National Water Resources Infrastructure Agency SOC Limited Bill: Public Hearings: COSATU

Meeting report

COSATU submission on National Water Resources Infrastructure Agency Bill

Mr Matthew Parks, Parliamentary Coordinator, COSATU, presented the submission, which opposed the establishment of the National Water Resources Infrastructure Agency (NWRIA).

Commenting on the tabling of the Bill at Parliament, he said COSATU believed that managing South Africa's national water resources effectively and infrastructure and efficiently was critical to life, jobs, food security and the entire country. South Africa was, and would remain, a water-scarce country and there was thus a greater burden to manage water security collectively, and with utmost focus.

COSATU appreciated the need to coordinate and pool the water infrastructure and resources together into a single state organ to ensure national water objectives were met. However, it was concerned that this state organ should be an agency within the public service, particularly the Department of Water and Sanitation (DWS). COSATU was thus compelled to reject Bill, as it believed this single state organ was best located within the public service and in the Department.

Mr Parks said South Africa had been under-investing in water resources and infrastructure for a long time, leading to significant water losses from leaks in deteriorating infrastructure, excessive water uses for home, agricultural and industrial purposes, and the need to invest in water recycling. These issues called for a unified national strategy, with well-coordinated management of the limited public resources, and successful integration.

COSATU acknowledged that the Bill provided for staff transfers from the DWS to the proposed water body, which would include establishing a water entity or Agency, the absorption of the Trans Caledon Tunnel Authority (TCTA), and maybe other water entities in the future. COSATU opposed this, as it believed the one state organ ought to be in the public service, not a part of the public sector.

Its objection to entities and agencies in the public sector was based on the following concerns:

• It fractured the state, weakening its capacity to implement when needed to consolidate the state and strengthen coordination.
• Entities and agencies were exempt from the public service pay system. As a result, senior management regularly awarded itself salaries and packages much more than what the Personnel Salary System (PERSAL) allowed. For example, executives of the Road Traffic Management Corporation earned salaries greater than the President.
• It undermined the security and certainty afforded to the state and workers by the central negotiating council for the public sector.
• Given their different management structures, departments struggle to exert policy and execute control over entities and agencies.
• Entities and agencies think that the collective agreement and conditions of employment in the public sector are not binding on them, and seek to impose their own conditions. 
• This generated financial instability for the state, and had a detrimental impact on the fiscus. 
• It also jeopardises the state's collective bargaining processes, causes duplication of engagements, and jeopardises workers' hard-won labour rights.

See attached for full submission

Discussion

Ms M Matuba (ANC) said that considering COSATU was a member of the National Economic Development and Labour Council (NEDLAC), she wanted to know if it had been involved in the talks regarding this specific Bill at NEDLAC. During the Portfolio Committee's meeting the previous week, it was heard that all NEDLAC's members had reached a consensus on how the DWS would proceed with the issues raised in the presentation. The Committee received a presentation from NEDLAC last week, and upon reviewing its contents, it appeared that COSATU was presenting a different narrative from NEDLAC as a member. She also wanted to know why COSATU was so certain that the Agency was the best fit for the Department, what the rationale was, if there were any significant changes if the Agency stayed with the DWS, and what the benefits would be if it were not housed within the Department.

Mr S Moore (DA) said COSATU's presentation was incomplete, and did not accurately depict the situation. He was curious about COSATU's concerns that creating a new entity's identity meant it was not bound by the previous agreement and how NEDLAC members had handled this agreement. Given the difficulty of the situation, he assumed that NEDLAC members had dealt with these issues prior to the agreement.

Ms M Mohlala (EFF) expressed concern over the Agency's reliance on commercial partnerships to maintain its long-term viability. She was interested in learning how it would affect the supply of water, sanitation, and water tariffs. She asked the COSATU members to report to the Committee on whether they believed that South Africa was heading towards more water privatisation, and how this would impact South African citizens.

