What you need to know about the Municipal Demarcation Bill of 2020

General powers of the MDB

While s 5(2) of the Municipal Demarcation Act proscribes the MDB from borrowing money, s 5(b) of the Bill qualifies that provision by stating that the MDB may not borrow money or overdraft on its bank accounts unless authorised to do so by the Public Finance Management Act (PFMA). What this entails is that there are now instances where the MDB may borrow money or even have a bank overdraft. In s 5(d) of the Bill, the powers of the MDB have also been extended to generating revenue to fund organisational projects that could not have been accommodated in the allocation of funds. The Municipal Demarcation Act does not currently afford the MDB such revenue generating powers.

Members of the Board

S 6(2) of the Bill stipulates that the business and affairs of the MDB must be managed by and be under the direction of the Board. Furthermore, in s 6(3), the Chairperson is designated as the executive authority of the Board for the purposes of the PFMA. Section 6(4) also states how the Board is responsible for corporate governance by among other things, steering the organisation and setting strategic direction, approving policy and planning that give effect to the strategic direction. This is an improvement from the Municipal Demarcation Act which does not stipulate that the MDB is responsible for corporate governance.

Composition of the MDB

In s 7(2)(a), the Bill proposes that the national Minister responsible for local government (hereafter the Minister) should determine the number of members of the Board by notice in the Government Gazette. In the current Act, there is no requirement for such a notice. There is a proposal to do away with the requirement that the composition of the Board must reflect regional diversity (s 6(3)(b)). The Government Gazette of June 2020 explains that there were some confusion and misrepresentation around the term ‘regional diversity’. Some provinces were demanding that the MDB should comprise of nine Board Members selected from each of the provinces, yet this was not the intention of the Act.

Qualifications of members of the MDB

The Bill proposes that information technology be included as an additional qualification, or experience that must be considered when selecting members of the MDB. This is essential given that the MDB makes use of, among other things, information and communication technologies and geographic information systems when determining municipal and ward boundaries. Having some members of the Board with information technology skills should enhance the quality of and efficiency of its decision making.

Political party office-bearers and fulltime employees of an organ of the state are now disqualified from becoming or remaining as members of the Board. This requirement is not enshrined in the current Act. The Bill defines political office-bearers as anyone who is in the position of chairperson, deputy chairperson, secretary, deputy secretary or treasurer of a registered political party nationally or in any province, region or other area in which that party operates; or any position in a political party that is equivalent to a position mentioned above irrespective of the title designated to the position. This means that anyone holding such political party positions can no longer be a member of the MDB.

Appointment procedure of members of the MDB

S 9 (1) of the Bill introduces changes pertaining to the composition of the panel, which considers all applications for the MDB appointments. For instance, the Bill states that the selection panel should now consist of the Chairperson of the Portfolio Committee responsible for local government in the National Assembly, or a person designated by the Chairperson, and the Chairperson of the National House of Traditional Leaders, or a person designated by the Chairperson. Another change to the composition of the selection panel is that it is no longer a requirement to have someone from the Commission for Gender Equality on the panel. The removal of women’s representation in such a key decision making body is worrisome. Without someone from the Commission on Gender Equality, who is going to ensure that there is gender equity on the composition of the Board?

S 9(7) of the Bill requires the President to make the appointments to the Board from the list of nominees provided by the selection panel and publish the names of the appointees in the Government Gazette. Previously there was no requirement to publish these names. This proposed change is important in light of transparency. It will enable people to know who the members of the Board are and hold them accountable. Nevertheless, one could ask why only publish the names of those shortlisted and why not be transparent about who was NOT shortlisted? This is equally important for transparency.

Another proposed legislative change is that when a vacancy arises in the MDB, the Minister may proceed to reconstitute the selection panel, or may recommend to the President name(s) from the shortlist that was previously submitted to the President (from the prior process to establish the Board). It is important to note that this does not apply if the Minister wants to reduce the number of members of the MDB.

Term of office of members of the MDB

S 10 of the Bill increases the term of office of the MDB from five years to seven years. This is calculated from the date of appointment of the Board by the President. The extension is meant to ensure that the MDB’s term of office does not coincide with the political office of municipal councils. Additionally, new provisions pertaining to the term of office are that if a vacancy arises and the President appoints a new member of the Board, the term of that member ends when the next Board is appointed. Furthermore, when such a term expires, the relevant member is eligible for reappointment.

The Bill also introduces a cap to the number of terms members may hold office. According to s 10(3), a person may not hold office as a member of the Board for more than two consecutive terms. A member ceases to be on the Board if he or she is absent from three or more Board meetings without being granted leave of absence by the Chairperson. The Bill affords the President the power to suspend members of the Board who are under investigation for misconduct or incompetence. Lastly, all members are to be appointed on a part-time basis with the exception of the Chairperson.

Conditions of appointment of members of the MDB

A new qualification under s 11 of the Bill is that the Minister responsible for local government must determine the conditions of service, remuneration, allowances and other benefits of members of the MDB by notice in the Government Gazette, after consultation with the Minister of Finance.

