National Assembly - 25 August 2004
WEDNESDAY, 25 AUGUST 2004
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PROCEEDINGS OF THE NATIONAL ASSEMBLY
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The House met at 15:00.
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
ACCOMMODATION FOR THE HOMELESS
(Draft Resolution)
Miss S RAJBALLY: Chair, I move without notice:
That the House-
(1) notes that - (a) a few weeks ago the harsh winters of the Western Cape left many people homeless and, as a result of heavy rains, some disadvantaged areas were flooded;
(b) though the Western Cape needs the rain, the areas that received these heavy rains were not agricultural areas;
(c) many people were left homeless as a result, and that many of them face annual flooding of their homes;
The HOUSE CHAIRPERSON (Ms C-S BOTHA): Hon member, I have asked for motions without notice.
Miss S RAJBALLY: Yes, it is without notice.
The HOUSE CHAIRPERSON: Please proceed.
Miss S RAJBALLY: (d) this does not only imply monetary damages, but leaves many in the area exposed to diseases; and
(e) these people need to be moved and adequately housed; and
(2) calls for the –
(a) construction of flats and tall buildings to accommodate the homeless and the use of these buildings, especially in disaster management cases; and
(b) creation of shelter and decent living conditions for the underprivileged.
Agreed to.
NATIONAL ENERGY REGULATOR BILL
(Second Reading debate)
The MINISTER OF MINERALS AND ENERGY: Madam Chair and hon members, this is rather a short debate, because the Bill that we are presenting is very straightforward and of an administrative nature.
The reason for this National Energy Regulator Bill is to merge the different energy regulators into one regulator. We are doing this to save the costs of regulating the energy industry in order to address the concern that Cabinet has about the proliferation of state entities so that we can make sure that we are able to synergise the skills that are there in our regulator environment in order to improve the efficiencies and the depth of the function of regulators. We also want to make sure that the different energy carriers have fair treatment where they are competing.
This Bill will bring together in particular, or rather initially, the National Electricity Regulator Act, the Petroleum Pipelines Act, as well as the Gas Regulator Act, and all of them will be administered together. This Bill will place the National Electricity Regulator and the other two regulators that I have mentioned, under one institution.
There will be five part-time regulators and four full-time regulators with a CEO. We expect that this, in turn, would significantly cut the costs in the field of regulating energy. According to our information, and I am sure that of the committee, this Bill has received general support from the stakeholders as it improves energy governance, which is one of the objectives of the energy White Paper.
I want to thank the portfolio committee for the contribution that they have made, bearing in mind that it is a relatively new portfolio committee in the sense that most of the members are new. We obviously also have a brand- new chairperson who has been able to drive this process in an exceptionally good way.
Some of the contributions that were made by the portfolio committee to improve the Bill include the introduction of a deputy chairperson of the regulator as a part-time person. They have refined the Bill in order to make sure that the appeals procedures are in accordance with the Promotion of Administrative Justice Act. They have improved the wording and made sure that it will be possible for the regulator to establish a subcommittee in order to delegate duties to them when it is difficult for the full members of the regulator to do certain things.
I would like to thank members and the House very much for affording us this opportunity. Thank you.
Mr E N MTHETHWA: Thank you, Chairperson, hon members, comrades and friends. Allow me to begin my talk by saluting women during this month of August.
This month symbolises resistance against the oppression of women and it is a constant reminder of the triumph of the struggle for gender equality.
Whilst this struggle’s bridgehead is occupied by women, it belongs to all humanity. The fundamental bastions of this oppression must not be lost sight of.
Comrade Thomas Sankara, the late president of Burkina Faso, reminds us in his writings on the subject:
Humankind first knew slavery with the advent of private property. Man, master of his slaves, land, and cattle, in addition elevated himself to be the woman’s master.
This was the historic defeat of the female sex. It came about with the appearance of the division of labour as a result of the new mode of production and a revolution in the means of production, thus the triple oppression is based on class, gender and race.
