Tag Archive | Zuma

FICA Bill : Hearings on legal point

President Zuma vs Parliament on FICA Bill

…..editorial……The convoluted thinking that is taking place in South Africa to avoid the consequences of the law has once again become evident in the ongoing battle between the Presidency and the Standing Committee on Finance with the return  of the Financial Intelligence Centre Amendment (FICA) Bill  by the President to Parliament and therefore unsigned into law.

Worried by warrants

The President claims that for representatives of the Financial Intelligence Centre (FIC) to visit business premises and even homes under special circumstances without a search warrant and in cases where obtaining a warrant would defeat the purpose of the search, may be unconstitutional.   FIC, meanwhile, has confirmed in Parliament that between the years 2011 and 2016, 930 warrantless searches with the consent of those searched had been carried out by its inspectors.

Rare happening


The move
by the President, after five months of inaction, has now forced Parliament to seek the opinion of senior counsel to reinforce their views that warrantless searches are indeed acceptable in terms of the Constitution.   The FICA Bill was originally recommended for signature into law and sent to the President by no lesser body than the National Assembly, then concurred to by the National Council of Provinces, both on the advice of Parliament’s own legal counsel on constitutional issues.   This is normal procedure with every piece of legislation.


This reason for further delay on the President’s part must have raised a few eyebrows at the Organisation for Economic Co-operation and Development (OECD) centre in Paris.     As those in financial circles are aware, the Bill was tabled by the Minister of Finance with the objective of not only aligning South Africa’s banking and financial institutions with global financial advances but to counter growing and localised corruption and money laundering.

Hurry up and wait

This august body, the OECD, much maligned by the Minister of Mineral Resources in tandem with his opinions on the SA banking system, is currently awaiting South Africa’s confirmation that it will comply with the latest round of requests for compliance with the fourteen rules, now amended, to counter international financial terrorism and extend the OECD’s ability to combat international money crime.

Warrantless searches are allowed in most major countries where compliance with OECD conditions are sought but in the same countries, as has been worded in the FIC Bill, the circumstances to allow this only in cases of suspected money laundering are specifically worded and this includes cases where the application for a warrant or a delay in obtaining a warrant would remove the element of surprise.

Treasury wanted immediacy

The request for South Africa to conform is more specific in terms of the requirements of the Financial Intelligence Task Force (FATF), better known by banks as the criminal investigation department of OECD.    A date for compliance was set by them in February 2017 and agreed to by South Africa. The banking sector is ready to implement the new rules both in staffing terms and with systems and procedures waiting. Minister Pravin Gordhan and some senior ANC party members have been vocal with their suspicions for the delay.

Mystery motives

In what appears to be almost Machiavellian in political terms, the President, with the knowledge that he must have that Parliament was about to close for business, might, according to some MPs, have lodged his further objections to the Bill in the hope that further support for his views could be garnered from subsequent hearings, submissions and more debate.

Chair of the Standing Committee on Finance, Yunus Carrim, countered the President’s unexpected move by cancelling urgent meetings on the Insurance Bill, scheduled for debate and hearings on the last two days of parliamentary business, and called for an urgent meeting of his Committee.  

Advocate Frank Jenkins, Parliament’s legal adviser, was asked to attend and give opinion, together with manager of FIC, Pieter Smit.   Also attending was the Deputy Minister of Finance, Mcebisi Jonas and National Treasury deputy DG responsible for FIC matters, Ismail Momoniat.

Carrim firm on subject

Adv. Jenkins confirmed the sections of the Constitution provided for a Bill to be returned but only once and on specific issues.  He saw the President’s action as unusual in that a Bill, worked on for two years with every clause scrutinized and with input from constitutional experts, could be returned at such a late stage with so much time having elapsed during which an objection could have been easily submitted.

