WESTERN CAPE MAKES SUBMISSION ON CONSTITUTION 17TH AMENDMENT BILL

On Friday the Provincial Government of the Western Cape submitted comment on the proposed Constitution 17th Amendment Bill. The following is the full text of the submission. The key arguments are set out in paragraphs 7a to 7d below, with detailed explanation thereafter.

COMMENTS ON THE CONSTITUTION SEVENTEETH AMENDMENT BILL BY THE PREMIER OF THE WESTERN CAPE 17 JULY 2009

1. The proposed Constitution Seventeenth Amendment Bill of 2009 seeks to insert a provision in the Constitution to provide for an Act of Parliament to further regulate the executive authority of municipalities in respect of local government matters listed in Part B of Schedule 4 and Part B of Schedule 5 when -

a. it is necessary to achieve regional efficiencies and economies of scale in respect of a specific municipal function;

b. municipal boundaries and executive authority negatively impede those efficiencies and economies of scale.

2. The manner in which the executive authority is to be regulated further is also prescribed in the proposed provision.

3. The Department of Justice and Constitutional Development is of the opinion that the proposed amendments fall within an amendment contemplated in section 74(3) (b) of the Constitution and that the approval of both the National Assembly and National Council of Provinces are required.

4. The comments set out hereunder are from the Premier of the Western Cape on behalf of the Western Cape Provincial Government, with additional department specific comments by the Western Cape Department of Local Government and Housing.

Comments from the Premier of the Western Cape

5. The proposed Constitution Seventeenth Amendment Bill of 2009 ("the Amendment Bill") was published for public comment in Government Gazette No. 32311, with comments to be submitted within 30 days.  The Provincial Government of the Western Cape ("the Province") objects to the Amendment Bill for the reasons set out below.

6. The proposed new section 156(1A) seeks to limit the executive authority of municipalities.  It does so by empowering the government to pass national legislation which further regulates the executive authority of municipalities in respect of the local government matters listed in Part B of Schedule 4 and Part B of Schedule 5.

7. The Amendment Bill allows national government greater scope for intervention in local government matters, and even the power to unilaterally transfer or strip municipal assets and functions in terms of certain (vaguely defined) criteria (see Paragraph (b)(i)). This province's main objection to the Amendment Bill is that, in so doing, it interferes with the balance of power between the national, provincial and local Governments, as set out in the Constitution. In brief:

a. In granting a range of newfound powers of intervention in municipalities to the national government, the Amendment Bill leaves the way open for national government to ‘leapfrog' the constitutionally designated role of provincial governments in supporting and monitoring local government (see also the separate submission below from the Department of Local Government). This is likely to undermine the capacity for co-ordination and co-operation between provincial government and local government, and also undermines the current function of provincial government to monitor and assist local government.

b. The Amendment Bill's Provision allowing national government to transfer municipal assets, intervene in municipal legislation, and to take away municipal functions listed in Schedules 4 and 5 of the Constitution (like electricity reticulation) risks negatively impacting on the budgeting and financial viability of municipalities. Funds raised through electricity reticulation are often used to cross-subsidise other services like water and sanitation. Impinging on municipal budgets in this way could lead to greater strain on the provincial government's role of supporting municipalities facing financial difficulties. It may also impact on provincially-driven regional economic planning by undermining municipal service delivery, which is crucial for economic growth.

c. The Amendment Bill has the potential to fundamentally alter the structure and functioning of South Africa's democratic system by reducing the accountability of local and regional government officials for service delivery standards. Local and Provincial government elections are the main device set out in the Constitution through which state service providers are held to account for the effectiveness of service delivery in each region of South Africa. If control over more of these functions is shifted to national level, as the Amendment Bill proposes, it will weaken this mechanism, whereby communities hold their local service providers to account through the ballot box.

d. The Amendment Bill introduces a range of legal conflicts and ambiguities into the Constitution that will create very significant legal complications where intergovernmental disputes over national government interventions in municipalities are raised. The vague nature of the criteria it imposes for national government interventions in municipalities (and the bypassing of provincial governments) will be open to political abuse where different political parties occupy municipal, provincial and national governments respectively.

