Report from North West COGHSTA MEC on issues raised during Committee Oversight Visit

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Cooperative Governance and Traditional Affairs

03 August 2021
Chairperson: Ms F Muthambi (ANC)
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Meeting Summary

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The Portfolio Committee on Cooperative Governance and Traditional Affairs convened a virtual meeting to receive a briefing from the Department of Cooperative Governance, Human Settlements and Traditional Affairs (COGHSTA) in the North West, on the issues that were raised during the oversight visit by the Committee. The Committee also heard comments from the provincial Department of Cooperative Governance (DCOG), as well as the South African Local Government Association (SALGA) in the North West province.

North West Department of Cooperative Governance, Human Settlements and Traditional Affairs reported that there was an assessment of all the municipalities in the province, which indicated challenges, and a decision was made to resolve all those challenges. The municipalities were characterised as either stable or at risk, and the level of risk was identified as either high or low, and the last category would characterise municipalities as dysfunctional. A view on the dysfunctional municipalities was not only that they should be dissolved, but that there should be an intervention led by the Municipal Infrastructure Support Agent, and multiple implementing agencies have been assembled. There will be immediate, medium-term, and long-term interventions. The Department holds a similar view to the directive of Cabinet that five of the municipalities must be dissolved, and the province would include municipalities such as the Naledi Local Municipality, which is facing litigation from a civic organisation, together with Ditsobotla Local Municipality. There are five municipalities, with four of them in the same region, and other municipalities will be added to the list while others will remain under section 139 (1) B. Other municipalities will have to go through business rescue. Four municipalities are going to be dissolved and the successful composition and correction of the district depends on the secondees from the affected local municipalities.

In terms of the state of the North West municipalities, the Department of Cooperative Governance reported that, since the invocation of section 100(1)(B) in July 2018 to provincial CoGTA, directives were issued by the Minister. Key amongst those was the organisational structure of provincial CoGTA that is not fit for purpose to support municipalities. A district based organisational structure has been reviewed, but it lacks funding and Community Development Workers are being migrated from the Premier’s Office to provincial CoGTA. Directives on service delivery, governance and administration and financial management were directed at municipalities, but there has been no tangible progress registered since 2018. According to recent categorisation, five municipalities are fairly stable but still at low risk, which require section 154 support; seven Municipalities are at risk and require close monitoring and support; 10 municipalities are dysfunctional. There are 19 (86%) financially-distressed municipalities; 17 (77%) adopted unfunded budgets. The equitable share for all municipalities is R6.7 billion and Municipal Systems Improvement Grant is R11 million.

The Committee noted Cabinet’s decision to intervene at 64 dysfunctional municipalities across the country but emphasised that there is a need to do things differently because the experience of intervention has not always been positive. Of major importance is the availability of dedicated technical support that will be essential in providing the necessary know-how to stabilise the municipalities.

On the possible dissolutions of municipalities, Members called for a clear and detailed plan on a process following the dissolution, especially in light of the Moseneke Report on the delay of local government elections. The Committee called for a thorough assessment and consideration of the decision, especially in relation to local municipalities within the Ngaka Modiri Molema District Municipality. This is because the dissolution of three of the five local municipalities in the district affects the standing of the district municipality.

Meeting report

Chairperson’s Opening Remarks

The Chairperson opened the virtual meeting, welcoming the Members and all the delegations to the meeting. She acknowledged apologies of the Director-General of the Department of Cooperative Governance (DCoG) due to prior engagements, noting that Mr Temba Fosi, the Deputy Director-General, would present on her behalf.  

She said that the MEC for the North West Department of Cooperative Governance, Human Settlements and Traditional Affairs (North West COGHSTA) will present on the progress that has been made in the North West since the Portfolio Committee’s oversight visit in the province from 02 to 07 May 2021. The other matter that the MEC will have to touch on is that which was raised by the traditional leaders and the progress in implementing the TKLA (Traditional and Khoi-San Leadership Act). The Committee is also interested in hearing about the developments in Kgetlengrivier Local Municipality (Kgetlengrivier LM), as well as the decision by Cabinet to dissolve 45 local municipalities – with five of them coming from the North West. She said that there was an agreement between the delegations and the Committee that the presentation documents must be submitted to the Committee 48 hours before the date of the meeting so that the Members can be thoroughly prepared for the meeting; she hoped that the MEC would explain why the documents did not arrive on time.

Briefing by MEC of COGHSTA North West

Mr Mmoloki Cwaile, MEC, North West COGHSTA, said that there was an assessment of all the municipalities in the province that indicated challenges, and a decision was made to resolve all those challenges. The municipalities were characterised as either stable or at risk, and the level of risk was identified as either high or low; the last category would characterise municipalities as dysfunctional. This work was done together with the National Department of Cooperative Governance and Traditional Affairs (COGTA) under section 100 (1)(A), and a view was developed on how to redress on these municipalities. There was also a roadshow led by the Deputy Minister of Treasury and the Deputy Minister of COGTA, unpacking how other provisions of the Constitution and finance laws can be utilised to invoke business rescue. Importantly, a view on the dysfunctional municipalities was not only that they should be dissolved, but that there should be an intervention led by MISA (Municipal Infrastructure Support Agent), and multiple implementing agencies have been assembled. There will be immediate, medium-term, and long-term interventions.

He assured the Committee that they hold a similar view to the directive of Cabinet, that five of the municipalities must be dissolved, and the province would include municipalities such as the Naledi Local Municipality – which is facing litigation from a civic organisation – together with Ditsobotla Local Municipality. He said that the reason they are delaying finalising this process, despite all other issues – including consultations and interactions made with the affected municipalities in looking for an alternative to dissolving them, is that they are receiving legal advice. There are five municipalities, with four of them in the same region, and other municipalities will be added to the list, while others will remain under section 139(1)(B). Other municipalities will have to go through business rescue. Four municipalities are going to be dissolved. The successful composition and correction of the district depends on the secondees from the affected local municipalities. The implication thereof is that there will not be a district called Ngaka Modiri Molema once the four municipalities have been dissolved. He said that they thought that they would not necessarily have to deal with the municipality through dissolution given that the provincial AGSA (Auditor-General of South Africa) is using Ngaka Modiri Molema as a pilot site for the implementation of the new Public Audit Amendment Act. However, the region has had six or seven years of disclaimer audit opinions, and as the region is a water authority, when municipalities are affected by water and sanitation issues, the district cannot escape dissolution. “Once the full consultation and legal advice is received, we will move with the necessary speed to get municipalities dissolved, including this district”, he said.

