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Publications | Parliamentary Bulletins
Parliamentary Bulletin Number 2, May 2001
Table of Contents
The 2001 Parliamentary Session is now in full swing. Government Departments are tabling various pieces of legislation and policy documents for deliberation by Parliament. These can be amended, rejected or accepted by the relevant Parliamentary portfolio Committees who are responsible, on behalf of Parliament and the electorate, for exercising parliamentary oversight over specific Government Departments.
The main focus in this edition of the COSATU Parliamentary Bulletin is the legislative programme for 2001. We outline some of the most important Bills which Parliament will be debating this year, which have strategic significance for COSATU. Already some key discussions are taking place in Nedlac and Parliament. Current legislative and policy debates are summarised to enable comrades to track the unfolding debates, and to actively engage in them.
The ANC received an overwhelming mandate in the 1999 Elections, based on a progressive elections Manifesto. Parliament has a key role to play in ensuring that the Manifesto is implemented, and questioning Departments who pursue a direction which is not compatible with the mandate given to government. The article in this edition on the policy cycle sketches the process which is supposed to be followed before proposed policies are adopted and translated into final legislation.
Political discussion in the country has begun to focus on the oversight role of Parliament in ensuring that the Executive and administrative arms of government are accountable to the electorate. This debate has largely focused on the controversy around the arms deal, and to a lesser extent the power of parliament to amend the annual budget. But the oversight role of parliament- both in ensuring that legislation and policies passed by parliament conform to the mandate given by the electorate and holding government to account for delivery of these policies - is exercised in a number of different areas.
The articles tracing debates on this year's legislative programme, including around labour law reform, shows that ultimately the political direction taken on different questions, depends on which social forces most actively contest the issue concerned. This again sharply raises the need for oversight by the political structures of the Alliance over processes of governance. Similarly, the need for mobilisation of a social movement to advance progressive policies of government, and to contest the introduction of measures which run counter to the imperatives of social and economic transformation.
A number of areas currently being contested in Parliament, Nedlac and elsewhere are of critical importance to the labour movement, and are discussed in this Bulletin. These include the debates around labour law amendments, restructuring of the Unemployment Insurance Fund, legislation to deal with Pensions Surplus, Social Security and health policy, draft legislation on Co-operatives, Minerals Development, amendment of the Budget, and many others.
A regular feature of the Bulletin will be a column called "Know your rights! Claim your Rights!". This will focus on significant legislation which has been passed, and its implications for workers. This edition focuses on the "Whistleblowers" legislation, and discusses how workers can use it to fight corruption in the workplace.
Ultimately the test of our democracy will be the extent to which the majority actively participate in shaping the policies and programmes of our government, or remain passive spectators in the unfolding drama. This is the difference between a shallow representative democracy in which citizens mainly exercise their political will at the ballot box every five years (while unelected power groups dictate the pace and content of policy inbetween); and a dynamic participatory democracy where people actively engage in processes of governance on an ongoing basis. The form of democracy our country takes will depend on how we engage in these unfolding debates. We hope that in a small way the Parliamentary Bulletin will assist in empowering our members to begin to do this more effectively.
At the time of writing, the final legislative programme for 2001 had not yet been published. But available information indicates that this year's parliamentary session will be one of the most important ever for the labour movement. Of about 100 pieces of legislation anticipated for this session, there are 15 - 20 which COSATU has identified as strategic priorities, although this list may still expand. These are outlined in the table below, which identifes the Department piloting the particular Bill, and the current status of discussions in each identified area.
Important Legislation expected in the 2001 Parliamentary Session Bill Department Status/Comment 1. Co-operatives Bill Agriculture & Land Affairs Initial very early draft - COSATU has submitted a comprehensive response* 2. Postbank Bill Communications Bill not yet published 3. Pension Fund 2nd Amendment Bill (Pension Surplus) Finance Ongoing negotiations* 4. Unemployment Insurence Contribution Bill Finance Bill not yet published 5. Capital Gains Tax Bill Finance COSATU made a submission to hearings. Final Bill still being drafted 6. National Health Bill Health Bill not yet published 7. Immigration Bill Home Affairs Goverment is currently redrafting* 8. Community Reinvestment Bill Housing Bill not yet published 9. Labour Relations Amendment Bill Labour Negotiations ongoing 10. Basic Conditions of Employment Amendment Bill Labour Negotiations ongoing 11. Unemployment Insurence Bill Labour Parliament will continue processing in May* 12. Minerals Development Bill Minerals & Energy Initial draft - COSATU response submitted to the Department and in Nedlac* 13. Energy Bill Minerals & Energy Bill not yet published 14. Gas Bill Minerals & Energy Bill not yet published 15. Electricity Supply Industry Regulation Bill Minerals & Energy Bill not yet published 16. Municipal Structures 2nd Amendment Bill Provincial and Local Government Traditional Leaders Bill-still being redrafting by government* 17. ESKOM Conversion Bill Public Enterprises Ongoing negotiations & dispute*
*See article elsewhere in this edition of the Parliamentary Bulletin
In addition to the above Bills identified as a strategic priority, there are over 30 Bills which may be important to labour. Once we have scrutinised their content, we will take a decision on whether and how to engage. There are also a number of COSATU proposals which, if accepted, would require the introduction of legislation. These include: the introduction of Prescribed Asset requirements compelling the retirement and insurance sector to channel a portion of investment into RDP programmes; a legislative framework governing restructuring of state assets; the introduction of National Health Insurance; and introduction of a Basic Income Grant. In some cases there is discussion on these matters either in government or the ANC. There is therefore a possibility that legislation in some of these areas may be introduced in the next one to two years, even if they are not currently on the legislative agenda.
The analysis below focuses purely on the legislative agenda, and doesn't look at a number of important policy initiatives, such as the investigation of Comprehensive Social Security, and the elaboration of various policy documents. Some of these areas are dealt with in the "Legislation and Policy Watch" column, which deals with current policy debates.
