Further Education and Training Colleges Amendment Bill [B13-2011] and Higher Education Laws Amendment Bill [B14-2011]: proposed amendments

Meeting report

Consideration of the Further Education and Training Colleges Amendment Bill [B13-2011] and Higher Education Laws Amendment Bill [B14-2011]: proposed amendments
The Chairperson stated that in an earlier meeting, it was concluded that the Department and the Legal team would formulate amendments to the bill as suggested by the Committee. The Chairperson invited Advocate E Borshoff to brief the Committee on the process.

Adv Eben Boshoff, Chief Director: Legal Services, Department of Higher Education and Training (DHET) briefed the Committee members on the changes made to the draft Higher Education Laws Amendment Bill. Adv Boshoff stated that Section 4A and 17A were the consequential amendments as a result of the Committee’s decision to ensure that an Administrator and a Council could not co-exist. The issues in these sections focused on the amendments caused by a conflict of interest and also provided technical amendments. The first important issue was that the current language in the first clause referred to a member of council, which would be affected by their conflict of interest and also introduced a member of a committee of council.

Clause 1 had three sub-clauses that were inserted. Subsection (7C) stated that a committee of the council with delegated functions in terms of 68 (2) may not take a decision on a matter considered by it if any member of the committee had a conflict of interest contemplated in this section. Subsection (7D) indicated that after council followed due process a member of the council who contravened the newly added subsections may be suspended from attending a meeting or disqualified as a member of council member. Subsection (7E) pointed out that after consultation with the institutional forum the council needed to adopt a code of conduct and determine rules and procedures for all members of the council and committees of the council.

Clause 2 omitted subsections (4) and (5) and emphasised, amongst other things, that an employee needed to declare in writing any business interests that may have raised a conflict of interest with the public higher education institution concerned and not conduct business directly or indirectly with the institution he or she is in the employ of. However, the employee may trade with the employer if the council was of the opinion that the goods, products or services in question were unique; the supplier was a sole provider; and it was in the best interests of the institution.

Clause 4 Subsection (1) stated that the Minister may issue a directive to the board to state actions specified by the Minister if the National Student Financial Aid Scheme (NSFAS) was a) in financial difficulty or otherwise mismanaged b) was unable to perform its functions effectively due to dissention among board members c) had acted unfairly in a discriminatory or an acquitable way towards a person to whom it owed a duty under this act d) had failed to comply within the law, e) had failed to comply with any directives given by the Minister under this Act or f) had obstructed the Minister in performing a function in terms of this Act. Subsection 2 detailed the steps needed to remedy a situation that arose as a violation of Subsection 1.

Clauses 5 and 6 were deleted as they provided for situations where the board coexisted with the administrator. The Committee instructed the Department to remove it from the Bill. The principles clearly stated that there was to be an administrators or a Board, but not in co-existence. A new clause (17D) was added, which indicated that the board would be dissolved from the date the Minister appointed the administrator in terms of Section 17A (3)(a).

(See attached document for more details)

Discussion
Mr S Makhubela (ANC) asked whether the reference to committee of council in Clause 1 Subsection 7D was redundant. He asked for clarification on Clause 2 Subsection (7), and whether conflict of interest went beyond direct or indirect financial gain. He suggested that conflict of interest was not limited to financial gain and suggested that it should include ‘other’.

Adv Boshoff responded that the clause could be amended by removing the word ‘financial’. This would then include indirect and direct gain.

Mr Makhubela asked about appointment process once the initial four-year appointment term for the Council had been concluded.

Adv Boshoff responded that the Minister was provided a limit to the timeframe, but no a specific period. The language of the Bill was not limiting it to carrying the old term, but a new determination that the minister would make.

Mr A van der Westhuizen (DA) asked for clarification on the implications of the word ‘and’ in Clause 2 subsection 5 related to the phrase “the supplier is the sole provider and it is in the best interests of the institution”. He asked if this clause would apply to staff members who authored a textbook but did not publish the textbook.

Adv Boshoff responded that the issue of conflict of interest was very difficult to define. The language used in the Bill showed that it was clear that direct or indirect gain was the criteria being used. It would be unfair to allow a person with a decision making function in the institution, to take a decision which provided personal gain. The were ‘and’ included all the criteria listed in Clause 2 subsection 5 a,b,c. There were profound implications for procurement processes.