With regards to Kgetlengrivier LM, he said that, in December, when the court made the ruling that within 10 days, the municipality must prevent spillage into Elands River and Koster Dam; it must also treat and rehabilitate the affected sites. They developed a plan and made all efforts but could not succeed completing the work within 10 days. Among the challenges was the unavailability of energy plants and the water treatment plants, and their reservoirs were producing six megalitres but functioning at half of their capacity. “The court directed that we should rather provide portable water to the affected communities and ruled in favour of the Taxpayers Association”, he added. He said that they put a progressive plan in place and managed to get ESKOM to energise the plant, completely stopped the spillage and began work to treat and provide water to the affected communities. “The court agreed to our settlement and made it a court ruling”, he said. The settlement was supposed to pay for the costs incurred by the Taxpayers Association, including the legal costs and operational costs. He said that they also made an intervention to ensure that Kgetlengrivier hands over to Magalies. He added that the association did not prefer Magalies, but the Department had to persuade them by going back to court. “They have appealed the matter, but we are confident that the court will rule in our favour given what we are doing”, he said. All other matters that were a concern to the Taxpayers Association are being resolved through the section 154 support of Kgetlengrivier LM for now, but the municipality remains a candidate for dissolution. Kgetlengrivier LM also has a serious problem with cash flow to an extent that even the other government departments find it difficult to settle their bills with the municipality, as it is not registered in the central database and is not compliant with its taxes. The municipality is also failing to honour its statutory obligations, including the paying of pensions, taxes, and medical aid of its employees. “We have a package of solutions that will collapse the long-term interventions to become immediate and medium-term because we have a system of a non-chemical water treatment method available at Mamusa LM, which we wish to roll-out to other municipalities as well”, he concluded.

Mr Phihadu Motoko, Head of Department, North West Department of Cooperative Governance and Traditional Affairs, presented the progress report on the responses to questions that were posed by the Portfolio Committee on their visit in the province. The presentation detailed the background of the visits, including the activities that took place during the visits and the progress that has been made on the turnaround strategies that were implemented as a result of the visit. The presentation also detailed a summary of the questions that were posed by the Portfolio Committee to the municipalities on Cooperative Governance and Traditional Affairs.

Briefing by DCOG on Cabinet Decisions on State of Local Government Report

Mr Themba Fosi, Deputy Director-General: Local Government Support and Interventions Management, DCOG, presented on the progress made on the implementation of the Cabinet resolutions pertaining to the state of local government report. The presentation detailed the challenges facing municipalities in the North West province, State of Local Government indicators, the state of the North West municipalities, the issues requiring intervention, recommendations to Cabinet, as well as the timeframes for the development of the Municipal Support and Intervention Package.

He said that the State of Local Government Report was presented to Cabinet and the following resolutions were taken:

  • COGTA and National Treasury should lead the process of the development of the municipal support plans in collaboration with sector departments, provinces and municipalities; and
  • COGTA and National Treasury should identify candidates for Interventions and propose the relevant mode of intervention that should be applied. This should include municipalities that need to be taken over by National in terms of section 139 (7) of the Constitution

Regarding the state of the North West municipalities, he noted that, since the invocation of section 100(1)(B) in July 2018 to provincial CoGTA, directives were issued by the Minister; key amongst those was the organisational structure of provincial CoGTA that is not fit for purpose to support municipalities. A district based organisational structure has been reviewed but it lacks funding and Community Development Workers (CDWs) are being migrated from the Premier’s Office to provincial CoGTA. Directives on service Delivery, governance and administration and financial management were directed at municipalities, but there has been no tangible progress registered since 2018. According to recent categorisation, five municipalities are fairly stable but still at low risk, which require section 154 support; seven municipalities are at risk and require close monitoring and support; 10 municipalities are dysfunctional. There are 19 (86%) financially-distressed municipalities; 17 (77%) adopted unfunded budgets and the equitable share for all municipalities is R6.7 billion and MSIG is R11 million.

He said that the issues that require urgent intervention include:

  • Parallel councils, two Mayors, two Speakers exist in some municipalities; 
  • Maladministration and corruption;
  • Defiance of provincial government interventions;
  • Private ratepayers' organisations withholding revenue and taking over municipal services;
  • Failing water and sanitation systems;
  • Vandalism and theft of infrastructure;
  • Gangsterism and criminal attacks on officials; 
  • Debts to Eskom & Water Boards threaten continuation of essential services.

He said that there have been interventions made in terms of service delivery, and a detailed action plan has been developed, completed and costed. Relevant sector departments at national and provincial level made inputs to the plan of action (Department of Water & Sanitation (DWS), Provincial Department of Transport, Department of Environment, Forestry and Fisheries). COGTA, through MISA, is already on the ground. DWS is already on the ground on the priority water projects. Department of Environment commenced cleaning & greening projects in July 2021.

The DWS committed to fast-tracking water projects that were incomplete for years, which will provide access to underserved communities, i.e., Taung Dam; Moretele Bulk Water; Brits WTW; Maquassi Hills Bulk Water pipeline. Joint National and Provincial Teams (COGTA, NT, PT COGHSTA, SALGA) are finalising the municipal specific support and intervention package and agree on the appropriate mode of intervention within the hierarchy of Constitutional and Legislative interventions measures; (139 (1) (a), 139 (1) (b), 139 (1) (c), 139 (5), 139 (7), section 106 of the MSA (Municipal Systems Act).

