MEMORANDUM

 

 

THE NATIONAL SPORT AND RECREATION AMENDMENT BILL, 2006

 

 


1.         THE SPORT AND RECREATION AMENDMENT  BILL

 

1.1        The implications for the South African Rugby Union (SARU), should the proposed amendments to the National Sport and Recreation Act 110 of 1998 (Act 110/98) taken up in the National Sport and Recreation Amendment Bill 2006 (the Sport and Recreation Bill) be promulgated, have been considered by SARU in detail.

 

1.2        We deal with aspects thereof hereunder.

 

1.3        SARU is a "National Federation" which under the Sports legislation means a national governing body of a code of sport in the Republic recognised by the relevant international controlling body as the only authority for the administration and control of the relevant code of sport in the Republic.

 

1.4        This applies also to the other major National Federations governing major professional sports in the Republic, including the South African Football Association (SAFA) and the United Cricket Board of South Africa (UCB).

 

1.5        For the purposes of this memorandum, the most relevant international controlling bodies are the International Rugby Board [IRB] in the case of Rugby Union, the Fédération Internationale de Football Association [FIFA] in the case of football, the International Cricket Council [ICC] in the case of cricket, and, in relation to the Olympic movement, the International Olympic Committee [IOC].

 

1.6        It is of concern to SARU that the thrust of the proposed legislation intrudes upon the autonomy and financial independence of the National Federations to such a degree that one or more of the National Federations could incur a suspension of the same kind as befell the Hellenic Football Federation (HFF) at the hands of FIFA on 3 July 2006. 

 

1.7        In the view of FIFA the situation of the HFF was not in line with the principles of the FIFA Statutes regarding the independence of member associations and the independence of the decision-making process of the football-governing body in that country.  According to FIFA:

 

                        "In September 2005, the FIFA Executive Committee gave the HFF a deadline of 15 July 2006 to obtain from the Greek government an amendment to the national law on sports in order to enable the association to be in conformity with the FIFA Statutes and the relevant UEFA regulations.

 

                        In spite of repeated warnings from both FIFA and UEFA, the commitment expressed by Greek government representatives to amend the law on sport to irrevocably recognise that football matters can only be decided by the HFF and its subordinated football structures has not been respected.  In fact, the recently presented draft of a new law on professional leagues constitutes another example of interference from the government in football affairs.  Therefore, the FIFA Emergency Committee has determined that the deadline would not be met by the HFF and that the suspension of this federation was necessary.

 

                        This decision means that the HFF and all of its members (clubs, players, officials) are suspended with immediate effect and until further notice from all international contact, which also includes participation in international competitions at all levels, the organisation of international matches in Greece and the appointment of officials for international duties.".

 

1.8        Although SARU does not speak for SAFA in relation to these matters, it must be recorded that should FIFA similarly consider the proposed legislation in a negative light, this will not be good for South Africa in anticipation of 2010.

 

2.         NATIONAL SPORT AND RECREATION AMENDMENT BILL, 2006 (THE SPORT AND RECREATION BILL)

 

2.1        Considering the Sport and Recreation Bill as a whole, it is clear that it will vest public law power (including the power of disposition over public funds) in the hands of a private law entity, namely SASCOC, a non-governmental Section 21 company incorporated under the Companies Act, 1978, alternatively a non-governmental association, SASCOC, originating in amendments to Act 110/98.

 

2.2        If the provisions of the Sport and Recreation Bill become law, it will impel National Federations comprising voluntary associations of persons to be members of SASCOC in conflict with their constitutional right to freedom of association.

 

2.3        The enactment of such provisions in the Sport and Recreation Bill will, in our view, render the legislation unconstitutional either in whole or in part.

 

2.4        Provisions of the Sport and Recreation Bill

 

In terms of the Sport and Recreation Bill:

 

2.4.1     SASCOC is a non-governmental sports body comprising a number of statutorily designated constituent components including the National Federations (as defined) in the Sport and Recreation Bill.  (Sport and Recreation Bill S.1).

