[PMG Ed. Note: footnotes have not been included]
Defining intergovernmental relations.
Intergovernmental Relations [IGR] are conventionally defined ‘as important interactions between governmental units of all types and levels.’ In this Audit, Intergovernmental Relations are defined as an interacting network of institutions at national, provincial and local levels, created and refined to enable the various parts of government to cohere in a manner more or less appropriate to our institutional arrangements. It is an evolving system of institutional co-operation that seeks to address the relations of equality and interdependence as defined by the Constitution.
The Presidential Review Commission recommended an Audit of IGR in February 1998 , identifying the main challenges as establishing a balance between the natural evolution of intergovernmental relations and the need for prescription. It also called for a review of the multiple structures established to promote intergovernmental relations and for proposals to improve the weak intergovernmental relations between local government and the other two spheres..
Meanwhile the Department of Constitutional Development (now Department of Provincial and Local Government) conducted a Functional Audit of the main instruments of intergovernmental relations and issued a Status Report on the IGF and the MINMECs for Local Government and Traditional Affairs. This was followed by a Discussion Document (March 1999) announcing the present Audit [in collaboration with the University of Fort Hare and the University of the Western Cape] for an enquiry into the existing intergovernmental structures throughout the country. A Conference on IGR in the same month served to provide the vision of intergovernmental relations as expressed by the President and also the framework for the Audit, especially the view:
that the intergovernmental relations system be seen in the context of social, political and economic realities;
that the institutional and legislative framework serve to guide developments, not control them.
The Audit Team’s primary role was to make recommendations for overcoming the many serious challenges impeding the development of a sound culture of intergovernmental relations and to inquire into those practices that inhibit the development of an effective and unifying system. Some of the constraints were caused by the hasty establishment of intergovernmental relations instruments to attain the rudimentary objectives of policy and planning in the wake of the transition from apartheid.
The chief objectives of the Audit were:
to map the numerous instruments of intergovernmental relations, intergovernmental processes, and the current reality of intergovernmental relations across the different spheres of government;.
to assess the strengths and weaknesses of the system and to provide some insights into the desirability of regulation;
to inquire into the practice of national government supervision of the provinces and provincial supervision of local government;.
to examine the efficacy of intergovernmental relations in the legislative branch of government – the role and function of the National Council of Provinces (NCOP), including its oversight functions and role in interventions of the national and provincial spheres.
to examine the reasons for disputes between and within the spheres.
The constitutional context:
The Audit has addressed the fundamentals of the system. The constitution establishes norms of co-operative government in which the spheres [as opposed to subordinate tiers] are distinctive, interdependent and inter-related. Distinctiveness is defined as the degree of legislative and executive power each sphere has to make laws and to execute them. Their interdependence is seen to rest on the degree of dependency they have on one another for the proper fulfilment of their constitutional functions -- and their inter-relatedness is defined as the duty of each to co-operate with the other in mutual trust and good faith.. There are, however, inherent tensions in the power relations which the Audit has not overlooked.
Theoretically, the concept provides for a structure in which all three spheres co-ordinate their actions in such a way as not to infringe on the integrity of any of the other spheres. In practice the relationship is far more sensitive. For example, at one level there is the duty of the national and provincial spheres to empower, and at another level, to intervene, as shown in the section on the supervision of Local Government and the complexities of Intergovernmental Fiscal Relations. Co-operation is thus central to the system . The instruments of IGR facilitate this and reflect the concept of co-operative government whose principles underline the predominance of the national interest and require from each sphere that it respect the constitutional status, powers and functions of the other spheres.
The Instruments of Intergovernmental Relations:
The co-operative government framework described above is what determines the distinctive features of the instruments of IGR and sets them apart from comparative, more conventional conceptions. Accordingly, the emphasis of the Audit has been on identifying the weaknesses of the existing structures, strengthening the mechanisms for intergovernmental co-operation and seeking ways to mediate tensions so as not to impair the integrity of the spheres but to elevate their overall unity. The Audit recognised that reform or regulation in itself might not lead to dramatic improvements in performance as poor IGR co-ordination is frequently a problem of capacity and management rather than a problem of inappropriate intergovernmental relations. The recommendations proposed by the Audit Team were accordingly designed to improve accountability and efficiency and provide an enabling framework for the regulation of IGR ‘in ways that would maintain the balance between an evolutionary system and the need for prescription.’ The recommendations were therefore the product of a careful review of the structures and functions of these instruments and the realities on the ground, as well as the perceptions of the elected and appointed officials interviewed by the Audit Team.
The instruments examined in depth comprised those so far developed in an evolving system of IGR. They are at once the institutions and actors in the system -- assessed according to the efficacy of their interaction between the spheres and within them for planning and integrated development. The instruments included, first, the executive branch of government and second, the legislative, which has its own role of developing co-operation between the national assembly and the provincial legislatures, through the National Council of Provinces. They include:
the national inclusive fora such as the IGF;
the recently created national/ provincial forum, the Presidential Co-ordinating Council [PCC]
the informal national-provincial sectoral fora [in the financial and educational sectors respectively], such as the MINMECs
the statutory MINMECS, fora formally derived from legislation, e.g. the Budget Council and HEDCOM
the administrative/ technical forum, FOSAD [the Forum for South African Directors’ General]
the intersectoral cabinet "cluster committees"
those at provincial and local government level, such as Organised Local Government and the Provincial Intergovernmental Fora
those at the legislative level, namely the NCOP and its interaction with the National Assembly and the provincial legislatures.