He then explained to MPs how the Constitution does indeed allow for warrantless searches in terms of the Constitution’s specific wording on the subject matter. He listed six precedents of Bills passed into law recently where warrantless searches are allowed in certain prescribed circumstances in terms of the Constitution.   He said this was not a complicated issue at law in view of precedent.

No good choices

Chair Carrim said he had no choice but to treat the FATF issue as the least worst of bad scenarios and he was forced to apply parliamentary rules to the issue in order that the President’s move could be countered with indisputable legal fact and by applying parliamentary rules objectively and strictly. He wanted to observe protocol so that the matter could become “de-politicised”.  

He said the media had called him “brave” to stand in the way of the President’s obvious wish.   This was not the case, he said, but just a matter of following the rules and respecting the fact that Parliament was the final arbiter in such matters since Parliament represented each and every citizen of South Africa.

The response

The rule, Adv. Jenkins explained to the Committee, was that should a Bill be returned to Parliament by the President, having been beforehand approved by the House on every issue in the Bill, then only the specific point, i.e. warrantless searches, could be discussed and debated subsequently and altered if seen fit. This was stated in the Constitution.   The Bill could then be returned to the President with Parliament’s view on the subject matter alone.

He said that should the Committee decide that the President’s view was a baseless argument then they could probably avoid the President referring the matter to the Constitutional Court with further long delays by supplying advice from counsel.  Chair Carrim agreed with this suggestion and with Committee approval across all parties the call for legal submissions in the form of submissions in the New Year and the matter down for hearings and debate in Parliament after it opens in February/March 2017.

Hands off the Bill

Parliament could then return the Bill to the President, Carrim explained, with full legal constitutional opinion and throughout the whole process, only the issue at hand, i.e. warrantless searches, would be allowed for debate.   No other substantive issues could be raised, debated or voted upon as the Bill had been approved by Parliament, Carrim said, and only one issue was under scrutiny.

He said, this would be clearly advertised when calling for submissions and the Speaker asked to observe the rule in any subsequent National Assembly debates.  Any other comments and observations would be regarded as irrelevant.  As far as the OECD was concerned, this was a risk that Treasury would have to handle in their meetings with OECD but this route, Yunus Carrim felt, was the better option.

Believe it or not

For the five months that President Jacob Zuma has been refusing to sign the Bill into law
and refusing to give any reason other than finding the time to “apply his mind to the issue”, any amount of publicity on the need for speed must have landed up on the President’s desk
, even if  just legal advice on the subject instructed by the President.   Lying to Parliament has now become a presidential practice, cartoonists Jonathan Shapiro, Neale Blandan and Jeremy Nell having turned President Zuma’s relationship with Parliament into an art form. 

The “G” factor

As far back as 2009, the OECD published a list of countries divided into three parts, all depending on how or whether they complied to “internationally agreed tax standards”, in select jurisdictions, tax havens or other financial centres of interest and whether they had implemented appropriate legislation in line with OECD requests.   

The procedures are now part of standard international banking procedure but now relate specially to identifying money movements of “prominent persons” and where money laundering seems possibly to be evident.

Whether the President, as the most elevated and “prominent person” in the country, might be trying to protect himself or other “prominent persons” including friends and associates alike against investigation into money movements is not, however, the main issue.

All suffer

The far more serious issue is that the President’s seeming neglect in responding for months has exposed the country’s banking and financial systems to risk.  This is quite outrageous.  The President may or may not have a good argument that it is constitutionally inviolate for the FIC to search without a warrant and possibly with or without warning beforehand  but it seems a stretch of the imagination, given his track record, that he is morally indignant.

Parliament has now issued a gazette calling for comment with the following proviso: “All submissions must therefore only deal with the constitutionality of section 45B (1C) dealing with warrantless searches in clause 32 of the Bill.     As the hearings are on the constitutionality of warrantless searches, those making submissions are requested to provide legal opinions for their arguments if possible.  No consideration can be given to submissions dealing with any other provisions of the Bill.”