 

2.4.2     SASCOC will be the overall recognised national co-ordinating macro-body for the promotion and development of high performance sport and recreation in the Republic.  (Sport and Recreation Bill S.2(a)).  (The Sport and Recreation Bill does not define "high performance sport" and it is not clear whether the concept can apply to all sporting codes).

 

2.4.3     SASCOC will have the discretion to require:

 

2.4.3.1  a government ministry;

 

2.4.3.2  a government department;

 

2.4.3.3  a provincial authority,

 

to consult with it concerning their activities relating to sport, recreation, physical education, training programmes and development of leadership qualities.  (Sport and Recreation Bill S 2(c)).

 

2.4.4     SASCOC will have the power to impel all sport and recreation bodies (which includes the National Federations and a trust or registered company of such a Federation or any agency or body involved in sport or recreation) to consult and co-ordinate with it on any matter prescribed by regulation.  (Sport and Recreation Bill S 2(d) and 15).

 

Furthermore, in terms of the Sport and Recreation Bill:

 

2.4.5     The National Department of Sport and Recreation will be statutorily required to enter into "a service level agreement" (not defined) in respect of functions assigned to SASCOC under the Act and the Minister must, after consulting with SASCOC, make regulations in relation thereto.  (Sport and Recreation Bill S.4).

 

2.4.6     The Minister must first consult with SASCOC before determining the general policy to be pursued with regard to sport and recreation.  (Sport and Recreation Bill S.5(a)).

 

2.4.7     SASCOC will determine priorities in the annual allocation, as Ministerial policy, of funds for the creation and upgrading of multi-purpose sport and recreation facilities (in consultation with provincial and local authorities and relevant sport and recreation bodies).  (Sport and Recreation Bill S.5(b)).

 

2.4.8     SASCOC will be empowered to exercise certain powers in relation to education and training needs in sport and recreation.  (Sport and Recreation Bill S 8).

 

2.4.9     It will be SASCOC which must, in accordance with its funding policy and S.10, provide physical facilities for sport and recreation on a national level (depending on the availability of funds).  (Sport and Recreation Bill S 9(a)).

 

2.4.10   SASCOC will have the power to allocate funds in relation to the funding of sport and recreation in the Republic in accordance with its funding policy.  (Sport and Recreation Bill S.5 (b)).

 

2.4.11   SASCOC is required to establish a national colours board to consider all applications for awarding national colours.  (Sport and Recreation Bill S.12(a)).

 

2.4.12   The Minister will be required to (must) consult with SASCOC before making regulations under the Act.  In terms of such regulations, matters such as the hosting and funding of major international sporting events, awarding of national colours and the fitness industry will be regulated.  (Sport and Recreation Bill S.15).

 

 

 

2.5        Consequences of the Sport and Recreation Bill

 

2.5.1     In terms of the Sport and Recreation Bill, SASCOC will take over the effective control of sport and recreation with wide executive and administrative powers (including the disposition of public funds) in the Republic.

 

2.5.2     SASCOC will in essence, should the Sport and Recreation Bill become law, substitute for an effective ministry of sport in the Republic which largely abdicates ministerial and government power to SASCOC under the Sport and Recreation Bill.

 

2.5.3     The Sport and Recreation Bill, therefore, gives rise to the following constitutional questions namely:

 

2.5.3.1              can the legislature appoint or designate a non-governmental private entity – in this case SASCOC – to perform executive and administrative acts and essentially to substitute as the sports ministry of the Republic?

 

2.5.3.2              can the legislature appoint such a body to exercise powers over the affairs of a series of legal persons with their own constitutions which administer professional sport in the Republic as National Federations in tandem with private companies and/or trusts which administer the professional aspects of the relevant sporting codes?

 

2.5.4     in particular, can the legislature statutorily determine that the National Federations (as private-law voluntary associations of persons) are impelled to be members of a private company incorporated under Section 21 of the Companies Act, 1973, or of any other non-governmental association of persons?