Where formerly the IGF was seen as the instrument at the apex of the intergovernmental relations system, it was, in the view of the Audit Team, an early instrument of IGR whose structure and functions were mutually incompatible. The Audit examined it closely. Although the restructuring of the presidency has provided the strategic architecture to integrate development planning through its intersectotal cluster committees and cabinet offices, there is still considerable need to develop adequate linkages between these and the IGR instruments for the greater coherence of the system. Similarly the creation in June 1999 of the Department of Provincial and Local Government has enabled the national government to improve its monitoring and oversight capacity and, through the department, provide greater strategic direction for intergovernmental co-operation. As indicated in the Audit, this arrangement was more sustainable than replacing the representation afforded by the IGF with any other forum at the centre of the system. The PCC, for instance, among others, technically assisted by the six inter sectoral committees in the Cabinet Office would therefore jointly have the responsibility of advancing the culture of co-operative governance.
The sectoral structures such as the MINMECs – a layer between the national and provincial governments -- were seen to be at the "coalface" of IGR. The recommendations [referred to below] to enact enabling legislation for their regulation is to provide a framework for their activities without imposing an inflexible regime upon them. Assymetry in the design of regulation was possible so long as it was not inconsistent with the general principles underlying the proposed legislation.
The practice of supervision and support
The Audit Team noted the failure at the provincial level to develop the necessary co-operative government framework, although an encouraging sign of progress was the Memorandum of Understanding between the Eastern Cape Provincial Legislature and the Eastern Cape Local Government Association which ,if acted upon, would regulate their interaction with Organised Local Government and, in so doing, encourage emulation by other provinces for improved co-operation with municipalities and metros.
In assessing the practice of monitoring, support and intervention by provinces, the Audit assessed the use of Section 139 of the Constitution and the obligation of the province to oversee the capacity of local government to deliver services effectively. The role and oversight function of the NCOP were equally addressed. The case studies on Tweeling in the Free State and Warrenton in the Northern Cape Province, provide insights into the role, relations [with province and NCOP] and the capacity of organised local government to discharge its services responsibly
A number of general conclusions flowed from the study, notably [in respect of the intervention in Warrenton] that with a proper monitoring system and use of the right measures of support, the intervention could have been prevented. The case of Tweeling, in the Free State was an example of political and administrative mismanagement on the part of the TLC. Among the lessons learned from the case study was that in this instance the intervention also could have been prevented, if the provincial department had understood its supporting role better and adopted the problem-solving role played by the NCOP after the intervention. Recommendations for the national supervision of provinces and conclusions drawn from the case studies extend the scope of IGR.
Intergovernmental Relations in the legislative branch of government
The Audit examined the NCOP’s function of articulating and promoting provincial interests through the legislative, executive and judicial branches of government. Since this function is exercised by all three components of government, the NCOP is regarded by the Audit Team as an important instrument for giving effect to intergovernmental relations. Moreover, its powerful review function – scrutinising specific national and provincial executive actions affecting the distinctiveness of another sphere, with the power to overturn or approve those actions -- makes its role in IGR significant. The Audit was critical of the NCOP at a number of levels, noting its functional overload, limited resources and dis-empowering legislative process. The consideration of Section 76 bills was seen to be its pre-eminent role and the one for which it was best equipped and structured.
The substance of the critique in respect of overload, is that the NCOP is inundated with work due to its broad mandate in which it scrutinises both Section 75 and 76 bills. As special delegates play little part in the committee system, the scrutiny of all bills rests with only the permanent delegates. The problem is compounded by the smaller 30 member provincial legislatures, where approximately half the members are free to do Committee work. The legislatures simply do not have the resources to cope with the exacting demands of legislative scrutiny or to deal with bills expeditiously within the legislative cycle. Hence there is hardly an opportunity for a considered view to be heard from the provincial legislatures.
The most persistent critique of the NCOP is, however, that executive IGR processes have effectively eclipsed its function, that is to say, that when legislation comes before the NCOP, provincial interests have already been articulated by the MEC’s in the MINMEC or through other IGR processes. Respondents felt that little value was added to the debate and the NCOP appeared to them as simply a "rubber stamp" of the National Assembly.
In its oversight function the NCOP had not carried out its role as competently as it is required to do. The internal organisation of the Select Committees was found to be seriously wanting in regard to their management and the issues to be probed.. However the NCOP’s current interventionist review approach was seen more positively, although it was likely to impact detrimentally on its limited resources.
The Audit presents a number of policy options – the way forward - in which NCOP activities would focus on IGR.
Intergovernmental Fiscal relations
The Audit Report maps out the constitutional responsibilities of the spheres in their fiscal relations and the inherent tensions in the system – reflecting the conceptual inconsistencies in the power relations between the spheres [referred to earlier in the Audit]. In elaborating the financial framework provided by the constitution for the provinces, this section considers the question of revenue raising – primarily reserved for national government but balanced by the provincial right to its equitable share .A critical review of the provincial intergovernmental fiscal institutions is provided, dealing with their roles and functions, alignment, and sequencing and inconsistencies in the intergovernmentaL budget process. A review is made of the part played by the Medium Term Expenditure Framework [MTEF]; the Budget Council, Finance and Fiscal Commission , the Departments of Finance and State Expenditure and the Department of Provincial and Local Government. Policy options for improving provincial fiscal relations call for a re-assessment of the roles and responsibilities of provincial and national goverbnment with regard to concurrent functions to bring consistency into the process and set norms, standards and policy objectives. A reassessment of the present revenue assignment is recommended, including increased taxation powers at provincial level.. Monitoring, co-ordination and alignment are seen as important in accelerating budget reform and improving co-ordination. An innovative aspect of this section of the Audit is the discussion on Key indicators -- both Outcome and Processed based -- for measuring the health of IGR.
