years—these 150 experts were made available to it. I hope that this approach will be followed by us in future.

The Bill before us, drafted by the commission and amended by the Government, is a prodigious piece of work. Its 423 pages, its 443 clauses, together with four schedules which the hon. the Minister referred to mainly by omission, would alone call for comment, but the real work of the commission lies in the content of the Bill which, when placed upon the Statute Book, will give us virtually an entirely new Companies Act. I personally have a great deal of sympathy for the view of Mr. Arthur Suzman, Q.C., who, in his minority report, said that the whole Companies Act should not at this stage have been entirely rewritten and that an amending Act embodying the basic recommendations of the commission should first have been introduced. This, Mr. Suzman says, would have allowed adequate time for testing. I also lean towards the view expressed in the minority report that uniformity of wording between our Companies Act and the corresponding provisions of the English Companies Act might well have been preserved. For those of us, Mr. Speaker, who have dealt with the Companies Act over the years and who have been involved in its administration, British company law judgments and particularly British precedents have been of inestimable value to us, and it seems a pity that to some degree anyway these benefits will now be lost. Sir, this Bill is something like the new arithmetic. Old and tried concepts have been scrapped; new and strange terminology has been introduced, and definitions which in the old Act, or through general usage, meant one thing, now in terms of this Bill mean something quite different. For example, the terms “holding company” and “subsidiary company” have been given entirely different meanings. When you and I studied the Companies Act, Mr. Speaker, we understood that a holding company was a company which held more than 50% of the issued share capital of a subsidiary, and vice versa. That no longer applies. As in the case of the new arithmetic, the old-timers will have to do a great deal of reorientation and, I am afraid, a great deal of homework. Sir, the establishment and the use of a company is not a static thing; it is part of the everyday dynamic business life of a country, and we therefore not only accept, but indeed we welcome, many of the new provisions which are found in the Bill.

I must say at once that the Bill is by no means perfect. I think this will be conceded. I have here, as I am sure the hon. the Minister has, literally hundreds of suggested amendments, a great number of which will have to find their way on to the Statute Book at the earliest possible opportunity. These are amendments, Mr. Chairman, which are suggested not on the Bill of the commission, but on the Bill which has been tabled in this House, and the early appointment, therefore, of the advisory committee, as the hon. the Minister has acknowledged, becomes of vital importance. As a matter of fact, had this Bill not made provision for the appointment of a standing advisory committee, we would have suggested that the Bill should be referred to a Select Committee so that all these queries, all these questions, could have been dealt with. The hon. the Minister has dealt with the changes provided for in the Bill in some detail. Nevertheless there are a number to which I want to refer, and the first is the definition of a “controlling company”, which is defined as follows—

of that company; or if it is entitled to exercise more than half the voting rights in respect of the issued shares of that other company; or if it is entitled or has the power to determine the composition of the majority of the board of directors of that other company.

Our problem is to determine what falls within the ambit of “indirectly”. How far does the chain go? We know that when you find that a definition is bound by the word “indirectly”, or the interpretation of the definition is so bound, there are a lot of red herrings that run across the course. I do not think anybody who has to deal with the law likes the term “indirectly”. A direct interest is clear. An “indirect” interest is capable of innumerable interpretations. I hope that the standing committee will find some method of finding a more definite approach to this situation.

Now the definition of a “holding company” is as follows—

Now you will note, Mr. Speaker, that what is being dealt with in the definition is 30% of the issued shares of another company. These must be held to make it a holding company, and not 30% of the issued equity shares. Now this means that a bank or a financial institution or any other company holding preferent shares in another company would be regarded as a holding company of the second company if the preferent share capital represented not less than 30% of the total issued capital, both preferent and ordinary, of the number two company. So you have the position that a bank or any other company having not a single voting share in another company, but holding only preferent shares, must regard itself as the holding company of company number two and make all the statutory disclosures of subsidiaries provided for in the Act. Frankly, this does not make sense to us. I hope it makes sense to the hon. the Minister. We have considered very carefully the motivation of the commission in deciding that issued capital and not issued equity capital should be the determining factor. We still believe that it is wrong that issued capital should be the criteria as to what is a holding company and what is a subsidiary. We believe that the yardstick should be the issued equity capital, and we propose to move an amendment in the Committee Stage.

We are in very much the same position in relation to the definition of a “wholly-owned subsidiary”. A “wholly-owned subsidiary” means a company all the issued shares of which are held by another company or by another company and its nominees. Here you have a position where a company can own the entire issued equity share capital of another company and in fact therefore control that company, but number two company need not be a wholly-owned subsidiary because of the quantum of the issued preferent shares. I do not know how this makes sense at all. Surely, a subsidiary of a company should have some relationship to the control of its parent company, not merely to the shareholding of the parent company as is the case here. There is a small amendment which is required in clause 3. It is purely a textual one.

Clause 18 provides for the appointment of a standing advisory committee. We believe this to be one of the major recommendations of the commission and we welcome the setting up of such a committee, so that any improvements to the Act which are found to be necessary can be dealt with speedily. The committee, which must have as its chairman either a judge or a senior advocate, is appointed by the Minister, but it is not specified in the Bill what the qualifications of members appointed to the committee must be. I want to say here very clearly that the effectiveness of the standing advisory committee will depend entirely on the quality of its members. If you can persuade the best brains who are concerned with company law in South Africa to serve on such a committee, then you will have a first-class, effective committee. However, if it is going to be a committee to which people are appointed for no real reason, it is not going to serve any purpose whatsoever. We expect—I think the hon. the Minister mentioned it—that lawyers and accountants and perhaps representatives of mining, industry and commerce and the Stock Exchange will find a place on the committee. I hope that the hon. the Minister will not overlook that there are such beings called shareholders who are not represented in the main by either accountants or lawyers or by mining houses or by industrial concerns. I hope he will give consideration to appoint to this committee perhaps a representative of such organizations as the Shareholder Association of South Africa that is dedicated to protecting the interests of shareholders.

In our view it is important that the terms of reference of the committee should be stated and that the report of the committee should be laid before Parliament. There was this provision in the draft Bill prepared by the commission, but it has been omitted from the Bill presented to the House.

Clause 17 enables the State President to amend the schedules to the Bill by proclamation in the Government Gazette. Here it immediately seems to me that such amendment should only take place on the advice of the standing committee. Surely, it is its function to consider any changes and therefore, if changes are to be made, particularly by proclamation, they should be on the advice of the standing committee.

Clause 20 makes it possible to have a one-man company. Previously a minimum of two shareholders was required. We all know that this two-man shareholder company was a farce and that the number 2 shareholder in many cases was merely a nominee of the sole owner. Therefore this change merely legalizes what in effect has been practised for years.

I want to ask the hon. the Minister in relation to public companies why are we wedded to seven members for a public company. What is this magical word “seven” that you cannot have a public company unless it has seven members? If perhaps its seven members decrease to six members, it ceases to be a public company. Maybe it is based on the seven fat years and the seven lean years …

It is a Biblical number.

One for each day of the week.

But it is strange that we have picked the number seven. We say that if there are seven members, there can be a public company; if it is six, it cannot be a public company any longer. I think a little consideration should be given to this.

Clause 30, as the hon. the Minister mentioned, still limits associations, syndicates and partnerships to not more than 20, but there is the very important proviso which makes this provision not applicable to any organized profession designated by the Minister. This will fill a real need for professional partnerships. In other words, professional partnerships of more than 20 are now permitted. Particularly in so far as lawyers are concerned and accountants are concerned we are finding that professional partnerships are growing every year. This is a very excellent clause. However, it has been pointed out that today in professional life you are getting something else. You are getting a professional partnership comprising different professions—for example, you can get a partnership which consists of architects, chartered surveyors and engineers—where you have a combination of skills which are required to deal with certain specific problems. You can conceivably get this situation in other professions. You might even one day find accountants and lawyers associated in a partnership for specific reasons. I almost say “heaven forbid”! We agree with this contention and I think that the hon. the Minister might give consideration to amending this clause so that a combination of members of the professions which he specifies could in partnership be permitted to contain more than 20 members.

Clauses 33, 34 and 36 make major changes to the object, powers and ultra vires position of a company. This is a very interesting topic and I am going to leave this to be dealt with by my learned colleagues who will be speaking after me. [Interjections.]

I now come to clause 38, subsection 2(a). We believe this requires amendment. Clause 38 deals with financial assistance to purchase shares of a company or holding company, a vexed problem we have always had in terms of the Companies Act. It reads (subsection (1))—

Subsection (2) reads:

1. (a) the lending of money in the ordinary course of its business by a company whose main business is the lending of money …

“Main business” is another one of these difficult terms to interpret. I think this clause would be vastly improved if we omitted the word “is” and inserted the word “includes” after the word “business” so that it would read:

Then, I think, we would solve the problem. The concept “main business” is a very interesting one, because the main business of a company can change. I was associated with a company for many years that had two types of business: It did shipping and confirming and the flotation of companies. When the time was appropriate to float companies, we concentrated all our efforts on doing that. That was our main objective at such a time. When the market crashed and we could not float companies any more, we turned our attention to confirming and shipping; and so we changed. So the term “main business” is a difficult concept to interpret.