The most important legislation on the 2001 parliamentary agenda can be clustered into the following categories:
- legislation related to the finance sector;
- labour market legislation;
- public sector and local government restructuring; and
- socio-economic legislation.
It is important to note that the placing of Bills on the 2001 Parliamentary programme doesn't necessarily mean that these Bills will in fact be discussed by Parliament this year. A number of political and practical factors may intervene, resulting in their removal from the agenda altogether, or delaying them until next, or even the following year.
Legislation related to the finance sector
A trio of important Bills relating to regulation of the financial sector are in the pipeline. These are the Pension Funds 2nd Amendment Bill, dealing with regulation of access to Pensions Surplus; the Community Reinvestment Bill (driven by the Department of Housing), dealing with measures to channel bank loans to low income communities; and the Post Bank Bill, dealing with expanding the Post Bank as a national public financial institution which offers affordable finance to the so-called 'unbanked' sector. At this stage, of these Bills, only the Pension Funds legislation has become available (see analysis of this legislation in the "legislation watch" column). The other important piece of legislation from the Finance Department which may be placed before Cabinet is the Money Laws Amendment Bill, enabling parliament to amend the budget (on this, see the article on the budget). Another 17 pieces of legislation from the Finance Department will be assessed once they are published.
Labour market legislation
The most important legislation for the labour movement in 2001 will be driven by the Department of Labour. Key among these will be the LRA Amendment Bill, ,BCEA Amendment Bill, and Insolvency Amendment Bill (the latter will be formally tabled by the Department of Justice). These Bills are currently the subject of ongoing negotiations, pending final approval of the agreement negotiated through the Millenium Labour Council. A detailed analysis of this draft agreement is contained in the February Shop Steward, and the recent Campaigns Bulletin. The COSATU CEC of the 24-26 April 2001will receive reports of the discussions with business and government, and assess responses from structures of the Federation to the February CEC's recommendation to adopt the package. If agreement is reached with business and government, then the Amendment Bills will be piloted in the 2001 Parliamentary session. A special Campaigns Bulletin will be published after the April CEC reflecting the state of progress on these negotiations. Therefore this edition of the Parliamentary Bulletin doesn't attempt to give any detail on this matter.
Public sector and local government restructuring
A number of Bills on this year's programme will impact on restructuring of state assets. These include the Eskom Conversion Bill, and three other energy related Bills. In addition several proposed Bills will deal with restructuring of public transport-related infrastructure, including rail and ports. At this stage, out of the Bills dealing with restructuring of state assets, only the Eskom Conversion Bill has been published. This is dealt with in the "legislation watch" column.
Several Bills will deal with the consolidation of local government restructuring. These include the Municipal Structures Second Amendment Bill, dealing with the role of traditional leaders in local government. The Department is shortly expected to release a new draft of this Bill, after it was withdrawn from Parliament last year.
Important socio-economic legislation includes the Minerals Development Bill, Co-operatives Bill and National Health Bill. There are also 13 Bills from the Department of Trade and Industry, but it is not possible, without seeing the Bills, to determine whether these are significant for COSATU. The Minerals Development Bill and Co-operatives Bill have been published in initial draft form, and may not be finalised in this year's Parliamentary session. Nevertheless, COSATU is intensively engaged in discussions around these Bills, as outlined in this Bulletin. The National Health Bill has not yet been published, but our information is that it doesn't deal with National Health Insurance, which is an issue which has been placed on the back burner since 1997.
Finally, the four 'human rights' Bills required by the Constitution, namely the Bills promoting Equality, Access to Information, Administrative Justice, and protection of 'Whistleblowers' are being gradually implemented this year, including through the promulgation of Regulations as required by the legislation. The Parliamentary Bulletin will carry a practical guide to these pieces of legislation, to assist workers in using their provisions. The first guide in the series is carried in this edition, dealing with the Protection of Disclosures Act.
Parlimentary Schedule for 2001 First Term Second Term Third Term 22 January - 06 April 07 May - 29 June 20 August - 16 Nov Leave Period : 09/04 - 13/04 Leave Period : 02/07 - 20/07 Leave Period : 17/12 - Jan 2 Constituency : 16/04-04/05 Constituency : 23/07 - 17/08 Constituency : 19/11 - 14/12
During the first four months of this year COSATU has had to make its input on a wide range of policy and legislative questions. Some issues are in direct response to Departmental requests for comment on early drafts of policy or legislation- such as the Minerals Development Draft Bill, Draft Co-operatives Bill, and National Higher Education Plan; other engagements are in Parliament on formally tabled documents, such as the Unemployment Insurance Bill; and inputs on a number of these or other issues may take the form of bilaterals with the Ministry, or in the Alliance, and detailed negotiations in Nedlac.
In this column we will produce briefings on important current engagements, which attempt to convey the essence of the relevant policy or Bill, as well as a progress report on unfolding processes. The obvious limitation of this is that the Bulletin only reaches readers about a month after it is written, so in many cases there may have been important developments since these articles were produced. Further, it is obviously not possible to capture all issues, since there are a whole host of questions being dealt with at any one time. Comrades needing more information should therefore check COSATU's Home Page, or contact the COSATU Parliamentary Office. Comrades wanting a sense of other issues coming up should look at the summary of the Legislative Programme for this year, or contact us for more detail. This edition of the Legislation and Policy Watch will deal with the following issues:
Parliament is currently discussing the Unemployment Insurance Bill, which aims to make some important reforms to the existing UIF, and extend coverage to various categories of workers who have been excluded in the past. This is critically important in the current context of high structural unemployment, where the UIF, together with the Old Age Pension, is the main form of social security which working people rely on.
