National Assembly - 25 June 2002
TUESDAY, 25 JUNE 2002 _____
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 14:02.
The Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.
NOTICES OF MOTION
Mr F BHENGU: Madam Speaker, I shall move on behalf of the ANC:
That the House -
(1) notes that Comrade Rusty Bernstein, a founding member of the South African Congress of Democrats - The SPEAKER: Hon Mr Bhengu, would you please take your seat? We are dealing with notices of motion. If you wait until we come to motions without notice, you may move this motion then.
Mr F BHENGU: It is notice of a motion, Madam Speaker.
The SPEAKER: It is notice? You do not wish to move it today? Very well. My apologies.
Mr F BHENGU: Thank you, Madam Speaker. As I was saying, I shall move:
That the House -
(1) notes that Comrade Rusty Bernstein, a founding member of the South African Congress of Democrats and former treason trialist, passed away yesterday;
(2) further notes that Peter Magano of GaRankuwa, who was sentenced to 15 years on Robben Island, and was elected a member of the Provincial Legislature in the North West province in 1994 and at the time of his death was serving as an adviser to the Premier of the North West, the hon Popo Molefe, also passed away last week;
(3) expresses its sincere condolences to the family and friends of the deceased comrades; and
(4) acknowledges the important role these comrades and cadres of our movement played in the struggle for a free, nonracial, nonsexist and democratic South Africa.
The LEADER OF THE OPPOSITION: Madam Speaker, I give notice that I shall move on the next sitting day:
That the House -
(1) notes that the floor-crossing legislation will be examined by the Constitutional Court soon;
(2) notes that the Democratic Alliance supports the principle that, subject to conditions, representatives should be able to follow their consciences and parties should be able to merge; (3) notes further that the DA believes that when floor-crossing leads to changes of governments or administration, the will of the people should be tested and a special election held so that a democratic mandate can be obtained; and
(4) therefore challenges the ANC-New NP alliance to place the people first and politicians second and agree to hold elections in the Western Cape and in KwaZulu-Natal, or anywhere else where a change of administration follows not on an election but on the movement of politicians.
Mr A M MPONTSHANE: Madam Speaker, I give notice that I shall move on behalf of the IFP:
That the House -
(1) welcomes the decision by the OAU not to recognise the government of Madagascar’s President Ravalomanana;
(2) whilst this decision comes six months after the elections in Madagascar, appreciates the fact that the OAU is finally prepared to isolate governments which lack constitutional legitimacy; and
(3) encourages African governments to ensure their readiness to uphold their commitment to constitutional democracy and to desist from changing constitutions whenever it suits their political whims, thereby causing political paralysis which often accompanies such arbitrary actions.
Mrs N R SHOPE: Madam Speaker, I hereby give notice that I shall move on behalf of the ANC:
That the House -
(1) notes reports that three Polokwane police station officers were arrested on Saturday following the death of a policeman, Leonard Hlagala, on Friday;
(2) further notes that the arrested police officers are alleged to have assaulted and killed Inspector Leonard Hlagala; and
(3) commends the SA Police Service for moving swiftly and bringing those who are alleged to have assaulted the police inspector to book.
Mnr F BEUKMAN: Mevrou die Speaker, ek gee hiermee kennis dat ek op die volgende sittingsdag, namens die Nuwe NP, sal voorstel:
Dat die Huis -
(1) kennis neem -
(a) van die inisiatief van Abrie Botha, 'n wynboer van Vredendal,
wat 'n ooreenkoms met sy plaaswerkers gesluit het om 30% van die
aandele in 'n wingerd van 50 ha te bekom;
(b) dat dit 'n positiewe voorbeeld van die bemagtiging van
plaaswerkers is, wat navolgingswaardig is;
(c) dat dit bevestig dat vennootskappe en samewerkingsooreenkomste
tussen kommersiële boere en hul werkers 'n belangrike
vertrekpunt is om groter toegang tot grondgebruik, -besit en
-benutting te bevorder; en
(d) dat dit 'n aanduiding is dat die wingerd- en wynbedryf in die
Wes-Kaap die voortou neem om groter toegang tot geleenthede vir
die voorheen benadeelde gemeenskappe in die landbou te bevorder;
en
(2) die pogings van die Wes-Kaapse regering en die georganiseerde landbou in die Wes-Kaap ondersteun om regstreekser en konkreter langtermynsekuriteit en voordele vir plaaswerkers te bevorder. (Translation of Afrikaans notice of motion follows.)
[Mr F BEUKMAN: Madam Speaker, I hereby give notice that on the next sitting day of the House I will move on behalf of the New NP:
That the House -
(1) notes
(a) the initiative by Abrie Botha, a wine farmer from Vredendal, who
has concluded an agreement with his farmworkers to obtain 30% of
the shares in a 50ha vineyard;
(b) that this is a positive example of the empowerment of
farmworkers which is worth following;
(c) that this confirms that partnerships and co-operation agreements
between commercial farmers and their workers are an important
point of departure to promote greater access to land use,
ownership and utilisation; and
(d) that this is an indication that the viticulture and wine
industry in the Western Cape is at the forefront of promoting
greater access to opportunities for the previous advantaged
communities in agriculture; and
(2) supports the attempts by the Western Cape government and organised agriculture in the Western Cape to promote more direct and concrete long-term security and benefits for farmworkers.]
Ms N C NKABINDE: Madam Speaker, I will move on behalf of the UDM at the next sitting of this House:
That the House -
(1) notes the Mpumalanga MEC for health’s actions yesterday which attempted to silence the media in reporting the atrocities that occur daily at the Philadelphia clinic;
(2) further notes the contents of the horrific footage that candidly reports the infringements upon patients’ rights to proper medical treatment, leading to certain women performing abortions on themselves at the clinic;
(3) similarly, expresses its disbelief at the actions of the MEC for health in refusing to accept assistance from Aids volunteers, and firing a doctor that did accept and encourage that assistance; and (4) calls on the Minister of Health to urgently intervene to protect patients at public clinics and welcomes the assistance offered by qualified volunteers to lessen the burden on our already overstretched health services.
Ms N V CINDI: Madam Speaker, I shall move on behalf of the ANC:
That the House -
(1) notes that 58 people were arrested for various crimes including rape, attempted murder and theft during a crime prevention operation in Katlehong on the East Rand last weekend;
(2) believes that this reflects the commitment of members of the SA Police Service and the Government as a whole to fight crime in our communities;
(3) commends SAPS for this successful operation; and
(4) calls on all communities to work with police in fighting crime.
Mrs R M SOUTHGATE: Madam Speaker, I hereby give notice that I will move on behalf of the ACDP at the next sitting of the House:
That the House -
(1) notes with concern the recent spate of violent robberies that have been occurring in the Western Cape, in particular the cruel and heartless murder of five petrol attendants in Grassy Park early yesterday morning;
(2) further notes that these five men were honest workers and breadwinners for their families, who braved the cold every night to provide a service to people;
(3) also note that there were no safety measures in place such as surveillance cameras, security personnel, available telephones to phone the police, or an alarm to alert the police that they were under attack, all of which could have prevented this tragedy from occurring; and
(4) calls on the Government to -
(a) offer their condolences and support to the families and loved
ones of the five young men who were killed;
(b) do everything in their power to make sure that the murderers are
brought to justice, and to stand with the ACDP in urging the
community to assist the police in doing this; and
(c) ensure that garage owners provide adequate safety precautions
for their staff in future.
Dr A I VAN NIEKERK: Madam Speaker, I hereby give notice that I shall move on behalf of the FA:
That the House -
(1) expresses its concern at the insanity and grossly destructive policies of the Zimbabwean government in the face of widespread famine in the region;
(2) recognises with the DA that the order to commercial farmers to allow crops to rot and not to plant new crops at a time when appeals are being made for food aid for the region, is tantamount to condemning millions of Zimbabweans to death by starvation; and
(3) challenges President Mbeki to end his disgraceful inaction against the man who has become the Pol Pot of Africa.
Mr S D MONTSITSI: Madam Speaker, I hereby give notice that I shall move on behalf of the ANC:
That the House -
(1) notes that the Metropolitan Council of Johannesburg on 20 June 2002 resolved to donate R7,5 million for the construction of the Albertina Sisulu community centre to cater for destitute children and children living with disabilities; (2) believes that -
(a) the construction of this community centre will provide for a
much-needed service for destitute children and those living with
disabilities; and
(b) this centre will empower these children by providing facilities
that will enable them to reach their goals in life; and
(3) commends the ANC-led metropolitan council for embarking on this important initiative.
Dr J T DELPORT: Madam Speaker, I hereby give notice that I shall move -
That the House -
(1) supports all attempts to protect the assets and money of ratepayers and, accordingly, supports the Scorpions’ investigation into corruption in five municipalities governed by the ANC and New NP before the elections of 2000;
(2) believes that if any official or councillor was corrupt or dishonest, he or she must face the full force of the law; and
(3) urges the Scorpions to extend their investigations to the Mpumalanga and Eastern Cape provincial administrations and to the Nelson Mandela Metropole and the mayor, Mr Faku.
Mr H J BEKKER: Madam Speaker, I give notice on behalf of the IFP that on the next sitting day I shall move:
That the House -
(1) notes that the Governor of the SA Reserve Bank has recently announced that the repo rate will further increase by one percentage point, thereby pushing the prime lending rate to 16%;
(2) believes this increase will necessarily negatively impact on the economic growth rate and on job creation;
(3) realises the predicament of curtailing inflation;
(4) calls on the governor and the Minister of Finance to consider ways in which long-term interest factors can be separated from short-term interest rates;
(5) believes that such separation will protect long-term lenders and long- term bonds of industrialists and entrepreneurs from sporadic negative increases; and
(6) is of the opinion that the Governor of the Reserve Bank should only punish the true culprits and short-term speculators rather than those that endeavour to create true economic growth and job creation.
Ms P N MNANDI: Madam Speaker, I shall move on behalf of the ANC: That the House -
(1) notes that -
(a) Safmarine donated a building constructed from sea freight
containers to the Agape centre for abused, orphaned and
abandoned children in Waterfall, Durban; and
(b) the expanded centre is comprised of separate dormitories for
boys and girls and a central covered area which functions as a
preschool and, at different times, a women's skills training
resource;
(2) commends Safmarine for making these containers available for the needy; and
(3) calls on other companies to emulate the example set by Safmarine by donating goods and other resources to those in need.
Mr A Z A VAN JAARSVELD: Madam Speaker, I hereby give notice that I shall move on behalf of the New NP: That the House -
(1) notes that the lack of good corporate governance in public enterprises is still a great deterrent to their profitability and ultimately the success of privatisation;
(2) further notes a R10 million loss due to a weaker price as a result of the decision by an executive director, who unilaterally granted Xisaka the right to transport all its scrap iron;
(3) welcomes the Auditor-General’s quick response in the matter and urges him to assist in stamping out poor corporate governance and corruption from public enterprises; and
(4) realises that South Africa cannot afford another ``Coleman Andrews’’ who enriches himself at the expense of the millions of poverty- stricken South Africans.
TORCH COMMEMORATING BRAZILIAN EARTH SUMMIT
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:
That the House -
(1) notes that President Cardoso of Brazil handed over a torch to President Mbeki at the Museum of Modern Art, Rio de Janeiro, today as a symbolic gesture from the previous host of the World Conference on Sustainable Development;
(2) welcomes this symbolic gesture; and
(3) affirms the readiness of South Africa to host this historic conference.
Agreed to.
RAILWAY ACCIDENT IN TANZANIA
(Draft Resolution)
Mr T D LEE: Madam Speaker, I move without notice:
That the House -
(1) notes the tragic railway accident in Tanzania when an out-of-control passenger train crashed into a goods train; and
(2) expresses its condolences to families of the victims of the crash which killed at least 103 people and injured about 800.
Agreed to.
PROJECT USING SMS MESSAGES TO ASSIST TB PATIENTS
(Draft Resolution)
Mr C H F GREYLING: Madam Speaker, I move without notice:
That the House -
(1) notes the innovative project of David Green, a Cape doctor, to assist TB patients by way of SMS messages;
(2) further notes that -
(a) the World Health Organisation has recognised this project and
has also included it in its most recent global report on health;
(b) the project has now also been expanded to patients suffering
from HIV/Aids, hypertension and diabetes;
(c) Dr Green has approximately 3 000 patients in his SMS databank
who are reminded daily to take their medication;
(3) recognises this project which literally saves the lives of thousands of people daily;
(4) believes that South Africans like Doctor Green, with their attitude and commitment, give South Africa hope and motivate all South Africans to make a positive contribution to our country’s future in their respective professions.
Agreed to.
RETURN OF REMAINS OF SS MENDI VICTIMS
(Draft Resolution)
Mr D H M GIBSON: Madam Speaker, I move without notice:
That the House -
(1) remembers the deaths of 607 South African soldiers who drowned in the English Channel in 1917 when their ship, the SS Mendi, sank after being struck by another ship; and
(2) welcomes the return home of their remains for reburial 85 years after their tragic deaths.
Agreed to.
AWARD TO ZACKIE ACHMAT
(Draft Resolution)
Mr T D LEE: Madam Speaker, I move without notice:
That the House -
(1) congratulates Treatment Action Campaign head Zackie Achmat on being awarded the Personality of the Year award by the SABS, an annual award for the courageous South African who has made a difference to the lives of others; and
(2) acknowledges his efforts to improve the lives of HIV positive people in our country.
Agreed to.
MINERAL AND PETROLEUM RESOURCES DEVELOPMENT BILL
(Second Reading Debate)
The MINISTER OF MINERALS AND ENERGY: Madam Speaker, hon Deputy President and hon members, I also greet the traditional leaders and other leaders in the industry who are with us today.
In my speech today, I intend not to be triumphant but, instead, to extend an olive branch. I did not want to feed into the polarisation that the country is being pushed into - not by Government, not by labour, not by mine owners, but by people who have nothing to lose, who are using their domination of mass communication to distort all of us, and, of course, the lousy Opposition, which pretends to speak for the industry without even the mandate of the industry.
I am here to extend an olive branch because the building of this country and, particularly, turning this industry into a sunrise industry, has always been a vision shared by all stakeholders in the tripartite alliance. This is a joint project and it is our quest to turn this industry around sooner rather than later.
On 26 June 1955, the people of South Africa, led by the ANC, declared that ``the people shall share in the country’s wealth’’. Today, once more, we bring that clause of the Freedom Charter to life. We bring sharing in the country’s mineral wealth to small companies, established companies, artisanal miners, small miners and all our investors, foreign and local.
The Freedom Charter also instructs us that ``the land shall be shared among those who work it’’. The diamond diggers in the Northern Cape, who know very little about technology, but a lot about tilling the land in the hope of finding precious stones, will, in future, be assisted in order to realise value for their sweat.
The Freedom Charter further adds that ``the doors of learning and culture shall be opened’’, and through this Bill we have determined that the Skills Development Act shall apply fully in the mining industry. The workers will be multiskilled and no mine company will be able to operate without opening the doors of learning and culture to the workers. [Applause.] The wisdom of our leadership, as demonstrated in Kliptown, has, once more, shown itself to be timeless and still relevant, even today. It is a pity we did not do this sooner. Anyway, it is not too late.
An HON MEMBER: Is that from a capitalist? The MINISTER: I should like to quote the father of capitalism, Adam Smith:
No society can flourish and be happy, of which the far greater part of the members are poor and miserable.
Yes!
It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.
If even the father of capitalism implores us to share, I wonder who my friends on the left are actually following now. [Interjections.]
We desire, with a passion, to help the mineworkers who suffer from aching backs, sore limbs and the dust in their faces. We also want to benefit the homesick men in the hostels, whose lives we get a glimpse of every week in Emzini wezinsizwa. That is the road we have travelled.
Those who have eagerly and impatiently waited for decades have argued in their submissions that this Bill does not go far enough. There are those who feel that the Government has gone too far and those, like me, who feel that this is a perfect piece of legislation. Between all these contradictions, I feel that we have reached sufficient consensus, which is typical of us South Africans.
We have travelled a long way since December 1994, when the ANC released the discussion document on a minerals and energy policy. This document started off a series of negotiations and debates around the future of minerals and mining policy for South Africa.
The White Paper on Minerals and Energy was adopted in 1998, and I want to thank Dr Maduna for the sterling work that he did.[Applause.] In November 2000, Cabinet approved the draft Minerals Development Bill, which was released for public comment, and the rest is history.
Those who accuse us of rushing this Bill must have been sleeping through all of this. Those who have been excluded from this industry feel that they have waited for generations - for over a century - for this day, so this could not be said to have been rushed. In the same breath, those who have had access and who have dominated the industry remain valuable contributors and we have no wish to alienate them.
The Bill is not in any way vengeful, but is inclusive and is about accommodation. We remain convinced that, notwithstanding the public positions that we have all taken in the heat of the debate, the Bill is well rounded and many of us will be able to support it. So, even though the current dispensation may have been preferred by the existing actors, especially the establishment actors, the new dispensation is actually not strange to them because this is what they experience in many other countries in which they work.
One of the industry’s main concerns with the Bill was the granting of excessive discretionary power to the Minister. However, a comparative study between the proposed provisions and the provisions of the current Minerals Act of 1991 reveals that the discretionary powers are largely limited by the proposed provisions of the new Bill. The current Act provides for the granting of prospecting and mining authorisation to applicants, provided the regional manager is satisfied with the manner in which the mining is to be done and the ability of the applicant to mine optimally. In terms of the Act, the regional manager just has to be satisfied and does not have any restriction. Yet in the new Bill that we are proposing, there are stringent conditions and criteria that have to be met before we can refuse, and if the applicant meets the criteria, it actually states that the Minister ``must’’. So I am not so sure who is worse off here.
In the current Act, the regional manager may issue a closure certificate which will exempt a mining company from all provisions of the Act when the regional manager is satisfied that the mine has been rehabilitated to his or her satisfaction. There is a lot of ``satisfaction’’ in the current legislation. In the new Bill, it is criteria, not satisfaction, that are critical.
The Mineral and Petroleum Resources Development Bill has, on the contrary, limited this discretion and it is critical that when stakeholders argue about this, they stick to the facts, rather than perpetuating a myth that does not exist. [Interjections.]
The Minister is also obliged to approve an environmental management programme once the statutory criteria and requirements have been met, in terms of clause 38. The Bill now applies the ``polluter pays’’ principles, which will prevent future ownerless and derelict mines from shifting the rehabilitation responsibility to the state.
The debate has been shifting. During the policy development and drafting, when we had made the first draft, we witnessed the rejection of the Bill to some extent, on the grounds that security of tenure was not secured as the years for the licence were not long enough.
After examining international experience, we have been able to prove that we actually are more generous. We are offering 30 years for a licence, a renewal for another 30 years and, of course, with the ``use it or lose it’’ principle, as long as one is using it one will never lose it. In that case, security of tenure is guaranteed. When that could not hold water as a problem with security of tenure, it was then raised that the fact that BEE is not defined constitutes an insecurity of tenure. We have now defined BEE; it is in the Bill. I do not know now what will be raised next.
The contents of the Bill include national patrimony, the vesting of the mineral rights in the custodianship of the state, redress, the socioeconomic development and uplifting of mining communities, respect for the environment and the ``use it or lose it’’ principle, and, of course, it provides compensation where anybody has a reason to feel that their property has been expropriated.
It is therefore inaccurate to say that there is no compensation in this Bill. The Bill also provides for beneficiation, and I must emphasise that almost all African economies that mine stop at mining, with very little effort made at beneficiating our minerals. In that way, we export jobs.
In this Bill, beneficiation will be entrenched in the sense that as long as the market conditions prevail, the mining companies will be expected to make provisions for beneficiating in South Africa. However, where the market conditions are obviously against beneficiation, it will be possible for the mining companies to export their raw material.
We have been asked why we have legislated redress. I can tell the House that until the last 10 years, to be exact, blacks were prohibited by law from participating in the mining industry. In defining empowerment, we have included equity for new entrants, in particular, in existing and new mines, affirmative procurement, employment equity, which will expect all BEE players in the mining industry to be operational; otherwise their bona fides as genuine empowerment companies will be questionable.
We have also made it compulsory for BEE companies and their partners to have a proper training plan which will ensure that within that company there is upward mobility and there is a skills plan that will benefit the workers. All of those things put together compose what we call, not BEE, but broad-based socioeconomic empowerment.
There are benefits for communities in the form of royalties that will continue to be used for social development. We are also going to encourage the communities, especially the traditional communities, to apply for their licences and assist them to qualify so that, in their own right, they can also mine.
I would like to acknowledge the representatives of the traditional communities who are here with us today, somewhere up there in the gallery. [Applause.] So it is not true that the Government and the Bafokeng are at each other’s throats. We have found one another and we have a unified way forward. [Applause.]
The Bill also makes provision, through the money Bill, for the rehabilitation of ghost towns as well as for ensuring that the dense labour- sending areas where the miners come from will also benefit from the mining industry. The social and labour plan which is also included here, and has been thoroughly discussed with our colleagues in organised labour, will ensure that in the event of retrenchment, provision is adequately made earlier on in the existence of the mine, rather than later, that there is welfare, including housing, for the workers, that a skills development plan is in place and, of course, that the local communities which are affected by retrenchments are also taken on board.
The Bill, as it stands now, is not a Bill for racial polarisation. It is a Bill for all South Africans who must find one another. I would like to see a future where the Koekemoer and Bakgatla sons and daughters own the same mine, where one can find joint ventures between Toronto and Kwa-Mamtane.
We are not, therefore, in this instance, trying to isolate any of the players, but we are not apologetic about the aggressive empowerment that we are going to pursue. For us, that is an important test case. If we fail to redress and to change the ownership patterns, then we should not have bothered to have the Bill at all.
As for the way forward, this has been a highly emotive Bill and we would like all the stakeholders to work together. We would like the Chamber of Mines, as an important employer, to ensure that it is able to find common ground with the other actors that are coming into the industry. After all, these are going to be their partners, and we think that, as an organised employer, they continue to have an important role.
I have also instructed my director-general to work closely with Anglo Platinum, so that they can find accommodation on what is otherwise threatening to divide us and have us fighting it out in court. I hope, without compromising any principles, we will be able to help one another.
I would like to thank many people who have made this possible, starting with my staff and the drafting team which is sitting up there. Khanisukumeni. [Please stand up.] [Applause.] My staff are very young and have given it their all. [Applause.] I would like to thank organised labour for their unfailing support and robust criticism, the Chamber of Mines and black business in all its forms, which united in this Bill. [Applause.]
I would like to thank the NGOs. I would like to thank the churches for continuously calling me and urging me to move ahead. I would like to thank academics, especially Dr Wayne Colliston, for their support. I would like to thank the banks for the sound and frank advice that they have given us, to thank Bridgette Radebe and the junior and small miners that she has led. [Applause.] Jeff can pass the message on.
I would also like to thank the international investors who have done a sterling job in giving us advice and have gone a step further in ensuring that they put in place mechanisms to support BEE. Of course, I would like to thank family and friends - Bonga and Bulelani, who are sitting over there - and, lastly, Cabinet colleagues who have been supporting me. I would like to quote from Minister Manuel’s letter, which I received today. It reads as follows:
Today is a big day for you, and I thought it appropriate to wish you well.
Thanks, Trev. I always appreciate it. [Applause.]
The DEPUTY SPEAKER: Order! We have noted who started the applause for Mrs Bridgette Radebe. [Laughter.]
Mr T M GONIWE: Madam Speaker, hon Deputy President and hon members, on an occasion of such historic significance as this one, it becomes imperative for us to take stock of where we come from in order properly to understand where we are going.
Often we are told by historians that our nation came into existence when Jan van Riebeeck landed in the Cape with the three ships in 1652. Many have forgotten the fact that South Africa was already inhabited by human beings long before the arrival of the white man. Our people had, prior to the arrival of those who purport to have brought civilisation to us, lived in a system which recognised communal ownership of land. In other words, land was held in trust by the chief on behalf and for the benefit of the people.
There was mining. In Southern Africa the oldest mines are at least 26 000 years old and copper mines had tunnels that ran for hundreds of metres underground. But it was this established system of landownership which was later abused to dispossess us of our land.
No one can deny the fact that the current situation was born out of the marginalisation of indigenous South Africans. Nothing illustrates this dispossession more clearly than the loss of our land. Repressive colonial laws in the late 19th century prohibited the registration of immovable property in the name of persons whose parents were both natives. In these circumstances Africans resorted to the expedient of arranging with missionaries to buy land for them which was then registered in the name of the missionary on behalf of the tribe.
One of the colonial masters, Sir Theophilus Shepstone, did not approve of land purchased by Africans being held and registered by missionaries on behalf of tribes. He instructed that all land purchased by or for natives was to be held in trust by the secretary of native affairs for such natives. In early 1880 the government of the Transvaal Republic decided officially that the secretary for native affairs be appointed ex officio as trustee for land purchased by native tribes. After the formation of South Africa, the 1913 Land Act put the nail in the coffin for black landownership.
Why do we link landownership to minerals and mining? We are told by lawyers that South African mining and mineral laws are based on the common-law principle that states that owner of land owns everything below and above the surface of the earth. If blacks could not own land, they certainly could not mine.
Provisions under prior legislation which granted to the landowner the exclusive right to prospect together with the option to acquire a mining lease were not applicable to blacks as they could not legally own land in most of the country. A barrage of legislation that followed specifically banned black people from owning and operating mines, from managing any part of the mining industry and even from working in the mines in any capacity above that of an unskilled labourer.
In case some people in this House have conveniently short memories, we need to remind them that this country had, inter alia, laws on its Statute Book which expressly prevented blacks, merely because they were black, from having access to mineral rights. Section 133 of the Gold Law of the South African Republic, Law 15 of 1898, provided that, and I quote: No coloured person, defined to mean African, Asiatic, Native or Coloured American, Coolie of Chinaman, may be a licence holder or in any way be connected with the working of the diggings, but shall be allowed only as a workman in the service of whites.
Twenty-five years ago, in our own lifetime, mining legislation under which the mineral laws of South Africa were consolidated provided that no prospecting permit would be issued to any coloured person or to any black person. This was repealed only 10 years ago without any significant change in the patterns of ownership.
It is a little-known fact that many indigenous South Africans actually owned and worked diamond claims, firstly on the Vaal River diggings and then in the four diamond mines operational in Kimberley prior to July 1872. In fact, available evidence shows that in mid-1872 at least 80% of all diamond mines were owned and worked by indigenous people for their own account. No compensation was paid to those blacks and coloured persons whose wealth and claims were seized.
In July 1872 the introduction of certain pass and other laws removed all mineral rights ownership from indigenous people and restricted their movement, thus curtailing their economic effectiveness. Cecil John Rhodes’s laws, passed around 1887, it will be remembered, effectively reduced all black people to a life as a source of cheap labour, imprisoned by poverty and excluded from any resource ownership. Had all this never happened I have no doubt in my mind that blacks, too, would have formed their own giant mining houses.
The liberation struggle waged by the oppressed masses of our country, led by the ANC and its allies, was informed by the need to correct these social and economic injustices. The rise of the trade union movement in the mining industry was a direct response of the mineworkers to the effective marginalisation of black workers as mere purveyors of cheap labour. The early struggles of black mineworkers were throttled by the apartheid regime. The mining sector, of course, sat at the heart of the apartheid state, which denied black South Africans economic and political power in their own country.
The spirit which inspired early mining unions is captured in the Freedom Charter, drafted almost 57 years ago by hundreds of ordinary workers, peasants, businesspersons, intellectuals, professionals, youth and women of all nationalities. The Freedom Charter declares, and I quote:
The mineral wealth beneath the soil shall be transferred to the ownership of the people as a whole.
The same spirit found further expression in the mass struggles of the 1970s and, in the 1980s, in the rise of the biggest mining union in the world, the National Union of Mineworkers.
Those of us who were inspired by the dedication of our forefathers and mothers, by their fundamental values of freedom, equality and social justice, by their heroism and resistance, believe and demand that the injustice of our past, which is still part of the current mining dispensation and industry, ought to be dealt with and will be dealt with firmly, once and for all.
It is a known fact that minerals and the mining industry in this country were built on the sweat and blood of the African people. If today we were to count the number of our people who gave their lives and sacrificed their families for this industry, those who oppose this Bill, including the official opposition, should realise that a failure by this Parliament to bring about equity in this sector would amount to a betrayal of their legacy. We cannot allow their suffering to have been in vain.
Hundreds of our best comrades, the likes of comrade Johannes Nkosi, Moses Kotane, Moses Mabida, Bram Fischer, Chief Albert Luthuli, J B Marx, A Nzulu, J Nkosi, E T Mofutsanyana, Joe Slovo, Chris Hani, Oliver Tambo, Govan Mbeki, Steven Tshwete, Peter Mokaba and many more gave their lives for the freedom and social and economic emancipation of the African people and all South Africans. [Applause.]
