National Assembly - 09 April 2003
WEDNESDAY, 09 APRIL 2003 __
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 15:06.
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.
QUESTIONS AND REPLIES - see that book.
PRECEDENCE TO QUESTION 66
(Announcement)
The SPEAKER: Order! Hon members, I have received a letter from the acting Minister of Transport for the following questions that have been addressed to him to stand over. These are Questions 1, 87 and 72. We will therefore proceed to Question 66, which has been raised by the hon Ramotsamai, addressed to the Minister for Agriculture and Land Affairs.
BOPHUTHATSWANA NATIONAL PROVIDENT FUND ACT REPEAL BILL
(Second Reading debate)
There was no debate.
Bill read a second time.
SEFALANA EMPLOYEE BENEFITS ORGANISATION ACT REPEAL BILL
(Second Reading debate)
There was no debate.
Bill read a second time.
DIVISION OF REVENUE BILL (Consideration of Bill, as amended by the NCOP, and of report of Portfolio
Committee on Finance thereon)
There was no debate.
Bill agreed to.
JUDICIAL MATTERS AMENDMENT BILL
(Second Reading debate)
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Chairperson, thank you very much. This Bill, like most other judicial amendment Bills, intends to effect amendments to a number of Acts of Parliament that do not require individual amendment Bills. In terms of the Administration of Estates Act of 1965, the Minister appoints a Master for each High Court. The Minister may also appoint Deputy Masters and Assistant Masters for each Master’s Office, who may in terms of the Administration of Estates Act do anything which may lawfully be done by the Master, subject to the control and supervision of the Master.
There are ten offices of the Master of the High Court in the Republic. Although the Master of the High Court in Pretoria is sometimes described and accepted as the Chief Master, there is no statutory authority for such an office. Masters are appointed in terms of the Administration of Estates Act and are obliged to carry out their duties and exercise their powers in terms of this Act, the Insolvency Act of 1936 and other related legislation. It is undesirable that each Master has different approaches and practices in respect of important or highly publicised matters such as the appointment of trustees, liquidators and similar functionaries in insolvent estates.In order to provide for uniformity within the different Masters’ Offices, the Bill amends the Administration of Estates Act of 1965 to make provision for the appointment of the Chief Master of the High Courts. The Chief Master will, as the executive office of the Masters’ Offices, exercise such supervision over all the Masters’ Offices as may be necessary, in order to bring about the required uniformity.
In order to address the imbalances that exist with the appointment of trustees, liquidators, judicial managers and similar functionaries in insolvency-related matters and in order to actively advance and empower previously disadvantaged people in line with Government policy, my department has developed a policy on the procedure for the appointment of these functionaries.
This policy aims to create uniform procedures in all the Masters’ Offices for the appointment of trustees, liquidators, judicial managers and similar functionaries. The policy is further aimed at promoting consistency, fairness, transparency and the achievement of equality for persons previously disadvantaged by unfair discrimination.
This policy is also aimed at promoting the image of the insolvency practitioners in the Masters’ Division. We are therefore amending the Insolvency Act of 1936, the Companies Act of 1973 and the Close Corporations Act of 1984, in order to make it clear that the Master must act in accordance with the policy determined by the Minister for Justice and Constitutional Development when making these appointments. The practical effect of this amendment is that it would ensure that there is no corruption in the appointment process. The amendments proposed in the Bill will all have the effect of enhancing the administration of justice.
May I take this opportunity to thank the portfolio committee under the leadership of Adv Johnny de Lange for their efforts and hard work put into the consideration of this Bill. I thank you. [Applause.]
Dr J T DELPORT: Chair, let me say at the outset that we support this legislation, but we have some clear reservations, which I will spell out. The legislation allows for two innovations. Firstly, it makes provision for the appointment of a Chief Master who will be the chief executive of all the Masters’ Offices and ``will exercise such supervision for all the Masters as may be necessary, in order to bring about uniformity in their practice and procedure’’.
The caveat we have is this, and I address the hon Minister directly: Please ensure that the appointment is such that it will serve transformation, but in the fullest sense of the word. Not only transformation in the sense of affirmative action, but transformation in the sense of improved service delivery. We need that desperately in those offices.
