1 Joint Workshop with National and Provincial Legislatures “Application of Section 139 of the Constitution, and the need for legislation to regulate its implementation” 2 November

2 (1)Provide an overview of kinds of interventions; (2)Rationale for section 139(8) legislation; (3)Breakdown of interventions and categories of challenges; (4)Key findings from the past experiences; (5)Key (ideal) success factors; (6)Monitoring, Support and Intervention Bill; and (7)Clarity on key issues the Bill has tried to address from the past experiences. PURPOSE

3  Section 139 (1) provides for general intervention in instances where a municipality fails to fulfil an executive obligation;  Section 139(4) provides for instances where a municipality fails to approve a budget or any revenue raising mechanism as required by legislation; and  Section 139(5) provides for intervention in instances where a municipality due to its financial affairs is unable to deliver services or meet its obligation. Types of constitutional interventions: 3 Kinds

4 (1)Section 100(3): National legislation may regulate the process established by this section. (2)Section 139(8): National legislation may regulate the implementation of this section, including the processes established by this section. Section 100 and 139

5  MFMA (Municipal Finance Management Act, 2003;  1998 & Local Government Laws Amendment Act, 2009;  South African Police Service, 1995;  Housing Act, 1997;  Intergovernmental Relations Framework Act, Other applicable legislation

6  legislation on section 139 would ensure a consistent approach to interventions;  Section 139(8) legislation would complement the provisions in the MFMA, which provides a detailed framework for ‘financial’ interventions;  Section 139(8) would also supersede all other sector legislation on the question. Sectoral legislation is increasingly referring to interventions in terms of section 139 and MECs are sometimes even obligated to exercise this supervisory power;  a uniform intervention regime would provide certainty for municipalities as to the legal workings of the intervention that they could be subjected to. Why a need for Section 139(8) legislation

77 Interventions undertaken in the municipalities: Breakdown Total municipalities under section Old section 1397 Amended section 139(2003)23 Municipalities currently under S13921

8 Categories of the nature of problems experienced GovernancePolitical infightings, conflict between top management and councillors, HR management FinancialFraud and misuse of municipal funds and property, lack of proper financial systems, revenue collections, A-G disclaimers Service Delivery Related to section 152/153 of the Constitution that clearly set out the service delivery obligations of municipalities

9  Section 139 of the Constitution was amended in 2003, the provisions coming into effect on 11 July The following are the major effects of the amendments: (i)The Provincial Executive has a prerogative in terms of the amendments whether to issue a directive, assuming responsibility or dissolving the municipal council by substituting “and” with “or” in the old provision; (ii)The Provincial Executive may now dissolve the municipal Council and appointing an administrator if exceptional circumstances warrant such a step (“exceptional circumstances” is not defined); (iii)The provisions empower the Provincial Executive to intervene in cases of financial crisis in a municipality within its jurisdiction; Second Constitutional Amendment Act of 2003

10 (iv)Dissolution of the municipal council if the municipality does not adopt a budget or revenue raising measures to give effect to the budget; (v)Time frames within which the Minister and the NCOP to approve the intervention has been extended from 14 and 30 days to 28 and 180 days respectively; and (vi)The national government may intervene in the stead of the provincial government only in the application of subsections 4 and 5. Second Constitutional Amendment Act of 2003

11 (a)The vast majority of interventions were conducted in terms of section 139(1)(b). The Provincial Executive usually appointed a representative to assume the authority over the entire municipal administration. (b)Directives in terms of section 139(1)(a) were not often issued or were at least not part of the documentation for review by the Minister and/or the NCOP. The value and status of the directive might need to be re- examined in terms of emphasis. Key findings

12 (c) The intervention mechanism can also be used outside the scenario of total collapse: more targeted interventions are possible (New Castle LM). (d)The limitation of section 139(1) to failures to fulfil an “executive obligation” led to difficulties in interpreting (a) when intervention is permitted and (b) what steps are permitted. (e)There is uncertainty regarding the nature of, and required intensity of the intergovernmental checks and balances, i.e. the review by the Minister and the NCOP. Key findings

13 (f)There was little indication that Provincial Legislatures exercised oversight over the Provincial Executives’ actions in terms of section 139. (g)The involvement of district municipalities in interventions (into local municipalities) seems apposite. (h)Participation by the local community in the implementation of section 139(1)(b) interventions is a critical factor for its success (Oudtshoorn). Key findings

14 Section 139(8) of the Constitution: “ National legislation may regulate the implementation of this section, including the process established by this section ”. (a)Intervention is a targeted response to a failure to fulfil obligations, whereby the most appropriate step is chosen out of the variety offered by section 139. (b)There should be clarity amongst all stakeholders on the legal basis, appropriate steps and procedural requirements of section 139. (c)Provincial Executives have due regard to intergovernmental checks and balances within and outside section 139. (d)Provincial Executives adopt an incremental approach with, in principle, the issuing of a 139(1)(a) directive as a regular first step. Key (ideal) success factors

15 (e)There is timely submission by the Provincial Executive of complete documentation to the Minister, NCOP and Provincial Legislature. (f)The effective and immediate oversight over the actions of the Provincial Executive is exercised by the Provincial Legislature. (g)The NCOP guards the fair and effective implementation of the intervention by means of an objective review and by means of useful recommendations to the Provincial Executive. (h)The role of the Provincial Executive and/or its representatives at the municipal level is clear for all stakeholders. Key (ideal) success factors

16 (i)Interventions are carried out with an ‘intergovernmental approach’, with the involvement of the district municipality (where applicable) as a key strategy. (j)Interventions are carried out with a strong focus on participation with the local community in the implementation of an intervention. (k)The Provincial Executive ensure that there is a sound exit strategy after a section 139(1)(b) intervention, with a role for the district municipality in the ‘after care’ (where applicable). Key (ideal) success factors