Mandela, Sisulu, Mbeki, Mhlaba, Goldberg, Kathrada, Motsoaledi and Mlangeni
- and many others, some of them present here, including our Deputy President - were subjected to prolonged imprisonment and torture. Some were even murdered. Vuyisile Mini, Khayingo, Ruth First, Joe Gqabi - all were murdered for a simple sin: the desire for freedom and social and economic justice and a place under the sun for their brothers and sisters. [Interjections.]
Our struggle for social and economic justice culminated in the first democratic election in 1994 and the adoption of a constitutional dispensation which is the embodiment of the will of all South Africans, black and white. This Constitution promotes the principles of equality and enjoins the state to pass legislation to redress the results of past racial discrimination. [Interjections.]
Mr W J SEREMANE: [Inaudible.]
Mr T M GONIWE: I am coming to you; just hold your horses.
Habitual liars have tried to deny the need to transform the minerals industry. They would rather have us believe in our own oppression and exploitation. They implored us to believe that there is nothing wrong with the mining industry and that it does not need transformation. They argued that skewed ownership patterns are good for the industry and the country. The truth is that the current regulatory framework is only good for the mining bosses and their puppets and the privileged few. [Interjections.]
To expect Africans in particular and blacks in general to be happy when the current regulatory dispensation effectively limits them to menial and dangerous jobs at low wages, when they effectively have no way to own and benefit meaningfully from their own God-given heritage, a heritage for which they have claimed their stake by pain, sacrifice, tears and blood is not only futile but cruel, immoral and criminal. [Applause.]
The DEPUTY SPEAKER: Hon Goniwe, your time expired long ago.
The LEADER OF THE OPPOSITION: Madam Speaker, on a point of order: Is it parliamentary for an hon member of Parliament - I am sorry, I do not know her name, but she is sitting behind the hon Mr Nash - to point her tongue out and to wave her hands in the air? [Laughter.] Is that an appropriate parliamentary form of expression? Perhaps you could rule on that. [Interjections.]
The DEPUTY SPEAKER: Order! Hon Leon, I do not know about an hon member sticking her tongue out. I would have to see it in the video, and then we could determine whether it is parliamentary or not. Hon Goniwe, you make take your seat.
Mr T M GONIWE: Madam Speaker, I just wanted to say that_
The DEPUTY SPEAKER: Hon Goniwe, your time has expired.
Mr T M GONIWE: _ the ANC supports the Bill. [Applause.]
Mr I O DAVIDSON: Madam Speaker, I must tell you that the lady who stuck her tongue out and waved at me refers to me as her husband in the committee. [Laughter.]
However, I wish to say something quite categoric at the outset of my speech, and I want the ANC to listen and, more importantly, hear. The DP is in favour of promoting equitable access for all South Africans to the minerals of South Africa. It does believe in the rapid expansion of opportunities for the historically disadvantaged. It does have a firm agenda for the promotion of employment and the advancement of the social and economic welfare of all South Africans.
These are not the issues here before us. What is at issue and what is in this Bill, as currently constructed, separates these issues from considerations of investment and investor confidence. These issues are inextricably linked. Without investors, there will be no black economic empowerment, no job creation, no wealth generation, no social upliftment and no rural development. [Interjections.]
Mr T M GONIWE: We will do it ourselves.
Mr I O DAVIDSON: But first a word about the process. I must inform hon members that the committee set out an exemplary public participation process. Over 80 submissions were received, many of them detailed and with constructive input. When the committee set out to deliberate, however, it made a mockery of that process. Scant attention was paid to the inputs. There was little debate and often, when a debate was attempted, the Chair would purposefully say to his side of the House: ``Do we really want to debate this? The ANC has already decided.’’ This is clearly a new meaning as far as steamrollering is concerned. The process was a disgrace and an insult to those who submitted proposals and a perversion of the institution of Parliament itself.
As for the Bill itself, firstly on the constitutional issue, cogent and detailed submissions were made to the effect that the Bill, as it stood, did constitute a direct assault on the property rights clauses of the Constitution. Although attempts were made yesterday - I repeat, yesterday - to overcome this, my advice is that the Bill remains fundamentally flawed.
In order to have an informed debate, the state law advisor was requested, early on in the process, to table his opinion. We are still waiting. A short verbal opinion was given which, quite frankly, had even ANC members, for once, stunned into an embarrassed silence. It was an opinion short on words and even shorter on substance.
Secondly, it is vital that those investing in our mining industry are afforded adequate levels of security of tenure. While this has been addressed in certain instances, it falls way short in others, namely what area constitutes a mining right and the need to cater for natural extensions to mining operations while preventing hoarding.
This was agreed at Mbulwa, but the Government is fast backtracking from it. Our legislation needs to address the economics involved in deep and complex mineral reefs which require massive investment and very long planning and investment lead times. This Bill achieves just the opposite. The effect is to discourage very large capital-intensive projects, with huge potential job loses. Little wonder that the captains of the industry met in an emergency session with members of the Cabinet over the weekend in a last- minute attempt to achieve a breakthrough on this subject, but to no avail.
To compound the matter, pending applications under the current Minerals Act are now to be considered under the new Act, prompting at least one mining house, as the Minister said, to seek redress in the courts. Section 10 rights under the current Act, which were brushed aside by the chairman as an irrelevance in the current proceedings, were about to be dropped until it dawned on that side of the House that their exclusion would bring Iscor to a grinding halt. Such is the level and the extent to which this Bill has been thoroughly thought through.
Thirdly, while the Bill tightens up the whole question of ministerial discretion in certain respects, in other respects, via the back door, it opens it by linking the fulfilment of key objectives of the Bill - black economic empowerment, the social plan and the new labour plan - to the most important regulatory consents in the Bill, namely the granting of prospecting and mining rights.
These objectives, despite what the Minister says, are vague and ill- defined. We heard that and again across the representations to that committee. Substance was to be given to these concepts in the form of a charter negotiated with the industry. But when we came to finalising that clause, the ANC, in a fit of pique and power-hungry vengeance, even withdrew the requirement that the Minister must consult within the industry in this regard.
Finally, redress to the courts is limited to the judicial review of administrative decisions. An appeal in respect of the law or fact is denied.
What this country needs is a Bill which promotes access to all and addresses issues of empowerment and social objectives while, at the same time, enhancing investor confidence by creating, in line with Nepad objectives, a mining regime that is internationally competitive in every possible respect. In this respect we have failed. [Applause.]
Mr E J LUCAS: Madam Speaker, for more than 100 years the mining industry has formed the backbone of the South African economy. Over the period, the industry has created hundreds of thousands of jobs, provided a lifeline for millions of dependants and created and expanded the foundation for a modern and a vibrant economy.
Even though certain sectors of the industry have been in decline over recent years, the industry remains vital to South Africa’s long-term economic wellbeing. The importance of the mining industry cannot be disputed, but it is also a fact that the industry benefited from apartheid racial discrimination by entrenching patterns of ownership and excluded the majority of South Africans.
Although some progress has been made since the early 1990s, ownership in the industry is still dominated by a minority. Clearly this situation has to change. Another historical development that characterises our mining industry is the fact that mineral rights are owned by private persons and the state. While some may argue that dual ownership of mineral rights has enabled the successful development of mining in our country, it is also a fact that the private ownership of these rights is limiting opportunities for new entrants and new investors to gain meaningful access to the industry.
The Bill, therefore, seeks to transform the mining industry in such a manner that it is brought into line with the realities of the new South Africa, particularly in respect of broadening the ownership base and empowering the historically disadvantaged. The IFP supports these overriding objectives and we therefore support the Bill. [Applause.]
Notwithstanding our generous support, the IFP must express certain reservations and concerns about the Bill. Black economic empowerment is obviously vital to the long-term success of the economy and indeed our democracy. But black economic empowerment should not be boardroom empowerment, where only a select group of historically disadvantaged persons benefit. It also should not mean the exclusive creation of a new range of so-called junior miners or small miners only. Empowerment should mean meaningful participation for historically disadvantaged persons - very importantly, communities - in the ownership and management of mining ventures that will benefit all concerned.
Mining requires billions of rands in initial and ongoing investment and years of preparatory work before the first profits are realised. Our concern is that the investment requirements of modern mining will have the effect of limiting access to the industry for historically disadvantaged persons who do not have the necessary means to raise the necessary funding. If this proves to be the case, the objective of the Bill empowering historically disadvantaged persons will not be met. I do note that the Bill has made some arrangements for financial support.
The question of royalties currently being received by communities from mining operations is a very sensitive one. The IFP feels that the state should ensure that royalties are ploughed back into the communities from which they are derived. If this does not happen, previously disadvantaged communities may find themselves further disadvantaged and disempowered.
The Bill provides that current recipients of royalties will continue to receive them for a period of at least five years if certain criteria are met. The IFP welcomes this amendment but questions why the period has been limited to five years and why no provision has been made for the possibility of new recipients of royalties in future.
The IFP welcomes the fact that the Bill provides for the creation of a socioeconomic empowerment charter that will establish a framework, targets and timetable for the entry of historically disadvantaged persons into the mining industry. However, the ruling party decided at the very last minute that the Minister will not have to consult stakeholders on the charter. The IFP must object strenuously to this ill-considered move.
Since 1994, a prominent feature of our young democracy has been thorough consultation between all stakeholders on matters of policy and law. It is a mystery why the ruling party suddenly decided that in this instance, no consultation should take place on this vital charter. This certainly was not the case when a similar charter was negotiated in the liquid fuels industry. The IFP can only express its sincerest hope that the Minister will consult the industry on the contents of the charter. We acknowledge that she has always walked the extra mile as far as consultation is concerned. We are confident that this will again be the case.
The constitutionality of certain provisions of the Bill has been hotly debated both inside and outside Parliament. The Minister has on numerous occasions stated the Government’s firm belief that the Bill is in line with the Constitution. Other affected parties have equally strongly stated their belief that the Bill is unconstitutional. It should, therefore, come as no surprise if the Bill is challenged in the Constitutional Court before long.
Mining, like all other business ventures, suffers from uncertainty in the legislative and regulatory framework within which operations must be conducted. Doubts about the constitutionality of the Bill are just one manifestation of such uncertainty. The IFP would therefore respectfully suggest to the Minister that it would be in the interest of all stakeholders that the Bill be referred to the Constitutional Court by the Government before it is implemented.
Finally, the IFP feels it was unnecessary for the Bill to be processed by Parliament almost with undue haste. We accept that legislative certainty should prevail sooner rather than later, but the fact is that the Bill cannot be implemented before the accompanying money Bill is approved by Parliament or before the Minister has published the necessary regulations. Surely these practical considerations would have made it possible for Parliament to spend a little more time fine-tuning the Bill. As it is, we can only hope that all possibilities have been covered and that no unintended consequences will result from the Bill.
In closing, I want to reiterate an earlier statement: Although we have some reservations and concerns, the IFP will support the Bill. [Applause.]
Ms L M T XINGWANA: Madam Speaker, hon Deputy President, hon members, ke dumedisa dikgosi tsa heso tsa Bafokeng, tsa Bakwena le tsa Bakgatla. [Ditlatse.] [… I greet our chiefs from the Bafokeng clan and the Bakgatla clan. [Applause.]
We greet the representatives mining industry, who have been with us here throughout the deliberations. I also want to greet the black businesspeople that yesterday broke ranks and stood up for the truth and justice. [Applause.] We thank them very much. I also want to greet oomama naboobaba abalapha namhlanje [the mothers and fathers who are here today], because today we have come to celebrate the Freedom Charter. [Applause.]
The passing of the Mineral and Petroleum Resources Development Bill in this House today, and in the NCOP tomorrow, signifies the celebration of the Freedom Charter adopted at the Congress of the People on 26 June 1955 in Kliptown. The passing of this Bill on the eve of Freedom Charter Day ushers in a new dawn of transformation for our economy.
In the Congress of the People, 47 years ago, our people declared that``the people shall share in the country’s wealth’’, and that the national wealth of our country, the heritage of South Africans, shall be restored to the people’’. This Bill gives effect to the aspirations of our people.
Today, I want to pay tribute to our mineworkers, who have paid with their blood and their lives so that South Africa can be where it is today. [Applause.] I also wish that all of us would remember -
… ooNohombile, ooMaNyawuza, ooMamtaung, ooMamkoena nooMamkhize abafelwe ngamadoda abo ngokuthi awelwe yitafile ngaphantsi emigodini yegolide, eyeplatinum okanye idayimani. [Kwaqhwatywa.]
Emveni koko, ndiza kuthi gqaba gqaba ukuchaza ukuba lo Mthetho uYilwayo usiphathele ntoni na thina, singoomama. Kambe, phambi koko, ndifuna ukugqibezela ngophando phaya kuqabane uGoniwe ngembali yemigodi nento eyenzileyo koomama nabantwana beAfrika. (Translation of Xhosa paragraphs follows.)
[Ms L M T XINGWANA: The Nohambiles, whose husbands have died by being buried in gold, platinum and diamond mines when these collapse. [Applause.]
After that, I will briefly explain what this Bill has to offer us, women. However, before that, I would like to report to comrade Goniwe on the research conducted about the history of mines and the impact they had on women and children of Africa.]
The discovery of minerals in South Africa resulted in the creation of the migrant labour system by the colonial and racist governments of the day in collusion with the captains of the mining industry and the agricultural sector. The advent of the migrant labour system resulted in the socioeconomic underdevelopment of our rural areas, and the impoverishment of the African people and their families, as African men were forced to go and work in the mines, leaving their wives to bring up their children alone in abject poverty over long periods of time. [Interjections.]
Alizange, eli lungu elihloniphekileyo, limshiye lona umfazi walo elamba. Lihlala nomfazi walo iiyure ezingama-24 bonke ubomi balo. [The hon member did not have to leave his wife behind hungry. He stays with his wife 24 hours a day all his life.]
That is not happening to our mineworkers. [Applause.]
The women’s role was virtually to reproduce future generations of cheap, unskilled, poorly paid labour for the mining industry, the agricultural sector and other industries. Today, eight years after our hard-won democracy, 70% of the hostels in the mines are still single-sex hostels. The long forced separation of our families has had a devastating effect on African family life and has destroyed the social fabric of rural African communities, where children grew up without their fathers, who only came home when they were old, sick and about to die … … kuthiwe utata watshipha, waphelela eRhawutini, kungachazwa iingxaki naye utata ajongene nazo. [… it would be said that the father deserted his family and went to stay permanently in Gauteng, and the difficulties he experienced never would be mentioned.]
The single-sex hostels have also contributed in no small measure to the current HIV/Aids pandemic. HIV/Aids infection rates in mining areas, for example Carletonville, are 60% to 70% - over three times higher than the national average. Although most mining houses have embarked on HIV/Aids campaigns, single-sex hostels lead to prostitution, which is also very high in the mining areas and has resulted in these high HIV levels.
Again, the mining industry must take responsibility for these problems. It is sad to note that this has occurred against the backdrop of massive wealth accumulation by the captains of the mining industry and increasing suffering, hunger, disease and poverty for our people.
One just needs to look at the neighbourhoods of the mining areas such as Cullinan. Cullinan is a little England. They have little English houses, little English cars, little English doors, everything a little English museum, when just outside there our people are languishing in poverty. Galeshewe is the same and also our labour-sending areas such as the former Transkei, northern Natal, the Limpopo province, Lesotho and others; one stares poverty in the face when one comes to these areas.
The areas are devastated by famine, cholera, TB, HIV/Aids and illiteracy. Not much has been done by the mining houses to improve matters and to alleviate the suffering in the former Transkei, in Welkom right now, in Galeshewe and in many other areas where our people are languishing in poverty. My own grandfather died of phthisis and TB as a pauper in the Transkei after spending his life-time in the goldmines in Johannesburg. [Interjections.]
I also want to address the biltong issue. Let me quote from the Minister’s speech on her Budget Vote:
… one white company is holding 63% of South Africa’s platinum reserves. In manganese, only two white companies hold 83% of the total manganese reserves and in the gold, also two white companies hold 51% of the total reserves. In diamonds, one white company controls 95% of South Africa’s production.
Abanantloni. [They are not ashamed.] [Laughter.] [Applause.]
Those who are asking for biltong still want some more, over and above 80%, 60% umntu emnye. [per person.] [Laughter.] Is this justice? Is this fairness?
Hayi, thina asiwufuni lo mqwayito, othi makutye umntu abe mnye nomkakhe. Futhi lo mqwayito womile, awunawo nomhluzi. [Kwahlekwa.]
Thina sikhule kuxhelwa emakhaya, sikhule kubizwa abantu xa kuxheliwe, inyama ithatyathwe ibekwe esithebeni, ifike indoda nemela yayo, isike, isikele nabantwana, zikhona nezithebe zamakhosikazi. Sithi: Mamlambo, thabatha inyama yesizwe uyibeke esithebeni abantu batye. [Kwaqhwatywa.]
Bubuvuvu nobuxoki into yokuba abatyali-zimali bayalibaleka eli lizwe. Amakhosikazi amaxhaphetshu KwaZulu-Natal emba udongwe, amalahle eNew Castle, eNdwedwe. Amakhosikazi, ngoku emba igolide eBarbaton. Amakhosikazi afuna ukuya kuqeqeshwa ukuze enze izitya ngoluya dongwe, ukuze enze iithayile zophahla, izitena kunye neethayile zodonga.
UMphathiswa ubathumela ngomso oku eIndiya, besiya kuqeqeshelwa ukukwazi ukwenza eziya zitya, bazizobe, singaphindi sizithenge eItaly, singaphindi sizithenge eNgilani. [Kwaqhwatywa] Siza kuzithenga apha ekhaya. Siza kudala amathuba empangelo.
Amakhosikazi athi ukuba uplatinum akayifuni le platinum nale dayimani makayizise apha kuwo. Akaxakekanga wona; anguVukuzenzele. Akasayi kuthi thina asingabo abathengisi bamajikazi, singabembi-migodi. Asisayi kuzuza. Kudala sazuza ngexesha likaCharlotte Maxeke singooVukuzenzele, sizenzela. Aza kuzenzela amakhosikazi, Mphathiswa.
Asisayi kubanika lo mqwayito. Sidiniwe kukudibana nedayimani yethu sele iseNgilani, singayazi ukuba iye kanjani. Sidibana negolide eNgilani kunye neemoto eJamani. Sifuna ihlale apha le ntsimbi yenza injini, siyiqale phantsi injini yemoto. Ndicela uMphathiswa wezoRhwebo noShishino noMphathiswa weZemali bahlangane noMphathiswa weZimbiwa naMandla. Kwithuba leminyaka eli-10, masibe sele sinayo eyaseMzantsi Afrika imoto; siyiqale phantsi. [Kwaqhwatywa.]
Zii-SMMEs ngapha namakhosikazi. Zininzi iinkampani ezifuna ukusinceda. OoCorobrick balapha eMzantsi Afrika benza ilinge lokuseka ishishini kunye namakhosikazi, ooTyco baseAustralia, ooAfro-ore baseKhanada. Ziintsomi ezi zithethwa apha lilungu elihloniphekileyo uDavidson ezithi abatyali-zimali bayabaleka. Ufanele kukuba uhlala eMars, akahlali apha kule planethi yethu. Abatyali-zimali bahleli apha eMzantsi Afrika, yaye baqhubela phambili. (Translation of Xhosa paragraphs follows.) [No, we do not want this biltong that can be had only by a man and his wife. And, this biltong is dry; it does not even have gravy. [Applause.]
We grew up in homes where we used to slaughter, and the meat would be put in reed trays, a man would take out his knife, cut a piece, cut pieces for the children, and there would be reed trays of meat for women too. We say: Daughter of the Mlambo clan, take the nation’s meat and put it on a tray and let the people eat. [Applause.]
It is utter nonsense and a lie that investors are running away from this country. Women are busy digging clay, coal in New Castle, at Ndwedwe. Women, at this moment, are miners in Barberton. Women need to be trained to do pottery so that they could make roof tiles, bricks and wall tiles.
The hon the Minister is sending them to India, they will be leaving tomorrow to attain training in making these dishes and decorate them, so that we do not have to buy them from Italy and England any longer. We will buy them here, at home, in our country. We are going to create jobs. Women say that if platinum magnates do not want platinum and diamond, they should bring it to them. They are not that busy to take up that task; they have taken up the Vukuzenzele campaign. They will not say that they do not sell necklaces, but are miners. We shall not gain. We have been gaining since the time of Charlotte Maxeke, doing for ourselves. Women are going to do things for themselves, hon Minister.
We shall not give them this biltong. We are not content with the fact that we find our diamond in England, not knowing how it got there. We find our gold in England and cars in Germany. We want the steel that is used to make cars to remain here; we want to build a car from scratch. I would like to appeal to the hon the Minister of Trade and Industry and the hon the Minister of Finance to meet with the hon the Minister of Minerals and Energy. In ten years time, we should be able to produce a car from its beginning in South Africa. [Applause.]
On the other side it is SMMEs and women. There are many companies that want to assist us. Companies like Corobrick based in South Africa are making an effort in conjunction with women, to establish business; Tyco from Australia is another one as well as Afro-ore from Canada. The hon member Mr Davidson is only telling folktales when he says investors are withdrawing. He must be living in Mars, and not on the same planet as us. Investors are in South Africa to stay and they are making progress.]
They have set aside funds to assist in empowering our people. They are ready for joint ventures and are waiting to talk to the Minister.
UMphathiswa simnika iinyanga ezintathu. Eziya nyanga zintandathu zinde. Makagqibe laamqulu. UMphathiswa uza kuchola-chola iingcebiso. Umntu makanga bingoxakekileyo, makafumaneke. Sifuna ukugqiba ngalo mcimbi. [Kwaphela ixesha.] [Kwaqhwatywa] (Translation of Xhosa paragraph follows.)
[We give the hon the Minister three months. The period of six months is too long. She should complete that document. The hon the Minister will be open to ideas and suggestions. One must not be too busy; one should be available. We would like to finalise this matter. [Time expired.] [Applause.]]
Mr A H NEL: Madam Speaker, let me say upfront, so that there can be no misunderstanding, that we support the objects of the Bill in so far as there must be equitable access to mineral and petroleum resources and the opportunities for previously disadvantaged persons must be substantial and meaningful. We also support the promotion of economic growth and employment and the advancement of the social and economic welfare of all South Africans. I know no one, here in Parliament or outside in the industry, who does not agree with this.
What we in the New NP cannot support is the structure of the Bill, in that it may affect the right to own property, and we believe that mineral rights are property rights.
Dit is ‘n uiters belangrike stuk wetgewing wat vandag hier voor ons dien, want dit raak nie slegs die mynbedryf nie, maar ons ganse ekonomie. Alhoewel die mynbedryf nie vandag meer so ‘n groot deel van die BBP uitmaak soos vroeër nie, is dit een van die vertakkings van die ekonomie wat die meeste buitelandse investering trek. Om dié rede is die persepsie wat die onderhawige wetgewing, wat oor eiendoms- en besitreg gaan, gaan skep, van die uiterste belang. Die struktuur van die wetgewing maak dit baie duidelik dat die staat die bewaarder van die mineraalbronne van Suid-Afrika is. Dié feit beteken nie per se dat die staat die regte op die bronne oorneem nie, maar wanneer ‘n mens verder daarop let dat dié wetgewing alle verwysings na mineraalregte in vorige wette of dele van wette verwyder, begin kuratorskap ‘n heel ander betekenis kry.
Die wyse waarop die struktuur van die wetgewing onsekerheid bring ten opsigte van die besitreg van minerale, kan mos nie vir ons land goed wees nie. Uiteenlopende menings bestaan oor of die bewaring wat die staat oor die mineraalbronne oorneem, neerkom op onteiening, en of die vergoedingsbepaling voldoende is om te beantwoord aan artikel 25(2) van die Grondwet. Bekende regspraktisyns het ‘n baie sterk saak uitgemaak as sou die wetgewing onteiening teweegbring, en nie voldoen aan die reg op besit van eiendom, soos vervat in die Grondwet, nie.
Die staatsregsadviseurs het weer gesê dat die staat die reg het om mineraalregte te ontneem, soos vervat in artikel 25(1) van die Grondwet, omdat die staat ‘n verpligting het om die natuurlike hulpbronne in die land billiker te verdeel. Ek is nie ‘n regsgeleerde nie, maar my regverdigheidsin sê vir my dat, ondanks die feit dat ek saamstem dat natuurlike hulpbronne beter verdeel moet word, die staat nie sy verpligtinge, soos in die Grondwet verwoord, kan afskuif op gewone mense wat regte volgens legitieme wette bekom het nie. Een van die medevoorsitters van die komitee se mening was dat sekerheid oor of die wetgewing aan die voorskrifte van die Grondwet beantwoord, slegs deur die Konstitusionele Hof uitgewys kan word. Ek stem daarmee saam. (Translation of Afrikaans paragraphs follow.)
[It is an extremely important piece of legislation that is before us today, because it does not only concern the mining industry, but our entire economy. Although today the mining industry does not form such a large part of the GDP as it did before, it is one of the sections of the economy which attract the most offshore investment. For this reason the perception that this legislation is going to create, which concerns the right of possession and ownership, is of the utmost importance. The structure of the legislation makes it very clear that the state is the custodian of the mineral resources of South Africa. This fact does not mean that the state is taking over the rights to the resources per se, but when one notes that the legislation removes all references to mineral rights in previous laws or parts of laws then custodianship starts getting a completely different meaning.
The manner in which the structure of the legislation brings about uncertainty with regard to right of possession of minerals surely can not be good for our country. Then there are different opinions about whether the custodianship of the mineral resources, taken over by the state, amounts to expropriation and whether the compensation clause would be a sufficient answer to section 25(2) of the Constitution. Well-known law practitioners have made a strong case that the legislation brings about expropriation and does not comply with the right to ownership of property as contained in the Constitution.
On the other hand, constitutional law advisors have said that the state has the right to expropriate mineral rights, as contained in section 25(1) of the Constitution, because the state has a responsibility to distribute the natural resources in the country more fairly. I am not a lawyer, but my sense of justice tells me that, apart from the fact that I agree that natural resources should be better divided, the state can not devolve its responsibilities, as expressed in the Constitution, on ordinary people who obtained rights in terms of legitimate laws. The opinion of one of the co- chairpersons of the committee was that certainty on the legislation that must answer to the prescriptions of the Constitution can only be identified by the Constitutional Court. I agree with this.]
The question that we must ask is: Is there another way? I think there is. We all know that land and mineral rights have been taken away from indigenous people in the past. We have tried to redress the land issue by passing legislation in this House to achieve land restitution. And we follow a policy of land reform to get a more equitable ownership of land.
But, in the case of minerals, through this Bill, we take away people’s rights, even those of communities like the Bafokeng. [Interjections.] I think this is wrong. The Minister should have made use of methods like restitution and reform to get a more equitable dispensation. Instead, she uses methods, through this Bill, which could probably divert foreign investment to countries which have more friendly systems and security of tenure.
We are in a global economy, whether we like it or not, and the Minister should take cognisance of that. The fight in the world today is to lure foreign capital to one’s country with incentives and friendly regulations, not chase them away with prescriptions of how they may or may not use their money.
Ter afsluiting, wil ek sê baie verbeteringe is aan die wetgewing aangebring. Hiertoe het alle betrokkenes, asook komiteelede van alle partye, meegehelp. Dit is nogtans ‘n jammerte dat, ná ‘n lang proses van meer as twee jaar, die indruk gewek is dat die afhandeling van die wetgewing deurgehaas word. Met meer tyd tot hul beskikking, kon die komitee, die departement en alle betrokkenes met beter wetgewing na vore gekom het.
Ons sal die wetgewing steun, met tekortkomings en al. [Applous.] Stadig! Stadig! Ons sal dit steun indien geen onsekerheid bestaan oor die aantasting van die eiendomsbepaling in die Grondwet nie. Daarom doen ons ‘n beroep op die Minister om die Regering se erns oor die regte in die Grondwet te bewys deur die President te adviseer om dié wetgewing na die Grondwetlike Hof te verwys voordat hy dit onderteken. Ek herhaal: so ‘n onderneming sal dit vir ons moontlik maak om die onderhawige wetgewing te steun. [Applous.] (Translation of Afrikaans paragraphs follows.)
[In conclusion I would like to say that many improvements have been made to the legislation. All role-players, including committee members of all parties, contributed to this. It is regrettable, however that after a long process of more than two years, the impression has been created that the finalisation of the legislation is being rushed. With more time, the committee, the department and the role-players could have come up with better legislation. We will support the legislation, warts and all. [Applause.] Slowly, slowly! We will support it if there is no uncertainty regarding the way the property clause in the Constitution is affected. That is why we are appealing to the Minister to prove the Government’s seriousness regarding the rights in the Constitution by advising the President to refer this legislation to the Constitutional Court before signing it. I repeat: Such an undertaking would enable us to support this legislation. [Applause.]]