The second innovation is the following. The Minister is given the authority to prescribe policy for implementation by the Masters in the appointment of curators, trustees and others. This policy must be formulated and ``in order to promote consistency, fairness, transparency and the achievement of equality for persons previously disadvantaged by unfair discrimination’’. I have some remarks to the hon Minister.
First of all, your policy must take due cognisance of the position of creditors and of beneficiaries of those estates which will come under the management of the trustees, liquidators and so forth. After all, they are the people who are entitled to have their interests protected. Please, entrench the say of these people in the appointment of those who will manage these estates. Flowing from this, the hon Minister’s policy must aim at creating effective and sound administration of those estates and assets. This objective may never run second after the ideal of affirmative action.
Thirdly, the policy must not enrich a chosen few. The liquidation business is a multimillion rand business. Recent reports talk of, in one instance, fees of R36 million to be divided between five liquidators. Do not fall into that trap, Mr Minister. See to it that capable people across the spectrum are used when these appointments are made. The policy of the Minister will be tabled in Parliament. We shall scrutinise it, hon Minister. If necessary, you will hear from us loudly and clearly. Thank you.
Adv J H DE LANGE: Chairperson, I rise on this occasion to unconditionally support this legislation on behalf of the ANC. And that is a surprise, seeing as I chaired the path of the legislation. [Interjections.] There are some things in life that will never happen and one of them is walking over to this side. [Interjections.] There goes one of my minutes; give me a chance here.
There are obviously two issues we are dealing with here. Firstly the appointment of a Chief Master for this country. With all the tasks we have had and even under the apartheid system, the Master’s Office has always been a bit of a stepchild of the justice system. That is starting to change now. We have a special business unit that deals with the Master’s Office, because as the hon Andrew will tell you, in the Master’s Office there are millions and billions of rands tied up. If the Master’s Office does not operate properly that money does not again get into circulation. So I think it is time, as is starting to happen in this country, that we realise the importance of the Master’s Office, realise the importance of proper service delivery and start to unleash and unfold and get that money into the economy again as soon as possible. You are dealing here with estates. People have died and their assets have to be dealt with and given to beneficiaries. You are dealing with liquidations and so forth. And in that we need to make sure that the system works properly.
We have over the last while, in a piecemeal way, which we had to do, started amending aspects of the laws around the Master’s Office so as to make it function better and give it more resources. If you look at the latest budget allocations you will see that there have been more resources given to that.
More importantly, to co-ordinate and harmonise their work so that there is a uniform practice and conventions coming from that office, we are now also appointing a Chief Master in the legislation. It was usually the case in practical terms that the Master of Pretoria used to be the Chief Master. We are now doing it in legislation so that there are clear duties of responsibility and so forth.
The second issue is that for the first time ever, also in legislation, we are spelling out what policies need to be looked at and applied when appointments of liquidators, curators, judicial managers and trustees are done in terms of the Administration of Estates Act, the Insolvency Act, the Companies Act and the Close Corporations Act. This is very important because what it is doing is, in a transparent way, putting the policies on the table.
Firstly, we can all be part of it and see what it is going to be and hopefully in that way make sure that, firstly, corruption is stemmed in its infancy. For a while now corruption has been thriving in the Master’s Office and some prosecutions have proved that. But, on the other hand, it also gives us the opportunity in a legal way and with a legal mechanism to open up the liquidators’ profession and the trustees’ profession so that those that had been excluded can also be part of it. With regard to the warnings that were put forward by Dr Delport, clearly we will look at that. That is also one of the reasons that you have mentioned why we are actually putting it in legislation that there should be such a policy.
There was no reason for us to do that. The Minister could have drafted a policy and could have given it to them to apply and there would have been no problem. We are doing it in this way to ensure openness, transparency and exactly to try and avoid the pitfalls that have been part of this system in the past. Thank you to everyone who has supported it and for all the hard work in passing this legislation. [Applause.]