The Settlement of Intergovernmental Disputes:
The final section of the Audit refers to the avoidance of legal proceedings against one another, by the spheres. This is a duty imposed by the Constitution. Whilst the latter foresees the likelihood of a breakdown between and within spheres, it imposes a duty on organs of state, in the event of a dispute, to exhaust all other remedies before approaching a court. An act of Parliament is required under S 41 (2)(b) of the Constitution to provide for such alternative[non judicial] mechanisms. In the absence of such an Act, disputes have to be settled politically and/or by means of intergovernmental relations. The Audit addresses these and recommends that legislation be delayed. It sees no compelling urgency to enact this legislation. Moreover, delay might allow best practices to emerge which can later be captured in effective legislation.. The duty to exhaust all procedures before resorting to judicial remedies will obviously continue to apply. Sectorally-based legislation is however encouraged for settling disputes within a sector [vide the National Environmental Management Act].. Such legislation is essentially issue-sensitive and can give content to a normative framework in terms of which disputes can be settled. The recommendations that follow encapsulate this approach.
The recommendations of the Audit appear below as a separate section to this summary.
The following are the main recommendations of the Intergovernmental Relations Audit. The chapters referred to appear in the same order in the Final Report.
2. Chapter 2: Instruments of intergovernmental relations2.1 Intergovernmental Forum
2.1.1 A failed attempt at IGR?During the course of the audit, a process of review of the IGF was under way. As an inclusive body, the IGF was initially seen to be important for consultation between provincial and national government. Potentially it was well placed to facilitate planning and co-ordinate the activities of the three spheres of government. but its lack of focus, "all-in" audience, and generalised presentations prevented this. Since it brought together most of the top leadership in the country, it was important for receiving (rather than sharing) information and should have provided opportunities for networking beyond the confines of political parties. It did, however, serve as a forum for members to receive information on important, often sensitive issues, requiring more inter-governmental consultation, co-operation and co-ordination than the forum was able to provide. On the whole, the Audit Team found that it failed as a multilateral, intergovernmental, policy-planning body upon whom government could rely for support, advice and the implementation of its development programme.
2.1.2 A programme review body
The recommendation of the Audit Team is that this body should not be disestablished. It should be a smaller forum which meets twice a year after the President’s address to Parliament. This would enable the government to meet and plan a programme of action based on the government’s priorities. A second meeting should take place at the end of the year after Parliament has convened in mid-June/July to reflect on government’s outputs and achievements. The first meeting should be used by the President to set out the priorities of government and these should be filtered down to the national, provincial and local levels. The purpose of the second meeting should be to review progress of objectives set out in the first meeting. In this way, "the IGF should be used as an instrument to co-ordinate government programmes and enhance and add value to Cabinet decisions." The presence of elected persons and officials is seen to be important to generate a sense of achieving the unity and common purpose of government.2.2 President’s Co-ordinating Committee (PCC)
2.2.1 Focus of the PCC
The remit of the PCC should be what the premiers themselves had realised was previously a lack of synergy between the provinces and the other spheres with respect to planning, policy and legislation. In addition, the new Council would need to include in their brief the terms of reference appropriate to the extensive executive authority prescribed for premiers by the Constitution (S 125 and ; S 127 and ). In order to achieve this, the PCC will perforce create new linkages with the other intergovernmental relations for a, such as the MINMECs, statutory co-ordinating institutions and other bodies. Given the experience of the previous forum, this is unquestionably a priority.
2.2.2 National-provincial co-ordination
The creation of the PCC should help to improve co-ordination between national and provincial government and, with the development of appropriate linkages between the formal and informal institutions of IGR, serve to integrate planning and development across all the spheres. The reference point for the new forum is the constitutional responsibility of premiers to exercise their executive authority (together with their Excos) to promote good governance in the province. Inter alia, this involves the development of provincial policy, championing development and the administration of key concurrent functions shared with the national government. What separates the national-provincial forum from the previous body is its emphasis on these core activities within a co-operative government framework. An important feature of this framework is the formal responsibility of premiers to use their executive authority to ensure the delivery of services through co-operative interaction with local government.
A "strategic agenda" should inform its deliberations and enable it collectively, with the advice and support of the national Department of Provincial and Local Government, to deal with the substantive issues confronting provincial government.2.3 MINMECs (Intergovernmental Relations Committee(s) of Ministers and Members of Provincial Councils)
There are seldom mechanisms in the provinces to deal with recommendations and it is unclear whether MECs regularly make full reports to their Excos or whether line ministers refer matters with any regularity or detail to Cabinet. The flow of information between provincial and national departments is one of the serious problems raised by respondents. The recommendation (see below) for an Act to regulate IGR structures is designed to address this.
The Audit Team recommends that legislation be enacted forthwith. While section 41(2) of the Constitution requires an Act of Parliament to "establish or provide a structure and institutions to promote and facilitate intergovernmental relations", it does not specify when this legislation should be enacted, or prescribe its nature.
Such legislation should be broadly enabling and set out such basic requirements as terms of reference, membership, criteria for compliance, technical support structures, and the assignment of responsibility for compilation of agendas, minutes of meetings, regular reports, a consultative process, linkages with other sectors, clusters and fora, and reports to provincial Excos and the Cabinet Office. Communication and information between the MINMEC structures, the provincial executive committees, appropriate national departments and the Presidency should be a requirement.
As the Act should be enabling, rather than prescriptive, regulation may be applied asymmetrically for each structure, provided that it is not inconsistent with the legislation.
While the requirements of the sector will determine specific objectives, the Act would establish general criteria such as would require MINMECs to act as a means of co-operation, alignment and co-ordination of policies, and to facilitate the interaction of national and provincial government and, wherever applicable, in local government, according to the principles of Section 41 of the Constitution.
It is recommended that the proposed legislation require MINMECs to include mechanisms for the settlement of potential disagreements in the regulations governing their procedures.