The main progressive innovations contained in the Bill include: A progressive scale of UIF benefits which ensures that low income earners get a higher proportion of their income than high income earners;
- The extension of coverage to high income earners, which together with the above point entrenches the principle of solidarity and equity and brings greater stability to the Fund;
- The 'delinking' of Unemployment benefits from Maternity benefits, meaning that pregnant women can claim maternity benefits from the UIF, without affecting their rights to claim unemployment benefits;
- The benefit period has been extended, with unemployed workers now being able to claim 8 months UIF benefits, as compared to the previous situation where they were limited to 6 months · It exempts UIF benefits from taxation.
However, there are some significant problems with the current draft which need to be addressed if the Bill is to achieve its objectives:
Exclusion of Domestic and Seasonal Workers: after the Parliamentary hearings, and discussions with civil society organisations- the Department has agreed to include domestic and seasonal workers unconditionally. An investigation on how to overcome practical problems of their inclusion will be appointed soon, before the Bill is enacted, and the amended Bill will explicitly include domestic and seasonal workers.
Exclusion of Public Service workers: COSATU and other organisations have opposed the exclusion from the UIF of public service workers in the national and provincial spheres , but not the local sphere of government, as unconstitutional, discriminatory against public service workers, and undermining the stability of the Fund, and cohesion of national policy.
Unconstitutional, because it is discriminatory, and contravenes the duty to progressively extend access to social security. It discriminates against public service workers, particularly low income workers who have been most vulnerable to retrenchment; and forces them to forfeit benefits which many workers, particularly African workers, had accumulated under the old Act before 1995. Inclusion of public sector workers would also ensure stability for the Fund.
It is also important that government send a clear signal to the private sector that national policies and standards apply across the board, and that no one, including the government as employer, or public service workers themselves, will be allowed to contract out of these.
The Department of Labour agrees that public service workers should be included. The government task team which was appointed in 1996 recommended inclusion. The ILO technical team supported their inclusion, and international precedent also supports this view. The ANC in the parliamentary hearings, as well as a wide range of civil society organisations and business, have criticised their exclusion. The real possibility exists that if they remain excluded this will be challenged in the Constitutional Court. The main opposition to their inclusion appears to come from the Department of Finance, or Treasury. This contradicts government's stated policy of extending social security. It also flies in the face of international precedent, as analysed by the government task team, which shows that compulsory social insurance schemes such as UIF, are generally underpinned by state support. In the face of this comprehensive argument supporting public service inclusion, the Department of Labour, and the ANC Labour Study Group, together with the Leader of Government Business and the Chief Whips Office, has undertaken to have discussions with the Treasury and Public Service.
Financing of the Fund and the Transitional Period
The UI Fund faces a crisis, inter alia because of its narrow base of contributors and high levels of unemployment. In the Nedlac negotiations on the Bill it was agreed to address this matter in two main ways:
- Firstly, a grant from government would liquidate the debt and interest burden of the fund, and government would undertake to stand as guarantor and meet any shortfalls in the Fund during a transitional period of two years, while the Fund stabilised itself;
- After the 2 year transitional period, a comprehensive actuarial evaluation would be conducted, with the assistance of the ILO, which would be used as the basis for a holistic review of a number of questions related to the Fund, including: the role of the state in financing and underwriting the Fund; the level of contributions and benefits; and the desirability of converting the Fund to a fully-fledged agency.
In the public hearings government has confirmed the Nedlac agreement and indicated that it intends to honour it. There are however a number of problems. Firstly the budget appears to make no provision to meet this commitment. Secondly, the UI Bill itself does not reflect this agreement, despite having a section on Transitional Arrangements. In fact it appears to contradict the spirit of the agreement. Thirdly, the agreement on Transitional Arrangements and financing was made in that part of the Nedlac negotiations dealing with the UI Contributions Bill, but that Bill is not before Parliament, and it is therefore not known whether it incorporates the agreement.
The UI Bill and UI Contributions Bill
Initially, the Department tabled one Bill. This was then split into 2 Bills- the main UI Bill; and a Money Bill dealing only with the Levy and collections- the UI Contributions Bill. Labour's view had been that it was unnecessary to split the Bill, since no new tax or levy was being introduced, and the level of contributions remains the same. In any event, the 2 Bills were negotiated as a package at Nedlac.
The problem is that only the UI Bill has been tabled, and not the UI Contributions Bill leaving a number of questions hanging in the air. The view of labour, business, and a number of other stakeholders in the hearings has been that the 2 Bills need to be dealt with simultaneously. However there is no sight of the UI Contributions Bill, although it has been certified, and it is rumoured that the Treasury only intends tabling it in July or even later. This poses a serious problem, for reasons indicated above.
The Department of Labour and the Chair of the Portfolio Committee have undertaken to have urgent discussions with the Treasury to resolve this matter.
At the time of writing parliamentary processes on the Bill had been suspended until after the April recess, to allow these discussions to resolve the areas of dispute.
COSATU has for several years been engaged in a struggle to protect the pension "surplus", estimated to be at least R80 billion from being raided. In 1998 the Department of Finance introduced legislation drafted by the Financial Services Board proposing to give employers access to the so-called "surplus" accumulated in retirement funds. COSATU opposed this in the strongest possible terms, given that the assets of retirement funds belong to members, and that employers' contributions are part of the deferred wage. The federation threatened to exercise its rights to socio-economic strike action under Section 77 of the LRA, if the Bill was processed. As a result the proposed Bill was withdrawn, with the support of the Parliamentary Finance Committee. COSATU, after discussion with the Deputy Minister of Finance, drew up an alternative Bill, which proposed tight regulation of the surplus to ensure that it was used in the interests of members of the funds.
There has subsequently been a range of engagements on different versions of proposed legislation, most recently a Nedlac process between March 2000 and March 2001. The key area of dispute has been whether or not employers have any rights to the surplus. Related to this is disagreement about whether past inequities should be addressed, and if so how far back the trustees should go and how much the adjustment should be. COSATU's position has always been that retirement funds are formed to benefit their members - the workers - and not employers. Meanwhile, there has been raiding of the surplus by employers, facilitated in part by problematic court decisions.