Mr T E VEZI: Thank you very much, Chair. A number of imbalances exist with regard to the appointment of trustees and liquidators in insolvency matters dealt with by the Masters’ Offices. This is in essence against Government policy, as the Masters currently have a measure of discretion in appointing such persons. In order to correct historical imbalances with the appointment of persons dealing with insolvencies, the Bill proposes amendments to the Companies Act, the Close Corporations Act and the Insolvency Act, to ensure that the Masters act in accordance with policy set by the Minister for Justice and Constitutional Development when it comes to the appointment of persons in these cases.
The main aim of these amendments is to achieve consistency, fairness and equality as far as the appointment of trustees and liquidators in insolvency matters is concerned. The IFP supports the approach with the Judicial Matters Amendment Bill, in the sense that a number of amendments to existing laws are dealt with in one consolidated Bill, rather than in various different amendment Bills. The consolidated approach saves time, saves money and energy and means that Parliament can deal with the amendments in a particular issue in a comprehensive manner, rather than in a fragmented manner in different amendment Bills, should different amendment Bills be presented.
The IFP supports the main objectives of the Bill, as they aim to rectify inconsistencies and imbalances relating to the Masters’ Offices throughout the country that are basically and practically a remnant of the system that operated under apartheid. The Masters’ Offices deal with mainly commercial issues such as liquidations, administration of estates and sequestration. Huge amounts of money are therefore involved and it is best that, in an economic sense, the same standards and practices are applied consistently and uniformly throughout South Africa. The IFP supports the Bill. [Time expired.]
Mr J T MASEKA: Chairperson and hon members, this amending Bill intends to amend four Acts, namely, the Insolvency Act, Act 24 of 1936, the Administration of Estates Act, Act 99 of 1965, the Companies Amendment Act, Act 66 of 1984 and the Close Corporations Act, Act 69 of 1984.
The Insolvency Act intends to include who will be responsible for the administration of justice to determine policy and further regulate the appointment of curators bonis, trustees, provisional trustees and court trustees by the Master of the High Courts. The Administration of Estates Act, Act 66 of 1973, is amended to the extent that it provides for the appointment of a Chief Master of the High Court. The amendment to the Companies Amendment Act intends to enable the Minister responsible for the administration of justice to determine policies and further regulate the appointment of liquidators, provisional liquidators, court liquidators and judicial managers by the Master of the High Court.
The amending Bill further intends to amend the Close Corporations Act to enable the Minister responsible for the administration of justice to determine policy for and further regulate the appointment of liquidators by the Master of the High Court.
The UDM supports the Bill.
Ms N MAHLAWE: Hon Chairperson and hon members, this Bill, as has been indicated by the Minister, seeks to bring a variety of amendments into a single Bill. These amendments flow from the following Acts: the Insolvency Act, Act 24 of 1936, the Administration of Estates Act, Act 66 of 1965, the Companies Act, Act 66 of 1973 and the Close Corporations Act, Act 69 of 1984.
These Acts previously gave powers to Masters of High Courts to exercise their discretion in the performance of their duties without statutory authority. As has been observed over the years, this resulted in inconsistency and unfairness, and there has been no uniformity in the functioning of the Masters of High Courts.
The amendments therefore enable the Cabinet member responsible for justice to make policies and regulate the functioning of the Masters of High Courts in the appointment of trustees, court trustees and curators bonis to administer insolvent estates and the appointment of liquidators and provisional judicial managers. Such are the amendments to the Companies Act and the Close Corporations Act. Furthermore also, the amendments provide for the appointment of a Chief Master of the High Courts, that is in the administration of estates. The policies and regulations so formulated would aim at promoting consistency, fairness, transparency and achievement of equality in the process.
The ANC supports this Bill. [Applause.]
Mr S N SWART: Chairman, one of the objectives of this policy, as envisaged in the amending Bill, is to create uniform procedures in all the Masters’ Offices for the appointment of trustees and liquidators and to promote the image of insolvency practitioners and the Masters’ Division.
The stated aim of this policy is to promote consistency, fairness, transparency and the achievement of equality in the appointment process. It is undeniable that there have been abuses and corruption in the past in the appointment process that need to be addressed.