This is the phenomenon that cannot be left alone by our national democratic revolution. Thina-ke esiyaziyo siyibiza ngembokodo kamagayisa, ngokugayisa uStrydom nobandlululo. [We call it the grinding stone, by grinding Strydom and the apartheid system.]
Koloi ya basadi e a tsamaya. [The women are moving forward.]
In the same spirit, we feel it is important to relate our experience on the congress of the young lions of the African century which took place this past weekend. We were in the midst of the young in age, the young in character and the young in delusions, as Ernesto Che Guevara would have said.
The single most important resolution this congress took was the introduction of a 40% women representation in all its leadership structures. This is a challenge to the ANC, which so far has about 30%.
Sithi kulesi sigamu sesigidi samalungu ombutho wetsha kaKhongolose: ``Khula Vukayibambe, khula!’’ [We say to this half a million-strong membership of the African National Congress Youth League; Long live, Youth league, long live!]
Coming to the Bill, Chairperson, there has been general agreement on it throughout the process, as the Minister has alluded to. The aim of this Bill is to integrate the different regulators into a single National Energy Regulator. This is in line with the RDP’s perspective of integrated development and of sorting out governance institutions.
Government noted with concern the proliferation of different regulators which could have derailed the process of service delivery. Upon this, government took a decision in 2002 against this proliferation.
We in the ANC firmly believe that having one regulator specifically catering for electricity, piped gas and petroleum pipeline industries will yield efficiency and effectiveness for the delivery of these basic needs to the people.
Furthermore, it will be convenient for the poor sections of our population to target a one-stop shop for all these needs. It will also be beneficial to the people through its cost-saving nature, which in turn would be used in our offensive against poverty.
Lo mThethosivivinywa ubalula nokuthi imibuthano yalesi sigungu sezamandla iyovuleleka ukwethanyelwa ngumphakathi wonkana. Lokhu kuhambisana nomgomo kaHulumeni wokwenza abantu ungqaphambili ezinhlelweni zombuso.
Imiphakathi yakithi iyothola nethuba lokukhalaza uma kukhona okungahambi kahle kulesi sigungu. Sihlalo, kulo mThethosivivinywa kuzoba nenkundla yokukhalaza ezothetha namacala athintene nalesi sigungu. Uma nalapho amalungu omphakathi enganelisekile, ayokwazi ukwedlulisa udaba luze lufike enkantolo ephakeme. Okwamanje, okuyisona sigungu esakhiwe nesinengqalasizinda, yileso esibhekene nogesi. Yiyo-ke le ngqalasizinda esizoyisebenzisa ekwakhiweni kwalesi sigungu samandla sikazwelonke. Translation of Zulu paragraphs follows.)
[This Bill provides that the meetings of the Department of Minerals and Energy will be open to all the members of the public. This is in compliance with the government’s Batho Pele policy in government projects. Our communities are going to have an opportunity to lodge complaints if there is something wrong in this department. Chairperson, according to this Bill there will be an ombudsman which will receive complaints and conduct hearings on cases concerning this department.
Should members of the public be not satisfied, they will be able to take the matter to the High Court. At the moment the only ombudsman that has been established together with infrastructure is the one that deals with electricity complaints. That will be the infrastructure that we will use to establish a national authoritative ombudsman.]
On comparing ours internationally by looking at the Australian example, we discovered that ours is a step ahead. Section 9(10) of subsection 1 in the Australian Energy Market Bill of 2004 states that the Australian energy regulator has the functions and powers conferred on it under the national electricity law, regulation and rule. Our Bill provides not only for the electricity section of energy, but also takes on board other sections.
The UK, for instance, under the Gas and Electricity Markets Authority of 2004, agrees on the composition and status of members of the two bodies. In Zambia, the energy regulator is still faced with the challenge of the enhancement of its independence. Similar work being done in Korea and Denmark makes our Bill seem to be one of the most progressive in this field the world over.
In the study of the international agency of organisations for economic co- operation and development, a number of general principles were identified to characterise the regulatory system. These are the rule of law, transparency, neutrality, predictability, independence and accountability. Based on these international norms of regulatory bodies, our national energy regulator passes the test.
