Airports Company A/B & Air Traffic and Navigation Services Company A/B: briefings; Civil Aviation A/B: consideration of submissions; with Deputy Minister

Meeting report

Airports Company Amendment Bill

Ms Dikeledi Magadzi, Deputy Minister of Transport, told the Committee that the Bills on the agenda had been dealt with by the previous Committee, but were not finalised. She hoped a presentation of the amendments made to the current legislation would be satisfactory and would result in the bills being accepted and finalised by the Committee.

Mr Alec Moemi, Director General (DG): Department of Transport (DoT), briefed Members on the status of the Airports Company Amendment Bill of 2018. He said the Bill sought to amend the Airports Company Act of 1993 (Act No. 44 of 1993) in order to strengthen the current economic regulatory framework, and to redress challenges in the current legislation, including:

• The current legislation did not provide for appeal mechanisms;
• It did not empower the Minister to make regulations regarding any matter related to economic regulation;
• It was not in line with the Companies Act, 2008 (Act No. 71 of 2008), which replaced the Companies Act,1973 (Act No. 61 of 1973);
• It did not outline the composition of the Committee;
• It did not provide for a dispute resolution settlement mechanism;
• It did not empower the Minister to make regulations regarding any matter related to economic regulation and the procedures to be followed by the Committee in terms of non-compliance by the company;
• The current legislation did not grant the Minister powers to disqualify members; and
• The Approach Document did not have legal status.

Mr Moemi presented the Bill solutions to the company

(See attached presentation document).

Discussion

Mr L Mangcu (ANC) asked the delegates to inform the Committee of the gaps in the current legislation that the Airports Company Amendment Bill of 2018 sought to address. On challenges to be addressed and problem statement number 10, he asked them to inform the Committee as to who had the power to make regulations regarding any matter related to economic regulation, if not the Minister. He asked them to explain the implications of having this power delegated to the Minister. He wanted to know why the words such as “empower” and “prescribe” were used interchangeably when explaining the functions of the Minister.

On the problem statement 1 and 2 of the presentation, he asked what the impact would be of amending certain provisions of the Airports Company Act in order to align the principal Act with the Companies Act of 2008 and the Public Finance Management Act (PFMA) of 1999.

On problem statement 3, he asked for the rationale behind replacing the word “3” in Section 3 of the principal act with the word “4.”

On the Bill solution to problem statement number 4 of the presentation, he asked whether granting the Minister the powers to disqualify committee members did not violate the Company’s Act. In addition, why was it important to legislate issues regarding vacation and procedures of the meeting, given the assumption that there was a company code of conduct dealing with this?

On problem statement number 5, Mr Mangcu asked the delegates to explain what the word “gaming’ meant. Why was the solution to problem statement 5 giving the Approach Document legal status? He requested clarity on problem statement number 6, and on problem number 7 pertaining to the procedures of the committee, he asked why the solution to this was also legislating.

On problem statement number 8, Mr Mangcu asked whether there was room for appeal for persons not satisfied with the decisions of the committee.

Finally, on problem statement number 9, he questioned why it was important to penalise people who did not attend committee meetings.

Mr L McDonald (ANC) asked whether granting the Minister the power to disqualify committee members did not create room for autocratic behaviour and political capture.

Mr M Chabangu (EFF) agreed that the details of the composition of the committee were not well outlined. He said this should be done and tabled to avoid “cadre deployment”, which may bring the Airports Company of South Africa (ACSA) down. He asked whether the previous Portfolio Committee had ensured there was professional consultancy on the proposed Bill. He said the Bill must state on what grounds the Minister could disqualify a member.

Mr C Hunsinger (DA) asked the delegates whether the office of the DoT could guarantee the Committee that it had given due consideration to the bill and found no underlying issues. On the issue of disqualifications, he said the section of the bill dealing with this was a copy and paste of the principal Act, which was broad in nature. He gave an example of part of the section dealing with the disqualification of members found to have been dishonest. He said some members could be disqualified for petty issues such as stealing a paperclip.