Despite the fact that agreement had not yet been reached at Nedlac, the Ministry of Finance decided to release a bill (the Pension Funds Second Amendment Bill) apparently in order to fasttrack the process. We have interacted with this proposed legislation with a view to better covering our concerns, but no agreement has yet been reached on our proposed amendments.
In Labour's submission to Nedlac on the latest draft of the proposed legislation, we welcomed Government's recognition that:
- Surpluses have arisen as a result of conversions between funds which deprived workers of their full entitlements; and that these past benefit payment practices were inequitable;
- It is necessary for the legislation to provide that former members who did not receive the investment reserves on their assets be paid these monies; and that the legislation must provide for minimum benefits to be paid to members when leaving a fund or on conversion and for minimum pension increases.
However, there are outstanding differences around inter alia the following issues:
(a) Former members
- There is a problem in relation to funds in which employers have exhausted the surplus. Government's proposed legislation suggests that only where surpluses still exist will funds be required to pay former members the benefits they should have received at the time of leaving the fund, giving no protection to those whose benefits may have been squandered by employers.
- It is necessary for the Bill to explicitly state that former members will be paid the present value of the benefits they should have received at the time of leaving the fund. The process of paying former members their benefit should be seperate from the process of apportioning existing or future surplus.
- In the event that the former members' assets are no longer in the fund due to the fact that they have been utilised for the benefit of the employer, the employer must be required to fund, over a period, any deficit which arises when former members are paid their benefits.
- Employers are not entitled and have never been entitled to utilise the difference between the fair value of the assets of a fund and the actuarial value of the assets, i.e. the investment reserve arising from unexpected investment returns, to fund contribution holidays or contribution reductions. Therefore to the extent that employers have utilised these monies for their own benefit it is justifiable to require the monies to be re-paid to the funds.
(b) Minimum benefits
The Bill does not clearly set out that under a defined benefit fund the minimum benefit is the market value equivalent to the present value of the retirement benefit promised. Similarly in relation to defined contribution funds, the Bill needs to clarify that the minimum benefit should include employer contributions (a principle which is currently recognised in the memorandum of objects).
(c) Members existing rights
Labour is concerned that the Bill fundamentally changes the nature of retirement funds and has the following consequences:
- The employer is elevated under certain circumstances to the status of a "beneficiary" of the fund and trustees are required to act in the interests of the employer which may require them to breach their fiduciary duties to the fund and its members;
- Employers are given rights to utilise the assets of retirement funds for purposes other than those for which these assets were placed in retirement funds;
- The Bill gives rights to employers to access the assets of functioning funds and on termination of the fund, notwithstanding the rules of the fund. In many funds these dramatic and far reaching amendments will reduce the benefits to which members presently have a right or reasonable expectation;
- COSATU does not believe that because the legislation is now granting members the proper protection by making explicit what benefits members are entitled to, should justify employers being granted to benefits to which they have never been entitled. This is particularly worrying when employer's access to these assets is likely to lead to further abuse and manipulation of the kind witnessed in the industry over the last 20 years.
(d) Dispute resolution procedures
We have various concerns regarding the dispute resolution and deadlock-breaking provisions in the Bill but have decided to address these once the issues of principle are resolved. Labour's position requires that the Bill clearly define and prescribe the payment of benefits to former members and the allocation of existing and future surplus. If this approach is adopted in the Bill very different dispute and deadlock-breaking mechanisms are required to those required if the Bill allows the trustees broad discretion in paying former and exiting members benefits.
The key areas in which members need to be protected should be entrenched in the final Act, and not left to Regulations, as appears to be the intention.
The pension surplus issue is a fundamental one, involving massive amounts of money and having direct implications for COSATU's members and former members. The longer it drags on without adequate resolution, the more opportunity employers get for asset stripping especially through ongoing contribution holidays. Given the high stakes, it is an issue unlikely to be resolved without sufficient political pressure from our side, and society more broadly. Public debate shows not only that we occupy the moral high ground but we also have sympathy for our position from a range of social forces. At the time of writing, we are still hoping to secure political agreement with government on the major issues, while preparing for a constructive engagement with our comrades in parliament to further advance workers' interests. Mass mobilisation is also required to complement these strategies in order to ensure that workers eventually get what is due to them.
COSATU has for some time called for a comprehensive social security system in South Africa, including in various submissions to Parliament and negotiations at the Presidential Jobs Summit of 1998 and subsequently at Nedlac. Arising from these interventions a process was set up at Nedlac which led to the Minister of Welfare setting up a Committee of Inquiry into a Comprehensive Social Security System, which is currently wrapping up its work. COSATU has had several interactions this year with the Committee in which we have advanced our perspective on social security.
In a detailed submission, we put forward a range of proposals on various aspects of social security, including the Basic Income Grant, unemployment insurance, health care, meeting the specific challenges of HIV/AIDS, and infrastructure provision as part of the social wage. We have also proposed funding mechanisms to finance these proposed interventions, including subsidisation by middle and high income recipients of the Basic Income Grant, increased effective taxation particularly of companies, reprioritisation of expenditure, and targeted borrowing. If implemented, these proposals would have a direct positive impact on the lives of workers and the poor. For example, the Basic Income Grant would ensure that no-one sinks into absolute poverty, as well as providing a stimulus to local and national economic development.
So far there has been a positive response to COSATU's approach, both from the Committee and from many civil society groups involved in this area, who have taken our proposals on board. The Committee will be submitting initial recommendations soon and will report to the public by July. We will continue engaging with this and other relevant processes in order to achieve a social security system which ensures that no South African lives in absolute poverty but is empowered to reach their potential, and which has a positive impact on our economic growth and development.