Discussion

Ms H Mkhaliphi (EFF) said that she did not hear justification for the presentations being submitted late by the DCOG delegation. She said that, following the Committee’s visits to the municipalities in the whole of North West, the follow-up presentation from the Department was traumatic, as the Committee was told that Ditsobotla is one of the municipalities that are going to be dissolved. She said that she is interested in knowing what the way forward will be on the matter, because the Committee was told that Cabinet took a decision to dissolve the municipalities, but the presentation by the DDG suggests that the Department is still going to engage with the provincial and national DCoG. She wanted to know how the people from the dissolved municipalities will access service delivery after the dissolution and asked for a clear plan of action to be provided. She asked when exactly the disbandment of these municipalities will commence, whether before or after the local government elections. She said that she does not feel that there is a tangible plan that the Cabinet has come up with except for the task team.  

Ms Mkhaliphi said that there was a burning issue that was raised regarding Bojanala District Municipality and the money that was paid from the provincial or national Treasury, which was used illegally, and when the treasurer requested that the money be returned by the municipality, only a small portion of it was returned. The MEC, at the time when this matter was raised, promised the Committee that there are going to be consequences. She asked for an update on the matter. She pointed that the presentation states that Bojanala DM, on governance and administration actions, required the development of a section 154 support package of the Constitution. She asked for an elaboration on the matter.

She commented that the presentation document is not well-written, as it is very difficult to follow, especially in terms of the issues that were raised by the Committee. She said that the Department has said that it has engaged with the traditional leaders in the province and provided them all information they needed regarding the TKLA. However, it has come to the attention of the Committee that the Department only held a workshop with the leadership of the traditional leaders and are going to call other traditional council leadership. She said that the presentation does not reflect the former.

Ms E Spies (DA) said that when the MEC spoke, he referred the Committee to a Cabinet decision that was taken to dissolve municipalities, which the Committee found out about in the media. When the DDG spoke, he said there was a decision, in principle, for urgent action to be taken – that municipal specific support plans and packages are going to be put together and made a reference more than once about the involvement of National Treasury and COGTA. She wanted to know if she was correct to assume that there was no decision taken to dissolve municipalities but there was just decision, in principle, that, in this intervention, municipalities up for dissolvement must be identified. She wanted proof of record that the decision has been taken. She said that because of the fact that the announcement of the local government elections is still pending, one cannot possibly think of having councils without elected representatives for six to eight months.

Mr I Groenewald (FF+) asked the MEC to submit, to the Committee, a report on consequence management that was implemented in the municipalities before there was a decision to dissolve those municipalities. “Dissolution should be your last avenue when a municipality is not functioning”, he added. He also wanted to know what the municipalities are doing in terms of administration.

In terms of resolution 139 (1)(C), he said that the Municipal Public Accounts Committee (MPAC) at Mamusa LM, North West, is still dysfunctional; he wanted to know how the resolution of councils is going help the situation. He also asked the MEC for a water report for Matlosana LM, as well as any investigation reports that were done within the province.

Mr Groenewald also asked the departments why they did not align all their plans with the budget process because one of the things that must be tabled in council when there is a turnaround strategy is the documentation. Lastly, he wanted to know what action has been taken against the Fresh Produce Manager in Matlosana who was involved in corruption at the Matlosana Fresh Produce Market. He asked the Department to clarify the blockage of projects by business forums and the names of these business forums. He also wanted to know when the public participation process will take place and why it was not included in the budget.

Mr K Ceza (EFF) wanted to know if section 100 has been lifted in the North West, as the DDG spoke as if the Department cannot do anything, while there is a section 139(17) that the Department can invoke in the event that the province is not able to perform its functions. He said that section 154 of the Constitution of the Republic of South Africa states that the national government and provincial government, by legislative and other measures, must support and strengthen capacity of municipalities. He wanted to know how it could have been that section 154 was said to have been a priority before section 139 (1)B and what could have prevented the invocation of this section. He asked why there was no action taken and why no one was held liable. He also asked about the impediments to providing support. He wanted to know the impact made by section 139 in the local municipalities in terms of ensuring that there is improvement in the delivery of services.

He asked SALGA to clarify the outcomes of the leadership institute, which was established to provide various training and capacity building courses to councillors, coupled with agreements entered with various institutions of hiring.

Mr B Hadebe (ANC) said that, in their last meeting, the Committee had requested a detailed report with a root cause analysis of all the dysfunctional municipalities; the status update on local government, with proposed interventions – including timeframes and measures in place to avoid similar challenges occurring in future; lastly, the consequence management actions taken against those found to have been responsible for collapsing municipalities. “The dissolution of municipalities is not a panacea to the challenges that are faced in municipalities because it only deals with symptoms and not the cause. For us to be able to understand what we are dealing with, we would have really appreciated a detailed report with a root cause analysis”, he added. He said that section 139(7) should have been invoked if there are, indeed, 66 dysfunctional municipalities; he added that this prolonging of the inevitable as if there is no applicable legislation that empowers national government to act is a worrisome factor. “It seems as if we are failing to be firm and decisive”, he exclaimed. He said that COGTA said that there are 10 municipalities, meaning 50% of municipalities in the North West are dysfunctional when you take into account the five that must be dissolved.

Mr Hadebe said that that the presentation by the MEC indicated that, in Ratlou LM, the date for the completion of the intervention is the end of July 2021 but it is now the first week of August 2021. He wanted to know if the date of the end of July implies that the intervention has been implemented to its fullest. He said that the same question applies to Mamusa LM, as the action required is the implementation of section 106 and the completion date thereof is end of August. The required intervention to complete the intervention is the appointment of an audit firm to conduct forensic investigation. He wanted to know whether the timeframe of the end of August implies that the investigation in terms of section 106 would have been completed, which is less than a month, or if it is only in relation to the appointment of the audit firm.