Clause 39(2) prevents a subsidiary from holding shares in its holding company, except where such a situation exists on the 1st January, 1974. It also provides that the subsidiary shall not have the right to vote at any meeting of its holding company. The question that arises here is, what happens in the case of a take-over by another company which happens to hold shares in the company doing the take-over? The hon. Minister mentioned that under the present section 24bis, the subsidiary company is permitted to continue to hold these shares, but in terms of the Bill before us—and, I must admit, in terms of the British Companies Act as well—the shares must be disposed of immediately—in fact, before the take-over is completed, otherwise an offence is committed. I know that if the shares in the parent company held by the subsidiary are not disposed of, the situation can arise where in effect a reduction of capital results. This is probably the main reason for the change in the Bill. However, what I am concerned about, is that, from a practical point of view, a situation can be reached in a take-over where the company taken over has to dispose of a large block of shares and throw them on the market, which can disturb the market mechanism. This is what is worrying me. I believe we should perhaps make some provision in the Bill for time to put the position right, so that it has not to be done immediately, or before the merger takes place. We do not object to the principle involved. We think it is a correct principle. But what does concern us is the mechanics, and how it is going to work out in practice.

Clauses 41 to 51 deal with names of companies. We welcome these new provisions. They are good provisions, particularly those that provide for the registration of a shortened form of name—this would be a wonderful thing for business—as well as clause 43(2), which allows for the registration of a defensive name. The hon. the Minister gave one example of a defensive name, but there is no definition of a defensive name. I have in my mind an idea of what it means, but I cannot explain it explicitly. For example, could it also mean that, if Wellworths was registered before Woolworths, they could register Woolworths as a defensive name to Wellworths, and Woolworths could not have been registered as Woolworths? I do not know. I think we need some explanation or some definition as to what is a “defensive name”. We also welcome the provision for the registration and use of the literal translation of a company’s name in the other official language. This is long overdue. This is a realistic approach to an everyday problem.

Clause 61 is a provision which is of great value to lawyers, accountants and company secretaries, but I do not think it goes far enough. It would seem from this clause, which deals with the consolidation of the articles of association with resolutions amending the articles, that you can only consolidate a company’s articles when it is using the whole or part of either the new Table A or Table B of Schedule 1. If this clause was made applicable to all articles, because many companies do not have a Table A or a Table B but have a new set of articles, it would be of the greatest value, because then articles which have been amended from time to time could be consolidated and in terms of the Bill a notarially certified copy of the consolidated articles would then be the articles of the company. The hon. the Minister has been in practice and he knows what it is like when you get hold of a company that has been in existence for many years and you have to look at the original articles and then go through the minute book for years to see what changes have taken place, it is a nightmare. This is a first-class provision, and I hope it will be made applicable to all companies so that we can get this notarial certification and one can say those are the articles.

Clause 76(1) provides that premiums received from the issue of shares be transferred to a share premium account and be reported as permanent capital. A banking institution in terms of the Bank Act is specifically excluded from the provisions of the clause. I wonder whether the hon. the Minister would not give consideration to including an insurance company in the same proviso which exempts a bank. If he would refer to the fourth schedule, he would see that both banks and insurance companies are exempted from disclosing share premium accounts in their published accounts. I think the position should be the same for banks and insurance companies. Clause 76(2) deals with the setting up of a share premium account where assets are acquired by the issue of shares of a company and no consideration is recorded. The difference between the par value of the shares and the value of the assets so acquired must be transferred to a share premium account. We have no quarrel with this, but there are two questions that arise. What is the basis of the valuation of the assets here?, because nothing in the legislation tells you how these assets mut be valued. Must they be valued by the directors, must they be valued by sworn appraisers, or how? The second problem we have is this: What is the position where the purchase consideration is met partly by the issue of shares and partly by cash? The Bill is entirely silent on what happens in that situation.

Clause 99 effectively does away with partly-paid shares. This is a controversial issue and we have had a great deal of representation by people who suggest that partly-paid shares should be allowed to remain in existence. There are a lot of people who are going to be sorry to see the end of partly-paid shares. We have given the matter a great deal of consideration and have come to the conclusion that the commission is right and that the Bill is right in that more harm than good is done by the ability to issue partly-paid shares, and we go along with removing partly-paid shares from our company life. It would seem that by the omission of any reference in the legislation to vendors, promotors, founders and management shares that the distinction between this type of share and the ordinary share of a company now falls away and that there are no longer these different types of shares. This is a welcome change, for the provisions in the Act regarding these types of shares have been got around by every possible means since, I think, 1926 when the Act was first introduced. They have really ceased to have any purpose, because it was easy to get around those provisions and we are glad to see the end of them.

Clause 140 reduces the time in which a company must deliver the certificates of respective shares transferred from two months to six weeks. This is an improvement, although a very small one. We know the problems of transfer officers being able so to organize themselves to give delivery of shares in a shorter period of time. But I do think that with mechanization and with computerization the standing advisory committee should keep a constant eye on this situation to see whether this period cannot be made shorter and shorter so that in time you will be able to get the shares that you have bought delivered to you in a week or two.

Clauses 141 to 169, dealing with the restrictions on offering shares for sale with a prospectus, and Schedule 3, dealing with the contents of the prospectus, are a vast improvement on existing legislation. Over the years we have had an enormous amount of criticism from every sector of the community with regard to the inadequacy of the provisions of prospectuses, the inadequacy of the information that has to be given to the public. These criticisms, I think, have been met in this Bill. They have been met to a very large extent without placing too onerous a responsibility on those who have to issue the prospectus. However, there is one weakness here, I think, because I still cannot find out—maybe it is due just to my own foolishness—what constitutes an offer for sale. It has been a problem that has concerned me all my professional life; it is a headache that nobody ever seems to have been able to solve, i.e. what, in effect is an offer for sale? There used to be a theory that, if you did not make an offer to more than 50 people, that was no offer, but there are all sorts of interpretations. Perhaps a better interpretation could be introduced into the Bill. I also question whether it is necessary for the prospectus to disclose the individual salaries of the director who is employed by a company in some additional capacity. I would have thought that the aggregate salaries of directors would be sufficient. I know that in America you can easily find out what everybody’s salary is, but that is foreign to our way of life in this country; we do not go bruiting about what Mr. A or Mr. B earns. I think some consideration might be given to that.

Paragraph 17 of Schedule 3 deals with the interest of promoters—another thing that has concerned the public for many years. I wonder whether this paragraph would not make more sense if the final words of the paragraph “if such promotion or formation occurred within five years of the date of the prospectus” were deleted there and inserted in line two of paragraph 17 after the word “company” so that the paragraph, which starts on page 394, would then read—

If this is not done, I believe that, if I interpret this provision correctly, you are going to have to deal in the prospectus with the interests of directors that go back for years and which are really of no concern with regard to a prospectus being issued at a particular moment of time.

Clause 186 provides that, unless the articles of a company provide for a longer period of notice, 21 days’ notice must be given for an annual general meeting or a general meeting called for the purpose of a special resolution. We would like to suggest that the 21 days could perhaps be extended to 30 days. People may be away; they maybe on holiday; they may live in different towns from the registered offices of the company and an unfortunate habit has cropped up with regard to many companies’ annual general meetings. They are held on the 30th or even the 31st December. This is an awkward time for people and I think to extend the 21 days to 30 days could well be done.

Clause 194 deals with the voting rights of preferent shareholders. Preferent shareholders, we know, do not have the right to vote unless the preferent dividend is in arrears. We have had it suggested to us that, where a preferent dividend has been in arrears for three years or longer, the voting right of preferent shares should be on a par monetary value basis, i.e. a preferent share of R2 should have four votes per share if the ordinary shares are 50c shares. At the present moment, it is parity: One preferent share gets one vote and one ordinary share gets one vote although their values are different. I believe that this suggestion has merit. After all, if a preferent dividend has been in arrear for three years something fairly radically is wrong with the administration of the company and the preferent shareholders should have the right to almost step in and protect their interests.

Clause 207 provides that where a report is circulated on the proceedings of a meeting of a company, it must contain a fair summary of all material questions and comments. We believe that it might be well and a good thing as far as a public company is concerned, to make a report on meetings of the kind referred to in the clause, obligatory. If that is done, and a meeting is held, a meeting like an annual general meeting or a general meeting where a special resolution is proposed, a report on that meeting should be forwarded to all shareholders. This should be done because so many shareholders today are, because of distance, represented by proxies. I think that such a step would be in the interest of good management.

Clause 224 prohibits a director from taking a call-on share, of giving call-on shares, or from entering into a put-or-take deal. This is quite right; it was time that this practice was stopped. However, I do not find anything in this clause which prohibits a bear sale, but I may have misinterpreted this clause. I think that bear sales should also be prohibited.