A more detailed explanation of these three key objections follows below.

With respect to point 7 (a) above:

8. the Constitution imposes a positive obligation on both national government and provincial governments to respect and to build up local government autonomy. For example, section 41(1)(e) of the Constitution requires all spheres of government to "respect the constitutional status, institutions, powers and functions of government in the other spheres". Interventions must only be carried out to support this ability to function autonomously, not to take away or take over functions. For example, section 154(1), requires national government and provincial governments, by legislative and other measures, to "support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions".

9. Section 155(6)(a) of the Constitution gives provinces the obligation to monitor and support local government. It empowers provinces, by legislative or other measures, to "provide for the monitoring and support of local government" in the relevant province. 

This is not a function conferred on national government. More importantly, as set out in section 139, the power to intervene in the affairs of municipalities is conferred specifically on Provinces.

Section 139 entitles Provinces to issue directives to municipal councils, to assume responsibility for the relevant obligations in that municipality, and even to dissolve the relevant municipal council and appoint an administrator in its place if the municipality is unable to pass its budget or carry out a substantial number of its functions in terms of the Constitution.  The power of national government to intervene in these circumstances is, in terms of section 139(7), extremely limited: it may do so only when a provincial executive either cannot or does not intervene.

10. These provisions of the Constitution, read together, impose a specific relationship on the three spheres of government, with provinces being principally responsible for the local sphere. The proposed amendment, however, allows national government to ‘leapfrog' the provinces and regulate the executive authority of municipalities. This undermines the integrity of the existing Constitutional arrangement. It should also be noted that the Constitution recognises the autonomous status of local and provincial government. Section 151(4) which provides that "The national or a provincial government may not compromise or impede a municipality's ability or right to exercise its powers or perform its functions". Local government is therefore defined as a distinct sphere of government with legislative, executive and administrative authority.

With respect to point 7 (b) above:

11. As stated in point 10 above, the Constitution imposes a specific relationship on the three spheres of government, with provinces being principally responsible for monitoring -- and co-ordinating with - the local sphere. Paragraph (b)(i) of the Amendment Bill refers to the national legislation providing for the "transfer of assets". This suggests that the national legislation will empower national government to unilaterally deprive a specific municipality of its assets and to transfer those assets to some other entity (for example regional electricity distributors in the case of EDI restructuring).  That will amount to an unwarranted expropriation of the municipality's assets and will significantly impact on the budget and finances of local government and local government service delivery. Paragraph (b)(ii) and (iii) of the Amendment Bill refers to the national legislation facilitating "appropriate planning and expenditure in respect of infrastructure and maintenance" and "equitable tariffs, user charges, fees and service levels". This will interfere with a municipality's control over its revenue and its expenditure.

12. The Amendment Bill's provision for centralised interference in municipal assets and finances risks having a knock-on effect by increasing the burden on the Provincial Government to assist local governments in financial distress in terms of section 139 of the Constitution.

13. The said provision will also limit the scope for regional co-ordination between provincial and local governments on regional economic growth initiatives: municipal infrastructure and services are a critical element in any economic growth strategy. If these are curtailed or undermined, regional economic planning will also be negatively impacted.

With respect to 7 (c) above:

14. The Amendment Bill's provision for national government interference in local government, and its provision for national government to ‘leapfrog' provinces, as described above, will fundamentally alter South Africa's current democratic arrangement by weakening the ability of elected local and provincial governments to implement the policies of their elected representatives. Local government 5 year Integrated Development Plans should reflect the mandate given to the elected government by the voters in local government elections. Through the process of creating Integrated Development Plans (which must also take into consideration input from mandatory public participation), translating these plans into Service Delivery and Budget Implementation Plans, and into annual budgets, the policies of local government executives should be translated into specific municipal projects. By allowing national government to strip assets and functions from local government, and allowing it increased powers to interfere in aspects of budgeting like tariffs, the Amendment Bill will interfere with this process, which is designed to translate voters' wishes into municipal delivery outcomes. To varying degrees, this will rob voters of some of their power to hold local governments to account.