On Ketlengrivier LM, he said that the required intervention is the resolution and appointment of an administrator, by the end of July. He wanted to know whether the administrator has been appointed. He said that the question also applies to Tswaing LM, as the province has placed under administrator, although the municipality is not under Section 139. He asked for clarity on why the administrator needs to be appointed and questioned whether the administrator is set to begin his/her duties before or after the dissolution of the municipality.

Concerning Mahikeng Local Municipality, he said that he does not know what political intervention in terms of the Constitution is. “I am worried when senior officials in government present a report that says they will do a political intervention”, he said. He was concerned that the political intervention has no beginning-date and end-date. He asked for clarity on what political intervention in terms of Section 139 is, as it requires a directive to be issued. He said that senior government officials must not venture into politics on challenges affecting municipalities and added that, if there is dysfunctionality, the Department should either dissolve, get rid, or give appropriate relevant recommendations on addressing the matters.

Mr C Brink (DA) said that, if there is an intervention in a municipality that is failing in its executive obligations, that intervention must be suited to the purpose of solving a problem. If the council is the reason why the municipality cannot perform its executive obligations, then the most extreme form of intervention is invoking section 139 (1)(C), which is dissolving that council and then, in terms of the Structures Act, having an election within 90 days to constitute a new council. If the problem is of a different nature, there are other ways to intervene, including issuing a directive and then taking a step up, taking control of a particular function that does not work, then looking at the other alternatives. But it should never be that, out of pure frustration, one just dissolves the council. In the case of Mamusa LM, just dissolving a council and having it re-elected did not work because, even though there are new people, the dissolution has not fundamentally addressed the underlying issues. He said that, until there is clarity on when South Africans can go to the polls, it would be very unwise for any council to be dissolved. Considering the Moseneke recommendations and the stance taken by the IEC (Independent Electoral Commission), if councils are dissolved now and elections only happen in February or April, it would be between six and eight months that communities sit without anybody to speak to who has got the authority to escalate a power outage, water outage or a water leak or a billing issue. Even if a council is dysfunctional, there are still measures taken to hold the decision makers to account. “If you take a council away for eight months, who knows what is going to happen in that particular place?”, he asked.

Mr A Motswana (ANC, North West Provincial Legislature) said that he was concerned when reading the report from the provincial DCOG, especially hearing about the dissolution of certain municipalities from the media without having had a formal engagement with the Committee. He said that, if one looks at four of the municipalities that are up for dissolution, all of them are from Ngaka Modiri Molema and the records show that there has been little support from the district to those municipalities. He said that, as much as provincial COGTA may say they have supported those municipalities, there is no proof of their intervention in terms of section 154 before intervening through section 139 (1)B and section 139(1)(C).

He said that it is untrue that there were two Mayors in Ramotsheremoiloa LM in 2018 and added that, although it may be true that the municipality is struggling with the appointment of senior managers, the municipality is not politically dysfunctional. He said that provincial COGTA invoked section139(1)B in Ratlou LM and there was a close-out report in December 2020, directed to the MEC. COGTA then sat on the recommendations of the close-out report until such time that the SIU (Special Investigating Unit) investigated the municipality. After the investigation by the SIU, they arrested one person and left the other person that squandered more than R25 million. This shows how the law enforcement seems to be favouring the side of the criminals, as these matters were also reported to the HAWKS, who did not do anything to resolve them.

He said that he agrees with the intervention that needs to happen in Ditsobotla LM and Tswaing LM but is more worried about the close-out reports that still need to be tabled by those municipalities because COGTA has sent two administrators to the municipalities. In Tswaing, there are about three or four court judgments that directed those criminal cases need to be opened against councillors that are disrupting services in the local municipalities and they are in contempt of court. He said that he was certain that the MEC and COGTA have copies of those documents pertaining the court outcomes, but they are not presenting them, yet they are pushing for the dissolution of the municipalities instead of acting on the directive of the court. He said that the problem started in September 2018, immediately after the invocation of section 100 in the province, which caused external influencing factors to happen in the municipality. One of the problems is the parallel programmes that are run by the national Select Committee in the province. Decisions are taken somewhere else externally and are camouflaged into the municipalities, which makes the chaos that already exists within the municipalities worse, as it is supported by external factors.

The Chairperson noted that one of the recommendations from the DDG’s presentation spoke of political champions working closely with the provincial administration. She stated that, based on the Committee’s interaction with municipalities in the Free State Province, the people said that they have never seen any of the political champions that were deployed to the province. She wanted to know who manages these political champions and to whom they account. Since the inception of the DDM (District Development Model), there are cases where some municipalities were told that they have political champions, but none of them have ever seen them. She wanted to know how is it that the Department thinks the political champions will do their work through the intervention, when their presence has never been felt or seen in the municipalities since the DDM. Are there are mechanisms to ensure that these political champions are going to be accountable in making sure that the intervention and the decisions of Cabinet are implemented?

The Chairperson wanted to know what is it that makes the Department think that the dissolution is the right form of intervention to be taken in these municipalities, as Mamusa LT was recently dissolved but still came back with even worse problems. She asked where the Intervention Bill is, as it was said to solve all issues within municipalities. She wanted to know the status of the Bill and when the Bill is going to be tabled.

Responses

Responses by North West COGHSTA

Mr Motoko said that the money from Treasury was returned to provincial COGTA, and the CFO and the Municipal Manager were subjected to disciplinary hearings, which ultimately led to the termination of their contracts and criminal cases being opened. He said that, in 2018, the turnaround strategies were developed for all municipalities, and the turnaround strategies of the municipalities who will be provided with section 154 support will be revisited and reinforced with more activities so that that they become more effective. This will also apply to Bojanala DM. A workshop was done with the traditional leaders, and it consisted of two sessions with the hope that those two sessions would cover all the traditional leaders in the province. He said that, based on the information received from the Committee, they might have to go back and organise another workshop.

He said that they would do a follow-up on the water report of Matlosana as well as the investigation report and submit the reports to the Committee, as requested by Mr Groenewald.