Meetings of the MDB

S 13(3) of the Bill introduces the quorum for a meeting of the Board as the majority of the members. A question or issue before the Board is decided by a supporting vote of at least the majority of the members of the Board. In case of a deadlock, the chairperson of the meeting will have the casting vote.

Rules of procedure of MDB

Under the current Act (s 16), it is the prerogative of the MDB to determine its internal rules of procedure. S 14 of the Bill seeks to change this. It requires the MDB to keep minutes of its proceedings and decisions; make rules regarding the effective corporate governance of the Board, the distinct roles of, and the relationship between, the Chairperson of the Board and the Chief Executive Officer. The MDB may also by notice in the Government Gazette, make rules regarding ancillary or incidental administrative or procedural matters that are necessary to prescribe for the proper performance by the Board of its functions.

Committees of the MDB

S 18 of the current Municipal Demarcation Act gives the MDB the discretion to establish committees. S 15 of the Bill stipulates that the MDB will be required to establish, at the least, the Audit and Risk Governance Committee and the Remuneration and Performance Committee. Another addition in the Bill is that all committees must now include at least one member of the Board.

Administration and staff members of the MDB

S 18(1) of the Bill requires the MDB to appoint a Chief Executive Officer (CEO) who is ‘suitably qualified and experienced’ for that office. In the current Act, there is no use of that phrase – ‘suitably qualified and experienced’. The Act merely states that the MDB must appoint a manager to hold an accounting officer’s position and does not specify that the officer must be ‘suitably qualified and experienced’. While one might think that obviously the MDB would be required to appoint someone who is suitably qualified and experienced, the Bill does not leave that to common sense, it unequivocally stipulates this as a requirement.

The Bill also seeks to clarify the financial responsibilities of the CEO. For instance, the CEO is defined as being the accounting officer in accordance with the PFMA, and is required to keep the necessary accounting and other related records; and may exercise all such powers and must perform all such duties and functions as may be entrusted or assigned to him or her by the MDB.  In the event that the CEO is absent from duty or unable to undertake his functions, s 18(5) of the Bill proposes that the MDB must designate a member of the administration to act in that capacity until the CEO resumes his or her functions.

Factors to be taken into account during demarcation

S 26 of the Bill adds new factors that the MDB must take into account when determining a municipal boundary. These are:

• common geo-statistical building blocks, which facilitate and support a standard geographical hierarchy;
• relevant national development policies and plans, which might impact on the nature of local government and its boundaries;
• relevant national and provincial policies and legislation relating to the institutional or functional reorganisation of local government; and
• natural endowments, resources, assets, business investments and other drivers of economic growth.

Initiation of the demarcation process

S 28(1) of the Bill proposes that the MDB may only make boundary decisions that move a whole ward in a municipality, once every ten years. If it does, the Board must do so at least three years before the next elections. This is intended to minimise the disruptive effect of major boundary changes. Boundary decisions with major consequences may only be done once every ten years and government must be given three years to deal with the consequences before they come into effect. The Bill also provides instances when the MDB can perform this function. This function must be performed three years before the earliest possible date for the next local government elections. Lastly, the MDB may not make the determination for municipal boundaries after the Minister has published the formula for councillors.

Notification of intention to consider a request for determination of a municipal boundary

S 29 of the Bill proposes that before the MDB considers any proposed (re)determination of a municipal boundary, it has to publish a notice in the area concerned inviting written representations and views from the public within a period of not less than 30 days. Previously the prescribed time was 21 days. This new provision gives the public more time to participate in the process. There is also a new requirement which stipulates that when the MDB publishes a notice, it must convey by any appropriate means of communication, the message contained in the notice.

Conducting investigations on municipal boundaries

In the current Act, it is not mandatory for the MDB to institute a formal investigation on all (re)determination applications. The Bill states that the MDB must institute a formal investigation on all applications with the exception of two instances provided in section 30(1). The two instances are if it is a minor technical adjustment or an application that can be resolved in terms of research already conducted by the MDB or if the proposed re-determination is in compliance with a provincial boundary change following a constitutional amendment. The Board may conduct the investigation itself, or designate one or more of its members, an expert, or an investigating committee to conduct the investigation on its behalf. The Bill provides much more detailed instructions on how the MDB should conduct investigations on municipal boundaries especially in respect of formal investigations.

Public consultation

The current Act provides a few provisions on public participation. The Bill regulates public participation extensively. S 31 – 34 of the Bill prescribe provisions dealing with consultation; mechanisms, processes and procedures; communication of information; and publication of boundary determination to strengthen community participation in demarcation matters.

Publication of municipal boundary determination

S 34(3) of the Bill states that, after the publication of its final decisions on boundary changes, the MDB must publish its reasons for these decisions through its website or any other appropriate means. This is a significant change from the current Act, which requires an interested party to request the MDB to provide the reasons for its decisions.

Ward delimitation

S 38 of the Bill proposes that after the Minister publishes the formulae for determining the number of councillors, the Board must publish a delimitation timetable in the Government Gazette. The number of wards must be equal to the number of ward councillors determined for a local or metropolitan municipality. The Bill provides how the number of voters in wards must be calculated. According to s 38(3) before the MDB finalises a delimitation process, the Board must obtain the views of the Independent Electoral Commission (IEC). Public participation provisions relating to the process of municipal boundary determination are also applicable to ward delimitation processes.