The department of education has released the National Higher Education Plan, in response to discussions around the Report on Higher Education entitled the 'Size and Shape report'. In our initial submission on the Size and Shape report, COSATU raised concerns on a variety of issues, for instance, the proposal for introduction of a three tier education system whereby some institutions would not be allowed to have post-graduate programmes and engage in research; restructuring of the curriculum appeared to be biased towards globalisation needs and economic competitiveness; and possible closure of some of the historically disadvantaged institutions. We proposed that restructuring of Higher Education needed to address:
- A national human resource development strategy,.
- Access by historically excluded communities and provision of redress funding to historically disadvantaged institutions.
- stakeholder participation.
- The need for all higher institutions to pursue relevant post-graduate programmes.
The national education plan has integrated some of our recommendations. Its proposals include:
- The national human resource development strategy shall inform the overall restructuring process in higher education, accepts that there is a need to provide redress funding and institutional capacity building in historically disadvantaged institutions. It proposes that the participation rate in higher education should be increased from 15 % to 20 % in the long term. The main focus over the next five years will be on improving the efficiency of the higher education system through increasing graduate outputs. It proposes a graduation rate benchmark that institutions would have to meet.
- The participation rate should also be increased through recruiting workers, mature students, in particular women and the disabled, as well as students from the Southern African Development Community (SADC) countries.
- It Encourages the development of programme in marginalised fields of study such as African Languages, as well as the more general restructuring of curricula to reflect an orientation towards the African continent. The Council on Higher Education is requested to propose a framework on language policy.
- Black and women students are still under-represented in business, commerce, science engineering and technology programmes, as well as in postgraduate programmes. Institutions are therefore expected to develop employment equity plans with clear targets for rectifying race and gender inequities.
- Redress for historically black institutions will be aimed at ensuring the capacity of institutions to discharge their institutional mission within an agreed national framework.
However, there are still implicit tensions embedded in the Plan, for example the report's support for redress funding contradicts the existing conservative macro-economic strategy. The plan is also silent on the role of various stakeholders.
Initial discussions were due to take place in Nedlac at the beginning of April. COSATU and its affiliates, NEHAWU and SADTU have stated that the proposed National Working Group set up to implement the plan should ensure stakeholders are consulted. We have raised concerns with the tight schedule as well as the need for the state to commit adequate resources. Further COSATU has proposed that the ANC Education Desk and MDM Education structures need to be consulted on the proposed plan.
The main intention of the Municipal Structures Second Amendment Bill is to provide a legal framework for the role and functions of traditional leadership vis-à-vis elected councilors.
On the 08 November 2000, the Department of Provincial and Local Government released a Bill and called for public comment. Public Hearings in Parliament were scheduled for the 16 November 2000. However, a different version of the Bill was introduced in Parliament.
COSATU, SALGA and Commission on Gender Equality successfully argued, in the Public Hearings, that the Bill was unconstitutional. both on procedural and substantive grounds. At a process level the Bill contravened Section 154 (2) of the Constitution which provides:
"Draft National and Provincial legislation that affects the status, institutions and powers and functions of local government must be published for public comment before it is introduced in Parliament or a Provincial Legislature in a manner that allows organised local government, municipalities and other interested persons an opportunity to make representations with regard to the draft legislation. "
The published version was fundamentally different to the one put before the Portfolio Committee. Interested parties were therefore not given an opportunity to make representation. COSATU also opposed Section 81 (1) of the Local Government Municipal Structures Second Amendment Bill which stated that:
"Despite anything contained in other law, a traditional authority observing a system of customary law continues to exist and to exercise powers and functions conferred upon it in terms of indigenous law, customs and statutory law, which powers and functions include the right to administer communal land, communicating the municipal council's decisions affecting its area to the people living in the area, communicating to the municipal council the views of the people living in its area.
" This provision nullifies the universal application of the Constitution, in essence, making the constitution inapplicable in terms of powers and functions of traditional leaders.
We therefore recommended that the Bill should be withdrawn and further proposed that the White Paper process pertaining to the role and functions of traditional leadership should proceed after local government elections. The Portfolio Committee withdrew the Bill after Parliamentary legal opinion confirmed that it was unconstitutional. We further argued that the role and functions of traditional leaders should be defined without the need to introduce constitutional amendments, as proposed by traditional leaders, and asserted that democratically elected rural local government should not be compromised.
A Cabinet Working Group has subsequently met to draft a new Bill. The Department indicated that the new Bill will be released before the end of April. Furthermore, a comprehensive Bill emerging out of the White Paper process will be tabled after June. COSATU is currently interacting with other Civil Society Organisation to ensure that the process is inclusive. Government has now indicated its intention to extend the consultation process beyond traditional leaders.
The COSATU Parliamentary Office will inform our regions as soon as the Bill is tabled. Ideally we should ensure that hearings are also held in the provinces, so that the views of communities on these and other matters are communicated both at national and provincial level.
The basis for this Draft Bill was laid with the Eskom Amendment Act (1998), which sought to create certainty on the ownership of Eskom, to corporatise the entity in terms of the Companies Act and to subject it to tax payment. The Eskom Amendment Act laid the basis for this Draft Bill. The current Eskom Conversion Bill in turn lays the basis for potential privatization of aspects of Eskom.
COSATU made a submission to the Department of Public Enterprises in November last year outlining our concerns with the Draft Bill and making alternative proposals. In summary the concerns centred around the following:
- The Bill opens the way for the privatisation of Eskom, and does not provide for any process or oversight in this regard;
- Potential negative impact of corporatisation on workers' job security and conditions of employment;
- Unilateral determination of the memorandum and articles of association (essentially the "constitution") of Eskom by the Minster; and
- Negative impact of taxation of Eskom on electricity tariffs and service rollout.