Mna M N RAMODIKE: Ke a go leboga, mohlomphegi Motlatša-Sepikara. Maloba ge re be re le ditherišanong tša Codesa kua Kempton Park, bao re ilego ra tšea karolo, re ile ra kwana ka molomo wa lehlabula gore Molaotheo o moswa wa naga o fe bathobaso ditokelo tša mahumo a meepo a lefase la gabo bona. Molaotheo woo o tlago ka mohlomphegi Tona o fa bathobaso ditokelo tša mahumo a meepo nageng ya bago bona. Ga o ba amoge ona! Re le ba UDM re a o thekga. [Legoswi.] (Translation of Sepedi paragraph follows.)
[Mr M N RAMODIKE: Thank you, Madam Deputy Speaker. Some time ago, during the Codesa negotiations, at Kempton Park, those of us who participated in the negotiations agreed unanimously that the new national Constitution must give black people, Africans, mineral rights in the land of their birth. The constitutional amendment which the Minister is bringing to this House gives black people mineral rights in the land of their birth. It is not taking it away from them! The UDM supports the Bill. [Applause.]]
We indeed recognise that the task of drafting this Bill and piloting it through to Parliament has been tough, long and bumpy. The UDM appreciates the inclusion of preferent, prospecting or mining rights in respect of communities in terms of clause 104 and the inclusion of exemptions from certain provisions of the Act.
These clauses address the concerns expressed by the UDM in our written submission, in which we made some proposals concerning the land surface rights. These clauses will, to some extent, redress the injustices flowing from the failure of the previous colonial and apartheid regimes to afford recognition and dignity to land rights held in terms of indigenous law.
The UDM recognises that the fundamental principles of this Bill are, indeed, internationally accepted and that the Bill seeks to address the inequalities, imbalances and injustices of the past. The UDM also recognises that the Bill seeks to eradicate all forms of discriminatory practices in the mineral and petroleum industries.
We recall the special provisions of the constitutions which governed the former bantustans during those dark days of apartheid which were designed to reserve matters for legislation and administration by the former self- governing territories, and specifically mineral and land rights. These provisions prevented and prohibited black people from owning mineral and mining rights and from having any say in matters related to mining. Black leaders and all black South Africans were placed in invidious and precarious positions, and were made aliens in the land of their birth. This was one of the worst types of oppression, suppression and depression by the former apartheid regime.
The Bill seeks to address that bitterness and those atrocities. It is against this background that the UDM finds it difficult to oppose the Government’s commitment to transform the mineral and petroleum industries in South Africa. We support the Bill. [Applause.] We welcome in particular the expansion of opportunities for historically disadvantaged persons to enter the mineral and petroleum industries to benefit from the exploitation of the nation’s mineral resources. Our emphasis in this regard is that the mineral wealth should benefit the communities in whose area mining takes place.
Gone are the days when our people were only regarded as reservoirs from which privileged and lily-white mining companies could draw labour. Our people support black economic empowerment and they want to be capacitated.
South Africans should learn from Zimbabwe. The delay in the implementation of the land programme in Zimbabwe has led to today’s political crisis. We want an amicable transformation of the mining industry in this country, and not the Zimbabwean way of doing things.
The key areas of concern for various stakeholders and the mining industry during the public hearings were security of tenure and the constitutionality of the Bill. There is a remedy or solution to the latter, namely to establish whether the Bill is constitutional or not. Instead of holding this important Bill to ransom, the UDM proposes that the President should refer the Bill to the Constitutional Court for a decision on its constitutionality. Security of tenure means that the mineral rights holder must have an adequate period within which to carry out exploration and/or mining operations, that he or she has a virtually automatic right to mine, subject to compliance with applicable regulations, and, finally, that there are clear obligations in order to maintain his or her rights, subject to clear and objective cancellation criteria.
This Bill provides for an exploratory licence term of five years and a mining period of 30 years. In comparison with Latin America and African countries, this Bill is very reasonable and the UDM supports it. [Applause.]
Ms N S MTSWENI: Madam Speaker, hon members,and the hon the Minister, silotjhisa emakhosini sithokoza bona nibe nathi namhlanje.[We pass our greetings to the Chiefs. We are grateful that they are here with us today.] South Africa is well endowed with world-class mineral resources and mining operations. Minerals will continue to play a central role in the development of our economy.
Geologists estimate that half of our minerals endowment has been used up in the last hundred years. We have no time to waste in ensuring that the other half is used in truly developing the nation as a whole. The development of our world-class resources depends, to a large extent, on opening up access to investment from both local and international sources.
We must replace the current apartheid-era system with a system that promotes transparency and access and ensures that the mining industry contributes to national development. We need a world-class regulatory framework to ensure this. Those who feel threatened by change have said that what we are proposing to do is unusual and very risky. I will compare the Bill with the regulatory system in a few other countries where these companies happily do business.
According to the World Bank’s estimates in Strategy for Africa 1992, virtually all African states have used the approach which can be called ``permanent sovereignty’’ over their natural resources in line with various UN resolutions in early 1960s. This approach is in common with all countries in the world, and does not prevent the allocation of secure, legal mining rights to private parties, nor does it imply that the rights cannot be tradable.
However, it does establish that the state can regulate access to resources and has a legitimate interest in the manner of its exploitation.
Security and continuity of tenure of mineral rights is essential if there is to be sufficient incentive to undertake high-risk exploration with substantial work commitment and then marshal the large sums necessary for development. The investor needs to be assured of the right to proceed from exploration to mining, provided predefined criteria are met.
The mining licence must be of sufficient duration and secure enough to make the exploration and development commitment worthwhile. Typically an exploration licence may be for a period of three years with possibly one or two renewals for the same period, whereas mining licences might be for a period of 20-30 years with similar renewal periods.
In a paper presented in an International Bar Association conference, Professor Cameron defined security of tenure as ``a reasonable legal entitlement for extraction rights after successful completion of the exploration phase.’’ In fact, the Bill provides fair administrative action by setting objective criteria to provide predictability and guide the Minister on how to exercise his or her discretion. For instance, the Bill provides that the Minister must grant or refuse applications for mining rights when certain criteria and requirements have been met, whereas in other foreign countries where some of our mining companies happily invest billions, the Minister’s discretion is extremely wide.
The Bill has opened up opportunities for new entrants and enables them to partner with existing companies. Many foreign investors have already embarked on joint ventures with these companies. They are applauded for this initiative.
The ANC cannot overlook the international campaign against the Bill that was orchestrated by the big mining industries in South Africa. The ANC wishes to remind everybody in the House that a mineral is a national asset and, hence, government is the custodian. This is not a new concept; in most countries mineral rights are vested in the state, as I will illustrate.
The Bill provides for security of tenure which compares favourably with the security of tenure provided for in legislation abroad.
One of the key pillars of this Bill is to bring the South African mining legislative and regulatory framework in line with the international best practice. In Australia, for example, prospecting licences may be granted for a period of four years, with no specific provision made for renewal. For mining the period is 21 years and can be renewed for another 21 years. In Namibia a prospecting licence is granted for three years, renewable for another two years. A mining licence is granted for 25 years and is renewable for another 15 years. No licence for life for mining is envisaged. In Zambia the licence is granted for 25 years and renewable for a further period of 25 years. This is also the situation in Tanzania. In Canada a mining licence may be granted for a period of 20 years and renewed for a further period of 10 years. In South Africa, by contrast, we give a generous renewable period of 30 years.
In all these countries, access to the mineral source is granted by the state concerned. Security of tenure is not dependent on a mineral right being granted for the life of the mine. There is no reason why we should do otherwise. In terms of the Bill, the granted rights are transferable and, tradable and can be mortgaged to facilitate funding for projects. If one compares it with the situation in foreign mining countries - Australia, for instance - transferability is subject to the Minister’s approval.
The same applies to Botswana, Zambia, Tanzania and Canada. Therefore the approach that South Africa has taken is in fact in line with the rest of the world. In conclusion, our particular apartheid-era mineral rights system has resulted in a few companies owned by a tiny white elite controlling the whole industry and not allowing smaller or new entrants. Contrary to the hysteria from the established industry, investors are queuing up to invest in South Africa’s mining industry and after today there will be more security of tenure and more transparency. This Bill will ensure that this development benefits the nation, generating jobs and developing and empowering millions of our people.
Truly, this is a better life for all. The ANC supports this Bill. [Applause.]
Mnr P J GROENEWALD: Mevrou die Speaker, die VF sal nie die onderhawige wetsontwerp steun nie. [Tussenwerpsels.] As `n mens eerlik wil wees, dui dit op niks anders nie as ‘n nasionaliseringsproses, en hoewel die VF nie in die komitee dien nie, wil die VF sy standpunt baie duidelik stel. Die agb Minister kom na vore en sê dat daar wel vergoeding sal wees vir sover dit mineraalregte betref. Die vraag is: vergoeding uit wie se perspektief? Dié van die agb Minister? In die huidige stadium het die hele debat in verband met dié wetsontwerp ontaard in ‘n rassedebat, met die groot mynmaatskappye aan die een kant en, aan die ander kant, die swartbemagtigingsmaatskappye.
Die agb Minister lees klaarblyklik nie die koerant nie. Sy weet nie wat aangaan nie. Dit is die werklikheid, want ‘n ander aspek is ook dat dit nie net oor swart bemagtiging gaan nie. Die mineraalsektor is een van dié groot werkgewers in die land wat reeds werk verskaf. Die vraag is: gaan dit hier werklik oor swart bemagtiging of gaan dit eerder om ‘n paar swartes wat net nóg verder verryk gaan word?
In my wêreld, Noordwes, is daar baie delwers wie se bestaan en voortbestaan afhanklik is daarvan. Die vraag is net in watter opsig hulle behoorlik vergoed gaan word, ook vir hulle mineraalregte.
Die laaste vraag is: hoekom is dit so dat dié wetsontwerp nou skielik deur die Parlement gevoer moet word? Hoekom kon daar nie nog verder gepraat word met die groter rolspelers nie? Sodoende kon ons verseker dat ‘n behoorlike ooreenkoms bereik word, sodat, met behoorlike konsensus, met dié ingrypende wetgewing vorentoe gegaan kan word? [Tussenwerpsels.] (Translation of Afrikaans speech follows.)
[Mr P J GROENEWALD: Madam Speaker, the FF will not support this Bill. [Interjections.] If one wants to be honest, then this is nothing more than a nationalisation process and although the FF does not serve on the committee, the FF wants to put it very clearly: The hon Minister comes forward and says that there will indeed be compensation with regards to mineral rights. The question is: Compensation from whose perspective? That of the hon Minister? At this stage the whole debate around this Bill degenerated into a racial debate with the big mining companies on the one side and on the other side, the black empowerment companies.
The hon the Minister clearly does not read the paper. She does not know what is going on. This is the reality, because another aspect is also that this is not only about black empowerment. The mineral sector is one of the biggest employers in the country which already provides work. The question is: Is this really about black empowerment or rather about a few blacks who are going to be enriched even more? In my world, North West, there are many miners whose existence and survival are dependent upon this. The question is in which respect they will be compensated properly, also for their mineral rights.
The last question is: Why is it so that this Bill must now suddenly be pushed through Parliament? Why could we not have further talks on this with the bigger roleplayers? By so doing we could have ensured that a proper agreement was reached so that we could have gone ahead with consensus with this incisive legislation. [Interjections.]]
The DEPUTY CHAIRPERSON OF COMMITTEES: Hon members, the next speaker will be making her maiden speech. [Applause.] Hon member, you may proceed. This is the welcome that you have received in Parliament. It is a noisy Parliament, but one learns to cope with it.
Ms J MOLOI: Chairperson, hon members, ladies and gentlemen, we present here today a Bill that seeks to radically transform the South African economy and bring about major changes, particularly the transformation of infrastructural development. This Bill seeks to redress the monotonously racial ownership within the mining industry, which has been left in the hands of a few individuals over a period of many years. It has been left unregulated, something which is amazing, with no consideration of human resource development. Mining did not consider that those who were working in the mines were human beings who also needed to benefit from that industry.
Because mining is risky and unsafe, thousands of mineworkers have died. We all know the sad stories about what happens in the mines and workers faced with unhealthy living and working conditions. This industry has been reaping the benefit of the mineworkers’ sweat, leaving their poor families to care for them on their way to the grave, owing to the unhealthy working conditions. After they have worked themselves to exhaustion they go home without anything in their pockets and are merely burdens to their families. This is a situation we could not endure indefinitely.
This Bill comes at a time when South Africa is faced with the mammoth task of not selfishly transforming just itself, but meeting the challenge of transforming the entire African continent. That is one of the major questions and challenges that are passed back to the South African Government at this point in time.
Can we come up with a sustainable economy that actually proves that we are able to drive the transformation aspect on the African continent? The implementation of aspects of this Bill will serve as a statement to the whole world to prove that as South Africans we have the potential and the capacity to sustain ourselves economically. This therefore cannot serve as a battlefield. We cannot afford that, considering the seriousness of the challenges that are facing us. We have to really take this quite seriously.
When we achieve this goal it will mean that we then have a key to open many other doors that will bring about major challenges for the poor in this country. This Bill does not only look at black economic empowerment in order to deracialise capital. It is not limited to that. It also focuses on the social plan that seeks to develop the communities where mining operations are taking place. It has therefore introduced a new aspect, namely that of broad-based socioeconomic empowerment. This aspect is captured in Chapter 7, clause 100 of this Bill. This becomes a reason for all of us to celebrate the introduction of this law. It looks at all spheres of society, both the BEE, which is black economic empowerment, and the socioeconomic aspect.
What does broad-based socioeconomic empowerment mean to our ordinary people? No more shall we have foreign investors digging our minerals and leaving ghost mines, ghost towns and unhealthy mine pollution. That is tantamount to looting and it is unacceptable.
I would just pause to refer to a very practical situation that is known about by all South Africans and happened in two of the provinces in this country. In Limpopo the communities of Penche and Mafefe were affected by the asbestos mine which was left by the foreign mine investor from Britain and people working there were infected and went home very ill. There were no health plans put in place for them or anything that could help them. It also affected a community in the Northern Cape. The two premiers from these two provinces had to go to Britain and argue this case and fight for these people. This situation cannot be tolerated. It shows that it is necessary to regulate this industry in order to avoid this kind of scenario. This case went on for a long time and it took a lot of time and money to ensure that the people were covered in terms of health conditions that affected them so badly. I am sure we all now agree that we cannot leave this situation unregulated.
Since this industry will be regulated, all the mining activities should meet the outlined requirements, which include a social and labour plan. Let me just amplify the importance of having a labour plan. What will happen when all the resources are exhausted? Life cannot only be limited to digging out the minerals. We need to be sure about what will happen if those all reserves have been taken out.
Communities will be involved in skills training with the introduction of this Bill. Technology, business partnerships and mainly the development of co-operatives will change the lives of the needy and the poor. There will be a lot of life and activities that will be taking place in order to ensure that we redress the poor state and conditions of our people. The labour plan will introduce the new concept of considering mineworkers an important human resource factor entitled to a human resource skills development plan. There should be a plan for dealing with skills development in this industry.
An employment equity compliance plan is also needed and will have to be monitored. Housing plans for employees are needed so that we move away from the ridiculous single-unit cells. We all know that in the past there were hostels where our dignified men were subjected to living conditions that were quite horrible. The unfortunate part is that the dignity of the men was reduced to nothing in those hostels. We therefore say that the introduction of this Bill should ensure a housing plan for employees.
A health and safety plan which includes combating HIV/Aids will also be part of the package. It is also important, from time to time, to introduce the literacy aspect within the mining industry. The literacy programme within the mining industry is significant and the implementation of the Bill will activate the mining sector. At the moment, statistics from the Mining qualifications Authority, and these are quote recent, tell us that 99,68% are black males, 1,26% are females and 0,67% are disabled. We have to improve these statistics.
This reminds me that through the initiatives that the NUM embarked on, a pilot project was conducted to involve women and see how they could fund themselves in the mine, without disadvantaging them and assuming that they may not be able to make it. That project needs to be supported in order for us to ensure that they are also asserted within this male domain.
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon member, your speaking time has expired.
Ms J MOLOI: I would like to conclude by saying: Mayibuye! [Applause.]
The DEPUTY CHAIRPERSON OF COMMITTEES: For the hon member’s education, when the orange light begins to flash, it means that you have to start winding up.
The hon member Rev Tolo has drawn my attention to the fact that up in the gallery there are a number of young children who have travelled all the way from the Sekhukhune district in the Limpopo province. I am quite certain that I have the support of all hon members in welcoming them here and saying to them that we hope that their visit to Parliament will have sparked in them an abiding interest in politics. [Applause.]
Miss S RAJBALLY: Chairperson, may I take this opportunity to congratulate the hon Moloi on her maiden speech. She did very well. [Applause.]
The Bill seeks to bring the mineral and petroleum resources of South Africa under the sovereign control of the Government so that the sector may be controlled, planned and pursued with a vision of sustainable development and equitable access maintained.
The MF notes that South Africa is a mineral-rich country. Noting the previous squandering of state funds and resources, we hope that under the watchful eye of our new Government, the potential and substance of these resources will be guarded to the advancement and betterment of all society. All South Africans own these resources and the state, appointed as legal custodian, has to implement provisions to protect them.
The MF agrees with Government policy that the introduction of previously disadvantaged persons into the minerals and mining industry is certainly liberalising, and the problem of poverty and unemployment may be helped in this manner. Sustainable development and economic growth are key factors that our society is working towards. The mineral and mining industries certainly have a lot of potential that may benefit this process in the long run.
The MF appreciates the constitutional provisions that this Bill seeks to uphold by ensuring that the nation’s mining and petroleum resources are developed in an orderly and ecologically sustainable manner. The MF supports this Bill. [Applause.]
Mr D M DLALI: Chairperson, Minister of Minerals and Energy and other
Ministers, the Freedom Charter still unites, and South Africans accordingly
say, the people shall share in the country's wealth'', andthe land
shall be shared amongst those who work it’’.
It goes on to state, there shall be work and security'', andthere
shall be houses, security and comfort’’. Our national Constitution also
guarantees the social and economic rights of all the people of South
Africa.
It is clear that there are those who do not want other people to have comfort and share the same cake. We have to overcome the enormous racial, gender and geographical disparities that continue to exist in the distribution of wealth, economy and opportunities. These disparities are themselves a fetter to the growth and expansion of the economy and wealth in our society.
The discovery of diamonds in Kimberley, upon which the South African economy was later established, paved the way for the colonist conveyance of interest. Both Boer and Briton found reciprocal accommodations as their interests coalesced. Their closed ranks confirmed the fact that the treaty of Vereeniging of 1902 guaranteed them the undivided authority over the land that they had usurped. Unity, while desirable for both the settler communities, was deemed unsuited for the indigenous people. For the latter, separate reserves and enclaves were prescribed and preordained.
Modern South Africa was in the making. The Union of South Africa Act in 1910 settled the marriage of Afrikaners and Britons. They excluded the majority of black populations, impervious to the petitions, deputation and nationwide outrage that accompanied their intentions.
The internationally accepted right of the state to exercise sovereignty over all mineral resources within the state itself was internationally accepted.
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, will you please allow the person who is speaking to be heard? If you do need to have a conversation, then conduct it in an undertone, certainly not in the voluble manner in which you are doing so at present.
I hope that this admonishment will stand and that you will co-operate with the Chair. Carry on with your conversations, but please, Mr Grobler, I am requesting you to do so in an undertone. Hon member, you may proceed.
Mr D M DLALI: We must also understand and accept that mineral resources are the common heritage of all South African people, and the state is the custodian thereof, for the benefit of all South Africans. South Africa is therefore not breaking new ground or acting out of step with other democratic and mature societies.
Strong mining countries such as Canada and Australia have provisions similar to those before Parliament today. Many of the new developing nations which are attracting massive amounts of foreign interest, investments and capital in the mining sectors, such as Chile, Brazil, Tanzania and Ghana, enshrine the principle of the state being the custodian and public trustee of mineral rights.
For example, in terms of the National Water Act, there has been no constitutional concern about the vesting of rights in the state. Why now? Why mineral resources? This Bill before us today does address the access to the nation’s mineral resources being not only possible but also meaningful and ensuring security of tenure in respect of prospecting and mining operations.
It is clear, in this Bill, that existing mining companies have security of tenure. The historically disadvantaged and marginalised communities will now have potential access to the resources of South Africa. Mining and rural communities will have environmental protection and development, and the state will become the custodian and public trustee of the nation’s mineral resources.
The effect of the Bill is to create a state licensing system which will bring our mining legislation into line with the rest of the world’s and will therefore eventually dispose of the common law system which has frozen out the junior and small-scale operators in this country.
Security of tenure is not an issue at all. These lawyers, the Chamber of Mines, De Beers, Anglo Plats and others are confusing the issue of ownership. If a person has possession of something for five to 30 years, that is still owning it. Nobody can claim ownership except that person as an owner. Once the person has been granted a mining licence, it is that person’s and no one can take it away, unless he or she is not doing the work. That is the ``use it or lose it’’ principle. This is more than enough in terms of security of tenure. After 30 years, it is also renewable. What more does a person want?
The media, Business Day in particular, have made statements on this Bill which have misled the public. I just wonder whether those very journalists and researchers have ever read this Bill. Or is their mission to represent the interests of the big white minority companies in this mining sector?
Business Day of 11 June asked, and I quote:``Is the new mining Bill Nepad- unfriendly?’’ This statement argues that this South African Bill appears to run against international trends, but the writers of this very same article know very well that they are wrong. They are misleading the public. I appeal to them to stop misleading the public. They must first read the Bill, and then tell South Africans the honest truth about what this Bill is all about. Firstly, the two researchers were saying:
… it does not allow for the automatic transfer of old to new order rights, compromising security of tenure.
That is not correct. The Bill guarantees the right of conversion from old- order right to a new right, and the Bill also says that the Minister must convert the old-order mining right into a new mining right. What more do they want? The Minister, in this section, is obliged to make the said conversion. It is obligatory. Do hon members not understand that?
I understand that the transformation is painful to those who enjoyed the riches of this country for so long. Now it is time for the indigenous people to enjoy the benefits of the fruits of their own country. The time is now for all South Africans to share the fat cake called the mining sector.
There are those who do not want to see the blacks, Africans in particular, doing things for themselves, and want them to continue being treated as cheap labour, servants of their masters. There are those who do not want to see black Africans, in particular, having food on their plates, put there with their own hands, without being employed and exploited by those big businesses. They want blacks to continue in terms of the common-law principle of master and servant for the rest of their lives and those of their succeeding generations, while these big capitalists are enjoying, with their succeeding generations, the riches of our country.
They also believe that blacks cannot do anything for themselves and just want to be employed. Now is the time for Vukuzenzele, and the indigenous people are more than ready to take the challenge thereof and run with it. Not tomorrow. They have been waiting for this opportunity for decades, for years, but they were denied the opportunity.
Now, the ANC Government is saying to the nation: ``Vukuzenzele, feed yourselves, your kids and your generations! You have been waiting for too long and struggled for this opportunity. The ball is in your court to run with it. The ANC has made it possible for you, the indigenous people, to do it, and it is your duty not to fail the ANC Government in its endeavours to redress the imbalances of the past. Now is the time to claim back what is yours, what was stolen from you, what belongs to you, what belongs to all South Africans, to all those who live in this country and to those who produce its wealth.’’
I want to return to these two journalists. They must tell south Africa what is correct and what is wrong in Business Day of 11 June. I quote further:
It has been estimated that, in its latest form, the Bill could cost between 200 000 and 300 000 current and potential jobs in the South African mining industry, a sector which employed an average of 409 546 people directly in 2000.
Who estimated these figures? Who collected them? What did this person want to achieve? These claims are unfounded, untrue and wrong. I want them to go out of this debate today and tell the readers of this paper and South Africa what this Bill seeks to achieve and to address in a positive way, not in the negative manner in which this has been done for the past few weeks. There is also an unfounded claim that the Bill in its current form does not put South Africa on a competitive footing with other regions, and does not exemplify the job growth environment that Nepad stands for. The question will be: Which regions are these? What job growth environment are we talking about? These are unfounded allegations.
This Bill, instead, is going to open up more opportunities, create more jobs, secure more jobs or guarantee jobs, housing for workers and health and safety for the miners and, more importantly, deal with these subcontractors as part of the definition of employees, to protect these workers who are employed as subcontractors and have no benefit and no protection at all. [Time expired.] [Applause.]
Mr P J NEFOLOVHODWE: Chairperson and hon Minister, for the first time, I can say with no reservation that you have made Azapo’s politics simpler. [Applause.] [Laughter.] Azapo has always maintained that the rampant market forces have failed to ensure equitable redistribution of wealth and, therefore, have disqualified themselves as saviours for the poor. The Bill before us translates into Azapo’s futuristic objectives in that it effectively cuts the umbilical cord of the relationship between colonial and apartheid mining and the new society which we are all building. [Applause.]
The Bill, as Azapo understands it, transfers control of all mineral rights from individuals and companies to the state, thereby transferring mineral custody to the state. In this way, the Bill seeks to change ownership patterns that, for decades, were concentrated into a few hands, especially those of white males.
The 25% which is available to black economic empowerment groups, while small, is nevertheless an important window of opportunity for disadvantaged groups in our society. The fact that this Bill is linked to social responsibility and the development of communities is something that Azapo cannot fault.
The Bill, indeed, marks a turning point in our country. It marks the beginning of a new relationship in the mining industry and, to Azapo, that is transformation.
Azapo supports the Bill and salutes those who were responsible for drafting it. [Time expired.] [Applause.]
Mr B G BELL: Chairperson, Ministers, fellow members and guests, I rise to speak on behalf of the DP, a member of the DA, in debating the Mineral and Petroleum Resources Development Bill.
This piece of legislation has caught the imagination of the entire country. As a committee, we received a large number of presentations from the public and mining houses. It is a pity that, because it was decided to rush this Bill through Parliament, no notice was taken of these opinions.
There are two distinct camps. One is for the Bill, and the other camp, although supporting the general principles and objectives, with which we agree, differs on a number of very important clauses.
The principle of the state owning all mineral rights is not uncommon in the world scene, although not all countries subscribe to this. In South Africa, over the last century, mineral rights became a marketable commodity and could be severed from the surface rights. The result was that ownership was spread over a large portion of the population. [Interjections.]
Rights belong to the communities, mining houses and individuals, mainly farmers, and then the state owns 45% of these mineral rights. Why they cannot hand that over immediately, I do not know.
In order for the state to be custodian over all mineral rights, expropriation must take place. This expropriation is in dispute. The state differs with the general public in the interpretation. A further consequence is that, when the state grants a mining right to a potential miner, the mining right allows the miner to enter a farm and virtually take it over, so that he can mine the minerals. This amounts to expropriation of the surface and compensation should be payable. The Bill disputes this, and only when the farmer refuses to allow the miner to enter his land, thereby committing a criminal offence, do the miner and the state have to enter into negotiations with the farmer. I ask the Minister to note that this aspect must be sorted out satisfactorily. In an attempt to stop the mining companies from hoarding large areas, it was found necessary to redefine ``mining area’’ in the Bill. The definition suggested was that the mining area would be confined to only the area in the mining right. This definition is totally unworkable as it is possible, for instance, that plant, villages, workshops, reduction works and office blocks may be erected outside the mineralised area and would not necessarily form part of the mining right. The consequences of this scenario are huge. The final clause may save the situation.
Another section that presents problems is the section on beneficiation. The desire to beneficiate all minerals mined is what all of us share. But this dream is impractical, for a number of reasons. The lack of investment, market shortage and our labour laws are but a few. The change to notifying and consulting in this clause will soften it.
I trust that, in the administration of this very important legislation, the development of the nation’s vast mineral resources will be placed first and not be clouded by the idealistic policies which have often come to the fore in the discussions on this Bill. [Applause.]
Mr J H NASH: Mr Chairperson and hon Minister, I received a special instruction from East London, from my dear wife, to leave the microphones alone. [Laughter.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Please do so.
Mr T D LEE: And leave me alone too! [Laughter.]
Mr J H NASH: This is indeed an historic debate as this Bill represents the transformation of an industry which controls the commanding heights of the economy, functioning on the basis of monopolistic practices. The transformation of the mining industry was the bedrock of our struggle for emancipation. At last we are coming to grips with the issues that are going to fulfil our aspirations as a people.
In the past few weeks we have benefited from public hearings in Cape Town, the Northern province, the Northern Cape, the North West province and the Free State. We listened to many of the best legal teams, or the prophets of doom, utilising all sorts of scare tactics to frighten the living day-light out of the committee. [Laughter.] The committee was taken on a guided tour through international treaties and the pitfalls of nationalisation as well as constitutionality. It was really time for the legal eagles to cash in.
I must say that if it had been the intention of the ANC to nationalise the minerals and petroleum industry we would not have spent the time and the money on a long-drawn-out parliamentary process. When will all South Africans realise that this party takes democracy seriously? [Applause.] We were subjected to threats by innuendo from the international community, who would not invest in South Africa, and even the possibility that the passing of the Bill would derail Nepad.