Accountability should include the relevant portfolio committee(s) to ensure that the structure works in a way that best served the sector and its related parts, within a co-operative governance framework.
2.3.4 Unco-ordinated growth of IGR structures
The growth of IGR structures is acceptable in an evolving system. However, the proliferation of structures needs to be co-ordinated to avoid duplication and to ensure linkages with other IGR fora. The proposed legislation should address the above and help to co-ordinate the system.
Irregular attendance affected continuity and communication. Attendance tended to fluctuate with the relevance of the MINMEC to the activity of the sector as a whole, the opportunity-cost of attending in terms of value added, and the logistical difficulties for MECs where their portfolios were not configured to deal with a single sector, as was the case with the national departments. Regulation alone would not remedy this. Effective management, proper sequencing of meetings and a co-operative style of management are necessary to ensure the success of IGR structures. The personality and style of the minister are also important. Generally, the presence of the MEC (properly mandated by the provincial Exco) is necessary for the success of the MINMEC.
2.3.6 Provincial portfolios
These should, where possible, be congruent with their national counterparts so as to facilitate scheduling of meetings and participation of MECs in the proceedings of MINMECs.
There are currently no mechanisms to deal with disputes. It is recommended (see above) that the proposed legislation to regulate IGR structures require MINMECs to include mechanisms for the settlement of potential disagreements in the regulations governing their procedures. As decisions are not constitutionally binding on the parties to MINMECs, the effect of a dispute is to prevent recommendations from being unanimous, with particular implications for the alignment of policy, integrated development planning and service delivery. It is rare (although not unknown) that a recommendation would be made without due consensus. In the view of the Audit Team, disputes were manageable provided there were mechanisms to resolve them.
2.3.8 Linkages between MINMECs and other IGR structures
The absence of structured linkages between the MINMECs and other IGR institutions was a major weakness in the IGR system. The proposed legislation is designed to address this.2.4 Statutory MINMECs: The Budget Council
2.4.1 Alignment with proposed regulation
If the recommendation for legislation is accepted (see above), it will be necessary to revisit the terms of reference of existing statutory MINMECs to ensure that their structure and the procedures governing their existence are consistent with the framework of the new legislation. The experience of these structures should be of importance when new structures are created or existing MINMECs formally established according to the proposed legislation.
Note should be taken of the considerable groundwork required before binding instruments into statutory structures and the experience of the Budget Council in this respect is instructive. Before this body became a statutory instrument a team was established, then legislation was passed. It is imperative that "best practices" be sought before MINMECs enter the statutory dispensation. For example, a notable shortcoming of current practice is the Budget Council’s under-resourced support service and absence of links between expenditure and service delivery. MINMECs may monitor this.
Commitment to a publicly stated medium-term expenditure and delivery framework is a powerful means of enhancing accountability within government. From it flows a sustained pressure for efficiency gains that translate into either service extension or service improvement. In order to install appropriate monitoring systems, it is important to ensure that information systems are put in place that will enable information on service delivery to be linked with information on financial flows. Proper costing systems need to be developed and fed into the Budget Council.
2.4.3 Local budget committees
The creation of local "councils" at provincial level is recommended. These would analyse the budgets of departments, oversee spending patterns and identify early warning signals of potential financial crises. They would also have a monitoring function.
2.4.4 Interaction with the Finance and Fiscal Commission (FFC)
There is little interaction with the FFC except at the Budget Council, which the FFC attends as an observer. The role of the FFC needs further clarification and its contact with provinces needs to improve.2.5 Forum for South African Directors-General (FOSAD)
2.5.1 A new role or disestablishment?
A diminished role is recommended as indicated below. FOSAD’s broad objective is currently to assist good governance and best practice within the public service and to promote the basic values as set out in sections 41 and 195 of the Constitution. Its five cluster committees were established to facilitate this. Translated into practical activity at a narrower level, this meant promoting co-ordination between national and provincial departments on policy implementation and passing on expertise and advice to Cabinet and Exco respectively. Essentially, this referred to its expertise and ability to advise government on interdepartmental or transversal matters of policy, service delivery, financial issues and information dissemination. In the view of the audit, this would duplicate the activities of the intersectoral Cabinet committees and, to some extent, the respective technical units of the Cabinet Office. It would also be expensive. It is recommended that the role and structures of FOSAD be revisited and that its meetings be reduced to biannual sessions to provide guidance to public sector management and to facilitate the sharing of information on best practice.
2.5.2 Role and structure
FOSAD’s role would include oversight of professional management and the impact of policy on service delivery. It could continue to review strategic direction of cross-cutting issues, and submit recommendations to the Cabinet structures on monitoring policy alignment. Its structure should reflect its new functions. Rather than being purely technical, it should concern itself with serious strategic management and its approach should be efficient governance generally, not performance management. The latter should be left to the minister.
In summary, it should do the following, but not duplicate the activities of the Cabinet committees:
_ consider specific strategic policy matters;
_ satisfy themselves that enabling mechanisms are in place to help fast-track the implementation of national policies;
_ ensure that policy decisions go through all the different processes;
_ satisfy themselves that they are cost-effective (this will entail a monitoring exercise);
_ ensure that they do not duplicate other initiatives; and
_ use their expertise to confirm that policies are viable and make recommendations accordingly.2.6 Organised local government
2.6.1 Policy options for provincial intergovernmental fora
There is a need to develop a policy framework for provincial intergovernmental fora which should plan and co-ordinate the programmes outlined at national level. An option would be to develop a policy framework for MECCOMS, i.e. MECs and Chairpersons of Standing Committees in Municipalities, based on the MINMEC model and comprised of all MECs and their DGs, mayors, Exco chairs, and representatives of organised local government. This would help:
_ to clarify roles between provincial and local government;
_ to focus on policy alignment in, for example, the following areas: housing, economic development, transport systems and tourism; and
_ to interrogate capacity problems in local government.