Clause 231 is one of the group of clauses which deal with the interests of and dealings by directors and others in shares of a company. This question of what the directors are doing is one the public leeches onto. These provisions for what has come to be known as insider-trading are tough and rightly so, but there does seem to be one very interesting omission. As I read the Bill, although directors, officers and people who have knowledge are not allowed to trade, I find nothing which says that a director or an officer of a company may not communicate information he has to another person. This seems very strange to me. In addition this clause should also apply to dealings in the shares of any holding subsidiary or controlling company. How is the spirit of this new legislation to be applied to the large financial institutions which do not have share capital? I think of mutual insurance companies which are effectively controlling vast empires. Are they not also to be barred? I think that consideration should also be given to that matter. I think this is a very important proviso and I think it can be tightened up.

Clauses 234 to 241 deal with the interest of directors and officers in contracts. This is another hardy annual. We have received very strong representations from people who believe in the principle, as we all do, that you have to control this very toughly, where they say that the provisions as they are in the Bill, are not practicable. Whilst subscribing fully to the principles of the Bill, we will propose some amendments in the Committee Stage which we believe will do what is required to be done, but in a more practical and simpler form.

We now come to the winding-up of companies. There are a number of useful provisions in the Bill but there is one clause, clause 424 on page 334 of the Bill, which causes some concern. When hon. members look at this clause they will see that subsection (1) states—

take certain steps. I do not believe it is right to tie together a person who acts recklessly and a person who sets out deliberately to defraud a company. I believe these are two different types of human beings. A man acts recklessly, that is true, but he has not set out deliberately to defraud the company. Besides, how do you determine “reckless”? Surely there are degrees of recklessness. Recklessness is a subjective term.

The hon. the Minister ought to know.

If you are reckless and you win, you are a financial genius, but if you are reckless and you fail, you are tied up with a man who sets out to defraud a company. I do not believe that in principle it is right that you should tie people together like this.

Clauses 427 to 440 deal with judicial management. I am gratified that despite the unanimous opinion of the Masters of the Supreme Court, who wanted to do away with judicial management, the system of judicial management, in a vastly improved form, is to continue. I believe it serves a purpose. I know from personal experience—I used to have something to do with liquidations and judicial management —that many a company has been saved from liquidation through being able to use the provisions of judicial management. It is true that some companies have abused judicial management to stave off liquidation, but I believe that the provisions in this Bill, particularly the provisions referred to by the hon. the Minister that the temporary judicial manager must report whether a company has a possibility of getting back on to its feet, are very good, and I am glad to see that these provisions remain in the law.

I do not intend dealing to any extent, as did the hon. the Minister, with the schedules. The print is very small and they are very complicated. However, I should like to say just a few words about them. Schedule 1 contains table A and table B. This is something new; we now have a set of articles for a private company and a set of articles for a public company. There are model sets of articles, but they only have a permissive use, so they do not require any comment. You do not have to use them; you use them if you want to.

Schedule 2 deals with the powers of a company as laid down by clause 34. This whole question of the powers of a company is very interesting, and I hope my friend, the hon. member for Green Point, is going to deal with this matter. It is very interesting indeed.

Schedule 3 deals with matters which must be stated in a prospectus. I have already referred to this briefly.

Schedule 4 is probably the most important feature of the Bill. It deals with the requirements for annual financial statements and interim reports by companies, so that the public shall know what the standing, the status and the health of a company is in which they hold shares. The changes are far-reaching. I cannot deal with the requirements in any detail, but I would like to highlight one or two of them. The term “profit and loss account” disappears entirely. We no longer have profit and loss accounts. This is replaced by an “income statement”. There are no longer annual accounts, but “annual financial statements”. This is the new arithmetic I was talking about, the new terminology we have to learn. The directors’ report, instead of being a somewhat meaningless, stereotyped statement, must now—and this is very important—be in narrative form, necessary to complement and explain the balance sheet and income statement. In other words, teeth have been put into the directors’ report. Directors must now tell their shareholders what the income statement means and what the state of the company really is. The financial statement must now fairly present the state of affairs of the company. The details required in the annual financial statement will now give a full picture of the state of the company and of its operations.

The duties of the auditors and the scope of the auditors’ report have been widened considerably. When I finished reading what the duties and the obligations of an auditor were in this little Bill which we have before us, I thanked the good Lord that I was no longer in practice.

The form of group statements and group reports has been specifically stated. Companies cannot now decide how they would like to present their reports. When they are involved, as a group, with other companies, the requirements are specific, and this is very good indeed.

Interim reports have been a cause of contention in this country for years. It has been a requirement of the Stock Exchange for a long time and it has been a requirement in England and America, and probably on the Continent, for years. Interim profit of loss, are now obligatory. There are one or two questions that do arise: How do you deal with paragraphs 54 and 57 of Schedule 4 when shares are acquired over a period? There seems to be a real problem involved here to meet the requirements of these two paragraphs of Schedule 4 when you have not bought the shares in one lot; you may buy them over two, three, four or five years. Perhaps the hon, the Minister might go into that. The other question is this: From what date do the accounting clauses in the Bill begin to apply? I think it might be useful for the Bill to state that these provisions shall not apply to any company in respect of any financial year ending prior to the 1st January, 1974, when the Bill comes into operation.

The hon. the Minister is aware that life assurance companies have some difficulties. The interim reports and provisional financial statements are giving them some trouble, and I think they have told the hon. the Minister that there are certain alterations that they would like. They say—.

Sir, I think they have a case here, because if every insurance company has to start with actuarial investigations twice a year, this position may become well-nigh impossible.

Finally, there are one or two other matters that might warrant consideration. Firstly, should not failure by listed companies to comply with Stock Exchange listing requirements constitute a contravention of the Act, with appropriate penalties? We do not seem to have a complete tie-up between what is happening in terms of the Companies Act and what happens in terms of the Stock Exchange Act. There is the very useful provision in the Bill that one of the sub-committees of the Standing Advisory Committee must be a committee to deal with problems of the Stock Exchange, but it seems to me that we might put teeth into some of the provisions of the Stock Exchange Act if we incorporated a proviso in the Bill that people failing to comply with the regulations of the Stock Exchange will be guilty of a criminal offence, because you must remember, Sir, that today we have a representative of the Department of Financial Institutions sitting in at the meetings of the Stock Exchange committee and therefore he knows what is happening, and many of the regulations are drawn at his request; so if listed companies do not comply with these regulations, we should consider the question of making it a criminal offence.

The other question is this: In view of the provisions of clause 63 of the Bill, which changes the duties, does the Stamp Duties Act not require amendment? There is no mention in the Bill that the Stamp Duties Act is to be amended. I also understand that there have been negotiations between the Stock Exchange Committee and the Registrar of Financial Institutions for amendments to the Securities’ Transfer Act of 1965, but one of the Acts repealed in this Bill is the Securities’ Transfer Act of 1965. The new provisions which are being discussed between the Stock Exchange Committee and the Registrar are not incorporated in the Bill. In other words, although discussions are going on to amend the Securities’ Transfer Act, we have ignored that entirely; we have simply said in this Bill that we repeal the Securities’ Transfer Act of 1965. By the time this Bill comes into operation they will not have had time to amend the Securities’ Transfer Act, and therefore provision might have to be made in this measure to take care of the desired new requirements.

Mr. Speaker, I have raised a number of issues, in connection with this Bill which we believe merit consideration and we will move some amendments in the Committee Stage. We will not move all the amendments which we think should be moved, in the hope that the Standing Committee, which will be appointed as soon as this measure comes into operation, will be able to deal with them and deal with them expeditiously.

Will you try to get those amendments on the Order Paper?

We will have them placed on the Order Paper. In the main we believe, Mr. Speaker, that this Bill is a vast improvement on the legislation we have at the moment. The present Act has served a useful purpose, but it has been a patchwork measure. It started its life in 1926, the child of an Act of 1909, was amended 15 times, and today it really does not provide the necessary legislation to deal with our modern dynamic economic society. We believe this Bill is urgently required and we will support it and give it our blessing. We support the Second Reading.

The hon. member for Parktown has made a very thorough study of this legislation. He has again made the kind of speech here that we have come to expect of him. He is always positive in his criticism; he is constructive in his criticism, something we appreciate about him. There is very little real criticism that he has offered, but what we appreciate is his constructiveness. The piece of legislation before the House at present is a very complicated piece of legislation. He spoke here also as a professional man. He began by sketching the history of the old Companies Act, and how this eventually led to its culmination in this present Bill. He made certain objections to new concepts that are now embodied in this Bill, but, as he rightly said, one does not remain static in one’s views and concepts. As I have said, he had little criticism, but I also want to fall in with him and sincerely congratulate the De Vries Commission, which investigated this matter and eventually came along with a draft Bill, on the work which they did. We have waited a long time for this Bill, but I think it was worth it. I also sincerely want to congratulate the department and the hon. the Minister and thank them for this new Bill and the form in which it has been drawn up. It is a very great improvement on the previous Act, as was, in fact, acknowledged by the hon. member.