Nepad would commence on the organic initiative of the continent, as investors only enter markets that already show stability and growth potential. The mining, agricultural and energy sector would form the key to African economic development, and therefore economic activities in this sector could not remain in the hands of an unproductive monopoly. It was, rather, free economic activity that would generate the necessary finance for the development of the key sectors of the continent. Upon these sectors would arise a manufacturing industry.
The veiled threat that, if the Bill is passed, it would negatively affect Nepad was ever present. It seemed to me that the industry’s support for Nepad would depend on the protection of past monopolies. Does the industry honestly believe that, when the objectives of the Bill are shown to international friends, they would not agree to the internationally accepted right to exercise sovereignty over mineral and petroleum resources and, most of all, to expand opportunities for historically disadvantaged men and women?
Knowing the history of this country, do we really think that the countries
that are keen to help in the Nepad process would turn their backs on South
Africa? No. The mining captains, the distinguished lawyers and the
Democratic Alliance or DP, whatever their title is, must note that those
countries would have shown us far more loyalty than they did in their
submissions to the committee, whose support for Nepad was dependent on the
Bill disappearing from the scene. Those are the conditions which the mining
houses put to us: You must support Nepad, so please get rid of this
Bill''. Thepistol to the head’’ approach. That is what they were using
against us.
I want to say today that long before this Bill came to Parliament, many countries showed an interest in our mineral industry. In fact, they showed far more interest and loyalty than the legal teams and the mine captains of this country in their submissions at the hearings. We South Africans must stop projecting a negative image of our country by bad-mouthing progressive policies which encourage foreign investment. [Applause.] We must follow our international friends who want to bolster the mining industry, thereby transforming the industry from a sunset industry into a sunrise industry.
Furthermore, we should follow the lead of those countries which offered to assist the small-scale miners with expertise and training, as empowerment among local mining houses is nonexistent. Our local industry was premised on complete protection. Monopoly ownership of mineral rights allowed ad infinitum the vast areas to remain unexplored and undeveloped, preventing free economic activity occurring, especially among the historically disadvantaged.
It should be clearly understood that in a competitive environment there is no shortage of investors. We need not be scared that the international community will not invest, as the prophets of doom have mentioned here a thousand times already and as they also mentioned in the hearings. In fact, investors find creative ways of making money and are operating profitably under different types of regulatory regimes. Those countries will come to South Africa in spite of all these gloom-and-doom stories which we heard.
Our mining industry needs to free itself from the shackles of apartheid and enter the international stage on the basis of currently prevailing international economics. Mining activities in South Africa will have to be benchmarked against current international practice to increase efficiency while creating empowerment at the same time.
The Minister, for her part, went a long towards meeting the industries by agreeing to a charter, which the Chamber and others requested. This clearly shows that the Government is prepared to meet the industry and labour to deal with concerns expressed. In fact, the industry kept on saying that they agreed with the broad principle of the Bill, which stood in direct contrast with the total onslaught which their legal teams presented. I must protect my two chairmen against the onslaught by Mr Davidson. [Interjections.] The honourable Mr Davidson, I should say. Just imagine, simply because he could not get his way in the committee, suddenly the committee is biased. The committee gave everyone their fair share.
I must also mention, in front of the royal Bofokeng representatives here,
that one thing which I was very impressed by was the fact that the Bafokeng
came to Cape Town and said to us: We do not want the minerals for
ourselves only.'' Everyone who spoke said that they wanted to share the
minerals with everyone else in South Africa. [Applause.] What did the
mining houses and our good friends in the DA decide? They decided that they
wanted to keep the monopoly as long as they live, to keep themwhites
only’’, to keep them for themselves. [Time expired.] [Applause.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members I would like to encourage all the wives of all hon members to instruct their husbands to co- operate fully with the Chair, as does Mrs Nash. [Interjections.]
The MINISTER OF MINERALS AND ENERGY: Chairperson, hon members, comrades in the gallery, it has been a good day. [Applause.] Judging by this debate, there are no issues. Really, there are no issues. Davidson is scratching for stories_
Kufuneka amoshe. Uze apha ukuza kumosha, qha. Ndithi kumaqabane lo mcimbi ugqityiwe, ucalanye. [Uwele-wele.] [He has to spoil. He is here only to spoil. I am saying to the comrades that this matter has been fully addressed. [Interjections.]]
This is a good Bill. I would like to congratulate the committee, including Davidson - Shame! [Laughter.] Of course I congratulate my two co-chairs and the study group of the ANC, who literally worked day and night. Mr T D LEE: Chairperson, on a point of order: Could the Minister please refer to Mr Davidson as ``the hon Mr Davidson’’. [Interjections.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Yes, you are perfectly correct. All members here are hon members.
The MINISTER: OK, the hon Davidson. We are on first-name terms. I would also like to assure the members of the New NP and the IFP that we take their advice on issues of constitutionality very seriously. I will advise the President to consider the importance of ensuring that we can test this before it is signed. I will give that advice. [Applause.]
I also want to assure members that the ANC members in the NCOP will propose an amendment which will further tighten, not just in the transitional period, but also beyond this period, the issues of compensation so as to ensure that the issue of property rights is not compromised in any way. This is just to demonstrate that we are very serious about ensuring that this Bill is constitutional. [Applause.]
A lot of people have made allegations here about what investors will do and not do.
Uyazi, abanye abakaze bayibone ne investment ukuthi yinto enjani! [You know, some people have never even seen what investment looks like.]
They are making allegations here about hearsay. I talk to investors. Minister Erwin, Minister Manuel, the other Ministers and I govern this country. We are taken seriously, not those members. We know what they have to say about this economy, this Bill and what their intentions are in this economy. It is because of what we have learned from them that we have been strengthened to move forward. We are not worried about what these members are saying in relation to investment, because as far we are concerned.
Mr W J SEREMANE: [Inaudible.]
The MINISTER: Shut up, wena Seremane! [Laughter.]
Today, because we are fighting for black people, and I am sure the hon Seremane has forgotten who he is, he is fighting the loudest.
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Gibson, are you rising on a point of order?
Mr D H M GIBSON: Yes, I am, Chairperson, the hon the Minister is also forgetting who and where she is. Will she please refer to the hon Mr Seremane in respectful terms and not tell him, ``Shut up, Seremane!’’ [Interjections.]
The MINISTER: Okay, Shut up, honourable Seremane! [Interjections.]
Mr K M ANDREW: Chairperson, on a point of order: Surely telling a member, honourable or otherwise, to shut up is unparliamentary? [Interjections.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon member, I think you know from long experience that in the cut and thrust of politics, one can be very robust. Therefore I would like state that this is part of a robust debate and it is parliamentary. [Applause.]
The MINISTER: Chairperson, I would also like to assure members that the money Bill is on the way. The Minister of Finance and the director-general have assured me that the Bill will be coming to Parliament within the time that we agreed with them. So as far as this is concerned there is no problem.
I want to advise members who also tried to speak on behalf of the industry in South Africa that the industry does not appreciate this. They do not appreciate this because those members continue to misrepresent their case. The industry speaks to us, and that is why we have an understanding which these members do not understand. They should not speak on behalf of di kgosi, in particular the Bafokeng, because they are here to speak for themselves. The DP should stop pretending that they have a constituency that they do not have. [Applause.]
I would also like to inform the hon Groenewald that I am shocked at his patronising attitude towards black people. He tells us that this has been too quick. Is 300 years of oppression not long enough for him? I could not believe that he could stand here and tell us that we are rushing this Bill. For those people who have waited it could not have happened too soon. This is our country, just as it is his, and our people want to enjoy the same things that his people enjoyed for many years when they excluded everybody else.
Tonight maqabane slya e St Francis kwa-Langa maksisuka lapha. [Tonight, comrades, from here we are going to St Francis in Langa township.] Viva to Azapo. [Applause.]
Debate concluded.
Question put: That the Bill be read a second time.
Division demanded.
The House divided.
AYES - 242: Abrahams, T; Abram, S; Ainslie, A R; Balfour, B M N; Baloyi, M R; Baloyi, O S B; Bekker, H J; Benjamin, J; Beukman, F; Bhengu, F; Blaas, A; Bloem, D V; Bogopane, H I; Booi, M S; Botha, N G W; Buthelezi, M N; Cachalia, I M; Chalmers, J; Chiba, L; Chikane, M M; Chohan-Kota, F I; Cindi, N V; Coetzee-Kasper, M P; Cronin, J P; Davies, R H; De Lange, J H; Dhlamini, B W; Diale, L N; Didiza, A T; Dithebe, S L; Dlali, D M; Doidge, G Q M; Dowry, J J; Du Toit, D C; Duma, N M; Durand, J; Dyani, M M Z; Fankomo, F C; Fazzie, M H; Ferreira, E T; Fihla, N B; Fraser-Moleketi, G J; Frolick, C T; Gandhi, E; Gcina, C I; Geldenhuys, B L; Gerber, P A; Gomomo, P J; Goniwe, M T; Goosen, A D; Greyling, C H F; Gumede, D M; Hajaig, F; Hanekom, D A; Hendrickse, P A C; Herandien, C B; Hlaneki, C J M; Hogan, B A; Holomisa, S P; Jassat, E E; Jeffery, J H; Joemat, R R; Jordan, Z P; Kasienyane, O R; Kati, J Z; Kgarimetsa, J J; Kgauwe, Q J; Kgwele, L M; Komphela, B M; Koornhof, G W; Kota, Z A; Kotwal, Z; Lamani, N E; Landers, L T; Le Roux, J W; Lekota, M G P; Lishiva, T E; Lobe, M C; Lockey, D; Louw, J T; Louw, S K; Lucas, E J; Luthuli, A N; Lyle, A G; Mabena, D C; Maduna, P M; Magashule, E S; Magazi, M N; Magubane, N E; Magwanishe, G; Mahlangu, M J; Mahlawe, N; Mahomed, F; Maimane, D S; Maine, M S; Makanda, W G; Makasi, X C; Malebana, H F; Maloney, L; Manuel, T A; Maphalala, M A; Mars, I; Martins, B A D; Masala, M M; Maseka, J T; Mashimbye, J N; Masutha, M T; Mathibela, N F; Matsepe-Casaburri, I F; Maunye, M M; Mayatula, S M; Maziya, A M; Mbadi, L M; Mbombo, N D; Mbuyazi, L R; Mdladlana, M M S; Mguni, B A; Middleton, N S; Mkono, D G; Mlambo-Ngcuka, P G; Mnandi, P N; Mngomezulu, G P; Mnumzana, S K; Modise, T R; Modisenyane, L J; Moeketse, K M; Mofokeng, T R; Mohamed, I J; Mohlala, R J B; Mokoena, D A; Molebatsi, M A; Molewa, B G; Moloi, J; Moloto, K A; Mongwaketse, S J; Montsitsi, S D; Moonsamy, K; Morkel, C M; Morutoa, M R; Morwamoche, K W; Moss, M I; Mothoagae, P K; Motubatse, S D; Mpaka, H M; Mpontshane, A M; Mshudulu, S A; Mthembi-Mahanyele, S D; Mthembu, B; Mtsweni, N S; Mudau, N W; Mufamadi, F S; Mutsila, I; Mzizi, M A; Mzondeki, M J G; Nair, B; Nash, J H; Ndzanga, R A; Nefolovhodwe, P J; Nel, A C; Nel, A H; Nene, N M; Newhoudt-Druchen, W S; Ngaleka, N E; Ngcengwane, N D; Ngculu, L V J; Ngubeni, J M; Nhleko, N P; Nhlengethwa, D G; Nobunga, B J; Nqodi, S B; Ntshulana-Bhengu, N R; Ntuli, B M; Ntuli, M B; Ntuli, S B; Nzimande, L P M; Olckers, M E; Olifant, D A A; Oliphant, G G; Omar, A M; Oosthuizen, G C; Phadagi, M G; Phohlela, S; Pieterse, R D; Pretorius, I J; Rabie, P J; Radebe, J T; Rajbally, S; Ramakaba-Lesiea, M M; Ramgobin, M; Ramodike, M N; Ramotsamai, C M P; Rasmeni, S M; Reid, L R R; Ripinga, S S; Roopnarain, U; Saloojee, E; Schippers, J; Schneeman, G D; Schoeman, E A; Schoeman, R S; Scott, M I; Seaton, S A; Seeco, M A; Sekgobela, P S; September, C C; September, R K; Shilubana, T P; Shope, N R; Sibiya, M S M; Sigcau, S N; Sigcawu, A N; Sigwela, E M; Sikakane, M R; Simmons, S; Sithole, D J; Skhosana, W M; Skweyiya, Z S T; Slabbert, J H; Smith, V G; Solomon, G; Sonjica, B P; Sosibo, J E; Sotyu, M M; Thabethe, E; Tinto, B; Tolo, L J; Tshabalala-Msimang, M E; Tsheole, N M; Turok, B; Vadi, I; Van den Heever, R P Z; Van der Merwe, S C; Van Jaarsveld, A Z A; Van Wyk, A (Anna); Van Wyk, A (Annelize); Van Wyk, J F; Van Wyk, N; Vos, S C; Xingwana, L M T; Zondi, K M; Zondo, R P; Zuma, J G.
NOES - 35: Andrew, K M; Bell, B G; Borman, G M; Clelland-Stokes, N J; Cupido, P W; Da Camara, M L; Davidson, I O; Eglin, C W; Farrow, S B; Gibson, D H M; Gore, V C; Grobler, G A J; Groenewald, P J; Heine, R J; Jankielsohn, R; Kalyan, S V; Lee, T D; Leon, A J; Lowe, C M; Maluleke, D K; Moorcroft, E K; Mulder, C P; Mulder, P W A; Ntuli, R S; Opperman, S E; Pillay, S; Schalkwyk, P J; Selfe, J; Seremane, W J; Smuts, M; Sono, B N; Swart, P S; Taljaard, R; Van Niekerk, A I; Waters, M.
Question agreed to.
Bill accordingly read a second time.
TAXATION LAWS AMENDMENT BILL
(First Reading debate)
Mrs R R JOEMAT: Chairperson, hon members, I hope that we are also going to have a song after this Bill has been passed. I rise here on behalf of the ANC to support the Bill before us. When the Minister of Finance delivered his Budget Speech in this House in February this year, he handed out grapes. Let us now see whether these grapes will taste sweet or sour for us.
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, those who are leaving the Chamber should do so quietly and quickly so that we can continue with the proceedings.
Mrs R R JOEMAT: I will cover only certain aspects of this Bill that affect individual taxpayers. Other speakers will cover other aspects in this Bill. Let us unpack what the Minister said in his Budget Speech and see what impact it will have on taxes for individuals. Thereafter, I hope we will understand and appreciate that all will have to contribute and sacrifice certain perks that were previously enjoyed and tax-deductible.
The scrapping of certain tax perks and deductions for certain individuals and businesses will net approximately R100 million for the Receiver of Revenue. Besides accruing from revenues gained, savings will also come from better utilisation of staff. Assessors will now use less time in having to assess, scrutinise and check up on deduction claims.
Looking at tax structures in other countries, one will find that most countries have limited deductions in favour of a scheduled approach. Our Government is moving towards a more definitive split between business and employment income. [Interjections.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Order! Carry on, hon member.
Mrs R R JOEMAT: They are also doing away with the general type of deduction for employees. This will simplify the tax system.
Let me give the good news first. The deductions that will still be allowed are pension, medical-aid and retirement fund contributions. The threshold of R1 000 for medical expenses has been removed. Taxpayers aged 65 and below will now be able to claim the amount of medical expenses which exceeds 5% of their taxable income. Exemption on interest has increased. Taxpayers under the age of 65 years can now claim an amount of R6 000, whereas previously it was R4 000. The increase for taxpayers who are over the age of 65 years is from R5 000 to R10 000. The primary rebate has been increased from R4 140 to R4 860. [Interjections.]
Chairperson, could we ask the Leader of the Opposition to shut up! [Laughter.] [Interjections.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Order! Hon Leader of the Opposition, order! Hon members, I have asked you to behave. I can name you, but I have asked you please to conduct whatever conversation you are conducting in an undertone so that it does not disturb the general order of the House. That is the rule and it is a rule to which all of us are bound. And I would like all of the hon members here to adhere to that rule, both in spirit and to the letter.
Mrs R R JOEMAT: Thank you, Chairperson. Donations to certain approved public benefit organisations will be allowed, but official receipts issued by the public benefit organisation must be produced.
Now for the news that is not so good, but is fair. Travel deductions will continue, but only if expenses can be proved by receipts. The following deductions will also affect MPs. For periods when an individual is away from home on business or work-related travels, claims for accommodation have been removed and the allowance for meals has been limited to R65 per day.
Entertainment and deemed subsistence allowances for individuals will be abolished if they do not affect the actual income of the employee. With these adjustments in this Bill, employees’ income will clearly be defined.
Any payment received in respect of employment is included in an employee’s gross income in terms of the definition of ``gross income’’.
However, certain benefits flowing from employment are not paid in cash, and these benefits in kind need to be determined. One may ask what kinds of benefits these are. For example, an employee might enjoy a motor vehicle or accommodation owned by the company, and in some instances enjoys both of these benefits. These benefits need to be calculated by way of formulae.
This Bill provides specific provisions for the calculation of the value that must be placed upon each benefit that accrues to an employee. The commissioner will use market value for some types of fringe benefit and cost price for others.
Other allowances are generally paid to employees to meet expenditure incurred on behalf of an employer. The portion of those allowances which is not expended must be included in the employee’s taxable income. The most common types of allowance are travelling, subsistence, uniform, cellphone and entertainment allowances.
These adjustments will bring some fairness to our income tax laws and close some loopholes. There are very creative remuneration structures and this is unfair to the majority of workers that only work for a straight salary package. We see juristic persons become companies with the aim of dodging tax, and then they can claim a wide range of benefits. This becomes a disadvantage to those who do not enjoy such benefits.
Tax evasion is a problem for our country. This is seen in the example the Donald King case, which is currently before Sars, of alleged tax evasion amounting to R900 million. The urgency of fairness in our income tax system must be recognised.
The concern was raised of the increasing tendency to grant wide discretionary powers to the commissioner. Whilst the intention behind this amendment is supported, the committee believes that appropriate checks and balances must be suitably managed, be transparent and free from subjective judgment and be accountable. The commissioner and his team of qualified tax assessors will carry out these functions.
A formal process for appealing against any penalties or any other charges has been established. This enhances the facilitation of transparency and ensures higher levels of compliance. The commissioner may also settle a dispute, but must comply with the provisions prescribed by the Minister of Finance.
I want to refer to two types of relationship in nature and in humans. In the first kind, one party benefits and prospers and grows. The other party suffers and is harmed.
Mense van dié aard kan vergelyk word met bosluise. [People like these can be compared to ticks.]
These are the tax dodgers - the parasites who benefit while others have to pay taxes. The second type of relationship is one in which both parties derive benefits from the relationship. They both grow and prosper like the bee and the flower - the bee gets the nectar and makes honey, while the flower gets the pollination and bears the fruits. This is the type of mutual relationship towards which we must strive.
But what is more important is to achieve the benefit that is economic growth by increasing competitiveness, raising employment levels and reducing poverty. That is why taxes must be fair and must be paid, so that all can benefit, especially the poor. The majority party supports this Bill. [Applause.]
Ms R TALJAARD: Chairperson, hon members, the Taxation Laws Amendment Bill is a mixed bag of taxation proposals flowing from both budgets. It also includes important provisions in terms of tax administration and the administrative powers of the Commissioner of the SA Revenue Service.
The good news in terms of this Bill is that it gives legal content to the welcome tax relief announced in February. The burden of personal tax has been reduced through rates and bracket adjustments, with a R15 billion cut mainly benefiting low- and middle-income earners, while the top marginal rate has also been cut from 42% to 40%.
This matter must receive more attention in an era of global skills mobility, where the top marginal rate is still considered a disincentive to retaining and attracting skills.
On average, according to the Economist Intelligence Unit, taxes for those earning under R150 000 per year are reduced by 25%, while the tax threshold for pensioners under 65 has been raised to R27 000. But, while we are formalising the welcome tax relief today, we need to take cognisance of the impact of relatively high inflation and the vagaries of fiscal drag. Economists, according to the Economist Intelligent Unit, calculate that after adjustment for this inflation effect, roughly only half the tax concessions are realised, especially for earners in the lower- and middle- income brackets. This, unfortunately, is the bad news.
The extension of tax relief to SMMEs through redefining SMMEs as those with a turnover of up to R3 million is welcome, but a tax compliance burden audit for small business, looking at all levies and taxes, is overdue. Perhaps Sars, the National Treasury and the Department of Trade and Industry can conduct such an audit as an urgent priority.
The DA welcomes the proposals that seek to formalise and categorise the tax- exempt status of public benefit organisations and the Ninth Schedule in the Bill, but urges Sars and the National Treasury to continue engaging with civil society in terms of their concerns in relation to the policy decisions behind parts I and II of the schedule, as well as the possible retrospective effect of letting the Minister of Finance list in accordance with the Ninth Schedule.
While this Bill creates an employment incentive and skews that incentive to target it at the unemployed, the benefit of the incentive must not falter due to administrative inefficiencies within the Setas, as the learnership registration process will be the key to unlocking the benefit. The efficiency of the Ministry of Labour and the Setas in this regard will be critical, and Parliament will be keeping a watchful eye.
The DA believes, however, that only higher levels of job creation and job- creating economic growth can dent South Africa’s unemployment crisis on a meaningful scale and that the incentive is merely a small social security net in the context of low levels of jobless economic growth. In a context where the Minister of Finance does a jig on the Mineral and Petroleum Resources Development Bill, with the consequences for foreign direct investment and job creation, we will have to see what measures an employment incentive can effect, and the impact it can make, when such action is conducted in this House by the Minister.
The Taxation Laws Amendment Bill tackles a soft target by doing away with tax-deductible allowances under the guise of claims of administrative efficiency. While the Sars aim to create a simple list of deductible allowances to increase efficiency, the DA believes that efficiency will be hampered by the new onerous burden of receipt verification inherent in the new proposed changes. During deliberations the committee expressed concern about the increase of the administrative powers of the Commissioner of Sars. The Bill furthermore seeks to establish a new dispute resolution and arbitration-type arrangement for Sars to the exclusion of other appeal mechanisms. While they could increase administrative efficiency through these provisions, these powers will be controversial until such time as a specified and codified taxpayers’ charter is adopted to give concrete substance to the obligations that befall Sars under the Promotion of Administrative Justice Act.
Revenue collection has exceeded projected revenue for the past few years, primarily due to marked efficiency gains by Sars. This factor has more than compensated for other areas where projections were not met, such as privatisation and the GDP growth rate, thereby enabling the National Treasury to stick to its fiscal balance targets. However, these efficiency gains and the focus on the soft target of the formal sector’s gap or noncompliance, correct as this is in terms of tax morality, cannot be expected to effect and offset shortfalls elsewhere in the budget ad infinitum.
In this regard, the National Treasury and Sars will have a number of tax policy questions to confront. Critical for future revenue growth and the integrity of the tax system will be the performance of Sars in terms of the tax policy objective of broadening the tax base. The tax base will, of course, broaden as a result of the new residence-based tax system and capital gains tax, whatever the merits and demerits of these taxes may be.
While corporate tax evasion has been addressed by Sars, in terms of the tax gap project, the key challenge remains that of taking the growing informal sector formally into the tax net.
In their submission to the Portfolio Committee on Finance on the Taxation Laws Amendment Bill, Sacob made the following observation:
The impact of these major tax reforms has yet to be tested. As a broad observation on the taxation measures introduced, Sacob believes that there has been a marked emphasis on the redistributive powers of taxation. Insufficient attention has been given to the potential effect - adverse or otherwise - those measures have had on economic growth.
Sacob’s observation highlights one of the key challenges for this Parliament: growing oversight and scrutiny powers over the impact of the policy and legislative measure we take. In the realm of tax, the need for this oversight is particularly pronounced. Having made these broader policy comments, the DA supports this Bill.
Mr H J BEKKER: Mr Chairman, the Taxation Laws Amendment Bill of 2002 results from the Budget, or the Estimates of Revenue. The IFP has accepted and applauded the Minister’s Budget Speech, and therefore we also accept the underlying clauses and we will vote for the Bill.
Die onderhawige wetgewing is gevolglike wetgewing. In die verlede is goedig daarna verwys as die sogenaamde rommelkaswetgewing. Dit beteken dat uitvoering gegee word aan die begrotingsvoorstelle van die Minister van Finansies. (Translation of Afrikaans paragraph follows.)
[The legislation is consequential legislation. In the past it was good naturedly referred to as the so-called omnibus legislation. It means that the Budget proposals of the Minister of Finance are being implemented.]
In terms of this legislation, several limitations on employee deductions are introduced.
As it is applicable to other taxpayers, of course it will also apply to members of this Parliament. This is particularly applicable with regard to travelling, accommodation, meals and incidentals. The deemed R150-per-day deductible item is being withdrawn. Where the employer pays for accommodation, the deemed expense is now reduced to R65 per day. The R2 500 per year for hospitality of a casual nature is also being withdrawn.
Transfer duty is being rationalised in the sense that property below R100 000 will not attract any duties. Five percent will be payable on property values between R100 000 and R300 000; and above R300 000, the duty is now 8%.
Remuneration of directors will also be subject to PAYE and Unemployment Insurance Fund contributions as well as the skills levy. On several items, stamp duties are being scrapped.
The good news is with regard to the basis of small business development. A small business corporation, in terms of its definition, includes any close corporation or company registered as a private company in terms of the Companies Act and it must comply with certain criteria. These criteria include the requirement that the gross income for the year of assessment, in terms of the present Bill before us, not exceed R3 million; that none of the shareholders or members hold any shares or interest in any other unlisted company; that not more than 20% of the gross income consist of investment income and income for rendering a personal service as defined; and that the company not be an employment company.
Small business corporations are subject to a graduated tax rate of 15% on the first R150 000 of taxable income and may write off investment expenditure in the year in which it has occurred.
Small business development is a key element of the Government’s strategy for economic growth and job creation. The proposals contained in the Budget Review this year build on the tax concession granted in the 2000-01 Budget.
With regard to customs and excise duties, several positive amendments are being made and greater control is being exerted in terms of that.
The IFP will support the Bill. [Applause.]
Mr F C FANKOMO: Chairperson and hon members, I am pleased to take the stage and debate on the huge improvements contained in the Tax Laws Amendment Bill of 2002. These improvements came about through a constructive interaction between Sars, the Department of Finance, the Portfolio Committee on Finance, the private sector and the nonprofit sector.
Since the coming to operation of the new Constitution, the ANC-led Government has been committed to transparency and people’s participation in the rebuilding of the newly formed democracy by bringing more people to contribute to legislation. Thus, the Taxation Laws Amendment Bill introduces amendments to, among other laws, the Transfer Duty Act of 1949, the Estate Duty Act of 1955 and the Skills Development Levies Act of 1999, which my speech will focus on.
Transfer duty was levied on the acquisition of fixed property in South Africa. Therefore the rate for the property acquired by natural persons was 1% on the value up to R70 000, 5% on the value from R70 000 to R250 000 and 8% on the value above R250 000. However, to further encourage the acquisition of property and to ensure a more equitable distribution of the transfer duty burden, these rates had to be amended. Therefore, no duty will be payable on the first R100 000 of the value of a property, 5% will be paid on the value of a property from R100 000 to R300 000 and 8% on the value of property above R300 000. This new rate structure was applied in respect of property acquired, or rights or interest in property renounced, in terms of the agreement entered into from 1 March 2002.
The Minister of Finance proposed that those institutions or boards established by or under any law which are exempted from from income tax under section 10(1)(cN) of the Income Tax Act of 1962, and which previously qualified for transfer duty exemption as they were regarded as religious, charitable and educational institutions, no longer qualify for transfer during exemption according to section 30 of the recommendation of the commissioner. Thus the Minister proposed that the institutions, boards and bodies established by law, which carry on public benefit activities as contemplated in section 30, be exempted.
The acquisition of certain properties by the natural person is exempted from transfer duty to provide relief to low-income groups. This includes the acquisition of a dwelling house or residential apartment held under sectional title with a value of R70 000 or less and the acquisition of unimproved land to erect dwelling houses with a value of R300 000 or less.
The Estate Duty Act of 1955 provides for the reduction from the total value of all property included in the estate of the value of any property which accrues to a public benefit organisation which is exempted in terms of the Income Tax Act of 1962. Thus, the introduction of the new provisions in the Income Tax Act of 1962 which regulate the tax exemption of public benefit organisations necessitated the amendment of section 4(h)(i) of the Estate Duty Act, as these institutions, boards and bodies were no longer exempted from income tax under section 10(1)(cN) of the Income Tax Act of 1962. Therefore the introduction of section 4(h)(iA) of the Estate Duty Act of 1955 was to ensure specific inclusion under the exemption of property which accrues to any institution, board or body created by law.