 

2.6        In the view of SARU, the answer to all of the above questions is "no".

 

 

2.7        A full consideration of the above constitutional issues is, however, beyond the ambit of this memorandum.  Suffice it to say, however, that insofar as Section 1(i) of the Sport and Recreation Bill impels such of the National Federations comprising voluntary associations of persons to become members of i.e. forcibly associated with SASCOC (whether a non-governmental private law Section 21 company in terms of the Companies Act, 1978, or other non-governmental association of persons), the said Section is in conflict with the right to freedom of association entrenched in Section 18 of the Bill of Rights of the Constitution of the Republic of South Africa, 1996 (hereafter the Constitution).

 

2.8        The provisions of Section 13(d) of the Sport and Recreation Bill, which propose to introduce new Section 13(5) to Act 110 of 1998, intrude upon the ordinary private law functions of the National Federations, which are private and not public law bodies, and the provisions will be ultra vires as a result.  (Sport and Recreation Bill 13(d)).

 

2.9        The provisions of the new Section 13(9) of the Sport and Recreation Bill as administrative action by the Minister or SASCOC are also of particular concern to SARU as the section does not provide for a procedure that is reasonable and procedurally fair; and the second proposition to exclude an appeal or review of the decisions of SASCOC in respect of disputes between members inter se or members of a National Federation and a member or members.  This section would, therefore, be in conflict with the right to just administrative action entrenched in Section 33(1) of the Bill of Rights of the Constitution, which provides as follows:

 

1)       Everyone has the right to administrative action that is lawful, reasonable and  procedurally fair;

2)       Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons;

3)       National legislation must be enacted to give effect to these rights, and must:

a)       provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal;

b)      impose a duty on the state to give effect to the rights in subsections (1) and (2); and

c)       promote an efficient administration.

                                                                                 

                No definition of “directive” is provided for.  In this respect and possibly also others, it is    

           suggested that some parts of the new Section 13 (5) is void for vagueness.          

           (Sport and Recreation Bill 13(d)).

 

3.         REPEAL OF THE SOUTH AFRICAN SPORTS COMMISSION ACT 109 OF 1998

 

3.1        The South African Sports Commission (SASC) was established as a statutory body on 10 September 1999 in terms of Section 3 of Act 109 of 1998 which provided:

 

                        "A juristic person to be known as the South African Sports Commission is established."

 

3.2        SASC was intended to be the overall co-ordinating governmental body for promoting and developing sport and recreation in the Republic and was charged with developing guidelines for this purpose (Section 2(1)(2) of the National Sports and Recreation Act 110 of 1998) (Act 110/98).

 

3.3        However, now in terms of the Sport and Recreation Bill, the South African Sports Confederation and Olympic Committee (SASCOC) will be substituted for the SASC in Section 11 of Act 110/98, the provisions of which will otherwise remain unchanged.

 

3.4        This follows upon the disestablishment of SASC under Section 2 of the South African Sports Commission Repeal Act No. 8 of 2005 on 1 August 2005 (the SASC Repeal Act) which provided:

 

                        "The Commission established by the South African Sports Commission Act, 1998, is hereby disestablished."

 

3.5        It is noteworthy that in terms of paragraph 1 of the Memorandum on the South African Sports Commission Repeal Bill, 2005 published in Government Gazette No. 26477 of 25 June 2005 (hereafter the SASC Repeal Bill), the objects of the SASC Repeal Bill were stated as being:

 

"(a)       disestablish the South African Sports Commission (hereinafter referred to as the Commission);

 

(b)        provide for the transfer of all the employees of the Commission as well as the transfer of its assets and liabilities to the Department responsible for Sports and Recreation at national level;  and

 

(c)        repeal the South African Sports Commission Act, 1998."

 

3.6        The implication was therefore that SASC would be absorbed within the Department of the Minister of Sport and Recreation which would thereafter carry out the governmental functions prescribed in Act 110/98 in lieu of the South African Sports Commission.