Hearings are promised as well in mid-March 2017 for  generalised input on the legislation, part of Chair Yunus Carrim’s call for Parliament to investigate “transformation in the financial sector.” 

 

FIC Bill hold up goes to roots of corruption – ParlyReportSA

Red tape worries with FIC Bill – ParlyReportSA

Madonsela: state capture and corruption linked – ParlyReportSA

 

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Zuma goes for traditional support with expropriation

Editorial….

Session ahead may bring clarity on expropriation…….

NAIt is a difficult time for business and industry to establish exactly where they are in terms of the legislative environment in South Africa, land expropriation and state or BEE participation being mainly the issues.  However, the cabinet must be aware of the need expressed in many circles for more certainty in terms of the investment climate.

The Bills held back by the Presidency for re-consideration or signature are re-emerging slowly back into the public sphere.   Aside from the highly controversial Traditional Courts Bill adding power to the arm of President Zuma’s supporters in rural  leadership roles but offending women’s rights groups, now re-tabled in Parliament in a different form, as a section 76 Bill, is the Expropriation Bill.

Being a 76 section Bill means that the proposed changes and the formation of a state valuator’s office as thezuma traditional final arbiter on land restitution will have to be debated in all nine provincial legislatures and a mandate provided to the National Council of Provinces to gain concurrence with any vote on the Bill taken in the National Assembly. 

It is interesting to note that some time ago, President Zuma let it be known that he would also like to see this Bill considered by the House of Traditional Leaders. This is probably in the light of the debate now emerging that traditional chiefs were not consulted properly, if at all, in terms of the Restitution of Land Rights amendments.

Serving notice

Crucially, the Expropriation Bill still seeks to allow any ‘expropriating authority’ to take property by serving a notice of expropriation on the owner stipulating the value the state will pay, presumably according to the state valuation if there has been an appeal.

Commentators have noted that the new Bill differs in that the state may then serve a further notice of expropriation, which could be less, more or not necessarily revised at all, and the owner will be deemed to have accepted that transfer of land to the state unless the owner commences litigation within 60 days.

The short amount of time to respond and appoint and brief counsel and the fact that litigation, a highly costly process (costs being to the owner not the state), will no doubt be an issue debated extensively in Parliament. At this moment the main opposition party has been caucusing on the Bill. The fact that the Bill will now have to be debated in all nine provinces will leave a fluid situation for some time yet.

Struggling to produce

The Protection of Investment Bill remains an unknown quantity. Speaking to the DTI legal advisor, all he could say was “We are struggling with it”. 

Similarly, no tabling notice has been published with regard to the Private Security Industry Bill.

No energy  outcome

At the time of writing the “Five Point Energy Plan”, promised by the cabinet “war room”, has also not been presented to Parliament, the minister of energy advising all that it was necessary to have first a trip to the DRC and discuss the Grand Inga Hydro project.

Instead of her unadvised non-appearance in Parliament, a presentation by the department of energy took place, monitored in this report. What did emerge however was that future regarding the intended energy mix is also very fluid, there clearly being a division of interest in what is necessary to bring about in the short term better service delivery to the poor and in the longer term the needs of investors.

Traditional support

Time and time again, since his state address to the nation, President Zuma, where land matters are concerned, has made reference to the Council of Traditional Leaders, the majority party having no doubt realised that this base of power can either be pacified or radicalised – a very sensitive area and where the least service delivery by government occurs.

In his speech opening the National House of Traditional Leaders, he encouraged traditional leaders to take advantage of the 2013 Restitution of Land Rights Act as amended and rushed through at the end of the last Parliament and for them to put in claims.

The amendment Bill passed reopened the window for lodging restitution claims, but retains the restriction that dispossession must have taken place after 1913. The hints by the President in subsequent days in further briefings that the date of 1913 “is negotiable” have led to further claims being notified some of them apparently going back many hundreds of years. 