2.6.2 A new legislative framework for intervention
As a matter of urgency, a new legislative framework needs to be developed for interventions. (See Chapter 3 on the Practice of Supervision and Support.)
2.6.3 Capacity development
In all provinces, there was an emphasis on the need for capacity building within SALGA. The Association was seen as ineffectual for a range of reasons – political, financial, and because of its lack of capacity to facilitate co-operation between provinces and municipalities. There is, in fact, a general dissatisfaction among local government regarding the intergovernmental co-operation between provinces and municipalities. In some cases there is little interaction between organised local government and the province because of political differences. Lack of capacity to address some of the major problems confronting local government is the cause of the problem.
2.6.4 Communication flow
There appears to be a problem of communication flow from national down to local level. Very often, issues, addressed in national level structures such as the IGF and MINMEC, in which SALGA is represented, do not filter down to local level. Some respondents also remarked upon the preparation of local government representatives who attend the MINMEC meetings. SALGA needs to address this as part of its programme to build internal capacity.
2.6.5 Poor linkages
The relationship between the provincial and local government is poor in most provinces and needs to be addressed with urgency. The absence of structured relationships between local government and the provinces has resulted in the programmes and policies not being co-ordinated and aligned. Many provinces tend to act as "big brother". Many respondents expressed the view that it should be appreciated that both levels of government are important in the governance process. The absence of an effective working relationship between the provinces and the provincial local government associations does not help this.
2.6.6 Growth and development
Fora need to be developed to deal with planning, growth and development. There are few linkages between the provinces and local government on growth and development. (For example, there is very little interaction (if any) with regard to the formulation of IDPs). There is no strategy in place to address issues. Communication takes place on ad hoc basis. In some provinces the MEC meets with Exco chairs from time to time. Most provinces compile their budgets in isolation. There is no consultation with local government thus resulting in duplication and wasting of resources. In some provinces (e.g. Eastern Cape), because of the lack of interaction, communities are able to apply to both province and local government for funding of the same project.
In order to bridge the divide between the two spheres of government, a need was expressed to develop a policy framework that would allow councillors to become participating observers in provincial standing commitees. As already indicated, this facility exists in Gauteng and a few provinces (where observers may not vote but verbal interventions are allowed). However, it is not standard practice and there are reservations about councillors’ participation. This should be followed up with the provinces.
3. Chapter 3: The practice of supervision and support3.1 National supervision of provinces
3.1.1 MonitoringWhile all the provinces accept that monitoring is required by the Constitution, there should be clarity about what monitoring entails. As a minimum, it entails the due performance of provinces’ statutory executive obligations. Whether such obligations are fulfilled requires monitoring, and processes giving effect to it should be devised. Because monitoring in terms of section 100 is in and of itself an intervention, it should preferably be spelled out in legislation.
_ A second level of monitoring concerns the performance of provinces in delivering services. This is a qualitative monitoring of good and efficient governance not linked to specific statutory obligations. In this area there should be agreement between the provinces and the national government of how performance is to be measured. Key indicators should be defined and agreed upon by all parties concerned.
_ The national department’s lack of co-ordination of monitoring activities imposed unnecessary obligations on provinces. This often led to a waste of time and resources. Co-ordination of monitoring activities is thus essential. This includes the sharing of information obtained from provinces. As the Department of Provincial and Local Government is the department concerned with provincial affairs, it should play a lead role in co-ordinating monitoring activities, distributing information and evaluating the overall health of provinces.3.2 Intervention
Section 100(3) provides that "national legislation may regulate the process established by this section". Because of the intrusive nature of the supervision process and its encroachment on the functional and institutional integrity of the provincial sphere, it would be advisable for the sake of clarity and avoidance of future disputes to define and describe the process closely in legislation.3.3 Provincial supervision of local government
3.3.1 Budgeting for support, monitoring and intervention
Provinces do not appear to have budgets for municipal support, monitoring or interventions. The result is that there is little incentive to monitor, assist or intervene. Indeed, with no budget available for interventions, a provincial department must scratch around within its existing budget for funds to employ outside agencies to assume the responsibility for a municipality’s unfulfilled executive obligations. In this sense, provinces have created a situation where the duty to monitor, assist and intervene is experienced as an unfunded mandate. Provincial budgeting for monitoring, support and intervention is thus essential.
3.3.2 Monitoring powers
At present the powers of supervision vary across sectors. Because this form of intervention can be very intrusive, it should be defined in legislation.
3.3.3 Intervention powers
_ There was a high level of misunderstanding of the purposes and procedures contained in section 139. Because of these misunderstandings, the process was conceived as more complex and cumbersome than it should be. A manual on how to apply section 139 would thus be a useful tool to ensure that the section is properly used and that there is a measure of consistency in its application.
_ In the long-term, legislation would be beneficial to structure the process effectively and efficiently. With the increased utilisation of these constitutional provisions, the difficulties of interpretation and implementation make it imperative that legislation should give some flesh to section 139.
_ The redrafting of section 139 of the Constitution may also be necessary. In terms of the concept of three spheres of government, the national department has direct relations with local authorities. This relationship includes having monitoring powers over municipalities. However, when it comes to enforcing executive obligations imposed by national legislation, the national government does not have any powers of intervention. In this respect the Constitution still works with the notion of tiered relations between national, provincial and local governments. There is thus a real disjuncture between intergovernmental relations in general and the structuring of supervision. Section 139 needs to be revisited to deal with this issue.
4. Chapter 4: Intergovernmental relations in the legislative branch of government: The role of the National Council of Provinces (NCOP)4.1 Functions and structures The NCOP is perceived as not working effectively and its functions and structures need to be reviewed for the following reasons, some of which are operational, while others are structural. These include:
_ There are too few permanent members to deal with the large number of bills especially since both section 75 and 76 bills receive its attention.