Public comment should be invited during the development of this policy before it is published in the Gazette and tabled in Parliament. We trust that the hon the Minister will determine policy of this nature only after full consultation with all stakeholders and particularly the body representing insolvency practitioners.
We do, however, appreciate the approach taken by legislating the development of this policy and will support the Bill while at the same time sounding a warning that we will carefully study the proposed policy. [Applause.]
Dr S E M PHEKO: Mr Chairman, the PAC supports the Judicial Matters Amendment Bill. It is necessary legislation, amending the Insolvency Act of 1936, a pretty old law whose relevance certainly needs revisitation because of the circumstances of 1936 and the conditions of 2003.
The purpose of this Bill is chiefly to insert a definition of ``Minister’’ to enable the Cabinet member responsible for the administration of justice to determine policy on matters such as the appointment of trustees. Simply put, the main aim of the Bill is to encompass in a single Bill a variety of amendments which do not require individual amending Bills.
The PAC supports the Judicial Matters Amendment Bill.
Miss S RAJBALLY: Chairperson, the MF notes the number of amendments that this Bill makes, finding it viable as it saves the House time in amending individually.
The MF agrees with the clarity provided by the definition of ``masters’’ in this Bill. The control that this Bill aims to attain over the Chief Master is supported in bringing uniformity, efficiency, transparency and a system of checks and balances. The control brought over Masters to correct the imbalances to the appointment of trustees, liquidators and similar functionaries, among other insolvency matters, is supported.
We constantly have to remind ourselves that we are a government by the people, for the people. Being a democracy government in constitutional supremacy, the provisions made in this Bill for fairness, consistency, transparency and equality are valid.
The MF supports the Judicial Matters Amendment Bill. [Applause.]
Mr M J MALAHLELA: Mr Chairperson, the passing of this Bill today represents another package of our Government’s reconstruction and development as headed by a proletariat biased of the ANC. Our political engine was ignited to respond to our people’s clarion call that increasing liquidations in South Africa are worsening the high unemployment rate and aggravating poverty, and not the ANC, as people want us to believe.
It was and still is our cherished ideal that the pronouncements of the congress of our people in Kliptown can be realised as long as the proletariat of our country continue to be active participants at the level of our economy, where we also want liquidators to do their work. A measure of protection in enhancing our proletariat’s job security was a necessary tool to prevent bogus liquidation of companies by those who are keen to maximise capital through exploitation of our proletariat’s labour power.
Therefore, we would support this Bill as the ANC, which indicates that we transform the labour relations agencies in making sure that in matters that deal with negotiations for operational requirements workers will continue to be consulted, as opposed to being told what needs to be done.
The consequence which we looked into as a political organisation, is that it will increase the protection of the proletariat’s claims in the event of insolvencies, so that after the payments of secured creditors’ preferent claims, what is due to the proletariat should be paid first.
As Government we continue to have a keen interest in the King Commission’s report on corporate governance so as to prevent the Enron scandal that robbed the US economy from being exported to our shores. In so doing, we continuously appeal to the auditing firms to follow to the letter the generally accepted accounting principles for liquidation of companies as a menace to our fragile but stubborn economy.
We would further encourage those political parties that are facing a bleak future, as a result of the floor-crossing legislation, to inform their employees about the prospects of their party’s liquidations - either provisional, final, voluntary or compulsory - for the said employees to be able to prepare thoroughly their exit.
Our successful review of all insolvency laws in favour of our country’s proletariat, who continue to drive the economy of our country, constitutes an achievement that is beneficial to our country, continent and workers of the world. It is, however, only those students of Joseph Goebbels whose thesis was and continues to be that ``the bigger the lie, the more likely the people are to believe it’’, who can’t giggle at our achievement in passing this Bill. [Applause.]
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Mr Chairperson, I thank the hon members for this very short debate on this Bill. I thank them, particularly, for the correct positions that all of us have taken with regard to this Bill.
The hon Delport, quite correctly, says that it’s our duty to scrutinise the policy and, as has been pointed out, we could easily have said, well, we’ll make the policy and then start implementing it as the department. But we felt that we should actually involve the duly elected representatives of our people in the evolution of this policy.