Ms N Sihlwayi (ANC) asked what the NEDLAC would be without COSATU. She said COSATU had presented a historical perspective that indicated how government had long ignored the provision of water and associated infrastructure. She asserted that this statement regarding government's carelessness in providing water was a way of responding to the Chairperson's introduction regarding the purpose of the Committee's meeting today. She said that government was working to enhance water provision, and was looking at many areas of the country's past deficiencies through all these meetings, agencies and presentations. The Agency's existence in the public service was due to a process of merging the government-created water provider businesses to better address the problem of providing water services to South Africans. As a result, she found it difficult to grasp COSATU's discussions on fragmentation, and the Bill's goal was unclear. This Bill was trying to bring sustainability together, rather than break it up.

She added that some of the Committee Members were once in COSATU, and were aware of the idea that agreements should not be challenged. However, she did not think this idea was set in stone, particularly when it came to issues with service delivery, because the government had a broad mandate to provide services to all. The process was not intended to undermine the collective agreement between government and COSATU, but rather to examine how best they could provide services to all.

COSATU had expressed concern about the country's water scarcity, and the Department operated under that premise. However, COSATU's fear should not be directed toward the National Treasury's position, as the latter releases funds but is unable to supersede the Department's well-thought-out service delivery programmes. Thus, this specific programme would comply with National Treasury requirements.

Mr M Tseki (ANC) said Mr Parks' study on the difficulties facing state agencies and the “agencification” of government could persuade the government of the wrongs that COSATU had suffered. He said that COSATU's concerns should, as a matter of principle, be cognisant of the principles of government under the ANC. He observed that Mr Parks saw circumstances of employment that were typically different from those set by government, which was a worry for COSATU, and he would concur if that were the case.

He said that while the Committee had occasionally discussed the water shortage issue, he believed it had to ensure South Africans had access to water. He noted that the presentation's many goals included ensuring South Africans had access to water, looking into pricing, and addressing several other issues that might impede water delivery to communities. For these reasons, he was tempted to concur with Mr Parks, but the Committee had to decide based on reasons that were just as significant as those he had put forward.

The Chairperson stressed that NEDLAC was an autonomous organisation with distinct interests and viewpoints that were to be served by a structure allowing its members to freely pursue their opinions. However, a decision would ultimately be made that would bind all members at a specific moment. So while he believed COSATU was pursuing its positions in NEDLAC, they were free to pursue their own independent positions over anything they stated there that may not have been approved. They were doing so in this meeting.

He said the Committee's position was that while it did not transcend the wishes of most structures seeking to approve this measure, they also could not be disregarded merely because they were a minority. He refuted Ms Mohlala's claim that COSATU favoured privatisation, saying that COSATU felt that this entity should be integrated into the Department rather than operating as a stand-alone entity. COSATU had also criticised the salaries of those employed by stand-alone entities, which was why it believed it was correct to intensify the role of the departments. This was COSATU's view, and he pleaded with the Committee not to misconstrue COSATU as being pro-privatisation, as it had not stated this.

COSATU's response

Mr Parks confirmed that the organisation had participated in the NEDLAC negotiations and positively interacted with the Department of Water and Sanitation. Of note were the disagreements over having a lone state agency as a cogent national answer to the nation's water crisis. NEDLAC and the DWS had decided that the Agency would be better served by being a part of the public sector, rather than existing as a separate organisation. COSATU had reviewed the NEDLAC report and found it acceptable. It showed the agreement between the DWS and its social partners regarding the Agency's goals, and the disagreements regarding the Agency's status as an independent agency separate from the public service. Despite the Department's best efforts, COSATU and DWS unfortunately could not come to an agreement on this issue.

Addressing the Committee's concerns regarding COSATU's position on the “agencification” was that it compromises collective bargaining and collective agreements, as well as conditions of service, because the legislation expressly stated that agencies would determine their own terms of service. His concern stemmed from the fact that there was no reference to the Public Service Coordinating Bargaining Council (PSCBC). He pointed out that the only reference to the PSCBC in collective agreements was found in the Board of Management Authority Bill Act, which was a compromise put forth by the Department of Home Affairs (DHA) on this Bill. However, in other Bills like this one, they just simply mentioned that the Agency would determine its own conditions of service and nothing further. If the conditions of service were not included in the Bill, one could not assume that the state could be held responsible for them, as COSATU did not establish new collective bargaining structures and procedures. Consequently, there was no guarantee that employees would receive the same benefits that they would have received from the public service department.