The ANC supports the Bill. I would like to thank members of the committee for their support, valuable contribution and the attention they have given to this Bill. To all the interested and affected parties, we thank you. To the department and the state law advisers, thank you for the assistance during this process.
Sithi-ke ngesiZulu, sibonga siyanconcoza. [In isiZulu, we say ”thank you very much!“]
Thank you, Chair.
Adv H C SCHMIDT: Madam Chair, briefings from the Department of Minerals and Energy Affairs indicated that South Africa is due to expect shortages in electricity supply as from 2007-2008. Eskom’s attempt to “demothball” its old coal-fired power stations, being Camdon at Ermelo, Grootvlei near Balfour and Komati in Middelburg, will relieve some of the shortages expected in electricity supply. Increased reliance on other possible energy sources in the long term and their effective co-ordination will be imperative for the growth of the South African economy.
This Bill intends regulating three of the most important energy sources, namely electricity, piped gas and petroleum pipeline industries, by establishing a national Energy Regulator from a date to be proclaimed as from 1 June 2005. It is clear that the synergy required for future planning and co-ordination of available energy sources is, to a certain extent, addressed by this Bill. Although the Gas Act, as well as the Petroleum Pipelines Act, makes provision for the existence of regulator authorities, no such regulators have been established to date. The reasons given to such failure relate to a lack of available skills in the regulatory environment, the duplication of costs and other policy considerations.
Although it has been argued that the King Commission report is not strictly applicable to the establishment of regulatory bodies, several of its recommendations have been made applicable to the National Energy Regulator. One such recommendation relates to its composition of more part-time regulators than full-time members. In accordance therewith, four full-time members and five part-time regulators will be appointed with varying periods of service, five and four years respectively, required from the regulators. This will ensure continuity of experience.
It is interesting to note that before the members of the Energy Regulator are appointed, the Minister must, by notice in the Government Gazette, call for nominations from members of the public. It is further interesting to note that no person may be appointed as a member of the Energy Regulator if that person has, within a period of 10 years –
… immediately before the date of the proposed appointment, been convicted of an offence involving dishonesty or served a sentence of imprisonment without the option of a fine for any other offence.
This clause is supported wholeheartedly, as any individual would be precluded from being appointed if he had been convicted of any offence relating to dishonesty within a period of 10 years, no matter the seriousness of such dishonest offence.
The Minister is also required to designate one of the full-time members to be primarily responsible for electricity regulation, another one for pipe gas regulation and a third regulator for petroleum pipeline regulation. This will ensure accountability in respect of each of those identified three industries.
An independent National Energy Regulator in the exercise of its functions is envisaged. A chief executive officer, who also serves as a regulator, is responsible for the employment of employees and contracting individuals to assist the Energy Regulator. However, on a point of caution, the Bill also provides for the Minister, “where a need exist” to instruct the Energy Regulator to make use of other persons employed or contracted by the Department of Minerals and Energy, or any other licensing or regulatory authority under the Minister’s jurisdiction.
Contrary to the Electricity Act, where appeals against decisions by the Electricity Regulator were directed to the Minister, appeals will in future be vested in the High Courts. So too is the provisions of the promotion of the Administrative Justice Act applicable by virtue of a judicial review to the High Court in respect of administrative actions by the Energy Regulator. The promotion of the Access to Information Act is also applicable in respect of that information which members of the public are entitled to where decisions have been made and proceedings of the Energy Regulator have been held behind closed doors. Meetings of the Energy Regulator must generally be open to the public, unless a valid reason exists for doing otherwise.
One remaining issue, which needs to be addressed, relates to the regional electricity distributors intended for the six identified regions. Our support for this Bill should not be confused with possible support or opposition to these six regional electricity distributors, which will require some degree of clarification. In light of the above, the DA supports the Bill. I thank you. [Applause.]
Mr E J LUCAS: Madam Chair, we welcome the new Chairperson, hon Mr Mthethwa, to the Portfolio Committee on Minerals and Energy, and we hope that the good working relations which prevail in our committee will continue.
