INTRODUCTION
In the case of Le Roux v Direkteur-Generaal van Handel en Nywerheid which dealt with the right of access to State information in terms of section 23 of the interim Constitution, it was stated that, "section 23 of the interim Constitution means that public authorities may no longer play hide and seek with members of the public when the latter exercise or protect their rights…. The object of the interim Constitution, as appears from section 23, is to subject organs of State to a new dispensation of openness and fair dealing with the public."
The ideals underlying the Open Democracy Bill (the Bill) are aptly described in the above case. The broad principles that make up the constitutional right of access to State information have already been agreed upon widely, and have been entrenched in the final Constitution. It can therefore safely be said that there is broad consensus with regard to why the principle of access to State information is justified, and why it is regarded as one of the fundamental rights necessary in an open and democratic society.
The intention and spirit of the Open Democracy Bill is accordingly supported by Transnet.
The stage has now been reached where the principles have to be put into practice, and thus the introduction of the draft Bill. The draft Bill is aimed at the ‘bread and butter’ issues:-
• the logistics, functioning and guidelines which will direct how all parties concerned will have to operate to give effect to the Bill in a manner that is fair and reasonable.
Parliament has until 4 February 2000 to enact the appropriate legislation to give effect to the right envisaged in section 32. The foregoing is important for practical purposes and is relevant as well, considering that one such instance of ‘appropriate’ piece of legislation to give effect to the right envisaged in section 32 of the final Constitution – namely the Open Democracy Bill.
This submission aims to highlight practical issues that may be considered in the development of the Bill. Different authorities are examined which provide guidelines relating to the Bill and a few suggestions are put forward which may be of practical use.
It is emphasised that these submissions are made in the spirit of contributing constructively to the development of the Bill.
UNFAIR ADVANTAGE TO COMMERCIAL COMPETITORS. SECTION 1(v)(a)(iii), SECTION 38(2)(a), (b) and (c), SECTION 31
Section 1(v)(a)(iii) includes Transnet in the definition of a "governmental body" by definition. It is submitted that an organisation such as Transnet be excluded from this definition for the following reasons:
(a) It is a public enterprise which is required to operate on a commercial basis. It is a commercial competitor in the marketplace for the services that it provides. It occupies a strategic competitive position in relation to other companies who provide similar services.
There would be an unfair advantage which Transnet’s competitors would have over it if they were allowed to have access to information which they could use to their benefit and to Transnet’s detriment, and Transnet is compelled to give them this information because it is included in the definition of a governmental body in terms of section 1(v).
(b) the inclusion of Transnet as a govermental body results in additional obligations and costs for it to provide information in terms of the Bill. The Bill makes provision for a structure and process which must be put in place by Transnet to supply information. Infrastructure will have to be put in place and staff will have to be employed and trained to facilitate the process of provision of information in terms of the Bill. Transnet’s private sector competitors are not compelled to incur the same costs. They will therefore have an unfair advantage over Transnet in the competitive marketplace.
(c) The Constitution (section 195) refers expressly to an organ of state and a public enterprise separately. The relationship that is envisaged by the Constitution is a "vertical relationship" i.e. a relationship between the state and the subject.
It is submitted that the distinction should be maintained between an organ of state and a public enterprise. Should a party require information, for example, on governments Transport policies, he./she should obtain the information from the Department of Transport.
A public enterprise such as Transnet should not be compelled to supply information to this party since the relationship between Transnet and the requester is a "horizontal" one (i.e. they are on the same "level playing field") if the definition of "governmental body" is limited to an organ of state only and not a public enterprise.
A further note to be added to this is the relationship that should exist between Transnet and public enterprises with strategic equity partners, or public enterprises which are in the process of being privatised.
It is submitted that the above entities, due to their hybrid nature, should be regarded as private sector entities, and they should be excluded from being able to request information from Transnet.
SECTION 31 -
It is submitted that section 31 should not be limited to mandatory protection of third party commercial information only, but should extend to protection of Transnet’s own information.