In terms of the alignment of the municipal budget with the implementation strategy and municipal processes, he said that they will ensure that it is subjected to public hearings so that they can receive public input. He added that they have tried as much as possible to align results, and some of the municipalities have been able to achieve some of the projects that they had funded budgets for.

He said that they had anticipated that EXCO would have already resolved on the interventions in the Tswaing, Mamusa and Kgetlengrivier municipalities and that they made a submission to EXCO during their July sitting, but they have referred the matter and cannot appoint the administrators before the end of July. He said that they have not finalised the appointment of the audit firm, as the due date for them to do so is the end of August 2021. This is because that process must go through supply chain processes and is currently within those processes, with the hope to finalise the appointment by the end of August 2021. He said that, even though Tswaing and Ditsobotla were under administration, the administrators had been blocked from entering the municipality, and the South African Police Services (SAPS) was unable to assist them. He said that they will submit a close-up report when they have been able to deal with all those matters.

MEC Cwaile said that it is true that the decision to dissolve was made at the level of Cabinet and the decision was communicated to the leadership of EXCO Governance Cluster and, at the level of EXCO, the cluster processed all this and made its own recommendations. He said that they had an interaction as far back as June/July with national COGHSTA on what should happen with the municipalities. He said that the municipalities themselves were also consulted but they did not get the results that they desired, which undermined the provincial intervention. The decision by national does not preclude the province from acting on other municipalities. In Madibeng, they agreed that they can continue with the intervention of section 139(1)(B), but they must conduct the assessment to the point where, if they can all agree that it is not progressing as desired, the municipality can be subjected to business rescue. It was decided in an EXCO meeting that, for now, the intervention should be extended by a month to ensure that a thorough assessment of the terms of reference has been made.

He said that the political instability that they have experienced in the municipalities has compromised the capacity of administration and undermined governance. The Department is not only dissolving but also deploying a multiplicity of implementing agencies to assist.

Regarding the Municipal Manager and CFO who misused funds that were not meant for the municipality, he said that they made a document detailing how the money could have possibly been spent and sent it to the SIU, last week Friday. This has been subjected to a forensic investigation by the SIU, as the municipality needs help to recover the money. He added that they requested the appointment of the MSA section 106 investigators to resolve the matter as quickly as possible. This would include having to investigate the allegations of unprecedented corruption, as they were submitted in relation with Matlosana. The impact of section 139 interventions has been undermined by the issue of timelines. “This is the reason why we end up having multiple section 139 interventions in a single municipality, because, in some of them, the administrators are denied access to municipalities for months before they can be able to do their work. The intervention of section 100 is a provision in the Constitution that does not make reference to the municipalities but to provincial governments, and because our department is under section 100(1)A, we are also taking instructions on what we should be doing directly from national COGTA”, he said. “Only when we are failing to discharge any directive, including our responsibility, national COGTA can move in”, he added.

MEC Cwaile said that they have assessed the cost of having to deploy administrators and would really appreciate to also have administrators coming from national so that they could take the responsibility of the cost for this intervention. He said that they are hoping that one day they will be able to persuade the FFC that, as they consider the budgetary allocation, they would also make packages available for interventions because it also takes from the budget allocation of the Department. The reality is that the municipalities have collapsed, and the Department has demonstrated this through an epistemological report with a clear methodology that is based on the reports that dealt with the Back to Basics and the 152 objects of the municipality. The other evidence comes from a pseudo indicator, where an assumption is made based on a specific indicator.

On consequence management, he responded that, besides the amendments made to the Municipal Systems Act allowing the provincial or national governments to act on behalf of the councillors at the level of the municipality, the consequence management remains the responsibility of the municipality itself. That is the reason all allegations made about irregular expenditure and corrupt behaviour in municipalities are referred to the law enforcement agencies, and the interventions of the Department would be limited to deploying the investigations. The Department also cannot enforce the recommendations made from an intervention, which is a limitation imposed by legislation.

The Chairperson asked MEC Cwaile to respond to the issues of selective dissolution as well as the issues in Madibeng LM, as they are important. She wanted to know the extent to which the dissolution of municipalities is a way to settle political scores.

MEC Cwaile said that they would need proof of the allegations that are circulating about what is happening in Madibeng in terms of the political infighting and instability. He said that he does not see anything special with Madibeng LM, as it has been experiencing problems and has been challenged even in the courts and the Human Rights Commission.

Responses by DCOG

Mr Fosi said that the interventions framework is a framework that is already provided for in the Constitution and it outlines the processes that must be followed in how those interventions or provisions are invoked by a sphere of government. For example, national government can invoke section 139(7) only when there is a clear demonstration that the province has failed to fulfil its executive obligation. Dissolution is provided for in section 139(1)(C) and section 139(5). The context of the Cabinet decision is recognising the constitutional framework.

He said that they have done a diagnosis and they know what the root causes are, but the issue is that they need to agree on the moment of intervention. Some of these provisions or interventions can be invoked by the executive council of the province and where there are cases that require a national intervention, they then agree that the cases must be managed at the national level.

He said that they also must agree on the funding to support these interventions, as there is no dedicated funding for interventions. This means that they must find the resources that can be deployed to fund and support this intervention. He indicated that they are in discussions with National Treasury to explore the issue of funding, particularly because they are also recognising that, despite Cabinet having taken these decisions, there are many other processes that are led by communities, businesses, ratepayers, inter alia, taking municipalities to court – seeking a more drastic intervention. Some of those interventions are suggesting that national should take over, but the others are suggesting that some of these municipalities must be dissolved.

Mr Fosi said that the approach to these interventions is not just about identifying individuals who must serve as administrators alone but looking at multi-disciplinary teams that must look at all the key areas, whether it is finances, infrastructure services or compliance issues. These teams look at how to respond to the root causes identified and these teams must manage and support the process of stabilising the municipalities.

In terms of the implications of the elections, he said that the Minister will have a media conference this afternoon where she will be making an announcement on the matters of the elections. “The issue that we need to look at is how to stabilise these municipalities for now”, he said.