I thought I should actually, with the time allocated to me, illustrate the problems that we are dealing with by way of expressing my own happiness that hon Delport has actually talked about, for instance, the issue of the few getting enriched through liquidations.
In 2001, in one province 83% of liquidation work went to one firm only. The rest - black and white - shared the rest of the work. In another province 65% went to one firm and the rest was shared by the rest of the liquidators.
I am told by liquidators - black and white - that it’s not just enough to be put on a liquidators’ panel at the Master’s Office. A lot of people are, indeed, liquidators because they have been put on those panels, but they say clambering onto the panel itself is a very difficult task. You never know with certainty whether you will be appointed as you apply to be a liquidator. Some are lucky and others are not, because again you never know how the Master is going to exercise his discretion with regard to your application. There is a lot of uncertainty.
But, having been put into the panel - it’s very interesting that you then have to approach them with trepidation - you are hoping against hope that you may get work from them. Many people have never done any liquidation work if, indeed, in one province 83% goes to one firm only. So, we’ve got to deal with that sort of situation.
What is also very interesting is that one time, I am told, after this House had passed a law amending the Companies Act of 1973 so that the SARS and labour unions representing workers in a company going through liquidation should be informed about the pending liquidation - after we had amended that - a worker in the Master’s Office in Pretoria then decides that all they do is just to inform them. They do not have an automatic right to be represented in a liquidation. She then says: ``Therefore, I decide who is going to be represented here - you don’t decide that.’’
So, it doesn’t matter how many workers are to be affected. She decides liquidator X is presumed to be capable of representing the interests of all. So when we asked her as to where in the law it states that workers must now be represented and that the only right they have under this law is the right to be informed, she says: ``Oh! Sorry Minister, I misread the law’’.
She could indeed have genuinely misread the law. But, this Bill will enable us to appoint the sort of person to whom all these complaints are going to go, because there is no way any Minister with small or broader shoulders can actually deal with the situation there.
The Masters’ Offices, for instance, are in charge of the Guardian’s Fund - which I am advised this year is in excess of R2 billion. Now, that’s a lot of money to be left in the hands of people who exercise this sort of discretion in the manner I have described. They are responsible for too big sums of money for us not to pay attention to them. So, by means of this Bill we are saying, as the hon Johnny De Lange has told us, they will cease to be a stepchild of the administration of justice. I thank you. [Applause.]
Debate concluded.
Bill read a second time.
The House adjourned at 17:40. _____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
ANNOUNCEMENTS:
National Assembly and National Council of Provinces:
- Bills passed by Houses - to be submitted to President for assent:
(1) Bill passed by National Assembly on 9 April 2003:
(i) Division of Revenue Bill [B 9D - 2003] (National Assembly
- sec 76).
- Classification of Bills by Joint Tagging Mechanism:
(1) The Joint Tagging Mechanism (JTM) on 7 April 2003 in terms of
Joint Rule 160(3), classified the following Bill as a section 75
Bill:
(i) National Small Bus iness Amendment Bill [B 20 - 2003]
(National Assembly - sec 75).
National Assembly:
- Referrals to committees of tabled papers:
(1) The following papers are referred to the Portfolio Committee on
Social Development:
(a) Government Notice No R 460 published in Government Gazette
No 24630 dated 31 March 2003: Amendment to Regulations
regarding grants and financial awards to welfare organisations
and to persons in need of social relief of distress, made in
terms of section 19 of the Social Assistance Act, 1992 (Act No
59 of 1992).
(b) Government Notice No R 461 published in Government Gazette
No 24631 dated 31 March 2003: Increase in respect of social
grants, made in terms of the Social Assistance Act, 1992 (Act
No 59 of 1992).
(2) The following papers are referred to the Portfolio Committee on
Public Enterprises:
(a) Report and Financial Statements of Eskom Limited for 2002.
(b) Strategic Plan of the Department of Public Enterprises for
2003-2006.