15. This also applies to provincial governments, because provincial planning functions and economic strategies are heavily reliant on local government services and functions. Provincial 5 year Strategic Plans are drawn up with careful consideration for municipal capacity and IDP goals, and a delicate and co-operative balance is needed between the two spheres of government in order to achieve optimal outcomes. National government interference that does not take this into account (and is no provision for this in the Amendment Bill) is liable to upset this balance. Once again, the power of voters in each region of South Africa to influence government service delivery in their region will be negatively impacted, this time with reference to Provincial Government elections. This is especially significant considering the differing economic, environmental, industrial and other conditions and needs in each region of this country.

16. It is worth noting that this is the first time in the 15 years of South Africa's democracy that the national government has sought to alter a fundamental principle of our constitution - namely altering the balance of powers between spheres of government. The federal elements of the constitution will be weakened in favour of centralisation. The weakening of local accountability translates into a weakening of the constitutional check on central state power.

With respect to point 7 (d) above

17. The phrase "Notwithstanding any other provision of the Constitution", which introduces clause (1A)(a), may give rise to interpretational difficulties. The effect of this wording is that certain provisions of the Constitution would be amended by implication.

It also appears intended to override the founding values of the Constitution, which would require a 75% support in the National Assembly in order to be passed.

18. The writers, Curie and De Waal in The New Constitutional Administrative Law at p182 fn 280, state as follows in respect of implied amendments:

"A constitutional provision cannot be amended or repealed by implication. As long as the provision remains it forms part of the Constitution. The Constitution must be interpreted as a unity and conflicting provisions must be reconciled with each other if possible. If not then the more fundamental of the conflicting provisions or more pertinently applicable provisions must be given preference in so far as it is inconsistent with other constitutional provisions in a concrete situation. The time of enactment may be a factor for the Court to consider when determining which of the conflicting provisions is more fundamental, but it cannot be decisive. The founding provisions will also provide the court with some guidance about which are the most fundamental features of the Constitution."

19. To interpret the proposed amendment correctly, it must according to the above, be determined which sections of the Constitution would be in conflict with clause 156(1A) and whether those sections are more pertinently applicable and fundamental.

20. Section 44(2), and sections 146 and 147(2) read together with section 44(2) appears to be in conflict with the proposed amendment.

Sections 44(2), 146 and 147(2) provide that national legislation may only provide for, and will only prevail over provincial legislation with regard to, a matter failing within an exclusive provincial functional area listed in Schedule 5, in the limited circumstances set out in section 44 (2).

21. Is it the intention for the proposed clause 156(1A) to provide that notwithstanding the limitations in section 44(2) of the Constitution, national legislation may provide for further regulation of municipal executive authority in respect of schedule 5 matters in the additional or overriding circumstances set out therein? Does this mean that the proposed national legislation would prevail over conflicting provincial legislation, even if the national legislation does not comply with the limitations set out in section 44(2) of the Constitution?

22. The proposed amendment could also be interpreted to be in conflict with some of the general constitutional requirements for national legislation. National legislative measures must, amongst others, comply with the following requirements and principles set out in sections 41(1)(g), 43(a) and (c), 139, 152(1), 154(1), 155(6)(a) and (b) and 155(7) of the Constitution:

a. the vesting of legislative authority in the three spheres of government with the national legislative authority as set out and limited in section 44;

b. that all spheres of government must exercise their powers and perform their functions in a manner that does not encroach on the geographical, functional or institutional integrity of government in another sphere;

c. the prescribed measures for intervention by provincial and national government, if a municipality fails to fulfil an executive obligation;

d. the overarching objects of local government to provide services and accountable government to local communities;

e. that national legislative measures must support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions;

f. that provincial government must by legislative and other measures provide for the monitoring and support of local government in the province and promote the development of local government capacity to perform their functions and manage their own affairs; and

g. that provincial governments have the legislative authority to see to the effective performance of municipalities of their functions by regulating the exercise of their executive authority in respect of matters listed in schedule 4 and 5.