With regard to the Skills Development Levies Act of 1999, the amount of the skills development levy paid by an employer was based on the amount of the remuneration paid or payable or deemed to be paid or payable by that employer to its employees during the month. Thus, in the past, the remuneration paid by a private company to its director was excluded from the employees’ tax provision. However, this was amended in the fourth schedule to the Income Tax Act of 1962 to include directors in the employment tax system by the introduction of paragraph 11C, which deems certain amounts to be paid by the private company to a director of the company. All these changes took effect on March 2002. According to the Skills Development Levies Act of 1999, the deemed amount of remuneration is also included for the reasons of determining the liability of any employer for the skills development levy. Therefore, inclusively, the deemed and actual remuneration would be taken into account in the determination of the employer’s liability for skills development. However, for the purposes of the Skills Development Levies Act, the deemed remuneration has not been taken into account in these amendments.
The exemptions relating to the religious and charity institutions were amended to bring them into line with the public benefit organisation provision in the Income Tax Act of 1962. We therefore, as the ANC, support these amendments of the taxation laws. [Applause.]
Dr P J RABIE: Mr Chairman, hon Minister and hon members, the Taxation Laws Amendment Bill is a lengthy and highly technical Bill and introduces amendments to a number of Acts which range from the Insurance Act of 1943 to the Unemployment Insurance Contributions Act of 2002.
The proposed amendment to section 8(1) of the Income Tax Act of 1962 clarifies employee deductions. It also clarifies taxation where an employee’s remuneration is derived in the form of commission based on sales turnover. Another aspect of section 8(1)(a)(i) is the definition of ``principal’’ as an employer or the holder of an office. Paragraph (c) refers to incidental costs incurred by employees and the amounts deemed to have been expended.
The amendment of section 2 of the Transfer Duty Act of 1949 will encourage the acquisition of property and will lead to a more equitable distribution of transfer duties. Allow me briefly to accentuate the following. No duty will be payable on the first R100 000 of the value of the property, 5% will be payable from R100 000 to R300 000 and 8% will be payable on the value of a property above R300 000. It is my opinion that the proposed new rate structure will enable previously disavantaged members of our society to acquire fixed property, a key prerequisite to alleviating poverty.
The amendment of section 4A of the Estate Duty Act of 1955 will increase the basic deductions of R1 million to R1,5 million in respect of a deceased estate. This is a significant deduction. We appeal for the review of the entire Estate Duty Act of 1955.
Belasting op aftreefondse moet ook spoedig hersien word, omdat duisende belastingpligtiges se staat van bates en laste radikaal verander vanweë omstandighede soos inflasie en die versterking of verswakking van die rand teenoor ander geldeenhede.
‘n Belastingstelsel moet ook ‘n kultuur van ondernemerskap en innovering bevorder, en ek is baie bly om te sê dat, volgens die finansiële tydskrifte, ons huidige belastingstelsel nie die gees van ondernemerskap en entrepreneurskap verwater het nie. (Translation of Afrikaans paragraphs follows.)
[The taxation of retirement funds should also be reviewed before long, because the schedule of assets and liabilities of thousands of taxpayers is changing rapidly due to circumstances such as inflation and the rise and fall of the rand against other monetary units.
Any system of taxation should also promote a culture of entrepreneurship and innovation and I am very happy to say that, according to financial magazines, our present system of taxation has not weakened our spirit of free enterprise and entrepreneurship.]
Section 12E of the Income Tax Act of 1962 provides for the deduction of certain plant and machinery operations. Again, I think this will spur growth in our manufacturing sector, especially smaller businesses and so forth.
The significance of section 18A in particular is that a group of public benefit organisations sharing a common purpose may register as a co- ordinating body and apply for tax exemption.
Clause 22(k) of the Bill provides for a five-year period to allow PBOs to reorganise their affairs to avoid jeopardising their tax-exempt status.
I know that my time is running out. This is a very important piece of legislation. The New NP supports this Bill. [Applause.]
Dr G W KOORNHOF: Chairperson and hon members, clauses in this Bill give practical effect to announcements of the 2002 Budget, and I will not refer to the individual proposals in detail, as they have been widely publicised and debated.
The major feature of the Bill is increased discretions given to the Commissioner for the SA Revenue Service. He receives powerful mechanisms to settle tax disputes out of court. It is reported that both the Margo and Katz commissions have indicated that such a trend should be avoided at all, if possible.
We therefore appeal to the Minister to ensure that the granting of such wide discretion to the commissioner should be accompanied by proper and transparent reporting.
A second concern regarding the Bill relates to section 18(A) status, that is the deduction of donations to certain public benefit organisations. At present the upgrading and renovating of schools and clinics, especially in the remote areas of the country, do not qualify for section 18(A) status or benefits. Sars has undertaken to take this matter back to the Minister, instead of awaiting the next cycle of the process. The Minister may want to inform this House of his response.
It is estimated that the Revenue Service will save in the excess of R100 million through limiting deductions and restructuring allowances, apart from revenue gains through the scrapping of tax deductions. We are grateful, however, that a number of important deductions will remain in place, including those for pension, medical aid and on retirement fund contributions. What is not included in the Bill is taxation on the banking industry, on the mining industry and on the retirement industry. We appeal to the Minister to be very sensitive regarding such taxes in future. We trust that the process will be consultative and that he will consult widely with all stakeholders on a transparent basis, if he decides to initiate any such taxes.
In conclusion, this Bill will put additional strain and pressure on Sars to perform. We hope and we trust that Sars has embarked on comprehensive and applicable training programmes for their employees in order to meet the increase demands of performance prescribed in this Bill. The UDM supports the Taxation Laws Amendment Bill. [Applause.]
Mr L M GREEN: Chairperson, hon Minister, members, owing to the limited time given to me, I just want to comment only on the tax-exempt status of NGOs.
The ACDP is happy to see that the tax-exempt status of NGOs has been clarified. The list for qualification has significantly expanded, providing great relief for many involved in this service. Tax benefits have always been an important factor serving nonprofit organisations and we wish to commend the Minister for expanding tax relief for NGOs. It is encouraging to see that many NGOs are applying for tax exemption. The requirement that organisations must register for income tax or tax-exempt purposes will help the sector to achieve greater coherency in how its donations can enjoy the maximum benefit. The burden of inconsistent fund applications or misappropriation of donations may be controlled, especially as public benefit organisations will be required to ensure that decision-making powers are not vested only in one single individual.
Another area where organisations may derive benefits through section 30 of
the Income Tax Act is the proposal that, in terms of the dissolution of an
organisation, the assets may be transferred to any institution, board or
body which is exemp from tax'' and which carries onany public benefit
activity’’.
The advantage of this proposal will help organisations identify other similar members who may benefit from the assets in the event of dissolution.
The whole idea of nonprofit organisations is to ensure that the public benefit through their services. Office bearers of such an organisation or any other person ought not to expect benefits beyond the reasonable objects of the organisation.
It is with these few comments in mind, that the ACDP supports this legislation.
Miss S RAJBALLY: Chairperson, the Taxation Laws Amendment Bill appears to amend a number of Bills. This may be for our convenience, so that we are not bogged down with many individual amendments, but it makes it hard to cover everything at once.
Nevertheless, the MF has no objections to the provisions suggested. The amendment made regarding exemptions from income tax is welcomed and understood in the light of the fact that the categories exempted should benefit the community. It will, however, be felt that such an exemption is richly deserved by the public at large, who suffer and struggle to put food in the mouths of their children and for whom the paying of income tax is virtually impossible.
The MF does not object to the payment of tax, as it is due, but the devastation of tax on small salaries that have to cover large families is burdensome. Taking 18% from a modest salary may appear reasonable, but with today’s cost of living and the needs that have to be met, apart from luxuries, these taxes are burdensome and often rob taxpayers of the rewards of long hours of hard work.
Further provisions set by the hon the Minister concerning estate duties are agreed to without objections.
The MF unfortunately is limited in addressing this Bill to the best of our ability by time constraints, but voices no objection to the amendments made. We find them relevant and support the Bill. [Applause.]
Ms B A HOGAN: Mr Chairperson, this Taxation Laws Amendment Bill is significant for a number of reasons; not the least is the learnership incentives.
Some time ago it was announced that in order to encourage employment and job creation, certain tax incentives would be put in place. The National Treasury and Sars, in consultation with other departments, have brought in a very interesting way of introducing this wage incentive, and that is through the learnership incentive.
Basically it means that should a person employed by a company enter into a learnership agreement, the total annual remuneration of that employee, to a maximum of R25 000, could be deducted for tax purposes and once again on completion. That would be 70%. For a person who was previously unemployed it would be the total remuneration on the signing of the learnership agreement and on completion thereof.
This is a very well-crafted incentive for job creation and for skilling our population. As Ms Taljaard has said, it is critically dependent on how well our Setas are operating. Our Minister of Labour is here, and he has assured us that they are looking very closely at the operation of the Setas. I wish business well when they look at these issues, because certainly it will assist us in going forward with tax incentives.
Besides the numerous forms of tax relief that are given, the other most significant part of this legislation deals with the relief given to public benefit organisations. This dispensation, which was first introduced in the Taxation Laws Amendment Bill of 2000, completes the cycle on the benefit given to public benefit organisations. For the first time in this country’s history significant tax relief is given to public benefit organisations, and civil society will, no doubt, benefit greatly from this.
However, there are one or two matters that I would like to raise. I know that we are at the start and have to go carefully, but we do know that the most significant tax relief that is given to NGOs is the donations tax, a tax relief given to those people who donate to public benefit organisations. This is an important tax relief because it encourages those who have, particularly corporations, to make donations to worthy causes. The fiscus loses but civil society gains through gaining alternative means of income.
The Treasury and Sars have been very precise in formulating which activities would receive this kind of tax relief. It falls under welfare and humanitarian activities. Basically, tax relief can be granted if one donates to organisations involved in the care or counselling of or the provision of education programmes relating to abandoned, abused, neglected, orphaned or homeless children and the care or counselling of poor and needy persons, where more than 90% of those persons are over the age of 60. There is also provision of health care to poor and needy persons, the care or counselling of terminally ill persons, the prevention of HIV infection, the care, counselling and treatment of persons afflicted with HIV/Aids and a whole range of concessions given for people involved in educare, training for the unemployed and the establishment of transfrontiers.
What we have here is donations relief which is very focused on the absolute poor and, we would almost say, the indigent people of our society. That is right. Over time I hope that we do come to review these very narrow restrictions, because I do believe that a flourishing social society is to the benefit of us all. I am not merely talking about the alleviation of poverty. I am also talking about organisations involved in cultural activities that enrich our societies and do not only deal with poverty relief. We are talking about a wide range of institutions which would benefit from donations from the corporate sector. If we are able to get these donations to move towards these other activities as well, I think it would be to the greater benefit of civil society.
The ANC has no difficulty in supporting this Bill. One of the issues that have been raised, though, is the issue of the regulation of tax advisers. The Minister has announced that that issue is going to be looked into in more detail. We all know there is a whole motley crew of people who provide tax advice, so certainly better regulation would be welcomed, as people do suffer from the lack of regulation.
Also, a lot of discussion in our committee was about whether the commissioner was receiving undue powers. I certainly have not made up my mind about this issue, but I do believe it might be useful for the commissioner, at some stage, to come before the committee to outline what new powers have been given him. Certainly, when I look at the powers given to him in terms of internal review procedures in the present Act, they do not strike me as undue powers. They fall within the terrain of the promotion of administrative justice and the requirements of that legislation. Nevertheless, I do think it is an issue that we need to come back to from time and time. When the committee has an opportunity we would like to engage with the commissioner on these issues.
The ANC supports this Bill. We want to congratulate Sars and the National Treasury, once again, on the extraordinary care and attention they take in addressing every issue that is raised by every person who appears before our committee. I say this every time. There is seldom a department that produces a comprehensive response to every issue raised by every person who makes a submission to our committee. It is an example of democracy in action and want to congratulate them on the ongoing way in which they respect democratic institutions in this country. [Applause.]
The MINISTER OF FINANCE: Chairperson, I would like to express sincere support to all the parties, because all the parties support the amending Bill before us. I would also like to share with colleagues here some good news about taxation and tax administration. On this past Sunday evening we launched the Southern African Tax Institute, where the first courses are being run for tax administrations from different African countries. There are some 60 participants from 16 countries who are undergoing training, alongside our South African representatives - that is, employees of Sars and the National Treasury. That is very good, because we then will develop a cadre of people on the continent who approach matters similarly.
Having said that, let me try to respond to some of the issues that have been raised by members. Hon Rabie raised the matter of the retirement funds and I would like to advise that that is a work in progress. We gave an undertaking that we would review the process and would come back here.
A number of members raised the amendments in section 18(A) and the relationship with public benefit organisations, and I would like to advise members that that also is work in progress. We have a meeting with the Nonprofit Partnership scheduled, so that we can deal with the issues that they are encountering as the voice of advocacy for public benefit organisations.
In respect of the issues raised by the hon Koornhof on the taxation of the banking sector and the mining sector, the first point to make is that, clearly, we have to be mindful of the contributions to the economy of these sectors. However, having said that, it is also imperative that we enjoy the support of members of this House to ensure that taxes are paid in terms of the laws passed by this House.
The discussions in respect of the banking sector, which we have reported on in this House previously, are essentially about going out there to collect taxes which have been due, and, clearly, there are going to be issues we have to deal with in a lot more detail, going forward. Amongst those would be that complex area of taxation, namely the taxation of financial derivative instruments. We are not alone in respect of the challenge here. There are very few countries that are dealing with these issues now, partly because there are no accounting standards for financial derivatives.
These will be big issues, so our engagement with the financial services industry in the future would require of us to ensure that we can place issues on an equal footing. In saying that, clearly, the approach to the retirement funds industry, as opposed to the funds themselves, needs to also be informed by the range of instruments that an industry like the retirement fund industry would use, often for tax minimisation and sometimes in that grey area between avoidance and evasion.
The hon Rajbally raised a point on which I am sure all in this House agree with her, namely the importance of trying to secure the earnings of low- income earners. It is for that reason that we have raised the tax threshold, so that people under the age of 65 earning below R27 000 do not have to pay tax, and people over the age of 65 who earn under R42 650 do not have to pay tax. The threshold is something we have moved up. It was R16 500 when I first became Minister of Finance, and it is something that we remain very mindful of, to try and secure the earnings of low-income earners.
The hon Hogan raised the issue of the regulation of tax advisers. Clearly, it is something that we remain in discussion about with the SA Institute of Chartered Accountants and the Public Accountants’ and Auditors’ Board, because they understand as well that these kinds of issues bring the profession into disrepute.
What we have said to them is that people take the best advice and, in fact, pay for professional advice, and if the advise is less than honest and less than rigorous, the taxpayer is then left with a huge tax burden later, and the adviser merely walks on. So the issue of regulation is important to protect the interests of taxpayers in their engagement with the Revenue Service but also in the interest of securing the good name of the profession.
The hon Taljaard raised a few issues. Let me just try and deal with three of them briefly. The first point is that I would like to suggest that she is patently incorrect in arguing that growth and redistribution are contradictory. They are not. By advancing issues of redistribution, we are growing the access of people to finance, we are growing the markets and we are growing the economy. It is important that we recognise that these are mutually supportive.
I do not suppose that we will ever agree on that, because our perspectives on this would be very different. However, societies that are more equal are societies that tend to grow better. In respect of a quote which I think I have now heard for the third time this week as an authoritative statement from the Economist Intelligence Unit, let us not fetishise them. They are economists and, like anybody else, they change their minds. Let us not construct an altar before the Economist Intelligence Unit.
In respect on the Mineral and Petroleum Resources Development Bill, I think the hon member is, again, patently wrong in saying that the Bill will, in any way, damage foreign direct investment. In the past few months, we have engaged with mining companies, both South African and foreign, and many of the foreign companies are, in fact, enthused by the fact that for the first time, some of them will have access to rights that were locked up by South African companies that may have acquired these rights as a result of the robbing of people of their land.
That is how mineral rights were acquired in South Africa, and if we retain these as locked up, we lock out not only South Africans who have been historically disempowered and impoverished, but also foreign direct investors.
I have it on good authority from the companies themselves that that they are interested in what we are doing because it is unlocking value and unlocking potential, and they are looking to partnership with South African blacks in the mining industry, going forward. [Applause.]
Thank you very much for the support on these issues. [Applause.]
Debate concluded.
Bill read a first time.
TAXATION LAWS AMENDMENT BILL
(Second Reading debate)
Bill disposed of without debate.
Bill read a second time.
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND CONSTITUTIONAL DEVELOPMENT - PROTOCOL ON ESTABLISHMENT OF AFRICAN COURT ON
HUMAN AND PEOPLE'S RIGHTS
Report adopted without debate.
The House adjourned at 18:22. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
ANNOUNCEMENTS:
National Assembly:
- The Speaker:
(1) Message from National Council of Provinces to National Assembly:
Bill, subject to proposed amendments, passed by National Council
of Provinces on 25 June 2002 and transmitted for consideration of
Council's proposed amendments:
(i) Implementation of the Rome Statute of the International
Criminal Court Bill [B 42B - 2001] (National Assembly - sec
75) (for proposed amendments, see Announcements, Tablings and
Committee Reports, 25 June 2002, p).
The Bill has been referred to the Portfolio Committee on Justice
and Constitutional Development of the National Assembly for a
report on the amendments proposed by the Council.
TABLINGS:
National Assembly and National Council of Provinces:
Papers:
- The Minister of Foreign Affairs:
Bilateral Agreement between the Government of the Republic of South
Africa and Germany, tabled in terms of section 231(3) of the
Constitution, 1996, concerning:
(a) Technical Cooperation Agreement for the "Public Sector
Reform";
(b) Technical Cooperation Agreement for the project "Study and
Expert Fund";
(c) Technical Cooperation Agreement for the project "Urban
Upgrading and Development Programme";
(d) Technical Cooperation Agreement for the project
"Broadening Agricultural Services and Extension Delivery";
(e) Technical Cooperation Agreement for the project
"Reorientation of Protected Areas (TRANSFORM)".
(f) Explanatory Memorandum to the Agreements.
COMITTEE REPORTS National Assembly:
- The Speaker:
The Speaker of the National Assembly, as Chairperson, presented the
First Report of the Rules Committee of the National Assembly, dated 21
June 2002, as follows:
The Rules Committee of the National Assembly having considered
proposals for the amendment of the Rules of the National Assembly
recommends the following amendments to the Rules:
Replace Chapter 10 with the following Chapter:
CHAPTER 10
QUESTIONS
Part 1: General
Notice and placing of questions
107. (1) Except as otherwise provided in these Rules or with the
prior consent of the Speaker -
(a) notice must be given of each question by placing it on the
Question Paper;
(b) no question for oral reply may be asked on the day on which
notice thereof is given.
(2) A member who wants to give notice of a question must
deliver to the Secretary, for placement on the Question Paper,
a signed copy of the notice, indicating the day on which the
question will be put.
(3) Questions delivered to the Secretary before 12:00 on any
working day may appear on the Question Paper on the second
sitting day thereafter and not earlier.
(4) Subject to Rules 108(7), 110(3) and 111, the Secretary
must place the questions on the Question Paper in the order in
which they are received.
(5) No question may be addressed to any person other than a
member of the Cabinet.
(6) If a notice of a question offends against the practice or
these Rules the Speaker may either amend the question or
return it to the member who submitted it.
(7) A member may give notice or take charge of a question on
behalf of an absent member if the member has been authorised
to do so by the absent member.
Part 2: Questions for oral reply
Form and arrangement of questions
108. (1) A member who wants an oral reply to a question must write
the words "for oral reply" on the copy of the notice of the question
delivered to the Secretary in terms of Rule 107(2).
(2) A question for oral reply may not contain more than five
subdivisions.
(3) If the Speaker is of the opinion that a question deals with a
matter of a statistical nature, the Speaker may direct that the
question be placed on the Question Paper for written reply.
(4) Questions for oral reply are limited to two questions per member
per question day.
(5) The restrictions imposed by Subrule (4) and by Rules 109(5),
110(4) and 111(5) do not apply to questions -
(a) approved as urgent questions in terms of Rule 112;
(b) standing over in terms of Rule 114(2)(a) or 115(1); or
(c) transferred from written to oral reply in terms of Rule
117.
(6) A question that is submitted for oral reply must be placed on
the Question Paper for reply at least six working days prior to
the Question day on which it is to be replied to.
(7) An authorised representative of a party may before 12:00 on the
Wednesday before the question day on which questions put by
members of that party are to be answered, notify the Secretary in
writing of the order in which those questions are to be placed on
the Question Paper.
(8) Questions that cannot be placed on the Question Paper for oral
reply because of quotas must be placed as questions for written
reply.
(9) The sequence of questions on the Question Paper rotates without
interruption for the duration of an annual session according to
the order in which members of the respective parties may put
questions. That order is determined by the Chief Whips' Forum from
time to time.
NOTE: Appropriate amendment to Rule 221 (Functions and Powers
of Chief Whips' Forum) requires consideration.
Questions to Ministers
109. (1) Questions for oral reply by Ministers must be dealt with
in accordance with three clusters of portfolios of government affairs,
as determined from time to time by the Chief Whips' Forum after
consultation with the Leader of Government Business, and published in
the ATC.
NOTE: Appropriate amendment to Rule 221 (Functions and Powers
of Chief Whips' Forum) requires consideration.
(2) The clusters rotate on a weekly basis, so that questions
relating to each respective cluster are answered every third
question day (subject to Subrules (3) and (4)).
(3) If a Minister is absent on a day when questions relating to the
relevant cluster are to be answered and those questions are not
answered by another Cabinet Member or by the Deputy Minister
concerned, the Speaker may, if requested to do so by the member in
whose name a question to that Minister stands, and after
consultation with the Leader of Government Business, direct that -
(a) questions to that Minister be placed on the Question Paper
for the first question session for Ministers following that
day; and
(b) an additional 30 minutes be added to the question time for
that session.
(4) Questions to Ministers must not be scheduled for a day on which
the President is scheduled to answer questions in the Assembly.
(5) The number of questions to a Minister is limited to ten
questions per question day in respect of any one department of
state.
(6) Where the order in which questions are put to Ministers
according to Rule 108(9) is interrupted at the end of a question
session, the next question session to Ministers starts from the
point where the order was so interrupted.
Questions to Deputy President
-
(1) Questions to the Deputy President must be scheduled for a question day once every second week.
(2) If that day falls within a week in which-
(a) the President is scheduled to answer questions in the Assembly; or (b) the Deputy President is scheduled to answer questions in the Council,
questions to the Deputy President must not be scheduled for that week,
but for the following week.
(3) Questions to the Deputy President have precedence over questions
to Ministers.
(4) The number of questions to the Deputy President is limited to
four questions per question day.
(5) Where the order in which questions are put to the Deputy
President according to Rule 108(9) is interrupted at the end of a
question session to the Deputy President, the next question
session to the Deputy President starts from the point where the
order was so interrupted.
(6) Notwithstanding Rule 107, questions to the Deputy President must
be submitted by party representatives in prioritized order before
12:00 on the Monday 9 days before the Question day on which they
are to be answered.
Questions to President
111. (1) Questions to the President must be -
(a) scheduled for a question day at least once per term in
accordance with the annual Parliamentary programme; and
(b) limited to matters of national and international
importance
(2) All other questions relating to the Presidency must be
directed to the Deputy President or the Minister in the
Presidency.
(3) Questions to the President must be submitted to the
Secretary before 12:00 on the Monday, 16 days before the
question day on which they are to be answered.
(4) The Secretary must submit the questions to the Speaker for
approval.
(5) The number of questions to the President is limited to six
questions per Question day.
(6) Where the order in which questions are put to the
President according to Rule 108(9) is interrupted at the end
of a question session, the next question session to the
President starts from the point where the order was so
interrupted.
Urgent questions
112. (1) A member may, with the permission of the Speaker, place an
urgent question for oral reply on the Question Paper for a question day
on which such a question would not normally be dealt with.
(2) A member who wants to place an urgent question on the
Question Paper must deliver a signed copy of the question to
the Speaker before 12:00 on the Tuesday in the week preceding
the week in which the question is to be answered, clearly
indicating that it is an urgent question.
(3) The Speaker must consult the Leader of Government Business
before approving an urgent question.
(4) If the Speaker approves an urgent question, it must appear
on the Question Paper before or on the Friday of the week
preceding the week in which the question is to be answered.
Times allotted and time limits
113. (1) Questions for oral reply have precedence on Wednesdays.
(2) The time allotted for questions is two hours.
(3) The reply to a question is limited to three minutes but if
the presiding officer is of the opinion that the matter is
of sufficient importance an additional two minutes may be
allowed.
(4) In respect of each question, four supplementary questions
may be asked.
(5) The member in whose name a question stands or who takes
charge of a question in terms of Rule 107(7), must be given
the first opportunity to ask a supplementary question.
(6) A member who asks a supplementary question may make a
statement or express an opinion, but may not speak for more
than one minute.
(7) A supplementary question may not consist of more than one
question.
(8) The reply to a supplementary question is limited to two
minutes.
Unanswered questions
114. (1) Replies to questions for oral reply which have not been
reached at the end of the time allotted on a question day
must be submitted in writing to the Secretary for inclusion
in the Official Report of the Debates of the Assembly.
(2) If a reply to such a question is not received by the
Secretary by 12:00 on the Thursday following the question
day concerned -
(a) the question must be regarded as standing over; and
(b) in the case of a question that has stood over in
terms of (a) or Rule 115(1) from a previous question
day, the Question Paper must be endorsed to the
effect that the question has not been replied to.
(3) Subrule (1) does not apply where questions to a Minister
are put on the Question Paper for the following question
day in terms of a direction by the Speaker under Rule
109(3).
Questions standing over
115. (1) A question for oral reply must stand over if the
person to whom it is addressed -
(a) so requests, either in the Assembly when the
question comes up for reply, or by notice in
writing to the Secretary before the start of
question time on the day for which it is on the
Question Paper; or
(b) is not present in the Assembly when the
question comes up for reply and the question is
not replied to by someone else on his or her
behalf.
(2) Subject to a direction by the Speaker under Rule
109(3), a question that stands over in terms of
Subrule (1) or Rule 114(2) must be -
(a) placed on the Question Paper for reply on the
next question day on which the person to whom
it is addressed is scheduled to reply to
questions; and
(b) must be published at the end of the Question
Paper, but may be prioritised in terms of Rule
108(7).
(3) A question for oral reply may not stand over more
than once.
(4) If a question standing over is not answered, either
orally or in terms of Rule 114(1) the Question Paper
must be endorsed to the effect that the question has
not been replied to.
Part 3: Questions for written reply
Form and placing of questions
116. (1) A question for written reply -
(a) may be placed on the Question Paper for any working
day
(b) must be delivered to the Secretary before 12:00 on
the Tuesday of the week during which it is to be
placed on the Question Paper for reply.
(2) A question for written reply may not contain more than 15
subdivisions.
(3) Questions for written reply are limited to three questions
per member per week.
(4) The restriction imposed by Subrule (3) does not apply to
questions referred to in Rule 108(8).
(5) If a question standing over is not answered, either orally
or in terms of Rule 114(1), the Question Paper must be
endorsed to the effect that the question has not been replied
to.
Written reply not given
117.(1) If the responsible Cabinet member has not replied in
writing to a question within 10 working days of the day for
which the question was set down for written reply, and the
member in whose name the question stands, or who takes charge
of a question in terms of Rule 107(7), so requests, the
Secretary must place the question on the Question Paper for
oral reply.
(2) If a reply to a question placed on the Question Paper for
oral reply in terms of Subrule (1) is submitted in writing to
the Secretary not later than 12:00 on the Question day on
which it is to be replied to, the question must not be called
in the House.
Report to be considered.
-
Report of the Portfolio Committee on Justice and Constitutional Development on the Implementation of the Rome Statute of the International Criminal Court Bill [B 42B - 2001] (National Assembly - sec 75), dated 25 June 2002:
The Portfolio Committee on Justice and Constitutional Development, having considered the Implementation of the Rome Statute of the International Criminal Court Bill [B 42B - 2001] (National Assembly - sec 75) and proposed amendments of the National Council of Provinces (Announcements, Tablings and Committee Reports, 25 June 2002), referred to the Committee, reports the Bill with amendments [B 42C - 2001].
Report to be considered.
-
Report of the Portfolio Committee on Housing on the Disestablishment of South African Housing Trust Limited Bill [B 3B - 2002] (National Assembly - sec 75), dated 25 June 2002:
The Portfolio Committee on Housing, having considered the Disestablishment of South African Housing Trust Limited Bill [B 3B - 2002] (National Assembly - sec 75) and proposed amendments of the National Council of Provinces (Announcements, Tablings and Committee Reports, 12 June 2002, p 693), referred to the Committee, reports the Bill with amendments [B 3C - 2002].
