EXPEDITED LEGISLATION IN PARLIAMENT: A BLOW TO ITS CREDIBILITY
The legislative process has a vital role in a functioning democracy. But its credibility can be severely undermined when bills are rushed through Parliament. The recent occurrence of three bills related to the energy sector being fast-tracked through parliamentary proceedings at the same time, suggests a hasty attempt to clear the legislative desk before the 2024 elections.
Three noteworthy bills related to the energy sector were recently open for public commentary: the National Nuclear Regulator Amendment Bill and the Electricity Regulation Amendment Bill, both with October 13th as deadline, with the Portfolio Committee on Mineral Resources and Energy overseeing these, and the National State Enterprises Bill, open for comment until October 14th, managed by the Portfolio Committee on Public Enterprises. It's worth noting that OUTA has submitted its comments on the National Nuclear Regulator Amendment Bill and the National State Enterprises Bill.
At least two of these bills have been long-awaited, as noted in OUTA's parliamentary oversight report for 2023, titled "Parliament: The Fairytale That Became a Nightmare." The delayed progress of the Electricity Regulation Amendment Bill and the National State Enterprises Bill, coupled with uncertainty regarding a Shareholder Management Bill, has raised questions about the legislative process.
Parliament appears to be grappling with managing the public consultation process, as its webpage listing bills open for comments fails to include the state enterprises bill and listed only four bills (at the time). In contrast, the Parliamentary Monitoring Group's list encompassed nine bills and eight additional documents open for public commentary during the same period.
National Nuclear Regulator Amendment Bill (NNR Amendment Bill)
While several enhancements to the existing legal framework are indeed welcome, it is evident that Parliament missed a significant opportunity to address the National Nuclear Regulator's (NNR) independence. South Africa's membership in the International Atomic Energy Agency (IAEA) and its ratification of the 1996 Convention on Nuclear Safety emphasize the importance of effective regulation in this realm. In a report following a visit to South Africa in 2013, the IAEA highlighted concerns regarding the insufficient separation between the regulatory functions of the Minister of Energy and the NNR, given that the Minister is responsible for both regulation and the promotion of nuclear energy.
This finding raises a clear need for a more robust separation between the Minister and the NNR, which OUTA believes could be achieved by reallocating the powers vested in the Minister of Mineral Resources and Energy to a ministry not biased toward a particular technology (such as the Ministry of Forestry, Fisheries and the Environment.)
We are very aware that most of our public institutions are set up in such a way that cabinet members are able to apply unfettered control, such as having the sole discretion to hire and fire boards of SOEs.
“The bill in its current form is a move in the right direction but does little to ensure, enforce and promote independence of the NNR,” says OUTA’s submission.
Reform will certainly not happen overnight, but that does not mean that civil society should stand back and wait for reform to come.
A copy of OUTA’s submission on the NNR Amendment Bill is here.
National State Enterprises Bill
While the concept of the National State Enterprises Bill holds promise, its current formulation leaves much to be desired. It envisions the dissolution of the Department of Public Enterprises, an entity central to the state capture saga, and replaces it with a holding company responsible for overseeing state-owned entities (SOEs). The specific SOEs to be placed under this holding company remain unspecified.
In theory, this arrangement could foster good governance based on established corporate principles and best practices. However, the centralization of power within the proposed holding company appears counterintuitive in South Africa's quest to move past a dysfunctional public service. The bill suggests that the State would serve as the sole shareholder of the holding company, and the President, as the representative shareholder, would have the authority to appoint and dismiss the board. The President can also delegate these powers to any cabinet member.
There is a legitimate concern that this arrangement might perpetuate a culture of cadre deployment unless private sector professionalization is incentivized and effectively implemented. As it stands, the bill does not provide the much-needed independence that the public service requires. Significant revisions are necessary, with active involvement from the private sector during subsequent public consultation processes.
The urgency for public service reform cannot be overstated, and this calls for the active participation of thought leaders and influential figures from the business community. It is crucial that they contribute to shaping a more effective and accountable public service system.
A copy of OUTA’s submission on the National State Enterprises Bill is here.