In addition, the wording of clause 5 of the Bill, which reads “may publish the names of people under consideration for appointment to the committee”, gave the Minister discretionary powers and must be changed to “must publish...” Under clause 5 of the Bill, in order for members to qualify for appointment in the committee, they must have considerable background in the aviation industry and there should not be an exception to this.

Finally, he commented positively on the bill’s establishment of an appeals committee. However, he cautioned the Committee of the situation with the Ports Regulator, where a Tribunal did not exist, which left one to wonder what the purpose of the appeals committee was.

Ms M Ramadwa (ANC) asked whether users of the airport had been consulted on the Bill. The presentation suggested that consultation had been limited to stakeholders.

Mr T Mabhena (DA) asked for clarity regarding the appointment of committee members. He asked how a member could be considered as fit by the Minister, and then later be withdrawn as incompetent by the same Minister upon consultation with the committee.

Responses by briefing delegates

Mr Moemi told the Committee that the gaps in the Airports Company Act of 1993 that the Airports Company Amendment Bill of 2018 sought to address were what had been presented as problem statements. The DoT had presented what it considered to be the effective solutions to fill these gaps.

Regarding the impact of the Bill’s alignment with the Companies Act of 2008, he said that this was quite positive. The current principal Act referred to the provisions of the Companies Act of 1973 that had ceased to exist, and the Amendment Bill rectified this by deleting reference to the provisions of this repealed Act. The Bill’s alignment with the PFMA was merely housekeeping, since the PFMA already superseded the principal Act.

On the same issue, the Office of the Chief State Law Advisor explained that ACSA was formed in 1993 as a public company. The Companies Act states that all companies formed in South Africa should follow the prescriptive regulations in the Act. When it came to any amendments that take place in the Companies Act, every other Act dealing with companies should be amended. For this reason, it was necessary to amend the principal Act. The delegates also told the Committee that the majority shareholder of ACSA was the state. For that reason, when it came to financial issues, the principal Act should be aligned with the PFMA.

Regarding the decision to extend the period of publishing of any airport charge by the company from three months to four months prior to that charge coming into operation, Mr Moemi explained that this was based on the observation that committee proceedings in relation to the consideration and award of new charges could be lengthy, and prevented publication from taking place in 90 days.

He said that the Regulator Committee was not set up in terms of the Companies Act, but the ACSA Act. Nonetheless, certain provisions of the Companies Act were applicable.

Regarding the issue of legislating the Approach Document, he said this was important to give the document a force of law and to avoid the validity of the document being challenged in future.

He confirmed that there had been professional consultation on the Bill by the DoT.

Regarding the issue of granting the Minister the powers to disqualify members, he explained that all ministerial decisions would be reviewed to safeguard against factional appointments and dismissals.

Regarding the issue of qualification and disqualification of committee members, Mr Moemi referred to state capture in his explanation, saying that a strict evaluation of committee members was necessary to avoid the appointment of people who were corrupt and dishonest. He emphasised that the law would not pardon minimal levels of dishonesty -- even members who stole “paperclips” would be disqualified.

On the question of the qualifications one required to be appointed to the committee, he said this was not limited to having an aviation background. People with financial and legal backgrounds were necessary to deal with issues that may arise in those areas. When the committee was looked at in totality, it must be made up of members with qualifications in different areas, including aviation. The Office of the Parliamentary Legal Advisor said that it was unlikely for one person to fulfil all the requirements necessary to be appointed to the committee.

On the issue of the appeals committee, Mr Moemi said that the Ports Regulator had a board which could now sit as a tribunal. He said that the Single Transport Economic Regulator (STER) was on the way, even though this was taking considerable time and prompting the dismissal of serious issues as a result of heightened anticipation of this law.

Commenting further on the issue of the appeals committee, the delegates told the Committee that the bill provided transparency, contrary to the principal law. The delegates also told the Committee that the appeal mechanism provided for an internal dispute resolution mechanism. Previously, aggrieved stakeholders had to pursue dispute resolution in the national courts.