Once again, this will only be finalised when parliamentary debate finally takes place as the issue is bound to be raised but the whole matters adds to current uncertainty.

Hole in the pocket

Meanwhile the budget for what can be paid out in the form of restitution has been decided by minister of finance Nene and was presented in the last budget to Parliament in the current session.

President Zuma’s reference in Parliament to land held by foreigners in the state of nation address produced an unfortunate atmosphere which was somewhat mollified by off-the-record remarks by ministers to the media but no legislative clarity for Parliament to consider has emerged.

Indeed, a difficult time for business and industry, not forgetting that the Eskom issue is about to be raised again in forthcoming portfolio committee meetings in the coming week, hopefully bringing some clarity to the issue of reliable electricity supply.

Editorial only

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Parliament circulates Russian technology agreement

 

Partnership in techno between SA and Russia…

russian flagThe agreement between the Republic of South Africa and the Russian Federation on scientific and technological cooperation has now been tabled in Parliament, according to a notice published recently. It includes an annex between the same parties, the point being made strongly that both Russia and South Africa are part of BRICS which includes Brazil, India and China and indicating similar agreements. After much to-ing and fro-ing in 2014 between Moscow and Pretoria by minister of energy Tina Joemat-Pettersson and a separate visit by President Zuma for personal reasons it seems but who met President Vladimir Putin, a Russian Federation delegation was reported as having visited Tuynhuis in the Parliamentary precinct in early December last year, meeting Speaker of the House, Baleka Mbete.

The “R” in BRICs

The actual agreement was signed by the chairperson of the National Council of Provinces, Thandi Modise, who appears to have hosted the event. It was also signed by the deputy chairperson of the council of the Federation of the Federal Assembly of the Russian Federation, Ilyas Magomed-Salamovich Umakhanov. In a statement issued at the time in Cape Town, it was announced that “the two Parliaments had agreed to strengthen ties and cooperation through exchange programmes and to encourage freer movement of people between the two countries.”

Not just science

Education, agriculture, economic cooperation and coordination in the global arena were also identified as key areas for closer cooperation. “This memorandum of understanding is testimony to the historical, present and future ties between our countries,” Ms Modise said.   With regard to the use of the word “historical”, President Zuma mentioned in his recent SONA address that the bodies of “two veterans of the apartheid struggle” were to be repatriated and re-buried in South Africa. The statement issued at the time by Ms Modise stated, “Members of Parliament should not be left behind in developments taking place at executive level between their countries.” Other articles in this category or as background Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA Nuclear and gas workshop meeting – ParlyReportSA National nuclear control centre now in place – ParlyReportSA

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Debate on Nkandla to intensify

Facts on Nkandla with MPs…..

effIn an internal parliamentary question paper, M Khawula, an MP of the IFP-KZN, asked for a reply in writing from the minister of police to his question, “Which structures, buildings and/or areas have been declared national key points and, secondly, what qualifies such to be declared national key points.”

He was not to know that minister of police, Nkosinathi Nhleko, would be forced out of blustering and show that president Zuma’s country homestead in the hills of KwaZulu-Natal, Nkandla, was indeed a national key point whereas, as illustrated by a newspaper in the parliamentary recess, nuclear experimental station, Pelindaba, north of Johannesburg, was not.

The reply in writing from the minister in the parliamentary replies of 19 September, in response to Nhleko’s question, was as follows, “To publish or to make known a list of all national key points would to a large extent defeat the purpose of the National Key Points Act 102 of 1980, namely the protection of such NKP’s. It is therefore not policy to provide such a list for public knowledge.”

When is a key point not one?

The minister added to the written note, “In terms of the National Key Points Act, section 2 deals with the declaration by the Minister of Police and I quote; “Declaration of any place or area as a National Key Point.

(1)  If it appears to the Minister at any time that any place or area is so important that its loss, damage, disruption or immobilization may prejudice the Republic, or whenever he considers it necessary or expedient for the safety of the Republic or in the public interest, he may declare that place or area a national key point.

