Madam Deputy Speaker, the Bill before the House today is the culmination of a process of reform that was initiated with the start of this administration. The need for such reform was underscored by the reality that at the time there was something like R3 billion in unallocated, undistributed lotteries funds. Through a combination of the administrative reforms and also the changes in secondary legislation regulations, I am happy to say that we have no such unallocated funds sitting in the National Lottery Distribution Trust Fund today.
The fact is that the applications for lotteries funding have more than doubled since then and that we have, as a result, seen a necessity to come to Parliament to request changes of the legislation to make the process of allocating lotteries funds much more efficient.
The Bill before the House today is intended to address the following problems, among others. There has been an absence of the quorum for adjudication by the part-time distributing agencies. This is because some of the part-time members of those distribution agencies have been unavailable to attend the ever-growing number of meetings that they were supposed to participate in. Members of the distribution agencies have also had to recuse themselves because of conflict of interest in particular applications.
There have also been some challenges in trying to demarcate the relationship between the National Lotteries Board and the distribution agencies, arising from insufficient clarity in respect of roles, and there has been inadequate structure and capacity in the National Lotteries Board to carry out its mandate effectively.
The Bill that is before us is as a result of considerable consultation with all affected stakeholders in the lotteries family. The Bill will, in the first instance, establish a new entity called the National Lotteries Commission. This is to distinguish between the institution and the board. There will still be a board, but there will be an appointment of a commissioner and the institution itself will be known as the National Lotteries Commission. The functions of the latter National Lotteries Commission have been clarified and enhanced to realise a great impact in communities through proactive and application-based measures. The amending Bill will also provide for the appointment of the distribution agencies as full-time bodies. This will obviate the problems arising from the lack of quorums in this respect.
The distribution agencies will account administratively to the board, whilst maintaining their adjudication independence in the same way the bid adjudication committees function in various public and business set-ups. The Minister will continue to appoint the distribution agency members, who will on a day-to-day basis and administratively report to the board. The full-time nature of the appointment will eradicate delays in adjudication due to the lack of quorums. Conflicts of interest will now be properly managed by providing that members of distribution agencies will no longer be allowed to be a member of those agencies and at the same time play an active role in organisations that apply for grants. Quite simply, if you are involved in that, you do not just stand aside at a particular meeting; you actually cannot any longer serve in a distribution agency. The amending Bill creates an internal review mechanism to enable applicants who are aggrieved to have that appeal dealt with expeditiously. There are some other measures that clarify the role of the Ministry and the Minister in this regard.
Let me refer to the controversial item that was clause 13. The reality is that there is only a handful of international companies that have the technology and capacity to operate national lotteries worldwide. In South Africa we formed consortia with local companies and these bid for the lottery licence. What we are saying in clause 13, quite simply, is that if this process does not yield us efficient local procurement of goods and services, does not transfer skills and technology or is not in compliance with broad-based black economic empowerment, the Minister may decide to choose the option - which a number of countries do - of having a public entity run the national lottery and then contracting one of those international operators as a technology partner.
I want to thank the portfolio committee for all the work that they have done, and I commend this Bill to the House.