Publication of pre-final ward delimitation results

In terms of s 40 of the Bill the MDB must also provide reasons when publishing its pre-final ward boundaries for public comments. After considering any objections, the Board must confirm, vary or withdraw its delimitation. It is important to note here that the Bill does not present the same requirement to the MDB to publish reasons for its decision for the delimitation of wards on its website or any appropriate platform.

Demarcation Appeals Authority

 The biggest change proposed by the Bill is the establishment of a Demarcation Appeals Authority (s 41). The current Act does not provide for an appeal mechanism or dispute resolution process against the decisions of the Board. Aggrieved persons have to approach the courts to review the decisions of the Board. Litigation processes by their very nature are expensive and time-consuming. This is perhaps why aggrieved communities often resort to violent protests. The establishment of the Demarcation Appeals Authority allows aggrieved parties to be heard by a competent and independent authority. S 41 of the Bill proposes that the Appeals Authority has jurisdiction throughout South Africa. The Appeals Authority would consist of a Chairperson and at least three, but not more than ten other individuals appointed by the President, on the recommendation of the national Minister responsible for local government.

S 42 states that the Appeals Authority adjudicates any disputes arising from a final municipal boundary or ward delimitation decision of the MDB. The purpose for the adjudicating is to determine if there are any merits to the dispute and if necessary imposes a remedy provided by the Act. The Appeals Authority also makes rulings necessary or incidental to the performance of functions in the Demarcation Act. S 46 provides that any person who is aggrieved by a decision of the MDB can lodge an appeal of that decision with the Appeals Authority no later than thirty days from the date of publication of that decision. The Chairperson of the Appeals Authority is responsible for managing the caseload of the Appeals Authority and must assign each matter referred to the Appeals Authority to a panel composed of any three members of the Appeals Authority. S 46 (2) stipulates that when making these assignments, the Chairperson must ensure that at least one member of the panel is a person who has legal training and experience. S 47 provides that in the event that there is a conflict of interest between a member of the Appeals Authority and any person before the Appeals Authority, the former must immediately and fully disclose the interest to the Chairperson and to the presiding member of that hearing; and withdraw from any further involvement in that hearing.

S 43 requires members of the Appeals Authority to collectively represent a broader cross-section of South Africa’s population and have experience in demarcation issues. It also requires that the Authority be comprised of sufficient persons with legal training and experience. Each member of the Authority must also be a South African residing in South Africa and have suitable qualifications and experiences in either economics, law, commerce, local government, demarcation or public affairs. Political office bearers, full time employees of an organ of the state and elected political representatives are disqualified from being members of the Appeals Authority. The disqualification of political office bearers is significant and seeks to insulate the appeal process from the reach of politics. S 44 of the Bill states that the terms of office for the chairperson and the members of the Appeals Authority are seven years. Lastly, the President may re-appoint a member of the Appeals Authority at the expiry of their term of office. However, no person may be appointed to the Appeals Authority for more than two consecutive terms.

Municipal capacity assessments

S 51 of Bill also seeks to impose a new function on the MDB relating to municipal capacity assessments. The MDB will be required to carry out these assessments, among other reasons, to support its decisions on the determination and redetermination of municipal boundaries. Currently, these assessments are carried out to assist Members of Executive Councils (MECs) when making the decision to shift functions between district municipalities and local municipalities. In carrying out the municipal capacity assessments, the MDB will be required to consider, amongst others, factors listed sections 9 and 10 of the Municipal Systems Act. These include:

• operational, administrative and financial management capacity;
• infrastructure that enables a municipality to collect revenue and to govern on its own initiative the local government affairs of its community;
• natural resources; and
• any other drivers of economic growth and social cohesion.

Provincial boundary alteration

S 52 of the Bill stipulates the role of the MDB in the alteration of provincial boundaries. The Bill states that the Minister may request the MDB to investigate matters pertaining to provincial boundaries changes. The Bill requires that the alteration of provincial boundaries be undertaken in accordance with Section 74 of the Constitution and the Rules and Orders of the National Assembly.

Conclusion

In conclusion, the Bill expands and clarifies a number of issues relating to municipal demarcation, including the role and composition of the MDB. There are perhaps two important changes introduced by the Bill. Firstly, the limitation of major boundary decisions to once every ten years to minimise the disruptive effect of such changes. Secondly, the establishment of the Appeal Authority to adjudicate disputes relating to the final municipal boundary or ward delimitation decisions of the MDB. The proposal to establish this dispute resolution mechanism is welcome. The Appeals Authority will fill an existing gap in demarcation matters which has proved to be a thorny issue. Once the Bill is adopted into law, aggrieved communities, among other interested stakeholders, may have a cheaper and quicker mechanism of having their grievances heard and if need be, rectified.

by Melissa Ziswa, Doctoral Researcher

The publication of the Bulletin is made possible with the support provided by the Hanns Seidel Foundation and the Bavarian State Chancellery.