There are several forms of business. The very first business known to man was the one-man business and later, through co-operation and seeking help from others, the partnership developed. As someone once identified a partnership agreement, it is “an agreement of the utmost good faith”, but as people are, confidence is sometimes shaken and consequently new types of companies were sought. Eventually the limited company was arrived at, a company with limited liability. Then there is also the co-operative type of company, whether limited or not, which is not applicable here at the moment. I think that there is room for all types of business in the economy of South Africa and in the economy of the world. But by far the most important type of business, is the limited company, a type that lends itself to the sampling of big capital, powerful capital; a type of business which lends itself to the creation of investment sources from which growth must emanate and from which there must also be proceeds—in other words, a very good investment source for the general public. When we think of the extent to which the principle of the limited company is already applicable in South Africa in the various businesses, there is hardly any person who does not, in some or other way, have an interest in a company, whether as directors, as entrepreneurs, as investors, or as persons receiving services from a company. Therefore it is of such great importance that the legislation controlling this type of business should be good and thorough legislation. I think we can say as much about this Bill. The Government’s biggest economic critic, i.e. the Financial Mail, recently announced this legislation as follows and said, inter alia:

This newspaper also has certain criticism which it expresses about matters that will have to be taken up in time.

This brings me to the first point I should like to broach, i.e. a completely new concept in this legislation. I am referring to the appointment of the standing advisory committee. I think this is a very good case. In a changed and still-changing modern society and economy it goes without saying and it is logical that legislation must continually be amended to adapt to changed circumstances. This applies, in particular, to this type of legislation where changes are continually taking place. It must therefore continually be adapted. That is why the appointment of the standing committee, as provided in clause 18, is sincerely welcomed. That was actually the only point in the hon. member for Parktown’s speech which was not nice. He surely knows that the hon. the Minister will give us the best people available in South Africa to serve on this committee. That goes without saying, after all, because the hon. the Minister has the interests of shareholders and entrepreneurs as much at heart as the hon. member for Parktown, and perhaps much more. We consequently have the fullest confidence in the hon. the Minister in that he will appoint the best people available to this committee.

He will appoint Sonny once Sonny has lost Parktown.

There are problems which these people will have to solve immediately. There is a great deal of criticism, such as that also expressed by the hon. member for Parktown, inter alia, which these people will probably have to give immediate attention to. They will probably also solve those problems in time. What is most important, however, is that this committee will keep this legislation up to date, and the amendments which the committee will continually submit to the Minister will result in this legislation always remaining streamlined and up to date.

A further point I want to touch upon is the question of directors. Directors are in positions of confidence in a company. They are the watchdogs when it comes to the interests of the shareholders. The weal and woe of a company can be determined by its directors. That is also why so much attention is being given in the legislation to directors, and that is also right. This not only protects the directors, but also the shareholders, and that is how things should be. Directors are people who hold positions of power and authority in large public companies, and they can easily abuse their position of confidence. They must consequently be checked. The new amendments, which are being placed on the Statute Book by means of this Bill, are important. I just want to summarize them briefly in so far as they relate to directors. Firstly every director must consent to his appointment. Unless receipt of consent is acknowledged by the Registrar, as already indicated by the Minister, he cannot act as a director, and his name may not be linked to directorship of the company. In addition, the director is also compelled to record any change of address himself. The onus will now be with the director himself to give notice of his change of address. Secondly, directors can only issue shares with the prior approval of the company at a general meeting, something which directors have also abused frequently in the past. Thirdly, with respect to share or option plans in which directors have an interest, it is provided that shares can only be assigned to them on the same conditions applicable to all other shareholders of the same class of shares. Fourthly, directors may not deal in options in respect of listed shares and debentures. Fifthly, the register of interests of directors in shares and debentures, and the register of interests of directors in contracts, are now being made available for public scrutiny. This is something that is also very important. In many cases, if one wants to find out who the directors of some or other company are, the names are simply not available, and one simply cannot find out in what respect those directors are connected with the company. Now it is compulsory for the interests and contracts to be made public. The register of the interests of directors must contain particulars of the shareholdings officers who, together with the directors, have knowledge of the affairs of the company, specifically to control the position of confidence in which directors are placed. There are essential objections— as also indicated by the hon. member for Parktown—which could probably be corrected in time.

Those are briefly, then, the few points I wanted to touch on in connection with this Bill. We welcome it and hope and trust that in the light of the steps being taken in this legislation, directors will not abuse their position in future. We shall hope and trust that this legislation will prevent this to a certain extent. You know that we are dealing with human beings. When a person is placed in a position of confidence, he sometimes abuses that position. But we want to express the hope and the confidence that this Bill will contribute towards placing South Africa’s economy, and particularly companies, on a sound footing by the methods which will be employed and by means of the standing advisory committee. We wish the Minister every success for the further progress of this Bill.

Mr. Speaker, I must say that it is not often that we have the opportunity in this House to listen, firstly, to such a lengthy and very clear explanation of the contents of a very long and very important Bill, and, at the same time, to have the privilege of listening to the leading speaker for the Opposition being able to deal with what the hon. the Minister has said in introducing the Bill, in such depth and with such clarity, making, at the same time, what I would term very constructive criticism and comments and, if I may say so, useful and interesting suggestions with regard to this Bill and its importance and operation in the activities of commerce in this country.

Having said that, I would like to say something about my conception of companies in general, and in respect thereof, also the Companies Act. I would like to say that the Companies Act, or the conception of company legislation, is the most important factor in the orderly and methodical development and control of large enterprises, and for that matter, perhaps all enterprises requiring the investment of risk capital; more particularly I feel it forms the basis on which enterprise has been able to attract the investment of capital and wealth for the continued growth and development of the economy of our modern society. Its part in the economy is not only vital, but virtually the life-blood of business and industry and has led to the high social development and standards which mankind has achieved. The company conception has been a major cause in the sound and secure conduit pipe for wealth to play its part in the greater rationalization of the needs of people and the greater spread of such wealth to benefit society in general. I would like to take a quotation from the report of the commission which reads as follows:

To this end it is my view, in supporting what the hon. member for Parktown has said, that we find the Commission has presented a Bill which, with amendments the Minister has in the light of numerous representations already made, is very readable and is presented in a much more simplified manner than the existing Act. There are many reasons given in the Commission’s report with regard to that simplification not only in respect of the language in which I am addressing you, but in respect of both languages in our country, because I believe that even in regard to the Afrikaans version of the Bill, we will find a tremendous improvement in the grammar and grammatical construction as well as in the general picture the reader will find when he studies the Bill. The endeavours of the commission to bring about a balance between all interests involved in a company, namely directors, members, the company itself, third parties and creditors as well as the general public, has indeed made an important contribution to this very delicately balanced confluence of interests. I hope it will play the important part it should in preserving the confidence of our investing community and the entrepreneurs who contribute by their know-how, enterprise and expertise to the continued growth of our country and the uplifting of the standards of living of all our people in all its aspects in this modern scientific age and in this country which has such a great future in store for all its inhabitants.