Regarding the issue on empowering the Minister to make regulations, the Office of the Parliamentary Legal Advisor said that section 15 of the principal Act already dealt with this, but the DoT felt that there was need to extend and clarify the nature of the Minister’s powers to make regulations. The Office of the Parliamentary Legal Advisor also said that this provision already granted Minister the powers to make regulations, so the Minister already had the power to make regulations even though this was not mentioned explicitly.

Regarding the question on the establishment and constitutionality of the committee, the Office of the Parliamentary Legal Advisor said that this was a difficult question to answer since there was an upcoming bill that took away the committee and its functions.

Air Traffic and Navigation Services Company Amendment Bill

Deputy Minister Magadzi said the Air Traffic and Navigation Services Company Amendment Bill had lapsed in the Fifth Parliament, and she was happy that Parliament was considering it in the Sixth Parliament.

Mr Moemi briefed the Committee on the status of the Air Traffic and Navigation Services Company Amendment Bill of 2018. He said the bill sought to amend the Air Traffic and Navigation Services Company Act No. 45 of 1993, in order to strengthen the current economic regulatory framework, and to redress challenges in the current legislation, including the following:

• The current legislation did not cover the mandate of the company to conduct business outside of the Republic;
• It did not provide ring-fencing on the business provided outside the country by the parent company and was not clear about the establishment of a subsidiary;
• The current legislation was not in line with the Companies Act, 2008 (Act No. 71 of 2008) which replaced the Companies Act,1973 (Act No. 61 of 1973); and
• It did not legislate the Approach Document into force of law.

Mr Moemi presented the bill solutions to the Committee.

(See attached presentation document).

Discussion  

Mr McDonald asked for clarification on the need to establish a subsidiary. What form of ring-fencing would there be to create the subsidiary?

Mr Mangcu asked the delegates to expand on the need for the Act to cover the mandate of the company to conduct business outside South Africa. How were privately owned airports and small airports owned by municipalities represented in the stakeholder groupings?

Mr K Sithole (IFP) asked for clarity on problem statement 4 dealing with ring-fencing. He understood that the Department was not financing the entity.

Mr Hunsinger asked whether the bill would extend to handling disputes that occur outside the South African borders.

Responses by delegates

On the issue of stakeholder grouping, Mr Moemi said the DoT had consulted with the National Economic Development and Labour Council (NEDLAC). The DoT had also interacted with owners of private airports, such as Lanseria airport.

On the subsidiary issue, he said the DoT had first done a benchmarking test, and had followed a Transnet model, which he explained. He said ring-fencing was important to protect South African assets. The agreements that South Africa was signing stated that South Africa would have jurisdiction over all disputes.

The Office of the Chief Law Advisor confirmed that the bill passed the requirements of the Constitution.

The Chairperson requested that Members take time to ponder on the bill.

Consideration of submissions on Civil Aviation Amendment Bill

The Chairperson said the Committee had received submissions on the bill, and that it needed to determine the day for the hearings. The hearings would be on 4 March in Cape Town.

Mr Mabena requested that the hearings be not limited to the Western Cape. He said that these needed to be extended to other provinces.

Members agreed that the hearings be conducted on 4 March.

Briefing on the National Land Transport Amendment Bill

Deputy Minister Magadzi said that this Bill had taken the previous Portfolio Committee some time to deal with. This was due to the fact that there were a lot of issues to consider. She hoped the Committee would be satisfied with the proposed amendments and provide recommendations where required, since this was a very important and urgent bill.

Mr Moemi gave a brief background of the National Land Transport Amendment Bill. He told the Committee that the bill had been passed to further the process of transforming and restructuring the national land transport system that had been started by the previous Transition Act of 2000 (NLTTA). The bill had also been passed to facilitate the implementation of the Public Transport Strategy and Action Plan of 2007. He added that the Bill had been introduced in a hurry.

After doing away with the transitional arrangements, especially around operating licences (OLs), Members of Executive Committees (MECs) and provinces had started experiencing problems in the implementation of some of the aspects of the bill. Because of this, the Department was now aware what existing gaps in the Bill needed to be closed, and which areas needed to be sharpened in order to bring about uniformity.