(2)The owner of any place or area so declared a national key point shall forthwith be notified by written notice of such declaration.

That was the full extent of the reply from the minister.      Meanwhile in the recess, the opposition has written to the Speaker of the House, requesting that President Zuma be forced to respect the Constitution and answer questions from MPs in the National Assembly orally on a regular basis.

Weight of the law

settlement_law_justice_In the meanwhile during the recess, Judge Roland Sutherland in the Johannesburg high court  ordered the minister to hand over the list of national key points and national key point complexes in “the next thirty days” to the parties complaining, who were the Right2Know Campaign and the South African History Archive. Such was finally acceded to.

It is now understood from a statement made at the proceedings by the Mail and Guardian, who joined the action as a friend of the court and who were represented by advocate Matseleng Lekoane, that according to the Act, security guards are allowed to search and seize peoples’ belongings if the people were in a national key point. “They were also allowed to use guns to do this”, she said.

Adv. Lekoane argued that if this was the type of reaction that people, including journalists, might face, then they had the right to be prepared for it. “You need to know the status of a place so you can inform your conduct,” she argued.

Just so we know

The advocate representing Right2Know campaigners, Steven Budlender, had earlier complained that his client was only asking for the names of the places not the addresses.

In any case, he added, it would not make a difference to the country’s security if places like OR Tambo International Airport were publicly known as national key points.  This is because, Budlender said, the “dark forces” that the minister’s counsel feared would inflict harm on the country do not need to be told that a place is important. They would already know.

He was responding to argument made by counsel for the minister of police who said that revealing which buildings and places were NKPs would place national security at risk. “This does not stand up to logical scrutiny”, said Budlender.

Judge Sutherland said minister Nhleko’s refusal to release the list was unlawful and unconstitutional, and ordered the ministry to pay the legal costs.   The matter will no doubt be tabled for discussion in the next parliamentary session by which time it will be even clearer what the realtionship  between President Zuma and Parliament will be after his State of Nation Address.

Maybe appeal

However, debate at parliamentary committee working level will now be at a different level in the new session . The facts are there and what was fog in a bucket is now in the open for proper debate.

Other articles in this category or as background
http://parlyreportsa.co.za/cabinetpresidential/nkandla-debate-rekindled-da/
http://parlyreportsa.co.za/cabinetpresidential/nkandla-ndp-argument-rages-go/

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Zuma vs Parliament

This weeks editorial comment……

ANC internal problems dominate…

zuma-Sonanational assemblyWhilst the task of  a parliamentary monitoring function such as ParlyReportSA is to observe impartially the workings of Parliamentary portfolio committees as they affect the business and the industrial scenario, it would be absurd to go to a concert and ignore the music.

The problem with Parliament at the moment is an unpleasant background sound which affects to a great extent not only the focus of any business to hand but which also points to a disconnect between the conductor and the orchestra within the governing party.

Most things that happen in the precincts of Parliament will affect the commercial world to some degree or in one way or another but currently, if our observations are correct, there is an overriding obsession within the Presidency to convey to voters an image that “all is well”.  In Parliament it is all too evident that things at times are not that well.

Watching their backs

The top priority with the presidency appears not to be with the commercial and industrial body corporate and dealing with the country’s economic issues but to battle on with the image problem the ANC Alliance’s relationship has with its own historical audience.  It was minister Jeff Radebe who had to make the statement on country’s most important issue, the energy crisis.

Raymond Suttner, a former ANC underground operative, political prisoner and leader, who rarely misses an opportunity for sanguine comment, said recently, “The ANC has become an organisation in which only one man can be acknowledged as a leader.”

He continued, “Before local government elections, the ANC is burdened with a president who is literally running away from Parliament, the country’s main democratic institution. In subordinating democracy to the needs of “uBaba”, fundamental democratic principles are being jettisoned.”