He said that the Department agrees that dissolution is not going to solve all the problems, but they need to be clear in terms of what triggers the dissolution and how they manage that process. The current state of matters now is that municipalities are collapsing and there is serious political instability and infighting that impacts on the administration and service delivery. These municipalities require urgent attention because these issues need to be resolved to an extent that the provision of services to citizens continues. The dissolution is addressing the political element of the council and the multidisciplinary teams that are proposed would ensure that the administration during the intervention is focused on correcting some of the problems that might be in administration – for example: capacity, filling vacant positions, introducing proper systems of functionality to municipalities. But at the same time, ensure that the municipalities are able to deliver services to communities. The Department has also recommended exploring other options of funding the delivery of services, as there are municipalities where the state of infrastructure does not allow service delivery to happen because they do not have capacity to revive infrastructure such as the water treatment and sewer plants.

He said that political parties must also take responsibility in ensuring that the quality of leadership they bring into the systems is ethical leadership that is committed to good governance and to adhering to the prescripts that govern the system of local government. As part of this intervention, the Department wants to strengthen its oversight instrument so that municipalities can have clear early warning systems where they can pick up some of the issues early. The assessment that the Department has done has confirmed the correlation between failures in governance and poor political oversight, which underpins many of the dysfunctional municipalities, and this requires that they deal with that root cause of the problem. Some of the administrative interventions cannot deal with that problem, so dissolution becomes one of the available instruments to the problem.

In terms of the budget process, he said that the intervention plans proposed by the Department are to ensure that, if a municipality has been receiving disclaimer audit reports for five consecutive years, the municipality must have a clear plan of how they are going to address that problem. It must be part of the administrative programme of the municipality. The issue of business programmes that are blocking administrators in municipalities is a phenomenon that happens in many provinces, and it also blocks municipal projects at times.

Mr Fosi said that the Department has intervened with section 100 (1)(A) and one of the directives was to deal with the issue of capacity, which is why they had to focus on the organogram to ensure that the structure is fit for purpose in terms of positioning the Department to perform its responsibilities of support, oversight, and monitoring municipalities. The other directive was around the intervention, and, as part of the department’s cooperative governance responsibilities, they must work with the province. But some of the decisions would require that the province itself take actions in terms of how this Department is resourced and how it is capacitated and prioritises performing its responsibilities.

He agreed with Mr Radebe that the Cabinet approach provides an opportunity to be more decisive in terms of actions that are taken, and these interventions must make a difference. The Department needs to ensure that the dissolution also sends a message when councillors are not able to perform their responsibilities. The interventions should send a message that, if one does not work according to the Constitution and does not respect the Constitution and the law in terms of the mandate and responsibilities that one has, there will be implications. On timeframes, he said that they want to manage this process by dealing with the urgent matters of crisis but, at the same time, this also becomes a programme for the next administration, for the next term of local government.

He said that Madibeng LM is currently under section 139, and the Department recommended that it stays under that intervention because the team that is seconded in the municipality have made good progress and just need to be supported.

He said that many of the issues raised by Mr Motswana should be dealt with by the province.

He agreed with the Chairperson that there are some challenges with the political champions and added that there are several districts that have not been visited; only 46 districts have been visited. He said that they have developed terms of reference and guidelines for the political champions and a template for reporting. He said that they met, during the previous week, with the Office of the President to see if they are also assisted because the champions were appointed by the President and their deployment to various provinces is done by the President. Based on the guidelines and the reporting template, there are those that are reporting, but there is still an unevenness in terms of the reporting. There are areas where the political champions are still inactive, and the Department is hoping that the Office of the President will also assist, working with the Department of Planning, Monitoring and Evaluation (DPME) to look at how they can strengthen and support the champions.

Regarding the Intervention Bill, he said that they have done a lot of technical work and the Minister indicated that they need to do a last round of consultation with the provinces and municipalities. They engaged all provincial COGTA apartments through the road shows by the two Deputy Ministers from COGTA and Treasury, where they engaged all the MECs. They also met all the TROIKAs of all municipalities across the country and presented in this Bill. They are consolidating the comments and after that, they will submit it to the State Law Advisor to check the Constitutionality of the draft and to DPME to look at the economic impact assessment. After those two processes, it will be ready for submission to Cabinet, and in terms of the MTF timeline, the Bill will be introduced within this financial year. After Cabinet has approved, it will then be submitted to Parliament.  

He said that selective intervention is one of the issues that they raised when presenting to Parliament about the interventions that they tend to be used to settle political scores and not as a corrective tool for helping or providing constitutional assistance. Therefore, the Intervention Bill is needed to provide clear processes of how interventions must happen and what the requirements that must apply before municipalities resort to interventions so that interventions are used as a last resort. “We must strengthen monitoring and support and ensure that the spheres of government also account for their responsibilities before resorting to an intervention”, he said. For example, the province must demonstrate the support that they have provided and the impact of that support to an extent that it requires more drastic actions. There must be a justification for taking drastic action, but those processes will be clarified in the Bill.

Follow-up Questions

Ms Mkhaliphi said that, to deal with the challenges faced by the municipalities, there will need to be a proper plan that talks about how to ensure they develop an early warning system to detect issues before they arise. A proactive approach needs to be taken to assist municipalities. She re-emphasised the importance of adding timeframes to the interventions in the municipalities. “The Department must come with other measures or other suggestions instead of the section 139 interventions because it has been proven that the intervention has not worked”, she said. She wanted to know exactly what the Department plans to do during the intervention and whether they have enough capacity because they tend to use the same officials in different municipalities. “As long as municipalities are not professionalised and the people who are officials in these municipalities are deployed by political parties, we ought to have these kinds of challenges going forward”, she exclaimed. She also wanted to know how service delivery will happen if the municipalities are dissolved.

Mr Hadebe wanted to know when the provincial EXCO is going to dissolve the municipalities, as per the directive of the Cabinet, COGTA and National Treasury. He said that it cannot be correct to say that the timeframes that are set for these interventions are for the interventions to continue until the next administration is elected because the basics of project management are that if you cannot measure the time for a project, then you cannot manage the project. He also wanted to know when the decision to dissolve the municipalities was taken by Cabinet to measure the extent to which the Department is confident that it is within the timeframe to commence with the dissolution.