The Bill largely follows the principles of company law as we know it. The hon. member for Parktown has related the history of the Companies Act and I think we are indebted to the country of origin of company law. In fact, the company law of Britain has been the standard from which the whole of the new world virtually, countries of the Commonwealth which were part of the British Empire of the day, and many other countries of the world have benefited. The company law of Britain has virtually been the standard bearer in the development of this form of business activity and in the structure it has created. But certain important changes have been made which will not in my opinion in any way affect the value of company life as we have known it, but which may raise certain doubts as to its practicability or as to its efficacy. I do not find too many problems because largely I believe the changes have been in the interests of the investor, the public, whilst not interfering much with the delicate balance which must always ensure the making of profits by the company, by its founders, its entrepreneurs and its promotors. It may interest hon. members to hear that company life in this country has accelerated, particularly in the last 10 or 15 years. Some figures which we find in this connection in the report are of great interest. For instance, it would appear that in November, 1935, there were approximately 7 852 companies in existence, a number which grew to 32 000 in July, 1948. Those are the figures I find in the report indicating the growth during that period. But the figure for the period 1959 to 30 June, 1969, shows that an additional 99 379 companies were registered, i.e. almost three times as many within ten years as, according to the figures for years gone by, was the case over a period of 13 years. It is also interesting to know that the 99 000, or practically 100 000, companies were responsible for a nominal share capital value of R1¼ billion. If we take into account the tremendous amount involved in the increase of share capital from time to time over the years, one can visualize that company life today is virtually the backbone of the business life of South Africa. In a country with such tremendous potential, we can well realize, as my hon. friend for Vryburg correctly said, the important role that companies play in the business life of our community. I, like all others, also welcome the early establishment and appointment of a standing advisory committee. However, I do not accept the mild criticism, if I may put it that way in all kindness, which the hon. member for Vryheid made with regard to what the hon. member for Parktown said, because I think we must go by the standards of the past. In Britain, for instance, there are the Cohen Commission and the Jenkins Commission, which have been standing commissions for years, which play a very important and vital part and have been able to call on the best possible ability in the country. Neither I nor the hon. member for Parktown denies that the hon. the Minister will seek men of ability. We hope he will be able to get them, but it is not easy these days, as has been very correctly said with regard even to the commission itself, to get men of ability and standing to take part in this important and vital work unless the hon. the Minister really makes up his mind to elevate the standing advisory committee. I think it is important, against the background I have given, to the proper standard with regard to salaries to attract the correct people and to provide the necessary incentive to attract those whom he feels and we believe are necessary in order to make the standing advisory committee a success. I say this particularly with regard to this Bill, which has been entirely reconstructed and contains numerous provisions which do differ in many respects, thereby creating additional work, as those provisions will have to be tested as time goes on. As has been pointed out, a considerable number of opinions have already been forwarded to members prior to the presentation of the Bill itself, so that one can deal with the Bill from the point of view of future amendments. Therefore the members of the standing committee will have a considerable amount of work to do and the hon. the Minister will require men who will be able to analyse satisfactorily what should be done if amendments are to be brought in. I have no doubt that they will direct their immediate attention to some of the important factors which are still outstanding, factors which may arouse confusion or doubt, as I have said earlier, such as the “objects clause” of the memorandum in respect of which a considerable amount of discussion has taken place. We find, for instance, that a memorandum, to which we are accustomed at the moment, which is regarded as a document with a prolixity of conditions, authorities or powers to the company, should be more concisely presented because of the tremendous amount of paper work involved. Storage and all sorts of other factors are involved and these should change in essence because the very construction of the document does not make it a sound one. That document may contain 20. 30, 40 or 50 different objects, with a final clause wherein it is stated that every object should be read independently, as if that were the main object of the company. In this way the purpose is defeated, namely to bring about a complete attrition and to endeavour to preserve the object of the company as narrowly as possible in the sense of the wording but as wide as possible in practice. I am sure that it will be the first objective of the standing advisory committee to consider very carefully the points which have been made and also to deal with them and to see whether something can be done in this respect. I furthermore think, as has been pointed out already, that the consideration of the alternative recommendations of Mr. Suzman, one of the members of the Commission, will engage the attention of that standing advisory committee immediately. He deals with this particular factor of insider trading and with one or two other factors which I believe will still worry the public for some time to come. I do think that that will be an important factor, something to which the hon. the Minister even might direct his own attention. We have also had some representations directed to us on the question of insider trading. I have received a very lengthy article which was written by a representative of one of the biggest companies we have in South Africa. This company has international standing, it has an international reputation, and it is a company which is highly respected all over the world. He felt that perhaps a single concise blanket clause should be inserted which would cover the action of any person with knowledge concerning information in respect of which he should observe the utmost good faith in keeping such knowledge secret. As an example I could just read the wording of this representation in order to give the hon. the Minister a better idea of what was intended:

This is an example of the suggestion that has been made to meet a situation which in terms of clause 231 is already causing concern. There is a gentleman who happens to be the secretary of another one of the largest companies in this country, but he has an entirely different individual view altogether. We talk about ensuring that the register shall reflect the interests of a particular director in case it affects a contract. These are matters that I feel should be very carefully considered by the hon. the Minister. Nevertheless, I hope that when the standing committee does deal with some of these important matters, it will preserve what I feel is one of the paramount features of this Bill and that is the simple manner in which it has been presented. I hope that it will make an effort at continuing this simplification both in the interests of those who have to work with it and the public who have to read it as well as in the interests of those who have to interpret it. In that respect one has to some extent a nostalgic thought with regard to the change of terminology, in the change to the entire structure of the Bill, because our law at the moment contains a wealth of precedents of case law which have been invaluable in the company life of this country. A great deal of it comes from England itself. Their laws have been the basis of our law and we have made considerable use of case law from Britain. I sincerely hope that it will not necessarily be destroyed by what I call simplification and what I believe has been a good approach in the drafting and presentation of this Bill.

I now want to say something which I think is particularly important in the whole approach to this Bill, especially by the public. I feel that one of its greatest values lies in the fact that it ensures the protection of the public. Here I want to say immediately that one does not call for protection as against the promoters of the enterprise, the directors of companies; there is no question of any investor having to live in fear. It will, however, give the public a greater sense of security in that they will be entitled to detailed information and to certain necessary disclosures. This approach by directors as regards both the management and direction of the affairs of a company and the involvement of the investor in the affairs of the company is now laid down. I think in that sense the commission has done a very good job of work indeed. I hope that this approach will be continued in the committee which is established, to ensure that the investor can invest his money with absolute ease and comfort. Many of us remember that until some 15 or 20 years ago, if, for instance, one were a trustee or someone in a fiduciary capacity with regard to the management of large funds in charity bodies, welfare bodies and other large undertakings, one would always invest in what we called “gilt-edged stock”. This meant that one bought either Government stock or municipal stock or any public utility stock. Then the whole trend changed, and that trends was responsible, in my view, for the tremendous upsurge in the commercial life of our country. The trend was then towards the idea that equities can be a safe form of investment; and that one need not fear, because equities would give better returns and would also ensure growth of capital. What has been significant is that as a result of that trend, the entire business and industrial picture of South Africa changed completely. That is where I feel the security of the investor is so important, because we must continue to attract his funds so that he can play his part directly, through the private sector, in the development of the country in which we live. I do not think this is new, but I think it should nevertheless be said: The country has tremendous potential, and the potential of a country can only be realized through its own people. We have at times, in discussions with the hon. the Minister and the Minister of Finance, complained about the imbalance between the public sector and the private sector. Here is one of the avenues in which the private sector can be given an opportunity, and I am sure it will be given the opportunity of attracting the private investor, the man in the street, to play his part in the development of his country.

There are one or two other very interesting features on which I should like to comment. One of them is the question of inspections. Where it was found that the directors in some way or another had harmed a company and that the company would suffer a loss, it was necessary for action to be taken, and the only person who could take action was a member of the company. Obviously a member of the directorate would not take that action; an officer of the company would not take that action. A shareholder could, however, take that action. The result was that, if he was successful in setting an inspection in motion —and I understand that this has not taken place very often—no matter how small it was, it would cost at least approximately R4 000, according to the report. This has been very well cured, as the Minister himself stressed in his statement, by the new procedure of being able to apply to court, to present a case to court, and for a curator ad litem to be appointed who would almost immediately begin to report on certain factors, for instance, whether there was a sound case to be made for action to be taken. This will now also restore to the investor some form of security because, without involving himself in a very lengthy and costly process, he has an opportunity, within a short period of time, through judicial approach and through judicial sanctions and surveillance, to endeavour to remedy something which he believes is wrong with the company. This will now not take a great deal of time either to prove or disprove. I think this is a very important change which has been made, and I think it should be highly commended.

I should like to ask the Minister something else which rather worries me, and this is in regard to the penalties. I find that the penalties laid down in clause 178 are rather severe. In terms of the present Act, if the provisions regarding the annual duty and the timeous lodging of documents have in any way been contravened —in other words if the duty has not been paid or the documents have not been lodged in time—certain penalties are laid down. If there was a three-month delay, the penalty was one-half the amount that was payable. If there was a six-month delay, an amount equivalent to the prescribed fee had to be paid. If there was a 12month delay, twice the prescribed fee had to be paid as a penalty. If there was a delay of more than 12 months, three times the prescribed fee had to be paid. In terms of clause 178 of the Bill, after a delay of three months, twice the prescribed fee must be paid. After four months three times the prescribed fee must be paid, and if the delay exceeds four months, five times the prescribed fee must be paid. Sir, this could be a very expensive business, to put it mildly. It could, in fact, be an extremely expensive business. I am sure it was not the intention of the Minister to hound people. I do not expect him to hound people. I also do not believe the drafters of the Bill intended to hound people. I do feel, however, that this is a very extensive form of penalty, particularly when one compares it to the present situation. Perhaps the present penalties are a little too mild and perhaps they have not had the desired effect. If that is the case, we could increase them somewhat, but I think that a penalty of five times the prescribed fee after a delay of more than four months is excessive. I think the annual fee is somewhere in the region of R50.

It has been increased recently; the minimum is now R50.

Well, if the delay exceeds four months, an amount of R250 will have to be paid for that alone. There are numerous documents which have to be lodged from time to time by company secretaries, public officers, etc. These people will be very heavily penalized, and I think perhaps this matter has been carried a little too far.

I would like to comment on one final point, to which some reference has been made, because obviously there is not very much new that one can say about this Bill because the Minister has covered the whole field so fully. Sir, Schedule IV will play a very important part, but there is one thing that we must bear in mind and I hope that the public will take this kindly —I have mentioned this to my colleague, the hon. member for Parktown—and this is that I think there is going to be an increase in the cost of running companies, as the result of increases in auditors’ fees, etc. But I think the value of disclosures under Schedule IV should amply compensate the public for the extra costs that they will have to incur. I have no doubt that a lot of concern will be expressed by the directors of smaller companies and by investors in smaller companies. I think that is a matter which the hon. the Minister might perhaps stress a little more. We on this side will stress it ourselves, but I do think that this increase in costs is going to be more than compensated for by the advantages that investors will derive from the provisions of this Bill.