He added that according to the Minister of Finance, there were currently 5 303 separate entities in government. COSATU opposed adding another one because they believed it was difficult enough to run 259 municipalities and 40 departments. COSATU still maintained that Parliament should stop fragmenting the state and instead attempt to consolidate it, despite the Committee having reviewed Treasury's suggestions.

He said the state could be consolidated by looking at recommendations from multiple administrations regarding where it was possible to integrate numerous different departments and entities. This was because it would be very expensive for the state to have departments with one Director-General (DG) and two chief executive officers (CEOs) instead of just one, or to have to establish a board, new management, new human resources (HR) department, and so on. He claimed that there were several duplications, which had an expense impact, and that these organisations did not fall under the purview of the public service regime. He used the Road Traffic Management Corporation (RTMC) as an example, stating that it was one of the organisations that had established its own terms of service and performed little more than the issuance of traffic citations, employing a management staff whose pay may surpass that of the President.

He commented that when department heads establish an entity, they did it with the understanding that they would be able to seek positions within these organisations with a greater salary. The country was experiencing a financial crisis, and Parliament had passed a budget from Treasury that reflected this. He felt that this budget should be reduced and expenditures should be decreased, so he did not see why the entity should be created. He found it concerning that the DWS was ignoring the nation's financial crisis while still wishing to move forward with the creation of the entity, fully aware that there would be controls over the extent to which the management of that entity was subject to public oversight. COSATU felt there was a bit of a contradiction in wanting a new entity at the same time as there was a financial crisis, pointing out that they had already seen the effects of the crisis when vacancies were frozen and investments in water infrastructure and infrastructure were reduced due to financial constraints.

He claimed that Ms Mohlala had brought up a crucial topic that worried COSATU as well -- that water was becoming a commodity, and that prices would rise beyond the means of impoverished working-class neighbourhoods and rural households. He warned the Committee that COSATU thought the Department's decision to follow the entity path would jeopardise people's constitutional rights to have access to water.

He explained that one of the reasons the DWS wanted to create the entity was so it could raise money for infrastructure loans. These loans, of course, would have conditions attached to them, such as interest payments, so the Department would be under pressure to raise the price of water. This was one of COSATU's concerns, as the cost of electricity was rising, and many low-income households were finding it unaffordable. As a result, there was genuine concern that the Agency would be removed from government service.

Mr Parks said COSATU supported the goals of the DWS regarding water provision, which must obviously coordinate with local government, because there were numerous water boards and entities, creating duplication of work. Nevertheless, COSATU did not agree with the Department's decision to give up on public service as the means of delivering government services; instead, it attempted to establish a brand new kind of state. Although some agencies were governed by labour rules, he claimed that the Department's response was inconsistent , as some agencies were not. COSATU was confused when the Department claimed that agencies had more flexibility, but he was unable to define this flexibility.

He recommended that there should also be a conversation at some point on how the departments and government planned to address numerous issues in most departments, not just water and sanitation, which had many challenges. He suggested that departments should address all the issues related to infrastructure and human relations, rather than continuously establishing new state institutions. This was because there would eventually be two states, which would involve needless duplication, unstated costs, and the need to have difficult conversations about what must be done to fix the state. 

While COSATU favoured a single state organ, they were not persuaded that the Department should dissolve the public service division and establish a new organisation. Instead, he suggested that it should focus on improving the public service division, and use it as the means of supplying water to the communities.

The Chairperson thanked CPSATU for its participation.

The Committee was supposed to hear another submission but the individual could not connect to the platform.

Committee minutes

Minutes dated 7 November were moved for adoption by Mr L Basson (DA), and seconded by Ms Matuba.

The minutes of the meeting held on 14 November were moved for adoption by Ms Sihlwayi, and seconded by Mr Tseki.

The meeting was adjourned.