Report to be considered.
-
Report of the Portfolio Committee on Public Service and Administration on Retention of Service, dated 25 June 2002:
The Portfolio Committee on Public Service and Administration, having considered the request for approval by Parliament of retention of service beyond the age of 65, recommends, in terms of section 16(7) of the Public Service Act, 1994 (Proclamation No. 103 of 1994), that the services of High Commissioner Thandi Lujabe-Rankoe be retained until 31 August 2004.
Report to be considered.
-
Report of the Portfolio Committee on Housing on Study Tour to KwaZulu- Natal and North West, dated 12 June 2002:
The Portfolio Committee on Housing, having undertaken a study tour to KwaZulu-Natal from 1 to 4 April 2002 and to North West on from 7 to 11 April 2002, reports as follows:I. Introduction A multi-party delegation of the Committee undertook a study tour to KwaZulu-Natal from 1 to 4 April 2002 and North West from 7 to 11 April 2002. The delegation to KwaZulu-Natal was under the leadership of Ms Z Kota (Chairperson), and consisted of eight members and one official, namely Ms M N Buthelezi (ANC), Ms M P Coetzee-Kasper (ANC), Mr G D Schneemann (ANC), Ms M S Maine (ANC), Ms S H Ntombela (ANC), Ms J A Semple (DP), Mr B W Dhlamini (IFP), Mr D G Mkono (UDM) and Ms A Jojozi (Committee Secretary). The delegation to North West was also under the leadership of Ms Kota. It consisted of nine members and one official, namely Mr D C Mabena (ANC), Ms M S Maine (ANC), Mr J H Nash (ANC), Ms S H Ntombela (ANC), Mr G D Schneemann (ANC), Mr W M Skhosana (ANC), Ms J A Semple (DP), Mr B M Douglas (IFP), Mr D G Mkono (UDM) and Ms A Jojozi (Committee Secretary).
II. Objectives of tour
The Committee went on tour with the following objectives:
* To fulfil its monitoring and oversight function, the Committee
intended to establish progress made with the "Housing the Nation"
programmes.
* To have exchanges of views and experiences with both provincial
portfolio committees on housing, mayors of different areas, local
ward councils, contractors and developers.
* To visit various housing projects such as the People's Housing
Process, rural housing projects, hostel redevelopment projects,
projects developed by women and other inner city Developments.
* To establish whether units constructed are in line with norms and
standards stipulated in the housing policy.
The aim of the government is for all South Africans to have permanent
residential structures with secure tenure, where there will be privacy,
water and adequate sanitary facilities, including waste disposal and
domestic electricity supply. For the housing challenge to be met, the
aim of the government is to establish a sustainable housing process
through a national housing strategy which will eventually enable all
South Africans to secure housing in a safe and healthy environment and
within viable communities in a manner which contributes to an
integrated society.
III. Observations
The Committee would like to commend MEC D Makhaye and MEC D Africa, as
well as departmental officials, for the support given to the Committee
during the tour and for the good work they have done in ensuring that
the lives of the poor are improved. Homeless people have been provided
with shelter and this was evident in the interaction that the
delegation had with the different communities.
IV. KwaZulu-Natal
A. Visit
1. Introduction
The delegation visited 10 housing projects in different
municipal areas. On the second day of the site visit, the
delegation met with the MEC, Mr D Makhaye. He provided a brief
outline of the future plans of the Department in ensuring that
the poorest of the poor are sheltered. The tour included
meetings with mayors of the different municipalities. Projects
visited included visits to low-income housing projects, hostel
projects, middle-income housing projects and the People's
Housing Process. Officials of the Department accompanied the
delegation.
2. Meeting with MEC D Makhaye
In the meeting the MEC raised the following:
From 1994 to date, about 224 169 housing opportunities have
been created. In the same period, a total of 90 281 houses
have been built. A total of 155 670 service sites have been
completed. Under the guidance of Minister Makhaye, the rate of
housing delivery in the province has increased by 80% for the
financial year 2000-01, compared to previous years.
3. Size of housing units
National norms and standards stipulate that no house smaller
than 30 m2 will be built. This is vigorously enforced in
KwaZulu-Natal, with the result that proposals for housing
projects where houses less than 30m2 will be built, are not
even considered. The Minister is adamant that he is not going
to approve project proposals where norms and standards are not
followed.
4. Rural housing programme
The Department reaffirms its commitment to ensure that the
lives of people in the rural areas are improved. The
Department will work with Amakhosi and municipalities to fast-
track the rural housing programme. With regard to this
programme, the Department has approved rural housing projects
valued at R210 million between December 2000 and July 2001.
The Department subscribes strongly to the notion that rural
housing projects should be in line with the Integrated Rural
Development Strategy (IRDS). This will ensure that service
delivery impact is maximised and that a co-ordinated approach
to rural development is enhanced. Another R37 million for
rural housing projects was set aside for 2001-02.
5. Slum clearance
The programme to rid the province of slums was borne out of an
observation that, although normal housing projects benefitted
mainly former slum dwellers, there was need to have a specific
programme for slums in order to fast-track the betterment of
the lives of the people. Slum clearance has grown to be one of
the most successful of the Department's programmes. This is
evidenced by the fact that towards the end of 2002 the
Department launched the biggest slum clearance project in
partnership with the Ethekwini Unicity Council. This R200
million project, which is already under way, is expected to
provide housing to 10 850 families who have been living in
slums in and around the greater Durban area. All urban housing
projects that the Department has launched, should be regarded
as "slum clearance projects" because most beneficiaries are
from slums.
6. Rehabilitation of houses damaged during political violence
Promoting sustainable peace is a priority of the Department.
It recognises the damage and pain caused by political violence
in the souls and homes of ordinary South Africans. To try and
reduce the pain suffered by the people, business plans were
prepared and the Department received an amount of R25 million
allocated from the Provincial Peace Fund. During 2000-01,
houses damaged during political violence in different areas
(Mpumalanga, Ezakheni, Wembezi, Kwa Mashu, Imbali) were
identified for rehabilitation. As a result of the success of
these projects, a "crisis of achievement" scenario has been
created, as more and more communities are approaching the
Department for help to rehabilitate houses damaged in their
areas. However, the money allocated for that is exhausted at
present.
7. Housing projects for flood victims
The Department has been getting projects under way, aimed at
housing families affected by the floods of late 1999 and early
2000. A total of R24 million was allocated to the Department
for the reconstruction of flood-damaged houses. A R7,2 million
project has been completed in Mkhuze, and similar projects are
under way in Mahlabathini, Mpumalanga, Mpophomeni and
Impendle, totalling R21 million. In Macambini, Chatsworth and
Ezimokodweni a total of R1,2 million has been paid out in
cheques to communities, depending on the extent of the damage.
8. Fighting fraud and corruption
The fight against fraud and corruption has been intensified
and is yielding results. Forensic investigations are conducted
by independent firms to look into allegations of fraud and
corruption. For example, a developer who had carried out
shoddy work, was asked to rectify it at his own cost.
Developers who have received double payments, are already
paying back the Department, while some cases of fraud have
been referred to the SAPS. Action is also taken against
corrupt officials within the Department. Fraud has been
discovered within the Department and some officials involved
have been arrested. The investigation is still continuing. The
aim is to eliminate corruption within the Department and to
crack the whip on those officials not performing up to
standard.
9. HIV/AIDS
The incidence of HIV/AIDS in KwaZulu-Natal is too high, and
there is still no cure for it. The Department believes itself
to be the only housing Department to have established a
housing policy for HIV/AIDS victims and to approve houses for
HIV/AIDS patients. The AIDS project involves the Department
providing funds to institutions who wish to provide cluster
homes for persons affected by HIV/AIDS, in particular children
who are orphans as a result of the syndrome, for as long as
the institution in its discretion deems it necessary, and for
those abandoned by families because of their HIV status.
Subsidies are also provided for families that care for AIDS-
infected children.
10. Human settlement redevelopment pilot programme
It is the policy of the Department to improve the socio-
economic conditions of people living in dilapidated houses and
informal settlements. All spheres of government agree that
there is need to build on the experience gained from the
programme of special presidential projects on urban renewal.
In the overall quest for more efficient and productive urban
and rural areas, and to move away from apartheid patterns of
the past, the Department supports the projects under the human
settlement redevelopment pilot programme. To implement this
initiative the Department has embarked on a programme to
improve the quality of the living environment by addressing
the legacy of the dysfunctional.
11. Empowering emerging contractors
Economic empowerment of the previously disadvantaged group is
one of the Department's key focus areas. The Department
utilises and will continue utilising emerging contractors,
including women contractors and developers.
12. Hostel redevelopment programme
The objective of the programme is to promote humane living
conditions and improve the quality of life of hostel
residents. The Department is striving towards converting
single accommodation to family units. Affected residents as
well as informal residents are relocated to new housing
projects via the project-linked subsidy scheme. Negotiations
were entered into with a number of local authorities to manage
the upgrading programme. A total of R60 million was allocated
for upgrading and redeveloping hostels.
13. Problems experienced by Department
(a) When the government took over in 1994, there were no
specifications in respect of contracts. Some structures
built by developers were as small as 18 to 20m2. This was
discussed with the developers, but the Department could
not take them to court, as the contracts signed by
developers had no specifications. From 1999, though, the
quality of houses has dramatically changed.
(b) Some municipalities do not have the capacity and
experience financial constraints. Once they are
capacitated, they will be able to operate efficiently and
effectively.
14. Conclusion
The Department is replacing the "Developer-Driven Paradigm"
with a new "Community-Driven Housing Process".
B. Meeting with Ethekwini Municipality
The Executive Mayor of Durban, Mr O Mlaba, briefed the delegation,
as follows:
In the past, houses were built for the people, and now the
municipality is focusing on building human settlements. Most of
the houses that the delegation saw, were houses that were built
based on the old policies formulated by the previous government.
They were approved by the old administration under old policies.
The KwaZulu-Natal administration is still operating under the old
administrative systems, hence the problems experienced. According
to new housing policies, all projects should have tarred roads,
water-borne sewage and units built should not be less than 30m2.
The municipality is now trying to investigate whether housing
policies in place are working well for the people. Over 30% of the
costs of developing projects are contributed by the city council.
C. Meeting with Newcastle Municipality - Madadeni K Housing Project
The meeting took place at the municipality offices, where the
delegation met local councillors, members of the provincial
housing committee and developers. The delegation was welcomed by
the Council, but due to time limits had to rush to the first
project in Madadeni K.
1. Background to Project
R25 million was handed over to the Newcastle Local Council by
the MEC for Housing, Mr Dumisane Makhaye, for use in the slum
clearance project. The funds were to be utilised to build
homes for families living in squatter camps around Newcastle.
The MEC donated a further R936 000 to 624 families whose homes
were devastated by the storms which hit Newcastle in February
2000.
2. Project profile
The Department approved R3,2 million to build 258 double
housing units to house different families. The units built are
70m2, split into two and separated by a wall, with each family
getting 35m2, with full waterborne sewerage and piped water.
The houses have one bedroom, a lounge, a kitchen and a
bathroom with a toilet and shower. There is only one water tap
in the house. Where possible, the Department has ensured that
it is beneficiaries from the same family who share the 70m2
dwelling, in order to avoid squabbles. The project employed
about 140 local people, who later received building skills
certificates from Fideco Homes. These certificates were to be
accredited by the Department of Labour.
The developer recommended to undertake the development is Mrs
Claudette Keene of Fideco Homes, who has been involved in the
building industry for nine years. Fideco Homes has achieved a
Merit Housing Developer Award for 2000. Mrs Keene has
established a good working relationship with the Department.
The Department has made an effort to keep the greenery (trees
and grass). Some relatives (extended family) who share the
same 70m2 have decided to extend them and occupy them as one
family.
3. Problems experienced
(a) The fact that there are two families living under the same
roof is creating conflict between the neighbours, because
one complains about the noise the other one is making.
(b) Two families occupying the same 70m2 have been fighting
because the one wants to take over the other one's space.
(For example, a brother wanting to take over the house of
his sister.)
(c) Most of the houses have cracks because of poor
workmanship. For example, door handles are loose, floors
and walls are damaged and roofs are leaking, but the
developer has promised to rectify these (K126 & K955).
(d) The structural design of the toilet wall is a problem. The
wall does not go up to the roof, and this creates
problems when someone is using the toilet while others
are enjoying their meal. This forms a health hazard.
(e) The community made it clear that they are not happy with
the houses and that they prefer stand-alone houses.
(f) The occupant of K92A complained about her toilet system,
that was not installed properly. The toilet is blocked,
and this results in sewage overflowing. She complained
that Fideco Homes is aware of the problem but has not
assisted in reparing the toilet. Mrs Keene of Fideco
Homes promised that she would ensure that the toilet
would be fixed.
(g) More houses still need to be built in the area, as there
are many people without shelter.
(h) The project is not a women empowerment project. The
developer was told that women are to be included, not
only as workers but also as shareholders.
4. Recommendations
(a) The Committee recommends that in future only separate
houses be built, regardless of whether the occupants are
family.
(b) The developer should address complaints laid by the
beneficiaries relating to poor workmanship.
D. Meeting with Mooi River Municipality
The Mayor could not attend the meeting, as he was not well. The
town secretary gave a brief background of the three projects the
municipality and highlighted the problems experienced in
Bruntville, as follows:
The Bruntville problem started in 1999 and, according to the
Department, it is a policy issue that needs to be rectified. The
provincial housing committee visited the project previously and
will be addressing the matter with the relevant authorities. The
Department has also promised to address the problem together with
the council and to ensure that the houses in Bruntville are
occupied. There are beneficiaries on the waiting list who can be
located in these houses. The problem is that there is no procedure
or policy that can be used to allocate the houses to new
beneficiaries, as other people already own the houses.
E. Bruntville Housing Project
1. Project profile
The size of the houses is 30m2. The houses were built in 1995
when the minimum requirement was 28m2. The value of the
projects is about R7 741 800.
2. Problems experienced
(a) Some of the houses have been built on a flood plain, which
resulted in some houses being flooded when it rained.
(b) Certain houses have been built on top of springs, which
resulted in them being continually damp.
(c) Water sewage pipes are clearly visible above the ground,
making them vulnerable to vandalism and water wastage.
(d) Sewer waste is flowing into some yards that are lower than
those of their neighbours.
(e) Unoccupied houses were vandalised (e.g. window and
doorframes were removed. Beneficiaries have deserted
their houses and have left Mooi River because the
factories that they used to work in have closed down. To
be able to address this problem, the municipality will
have to take responsibility of the houses. The Department
will hand over the houses to the municipality. However,
the municipality cannot allocate these houses to new
beneficiaries. They have to inform the owners first,
which they do by advertising in the newspapers. Should
they not respond, the houses are then allocated to those
on the waiting list.
(f) Certain houses have deep cracks in walls, bacause of
structural defects.
(g) Most of the people in the area are unemployed and there is
high crime rate.
3. Recommendations
(a) The Committee is interested in finding out exactly what
the Department intends doing to ensure that there is
economic activity in Mooi River. It recommends that the
Department interact with and request the Department of
Trade and Industry to assist in identifying possible ways
of ensuring that economic activity is restored in Mooi
River.
(b) The developer should repair the cracks in the walls.
(c) The MEC should try and ensure that:
* Mooi River municipality speed up the process of
identifying beneficiaries who will occupy the vacant
houses. Advertisements should be on the radio as well
* Flowing sewer waste be rectified so that it does not
result in residents picking up from diseases
* The Bruntville town Planner, engineer and developer
submit an explanation as to why the sewerage system
was not properly installed and why there was bad
workmanship in the units.
F. Meeting with Mngeni Municipality
The delegation was briefed by the technical director on problems
experienced by the municipality. He briefed the delegation on the
home development project, which has three phases. The phases
differ in terms of quality; the project was developed by Howick
TLC. With reference to phase 3 of the project, beneficiaries are
on the waiting list, as houses are still not complete. The houses
are small and of low quality, with very small yards, bad
foundations, and inferior roofing and window panes. There are no
proper tarred roads in the area. The units that are occupied, have
been improved and renovated mostly bt the beneficiaries. There are
no Peoples Housing Process, but emerging contractors are awarded
tenders where they qualify. Houses being built at present are
38m2. Women in Howick have not been involved in building projects,
as they still need training in building skills. The whole province
has been under a moratorium as regards individual subsidies; the
Department is helping those who submit individual subsidy
applications.
G. Meeting with Msunduzi Municipality
1. Briefing by Mayor of Msunduzi
(a) Rental stock
The Council owns substantial rental stock and these
generate some income to sustain the organisation and at
the same time offer housing to the homeless and needy.
The previous Council created a s21 company and some of
the present Council members are board members of this
company. No projects were implemented by the previous
Council, as they had encountered many problems. Problems
experienced included resistance from non-ANC and IFP
housing board members. The Council is grappling with
issues of providing good service to the people. The
problem is beneficiaries who are not satisfied with the
size of the houses they are offered.
(b) Slum clearance
Houses have been built in order to do away with informal
settlements in the area. The Council is hoping to
relocate people to the new houses by the end of June
2002. 2 000 houses have been built and two of the
projects are in Greenfields. The Council welcomes the
increase in subsidy as it will benefit the people by
affording them better houses when combined with their
contribution.
2. Recommendation
The Committee is concerned about councillors who are board
members, as this may affect their objectivity.
H. Meeting with Matatiel Municipality
The Mayor gave a brief background of the Harry Gwala Park Project.
He highlighted the following points:
The size of the houses built in Harry Gwala range from 30 to 35m2
but there are also houses that are 17m2. Some people who qualify
for 30m2, have been allocated 17m2. This creates a problem, as the
Council does not understand how it could have happened. There is
another project in Matatiel, the Njongoville Project, where small
houses have been built for the people. Some of the beneficiaries
were not happy with the size of the houses and developers offered
to give them loans to the amount of R10 000. These loans were to
assist them to extend their houses. Some of the beneficiaries
could not pay back the loan and developers sold their houses to
those who could afford it. The MEC is aware of the problem and is
trying to resolve it legally. A library and a shopping centre were
also built, both by women.
Harry Gwala Park - Matatiel Area C - Rural Project
1. Project profile
The project has about 1 124 sites and is a rural project which
is developer-driven. The project was approved in March 1999
and was started on 1 April 2002. The expected date for
completion is 30 July 2002. One of the reasons for the delay
is the fact that beneficiary approval was delayed due to a
change in beneficiaries. Provision for schools, clinics, a
créche and a community hall has been made. The houses are 30m2
and 35m2 and will be electrified with waterborne sewage. The
Council has approved R1,6 million for building a taxi rank. A
community hall will be built soon. A R780 000 contract has
been awarded for a walkway bridge. Trees have also been
planted.
2. Problems experienced
The community issued the delegation with a summary of
grievances and the Mayor assured the delegation that issues
raised have been addressed.
The community is complaining of the following:
(a) Some people who previously qualified for vacant plots
cannot afford to build houses as some have been
retrenched and do not have a source of income.
(b) Some people have been allocated more than one house while
others sell theirs or lease them.
(c) They are not happy that Stedeone Construction was awarded
the tender. They believe that it does not deserve the
contract, as they came third in the tendering process.
(d) They are questioning the criteria used when houses are
allocated.
(e) Some people use their houses for business purposes.
(f) The developer approached beneficiaries who wanted to
extend their houses and offered them a loan of R10 000.
Some beneficiaries could not afford to pay back the loan
and the developer repossessed their houses.
(g) Funds allocated for the walkway bridge were never utilised
as the bridge has not yet been built.
3. Recommendations
(a) The Department should ensure that people who previously
qualified for vacant plots are placed on the waiting list
for the subsidy.
(b) The matter of developers repossessing houses should be
dealt with legally and the Minister should be made aware
of it.
I. Meeting with Greater Kokstad Municipality
The municipal manager highlighted the following points:
The Bhongweni project has not been successful as the developer
went bankrupt. This has left the project incomplete. 6 000 units
with 33m2 units have been built in the last two-and-a-half years,
and a tender to complete an additional 100 units has been put out.
The cost of installing electricity was about R10 million, but
installation has not been completed. About 400 houses are
unoccupied and the Department is struggling to locate
beneficiaries. No complaints have been received on the standards
and quality of the houses. Within the Kokstad Municipality there
are six rural projects, and the municipality is succeeding in
delivering houses. Local people are utilised to build houses; they
were also utilised to build houses in the People's Housing
Process. Kokstad has, however, stopped implementing the People's
Housing Process. Another project was approved for the People's
Housing Process, but the community opted for a developer-driven
project.
The Housing Board and the Department of Housing were very useful
and co-operative in ensuring that the tender processes were
approved quickly in Kokstad.
J. Bhongweni
Project profile
6 000 units have been built in the past two-and-a-half years. The
developer went bankrupt and the project is not complete. In phase
I, 400 houses are unoccupied, as beneficiaries have vanished and
the Department is struggling to locate them. 200 of those
beneficiaries have been located. The houses that were initially
built, were 25m2, and now 30m2 houses are being built. The size of
the houses to be built in phase 2 of the project will be 40m2.
K. Meeting with Ugu Municipal Housing
Within Ugu Municipality, two projects that will be community-
driven have been approved. 733 houses will be built in the first
project and 2 000 units in the second project. R18 million was
approved for the two projects. There are delays in commencing with
the projects and the Council is grappling with initiating the
People's Housing Process. Initially there was no director of
housing in the municipality, but one has been appointed recently.
Developers are facing huge challenges, including shortage of land
to build houses.
L. Gamalakhe Tin Town - People's Housing Process - Port Shepstone
1. Background to project
The community of Tin Town initiated the construction of houses
as there was a great shortage in the area. They realised that
given a chance to build or organise the extensions to their
homes themselves, they could achieve a greater level of value
for money. The Gamalakhe Tin Town project was approved in
March 1998 and was completed in December 2000. The project was
managed by a partnership between the housing development
committee formed by the community, known as the Gamalakhe
Development Trust, the provincial government and the local
authority.
The community identified its housing problem and initiated a
programme to provide its own housing. The houses they were
living in before, were tin houses (shacks). The project was
funded by the Department.
2. Project profile
People of the community constructed the houses utilising their
own skills. They also provided personnel to manage the
material supply programme. Certain members of the community
also managed the allocation procedure, which included all the
documentation. The action of the community in completing their
own houses encouraged more social responsibility and the
managing of their own affairs on a broader scale. They used
the People's Housing Process to achieve the objective of
completing 600 houses for families with incomes below R1 500.
The houses included individual water and sewer connections,
which were included in the budget. The blocks were
manufactured by the community and this stimulated
entrepreneurship within the community. The community committee
continues to tackle ongoing community needs such as security
and health.
The houses have one bedroom and a bathroom with a toilet and
shower. The tin shacks that the beneficiaries used are still
at the back of the two-roomed houses. The project won the
nomination for best housing project. The beneficiaries are
happy with their houses and they are grateful to the
Department for providing them with decent homes.
M. Bhobhoyi Show House
The show house has been finished and the project has been approved
but no houses have been built yet. The show house has been built
with good quality material and has tiles for roofing. The top
structure costs about R10 445 and services R7 245. The
beneficiaries will be trained to build the houses themselves. The
project is part of the People's Housing Process, and the developer
will also be involved in building the houses.
N. Kwa Dukuza
Shakaville Men's Hostel
1. Background to project
Preliminary investigations to upgrade the hostel started in
1994 (upgrade existing building with new ablution facilities
and shower area). The tender to upgrade the hostel was
advertised on 4 November 1998. Consultants Csko Coltzee,
Steyn, Kruger, Oelsen (?) from Richard's Bay were appointed by
the Department of Housing as project managers. In July 1999,
the Department awarded the tender to a local contractor,
Multipro Construction Company, for an amount of R352 000.
2. Project profile
The men's hostel consists of three blocks with 44 rooms and a
population of approximately 100 residents, including families.
The hostel upgrade was completed in December 1999. A hostel
committee is in place and residents pay R40 for rental, which
includes communal water, maintenance, bed rental and
caretaking. Rentals are collected and paid into the local
authority's account. Each room has a pre-paid electricity
meter. The local authority is presently doing emergency day-to-
day maintenance and administration of the hostel. The family
units have one room, which is used as a bedroom and a kitchen.
There is a communal bathroom with toilets and showers. A woman
is employed to clean the yard and the bathroom.
Shakaville Women's Hostel
1. Project profile
On 23 November 2000 the Kwa Dukuza Municipality awarded the
tender to an emerging contractor, Macingwane Security and
Gardening Services, for an amount of R116 000. Construction
commenced in January 2001 and was completed in May 2001. The
women's hostel has one block with 36 female residents. There
are 11 rooms and a bathroom with toilets and showers. There
are about two to three occupants sharing one room and using it
as a bedroom and kitchen. The plan is to allocate these women
to family units that are going to be built. There is a hostel
committee in place and the residents pay R40 for rental, which
includes communal water, maintenance, bed rental and
caretaking. Both the men's and women's hostels are well kept.
2. Recommendation
The issue of more than one person sharing a room should be
discouraged. One person should be allocated to a room as
occupants deserve privacy.
Shakaville Family Units
R294 000 is available from the Department as a pilot project for
the construction of family units. This aspect is presently being
discussed with the hostel development committee and the local
authority.
O. Newlands West - People's Dialogue
1. Background to project
To access land for the housing project, the South African
People's Homeless Federation, on behalf of the community, had
to negotiate with the Durban Metro and the Department. Land
was allocated to the community and loans to build houses were
accessed from uTshani Fund by those who qualified. The
beneficiaries are still waiting for their subsidies to be
approved. Once they are, they will be able to pay back their
loans with the subsidy grant. The Durban Metro arranged with
different organisations to offer the community training on the
maintenance of the project. The community had saved money to
assist them to contribute towards subsidies.
2. Project profile
The houses are 56m2 in size, with four rooms - two bedrooms, a
lounge, a kitchen and a bathroom with a toilet and bathtub.
They were built by women. Each house has a waterborne sewerage
system and a water tap. The houses are big with two doors, one
in the kitchen and the other in the lounge. The loan accessed
from uTshani Fund is R10 000 and beneficiaries have to make
repayments of R120 every month. Some beneficiaries raised
additional funds to build bigger houses.
3. Stakeholders involved
(a) Durban City Council
(b) International organisations
(c) Newlands community
4. Problems experienced
(a) The project has been delayed because the beneficiaries
cannot afford to proceed with construction due to
financial constraints.
(b) 15 beneficiaries have passed away, which makes it
difficult for their loans to be repaid.
(c) There is corruption with regard to the delivery of
building material. Building material is often delivered
to those who do not qualify for delivery. Some of the
houses of beneficiaries who are first on the waiting list
are still not complete due to allocation of material to
the "wrong" beneficiaries.
(d) The community believes that officials are not honest when
they say their subsidies are not yet approved. They are
suggesting that the Council should intervene in the
matter.
Despite the problems experienced by the community, this is an
exceptional projects, as it incorporates the RDP principle
that puts people at the centre of its development.
5. Recommendations
(a) Local government should implement job creation projects to
assist in fighting unemployment amongst the residents of
Newlands West.
P. Kwa Dabeka Hostel - Pinetown
1. Project profile
The hostel consist of nine multi-storey buildings and has
about 11 230 formal residents and 3 770 informal residents.
The Department is doing emergency day-to-day maintenance and
administration. So far an amount of R26,5 million has been
spent for upgrading electrical distribution boards and partial
external upgrading of block H.
In order to embark on a pilot project 25 dormitories were
converted to make provision for 25 family units in block A. A
further R20 million was made available to continue with the
upgrading programme. Another R20 million was made available to
continue with the upgrading programme and also for the
provision of family units. Rentals are collected by the
Department and deposited into the Inner West City Council's
account. Rental ranges from R11 to R25, depending on the
number of residents per room. The tender was awarded to 35
different contractors. Local people were trainied to assist
with the renovations. The units have a bathroom with basin,
toilet and shower, two bedrooms, lounge and a kitchen. The
community was consulted before the renovations were done.
2. Observations
When the delegation arrived in the afternoon, electricity
lights were on and there were water leakages. The general
appearance of the outside surroundings was not good.
3. Recommendations
(a) Control measures should be addressed by the hostel
management.
(b) Maintenance of the hostel needs to be improved and the
environment cleaned on a continuous basis.
Q. Thokoza Women's Hostel - Central Durban
The Thokoza Women's hostel consist of three hostel blocks with
1 010 formal residents and 990 informal residents. Thus far an
amount of R14 million was spent on upgrading the hostel. The
Ethekwini Municipality is presently doing, at its own cost, day-to-
day maintenance and administration. Rent is collected by the
Ethekwini Municipality and ranges from R6,65 to R50,50, depending
on the number of residents per room. The kitchen and toilets are
communal. The general appearance of the hostel is good as it is
kept clean.
R. Comments
The Committee intends to revisit KwaZulu-Natal. The programme was
drafted in such a way that it did not cater for distances to be
travelled. This resulted in the delegation spending little time in
the areas visited.