Pulling the donkey’s tail

The legislative and government departmental policy issues that involve our watchful eye rarely involve the EFF circus but it is interesting to note that at parliamentary working portfolio and select committee level, the few EFF members and not so many but nevertheless much emboldened DA MPs, are tending to ask better and more direct questions.

However, a lot of this is designed to get under the “ANC’s skin”, as distinct from informed, serious and challenging commercial questioning.   Much will play out in the coming months, particularly once the municipal elections are over and the posturing in that direction ceases.  All the same, President Jacob Zuma’s relationship with Parliament is not currently a happy one. Inordinate delays are common.

Slow moving policy decisions

In regard to the analogy of the irritating background sound caused by this disconnect, for the moment then the music will just play on.   Fortunately, it does not affect to any great extent the work of the more dedicated chairpersons of committees but it still seems that in order to get policy decisions out of cabinet, nobody seems to move without the assent of President Zuma and no convoy is faster than its slowest ship.

This irritating factor will also not affect parliamentary oversight to any great extent as better systems are now in place for checking departmental financial performances and the reporting of departments and utilities to reach their service targets.

Unless of course, as happened with Eskom, material facts are withheld.  In this regard, the maintenance of freedom of speech and an unencumbered media remain vital.

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Zuma

Nkandla vs NDP: the argument rages

Editorial…

Has the emperor got clothes on?….

Whilst the nation focuses on the Nkandla issue, which has now involved to a lesser or greater extent the parliamentary process on the subject of who reports to who in terms of the Constitution, the largest elephant in the room still remains. This, of course,is how far the ANC will go to protect President Zuma in terms of the law, aside from the Constitution.

Accordingly, we have not monitored the issue further until the subject once again reaches the level of parliamentary committee debate.

Nevertheless, there still remains a smaller elephant in the room. Whilst this issue does not reach the media in the same way, it concerns business, manufacturing and industry to a far greater extent than the Nkandla issue.

Reality check

This smaller elephant concerns the ever-present issue of how to create more jobs in South Africa.  It also concerns the manner in which South Africa goes about achieving the noble aspirations of the National Development Plan (NDP).    Meanwhile, unemployment has now reached a record 45%.

MPs across party lines are of two minds on this. There are two distinct camps of thought developing on these subjects and attitudes are hardening on which approach should be taken.  Firstly, to put it in question form, are the state utilities really the controllers of our destiny and will a massive infrastructure spend by state institutions alone, with emphasis on black procurement, turn the economic corner as far as jobs are concerned?

Or, is the answer to create a very much more enlightened environment for investors on the basis that we need their money and is this sufficient excuse to play down some more investor-unfriendly legislation and regulatory red tape and a place less emphasis on BEE with its sad and long history of black non-empowerment?

Problems, problems

In every parliamentary committee meeting one can sense this philosophical and ideological problem.   Indeed, if this is not the commercial and industrial elephant in the room, it is the dichotomy that ANC whips have to handle on a daily basis and work hard with every party MP involving strong messages coming down from Lithuli House.

Witness the confusion of the power of African traditional leaders, which clearly emanates from the President himself; the necessity to bulldoze through certain unworkable legislation on transformation which then gets returned to Parliament on good legal advice; and the fight between finance minister Nene to suck in more for the fiscus to finance social welfare and health budgets with ridiculous customs and excise tariffs at the expense of the national deficit.

Stay positive

mantasheWe cannot comment, only observe, but somehow we believe that many of Gwede Mantashe’s more obtuse observations do not represent all of ANC parliamentary thought patterns.   We sincerely believe that within the governing party machine and with added well-tuned opposition, there will follow a sensible compromise in order to survive.

We also believe that it may be discovered by adherents that the emperor may not have clothes on, despite what the praise singers say, and that also, and more importantly, a good investment climate can be balanced with social imperatives.

Hof Communications

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