The input received from various stakeholders during the public hearings was very positive, and the few points of concern that were raised were dealt with in a constructive manner within the committee. The aim of this Bill is simply to establish a single regulator, the National Energy Regulator, to regulate the electricity, piped gas and petroleum pipeline industries. We support this wholeheartedly, as it will bring about massive savings.
The sharing of staff and, more importantly, of expenses will ultimately result in the increased efficiency of the Energy regulator. This is a relatively new concept in South Africa and we do believe that, if operated correctly, it will be the way to go in the future.
Initially, we did have some misgiving about the position of the chief executive officer. However, at the end of the day, we were happy. We accept that he will have a very important role to play and that he will have voting rights. There was a concern raised about what should happen if, for some reason, the chairperson was unable to attend a meeting. Here again, whilst it did not appear to be a serious issue - as we were dealing with professional people - we did agree to the appointment of a deputy chairperson.
Regarding full-time and part-time regulators, we are sure that the Minister will appoint worthy candidates. We do, however, appeal for the candidates for the Energy regulator to come from a broad spectrum of society, including community and business.
Ms N F MATHIBELA: Madam Chair, hon Ministers, hon members, firstly, allow me the opportunity to congratulate our hon Minister, Phumzile Mlambo-Ngcuka on her having been nominated for the Platinum Lifetime Award. [Applause.] Allow me to quote a portion of an article that appeared on page 5 of the City Press this past Sunday, in which it was stated that:
Mlambo-Ngcuka will be specially recognised for her sterling work in the entry of women into the previously male-dominated minerals and energy field. [Applause.]
There is a saying in Sepedi that says: Tša etwa ke ye tshadi pele di wela ka leope. [That which is led by women will not thrive.]
Loosely translated, this means that that which is lead by a woman will not thrive.
Nna ke re seema seo se swanetše go fetolwa, se bolele gore tša etwa ke ye tshadi pele di a tšwelela. [I say that the idiom should be changed to say that that which is led by women will thrive.] I’m saying that this saying should be rewritten to record the opposite.
Today, as the ANC, we are putting the final mark on the process of integrated energy by passing the National Energy Regulator Bill. It has been the policy of the ANC to have an integrated approach on energy supply and distribution in the country and to regulate that approach in order to provide energy to industry and households in a more structured and efficient manner.
The passing of this Bill heralds a new era in the energy sector in the country by establishing a regulatory framework to regulate the electricity, piped gas and petroleum pipeline industries. By creating a single energy regulator for all these industries, the ANC-led Government will ensure that synergies between these industries are created.
There is a saving on cost, and most importantly, to ensure that there is transparency and accountability by making the regulator subject to the provision of the Public Finance Management Act of 1999. The creation of a single energy regulator has already taken place and continues to exist in Britain, Australia, Zambia and other countries. Thus, in drafting this Bill, due regard was given to the experience and lessons emanating from those countries.
In addition, due and proper regard has been given to the needs of the public in South Africa. Examples of these are to be found in section 10 of the Bill which provides, amongst others, that decisions by the regulator must be in the public interest, and also that persons affected by regulator’s decision are to be granted the opportunity to submit their views and present relevant facts and evidence to the regulator.
What is also of interest and perhaps of importance as well is that under section 8 of the Bill, unless a meeting of the regulator has been declared confidential, all meetings of the Energy Regulator must be open to the public. Furthermore, prior to any meeting of the regulator, the regulator is to bring to the attention of the public all business to be conducted at such a meeting. By attending meetings of the regulator, the public will have an opportunity to be made aware of all the processes and decisions of the regulator. Given our history and where we are today as a country and as a people, the need of the public to be involved in the processes of the government cannot be overemphasised. The government needs to be applauded for ensuring that, as far as possible, the public will be involved in processes to be initiated in terms of the National Energy Regulator Legislation.