17 (a)Regulate processes established in terms of Section 100 of the Constitution; (b)Regulate processes established in terms of section 139 of the Constitution; and (a)Monitoring and support in terms of section 154 and 155(6) of the Constitution. Monitoring, Support and Intervention Bill

18  (Chapter 1): Preamble; Interpretation and application of the Act;  (Chapter 2): Monitoring and support of municipalities; Early warning system;  (Chapter 3): Provincial interventions in municipalities;  (Chapter 4): National interventions in provinces;  (Chapter 5): Administrators in provincial and municipal interventions;  (Chapter 6): Miscellaneous. Structure of the Bill

19 “ Executive obligations”  The Constitution limits intervention to the non-fulfilment of an executive obligation “in terms of the Constitution or legislation.”  This requires the intervening Cabinet or Provincial Executive Council to identify the statutory source of the executive obligations that are not being fulfilled;  In many interventions, the references to executive obligations in the documentation submitted to the Minister and NCOP are incomplete or inadequate;  The practice may render the interventions vulnerable to legal challenges; Clarity on key issues

20 “Executive obligations”  Meaning of “executive obligation” in the Bill, in relation to – (a)a province, means an obligation placed on a province in terms of the Constitution or legislation as contemplated in section 100(1), excluding an obligation to approve a budget or to pass revenue raising measures or provincial legislation; or (b)a municipality, means an obligation placed on a municipality in terms of the Constitution or legislation as contemplated in section 139(1), excluding an obligation to approve a budget or to pass revenue raising measures or a by-law;  Thus, “executive obligation” is defined in terms of section 160(2) of the Constitution. It means everything outside of the issues listed in this section are constituting executive obligation. Clarity on key issues

21 Monitoring & support of municipalities  Primary responsibility of ensuring municipalities fulfil their executive obligation lies with the municipalities themselves;  If municipality encounter signs of possible or impending failures, it must immediately take remedial steps;  Municipality must establish self-monitoring systems and must diagnose possible, impending or actual failures followed by remedial steps; and MM must determine whether national or provincial support is needed and what kind of support;  Provinces must also monitor compliance by municipalities of their executive obligations and must provides a framework for the establishment of a provincial monitoring system. Clarity on key issues

22 Interrelation and conditionality  Is a 139(1)(a) directive a precondition for assumption of responsibility? The Constitutional Court’s interpretation of section 100 suggests that it is.  2003 effected amendments to section 139 of the Constitution by replacing “and” with and “or”.  On the other hand, section 100 did not have such an amendment.  The Bill does not provide for this preconditionality. Clarity on key issues

23 Assumption of responsibility  To date, the 139(1)(b) intervention usually meant the deployment of an administrator who ‘took over’ the affairs of the municipality.  It should be noted that it is a subject for different interpretation whether section 139(1)(b) allows for the appointment of an “administrator”;  Example: In the Ngaka Modiri Molema intervention, the municipality challenged the North West Provincial Executive that the application of section 139(1)(b) does not provide for the appointment of an “administrator”; Clarity on key issues

24 Assumption of responsibility  The Bill provides for the appointment of an Administrator even when invoking section 139(1)(b) – This is not against the Constitution;  Section 100 allows for the appointment of an Administrator when assuming the executive obligation and this is also covered in the Bill;  Dissolution of provincial legislature and provincial legislative council dealt with in terms of section 109 and 141 respectively. Bill does not deal with these aspects. Dissolution  Dissolution of the council can be done “if exceptional circumstances warrants such a step’. Clarity on key issues

25 Suspension of councillors  In the review of past interventions, the issue arose as to whether section 139(1)(b) offers a legal basis for the suspension of the council;  The constitutional difficulty is that the suspension is then based on the non-fulfilment of an executive obligation but encroaches on both the executive and legislative function of the council;  The Bill does not seek to suspend the council, except for undertaking certain identified executive obligation. The councillors will still receive remuneration. Clarity on key issues

26 Court action  In certain instances, court action may be the appropriate intervention mechanism outside of invocation of section 139 of the Constitution.  The situation obtained in Abaqulusi Municipality is an example. If a municipal council refuses to accept the election of a councillor (even after a section 139(1)(a) directive instructing it to do so), obtaining a court order may be an appropriate intervention.  Similarly, in August 2008, the Minister disapproved section 139 intervention in the Amajuba District Municipality and advised that the matter can best be resolved by applying legal route after the Council refused to accept specific particular individuals appointed by a political party for a proportional representation.  The Bill allows for court action to be used outside of section 139 of the Constitution. Clarity on key issues

27 Clarify the review role of the Cabinet member responsible for local government affairs, NCOP and the Provincial Legislatures  It is suggested that the Minister’s review role should be specifically defined to include, procedural requirements such as the issuing of a directive,  determine if the cited reasons for an intervention are indeed executive obligations,  determine if there were any prior endeavours by the provincial executive to resolve the matter with the municipality (especially support issues),  Role of the Minister regarding section 139(4) &(5): Minister will still not have a role in the application of section 100 in the Bill. Clarity on key issues

28 Clarify the review role of the Cabinet member responsible for local government affairs, NCOP and the Provincial Legislatures  The absence of specific provisions in section 139 with regard to the Provincial Legislature’s oversight role seems to have led to the misguided conception that the Provincial Legislature hardly plays a role.  One of the Provincial Legislature’s key functions is to exercise an oversight role over the Provincial Executive.  The Bill is now dealing specifically with: (i) the oversight role of Provincial Legislatures; (ii)the duty on Provincial Executive to furnish them with the relevant information; and (iii)the provincial legislatures assuming more the role as that of the NCOP. Clarity on key issues

29 THANK YOU