Mr Brink wanted to know how the Department plans to disband an elected local council if there is no prospect of going to the polls, as the law requires 90 days to elect a new council. He was concerned by the idea that problems in municipalities can be solved by just getting rid of the councillors. He said that if that was true, there would have been stellar success stories in places like Mamusa and Tswaing. “If you take away the council, you take away the part of the constitutional design that is meant to ensure accountability, and you also take away a channel of communication between the community and the municipality”, he exclaimed.  

Mr Groenewald said that the MEC did not answer his questions about the documentation of Matlosana that the Committee handed over to them during its oversight visits, as well as the alleged corruption and fraud case on the fresh produce market by the fresh produce manager and what has been done about it. He also wanted to know about the councillors that were handed over to court in Ditsobotla and whether there was any action taken against them. In terms of the JB Marks municipality, he asked for the legal opinion regarding the election of the mayor that the MEC said he would get within five days.

Mr Ceza said that he is not getting historical evidence in terms of the outcomes of these interventions in municipalities. He wanted to know how the interventions guarantee positive outcomes in the improvement of local municipalities in terms of the provision of service delivery and the achievement of performance targets.

The Chairperson asked for a report on the amendment of the TKLA from the DG of the Department of Traditional Affairs (DTA). She asked for examples of the interventions that have been made in the municipalities over the years, which have yielded positive results. She said that, from the experience of the Committee, the government is very good at developing and presenting plans, but there is a deficiency in implementing those plans at the desired outcomes. She wanted to know what is going to be done differently with these interventions in the North West municipalities that will yield positive results.

Responses

Responses by DCOG

Mr Fosi admitted that the Department does not have capacity to manage this level of interventions and that even the provincial department do not have the capacity. One of the matters the Department has raised with Treasury is to ensure that they both create an Interventions Grant. The principle is about resourcing interventions, and it can take whatever form, but they will need to resource these interventions. The multidisciplinary teams that are sent to municipalities are people that must be funded to go and assist for a particular period. “In terms of the budget cuts that we have been experiencing and the limited capacity both provincial and national, this expertise is needed, but we can only source them from outside, so we need to pay for their services”, he said. Treasury agreed with this intervention grant idea, and the interventions are led by Treasury, who have also allocated funding to ensure that they are able to deploy teams to support the municipalities. This is one thing that is going to be different, as the department wants to ensure that there it is not just the province working alone but also at a national level in terms of ensuring that there is dedicated support. The Department has also engaged with the North West province and developed a clear and costed plan with clear indications of one of the immediate actions and the medium to long-term actions, as well as the different role players involved. All the plans will be finalised and consolidated by the end of August. Deputy Minister Bapela and Deputy Minister Masondo will continue to do the roadshows of engaging the provinces to ensure that they are consulted about this process in terms of decisions of Cabinet to ensure that when the technical teams move in, it will assist the Department to have clear timeframes of what needs to be done and when it needs to be done.

He said that they have only engaged EXCOs in the North West so far. At a technical level, the HODs have received letters from the DG, which communicate the Cabinet resolutions, and the secular has been sent to all HODs. The implementation plan of these plans will be guided by the example of North West, where there are complete immediate, medium to long-term plans. In the Department’s recommendations that they have made to Cabinet, they also suggested that, to ensure continued delivery of services, part of the intervention must look at different approaches. For example, the repurposing of the MIG (Municipal Infrastructure Grant) from creating an indirect grant gives the ability to not just wait for municipalities to plan and manage the whole value chain of the Infrastructure Grant; the Department can bring in its own implementing agent, whether it is DBSA (Development Bank of Southern Africa) or any other entity to ensure that the whole process from the planning to pairing of the projects that a credible pipeline of projects are developed and the funding is already available. In this case, if a municipality does not have capacity, it means that the department will be bringing that capacity through that approach. Treasury has units that deal with specific interventions – for example, the supply chain and audit outcomes. The Cabinet meeting on the state of local government sat on 30 June 2021.

He agreed with Mr Brink that interventions should not deal with entire councils but should directly and decisively deal with the members of councils that are problematic instead.

He also agreed with Mr Ceza that, historically, no interventions have worked in municipalities, and added that the conclusion is made on the basis that there is no sustainability and that there is no clear exit strategy in the interventions. During the period of the interventions, a lot of work is done to improve systems and putting processes is in place. But what happens is that after the exit of these interventions, the entire gains from the interventions are reversed by the incoming administration, so the problem becomes sustainability.

He agreed with the Chairperson that, without the dedicated technical support that accompanies the intervention, there is not much that is going to be achieved. He added that this is the reason that the Department has emphasised working closely with Treasury to have a collaborative framework on interventions. Even the two deputy ministers have led roadshows to demonstrate that they are working together with the teams from both Provincial and National Treasury, and they have met to agree on the approach.

Responses by COGHSTA

MEC Cwaile said that they would start working on project management within the next two weeks and that they are confident that they can process all the issues that need to be taken into logical conclusion. They will move quickly to enact the Cabinet decision.

He said that the issue of fraudulent CFO certificates will be investigated, and amongst other municipalities, it affected Mamusa LM. In terms of the responsibilities of the municipalities, he said that section 160 subsection 2 determines all the four key deliverables of the council that cannot be delegated, and it will be the only four key deliverables that will be affected by the dissolution; it will be assumed by the administration team that is there. One of the deliverables has to do with the processing of budgets and approving them, the issue of bylaws, and so on.

Holding off the administration personnel at the dissolved municipality will be done by the rules and will be exercised at the level of either the province or national COGTA or both departments. The role of holding those who have taken over municipalities accountable will be at the competence of the legislature. When Mamusa LM was dissolved in 2018, it did not dissolve all its problems, but there is no a disability that makes it very difficult for government to try. “We know of the officials who made it very difficult to clear the challenges with the audit and we are of the view that it might be the subject of business rescue, and all other material irregularities will be investigated”, he said.