While this legislation deals with specific aspects of Eskom, it also relates directly to the broader restructuring of electricity supply and distribution which unions are currently engaging. The legislation also relates to the broader process of state asset restructuring, and the questions of enforceability and the role of elected representatives in this regard.
We have subsequently engaged with the two relevant Ministries, Departments and ANC Study Groups in an attempt to ensure that our concerns are covered in the legislation. However the Department has not honoured the spirit or letter of these agreements. At the time of writing there was a proposed high level political engagement in an attempt to resolve the differences. The parliamentary hearings on the Bill are currently scheduled for 8-9 May. COSATU will have to determine in the context of political agreements reached, how to approach these hearings.
The Mineral Development Draft Bill has been the subject of much controversy since its publication last December. Big monopoly mining companies in particular have attacked government for what they perceive as an attack on their property rights and ultimately their ability to make and maximise profits. It is natural that the large monopoly mining companies, which are currently direct beneficiaries of the status quo, will fight to protect their monopoly status, hence the negative reaction to the Draft Bill which we have seen from this quarter. COSATU and NUM support many of the aspects of the Draft Bill, in particular the commitment to transforming the mining sector and the vesting of mineral rights in the state. However, we have argued that the legislation needs substantial strengthening, especially in relation to the role of the state and the commitment to break up monopoly ownership and control of the mining sector. We have urged government to remain firm in its resolve to ensure that mining is a truly South African industry from which the majority of South Africans benefit.
The Draft Bill is an overarching piece of legislation which deals with a range of aspects of the mining industry. It takes as a premise a recognition of the state as the custodian of the nation's mineral resources. Flowing from this, only the state will be able to grant prospecting rights, mining rights, retention permits and permission to remove minerals; and much of the Draft Bill deals with the processes around this. It also aims to give effect to the "use it or lose it" principle. The legislation proposes the establishment of a Mineral and Mining Development Board. There are specific chapters on trade in diamonds and on petroleum exploration.
While COSATU and NUM have been broadly supportive of the proposed legislation we believe that it needs considerable beefing up, and requires a number of substantive and technical amendments. Some of the key points which COSATU and NUM raised in our submission to the Department of Minerals and Energy include:
- We propose that the legislation as well as government policy more broadly, needs to set out a clear role for the state in the mining industry, particularly in terms of productive mining.
- The mining industry is currently highly concentrated with productive assets located in the hands of a small, predominantly white group. This legislation should explicitly set out to transform the patterns of ownership and control in mining, to reduce monopolisation, and specifically to provide for direct ownership and control by mineworkers in the industry.
- Given that mining is dependent on the people who work in this sector, the Draft Bill needs to be far more "people-centred". Its scope needs to be broadened to include issues of direct concern to workers' and surrounding communities such as living and working conditions and health and safety considerations.
- Beefing up information to be provided by applicants and setting out more clearly the benchmarks to be used in evaluating applications. These criteria also need to include issues of employment, living and working conditions of miners, and contribution to the local and national economies.
- Consultation and negotiation with affected workers around the possibility of the curtailment of mining operations.
- More active promotion of mineral beneficiation, including less of a reliance on the "carrot" of tax incentives and more direct intervention to require mining companies to add value.
- Considering reducing the periods for mining rights and renewal thereof.
- Timely state intervention to deal with mismanaged mining operations.
- Social plan for mineworkers, their families and affected communities.
- In relation to the diamond and petroleum chapters of the Draft Bill, stronger regulation around conflict diamonds and broadening the obligations of the holders of petroleum exploration rights.
- Issues of concern which we believe the legislation should also speak to: sub-contracting and outsourcing; working and living conditions of miners; the promotion of small-scale mining; and health and safety considerations.
This Draft Bill has been published for comment by the Department, which will now be considering all the submissions made by stakeholders and contemplating amendments to the legislation. We are embarking on a Nedlac process in which we will attempt to reach agreement with government and business on amendments to the Bill. A bilateral process between unions and government is also underway. After the completion of this process, the amended Bill will come to Parliament - possibly only next year - where the Minerals and Energy Portfolio Committee will hold hearings on the Bill for interested parties and possibly amend it accordingly. We hope that by the conclusion of this process the legislation will be beefed up as per our proposals, so that it becomes an effective tool for transforming the mining industry to the benefit of all South Africans.
Last year's COSATU Congress identified the co-operative sector as having the potential to:
- Mobilise the savings, skills and energies of a wide strata of working people
- Extend ownership and control to workers, and provide additional quality employment and income for workers
- Empower large numbers of workers and poor communities
- Contribute to social and economic transformation, by shifting emphasis from individual enrichment to community development, and
- Develop collective capital.
The Congress resolved, among other things, to engage with government around legislation to promote and regulate co-operatives. The building of the co-operative sector has also featured in the resolutions of our Allies, and has been a focus of the SACP's ongoing campaign on transformation of the financial sector.
The Department of Agriculture has since published a Draft Co-operatives Bill for public comment, which aims to set out a comprehensive framework for this sector. The legislation deal with many of the aspects of the current Co-operatives Act of 1981 (although in a different way), such as membership of co-ops, capitalisation of co-ops, and the election and appointment of directors of co-ops. It also introduces a number of new provisions, including the setting out of principles of co-ops; supervisory boards to oversee co-ops; the possibility of a co-operative advisory board to be appointed by the Minister; the creation of a co-operatives guarantee fund; and special measures for particular types of co-ops in sectors such as agriculture, financial services, housing, and transport.
South Africa has a rich and diverse history of co-operative forms of organisation. This includes a large, relatively informal sector of stokvels, burial societies, and other forms of community savings organizations. Although participants in such enterprises may not consciously define themselves as co-operative members, such experiences of organic co-operative activity can form the basis for a strong and vibrant co-operative movement in South Africa. Legislation needs to draw on such experiences, and respond to the challenge of drawing existing and nascent co-operatives into a regulatory net as well as providing appropriate support and capacity building.