One other key feature of the Bill is the provision requiring the Minister to publish a notice calling for nominations from the public before appointing members of the energy regulator. This provision will ensure that the public is involved in the process of selecting members of the regulator. The Bill further requires the Minister to, amongst others, appoint to the regulator persons who are collectively broadly representative of South African society as a whole. Given the Minister’s track record, we as the ANC are exceptionally confident that the Minister will select to the regulator sufficient numbers of appropriately skilled persons from the previously disadvantaged groups, particularly persons with disabilities, black women and women of other races. As the ANC we are undivided in our decision that there is a need to have a single regulatory framework for electricity. Not only will the consolidation of the piped gas and petroleum pipeline industries be cost-effective, but it will also be efficient and ensure a more structured and co-ordinated service delivery to the people of South Africa. I once again would like to state that the ANC supports the Bill. Thank you.
Mr A HARDING: Madam Chair, I will have to be very snappy in this snap debate, so here we go. The ID has stressed the importance of an affordable low-cost option for community participation in decisions or rulings of the NER, and that the department tags some of the costs in this respect. Access to information and transparency around tariff setting and charges is crucial if we are to build credibility in the press. In this regard I want to mention the fact that we are particularly glad that the committee and the department saw their way clear to accommodate the changes that we suggested. The ID recognises the need for one regulator to oversee various sectors, as we need to get the industry dynamics right before the introduction of competitive markets. How BEE is facilitated in this process is another challenge. We also recommend that the funds received from each sector in the form of fines be used exclusively in that sector for the development and training of previously disadvantaged persons into these highly technical areas. In conclusion, the ID supports this Bill.
Miss S RAJBALLY: Thank you, Chairperson. The MF has no objection in merging the management of electricity, piped gas and petroleum pipeline industries under the management of one entity, namely the Energy Regulator. It would be advantageous if the petroleum products industry is merged at the same time. Further, the amendments made to each industry’s Bill should have been included. However, it is hoped that this entity set up to manage these industries will be efficient in doing so. It is further hoped that the infrastructure utilised for the national Electricity Regulator, chosen by the Energy Regulator and used by the gas and petroleum pipelines industry, would be adequate. The MF is confident that this merger will minimise costs in the long run and will benefit to the energy management sector as a whole. The MF supports the National Energy Regulator Bill. Thank you. [Applause.]
Mr C D KEKANA: Thank you, Chairperson. As participants in the Portfolio Committee on Minerals and Energy, we are happy that this Bill has received unanimous support from all parties, from all participants and from both sides of the political line. This is a very rare occurrence in this House, so we are happy that everybody has unanimously supported it.
We wish to underline just a few points because all the speakers have already given a good background and a good outline of the debate on the Bill itself. The first point is that the National Energy Regulator Bill outlines the fact that the regulator will be independent from undue influences, and that it must remain impartial and take decisions that are in the interest of the public, instead of decisions that are of personal interest or narrow sectoral interests. That is the first point, namely that it should be independent and impartial.
The second point is that the Minister is going to do the appointment. Though the Minister is going to do the appointment, it is important for you to notice that the Minister will gazette an invitation to members of the public to nominate all the people from whom she will appoint. Therefore the Minister appoints, but before she does so, she will gazette an invitation that invites members of the public to make nominations. Out of those nominations the Minister will make a final appointment of members of the board.
The third point is that the chief executive officer will become a full-time member of the board. The rationale for that was to link the board with the administrative wing of the regulator. We thought that, because the CEO has such an important role, it is important that he should be well versed with the occurrences and happenings regarding every activity within the board.
The other point is that members of the regulator will not be accountable to the CEO, but they will be accountable to the board. This means that the CEO can’t control them. We will just be there to make positive contributions.
Another point that was mentioned and which I think is very important…
Ka Sesotho ke taba bohlokwa haholo eo re buang ka yona, ya hore batho bao e elng ditho tsa lekgotla ba tlameha ho ba le botshepehi. Ke dinokwane mme maobane ke utlwile ho sebediswa lentswe le leng la manyofo-nyofo. Batho ba jwalo ha ba batlehe lekgotleng lena. (Translation of Sotho paragraph follows.)
[In Sesotho, we are discussing a very important matter, namely that members of the board should be trustworthy. They are criminals, and yesterday I heard the use of another corruptive word. Such people are not welcome on this board.]