Despite the challenges faced by the province, delivery of houses
is being speeded up. Rural houses are built and new housing
projects are started. It is obvious that the Department is
committed to ensure that the lives of the poor are improved.
V. North West
A. Visit
1. Introduction
The delegation visited eight projects in different
municipalities and also met with Mayors, councillors and
relevant ward councillors of the different areas. It met with
the housing MEC, Mr D Africa, on the third day, and was
accompanied by officials from the Department for the entire
tour.
2. Meeting with MEC
The challenges of housing and infrastructure are vast and much
has been done but much remains to be done to ensure equitable,
sustainable and intergrated settlement development throughout
the province. More than 16 000 houses were delivered in the
province during the 2001-02 financial year. In order to
eradicate the backlog of some 396 000 houses, an amount of R7
billion is required. Integration at all levels, with other
sectors, other spheres of government, will be the only way the
Department can coherently make a difference to housing and
infrastructure delivery.
3. Project-linked programme
This programme entails the establishment of townships and the
transfer of full title to individuals. It comprises 94 urban
and peri-urban projects to the value of more than R1,474
billion. A total of 41 357 dwellings have been constructed and
more than 100 000 subsidies approved under this programme
during the first six months of the 2001-02 financial year.
4. Project-linked rural housing programme
The rural housing programme was finalised in 1999 and
different projects have been launched in 2000-01. The
programme includes 23 housing projects in rural areas,
comprising 22 448 subsidies/units to the value of more than
R355 million. A total of 1 655 dwellings have been constructed
under this programme during the first six months of the 2001-
02 financial year.
5. Individual subsidies programme
The Housing Code allows individuals to access subsidies. A
total of 9 524 individual subsidies have been approved and
houses built to the value of R294,5 million. A total of 25
dwellings have been constructed under this programme during
the first months of the 2001-02 financial year.
6. People's Housing Process
Five housing support centres have been established to date.
These centres enable local communities to create savings
schemes from which dwellings are financed. They have been
supported financially by the Department to an amount of nearly
R50 million, which includes the approval of 3 324 housing
subsidies. The People's Housing Process has completed 764
units to date, which are, on average, 50m2 in size. This year
at least seven centres, especially in the rural areas, will be
established.
7. Developer-driven individual subsidies
This programme is targeted to assist SMMEs and small
developers or contractors that are in a position to build
houses up to 100 units at a time. A total of 71 dwellings have
been constructed under this programme during the first six
months of 2001-02 financial year.
8. Hostel redevelopment programme
This programme entails the conversion of seven hostels into
2 172 family units. A total of 35 hostel units have been
converted into dwellings under this programme during the first
six months of the 2001-02 financial year.
9. Human settlement redevelopment programme
The intention is to ensure urban renewal where necessary. Two
projects to the value of R13 million have been completed in
Winterveld and Mafikeng.
10. Housing projects for flood victims
An amount of R8,1 million in the form of a conditional grant
was specifically allocated to the Department to
reconstruct/erect 501 dwellings damaged during the floods of
February 2000. A total of 317 dwellings have been constructed
under this programme during the first six months of the 2001-
02 financial year.
11. HIV/AIDS
The possibility of setting aside houses to cater for AIDS
orphans, people living with HIV/AIDS and the elderly in
conjunction with relevant welfare and health departments is
being explored.
12. Women in housing
The 10% target set by national housing has to be met by 1
April 2003. At the moment there are 5,7% women who are
executing 10 housing projects comprising 5 270 subsidies to
the value of R134 million. In terms of the new procurement
policy preference will be given to women developers.
13. Presidential job summit - rental housing programme
The national Department of Housing has set aside funding for
the erection of 5 000 rental housing units to the value of
approximately R250 million in North West, in respect of which
75% must be retained for rental purposes and only 25% may be
sold.
14. Job creation
The MEC has urged developers to address the issue of job
creation.
15. Housing institutions
The province is concerned at the fact that they are excluded
from the benefits of different housing institutions.
B. Briefing by Mr E Sinovich
Mr Sinovich briefed the delegation on the new policy imperatives
and challenges faced by the Department, as follows:
1. Increase in subsidy
People's Housing Process beneficiaries will not be compelled
to pay a contribution. The increase in the subsidy was
effective on 1 April 2002 and it only applies to projects
approved after 1 April 2002. The Minister has been requested
to consider the People's Housing Process as an exeption to the
rule and let the effective date be 2 January 2002. The
Department is still waiting for her approval.
2. New procurement regime
The housing MINMEC on 29 May 2000 approved a proposal on the
procurement principles required to enable the housing subsidy
scheme to comply with the provisions of section 217 of the
Constitution. Consequently, on 21 July 2000, the heads of
housing departments approved new procurement procedures in
respect of the housing subsidy scheme. A new complete process
for housing development will be introduced, with fair
competition in all phases. Firstly, IDPs will be finalised,
needs and priorities identified and suitable areas for
addressing needs will be identified. Municipalities will be
invited to make provision in their applications for a profile
of the communities. Land offer calls will be made after all
information has been received from municipalities. Land will
be accessed through negotiations with owners if it is private
land. Municipalities will conclude land purchase agreements
with landowners.
Project description - municipalities will have to compile
project descriptions, which comprise the number of subsidies,
and undertake to provide services and land acquisition
agreement.
In order to deliver, it is necessary to appoint a developer to
manage the project, contractors to install services and to
build houses. The developer will then decide how to undertake
a project best suited for local circumstances. It will decide
on how to construct houses (for instance, the design). It can
decide to engage in the People's Housing Process, it can
execute the project itself or outsource the project.
Most people prefer to build their own houses but the problem
is they do not fall under the warranty cover offered by the
National Home Builders Registration Council (NHBRC). Another
problem is that it takes time before PHP projects are
completed.
49% of developers in the North West are women, only two of the
six women developers are emerging ones, the rest being fully-
fledged developers.
Only a few people receive free basic services, as
municipalities have no authority to provide water and
electricity. Water is provided by the Department of Water
Affairs and electricity by Eskom.
3. Recommendations
(a) The People's Housing Process must not be excluded from the
warranty scheme.
(b) Policy should ensure that in a developer's contract it is
stipulated that local small contractors should be
capacitated and utilised and that first preference should
be given to emerging women contractors.
C. Briefing by North West Housing Corporation (NWHC)
After 1994 transformation took place and it resulted in a new
company, the Housing Infrastructure Development Company (Hidco).
There were management problems within the Company which emanated
from before 1994 and continued after 1994. The role of the board
had to be changed before it became the NWHC. Until 1997, the NWHC
received funding from the government.
1. Financial overview
The NWHC has stock of R210 million. This include R20 million
(flats) and serviced stands (R39 million). All of them are at
book value, which on average is 50% below market value.
Work in progress amount to R42 million
Accounts receivable - R220 million
Fixed Assets - R1 million
Investments - R7 million
Liabilities of the NWHC are mostly historical - long-term
loans of about R77 million (Public Investment Commissioners),
Winterveld Trust (R5 million), accounts payable by SA Housing
Trust (R22 million), and retention of about R1 million. It has
stock worth R210 million.
2. Challenges facing NWHC
(a) Policy and financial
The transformation and repositioning process still needs
to be completed and the legacy problems still needs to be
solved. The NWHC has to reduce its liabilities.
(b) Housing delivery
* More units have to be delivered.
* The quality and size of the units constructed have to
be improved.
* The NWHC has to offer those who have already
benefitted an opportunity to improve and enlarge
their homes.
* It also has to improve access to housing finance and
implement the discount benefit scheme and, where
applicable, pass ownership.
(c) Policy
* The transformation process still needs to be
completed.
* Transit to HIDCO also has to be completed.
* HIDCO has to be changed into a s21 company.
* All operations and policies based on the old
dispensation still have to be eliminated.
* With the new mandate from the province, the NWHC has
to be realigned (e.g. introduction of social
housing).
* The NWHC has to work with housing institutions at
national level through co-operation and joint
ventures.
(d) Financial
There is a need for the NWHC to:
* Access short-term finance to pay current
liabilities.
* Collect accounts receivable, especially from
government institutions.
* Become a primary market lender.
* Resolve barriers related to work in progress:
- Proclamation R293
- Land transfer.
* Renegotiate terms for the loans obtained in the
past, if they cannot be turned into grants.
The NWHC is requesting the intervention and assistance of
the Committee, the Department of Housing, the Social
Housing Foundation, NURCHA and the NHFC in addressing and
solving the following problems:
* The transfer of land among government spheres -
there are houses that have been built on national
land - some of the land has been transferred to the
municipality.
* Properties in the Free State - the NWHC has
properties in Thaba Nchu that, under the new
demarcation, fall under the jurisdiction of the Free
State. The NWHC want the land transferred back to
them. They need help with negotiations between North
West and the Free State over properties in Thabu
Nchu.
* Loans taken during the old dispensation - the NWHC
requests that loans taken by them in the old
dispensation be turned into grants, especially in
view of the NWHC not receiving annual grants anymore.
(e) Department of Housing
The NWHC suggests that if no immediate legislative
solution to the problem of proclamation R293 can be
found, it seeks the following:
* Co-operation of the Department of Provincial and
Local Government, the State Attorney and the Surveyor-
General to speed up the opening of new township
registers.
* Intervention of the Department of Provincial and
Local Government to help municipalities take over
basic services rendered by the NWHC.
* Guidance of the Department where a discount benefit
is given to beneficiaries while the NWHC has to
service loans and pay interest as well.
* Intervention from Provincial and Local Government in
the matter of rent collected by municipalities on
behalf of the NWHC but was never paid over, for
example R5,7 million from Temba, Mabopane and
Garankuwa alone.
(f) Social Housing Foundation
NWHC requests the Social Housing Foundation to:
* Utilise the NWHC's experience in rental housing
* Form a partnership to develop capacity among
municipalities
* Turn some of the NWHC's existing flats into social
housing projects and utilise some of the services
stands for the same purpose
Arrangements are being made for the NWHC to have their
first meeting with the Foundation.
(g) National Urban Reconstruction and Housing Agency (NURCHA)
The NWHC would like to have joint ventures with NURCHA
for non-subsidy projects and to have NURCHA bridging
finance for low-cost projects. Applications are finalised
for low-cost projects and one affordable housing project
for the short term, while another affordable housing
project is planned for the medium term.
(h) National Housing Finance Corporation (NHFC)
The NHFC is unfortunately not operating in the North
West.
* The NWHC approached the NHFC for short-term
financing of R10 million for operational expenses
* The NWHC needs to turn existing instalment purchase
agreements into loans and sell them to the NHFC
* The NWHC needs to form a joint venture with NURCHA
to build houses for those on the waiting list with
end-user finance and loans sold to the NHFC.
D. Meeting with Stinkwater Municipality
The delegation met with the Mayor, the Council, ward councillors,
the developer and members of the community. The local council
informed the delegation that members of the ward committee was not
informed of the delegation's visit. They are happy with the top
structure but are struggling to get clean water. The water supply
is low and the capacity of the local dam is not great.
The developer, Megacom Housing, briefed the Committee:
1 267 houses have been completed and are ready for the
beneficiaries to sign their happy letters. 1 307 units have been
roofed but are not yet occupied. 1 348 units (up to wall paper,
not roofed yet) have been built thus far. The type of foundation
built is approved by engineers before it can be built, and blocks
used were approved by the CSIR. Local people were employed in the
project and there are about 904 workers on site, 610 men and 294
women. Funds were not made available for a water-borne sewerage.
People fetch water from water taps, 200m away from their
households.
E. Stinkwater rural housing project
1. Background
Stinkwater township is situated on the remainder portion 6 of
the farm Stinkwater, 15 km from Hammanskraal. It is adjacent
to Dilopye (to the west) and on the road between Temba and
Soshanguve. The contract for the development to commence was
signed in May 2000. The project to build 200 units was started
in May 2002, and the project is developer-driven.
2. Stakeholders involved
The Stinkwater local development forum community-based partner
Megacom Housing - developer
The district council
The RDP standing committee
The main objective of the agreement was to provide low-cost
housing - a type of individual house acceptable to the
community. The services level comprised graded roads.
3. Project execution
The portion of land that the project was built on, was
transferred from the national government to the North West so
that each site could be registered in the name of the
beneficiary. CMIP funding was also approved for the provision
of bulk water. Construction of internal infrastructure began
in October 2000 and was completed in July 2001.
4. Project profile
Internal services comprise a water tap in each yard, a pit
toilet and graded roads. The units are 40m2 and the project
value is R36 800. By the end of May 2002, water construction
for the area will be completed, as it is now under
construction. The houses consist of three rooms with three
windows, plastered inside and outside and also painted
externally in a variety of colours. The blocks for the project
are manufactured on site, thus increasing opportunities for
local labour and transporters. Sand was transported by local
people and blocks were manufactured locally. The houses do not
have bathrooms.
Local-based labour was used by the developer to promote
training and skills transfer and to ensure maximum community
involvement. The project created employment opportunities for
about 1 045 people, which included 189 women, 452 men and 404
youths (under 30 years).
The project is not yet complete. 1 307 units have been roofed
but not yet occupied. 1 267 units have been completed and
ready for the beneficiaries to sign happy letters.
5. Problems experienced
(a) Some women cannot access houses and some are not allowed
to sign happy letters. According to one of the
beneficiaries, it is only their husbands who are allowed
to sign the happy letters. Her husband is not interested
to stay in the house and she is worried that when the
title deed is given to the beneficiary, her husband will
refuse to hand it over to her.
(b) The municipality is not actively involved in Stinkwater.
(c) Water supply is in demand in the area and the community
has some difficulty in accessing water, as the capacity
of the local dam is low. The community has been without
water for three weeks. The matter has been taken up with
the Department of Water Affairs.
(d) The approval of the project was delayed - the application
for the project was submitted in 1996 and the project was
approved in 1999.
(e) Developers are accused of not empowering subcontractors
and only allowing them to do painting and installation of
window-panes. They employed local brick layers and local
people as labourers.
(f) Local and provincial governments were not allowed to solve
the problems experienced with the developer.
The provincial housing committee will revisit the area to meet
the local people and the developer, Megacom Housing. The
purpose of the visit will be to find out exactly what the
problems of the community are.
6. Recommendations
(a) The Department of Water Affairs should expedite the
provision of water to the community.
(b) Contracts signed by developers should stipulate that they
should fully empower local contractors.
(c) The Department should see to it that the municipality is
actively involved in matters affecting the Stinkwater
community.
F. Mabopane Unit U
1. Project profile
This project is located in Mapobane and is referred to as Unit
U. It is situated North of the Morula Sun and is adjacent to
the Sand River. This project consists of 1 411 housing units
to the value of R259 624 000 and is developer-driven. To date
R231 537 35,50 has been paid over. The houses are 30m2 (on a
minimum size of 250m2). The houses have a bathroom with a
basin and toilet and one big room used as a bedroom, and a
lounge and kitchen. Provision has been made for a bathtub.
Eskom is installing meters for electricity and local people
are trained and were employed to assist with the installation.
The developers had consulted the community before the project
was started.
Each house has full water-borne sewerage and a water tap. All
internal roads have been graded and a tarred bus road is
provided. Construction of the units commenced in May 2001 and
the project was completed in November 2001. Training was
provided for the local people employed in the project, and as
such skills were transferred to them.
2. Stakeholders involved
The project was successfully run by community members, the
municipality, SANCO and the developer, Homes 2000.
3. Problems experienced
(a) Some of the houses have structural defects. There are
cracks in the walls even though they were recently built.
(b) Some subcontractors approached the developer but only one
was employed; the local people employed in the project
were underpaid.
(c) There are school children who own houses and who do not
qualify for subsidies. Of the 1 411 houses, 200 are
occupied illegally.
(d) Some of the houses are used for business purposes.
(e) Some of the houses are built along the river banks. The
MEC promised to look at the matter and to ensure that it
does not happen again.
4. Recommendations
(a) The Department should ensure that Homes 2000 repair the
cracks in the walls, caused by poor workmanship on their
part.
The Department should see to it that houses are properly
allocated and are occupied by the people who qualify for
them. It should ensure that these houses are used only
for residential purposes and not for business purposes.
(c) The Department should investigate whether there are houses
that are built below the flood line, and if there are,
the occupants should be relocated elsewhere.
G. Garankuwa view
1. Project profile
This project is situated north of Garankuwa's industrial area.
It consists of 3 249 units to the value of R597 816 000. To
date R404 313 93,33 has been paid for the project. The houses
are 30m2 in size (on a minimum stand size of 250m2). These
houses have one room and a bathroom. Each house has water-
borne sewerage and one water tap is installed outside.
Electricity has not been installed.
All internal roads have been graded and a tarred bus road is
provided. Construction of the units commenced in April 2001
and the project was completed in November 2001. The project
has been successfully run by the steering committee, which
consisted of the municipality, Homes 2002 and the CBP. In
phase 2 of the project, 935 houses will be built. Land
identified for the project was an industrial area, and the
developer is waiting for the municipality to allocate land for
the project.
2. Problems experienced
(a) It is very inconveniencing for beneficiaries to access
water from the water tap outside.
(b) There is no privacy in the house, as there is only one
room where the whole family sleeps.
(c) It is very dark in the road at night, as there are no
streetlights.
(d) School children have to walk about 15 km to the nearest
primary school.
The developer is going to donate the show house to be used as
a clinic. Trees were also donated by the developer.
3. Recommendations
(a) Provision should be made for a school bus to transport
pupils until a school is built in the area.
(b) The Department should in future ensure that developers
build houses according to set norms and standards.
(c) Streetlights should be installed as matter of urgency, as
the area is prone to crime.
H. Meeting with SA Homeless People's Federation
The delegation met with councillors and members of the SA Homeless
People's Federation (SAHPF). The SAHPF briefed the delegation as
follows:
Most people in the area do not earn enough to support their
families. Some are pensioners who have to support their families.
The People's Dialogue/Federation's approach to savings differs
fundamentally from the conventional type of savings. The SAHPF has
moved away from set monthly savings and loan repayments required.
Instead, there are treasures that are trained to make daily
collections of loan repayments. These daily collections can be any
amount. Some people started saving as little as 20 cents, because
some people are unemployed and are involved in the informal
sector. As soon as people have saved enough, they are grouped in
numbers of 10 and allowed to access Utshani Fund. Utshani Fund is
a fund that provides low-cost finance directly to the savings
groups affiliated to the SAHPF.
The size of the houses built in Oukasie range between 56 and 72m2.
The houses are built of cement blocks and cost about R10 000.
Building costs are reduced by using voluntary unskilled labour
from families that are building, buying material collectively,
negotiating low prices with local builders for the skills that are
needed, eliminating the profit in contractor building, re-using
existing building material and manufacturing their own building
blocks. This enables the community to extend their houses.
I. Oukasie People's Housing Process
1. Background to project
Oukasie was owned by a farmer and was not rezoned for human
settlement. The application to develop the 570 sites in
Oukasie was submitted by the SAHPF. The project was initially
approved for 300 subsidies and was subsequently increased to
570 as a result of the increase in demand for houses. The
community of Oukasie started saving for their houses from as
little as 20 cents daily. Some of the people are poor and
others are pensioners who have to support their families. As
poor people they met to find ways of assisting each other.
Those who have been saving were allowed to access uTshani Fund
and were shown model houses before their houses are built so
that they understand exactly what their houses will be like.
2. Project profile
The total value of the project is R4 845 000, and R263 500 has
been paid. About 80 houses have been completed and handed over
to beneficiaries. They vary in design and size - there are
four-roomed, five-and-a-half-roomed and two-roomed houses. The
sizes are between 56m2 and 72m2. The houses have big windows,
electricity, ventilation, and the bricks used are of good
quality. Material to build the houses is also obtained from
shacks that the beneficiaries were occupying previously. The
cost of a 69m2 five-roomed house built by one Patrick
Matsimela was R12 000, and old material from an old shack was
used to build the house. In respect of each house, it takes
two weeks to build the foundation, two to three days to build
the top structure, and another two days to put up the roof.
3. Problems experienced
(a) There were delays in the processing of the transfer of
land and this has resulted in the Department refusing to
release subsidies hence only 80 houses were built. Most
people are now waiting for their subsidies to be
approved. According to the SAHPF developers were granted
land yet they are refused access to land.
(b) It is difficult to acquire title deeds and this results in
subsidies not being released by the Department. The
People's Dialogue has been negotiating with the
Municipality for three years and the Municipality has
promised to process the applications for title deeds.
(c) Some people have built houses even though they do not have
title deeds. SAPHF is proposing that they be issued with
title deeds.
4. Recommendations
(a) The Department of Housing should expedite the issuing of
title deeds to the community, especially to those who
have already built their houses. The issuing of title
deeds will enable the community to access subsidies.
5. Comments
The delegation was impressed with the commitment of the
community to own their own houses, the size and design of the
houses and the quality of building material used in the
Oukasie People's Housing Process. From the observation that
was made by the delegation, it is obvious that the People's
Housing Process is the way to go.
J. Meeting with Klerksdorp City Council
The delegation met with the Council and was briefed by the
Executive Mayor, who gave an overview of the challenges faced by
the municipality.
The Council has developed a strategic document in response to
challenges facing the municipality, and is working hard to ensure
that these challenges are met. The first social housing
association will be set up before the end of June 2002. The social
housing foundation is supporting the municipality. Since 1994, 26
housing projects have been built and 90% of the projects were
people-driven. Over 30 000 houses of 42m2 have been built in the
area. The municipality has prioritised the People's Housing
Process, as development has to be people-driven to succeed. Since
2002, no projects have been approved. The Council wants to ensure
that the projects create jobs and are labour-intensive.
1. Problems experienced
(a) The manner in which the steering committee at municipal
level was set up, created problems. That committee was
not trained to carry out its mandate and they do not know
where their responsibility starts or ends. It was
explained to them that they should give way to the ward
committee members.
(b) Most of the projects that are developer-driven, are
incomplete. Some of the projects that were paid for are
not yet constructed - there are no structures in place.
The Mayor is aware of the problem and will be assisting
in rectifying it.
(c) Women empowerment and poverty alleviation have not yet
been achieved. With regard to black empowerment, the
municipality is doing well and has received the Mpumelelo
award.
(d) Building material in some cases is dumped with the
beneficiaries, and these beneficiaries are forced by
developers and contractors to sign happy letters in
respect of houses that have not yet been built. The
developers have been cautioned not to continue with this
activity.
(e) There are serious backlogs in the delivery of houses.
8 000 people are on the waiting list for stands to be
allocated to them.
(f) Most communities are still using the bucket system and it
is going to take a long time before the system is
improved.
(g) Some beneficiaries have disappeared and it is difficult to
trace them.
(h) Other allegations include the exploitation of historically
disadvantaged communities and contractors in the name of
black empowerment.
2. Recommendations
(a) The Department should address the bucket system problem
and should ensure that programmes to replace the bucket
system with adequate sanitation are put in place.
(b) The municipality should speed up the process of ensuring
that houses left vacant by beneficiaries are occupied.
(c) Developers engaged in illegal activities should be brought
to book.
(d) The housing backlog should be addressed as a matter of
urgency.
(e) Proper training in building skills should be provided for
women.
K. Kanana Hostel
1. Project profile
R1,4 million was approved for the renovation of the project.
Renovations were started in 2000 and are still not completed.
There are about 800 residents in the hostel, some of whom used
to work in the mines, most of which have been closed down. The
Council does not have the records of people who should be
staying in the hostel, and residents stay free of charge.
There are only three water taps in the whole hostel. According
to the councillor in the area, 99% of the residents are
unemployed; some are from Lesotho and Mozambique and do not
possess South African identification documents. This makes it
difficult for them to get employment.
2. Problems experienced
(a) Delays in the awarding of tenders - Roofguard was awarded
the contract to renovate the hostel. Kanana-based
building contractors demanded to be awarded the contract.
On 21 July 199, the Council agreed that 40% of the
contract be awarded to local contractors. Construction
commenced on 30 March 2000, but due to poor performance
by Roofguard the Council adopted a resolution to cancel
their contract. L Construction and Ncedanani were
appointed to complete the work started by Roofguard.
(b) Vandalism and theft - building contractors were assured
that units would be vacated during construction work.
This arrangement never materialised and some R25 000 was
lost as a result of vandalism and theft on site.
(c) Delays in construction - significant delays in
construction work were experienced as a result of the
presence of occupants in the hostel building during
construction.
(d) Poor payment of subcontractors by main contractors - this
resulted in disputes and work stoppages.
(e) Lack of sanitation - there are no toilets in the hostel. A
bucket system was previously used but now there are no
buckets, as they are continuously being stolen. The
Council did not set aside funds for sanitation and water
supply when they budgeted for renovation of the hostel.
(f) There is a high rate of illnesses in the hostel - some of
the residents suffer from TB and sexually transmitted
diseases.
The Klerksdorp Municipality inherited this problem from the
Orkney Municipality.
According to the MEC, the Klerksdorp Municipality received R7
million, but only utilised R1 million. The project to remove
the bucket system is under way, but the municipalities are
fighting about who should be awarded the tender for the
projects. The Department tried to assist the Council, but the
Council was unable to carry out its responsibilities because
most of the projects were implemented during the transitional
period when they the municipalities were not yet in power.
Funds will be made available for the improvement of the Kanana
hostel.
3. Recommendation
The Council needs to urgently improve the living conditions in
the hostel and should also implement proper control of access
to the hostel.
L. Khuma Extension 2 & 3 - Stilfontein Housing Project
1. Project profile
The project is situated near Orkney and the stands are all
serviced with essential infrastructure. The entire project has
477 units to the value of R8 228 250. To date R7 412 131,50
has been paid in respect of this project. Local people and
local subcontractors were employed to build the top structure.
The size of the units is 40m2, and 7 000 houses have been
built. The houses have waterborne sewerage and water taps.
2. Problems experienced
Some of the houses are vandalised; 150 houses are unoccupied
(without beneficiaries). 10% of the beneficiaries have passed
away and some people are illegally occupying their houses.
3. Recommendation
People on the waiting list should be allocated to the
unoccupied houses and the illegally occupied houses.
M. Blydeville - Lichtenburg
1. Project profile
The value of the project is R34 586 250 and it has 2 005
units. R29 530 951,55 has been paid in respect of the project.
The land where the project is situated, is a portion of the
remainder of portion 1 of Farm Rietdraai 51 - 1P. Blydeville
is located to the south of Lichtenburg and was a former
"coloured" township. With the exception of a few businesses,
Blydeville is primarily a residential area.
The Lichtenburg Municipality provides water and sanitation to
the beneficiaries at no cost. The services provided include
graded gravel roads, electricity, water and sanitation. The
land was made available by the municipality at no cost at all.
The size of the houses is 32m2 and the stand sizes range
between 250m2 and 450m2. The houses have one room and a
kitchen and are electrified. The Council is the developer and
the Department of Local Government and Housing is the
subcontractor. Each house has waterborne sewage and a water
tap, the bathroom has a toilet and a basin, but there is no
shower.
2. Problems experienced
Some beneficiaries cannot afford to pay electricity and as a
result electricity supply to them has been disconnected.
Electricity supplied is not prepaid.
3. Recommendations
(a) The Department should assist in ensuring that prepaid
electricity meters are installed in all households to
avoid non-payment of electricity accounts.
(b) The Department together with the municipality should
establish whether the construction method used in the
project is favourable for the units to be extended.
(c) As there is plenty of space for a shower in the bathroom,
it is suggested that these should be installed.
N. Mathatheng Flood Reconstruction Rural Housing Project by Women
1. Background to project
In 2000, Mathatheng and other neighbouring areas within North
West experienced torrential rainfalls, which left a huge
number of people without homes. The government was not aware
of the plight of the Mathatheng community. It was the SABC
that brought this to the eyes of the government by producing a
documentary on the community. The Department of Local
Government and Housing responded to this call by approving for
an amount of R10,6 million to be allocated for reconstruction
in this area. R288 000 was allocated to 18 beneficiaries and
each received a relief fund amount of R16 000. There are about
400 people living in the community of Mathatheng.
2. Implementation process
Thaba housing support organisation was appointed by
beneficiaries to render the following support services:
(a) Capacitate beneficiaries in all aspects of housing.
(b) Empower them through skills transfer.
(c) Support and strengthen their capabilities throughout the
reconstruction process.
(d) Offer training in respect of indigenous building
technology.
(e) Train them in project management.
(f) Assist them in the establishment of the housing support
centre.
The project was implemented in terms of the Rural Housing
Programme and the People's Housing Process.
3. Specifications - norms and standards
The norms and standards were designed and put in place by the
Department, the Thaba housing support organisation and the
beneficiaries. Structures not less than 45m2 ion extent were
constructed by the beneficiaries themselves through the above-
mentioned acquired skills. Toilets are outside and are pit
toilets. Prepaid metres for electricity have been installed.
The houses have different designs and the number of rooms
differs from house to house.
