South African Social Security Agency Bill: deliberations

Meeting report

PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT
3 September 2003
SOUTH AFRICAN SOCIAL SECURITY AGENCY BILL: DELIBERATIONS

Chairperson: Mr E Saloojee (ANC)

Documents handed out:
South African Social Security Agency Bill

SUMMARY
The Committee deliberated on the concepts and legal implications of the Social Security Agency Bill and expressed some concerns with wording and structure, particularly regarding the transfer of Agency functions and staff. They suggested that the Department implement a clause to cater for staff security in the regulations, and the Department agreed to re-examine the Bill. There was uncertainty as to whether the Bill would go through the National Council of Provinces.

MINUTES
The Committee decided to go through the Bill clause by clause. Mr Fezile Makhiwane led the delegation from the Department of Social Development and was assisted by State Law Advisor, Advocate Krull.

Chapter 1 Definitions
Changes to clause 1 were informally adopted

Chapter 2 South African Social Security Agency
Ms J Chalmers (ANC) asked whether Clause 4(1)(C) applied to fraud perpetrated by public service providers

Mr Makhiwane (DSD) responded that the policy intention was that the unit responsible for payments develop mechanisms to prevent fraud anywhere along the payment cycle. Fraud and compliance mechanisms were critical because billions of rands would be transferred to the Agency.

Adv Masutha (ANC) suggested that the Regulations should specify powers for an established fraud and compliance unit, as constitutional issues that would arise with the empowerment of this unit.

Ms Chalmers sought clarity as to whether the fraud and compliance unit was one aspect of the Inspectorate. Mr Makhiwane said it was separate.

Adv Masutha said although they had emphasised independence of the Inspectorate, its functions would be entirely located within the agency. Thus the issue of potential duplication arose. They needed clarity on the need to have an Inspectorate solely for quality assurance and preventing fraud in the Agency.

Mr Makhiwane thought this was poorly phrased as it was not the unit as such but rather a mechanism similar to that used by banks to prevent fraud in their systems. The Inspectorate would set up a unit to monitor and will inspect whether the Agency had mechanisms to detect fraud - this was different from policing fraud.

Adv Masutha suggested rephrasing to ensure that the Agency has the competency within itself to monitor compliance without creating a statutory entity.

The Committee requested that clause 4(1)(e) be redrafted for clarity

Ms C Ramotsamai (ANC) felt that clause 4 (2) needed to be show that initially the Agency's main focus would be the Social Assistance Act, lest they overambitiously expanded prematurely.

Adv Krull (State Law Advisor) pointed out that the Minister's discretion was catered for in clause 4(2)(a).

Adv Masutha emphasised that Clause 4 was a conception clause. It implied that the function of paying grants, and possibly other areas of social security, would be firmly rooted in the agency and that its head would be accountable directly to the Minister. This was inconsistent with National Treasury's idea that the principal would be the Department of Social Development. This was almost the creation of a new department for social security except named an Agency. This was along the same conception of SA Revenue Services.

Chapter 3: Chief Executive Officer and Other Staff of the Agency
In Clause 6 (4)(a), "or assignment" was removed.

Mr M Da Camara (DA) felt that if people were in the employ of the Agency and not the Department they should not fall under the Department's budget. It needed its own budget vote.

Mr Makhiwane said it was like all other public entities. Funds were voted and then channelled via the Department. The Minister would have the vote, and there would be transfers out of this vote.

Ms Ramotsamai (ANC) said she understood that the money would be voted for the Agency and then it was for the Agency to decide how to spend it.

Adv Werner Krull explained the vote system.

Adv Masutha said that from the first day, the Agency would probably not have the capacity to assume responsibility for all functions currently held by the nine provinces, and so complex technical issues could arise regarding budget allocation This would need further discussion.

Mr Makhiwane said they were looking at transitional arrangements in terms of these issues.

The Chair felt the transition was critical and needed to be discussed extensively at an arranged meeting.

Adv Krull stressed that the changes in Clause 7(3)(a-f) were encapsulated in the broad code of conduct to create good governance.

Ms Borman felt the Clause 7(3)(C) lacked the emphasis of honesty in its phrasing.

Adv Masutha said he was aware that Clause 17 dealt with confidentiality but it could have been elaborated on within the Clause 7 code of conduct, as was done with the prevention of conflict of interest in Clause 7(3)(f). Clause 7 was not dealing with criminal sanctions but rather with disciplinary proceedings.

Ms Ramotsamai asked whether the protection of the lives of staff was dealt with anywhere in the document as many lost their lives in jobs of this nature. The document did not address staff protection, and the Committee felt its inclusion was critical

The Chair agreed and suggested that safety and security of staff was included in Regulations Clause 22.

Adv Masutha stressed the need to allocate an appropriate place for establishing the principle clearly in the legislation itself.

Dr Jassat (ANC) asked for clarity on when an employee should excuse him/self when processing grants applications by relatives.

Adv Krull said the employee would excuse himself from that particular application and that this was addressed in Clause 8(3). Adv Masutha, however felt this subclause belonged to the code of conduct.

Chapter 4: Funds and Business of Agency
The Committee sought clarity regarding Clause 9, particularly in relation to charging fees.

Mr Makhiwane said Clause 9(d)(2) was ambiguous and should be removed. They also had agreements with SADC and the European Community to provide occasional services so the subclause enabled South Africa to charge for services rendered. The provision for this was laid out in Clause 4(2)(b).