Everybody who serves on the board should be of good standing in the community. He shouldn’t have displayed any dishonesty in his life that can be proven, as has already been mentioned. He also shouldn’t have been convicted and sentenced without the option of a fine at any time in the past 10 years.
There is an expression that was used that caused a lot of debate in our committee. That expression said that anybody who is going to serve must not be of an “unsound mind”. We were not happy about these people with “unsound minds”. We thought that it doesn’t show respect for ill people. However, it is said that in many Acts that the President has already signed, the word “unsound” is used. So we accepted it. People who serve on the board shouldn’t be of unsound mind. Those are requirements for people who will serve on the board. The last provision is that somebody might be disqualified if that person shows dishonesty in terms of fraudulent practices or any criminal offence during the term when he is serving.
In conclusion, after the board has taken a decision and if any member of the public is not happy with that decision, there is a course for redress. The first one is the tribunal, which will hear a review of the decision. If the person is still not satisfied with the decision of the tribunal, he can make an appeal to the higher court.
We think this is a very constructive and well considered Bill. We would like the whole House to support it. Thank you very much. [Applause.]
The MINISTER OF MINERALS AND ENERGY: Thank you, Chairperson. Again, I would like to ask this House to approve this Bill. I’d like to thank all the parties who have contributed, as well as the support that all parties have given to the Bill. I would like to welcome the DA’s late support for the Bill. I realise that they had abstained during voting in the committee, but late is better than never. They have seen the light before it’s too late. I would also particularly like to thank again the new chairperson for the work that he has done, and I do want to salute my old chairperson. It is the first time that I’m addressing him as the Chief Whip. Congratulations former chairman!
This Bill is being debated during the Women’s Month. I’m sure comrades will agree that energy is a woman’s issue because in every household women are the energy managers. [Applause.]
Abantu besifazane yibona abatheza izinkuni, abafuna amalahle, abathenga amakhandlela, abenza kufudumale endlini nokunye nokunye. [Women are the ones who gather firewood, look for coal and buy candles, thereby making the room warm and other things.]
So I dedicate this Bill to you, women of South Africa. Thank you very much. [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:
- Introduction of Bills:
(1) The Minister of Finance:
(i) Government Employees Pension Law Amendment Bill [B 15 -
2004] (National Assembly - sec 75) [Bill and prior notice of
its introduction published in Government Gazette No 26676 of
16 August 2004.]
Introduction and referral to the Portfolio Committee on Finance of
the National Assembly, as well as referral to the Joint Tagging
Mechanism (JTM) for classification in terms of Joint Rule 160, on
26 August 2004.
- Draft Bills submitted in terms of Joint Rule 159:
(1) Financial Services Ombud Schemes Bill, 2004 and Securities
Services Bill, 2004, submitted by the Minister of Finance on 15
July 2004. Referred to the Portfolio Committee on Finance and the
Select Committee on Finance.
(2) Petroleum Products Amendment Bill, 2004, submitted by the
Minister of Minerals and Energy on 16 August 2004. Referred to the
Portfolio Committee on Minerals and Energy and the Select
Committee on Economic and Foreign Affairs.
TABLINGS:
National Assembly and National Council of Provinces:
- The Minister of Environmental Affairs and Tourism:
Report and Financial Statements of the National Botanical Institute for
2003-2004, including the Report of the Auditor-General on the Financial
Statements for 2003-2004.
- The Minister of Arts and Culture:
Report and Financial Statements of the Nelson Mandela National Museum
for 2002-2003, including the Report of the Auditor-General on the
Financial Statements for 2002-2003.
- The Minister of Science and Technology:
Report and Financial Statements of the National Research Foundation
(NRF) for 2003-2004, including the Report of the Auditor-General on the
Financial Statements for 2003-2004.
National Assembly:
- The Speaker:
Report and Financial Statements of the Independent Electoral Commission
(IEC) for 2003-2004, including the Report of the Auditor-General on the
Financial Statements for 2003-2004 [RP 115-2004].