Although section 38(2)(a)(b) and (c) makes provision for protection of commercial information, this protection should be explicitly mentioned. It is therefore submitted that all references to "third party commercial information" in section 31 be extended to include protection of a governmental body’s own information on the same terms and conditions in section 31(1).
This section should be further amended to address subsection (c) of section 31. This clause refers to "better informed choices". [Section 31(2)(c)]. It is submitted that this clause is too wide and vague and should the application for information reach the High Court, Transnet could be compelled to disclose confidential information. Section 31(2)(c) should either be deleted, or the phrase "better informed choices: should be clearly defined and elaborated upon, to make the situation fair to both parties.
THE ‘LE ROUX’ TESTS– PURPOSE AND REASONABLE FOUNDATION – BURDEN OF PROOF SHOULD BE ON APPLICANT (AN ALTERNATIVE TO SECTION 79)
The LE ROUX case quoted above provides guidelines for the provision of information by the State. Where a subject (natural or legal person) requires information from the State in order to exercise or protect his or her rights against another subject, the party requesting the information should, at the outset, have a legally good reason for doing so.
(a) An applicant, in order to demonstrate in legal proceedings
his entitlement to information …, should in his application, in respect of each document claimed, at least lay a foundation for why that document is reasonably ‘required’ for the exercise or protection of his or her rights.
(b) In order for this purpose to be properly considered, it is important that an applicant lay a proper and complete foundation for the exercise of that right. (own underlining).
It is clear that an organisation such as Transnet would require:
(a) a foundation (or purpose) which is
(b) proper and complete
before even considering whether to provide information to the public.
The above test is thus suggested as a preliminary test to be applied in considering whether to entertain an application for State information. Should the applicant’s request pass this preliminary test, it may still be excluded due to further qualifications that bar the disclosure of the information. The onus should thereafter shift to the state to justify their refusal. Section 79 could be redrafted to incorporate the above.
ARTICLE 10 OF THE CONVENTION FOR THE PROTECTION OF HUMAN RIGHTS AND FUNDAMENTAL FREEDOMS – CRITERIA FOR APPLYING CHAPTER 2 OF PART 3 OF THE BILL
Article 10 reads as follows:-
‘(1) Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.
(2) The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.’
The restrictions mentioned in (2) above are comprehensively addressed in Chapter 2 of Part 3 of the Bill. The question that arises is how are proper guidelines to be formulated for the application of the above?
In GOODWIN v UK it was held that in order to reveal the source of confidential information, there had to be exceptional circumstances where vital public or individual interests were at state6. In applying article 10 it was necessary to carry out a balancing exercise between the need to protect sources and the ‘interests of justice’.
It is submitted that section 78(3) should be amended so that the High Court may refuse disclosure in the interests of justice and on the grounds of public policy as well. The concept of public policy implies a wider ambit than the interest of justice, and should the circumstances arise, the court should have the option to refuse disclosure on the grounds of public policy.
Section 5 of the Bill makes provision for the publication of a guide containing information regarding the Bill. It is suggested that the guide should specifically mention the relevant sections of the Constitution upon which the Bill is based i.e. section 32 and explain in layperson’s terms the implications of a person’s right to access of State information. This would help to prevent unnecessary enquiries to a large organisation such as Transnet, which cannot afford to be inundated with requests by requesters who do not properly understand the basic concept underlying the Bill.
It is suggested that Article 10 quoted above also be included in the guide since this explains the concept in a single, straightforward manner.
To go a step further, it is suggested that a person seeking guidance from the Human Rights Commission (HRC) on how to approach Transnet, (but not wishing to be represented by the HRC in its application to Transnet) should be given proper guidelines on the relevant aspects of the Bill, so that when he/she eventually makes an application for information at Transnet, he/she is well "coached" in the substantive and procedural aspects of the application for information. This will ensure efficiency and smooth functioning of the entire process.