23. The proposed legislation in terms of the Constitutional amendment may only be enacted if it is necessary to achieve "regional efficiencies" and "economies of scale" in respect of a municipal function. "Economies of scale" is defined as follows in the Concise Oxford Dictionary:

"a proportionate saving gained by an increased level of production".

24. It is uncertain what the meaning of "regional efficiencies" is in the context of the Constitution or how it will be determined, as regions are not specifically referred to in the Constitution. The Concise Oxford Dictionary defines "efficiencies" as follows:

"the ratio of useful work performed by a machine or in a process to the total energy expended".

25. The question arises whether it is the intention of the drafters that the proposed national legislation may override all of the above limitations and general principles as long as the proposed legislation ensures a proportionate saving and efficiency in respect of a municipal function. In line with the argument of Curie and De Waal referred to in paragraph 22, in order to determine whether the above requirements and principles may be overridden by the proposed amendment and the proposed legislation, it is necessary to determine whether the limitations referred to in paragraph 24 and the principles set out in paragraph 26, are more fundamental to the Constitution than the principle underlining the proposed amendment to the Constitution and the proposed national legislation, namely to keep costs down and to ensure efficiency. This raises a host of difficult arguments. Is it the intention of the drafters to provide for an overriding national legislative competence for cost saving measures in respect of municipal functions which are not subject to the general principles, requirements and limitations for valid national legislation as referred to in paragraphs 7 and 9?

26. For all the reasons set out above, which will be elaborated upon when the Provincial Government of the Western Cape makes its oral submissions, I respectfully request that the Amendment Bill be withdrawn. Many of the aims of the proposed constitutional amendment could be achieved if national government and provincial governments were proactively to utilise their existing monitoring and support powers, and even their supervisory powers, to facilitate greater co-operation between municipalities.

Helen Zille
Premier of the Western Cape
17 July 2009

Additional comments from the Department of Local Government and Housing

27. The context within which this proposed amendment is being made and the rationale therefore can be understood against the background of the collapse of municipal services in certain provinces other than the Western Cape. The intervention processes contained in the Constitution are cumbersome and do not always bring about the required outcome.

28. This being said, it does not justify infringing on the powers of provinces and municipalities by way of an amendment to the Constitution that distorts the previously enshrined Constitutional balance of powers between the three spheres of government. 

29. The amendment, should it become law, will firstly result in creating an imbalance in the relationship among the national, provincial and local spheres of government.  National government will, in certain circumstances, be granted authority to further regulate the executive authority of local government on matters that fall within the provinces' area of exclusive legislative competence.  This is inconsistent with the current constitutional scheme and undermines the supervisory role of provinces towards local government.

30. Secondly, should the amendment become law, it will create a void as to who will bear the responsibility for the function that is being regulated.  The amendment grants authority to the national government to limit the executive authority of municipalities, but it is not elaborative enough to state where the responsibility to perform the specific "regulated" function actually lies.  It is presumed that this void will be addressed in national legislation that is to be drafted in terms of section 156(1A) of the Constitution.

31. The Department is of the view that there are options available in terms of sections 86 to 88 of the Local Government: Municipal Systems Act, (Act 32 of 2000) to resolve the difficulties with the regional electricity distributors (REDS), without having to resort to a Constitutional Amendment of this nature.

32. The 17th Amendment Bill is not supported by the Department for Local Government and Housing for the reason that it conflicts, in the view of the Department, with the current constitutional scheme. 

33. The proposed amendment opens the door for political expediency and should instead be dealt with within the Constitutional model as it was negotiated and presently stands.

Issued by: Western Cape provincial government, July 19 2009

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