Then there is another matter which has been a matter of some concern to some people, and the hon. the Minister should perhaps consider this too. I do not know whether he would wish to remedy this, but at the moment, as hon. members know, the memorandum of a company always provides that the liability of the members is limited. I would imagine that the answer to this would be that the term “proprietary limited”, or “limited by guarantee”, speaks for itself. But I wonder whether the hon. the Minister will think about this, because there are some people, particularly accountants, who feel that it would be a pity to omit that clause from a company’s memorandum because it merely gives additional clarity, and gives an investor the assurance that if he buys a share of a certain nominal value, his liability is limited to that amount. I think that is a very important factor, and perhaps the hon. the Minister might deal with it.

Then, finally, there is the recommendation which I hope the hon. the Minister will discuss with the Minister of Justice at the appropriate time because he would know something about this. Partnerships consisting of more than 20 persons, in terms of the present Act, must be incorporated in the form of a company. But notice may now been given in the Gazette by the Minister that members of organized professions in excess of 20 may remain partnership bodies. I believe that in the Stock Exchange Act provision has been made to enable stockbrokers to become incorporated. I hope this will apply to legal firms as well.

Sir, today we have before us, as the three previous speakers have also said, a very important piece of legislation. It is a bulky measure, but I think its bulkiness is small and insignificant in relation to its importance to South Africa. Sir, sitting here and listening to the previous speakers, and looking at the Bill, my thoughts went back to the time, years ago, when I read about Parkinson’s Law. Parkinson describes how a certain board of directors convenes on a certain morning to hold a meeting. There was a R30 shortage in the petty cash, and the directors held a meeting about that the whole morning; they called in the typist and the cashier and all the members of the staff and questioned them. Then they adjourned for lunch, and after lunch they continued with the meeting and there was a terrible fuss about those few rand which had disappeared. The following item on the agenda was a large contract of R2½ million for the installation of new machinery. One director after another said he knew nothing about that. They then called in an expert and asked him to give them his opinion about the machinery. The expert said a few high-faluten things which none of the directors could understand, and the directors then immediately said: “Yes, we think this is a good thing; if you think so, we must then install the machinery,” and the expenditure of R2½ million was immediately approved. I hope this will not be the case with this new Companies Act for South Africa, but even if things were to be done so quickly, we could freely approve this Bill because it is a very good measure.

Mr. Speaker, previous speakers pointed to the importance of this Bill, but I wonder if we do, in fact, realize to what extent the Companies Act affects every person in South Africa. If we take our latest Estimates, for example, we find that the direct taxation of individuals in South Africa amounts to R866 million, while the direct taxation from companies as such is R1 079 million, apart from all the other revenue which the State obtains from them. If we think of the industrial sector in South Africa, which furnishes the largest contribution to the gross national product, one finds that it is just companies that are chiefly involved. If one thinks of all the employees who work for those companies, one realizes that everyone’s lives are affected by the Companies Act. Therefore it is good and proper and important for such a measure to be good and watertight to control and regulate the weal and woe of all these people and to control and regulate their money.

If we just think of the Stock Exchange, we realize that there is not a single share that does not come from a company. In other words, the whole Exchange must be regulated and controlled by the Companies Act. Here I want to link up with the previous speakers and thank the Minister very sincerely for having come along with this measure. It is a good thing. We are also grateful for the tremendous task which the commission carried out, and we are also grateful for the work of the department.

I do not think it is generally known what work has been done behind the scenes during the last few months by the department, the legal draftsmen and the printers to get this legislation ready. We want to thank all those people very much for what was done. It is also very important, particularly for our students at university and at school, and for the lecturers. They very urgently need this Companies Act. I want to mention this and say thank you very much, on behalf of these people, for the fact that this measure will be in force from 1st January. This still gives the people sufficient time to conclude this year and to bring themselves up to date with the Companies Act which they have to lecture about next year, and also to draw up handbooks and have them printed and made available. I also want to express the wish that when the Companies Act is printed, a sufficient number of copies will be printed so that everyone can have a copy at the beginning of next year. Because there is probably not a solicitor, auditor, company secretary, lecturer or student, even in law, or an accountant, who will not have to have a copy of the Act. It is therefore essential to realize that we should have a sufficient number of copies.

It is also important for us to think of the companies office. When a new Companies Act is introduced, there are many other additional matters which will enlarge upon the work and the task of the registrar, and although the work is perhaps up to date now, in time to come it may not be so easy for them to keep it up to date. I just want to mention an example, in the light of the report of the van Wyk de Vries Commission, of all the things that have been done. In the year 1968 things were not nearly as active as they are now. Applications for names that had to pass through the Registrar’s office, amounted to 34 436. Name changes alone amounted to 1 810. The newly registered companies amounted to 15 845 with a nominal capital of R342 million. This gives us an idea of what must go on in that office, and I want to express the wish and the hope that their compliment remains at full strength and that the administration will be kept in good trim so that everything can be done. We think of the forms that were submitted at the time, there is form C, the annual statement. There were 86 272 of them in 1968 alone, while there were 16 834 E forms, the companies’ change of address forms. There were 45 926 J forms, indicating changes in the board of directors, and 9 335 L forms, a total of 158 985 for the year. Those forms had to be handled by these people one by one, scrutinized to see if they were correct and then placed in files, and then at times there are still some things that are wrong, for example there are insufficient stamps, and then further correspondence must be entered into. Today of course there are many more. The number of companies registered this year, during the past year, has assumed on such proportions that the hon. the Minister of Finance himself had to increase the company licence this year for R10 to R50 to thereby prevent companies from being registered for every trifling matter under the sun. This indicates that we shall have to have the necessary manpower in the companies office in order to keep abreast of the work so that the private sector will not eventually be embarrassed by all the various returns.

And then I want to come to certain provisions in the Companies Act. I think there are quite a few provisions about which we shall be able to speak at length in the Committee Stage. I also want to express my sincere thanks for the fact that a standing advisory committee will be called into being in terms of the provisions of clause 18. All the members who preceded me in the debate have already spoken about this, but I just want to bring one idea to the hon. the Minister’s attention. The hon. the Minister of Finance appointed the standing committee on income tax. I think it would perhaps be a good thing if one of the members of that committee also had a seat on this standing committee so that there could be a close correlation between the Companies Act and the Receiver of Revenue. A few years ago—I do not know if this is still the case today—we had the problem of companies submitting income tax statements without those statements being audited. Perhaps that problem has since been eliminated, but I am just mentioning this as an example of an area in which co-operation could take place with a view to establishing a good Companies Act and a good Income Tax Act.

There is also another aspect I want to refer to. In terms of the Bill it will be possible in future to have private companies in which there is only one shareholder. All my colleagues in the accounting profession will agree with me when I say that in the past we have had many problems with companies consisting of only two shareholders. Since provision is now being made for a company to exist with only one shareholder, this will result in a lot of unnecessary work being eliminated, not only for the company secretary, but also for the companies office.

This brings me immediately to the registration of companies. When a company is registered, the original memorandum of association and the statutes, together with two copies, must be submitted. The Companies Act provides that those two copies must be certified by a notary public. Why this must be so, I really do not know. I find it really unnecessary that those copies have to be certified as correct by a notary public. This problem goes further. Someone will draw up all the documents fully and have them ready for submission, but now he must go to a notary public to have the copies certified. The Law Society prescribes that the minimum amount must be asked for the certifying of those two copies. He must therefore ask the minimum amount which he would have asked if he were handling the registration of the relevant company. If he would therefore have asked R80 to handle the registration of the company, he must now ask R80 for the certifying of the copies. I think unnecessary time is being lost by this, manpower is being wasted and unnecessary expenditure is being incurred. If the necessary documents are drawn up by a professional person, that professional person could just as well certify those documents. I should like to ask the hon. the Minister whether this matter could not be put right.

Next I come to the question of accountancy records. The Bill proposes that a great deal more will be required of companies as a result of the fact that more accountancy records will be necessary. This will result in a great deal more work, and a great deal more skilled work, being required, which means that companies will in future have to appoint better and more skilled employees to do all this work. There will consequently be a drainage from the accountancy and auditing profession. I must point out, however, that there is already a shortage in that profession. Before a person can qualify as an accountant or an auditor, he must study for five years, and then there is still his period as an articled clerk, of course. In future that period of study is going to be six years in length. Qualified persons in this field are scarce, but it will be important for the larger companies to employ more trained people. There are many functions that will be handled by such better trained staff, for example group accounts, directors’ reports and something new that is added and requires a new technique, i.e. the source-and-appropriation-of-funds statements.