COSATU believes that state support and policy for co-operatives has to create an environment that would be conducive to the development of a powerful and viable co-operative movement and sector. Hence policy must be enabling - it must provide a clear and accessible regulatory framework, a host of incentives and institutional support. Policy should also be activist, making necessary interventions to directly promote a co-operative sector and in particular to assist emerging co-operatives. Support, technical training, after care and even capacitation work should be spread out amongst several organisations, and the state has a crucial facilitating role in this regard.
COSATU made a detailed submission to the Department on the Draft Bill, in which we raised various concerns around both the conceptual approach and the detail of the legislation, and made alternative proposals where appropriate. We believe that the Draft Bill has the potential to frame the development of this sector; however, it has a number of serious shortcomings both in structure and content. Our key criticisms of the Draft Bill are that the structure and style are confusing and inaccessible; the language and content are overly corporate and business-oriented; the relationship between the state and the co-operative sector needs clearer conceptualisation; the Draft Bill is not sufficiently rooted in member ownership and control.
Several of our regions have made or at the time of writing are intending to make submissions at provincial hearings convened by government on the legislation. COSATU has also been invited to participate in the Co-operatives Working Group which brings together the Department and a few key stakeholders. We have also indicated to government that we would like to be part of the drafting team which reworks the legislation in the light of public submissions. After the Draft Bill has been amended through the departmental process, it will be referred to parliament where we will have a further opportunity to influence it.
Of course the legislation is but one - albeit critical - aspect of the building of a vibrant and sustainable co-operative sector. Co-operatives also relate to our approach to industrial strategy. This needs to be taken up through the sector summit processes. Furthermore, as per our resolution, consideration must be given to investing workers' retirement funds and other financial assets which we have influence over in the co-operative sector, rather than in unproductive speculative investment. A number of our affiliates are currently directly involved in building co-operatives on the ground, which needs to be advanced. Proper co-ordination between such initiatives will also be vital, so that co-operatives do not struggle as isolated entities but rather are linked into a viable co-operative movement.
Immigration Bill and White Paper
As reported in Parliamentary Bulletin No.1 finalisation of the Bill and White Paper has been blocked in Parliament, because of fundamental policy differences with the Department. At the time of writing this deadlock had not been broken. However, indications were that Cabinet was fast-tracking a new draft Bill, particularly to deal with facilitating access by skilled foreigners, while the broader policy questions were resolved. COSATU is currently seeking clarity on this matter.
Promotion of Access to Information Act
This Act has now been put into effect, with the exceptions of Sections 10, 14, 16 and 51. These sections which have not been activated deal with: a guide on how to use the Act; a manual containing an index of records held by public bodies; details in telephone directories of all public bodies and contact people/no.s to access information; and manuals to be compiled by private bodies. These sections will be promulgated when the necessary logistical preparations have been made. The next edition of the Bulletin will contain a practical guide to use of this Act.
E-commerce Green Paper
An initial COSATU submission was forwarded to the department at the end of March 2001 in response to the green paper presented for comment by the department.
Municipal Systems Bill Draft Regulations
This Bill addresses the regulations to implement Chapter 6 of the Municipal Systems Act. The draft regulations are being revised to integrate issues raised at the Department's Stakeholders Workshops.
Property Rates Bill
The bill aims to define the power of local governments to set property rates. The COSATU submission has been finalised for discussion at Nedlac. The Bill was due to be discussed at Nedlac in April 2001.
These regulations deal with the mechanisms to effect the Water Services Act. The regulations outline a process that should be followed when dealing with both Private and Public service providers. The draft regulations were due to be placed in the Nedlac process at the end of April 2001.
The Bill aims to develop and regulate the piped gas industry and establishes a National Gas Regulator. COSATU made a submission on the Draft Bill to the Department last year. The Draft Gas Bill will be presented to Parliament after April 2001.
Know your Rights! Claim your Rights!
The Protected Disclosures Act, No 26 of 2000
The recent factory deaths in Lenasia acutely demonstrate the importance of reacting to the whistle when it is blown. The tragedy in the case of the 11 chemical factory workers who lost their lives in this instance is that it could have been prevented. Following their deaths, it has come to light that the Department of Labour had received written notice from concerned employees who had blown the whistle three months before about working conditions in the factory. These included being locked up with gas bottles for up to 16 hours, fire extinguishers that were not in working order, lack of ventilation and the absence of an emergency alarm system; conditions that were inexcusable if not illegal.
If understood correctly, whistleblowing is not about informing in a negative, anonymous sense. Rather, as the United Kingdom's Committee on Standards in Public Life puts it, it is about "raising a concern about malpractice within an organisation" and in this way is a key tool in promoting individual responsibility and organisational accountability.
The reality is that, in sticking their necks out to raise concerns within their place of employment, people more often than not risk victimisation, recrimination and sometimes dismissal as it is often the case that the messenger, rather than the important message that is conveyed, is attacked. International and local experience has shown that failure to address legitimate concerns raised by employees may have a number of harmful consequences, including loss of life or huge financial losses.
Whistleblowing and Anti-Corruption Strategies
In South Africa, the newly passed Protected Disclosures Act (no 26 of 2000) makes provision for procedures in terms of which employees in both the public and private sector who disclose information of unlawful or corrupt conduct by their employers or fellow employees, are protected from occupational detriment. It was signed by the president on 1 August.
How will the Act work?
In its current form, the Act makes provision for procedures to allow and assist employees in both the private and public sector to raise concerns about the unlawful or irregular conduct of their employers or co-workers. Various types of information disclosures are highlighted in the Act, including
- suspicion of criminal offences,
- failure to comply with legal obligations and,
- "a reasonable belief that the health or safety of an individual has been, is being or is likely to be endangered."