_ The system is too complex and the resources are too limited.
_ The special delegates play little or no part in the committee system.
_ There is very little time to study documentation sent by the NCOP to the provinces.
_ The provincial legislatures are unable to apply their minds to issues (due to the shortness of the legislative cycle).
_ Provinces do not have the required research capacity or available MPLs to make informed decisions.
_ Tight time-frames set by the NCOP make it difficult for all concerned to deal expeditiously with the legislative cycle and there is hardly an opportunity for a considered view to be heard from the provincial legislatures through public hearings.4.2 Critique of the legislative process
The following contentions need to be addressed:
_ that executive IGR processes have effectively eclipsed the NCOP’s function;
_ that provincial interests have already been articulated by the MECs in the MINMEC or through other IGR processes;
_ that the NCOP is simply a rubber stamp of the National Assembly; and
_ that when the bill arrives at the NCOP, it is a fait accompli.4.3 Select committees and oversight function
The NCOP needs to carry out its oversight function more competently and select committees need to be more active. The internal organisation of the select committees has been found seriously wanting in regard to their management and the awareness of delegates of the issues to be probed. (Note: There is no specific constitutional provision that mandates the NCOP to perform an oversight function. Where it does exercise this function, it should be situated within the framework of its overall objective as stated in section 42.)4.4 South African Local Government Association (SALGA)
There is a strong need for SALGA to improve its participation. It is currently viewed as neither having sufficient capacity nor attending proceedings regularly enough to make a difference. While the NCOP has gained a high profile in local government through its review of provincial interventions, SALGA’s role in the NCOP has been limited. SALGA’s view that its "under-participation" is due to the lack of resources needs to be addressed. The fact that SALGA has no permanent members in the NCOP, also requires attention.4.5 Providing a greater IGR focus to NCOP activities
A number of reforms are needed for the NCOP to achieve this. There is a strong view that, despite its limitations, the NCOP could play an effective role if the following were addressed:
_ if its activities were focused and concentrated on its constitutional mandate;
_ if it concentrated more on the provinces;
_ if it had a more focused orientation, e.g. on specific issues; and
_ if it was not seen to duplicate the National Assembly.
Given its limited resources, time pressures and lack of political clout hitherto, the perception is that the obvious way forward is to ensure that the NCOP has a definite IGR focus. This should apply in particular to its legislative and oversight functions.4.6 Legislative function – Section 75 bills
The only function with regard to section 75 bills should be:
_ to convey the national perspective to the provinces; and
_ to keep the provinces informed of such legislation. (Of particular importance is the annual Division of Revenue Bill, which divides the revenue raised nationally between the three spheres in equitable portions.)4.7 "Mixed bills"
There is considerable artificiality in splitting bills into their section 75 and section 76 components, requiring the devising of most complex procedures. It is recommended that this distinction be addressed. Although the differentiation between the categories of legislation remains fundamental to the constitutional dispensation, it should be applied more flexibly in practice without introducing unnecessary rules that are not required by the Constitution. The option that mixed bills should not be in the Constitution but should be regulated by legislation, warrants consideration.4.8 Introducing section 76 bills in the NCOP
This is a policy option to be addressed. If followed, it is likely that section 76 bills would have a provincial perspective, which is currently missing in the early debating stages of these bills. It might also generate enthusiasm in the provinces about participating in the national legislative process. In order for the NCOP and the provinces to be able to perform this primary legislative task adequately they would have to be well versed in the relevant issues to deal competently with complex bills. This again calls for focused capacity building in the areas of provincial competencies. (Note: The NCOP has the power to initiate and prepare section 76 bills other than money bills. It could also be more proactive by using its powers to propose section 75 legislation.)4.9 Oversight function
This should be confined to:
_ steering clear of duplicating the roles of either the National Assembly or provincial legislatures;
_ concentrating on its own unique role of being concerned with provincial and local government issues; and
_ limiting its oversight function to issues dealing directly with the executive conduct of intergovernmental relations such as:
(a) national executive actions that affect provinces and local government, including:
_ the implementation of section 76 legislation;
_ the review of subordinate legislation issued in terms of section 76 legislation;
_ the national determination of policy affecting provinces; and
_ the implementation of national policies by provinces, such as the determination of teacher/pupil ratios in education and labour contracts, etc.
(b) national interaction with provinces and local government, including:
_ the functioning of the instruments and procedures of IGR such as the IGF, MINMECs, the Forum for South African Directors-General (FOSAD), etc; and
_ the monitoring and support of provinces.
(c) provincial executive actions that affect local government, including:
_ monitoring and support of local government.4.10 Constitutional reform
Although it may be too soon to speculate on alternative ways of restructuring the NCOP and the provincial legislatures, particularly if the informal reforms are effected, the various proposals made by respondents in this audit merit debate. (See Chapter 4, paras 188.8.131.52 and 184.108.40.206 of this Report.)4.11 Membership qualities
The following criteria for membership need to be debated.
_ should have political status in their own right;
_ should be selected for their sensitivity to the perspectives of their provinces;
_ should be chosen for their commitment to retaining their provincial linkages and their commitment to their allocated constituencies, even though they are based outside the province during part of the legislative cycle; and
_ should also be skilled in managing tight timetables in the NCOP and the provincial legislatures.4.12 Special delegates
There is a strong perception that the constitutional provision for special delegates needs to be addressed for the following reasons:
_ that special delegates play a minimal role in proceedings;
_ that "there is no role for special delegates"; and
_ that they have "very little impact on legislation" and "would be rehashing the work that they have already done at MINMECs".4.13 Reforming the composition of the NCOP
A number of options need to be considered:
_ Replacing the special delegates with 40 additional permanent delegates: The main reason for the increase in the number of permanent delegates is to capacitate the NCOP to fulfil its constitutional obligation more effectively.