Ms Tsheole (ANC) thought Clause 4(2)(b) referred to Clause 4(2)(a) and felt links should be made clear.

Adv Masutha said that referring a competence to a service not linked to an agreement was not adequate. A whole clause that dealt with international agreements if Clause 9(1)(d) was not adequate.

Adv Werner Krull explained that Clause 12 catered for the Agency in the event that it wanted to form an alliance with another institution.

Chapter 5: General Provisions
The Committee asked the Department to reflect on why section 8(7)(a) had been brought into Clause 17.

Adv Masutha was concerned that where Clause 20 focused on the staff of the Agency, there was a need to cover persons purporting to be employees of the Agency. The Department responded that Clause 19(1) catered for the above concerns.

It was noted that the safety and security of staff would be added to Clause 22.

Chapter 6: Transitional Provisions
The Department highlighted that Chapter 6 was a work in progress designed to stimulate debate. It interlinked with the Social Assistance Bill

Adv Werner Krull briefed the Committee on broad and non-prescriptive Clause X, located after Clause 24, relating to the transfer of social assistance function to the Agency. The assumption was that Social Assistance would fall under schedule four of the Constitution. The Constitution provided that any sphere could legislate, but when in conflict, section 146 provided a solving mechanism.

Ms Tsheole asked whether the Minister would get co-operation from the provinces and if not, how this would impact the establishment of the Agency. There needed to be a way of placing less pressure on the Minister and be more binding. This put imperatives on the amendment of the Constitution. In agreement, the Chair added that Chapter three tried to resolve this problem by forcing other players to come to the table.

Adv Werner Krull referred to section 146 of the Constitution, and said uniform norms and standards were needed. Provisions in the Bill were strong in that they urged all role players to succeed.

Ms Mars asked about the response of MINMEC.

Ms Tshoele asked whether MINMEC agreements were signed to avoid conflict between National Ministers and Provincial Ministers.

Ms Borman asked about the difference between transaction arrangements under discussion and current pension card system transactions.

Mr Makhiwane explained that the move from the current position to the Agency was a policy decision supported by MINMEC and endorsed by Cabinet. Smooth transaction implied that provision of the transition was provided for in the Bill in terms of applying the law. The Constitution set up a legal framework. The memoranda were expressions of intent and not legally binding.

Adv Masutha stressed that although Clause X was relevant, it ought to be confined to the capacity of the Agency and not its function. Transitional arrangements would also be needed for service providers.

Adv Krull said it was possible for the Agency to enter into agreements in the transitional period. The Constitution promoted legal relationships. If contracts were expressed, there should be no interference.

Adv Masutha cautioned that they could be dealing with a tripartite alliance. Cessionary arrangements meant provinces ceded their rights and regulations to the Agency. Adv Krull's response was that the playing fields needed to be levelled.

The Chairperson asked how the budget would be organised.

Mr Makhiwane related that the three-year transition would be staggered. In the first year, monies going out of the provinces would be ringfenced and managed by the Department and Province. The first year would be used to demarcate staff and budget. The second year would pilot the best methods for paying grants. Everything would be moved to the Agency in the third year.

The Committee asked about the position of the Social Pension System (SOCPEN). Mr Makhiwane said that it was not coping and the institution needed to be improved irrespective of the Agency. SOCPEN was not designed for the work is was carrying.

Adv Masutha asked whether the transition should be provided for in the clause dealing with asset, liabilities and funds.

Ms Borman asked how involved the Department would be in the phasing-in period of the stand-alone Agency.

Mr Makhiwane explained that in terms of the Cabinet decision, the Minister would appoint a full-time team to ensure appropriate movement and function. It would still be the responsibility of the Department.

Ms Chalmers asked whether social relief of distress legislation would remain with the provinces, and how this aspect would be administered because it was not in this Bill.

Mr Makhiwane said that currently all the stakeholders were not talking to each other and this was problematic in terms of implementation. There needed to be a comprehensive policy.

The Chairperson asked whether there had been consultation with civil society, particularly organised labour.

Mr Makhiwane said they had had informal policy consultation and a workshop. The onus was on the Portfolio Committee to create a formal consultation process because there was now a final product.

Ms Borman said the social security definition included social relief. What social relief was for the Agency and what was for the Provinces?

Mr Makhiwane doubted that the Agency could take that on board. It would seemingly be a social assistance agency and not a social security agency. Government transfers to the pool in terms of that definition suggest that the narrowing of the definition might be necessary, and or the renaming of the Bill itself.

Ms Tshoele asked if the real Agency would be in accordance with the Taylor Report that referred to a comprehensive social security Agency. Clarity was needed as to whether the transition team would include seconded members to ensure the smooth transfer from different departments to the Agency.

Adv Krull said the Interpretation Act of 1937 was adequate for the transitional team.

Ms Tshoele requested that reference to that Act be included.

Mr Makhiwane assured the Committee that they would take up these issues and look at the two Bills to enable a smooth transition. The evolution of social assistance was the payment of grants, but the futuristic vision would include a social security system including funds and services for institutions like the RAF.

The Chairperson expressed that the Bill had come too late and the NCOP had signalled that their workload might prevent them from going through the Bill. He warned the Committee of the implications of this. The Children's Bill and the Older Persons Bill would also not go through.

Ms Ramotsamai suggested inviting some NCOP members to sit in on the deliberations.

Ms Borman asked if the Social Assistance Bill and the Social Security Bill would still be considered under one set of public hearings. The Chairperson said they would be.

The meeting was adjourned.