Employees making a protected disclosure in terms of the procedures in the Act are protected from occupational detriment. This might include being subjected to disciplinary action, dismissed, suspended, demoted, harassed, intimidated, transferred against his or her will, refused transfer or promotion, or otherwise adversely affected in respect of his or her employment, profession or office, including employment opportunities and work security. The Act stops an employer from subjecting an employee to an occupational detriment on account of having made a protected disclosure. Should occupational detriment occur and is found to have been linked to the making of a protected disclosure, the bona fide whistle blower would be protected and the employer would not be allowed to dismiss or prejudice the employee for having raised legitimate concerns. This, in effect, is how the law protects whistle blowers.
It is important to note that disclosures of information relating to the above will only be "protected" if made according to specific procedures. In order to be protected, a disclosure must be made in one of the following four ways:
- to an employer (clause 6);
- to a minister or provincial member of the Executive Council (clause 7);
- to a specified person or body (clause 8) [only the Public Protector and the Auditor-General are currently mentioned with other persons or bodies required to be prescribed by the Minister of Justice in regulations]or
- as a general protected disclosure (clause 9).
A disclosure made to a lawyer or to a person whose occupation involves the giving of legal advice is also protected where it is made with the object of obtaining legal advice. So, if a shop steward or other Union representative's responsibilities include giving legal advice, it would be prudent and permissible under the new law for a worker who is thinking of blowing the whistle to consult with them first.
At the heart of the Act is the notion that prevention is better than cure. It strongly encourages whistle-blowers to disclose first of all to their employer, in order that the employer should have the opportunity to remedy the wrongdoing. Potential whistleblowers need to know that they must first go through this door where the test is that of good faith, rather than making a wider disclosure which would require higher tests.
How would making a protected disclosure work in practice? Consider the hypothetical case of the options faced by an honest official (Mr X) working in a traffic licensing department. He notices that a fellow employee is allowing visibly unroadworthy vehicles to be issued with clearance papers. The honest employee, motivated out of good faith and public interest concerns, and knowing how many deaths result from such vehicles being on the road, decides to blow the whistle on his co-worker. Being a public servant, the traffic official might already have signed the Code of Conduct where the duty to report impropriety is stipulated. If there is a procedure in place for making protected disclosures, the official would be wise to do so, or for example, may report the suspected wrongdoing to his immediate supervisor. It is not the duty of the whistle blower to investigate the matter under these circumstances, only to disclose information according to procedures specified in the Act to those in a position to investigate it.
If the traffic official's immediate supervisor is a responsible and honest manager, he would welcome the information and ensure that the allegations are followed up. However, if the line manager to whom the disclosure is made, is an accomplice of the corrupt co-worker, a situation may arise where the traffic official is dismissed, demoted or labelled as a trouble maker in the department. It is under such circumstances that the Act, when it comes into force, will be able to protect employees, for the dismissed or victimised traffic official would have some recourse in terms of the remedies laid out in the Act.
The Act provides for employees who have made a protected disclosure to request transfer,if it is reasonably possible,to another post or position. Dismissal or any other occupational detriment would be an unfair labour practice in terms of the Act.
Because cases may arise where it is impossible for an employee who is a bonafide whistle blower to make a disclosure to his or her direct employer, the Act does provide for other channels for making disclosures, such as a general protected disclosure. Here the tests are higher than 'good faith', since the Act is structured in a way to encourage employees to raise their concerns internally where organisations can take responsibility for responding to the concern, rather than externally (such as to the media). Returning to the traffic official discussed above: if he had reason to suspect that his employer would react negatively to the disclosure and find reasons to dismiss him, or that evidence might possibly be destroyed, he may be tempted to go the route of making a general protected disclosure, although the tests are much higher. Such a disclosure would only be protected in terms of clause 9 of the Act if it could be shown to be motivated by good faith, reasonable belief, substantial truth and was not made for personal gain. It also has to be shown that the circumstances referred to above were relevant and that it could be deemed reasonable for the traffic official to make such a disclosure.
It is important to re-iterate: a whistle-blower can only "walk through" one of the 'outside' (ie non-employer) doors in these particular circumstances - otherwise, he or she must first make the disclosure internally to his or her employer in order to be protected by the new law. This is the concept that underpins the whole approach of the new law and why it is so important that workers and their Union representatives are well-informed about how they can both protect themselves and their fellow workers by blowing the whistle. ·
- For Unions or workers needing further advice or information in relation to the new law and for information on future training sessions, please contact the Manager of the Open Democracy Advice Centre, Alison Tilley, on 021 461 2559 or at firstname.lastname@example.org.
Edited by Alison Tilley, project manager Open Democracy Advice Centre from a paper written by Lala Camerer.
A guide on how laws are made*
The Department announces the policy intentions of government in a Discussion Document or Green Paper and invites the public to comment
The Department subsequently releases a White Paper for public input which takes into account comments on the Green Paper
A Draft Bill is released for comment by the public within a stipulated timeframe
The Bill is referred to State Law Advisers for certification
If the Bill deals with the labour market or significant changes to social or economic policy it is referred to Nedlac for discussion & redrafted accordingly
The Draft Bill is redrafted taking into consideration comments received
The Bill is submitted to Cabinet for consideration and approval.
The Bill is introduced in the NCOP or National Assembly or both. It is referred to the relevant Portfolio or select committee which may conduct public hearings & either accept amend or reject the Bill.
The Committee submits its report for debate in the National Assembly or NCOP and for the final vote.
Regulations are promulgated by the Minister as stipulated in the Act, to facilitate the details of implementation. Usually the regulations are published for public comment. In some cases the Regulations have to be submitted to parliament.
Finally the Act is published in the Government Gazette and becomes the law of the land.
When passed by both houses the Bill goes to the President for assent. *In theory this is the procedure to be followed. However in practice legislation is sometimes introduced before policy proceess is complete.