Regulator’s powers excessive, say business sectors
The Economic Regulation of Transport Bill is now before Parliament for debate, four meetings of the Portfolio Committee on Transport having taken place on this legislation which will establish a Single Transport Economic Regulator (STER) to replace existing regulatory entities. The STER will have an Economic Council on an advisory basis attached.
The Bill, which is in final debate, is nearing completion but a stumbling block exists in the fact that the Parliamentary Committee on Transport finds itself at odds with the Department of Transport (DOT) on the appointment of “peace officers” who have powers of arrest and to gain access and search. It is also uncomfortable with the additional powers granted to the Minister of Transport.
The new single entity will include the Ports Regulator, the National Public Transport Regulator, some of the Cross-Border Transport Agency, the Regulating Committee for Aviation, the two Air Services Licensing Councils, and certain functions of South African National Roads Agency Limited (SANRAL).
Hearings on the Bill were conducted in October 2020 but shortly a vote will take place to move the Bill forward to the National Assembly and then to the National Council of Provinces for more input, final hearings and consideration.
One for all
Over two years ago, DOT stated that one of the Bill’s long-term objectives was the rationalisation of regulatory and governance frameworks to regulate transport monopolies on pricing structures, specifically in the area of state airports, state ports, and road and rail concessions to allow South Africa’s economic infrastructure to operate more efficiently and to set tariffs that were appropriate for development.
At the time it was noted that in terms of the National Land Transport Act, the taxi industry falls into the regulated sectors and entities. Economic regulations on tariffs / fares will apply to the taxi industry in the course of time. Consequently, the Bill now before Parliament has been tagged as a Section 76 Bill since the current debate concerns functional areas that fall within the jurisdiction of both national and provincial governments.
Putting up barriers
The Bill proposes to empower the Regulator as the functionary authorised to sign off on the prices imposed by regulated transport entities in any one sector. The Bill is the result of two periods of public comment in 2018.
As we have said before, in one of the better Bills to come before Parliament, an attempt is being made to rationalise on costs by bringing together some six regulatory authorities; to have one council attached specifically to tackle pricing structures; and generally, to oversee sector behaviour and promote the concept of less red tape.
In hearings, however, the issue of a state function monitoring the “red tape issue” was strongly contested. Parties stated that in all probability more red tape would be generated and, as usual, this would force up the cost of doing business.
A stumbling block has been the major concern expressed in hearings on the powers granted to the Minister of Transport and, similarly, the authority that ‘peace officers’ will have when appointed to deal with the regulations and alleged offenders. Opposition MPs have always expressed their view that any such powers granted by any legislation should only be exercised where political influence can be controlled or not granted at all.
This view was supported by Nkosinathi Mangcu, an influential ANC member, who said that all MPs should apply their minds very carefully to this part of the Bill since it could be termed as “seeking to establish a quasi-law enforcement agency within the Regulator.” He went so far as to caution the House in the light of the alleged “rogue unit” in SARS.
Chris Hunsinger (DA) added his party’s view that a Regulator could not be a law enforcement agency. The intention stated in the Bill was to deploy “peace officers” but a peace officer appointed in terms of the Criminal Procedure Act had the right to arrest people. The Regulators office being set up was intended to deal with economic matters such as tariffs and prices, not policing, he said. On matters where powers of arrest are needed, for this the SAPS and SIU existed.
Hunsinger added that the justification for Parliament’s involvement in the Bill was to provide oversight and by ensuring that the Regulator maintained a certain degree of independence from the Ministry, similar to the way the Broadcasting Act provided for the SABC board.
Sikhudo of DOT attempted tried to deflect the views coming from MPs on certain issues by stating that the Bill was “an overall game changer” and in principle met “ international benchmarking”. But he maintained still that it was necessary for the Regulator to have the power to access information from regulated entities when and
if withheld. “We have practical examples of these incidents”, he said which has resulted in the Ports Regulator, as one example, being called ‘toothless’.”
He promised that any investigators “would be granted the powers of a peace officer only when a complaint was received which had to be investigated and could not be otherwise”. Hunsinger broke in and said that the wording of the Bill had to reflect this and not as otherwise since a tool for corruption and misuse of power “was being created once again”.
The devil in the detail
Whatever the outcome on that issue and which was also raised under the Audit Professions Management Bill, the objective is to hopefully allow the Ports Authority to untangle at an operational level and give a better maritime and warehousing service; to make some inroads into the into the rail freight and passenger rail service pricing at a time when both are trying for a comeback to free up SA roads.
Unspoken of is, of course, the one aim to bring the taxi industry into the economic net and bring some protection to all communities and within the sector on the question of pricing. A second aim, also not put upfront, is that the transport sector is not producing the kind of revenues for SARS that Edward Kieswetter of SARS has said he would like on numerous occasions giving an overt eye to the taxi industry.
Operationally, Moeketsi Sikhudo, project manager at DoT, told MPs early in February that the Bill under discussion for the single transport economic regulator to be established in three phases. It would use first of all the Ports Regulator as a nucleus, or base, to start and thereafter incorporate the economic regulation of rail and then road transport sectors in turn.
He said to parliamentarians that DOT expected the new Regulator to add R3.5bn to the national fiscus and would employ 78 people at the outset, growing to 134 once it was fully staffed. The result in not having three or more regulators would give an average saving of more than R170m per year. No period or breakdown was given for the incoming R3.5bn.
Sikhudo said that consequential amendments to the National Ports Act, Airports Company Act and the National Land Transport Act would have to be processed through Parliament, but he noted that it would not affect any of the substantive law affecting these sectors. During the transition, existing tariffs would remain in place.
He said that the new Regulator would employ compliance officers to ensure that its regulations were followed but he did not wish to call their overall function an “inspectorate” as this might introduce confusion about its powers with respect to the Road Traffic Management Corporation.
Moeketsi Sikhudo also confirmed that DOT’s intention was that both the Regulator and the Council would be Schedule 3 institutions, and neither would determine fees to be levied but that this would be fixed in consultation with stakeholders. The relative prominence of the Regulator and the Council was expected to be similar to the Competition Commission and the Competition Tribunal and both entities would be subject to the PMFA.