Mr van der Westhuizen enquired if the librarian had to first get the right from the university council if she or he wanted to buy a book for reference if the employee of the university authored it.

Ms Anthea Gordon, Parliamentary Legal Advisor stated that the book had to be recommended by the council of the university if it found it to be a resource and was developed by the university employee.

The Chairperson stated that a university would have to structure a supply chain management system that responded to this clause. How would one manage the procurement process in its own institution? On the issue of appointment and dissolution of council members, the processes for dissolution of the council may be impractical.

Ms N Gina (ANC) stated that it was proper to leave the clause as it was, because if the Minister was alarmed, due process would be followed and a decision would be taken rather then internally y the Board.

Dr J Kloppers-Lourens (DA) added that a distinction needed to be made between a Member of the Board and the Board.

The Chairperson stated that a Board was a properly constituted body. Three members would did not form a quorum did not constitute a board.

Adv Boshoff responded that if there were coexistence of the Board and the administrator, the Board may request the administrator to assist. In this case since there was no coexistence, if a minister wanted to resign, he could design.

The Chairperson asserted that the subsection at issue was superfluous.

Adv Boshoff stated that if the Minister appointed the administrator, the list of criteria in subsection (1) was a list of objective criteria against which the Minister needed to take a decision. Subsections a) and b) needed evidence, while c) did no require the same level of proof. It was making the appointment process much easier because there was clearly a dysfunction.

The Chairperson stated that the Committee needed to accommodate both views because there was a possibility that the Board would not be able to agree.

Dr Kloppers-Lourens stated that she was happy with the amendment

The Chairperson that the phrase NSAFAS and Higher Education should also make reference to ‘and Training’ because NSFAS also funded Further Education Training colleges it was important to not excluded training.   
Mr Makhubela asked who would remove the appointed administrator from office was this Ministerial approval a regular variable? What happened if the Minister did not approve?

Adv Boshoff responded that there were also financial implications with the appointments and the complexities of governing an institution of this nature required discipline. The Minister would have an obligation to consider a request of this nature within the ambit of the administrative laws to consider all the relevant fact and provide a reason for such a decision. There were checks and balances built into the administrative law to ensure that it was properly considered.

A Committee Member stated that an administrator would take over all the duties and functions of a Board, and could not be a player and referee at the same time. This was also a conflict issue.

Dr Kloppers-Lourens asked whether the phrase ‘any other person’ in 17 (B) applied to singular and plural. In the initial document it was referred to persons.

Adv Boshoff responded that the draft legislation was always in the singular, unless the intention was to specifically have it in the plural. The Interpretation Act provided the flexibility that the singular would also include the plural.

Mr Makhubela asked about the issue of conflict of interests, and where did the committee of council take decisions?

Adv Boshoff responded that the decision-making structures were those who were included when it came to the issues pertaining to procurement and the surviving financial benefits to the decision makers. The understanding was for the council and committees of council, the delegated functions received dealing with procurement aspects needed to be included, and not the other structures that were more of a policy-making function such as the institutional forums did not deal with procurement, but dealt with the policy relating to their constituency and there fore it was not included.

Mr Makhubela stated that councils were not accounted for in the same manner that committees of council were. Committees operated independently from council.

Adv Boshoff called the Committee’s attention to clause 9 (E) b) I which stated that ‘each member of council, each member of council committee and each person who exercises functions of council in terms of delegated authority’ this person would also be covered as part of the declaration of the rules that the institution needed to develop in order to keep different structures in tact and ensure that they complied with their responsibility in terms of this clause.

Mr van der Westhuizen commented that he would like to put it on record that the DA opposed the view that Further Education Training colleges were being nationalised or made a national competency. The DA believed that the Amendment Bill had omitted changed that the DA would have like see such as the strengthening of FET college councils. The council’s role as an employer had been decreased through these changes and the DA  had a different view, that they would have wanted to see the councils be more autonomous and to take on greater responsibility. This was a fundamental difference of opinion.

The Chairperson noted Mr van der Westhuizen’s comments.

The Chairperson adjourned the meeting.