Although 18 houses have been rebuilt, there is need for an
integrated and sustainable rural development strategy. With
the skills acquired, beneficiaries have the potential to
undertake any housing development process. The MEC has
approved the building of an additional 250 houses.
4. Problems experienced
(a) Schoolchildren have to walk a long distance to the nearest
school. There are no clinics or shops in the area and one
has to walk long distances for medical assistance and for
buying groceries. The Council is struggling to obtain a
mobile clinic.
(b) There are no water taps in the area and the community
accesses water from bore holes.
(c) The community is skeptical of the People's Housing
Process. When it was launched, the community thought it
was one of those schemes where people are conned out of
their money.
5. Recommendations
(a) The Department of Transport needs to assist by providing
the children with a school bus until a school is built in
the area.
(b) The Department of Water Affairs should assist in ensuring
that water is made available for the community.
(c) The Department of Health is urged to come to the rescue of
the community by ensuring that at least a mobile clinic
is provided in the meantime.
(d) The People's Housing Process programme needs to be
launched so that people can be informed of what exactly
it entails.
Redevelopment of the houses in Mathatheng has brought back
dignity to the beneficiaries whose houses had been destroyed.
O. North West Provincial Housing Policy Update Workshop
The delegation briefly attended a workshop session on the policy
update. The workshop was organised by the provincial Department
and was attended by approximately 200 delegates consisting of
porvincial housing stakeholders. Matters discussed included the
increase in subsidy amounts and a new procurement policy.
Unfortunately the delegation could not attend the whole two-day
session, as it had to leave on the first day.
P. Comments
The North West Department of Housing is fully involved in housing
development. There are many projects currently taking place with a
view of tackling the housing challenge and problems experienced by
different communities. The MEC is aware of most of the problems
that are faced by beneficiaries in different communities. He is
committed to addressing them and is doing so in line with the
policies of the government.
VI. Conclusion
It is obvious that much has been achieved, but there is still more
that needs to be done to ensure that inhabitants of this country
are housed. The structure, vision, policies and legislation that
are now in place, create the platform from which to effectively
move forward.
Collective efforts are needed to establish a productive climate
that will remove the plight of the homeless. The creation of
partnerships between the various spheres of government, the
private sector and the communities is fundamental for sustained
delivery of housing. It assists in ensuring that different parties
accept their responsibilities and work together in unity with a
common purpose. By meeting the housing challenge, the social
structures of this country will be rebuilt, thus regenerating the
economy and integrating communities. These integrated communities
should be situated in areas that allow convenient access to
economic opportunities and health, educational and social
amenities.
- Report of the Portfolio Committee on Provincial and Local Government on Study Tour of Spain, dated 20 June 2002:
The Portfolio Committee on Provincial and Local Government, having
undertaken an intergovernmental relations study tour of Spain, reports
as follows:
A. Introduction
1. With the finalisation of the new system of local government
(but for outstanding issues of local government finances), the
Ministry and Department of Provincial and Local Government are
beginning to increasingly focus on developing our system of
intergovernmental relations (IGR) and co-operative governance
in order to improve delivery and development. This is going to
be a major pre-occupation of the Ministry and Department over
the next few years.
2. In terms of section 41(2) of the Constitution, legislation has
to be passed to:
"(a) establish or provide for structures and institutions
to promote and facilitate intergovernmental relations;
and
(b) provide for appropriate mechanisms and procedures to
facilitate settlement of intergovernmental disputes."
3. The Department has for some time now been pre-occupied with
these matters - it has commissioned reports, sent staff
abroad, engaged with experts, and commenced an internal policy
formulation process.
4. The Department intends to introduce initial legislation in
terms of Section 41 of the Constitution either late this year
or early next year.
5. In order to equip the Portfolio Committee more effectively to
participate in the process of developing policies and
legislation on IGR, the Portfolio Committee undertook an IGR
study tour of Spain from 7 to 14 December 2001.
6. Spain was specifically chosen because there are a number of
features of the Spanish system of government that are either
similar to those obtaining in SA, or which have a bearing on
possible future developments here. These include:
(a) The history of centralised or autocratic government and
recent turn to democracy.
(b) The relative newness of the national constitution.
(c) The constitutional recognition of at least three tiers of
government.
(d) The presence of strong regional identities.
(e) The existence of a diverse set of intergovernmental
relations mechanisms and structures.
(f) The existence of a body similar to our intergovernmental
bodies.
(g) The internationally unique intergovernmental concept of
"asymmetrical devolution".
7. Those who participated in the tour were: Mr Y Carrim
(Chairperson, ANC), Mr J Kgarimetsa (ANC), Rev A Goosen (ANC),
Ms C Lobe (ANC), Ms G Borman (DP), Mr P Smith (IFP), Ms R
Southgate (ACDP) and Mr C Sibanyoni (Researcher).
8. The central government and the regions (provinces) of Madrid,
Andalusia, the Basque Country and Catalonia were visited.
These included visits to Madrid, Seville, Vitoria and
Barcelona. Meetings were held with a wide range of
stakeholders, including national and regional
parliamentarians, local government councillors, government
officials, academics and representatives from the Spanish
Federation of Municipalities and Provinces.
9. The study tour was very helpful and valuable. It might have
been useful to also have visited a relevant developing country
to examine its IGR system and draw comparisons.
10. The study tour was facilitated by the South African embassy in
Madrid. The Committee records its appreciation to the embassy
and in particular Ms D Viljoen, the political counsellor. Mr C
Sibanyoni is acknowledged for his assistance in the
preparation of this report. The Committee is also especially
grateful to its secretary, Mr L Brown, for the enormous amount
of work he did to ensure the success of the study tour.
B. Background on Spain
1. Spain has now experienced some 23 years of democracy after
almost 40 years of autocratic and strongly centrist rule under
General Franco. Since the adoption of its new Constitution in
1978, Spain has been acclaimed for the uniqueness of its
constitutional system, premised as it is not only upon the
asymmetrical allocation of powers and functions to the State
(central government) and Autonomous Communities (ACs)
(provinces), but equally, on the constitutional method by
which these powers and functions are allocated. Variously
identified as asymmetrical federal or asymmetrically
decentralised, Spain is a parliamentary monarchy whose
transition has been long and complex but also highly
successful.
2. A key political and constitutional theme in Spain has been
that of centrism versus regionalism, and more particularly, of
centrism versus community autonomy, especially in those parts
of the country which have historical, linguistic and cultural
claims to being different to the rest of Spain - such as the
Basque Country, Navarre, Catalonia and Galicia - and in which
secessionist sentiment exists. The Constitution "is based on
the indissoluble unity of the Spanish nation, ... and
recognises and guarantees the right to autonomy of the
nationalities and regions that make it up, and the solidarity
between them" (Article 2).
3. During the constitution-making process there were different
conceptions on what the political system in Spain should be.
The parties on the right were in favour of a unitary state and
they asserted that any concession to the nationalities of
Spain posed a threat to national unity. The parties on the
left wanted federalism. The nationalists wanted greater power
and autonomy for the Basque Country and Catalonia than for the
other regions. Consequently, the negotiating parties agreed on
establishing three routes to autonomy. The regions that voted
in a referendum in favour of autonomy in the past were allowed
to follow a relatively fast process towards full autonomy. The
Basque Country, Catalonia and Galicia qualified to follow the
fast process. Andalusia, however, followed an exceptional
route towards full autonomy. The reason is that it did not
qualify as a historic nationality but had a majority support
for full autonomy. The other 13 ACs followed a 5-year long
route in order to achieve autonomy.
4. In its change to democracy and in the decentralisation of its
system of government, Spain has been fortunate that socio-
economic factors have strengthened rather than hindered the
process. In the first place, Spanish society was at the time
of the 1978 transition, and remains today, a society with
considerable social equality, unlike South Africa. Spain is
indeed, a welfare state. Moreover, the post-1978 period has
been characterised economically by significant stability,
diversification and growth, reducing the prospects of civil
unrest and increasing the legitimacy of the system.
Notwithstanding the much lower levels of inequality compared
to South Africa, there is strong emphasis placed on reducing
inequality between regions and within regions. Membership of
the European Union (EU) is important in this regard, and it
was observed on several occasions that in a sense the Spanish
system is of four, not three, spheres of government. Spain's
relations with the EU is a major preoccupation.
5. Interestingly, the transition from a centrist state to a
decentralised one is not quite complete - after over 20 years
- and the decentralisation process in respect of local
government has barely begun.
C. Evolution of IGR in Spain
1. The drafters of the 1978 Spanish Constitution fudged several
contentious issues in favour of reaching consensus, leaving a
range of matters to be resolved in the future. One consequence
of this is a division of powers and functions reliant on a
process to be fulfilled rather than a rigid and uniform
constitutional enumeration of allocated competences. Another
is that since the ACs only came into being after the
Constitution was adopted, the Constitution makes no reference
to the 17 ACs making up the current territory of Spain.
2. But importantly, from an IGR perspective, this purposive
constitutional obfuscation resulted in what was initially at
least, a highly litigious system in which the State and ACs
made extensive use of the Constitutional Court, largely in
respect of defending their respective competences against
perceived encroachment. There have been some 800 cases before
the Constitutional Court over 20 years, though the vast
majority of these were in the early years of the transition. A
view commonly expressed was that following the development of
a necessarily large body of authoritative and politically
accepted jurisprudence, the system is currently far more
mature in that both ACs and the State operate in terms of an
established understanding of the limits of their respective
competences. The result is far less conflict now than in the
past.
3. Another noteworthy feature is the extent to which reliance has
been placed on mechanisms and institutions not directly
created by the Constitution. Instead, a combination of
statutory and non-statutory bodies play key roles in an
interlocking system in which negotiation plays a major role in
addressing potential or actual conflict.
4. As in any multi-sphered system with the same political party in
control at both the national and sub-national level,
governmental disputes are frequently mediated within the party
rather than between governments. This was accentuated by a
strong Proportional Representation electoral system
strengthening the role of the political party in respect of
its public representatives, though it appeared that the left
of centre parties permitted greater sub-national autonomy and
thus deviation from party policy than did the centre right
parties.
5. A key theme was the length of the transition. Stakeholders
often referred to the fact that the transfer of powers to the
ACs and the concomitant finalisation of structures, staffing
and finances associated with AC governance is only now
reaching its conclusion, while those ACs wanting greater
competences saw the process requiring yet more time to reach
"finality".
6. Allied to this 23-year time-frame has been a single-minded
focus on completing the first phase, AC governance, before
commencing on the so-called "second wave of decentralisation"
- to municipalities. This contrasts with South Africa in which
the transition is commonly conceptualised as a far more
condensed process.
D. Powers and Functions of Central and Regional States
1. The Spanish Constitution utilises a unique approach towards the
allocation of powers and functions between the State and the
ACs. The focus is more on the constitutional process than it
is about any a priori allocation of competences. Indeed, the
essence of the system is one in which the Constitution merely
enumerates which competences an AC may assume whereas the
specific competences actually assumed reflect a constitutional
negotiations process between the State and a particular AC.
2. In general, the sequence is as follows: the State and the AC in
question reach broad agreement on the competences to be
assumed; the AC drafts its "Statute of Autonomy" or
Constitution which is ratified by way of a referendum and is
adopted by its Parliament; the State Parliament then passes
the statute - with a special majority - as a law of the
centre. The Constitution provided for a fast-track approach
(adopted by the historical communities) and a slower approach
(the other ACs). The actual allocation of competences over
time reflects these two groups of ACs, though there are
differences, sometimes significant, within each group. In
addition to the enumerated functions an AC may assume, it may
also, with State agreement, assume competence over specified
issues falling within the scope of non-allocated residual
competences. The Constitution further guarantees the
historical position of specified communities. This for
instance, is why revenue collection in the Basque Country is
completely different to the rest of the country.
3. The AC competences are of three types: exclusive, concurrent
and shared. Though the Constitution theoretically provides for
an intervention or override mechanism, it appears in reality
as though exclusive powers permit of no State competence in
that same field within the AC in question. The nature of
Spanish concurrence differs from ours. Whereas in our case
both national and provincial spheres have full competence in
respect of any particular Schedule 4 functional area, this
overrides being the means of resolving a dispute, in the case
of Spain, State competence is limited to setting out broad
principles which the ACs are free to give effect to as they
see fit. Conflict over the extensiveness or otherwise of what
is permissible has been addressed by the Constitutional Court,
in favour of a limited rather than extensive State competence.
In respect of a shared competence, the AC is obliged to simply
execute national legislation. State competence is likewise
exclusive (enumerated) and concurrent. Residual powers lie
with the State except in so far as any particular functional
area has been allocated to an AC by way of agreement.
4. As far as the classification of the system is concerned, there
appear to be two firm views in Spain: one group claimed the
country was clearly federal in nature or that it was federal
in all but a few matters, such as the structure of the senate;
the second group felt the system was simply decentralised.
Interestingly, these views tended to correlate with political
party affiliation: centre-right centrist parties, such as the
Popular Party (PP), view the system favourably as merely
decentralised while socialist parties view the system
favourably as federal, stating that Spain was simply incapable
politically, of recognising this fact.
5. The Portfolio Committee participants in the study tour noted
the particular challenges posed by the specific circumstances
of the Basque Country and the role of the ETA in particular,
but does not feel competent to make any useful observations,
except to stress the need for negotiations to solve political
conflicts wherever they may exist.
E. Local Government
1. At one level, local government seemingly occupies the same type
of constitutional position common to most three-tiered systems
- it is subordinate to and is a creature of the national or AC
governments. This is so because it derives its legislative
competence from national and AC statutes and is not accorded
original powers by the Constitution. Indeed, "local
administration" is expressly listed as a competence that may
be assumed by ACs. However, it would be simplistic to assume
from this an exaggerated position of subordination.
2. First, in terms of human capacity and financial capacity,
municipalities do not on the whole appear to suffer
significant capacity constraints. Whilst it is acknowledged
that there are far too many (about 8,000 mostly very small)
municipalities, the view was commonly expressed that local
identity took precedence over the need for rationalisation,
and that despite this need, local government worked.
Certainly, State and AC capacity building did not feature in
our discussions.
3. Second, while in terms of national legislation municipalities
are required to provide a minimum set of services according to
the population of the municipality in question, they appear to
enjoy considerable freedom in respect of how they give effect
to what is a nationally-determined framework. For instance,
municipalities provide for service delivery via a host of
mechanisms equivalent to those provided for in Chapter 8 of
our Local Government: Municipal Systems Act.
4. Third, the larger municipalities have competences that in our
country reside with national and provincial governments - such
as social services and housing. These municipalities are
seeking more competencies. Many of the service delivery
functions preoccupying us are delivered not directly by the
municipality but by what in Spain is called a Province. The
Province is indirectly elected by municipalities and is
superficially similar to our District. Though acknowledged as
a tier of local government, it is not expressly termed a
municipality. The larger municipalities visited exercised more
than the minimum competences, having negotiated the transfer
of further powers. A view was expressed that the ACs were
sometimes too remote from local communities and too inclined
to provide services in a manner incongruent with the views of
the local community, necessitating that municipalities expand
their delivery role.
5. Fourth, there are two constitutional guarantees of key
significance. On the one hand, the Constitution provides that
municipalities must be guaranteed the funding required to
carry out their services; the existence of unfunded mandates
did not appear to be a major issue in Spain. On the other
hand, and most important, the Constitution guarantees the
"autonomy" of municipalities. This appears to be of an
institutional form in particular, including its
administration, and has the effect of reducing State and AC
intervention in the manner provided for in our Constitution.
The only intervention mechanism available to the State and AC
appeared to be the courts. Interestingly, it appears as though
municipalities cannot be compelled to accept new competences,
even if funded, but have the discretion to accept or deny
them.
6. A recurrent issue raised was that with the first phase of
centralisation now almost over, from State to AC, Spain is
shortly to commence the next phase in the process, of the
transfer of further competences to local government.
Constitutionally, this is not a solely State-determined
process, but requires AC co-operation. Although various State
stakeholders saw AC resistance to having to hand over some of
its competences as a serious impediment to the success of the
process, a number of AC representatives viewed the process as
inevitable and desirable. Municipalities have achieved low
levels of development. For historical reasons priority was
given to ACs rather than to local government. Local government
wants more powers but the progress is very slow. The ACs are
reluctant to devolve some of their powers to municipalities.
To address this, the Socialist Party and the Popular Party
have signed an agreement 4 years ago to devolve powers to
municipalities. All stakeholders recognised that the process
will take a long time and will require extensive negotiations.
7. There is a Federation of Municipalities and Provinces in Spain
that unites local government. Of about 8 000 municipalities,
about 6 000 belong to the Federation of Municipalities. The 6
000 or so municipalities account for 94% of the population of
Spain. Out of 50 provinces in Spain, 49 are members of the
Federation of Municipalities. The existence of the Federation
of Municipalities is not recognised in the Constitution - but
the central government does engage with it. The Federation of
Municipalities has been promoting the devolution of power and
expenditure to local government - but is not satisfied with
progress so far.
F. Intergovernmental Fiscal Relations
1. ACs are not only guaranteed political autonomy by the
Constitution, but also financial autonomy: Article 156.1
provides that "the Autonomous Communities will enjoy financial
autonomy for the development and execution of their
competences ...".
2. The Spanish system is complex. Since the "historical
communities" had their historical rights guaranteed by the
Constitution, this has resulted in a measure of asymmetry. On
the one extreme, and unique to the relatively wealthy Basque
Country, almost all taxes including income tax, Value Added
Tax (VAT) and excise duty are collected by the AC which then
pays over to the State its agreed share. The State collects
none of these itself. The share paid by the AC to the State is
intended to reflect the cost of state services provided in the
Basque Country as well as a pro rata share of other non-
territory-based State expenditure such as foreign affairs and
defence. It also includes a "solidarity" component - funds to
be apportioned to the poorer ACs as part of the State's inter-
AC financial equalisation efforts. Typically, costing these
State services is a complex, lengthy and contentious process,
entailing considerable negotiations. The Basque government
emphasised that it, rather than the State, carried the risk,
since the sum to be paid to the State was fixed irrespective
of actual revenue collection and underlying economic
performance. Importantly, agreement reached between the Basque
Country and the State is enshrined in a freshly-negotiated and
updated "Economic Agreement", enjoying high political and
contractual status, equivalent indeed, to its Statute of
Autonomy.
3. Other historical communities such as Catalonia are likewise,
though not as extensively, differentiated from what is called
the common tax regime system to be found elsewhere in Spain.
4. In terms of the common system, there are three groups of tax
resources to be divided between the State and the AC. First
are the "financial sufficiency" finances. This is revenue
provided by the State from tax revenues intended to cover the
cost of transferred functions. From specific taxes collected
by the State in the territory of the AC, and especially income
tax and VAT a percentage of each is apportioned to the AC for
this purpose, to which is added "own-taxes" collected and
managed by the AC. Costing of services transferred and thus of
revenue transferred is not zero-based or need-based, but is
based on the cost at the time of transfer adjusted for
necessary increases. Moreover, should there be a shortfall
between the cost of the services rendered and the fiscal
capacity of the AC, the Financial and Fiscal Board comes into
play to facilitate the transfer of further funding from the
State.
5. The second group covers self-government, and is sourced from
specific AC taxes. The application and extent of this taxing
power is limited by a number of factors such as EU rulings,
State prescripts regarding market unity and macro-economic
stability, and the like.
6. The third group is centred on so-called "solidarity", being a
geographical, basically AC, compensation fund or minimum
balancing or equalisation fund aimed at equalising the quality
of services for all Spaniards regardless of residence,
especially in respect of education and health.
7. The allocations take place in terms of a "Quota Law" providing
for a formula-based quota, negotiated for 5-year periods.
There are currently attempts being made to make the formula
permanent. Interestingly, Spain has reverted to the present
system of AC entitlement to individual taxes raised by the
State after experimenting with and rejecting a pooling system.
8. For the ACs in the common system, transfers from the State are
thus critical, since "own" revenue is limited between 12% and
15% of revenue, EU transfers excluded. In most instances these
transfers are unconditional.
9. Local government raises some 60% of its own revenue on
aggregate, the balance comprising State transfers via the ACs.
The level of financial autonomy is less than that of the ACs.
10. EU transfers have been extremely important in respect of
promoting development in the poorer ACs. The quantum of
transfers is based on the extent of AC deviation from an EU-
determined standard of living norm, and is of two types:
infrastructural grants (especially transport), and specific
programmes (such as job creation). Among the key EU funds are
the European Regional Development Fund, European Agricultural
Guidance and Guarantee Fund, and European Social Fund.
11. Intervention measures by the State in respect of AC or
municipal mismanagement is virtually non-existent, and the
State is thus reliant on the courts to secure compliance.
G. Institutions and Mechanisms of IGR
1. Typically, the Constitution of Spain does not expressly provide
for the full range of IGR institutions and processes utilised
by IGR roleplayers. Some of the more important institutions
are referred to below.
2. Senate: According to the Constitution, the Senate represents
the interests of the ACs. In practice it does not. But
political parties are trying to address this. The Socialist
Party wants the Senate to play a role in mediating conflict
between central government and the ACs. To achieve this, the
Socialist Party wants the Constitution to be amended. However,
the Popular Party does not want to change the Constitution.
According to the Popular Party, it is better not to change the
Constitution.
3. Council for Fiscal and Financial Policy: There is a special
Council for Fiscal and Financial Policy, composed of the
Minister of economics and finance from the central government,
and his or her counterpart in each region and the Minister of
Public Administration. The Ministry of Public Administration
is directly charged with overall intergovernmental relations,
co-operation, and capacity-development, but in practice this
is shared with many functional ministries. This consultative
body provides an intergovernmental forum for debate. The body
is also concerned with the co-ordination of policy regarding
the distribution of state resources to the regions, as well as
public investment, the costs of services and public debt.
4. Multi-sectoral Conferences: There are sectoral conferences
similar to MinMecs.
5. Bilateral Commission: There are also bilateral meetings between
central government and some of the ACs.
6. Political Party System: Political parties contribute to
stabilising IGR by mediating differences between ACs and the
center and between ACs through party political structures.
7. It would seem that there is no forum which bring together all
tiers of government on a regular and organised basis.
H. The European Union
Currently, there is a debate regarding the participation of the
ACs in the European Union (EU). Some ACs want to be represented in
the EU institutions. For example, the Basque Country argues that
since it basically has its own fiscal system it should have a
chance to defend itself in the EU. However, the central government
argues that the EU is a union of states. In addition, the State
asserts that foreign relations is a non-transferable competence of
the Central Government. EU policy falls under foreign policy.
However, a counter argument is that the process of the EU
integration is not, in any way, a foreign relations issue, for the
central government is giving its powers and those of the ACs to
the EU. The ACs, for example, have competences in respect of
agriculture. But decisions and policies on agriculture are made at
Brussels. Thus, the EU impinges on ACs competences.
I. Conflict Resolution
1. The Constitutional Court plays a vital role in conflict
resolution. This is more so, because the Spanish Constitution
is unfinished. When the Constitution was drafted it was left
flexible and some of the clauses are vague. This created
particular challenges. In the 1980s many cases were taken to
the Constitutional Court. The implication is that the
Constitutional Court, which is not elected, has to finish the
draft by clarifying the vague clauses in the Constitution.
However, the Basque Country has raised a concern regarding the
Spanish Courts. The Basque Country has decided not to use the
Spanish Courts, for in 90% of cases they have taken to court
their powers were reduced.
2. The Audit Tribunal reviews and adjudicates public accounts. The
Audit Tribunal tries to resolve an issue before it is sent to
the Constitutional Court.
3. Besides these mechanisms, there is another mechanism to
resolving conflicts between the State and the AC. In this
process the central government negotiates with an AC for 3
months. If an agreement is not reached, they go to the
Constitutional Court for extension. The Constitutional Court
can extend the period of negotiation up to 9 months.
J. Overview of Lessons for South Africa
1. Closer to the time that the Department begins to further
develop its IGR policy and legislation, the Portfolio
Committee will discuss this report in some detail, especially
for the lessons it offers to our own country. The lessons have
already been suggested in the way the report has focused on
issues taken up above. Below is a brief overview of the
lessons.
2. It is important to locate the Spanish system within a uniquely
Spanish context. For instance, Spain was fortunate in that its
transition to democracy took place within the context of
relative social stability and a growing economy. It was,
moreover, a society with relatively low levels of inequality
within and between regions. These conditions do not apply to
South Africa. They point though to the challenges our IGR
system confronts, especially given the huge material
disparities within our country. These disparities are
reflected not just between provinces and municipalities, but
within the population as a whole. We have among the highest
income inequalities in the world. The need for redistribution
partly explains the relatively strong national sphere of
government we have, and the system of co-operative governance
we have opted for.
3. One of the striking lessons of the Spanish experience is how
long it takes to develop a stable IGR system. It has taken
Spain some 23 years to implement a national and provincial
system which is only now being acknowledged as reaching some
sort of finality. There are a number of reasons for this, the
most important of which may be unique to Spain, especially the
post-constitution process-led asymmetrical establishment of
the ACs and negotiated conferral of powers and functions. But
stakeholders made it clear that this time-frame, far from
being a hindrance, has contributed positively towards the
evolution of the system. In our country there has been a
certain tendency to expect too much progress too soon. Some
key practitioners have even called for a fundamental review of
our provincial system or our new model of local government or
our co-operative governance system generally, as relatively
new as they are. While these systems must be regularly
reviewed, surely it is far too soon to contemplate fundamental
changes. The allocation of yet further powers to local
government in South Africa should also be dealt with gradually
and sensitively.
4. Constitutional asymmetry is not in itself unique, but the
extent and manner of its application in Spain surely is.
Though the reasons for this are largely historical, its
adoption as a constitutional mechanism is viewed by key
stakeholders in Spain as successful. In South Africa, however,
there is little support for asymmetry. There are many reasons
for this. This includes the need to create national unity
following the deep divisions created by apartheid; the acute
inequalities between the provinces; the lack of sufficiently
strong regional identities; the need to create stability; and
the establishment of a simple provincial system. The majority
of the participants in the study tour felt, as much as there
were many useful lessons to draw, that the Spanish system of
asymmetry was not suitable for South Africa, at least not at
this stage. The minority felt that consideration should be
given to asymmetry in South Africa based in part on lessons
drawn from the Spanish experience.
5. Each level of government plays an important role in revenue-
collection. This is, however, less pronounced in the non-
historical ACs which seem to collect only between 12% and 15%
of their own revenue. The State and the ACs divide individual
taxes between themselves rather than disbursing revenues from
an undifferentiated pool. Of course, in South Africa provinces
rely on the constitutional provision of an "equitable share"
The Constitution provides for legislation to be passed for
provinces to have further revenue-raising powers - but there
is no significant step in this direction. There are many
reasons for this. In the main, they revolve around the nature
of our co-operative governance system and the early stages of
it that we are in at present. Some limited form of revenue-
raising powers are not to be ruled out altogether, especially
if they do not undermine the objectives of creating greater
social equality in the country overall.
6. While by no means unknown in Spain, unfunded mandates are
seemingly not the problem as they are in South Africa. In
Spain, both AC government and local government enjoy
constitutional and statutory entitlement to adequate revenue
as well as protection against unfunded mandates. Local
government in South Africa is particularly vulnerable- and it
might well be necessary to provide stronger safeguards for it
against unfunded mandates, beyond to what is provided in the
Constitution and the Local Government: Municipal Systems Act.
7. Whether Spain is federal or decentralised is a question not
unfamiliar to South Africans. Interestingly, left-leaning
parties in Spain support federalism while right-leaning
parties support a more unitary approach. This is the opposite
of the situation in South Africa. Both ACs and municipalities
enjoy considerable legislative, executive and fiscal autonomy.
The central government enjoys fewer intervention mechanisms
than is the case in South Africa. In many senses, the ACs have
more power than our provinces. In some sense, local government
in Spain also has more power, but in other senses, it does
not. Unlike in South Africa, local government in Spain does
not have original powers and functions set out in the
Constitution. Key stakeholders in Spain were impressed to
learn about our system of local government, and were struck by
how advanced our vision and framework for local government as
set out in the Constitution, legislation and policies is.
8. As is common in many federal or quasi-federal systems, there
are a myriad of institutions managing IGR in Spain. Of note,
however, is that most are not expressly provided for in the
Constitution. Rather, they have evolved over time to reflect
the exigencies of IGR within a particular period. Furthermore,
they are even then not necessarily creatures of statute. This
re-emphasises the need to avoid unnecessarily regulating our
system of IGR, especially as it is so new.
9. It was instructive to see how political parties contribute to
stabilising IGR by dealing with differences between ACs and
the center and between the ACs through their internal party
structures. This is, of course, also the case in our country -
and obviously more so because of the strength of the majority
party. Clearly, political parties in this country have a vital
role to play in stabilising our system of IGR.
10. The Portfolio Committee was very stimulated by its study tour
of Spain and would like to pursue the issues raised in this
Report further through various means.