CHAPTER 2 – PART 6 – APPLICATIONS TO HIGH COURT
From a Transnet point of view, there is concern over two aspects of the process during legal proceedings, i.e. the availability records of the judicial proceedings and. oral evidence. It is conceded that section 78(1) is a necessary evil - an organization would have to provide records of even the most sensitive information to the court, and it cannot refuse to do this "on any grounds". It is clear that an organization such as Transnet would be loathe to provide information regarding for example a project which:
(i) it has spent time and money developing;
(ii) is strategically sensitive;
(iii) discloses methods which the organization uses to handle relations with its other clients and tenderers;
(iv) it intended never to be disclosed to anyone else except certain of its employees.
to a court, knowing that there is a probability that it may be disclosed to a 3rd party.
The concern expressed, however, is that even if the court dismisses the application and refuses to allow the information to be divulged to the applicant there is still the possibility that the applicant may obtain information regarding the project from a transcript of the court proceedings and/or the reasons for judgement. It is therefore suggested that since a judicial officer would have knowledge of the information in terms of section 78(1), the Bill make provision for the following:
(a) During the hearing of the application, if it has reached a stage where oral evidence is given, the judicial officer should:-
(i) allow a respondent (such as Transnet) to refuse to answer certain questions which may have the effect of disclosing sensitive/confidential information.
(ii) allow a respondent to refuse to answer questions which may have the effect tof indicating to the applicant the source of confidential information.
(iii) allow a respondent to refuse to answer question which may have the effect of prejudicing it in any manner regarding the disclosure of confidential information which it possesses.
ALTERNATIVE MEANS OF OBTAINING THE INFORMATION AND COSTS THEREOF
With the advent of the information age, there are many other avenues which exist for an individual to obtain information. It is only fair that should information be available from an alternative source, then Transnet should not be burdened with the task of providing the same. The Bill makes provision for this in section 43.
The only concern, however, is the question of costs. It is submitted that the latter part of section 43 dealing with costs should be deleted. The effect of that section should simply be that if the information is available elsewhere then the applicant should make use of the alternative source, e.g. the internet.
Therefore:
(a) the alternative source of information should include all alternative sources of information and not only information which is available to the public in accordance with other legislation; and
(b) there should not be a comparison of costs in determining whether Transnet should supply the information or not. The exclusion should be absolute - if the information is available elsewhere, then the applicant should avail himself/herself of the alternative source, at his/her own cost.
TENDER PROCEDURE OF TRANSNET
In the light of the decision in Goodman Bros. (Pty) Ltd. V Transnet Ltd. 1998 (4) SA 989 (W), it is submitted that section 32 of the Bill is not specific regarding tender procedures and the protection of information pertaining to tenderers who have not been successful. In the Goodman Bros. Case it was held that Transnet would have to disclose its tender documents and provide reasons for their decision not to accept certain tenders.
It was held that an award of a tender by an organ of state constituted an administrative act. The fact that the organ of state’s conditions of tender provided that it was not obliged to furnish reasons for its decision to unsuccessful tenderers was regarded as contrary to the spirit of the Constitution.
It is submitted that Transnet should not be obliged to disclose its tender documents and the right of a party to reasons for an unsuccessful tender should be limited to broad reasons for refusal and not disclosure of detailed information.
The Bill as it is currently drafted, does make provision for protection of 3rd party information, but does not specifically mention information supplied for the purpose of securing some advantage, grant, permit, contract or concessions from the govenrmental body concerned. Therefore it can be argued that there is insufficient protection for 3rd party information in the tender process.
It is submitted that section 32 should include information supplied to a governmental body for the purpose of securing some advantage, grant, permit, contract or concession from the governmental body concerned.
ADDITIONAL SUBMISSIONS BY TRANSNET LTD TO THE PORTFOLIO COMMITTEE ON JUSTICE WITH RESPECT TO THE OPEN DEMOCRACY BILL
Transnet supports the concept of access to State information with respect to the vertical relationship between the State and its subjects, but is concerned that the particularly sensitive and different position of Transnet Ltd. is not recognised and addressed in the Bill.