It is true that the layman cannot always understand all that a financial statement entails. He simply cannot understand it and cannot make any sense out of it. It is also true that the form in which various public companies’ statements are published frequently differs from company to company. Standard forms are not used. The various companies’ statements contain the same information, of course, but for the laymen it is very difficult to interpret that information. I am very glad that the commission has made the necessary recommendation in this connection. In the commission’s report reference is also made to the Kimber Report which made similar recommendations in the United States of America.

There is also something else I want to refer to. Apart from a controlling company (“beherende maatskappy”) which owns more than 50% of the shares, there is also a holding company. The latter is something new and has already been explained by the hon. the Minister. A holding company owns at least 30% of the shares. I foresee this arrangement causing problems in practice. An example of this is that the word “subsidiary” will now have two meanings. One has a controlling company, and according to the definition in the Bill one knows what that is. One has a holding company, and according to the definition one also knows what that is. A subsidiary can, however, be any one of those two. If the holding company controls 30%, it is a subsidiary. If the controlling company controls 50%, it still remains a subsidiary. From the point of view of the student, the entrepreneur, the accountant, the solicitor, etc., it would perhaps have been a good thing if there was another name for one of these two kinds of subsidiaries. If the holding company is also a subsidiary, as it can be on the basis of the example I have quoted, it could perhaps be called a “daughter company”. If such a distinction could be made, it would greatly facilitate matters in practice. As the Bill now reads, the matter is such that if I speak of a subsidiary, it is not clear what I mean exactly. I shall have to clarify whether I have in mind the holding company or the controlling company.

I also see a further problem. According to the definition, a holding company has 30% of the shares in another company. One could easily have the position where three companies each hold 30%. If such a thing were to happen, one would have three subsidiaries and they can have nothing to do with each other. Problems could therefore crop up in relation to co-operation, etc.

The Bill therefore makes provision for our carrying out an experiment as far as these matters are concerned. I am not implying that I am not in favour of that; I am in favour of it. However, I want to point out that we must realize that certain problems can result from this. Such problems will then have to be ironed out in time. I believe that the aspects I have just referred to are matters that must be brought to the attention of the standing advisory committee in good time so that attempts can be made to solve the problems which will be experienced before they become too serious.

I now come to another matter. This matter concerns auditors. As I have already said, we are experiencing a manpower shortage in South Africa. The auditing profession is one of the sectors for which one cannot, as it were, recruit manpower from the streets. It takes years of training, and then there is the additional problem that a person does not necessarily remain in the profession after he has been trained as an auditor. Big companies are only too anxious to draw trained auditors from the profession. It is also true that auditors usually retire at a relatively young age because of the fact that it is a demanding profession.

Clause 280 has to do with the resignation of auditors. I quote subsection (2)—

It does not matter when the auditor resigns, whether in the middle of the financial year or at the end of it, but when he resigns, he must submit an affidavit, I really do not know why such an auditor must submit an affidavit. If a person dies and the doctor issues the death certificate, he is really not going to have that certificate sworn to. He merely issues a certificate. Why this certificate, issued by a professional person, must be sworn to, is not clear to me. Let us argue this matter. Suppose the certificate is not sworn to. If he issues a certificate and the company’s statements are in order, nothing can happen, after all. Let us suppose he issues a sworn certificate. What could happen? But if he has not sworn to it, what could happen then? What I am saying is that exactly the same thing could happen. A person has issued a certificate which is incorrect, and he can surely be held liable. The auditing profession is, as far as I know, the only profession to which a man may never return once he has been scratched from the role. I think that is a good sword. It was introduced at the time by the Accountants Act of 1951. The discipline is strict. The people are objecting to the fact that these certificates must be sworn to, and I think this is really something we should eliminate. I want to ask that the Minister move an amendment for the deletion of this provision in the Committee Stage.

I now come to the fourth schedule. Here one of the most important factors in the private sector is dealt with, i.e. all that must be included in the statements. This is explained here with crystal clarity, and quite a few amendments are being introduced. But there are a few small matters that could, in fact, be raised, inter alia, translations. I notice that the Bill was drawn up in English—that is the conclusion I come to—and then translated into Afrikaans. The heading of paragraph 11 of the fourth schedule reads: “Secured liabilities” and the translation is “Gesekureerde Verpligtinge”. In practice we know this as “versekerde verpligtinge”. This is also the term as mentioned in the Van Wyk de Vries Report. I think we could have a look at that. I am no linguist, but I take my hat off to the quality of this translation and the speed with which it was done. While there is still a chance, however, to correct certain matters in the Committee Stage, I think it would be a very good thing if we could have a look at that.

In concludion I want to make no secret of the fact that I want to refer to the importance which this Bill entails for the accounting profession in South Africa. If one looks at the index, one could take almost all seventeen chapters and, with a few exceptions, there is hardly a single chapter which the auditor and his staff must not look at from A to Z when the books of a large company are being audited. When an audit has been done, and the auditors firm has issued a certificate, it is a fact that every living being in South Africa depends on that certificate, if it has been certified as being true and correct. In the light of that people negotiate large business transactions and take-overs. Millions of rand are prejudiced. The whole Stock Exchange rests on the genuineness and truth of that. It is, of course, very important for this Bill to give guidance to such persons and to protect and support them.

But with the amendments that are being proposed, this Bill is now almost as important to directors as to auditors. I am very glad that the days when people were merely “used” as directors are passed. Their names were used. The person concerned was perhaps a person who knew nothing of the Companies Act, of accounting or of the affairs of the company. He was then simply “used” by someone behind the scenes who told him everything that had to be done. I am very glad those days have passed. A director must now be knowledgeable if he is serving on a board of directors and he must ensure that that business is sound. Because this is so important, I wonder whether there could not be some or other form of training in that connection, whether the hon. the Minister, whether in co-operation with the Minister of National Education or the universities, could not publish an abridged publication, a manual or a summary which could serve the directors as concise source of study to bring them up to date with the provisions of the new Companies Act as it will be in future. It is not easy for anyone, particularly a layman, to study this colossal piece of legislation. It cannot simply be done overnight. The hon. member for Parktown said that it took him seven days to study and understand it; but I am telling you, Sir, that it takes one much longer to really understand it and to be able to implement it in practice. Seven days is too short a period. People who are in the professions, whatever work they may be doing, do not have the time at their disposal to go through the entire Bill. Therefore it would perhaps also be a good thing for us to do something so as not to set traps for the directors in the provisions applicable to them, but to help them to find the right road, so that they can study a good Bill and quickly be au fait with it. There is no excuse for them not to study the entire Act. They must do so. But, Sir, I think it would be a good thing to make something available to them as an introduction. I do not know whether the department could do so. I do not think so. Therefore I am just asking that we investigate the matter further.

Then I just want to say in conclusion that when this Bill comes into operation on 1st January next year, the Minister must please not hesitate to come to this House quickly with any amendments if they are thought to be necessary. If necessary, that standing advisory committee must publish an interim report in good time, even before the Bill comes into operation, so that the hon. the Minister can come along next year, in good time, with essential, fitting and good legislation which would be of benefit to the country.

Mr. Speaker, I want to associate myself with what the previous speakers have said in connection with this Bill. However, I want to express the opinion that not seven days, but 40 days and 40 nights, are necessary to understand anything about it.

In a capitalistic state like the Republic of South Africa we cannot, indeed, overemphasize the importance of the company in modern economy, because all the confidence, locally and abroad, with respect to investment, depends upon the integrity of the company, on the integrity of the directors who serve that company and on the integrity of the officers who are in the service of that company. In law it is said, as we also mentioned the other day, that the criminal procedure that is applied in any country is, indeed, the criterion in terms of which the civilization of a people is measured. I want to draw a comparison and say that, economically speaking, it is the company, and its formation and establishment, which form the core of a country’s activities because, from the nature of the case, millions and millions of rand in capital are controlled by it. Particularly a country like South Africa, with its diversity, with its gold mines, etc., must be able to compete satisfactorily at this level with similar institutions, companies and others in the rest of the world. We can probably say with conviction that in South Africa the days of the one-man business are irrevocably past, that we are now moving, no longer even in the sphere of the partnership, but in the sphere of the big syndicate. It has, indeed, become the age in which big capital, the syndicate, the big company, have become the important factors in our whole economic set-up. The various mergers and set-ups which there are today attest to this fact. That is why I believe that it is correct for it to be simplified in legal language to that extent in the Bill so that it will be less complicated and so that the layman can also have confidence in it, and not only the layman, but also the general public, because members of the public invest their money, take part in the venture and take a chance. I therefore believe that it is also essential for the ordinary man in the street to be able to promote the aims and the functions of the company, as being envisaged by the Bill and as pictured for the future. Today this no longer applies only to the bit capitalist, to the big businessman; it is a sphere we all move in, i.e. the farmer, the solicitor, or whoever comes across this in ordinary everyday life. For that reason it is a good thing for it to be ordered in a very good and suitable manner. I think the contribution of the company to the economy and the national revenue of the country is probably almost incalculable and must definitely be astronomical. It is still escallating and we can probably hold out the prospect of the registration of companies in a country like South Africa still continuing to increase in the foreseeable future.