_ An alternative appointment procedure: Linked to increasing the number of permanent delegates, would be the institution of an alternative appointment procedure which would ensure that the NCOP is composed of those who have the suggested qualifications. Direct elections are a further option. (Note: A similar reduction in the provincial legislatures or even the National Assembly would cancel out any additional costs.)4.14 Representation of SALGA in the NCOP
The proposal that there should be more appropriate representation for SALGA in the NCOP, including voting rights, should be addressed. SALGA would then come into the NCOP as a sphere of government. (Note: Currently, each provincial association elects 10 representatives to the NCOP, while SALGA would select 10 representatives from the 90 provincial nominees for a particular meeting. The SALGA representatives in the NCOP are thus in continuous flux. The deputy chair of SALGA regarded this practice as being democratic, but lacking continuity. She proposed that "this lack of continuity and consistency could be addressed if the same principle applicable to provinces is applied, that is, provincial associations should choose six permanent and four special delegates.")
5 Chapter 5: Financial intergovernmental relations5.1 Addressing the inherent tensions It is recommended that government re-assess the roles and responsibilities of provincial and national governments with regard to concurrent functions to ensure that there is consistency between setting norms and standards and that policy objectives are congruent with intergovernmental financing and implementation.
_ Government should re-assess the present revenue assignment. Increased taxation powers at provincial level could help enhance accountability at the margin for provincial expenditures.
_ Provincial taxation powers will also have an impact on the Department of Finance, which will need to put in place mechanisms to monitor provinces to ensure that provincial taxation policies do not materially and unreasonably prejudice national economic policies, economic activities across provincial boundaries, or the national mobility of goods, services, capital or labour.
_ A more asymmetric approach to provincial governments could be considered in the further evolution of the system to take capacity considerations into account. This could be based on the extent of institutional development of each particular province.5.2 Monitoring, co-ordination and alignment
5.2.1 Shortcomings of the Medium Term Expenditure Framework
The shortcomings of the Medium Term Expenditure Framework (MTEF) should be addressed. The most noticeable shortcoming of the current system is that there is no link between expenditure and service delivery.
It would be preferable to introduce a performance-based budgeting system, which would link planning, resource allocation and service delivery.
Commitment to a publicly stated medium-term expenditure and delivery framework is a powerful means of deepening accountability within government. The system needs to be monitored.
5.2.2 Information and costing systems
In order to install appropriate monitoring systems, it is important to ensure that information systems are put in place that will enable information on service delivery to be linked with information on financial flows. In addition, proper costing systems need to be developed which can feed into both the Cabinet and Budget Council.
5.2.3 Capacity-building programme
In order to implement the above recommendations a significant capacity-building programme should be developed. It should not be ad hoc but rather requires a proactive and systemic approach. In addition, the appropriate infrastructural development should be considered at the same time.5.3 Addressing unfunded mandates
In addressing the issue of unfunded mandates, the following actions are necessary:
_ In any proposed legislation, the functions of each sphere need to be clearly defined as well as the sectors within each sphere. For instance, the Child Justice Bill has implications for both the Departments of Welfare and Justice within the national sphere as well as the Departments of Welfare and Education in the provincial sphere. Cost implications for the affected spheres and sectors need to be considered.
_ All proposed legislation should be costed using technically sound methodologies, in order to adequately evaluate the financial implications of passing a particular piece of legislation.
_ The costing should be included in the proposed legislation, and not done as an afterthought.
_ Government should build internal capacity for costing and policy analysis. Where this capacity is to be located requires further investigation.5.4 Key indicators for measuring the health of IGR
There are broad categories of indicators that need to be considered with regard to intergovernmental relations. (See Chapter 5 para 4.4.1.) These ought to be developed further.5.5 Policy options for improving local government intergovernmental fiscal relations
5.5.1 Monitoring, co-ordination and alignment
The introduction of budget reform processes would go a long way towards improving monitoring, co-ordination and alignment at the local government level. To this end, the introduction of an MTEF and output-based budgeting at a local government level is crucial.
5.5.2 Improved information systems
Attention needs to be given to the fact that the information available at a local level is presently inadequate for any type of comprehensive, in-depth analysis. The Department of Provincial and Local Government has made some leeway in this regard with Project Viability. However, more emphasis should be placed on detailed information collection.
5.5.3 Sustainability of demarcation
Demarcation of municipalities should be underpinned by a thorough technical analysis of financial sustainability, which has not been done as yet. Up until the present, the process has been largely a political one. A thorough cost-benefit analysis has not been rigorously applied to the demarcation process in South Africa.
5.5.4 Capacity building
It is vital to have structured capacity-building programmes in budgeting and financial management at the local government level. In the past two years there have been dramatic improvements in provincial budgeting, partly due to the government’s increased allocation for conditional grants aimed at building financial management capacity and financial management systems. The same level of commitment should happen at the local level.
6. Chapter 6: The settlement of intergovernmental disputes6.1 Enactment of national legislation to provide for non-judicial dispute settlement mechanisms and procedures while national legislation must still be enacted to provide for dispute settlement mechanisms and procedures, it is recommended that the legislation be delayed. Although the legislative duty in section 41(2)(b) is explicit, "An Act of Parliament must provide for appropriate mechanisms and procedures to facilitate settlement of intergovernmental disputes", it does not have to be immediate. Parliament is obliged to enact this Act "within a reasonable period of the date the new Constitution took effect".1 The reasonableness of the period should, however, be judged by the nature of the Act and its function to facilitate effective and efficient government.