Mr Moemi said the bill provided for the creation and recognition of associations. However, it did not provide for the management of associations, which left a loophole for corruption and autocratic behaviour. This resulted in monopoly and hence taxi warfare. In the bill, administrative arrangements for operating licences (OLs) were streamlined.

The bill sought to deal with electronic hailing (e-hailing) services, and clarified the powers of the MECs and regulations by MECs. It included a new section promoting accessible transport and non-motorised transport (NMT). It dealt with the responsibilities of spheres of government and provincial transport authorities, and with various issues involving the municipalities. The bill also negotiates stopgap measures. It empowers the Minister to regulate metered taxis, and clarifies where it is safe to stop. The bill also dealt with charter and staff services, and tourist transport.

Discussion

Mr Mangcu commented that he had a lot of questions to ask but these questions would have to be postponed, as the Committee needed to figure out some agreed rules before he asked them. He added that he would need the legal advisors’ assistance in order to better understand the process. 

Mr Sithole agreed with Mr Mangcu’s point. He asked if the Committee could be provided with more submissions by sectors, because Members needed to be more informed on the issue.

Ms Valerie Carelse, Committee Secretary, urged Members to come to a conclusion on this matter. There had been a decision of the House, dated October 2019, which read that “the deputy chief whip of the majority party, on behalf of the chief whip of the majority party, that the House resumes its proceedings on the following bills, which the bill under discussion was part of, in terms of Rule 333 and Rule 351, at the last session of the sixth session of Parliament. From this stage, they were referred to the relevant assembly.” The bill under discussion had passed the second reading of the National Assembly, and the version of the National Council of Provinces (NCOP) had also been passed on 29 March 2019. Thus, according to Rule 3(11)(2), this Committee was confined to the amendments that were approved by the NCOP.

The Chairperson commented that he thought there would be more questions for the Department, but Members seemed to have no questions. He asked if the Department wished to make any input.

Response

The Department said the issue of e-tolls was not within the scope of the meeting’s discussion.

On the Uber and Taxify issues, the Department recognised the fast speed of technology. However, once a company from abroad was registered in South Africa, the laws and regulations in South Africa applied to them. The Department also noted that driving an Uber vehicle was not on the government’s scarce skills list, and thus did not justify why Uber was employing non-South Africans. The Department was planning to roll out the registration of Uber drivers to correct the current situation.

On road disputes, the Department would look into the issues raised.

The Chairperson thanked the Department and expressed the Committee’s appreciation for the work that had been done from both sides. He also asked the Department to deliberate on the uncertainties around the Passenger Rail Agency of South Africa (PRASA), Transnet and South African Airways (SAA). He recognised the difficulties faced by these entities, but urged Members to bear the transformation goal in mind, although little was mentioned in the amendments.

Adoption of bills

In the afternoon session, the Chairperson asked Members to accept the Airports Company Amendment Bill and Air Traffic and Navigation Services Company Amendment Act, for these bills to be debated in Parliament.

Mr McDonald moved that the bills be sent up to Parliament for debate.

Ms Ramadwa seconded.

The chairperson asked for the dates that Bill could be debated in the NCOP to be identified.

Members were asked to finalise on the National Land Transport Amendment Bill .

Mr McDonald moved adoption of the bill, and Mr Mangcu seconded.

Mr Sithole said the bill needed to be reviewed thoroughly.

The Chairperson suggested the Committee should have a report first, and then adopt the bill on Tuesday the following week. Members accepted the suggestion.

Mr Mangcu asked when those dates could be considered.

The Chairperson said the administration had already begun considering the dates, and these would be ready on Tuesday.

The Committee Secretary said she would need more information on the engagement at the provincial level.

The Chairperson asked Members to open up the dates a bit more in the meeting the following week.

Mr Mabhena asked if a timeframe could be agreed on. The legal team replied that the report could be sent by Friday, but the strategy still needed to be finalised.

The Chairperson commented that Members need to submit their inputs on 18 February, when the Director-General of the Department was present. He further informed Members that the Minister was available only on 25 February.

The meeting was adjourned.