(3) The following paper is referred to the Portfolio Committee on
Finance:
The Intergovernmental Fiscal Review for 2003 [RP 27-2003].
(4) The following paper is referred to the Standing Committee on
Public Accounts and to the Portfolio Committee on Finance for
consideration:
Memorandum on changes in the form of the 2003 Estimates of
National Expenditure (ENE).
(5) The following papers are referred to the Portfolio Committee on
Environmental Affairs and Tourism for consideration and report:
(a) Protocol on Wildlife Conservation and Law Enforcement in
the Southern African Development Community, tabled in terms of
section 231(2) of the Constitution, 1996.
(b) Explanatory Memorandum to the Protocol on Wildlife
Conservation and Law Enforcement in the Southern African
Development Community.
(6) The following paper is referred to the Portfolio Committee on
Labour:
Strategic Plan for the Department of Labour for 2003-2006.
COMMITTEE REPORTS:
National Assembly:
-
Report of the Portfolio Committee on Justice and Constitutional Development on the Southern African Development Community Protocol on Extradition, dated 7 April 2003:
The Portfolio Committee on Justice and Constitutional Development, having considered the request for approval by Parliament of the Southern African Development Community Protocol on Extradition, referred to it, recommends that the House, in terms of section 231(2) of the Constitution, approve the said Protocol.
Request to be considered.
-
Report of the Portfolio Committee on Justice and Constitutional Development on the Southern African Development Community Protocol on Mutual Legal Assistance in Criminal Matters, dated 7 April 2003:
The Portfolio Committee on Justice and Constitutional Development, having considered the request for approval by Parliament of the Southern African Development Community Protocol on Mutual Legal Assistance in Criminal Matters, referred to it, recommends that the House, in terms of section 231(2) of the Constitution, approve the said Protocol, and recommends further that the Director- General: Justice and Constitutional Development, in terms of Article 3 of the Protocol, be designated as the Central Authority to make and receive requests pursuant to this Protocol.
Request to be considered.
-
Report of the Portfolio Committee on Foreign Affairs on Protocol Relating to the Establishment of the Peace and Security Council of the African Union, dated 9 April 2003:
The Portfolio Committee on Foreign Affairs, having considered the request for approval by Parliament of the Protocol Relating to the Establishment of the Peace and Security Council of the African Union, referred to it, and having conferred with the Portfolio Committee on Safety and Security, the Portfolio Committee on Defence, the Portfolio Committee on Justice and Constitutional Development, the Joint Standing Committee on Defence and the Working Group on the African Union, recommends that the House, in terms of section 231(2) of the Constitution, approve the said Protocol.
The Committee wishes to report further, as follows:
In its conference with the Working Group on the African Union, the Working Group indicated that the South African constitutional mandate regarding security is clear: Security policy “…must reflect the resolve of South Africans, as individuals and as a nation, … to be free from fear and want and to seek a better life.” [Section 198(a)]. This broad, holistic approach to security recognises the various non-military dimensions of security and is rooted in our collective experiences of insecurity. Through the various consultative processes that led to the drafting of the White Paper on Defence and the Defence Review of 1998, it became clear that South Africans viewed security beyond the narrow confines of state security.
This should guide the implementation of the Protocol, while taking due cognisance of the needs of States to safeguard their territorial integrity. This perspective and the understanding of the inter-linkage between the processes of conflict resolution, peace-making, reconciliation, democracy, human rights and development underlines South Africa’s understanding of sustainable peace and stability in our country, the region and the Continent.
The United Nations’ Secretary-General has described the need to define and promote this understanding of human security as one of the greatest challenges of the 21st Century.
Request to be considered.
-
Report of the Portfolio Committee on Safety and Security on the Explosives Bill [B 43B - 2002] (National Assembly - sec 75), dated 9 April 2003:
The Portfolio Committee on Safety and Security, having considered the Explosives Bill [B 43B - 2002] (National Assembly - sec 75) and proposed amendments of the National Council of Provinces (Announcements, Tablings and Committee Reports, 27 February 2003, p 102), referred to the Committee, reports the Bill with amendments [B 43C - 2002].
Report to be considered.