6.1.1 Delaying enacting legislation
In the experience of the Audit Team, there would appear to be no compelling urgency to enact this legislation. First and foremost, delaying the legislation does not impede non-judicial dispute settlement; to the contrary, it might allow best practices to emerge which can then be captured in effective legislation. Rather than regulating dispute settlement processes too much, too early, it would be in the interests of developing sound intergovernmental relations to allow the maximum of flexibility and informality in view of the complex web of intergovernmental relations in which the array of organs of state are involved. Creating inappropriate formal structures and procedures may encourage more, rather than less, disputes.
Second, the absence of legislation does not create a legal vacuum. The general duty to pursue non-judicial means of dispute resolution still applies. Every organ of state remains under the general constitutional obligation of co-operative government of avoiding legal proceedings against another organ of state. Likewise, the duty to exhaust all other non-judicial remedies before approaching a court, remains operative. Practice suggests that the various organs of state are indeed heeding this constitutional mandate. Disputes between and among spheres of government have not been disruptive of intergovernmental relations. Practice suggests that where disputes did arise, they were approached in the spirit of co-operative government by seeking compromises through the political process. Litigation, where it did occur, has not been destructive or unnecessary; the Constitutional Court has in a number of judgments given more flesh to the bare bones of the Constitution.
Third, there is already legislation in some sectors. The National Environmental Management Act is an example of how detailed procedures can be developed for disputes arising within a specific sector. Sectorally-based legislation should be encouraged as it is issue-sensitive and can give content to a normative framework in terms of which disputes should be settled. These reasons are sufficient justification for delaying the enactment of a specific Act of Parliament without breaching the constitutional obligation set out in section 41(2)(b).
6.1.2 Elements of an Act
The experience gleaned from practice suggests that when the legislation is drafted the focus should be on the process of dispute settlement rather than the creation of new structures. Furthermore, in prescribing mechanisms and processes a minimalist approach should be taken.
220.127.116.11 Focus on process
The focus should be on promoting the process of dispute settlement rather than the creation of new structures. Section 41(2) makes a clear distinction between Parliament’s obligation to "establish or provide for structures and institutions to promote and facilitate intergovernmental relations" and its obligation to "provide for appropriate mechanisms and procedures to facilitate settlement of intergovernmental disputes". With the promotion and facilitation of intergovernmental relations, the focus is necessarily on institution building – the creation of fora in and through which co-operative government can be effected. In contrast, where disputes develop, the focus is properly on the processes of dispute settlement, rather than on creating new institutions for this purpose.
18.104.22.168 Minimalist approach
The audit has revealed that intergovernmental disputes include constitutional issues, legislative interpretation and policy, and factual disagreements. The nature of the disputes differs as well as the need for expeditious settlement. It would neither be desirable nor practicable to prescribe a uniform mechanism and procedure for the settlement of all these disputes. The fear was expressed by interviewees that legislation should not make the process of dispute resolution inflexible or too cumbersome which would then defeat the object of the exercise. Examples were mentioned where a dispute had to be resolved within 24 hours. In view of the wide variety of disputes that may arise between a wide array of organs of state, the Act should list the broad range of dispute settlement mechanisms and procedures.
A wide choice should be available because the nature of a dispute and the position of the parties involved are important factors in determining an appropriate dispute settlement mechanism or procedure. The choice should be left to the parties. Where they cannot come to an agreement, the court which is approached by one party, may well refer the dispute back; a failure even to agree on a method of non-judicial dispute settlement could well be evidence that "every reasonable effort to settle" has not been made.
22.214.171.124 Investigative powers
An important element of the envisaged Act should be appropriate investigative procedures and powers. Factual or policy conflicts can be resolved through independent investigative bodies and procedures. At present premiers can only appoint commissions of inquiry in their area of jurisdiction. To deal with some interprovincial disputes, legislative authorities should authorise the establishment of joint provincial commissions. Provisions similar to those in the National Environmental Management Act with regard to fact finding and evaluation would also be useful to include.6.2 Policy on and practice of dispute settlement
In the absence of national legislation of a general nature, much can be done at an executive level to facilitate effective and efficient dispute settlement. In this field the Department of Provincial and Local Government has a lead role to play in giving effect to its constitutional obligation of providing support for other spheres of government.
6.2.1 Intergovernmental agreements on the provision of goods and services
Intergovernmental agreements on the provision of goods and services have in the past given rise to disputes, and they are bound to do so in the future. This is particularly the case with agency agreements and other contractual relationships of a continuous nature. Measures can be taken to ensure that these disputes be settled effectively and efficiently within the spirit of co-operative government.
First, there should be a drive towards regularising relationships between organs of state by reducing to writing agency agreements and other contracts. Second, it would be imperative that such agreements include appropriate dispute settlement mechanisms and procedures. Third, the agreements should also develop and articulate co-operative government norms that are appropriate to the subject of the agreement.
The Department of Provincial and Local Government should play a facilitative role by developing model agency and other agreements for use by provinces and municipalities. Such agreements should include appropriate dispute settlement mechanisms and procedures and a normative framework within which the agreements should be executed and disputes settled. Through the appropriate instruments of intergovernmental relations such as the MINMEC on Local Government and its technical committees, the department can, then, advance the implementation of this policy.
6.2.2 Facilitation service
Any non-judicial dispute settlement mechanism or procedure usually includes the offices of a mediator, conciliator or arbitrator. It is not recommended that organs of state should perform this function as it blurs the distinctiveness of spheres. Independent facilitators and arbitrators would be more appropriate to fulfil this function. The Department of Provincial and Local Government should, however, play a facilitative role by keeping a list of accredited mediators and arbiters. The list may specify specialists in particular fields of intergovernmental relations, such as local government or finance.
1 Schedule 6 item 21(1) Constitution.