A. THE FOLLOWING CRITICAL AREAS COME TO MIND:
1. In order not only to be profitable and provide maximum dividend to its shareholder, the state, but indeed to survive, Transnet is compelled to compete internationally with competitors in the transportation and logistical field. In addition Transnet’s position is even more critical than parastatals such as Telkom and Eskom in so far as it is also subject to intense competition within the borders of South Africa.
1.1 It is submitted that an uneven playing field will be created by establishing access by its competitors to information directly or indirectly critical to Transnet’s business which information may be of such a sensitive nature that even making it available to the State may lead to it being used against Transnet by its competitors.
1.2 Transnet is of the view that additional and perfectly legal opportunities will be created for its competitors for obtaining evidence from Transnet’s own records to support such competitors’ applications for road or air transport permits or in order to oppose applications by SAA or Autonet in terms of the relevant legislation. It is submitted that the relevant Road Transportation Act, Act No. 74 of 1977 and International Air Services Act, Act No. 60 of 1993 as well as the Air Services Licensing Act, Act No. 115 of 1990 already provide for the manner in which evidence should be obtained and placed before the relevant tribunals and that it is iniquitous that a particular party should be prejudiced by virtue of the State’s involvement in such party’s shareholding. It may be argued that Section 38(2) of the Bill safeguards Transnet’s commercial information, but this does not preclude a competitor from using the appeal and application procedure as set out in Sections 67-81 by delaying the total process and pressurising Transnet management.
2. Transnet is in terms of Government policy presently in a process of finding strategic equity partners for certain divisions and business units of Transnet. It is difficult to evaluate the inhibiting effect that the Bill may well have on potential candidates and to what extent information exchanged between the parties may be prejudiced due to the varying ways of processing such information and to what extent either Section 31 or Section 38 may be applicable, but is likely to reflect negatively in the purchase price eventually paid to the state, especially if the State retains at least a 51% shareholding.
The same inhibiting, paralysing and general aspect of uncertainty will apply with respect to information pertaining to major existing or planned joint ventures between Transnet and ISCOR, RBCT, etc.
Due to the precedence of statute over contractual arrangements, confidentiality agreements between Transnet and its clients or other contractual parties may well have only limited application.
The tender process of Transnet Ltd should be subject to the same criteria that apply to the tender process of any similar large public company incorporated in terms of the Companies Act, Act No. 61 of 1973. Any information supplied to outside parties should be given in accordance with the principles of good corporate governance and not on account of the fact that the State happens to be a shareholder of Transnet Ltd.
IT IS SUBMITTED THAT APPLICATION OF THE BILL ON TRANSNET WILL HAVE THE FOLLOWING NEGATIVE AFFECTS:
a) Additional non-productive personnel will be required to give effect to Section 4, while Transnet is indeed in a process of transformation and restructuring to enable it to be more competitive. Additional management time will have to be allocated with corresponding loss of focus on its business activities and opportunities.
b) An element of uncertainty will be introduced in the day to day operation of the company in so far as no particular locus standi will be required in so far as in terms of Section 4 any person may at any given time start what may amount to a fishing expedition with respect to critical operational areas of the company.
c) It must be stressed that an additional mechanism for delaying critical Transnet processes is created by the Bill in so far as a competitor or its associate may well under the guise of an appeal against the refusal of certain information by Transnet, paralyse a commercial process of Transnet by arguing that the matter is sub iudice until a final decision has been reached in terms of Sections 67-81.
This may well result in a window of opportunity being lost by Transnet in its own particularly competitive environment.
d) With reference to its competitors, Transnet will be doomed to play on an unlevel playing field. This has the effect of relegating Transnet to less profitable markets in the industry.
e) The value of divisions/business units, which may be earmarked for privatisation, will be negatively affected with corresponding reduction in the return realised by the State for its shareholding.
f) Transnet’s profitability and cash flow will be negatively affected with a corresponding negative effect on the dividend payable to the State as its shareholder.
C. CONCLUSION:
Transnet wishes to submit that the Bill does not address the commercial and other complexities of Transnet’s present and future position and propose that Transnet Ltd as a public company be exempted from the proposed Bill in toto.