Regarding the councillors of Ditsobotla, he agreed that they must act based on the conduct of the councillors, as it relates to different things, but there are decisions that would have cost implications that they may have to recover from. He said that they have referred many issues to the SIU and they are confident that, should they find any wrong, including when conducting their own investigations, they will not hesitate to apply for a preservation order to withhold the advections. If the dissolution happens and the IEC is not able to conduct the elections, it will equally affect the by-elections.

He indicated that the report on JP Marks Municipality is available and that they will make sure that it is received by the secretariat of Portfolio Committee.

He confirmed that it is true that Council did not necessarily comply with spending rules because there were two of the councillors who were on isolation. The issue here is whether the Disaster Management Act would take precedence or not, it will also depend on an engagement and directives. The nature of the interventions is not necessarily finalised, but the Constitution provides that they should intervene, and the financial regulatory laws provide that the intervention must help the municipalities when there are challenges that make such intervention necessary. He said that when they intervene in a municipality, they do not wish to become the administration of the municipality, but it means there will be key performance indicators shaped by the terms of reference. On realisation of those key performance indicators, the intervention is expected to be withdrawn. He said that they have implementing agencies that enable them to achieve what they planned for in terms of immediate, medium to long-term plans.

With regards to interventions being used to settle political scores, he said that even if it is the responsibility of a political party to decide on the political composition of the municipality, it is the role of the Department to make sure that there is compliance in terms of the prescripts. It is also true also that many problems in municipalities stem from political instability and disagreements. It is not only intra-political problems but also inter-political. In all the challenges faced by municipalities, none of the political parties in the country can be exempt because they form part of the political composition and the leadership of any municipality that is affected. If there are two groups in one municipality, dissolution will affect both groups and will be detrimental to both sides.

Responses by Department of Traditional Affairs

Mr Mashwahle Diphofa, Director-General, Department of Traditional Affairs, said that they have started with the induction and workshopping of the traditional leaders on the TKLA and are treating it as a matter of high priority. He said that they worked on the programme in partnership with the Local Government Sector Education and Training Authority (LGSETA) and the provinces to identify participants for the workshop. He added that they received the names in the North West but the issue was that, in consultation with the houses, the houses indicated that they do not want virtual workshops and that they want the workshops to be physical. The Department had had to make sure that they work based on the window periods that arise depending on the relaxation of the lockdown alert levels and work in smaller numbers for the time being. There were two sessions held in the North West, and they were strictly with the traditional leaders because that is what the House of Traditional leaders requested. The next step will be to hold more workshops with the municipal councils. This discussion will need to be guided by the province because, at some point, there was an issue about who will get workshopped, considering that there might be elections being conducted.

Responses by North West SALGA

Ms Desiree Tlhoaele, PDO, North West SALGA, said that they have not done training of traditional leaders on the TKLA, as there were issues that still needed to be resolved in terms of the Act itself. She said that they required speakers to have knowledge of the Act, as it exists; the Act was sent to the speakers for them to study it. They were also reminded of the importance of them to improving and meaningfully including traditional leaders in all communities so that they can take part in all the discussions, as the issue is that they are represented but they are not meaningfully taking part in all Committees.

Regarding environmental health, SALGA has conducted an assessment and a report on that assessment was to be tabled on the North West Power and Conservation Council (NWPCC) so that all the issues regarding environmental health in the province are known. The report was tabled at the Technical NWPCC, and it is on its way to the political NWPCC so that the status is noted. In terms of them also knowing the legislative imperative to all the districts and the powers and functions that should be conducted by them, she indicated that all the officials were trained, and the report is indicative of the fact that the whole process of powers and functions needs to be scrutinised. “We are awaiting the NWPCC to give us a directive in terms of what can be done, and we have met with the Department of Health to indicate that this is a serious area that we need to look at”, she said.

The Chairperson wanted to know some of the issues that were still outstanding in terms of the Act, as it has been in operation since 01 April 2021. She also wanted to know what is being done about municipal health services that are supposed to be performed by the districts. She said that she thought that SALGA was also responsible for training councillors as well because some of them have no experience on office leadership and some do not even know their own mandate.

Mr Ceza said that there is currently an issue with the air quality scale and micrometres for people who reside near mines because of the air that they breathe and from the coal that they use to keep warm during winter. He wanted to know the data that has been collected by SALGA and the remedial action.

Ms Tlhoaele said that the report that SALGA has compiled identifies all those areas as gaps that need to be worked on, and the major partner in this is the Department of Economic Development and Environmental Affairs. In the districts, the authorisation to give licenses and to do air emissions have been given to districts and it was found that it was not effective due to the capacity in districts. SALGA held a webinar, together with the Economic Development Department, and agreed to work together to ensure that, if districts have the authority and cannot effectively utilise their authority to stop the emissions, then something will need to be done in terms of either the province taking back the authority and doing the work itself or through capacitating the air quality officials to do their work. The two districts in the province that have the authorisation are Bojanala and Dr K.K, but there are still underlying issues of how the licensing is being given out and how monitoring is done. “This is an area in which we committed to work with Department of Economic Development to ensure that they assist municipalities in terms of capacity building, and we have raised this issue with national SALGA so that we do get the expertise”, she concluded.  

Chairperson’s concluding remarks

The Chairperson said that all the matters that were discussed in the meeting are ongoing, especially considering that some reports have been received late and some reports have not been received yet. She said that all the relevant Portfolio Committees must submit a report to the COGTA Portfolio Committee to consider all the affected municipalities, so that the Committee can understand what is at play. She then asked DCOG, SALGA and COGHSTA to submit all the outstanding reports that they promised to the Committee as soon as possible so that the challenges in the North West can be interrogated further.

She thanked all the delegations for availing themselves to the meeting and appreciated their commitment to the work of serving their communities.

The meeting was adjourned.

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