It is clear that this Act, which we want replace by the Bill which is before us, has already existed since the year 1909, except for the substantial amendments introduced in this connection in the year 1926. It is actually surprising that in South Africa, throughout these years, we have still been able to meet the requirements set by the present-day community with this old-fashioned legislation of 1909, compact and obscure as it is in a language we almost do not speak and understand any longer. It is actually more than essential for us to have, as we now have here, a more efficient measure to adapt to our present circumstances, and for that reason we welcome this measure. I believe that it contains important new provisions. We have in mind, in particular, the provisions relating to the registration of private companies and the fact that this even makes it possible to have just one single shareholder now. I think this is nothing but complete common sense. The hon. member for Sunnyside mentioned the problems we have had in the past, in this connection, and it is true that the provisions and wording of the old Act were, in fact, only there for the sake of appearance, because persons A and B, a man and his wife, would for example form a company thereby to comply with the provisions of the Act while A, in actual fact, had sole authority in the company. I therefore believe that this is a provision which is completely sensible and which would also make a considerable contribution towards facilitating the administration of this type of company.

We then wish to acknowledge immediately that since we are dealing here with an extremely complicated matter such as this, and since we are now holding out the prospect of this measure, we have probably not reached the end of legislation which we shall have to pass in that connection in this House. We believe that in future we shall still have to make provision for many amendments which we may regard as essential from personal experience of this and as a result of the recommendations of the proposed standing advisory committee, which is a very sensible idea, I think it is correct that in future we could possibly even implement the recommendations of the minority report in some or other way.

Thus I also believe that we have certainly not said the last word in connection with the provisions about and in respect of the relations between holding and subsidiary companies, as was also quoted by the hon. member for Sunnyside. “Controlling” and “controlled” companies are accepted by us. We also accept the principle that a subsidiary may not be a member of its holding company. We think this is a very sound principle which is, in truth, going to avoid the measure of manipulation and eliminate malpractices which are now possible, particularly if we think of the undesirable nature of these cross-shareholding companies and circular-shareholding companies. In that connection we could have problems, and I accept this. Thus company A can, for example, be a subsidiary in the holding company of B, but B can again also be a subsidiary of A. This is a vicious circle which could, in my estimation take place, and I do not even want to try to intimate to this House how one could sort that position out and how one is going to solve the problem. It makes me think that the position I find myself in if my fishing line gets tangled up there at the fishing waters is about the same position one could be in if something like this were to happen. It would be very difficult to disentangle it. But I think it is right that we should try to control such a position, that we should limit these activities and that we should also make this matter comprehensible to the ordinary person entering upon such a venture and to the ordinary shareholder who has an interest in such a company. Thus, too, I think that the reports which the liquidator must furnish in terms of clause 400, particularly in respect of the offences committed by directors and officers, is a desirable and sensible regulation. I accept the fact that it is possibly a difficult task which is being placed on the shoulders of the liquidator, but I think it will nevertheless be a very handy and serviceable provision, one that ought to be welcomed. Our experience of the past actually indicates that some of the liquidators were, in many respects, more bent on putting things in order, recovering and collecting what could possibly be got out of the matter without further concerning themselves very much with other related aspects as provided for here. Thus I believe, too, that the provisions of the Insolvency Act could not perhaps, at this stage, be implemented in any other way, and I think that it is correct that it is being done here on a mutatis mutandis basis. We have in mind, too, that it could perhaps even be changed in the future. I have heard criticism from certain bodies to the effect that the emphasis is being placed here on a narrowly delimited, bureaucratic administration. However, I do not think one of us in this House believes that; I do not think that is so. On the contrary; I think this was the result of a very thorough investigation into the old-fashioned shortcomings and flaws in the old Act, and that this contains a great deal which is going to make the position, in respect of company legislation, more orderly, more efficient, simpler and more streamlined. We welcome the provisions in many respects. In that connection I am specifically thinking of the ultra vires doctrine which is going to be settled here and embodied in this legislation, according to the provisions of clause 36. As a result of the old dispensation the public suffered a great deal of damage. I am referring to the doctrine which provides that if a company were to exceed its powers, the public could not in such a case, in terms of the existing Act, recover its losses because of the plea that the directors exceeded their powers ultra vires. This caused some people to suffer great damage. I am thinking in that connection, for example, of companies who negotiated colossal transactions, for example property companies who operated on a large scale and carried out and concluded transactions for which they were in no way qualified in terms of their memorandum of association, something which resulted in the public as such suffering a great deal of damage. I therefore think that these measures are, indeed, contained here as a protection for the public.

Provisions that we also welcome are those of clause 38, which are aimed at exposing malpractices such as the manipulation of advances and financing for the purchase of a company’s own shares, except in cases where this is their business. But I want to say that this provision is perhaps not yet completely watertight because, in some respects, circumvention could still possibly take place in that connection. We could imagine circumstances that could perhaps make this possible. However, I think that this is a step in the right direction and that it is, in particular, a matter which the standing advisory committee could perhaps improve upon and extend further.

The simplification of the memorandum of association as the chief objective, as contained in the Bill now, and the single objective in terms of the provisions being embodied in clause 33, is a good provision in my opinion. It eliminates quite a bit of redundancy. The provisions of clause 266, which deal with the appointment of a curator ad litem when there has been alleged wrongful actions or acts on the part of directors, I also regard as a good measure. In the past we have had the problem of some of the directors obtaining and expropriating powers by virtually unlawful means, powers which at times virtually bordered on the criminal. The aggrieved persons had little recourse to check or prevent this. The only procedure they could adopt in that connection was to submit to the courts a motion which was sometimes based on insufficient knowledge and, as a result, could not make the grade. Otherwise they were dependent upon applying for the liquidation of the company. I think that the present procedure, according to which this is being eliminated and in terms of which the opportunity is being created for the appointment of a curator, improves the position a great deal.

In conclusion I just want to point to an aspect which I want to focus attention upon. I do not know whether provision has specifically been made for that in this Bill. I am referring to the legal-illegal actions that take place in private companies in terms of White and non-White groups, where Whites, in particular, give their names to companies which are apparently White companies, but which are controlled by other groups. I want to accept that this is an illegal practice. I also accept that it is a very difficult practice to expose, but I also believe that it is an evil that must be combated. I also think that this is an idea which the proposed advisory committee could investigate and in connection with which it could possibly think up ways and means for trying to combat this, whether by heavy penalties that are imposed or possibly even by confiscation. That is all I want to say in that connection.

We support this Bill. I think it is good legislation and that it will make an extensive contribution to good legislation in this country.

Mr. Speaker, I would like to deal with the point which was dealt with by the hon. member for Ermelo in his concluding remarks. He dealt with what one could almost call the “race classification” of companies for purposes of certain laws which have to be complied with. I agree with the hon. member that this is a problem which is presented both to the non-Whites, who need the expertise and finance for development in a non-White area, and to Whites, to whom it gives an outlet for genuine investment, who must retain some control over the operation of this company which is classified for various purposes as White or non-White according to the control of the company. It is a problem which must be looked into; it is a very real problem. There are instances where it becomes necessary to move from one place to another. Let us take as an example a manufacturer that has to move from District Six to the industrial area of Bellville South. The only way this manufacturer can do it is to get finance somewhere, and he is usually offered financial assistance by White persons who go into business with him. The result is that the White person ends up by having a majority interest because of his financial holding in it. In order to assist that man they have to get around the law in some way or another. I agree with the hon. member that this is a matter which needs investigation and which poses a problem to the Coloured entrepreneur who tries to develop his business and who needs the finance for it.

I also want to say that I support the remarks which had been made by the hon. member for Sunnyside in connection with the very heavy responsibilities on an auditor in terms of clause 280(2) of this Bill. One wonders how an auditor can ever sign such an affidavit especially during the course of the year unless he has sat down and has done a complete audit before he resigned from his position as auditor of a company. It may well be the intention that that should be so, but this is a matter which requires some consideration.

Generally there is another matter which concerns the hon. the Minister and which certainly concerns the company’s office, and that is the enormous growth in the number of private companies in South Africa. One wonders to what extent one can simplify the procedures and the work which is done at the company’s office in regard to effecting the registration of these companies. Then there is a practice which occurs more and more and which a business house, a businessman or a bank, adopts as a rule, when dealing with a private company. This private company wants facilities from, say, the bank but the bank is not interested in the accounts of this company. What it is interested in is who the directors are and the signatures of the directors who guarantee the loan that is made available to the private company. More and more people trading with private companies are utilizing that procedure and one wonders whether this burden is not becoming almost intolerable for the company’s office and whether they feel that this has been necessary at all. I believe that that is also a general matter which could be looked into.

The point in this Bill which has been welcomed by all is the provision in clause 18 for a standing advisory committee. I have some suggestions to make to the hon. the Minister, suggestions of some detail, but at this stage I do not want to do more than just to mention that I will deal with those details on Monday.