 

3.7        No indication was given in the SASC Repeal Bill that SASCOC (a private body) would be substituted for SASC by means of amendments to Act 108 of 1998 despite the absorption of SASC into the Department under the SASC Repeal Act.

 

3.8        Curiously, however, Section 1 of the SASC Repeal Bill provides a definition of the juristic non-governmental body, SASCOC, without otherwise mentioning it in the text of the Bill. 

 

3.9        The SASC Repeal Act makes no mention, subsequently, to SASCOC.

 

4.         THE SOUTH AFRICAN SPORTS CONFEDERATION AND OLYMPIC COMMITTEE (SASCOC)

 

4.1        The proposed relationship between SASCOC and the National Federations must be of real concern to the latter.  We proceed on the basis that the Sport and Recreation Bill, when referring to SASCOC, means the Section 21 company referred to in the following paragraphs as this conclusion appears to us to be inescapable.

 

4.2        Insofar as "SASCOC", as referred to in the Sports and Recreation Bill, could, however, turn out to be a non-governmental association of persons other than the Section 21 Company of that name, the considerations hereunder set out apply equally thereto, unless the paragraph concerned clearly refers to the Section 21 company only.

 

4.3        SASCOC was incorporated as Section 21 company No. 2004/033949/08 under the Companies Act, 1973, on 26 November 2004 (that is prior to the statutory disbandment of the SASC on 1 August 2005).

 

4.4        Should the NSR Sport and Recreation Bill, become law, SASCOC will be vested with wide-ranging powers (as it steps into the shoes of SASC in terms thereof) which include extensive powers of control over the affairs of the major National Federations.

 

4.5        The draft control provisions to be inserted in Act 110/98 include the following:

 

4.5.1     in terms of the definitions section SASCOC will be a non-governmental sports body consisting of seven constituent components of which the major professional National Federations are but one and whose powers and autonomy will be diluted by the equivalence of the other constituent components, being the Olympic National Federations, the Commonwealth National Federations, school sport, tertiary institution sport, National Federations catering for athletes with disability and the All Africa Games National Federations;

 

4.5.2     most importantly the definition of "sport or recreation body" means any National Federation, agency, body, including a trust or registered company of such a National Federation, agent or body, involved in the administration of sport or recreation at national level.  In other words, SASCOC will exercise control over the companies which professional sport have created under their constitutions to govern the activities of the codes concerned at the professional level.  Such companies will include SA Rugby (Pty) Limited, SAFA Promotions (Pty) Limited and Cricket South Africa (Pty) Limited;

 

4.5.3     If the Sport and Recreation Bill becomes law, Section 2(1) of the amended Act 110/98 will place SASCOC in the position of the overall recognised national co-ordinating macro-body for the promotion and development of high performance sport and recreation in the Republic (high performance sport not being defined);

 

4.5.4     Section 2(4) of the amended Act 110/98 will require all National Federations to consult and co-ordinate with SASCOC in respect of any matter that might be prescribed under the Act by a Regulation. 

 

4.5.5     These Regulations will concern virtually all aspects of the governance of sporting codes and recreational activities in the Republic.  (Sport and Recreation Bill S.15).

 

4.6        As a result of its incorporation under the Companies Act, SASCOC also derives extensive powers over the National Federations from the provisions of its registered Memorandum and Articles of Association, which provisions are contractually binding upon its members and which together comprise the constitution of SASCOC in terms of clause 1.1 of its Memorandum of Association.

 

4.7        National Sports Federations which run codes of sport also on a professional level in the Republic must therefore also be wary of the provisions of the Constitution of SASCOC as they impact upon the financial and other autonomies of the National Federations concerned. 

 

4.8        In regard to the aforegoing we have taken cognisance of the following clauses in the Articles of Association of SASCOC namely:

 

4.8.1     National Sports Federations must make application to and be accepted as a member by a general meeting of SASCOC (articles clause 5.1);

 

4.8.2     As already recorded herein, the National Federations will be statutorily included as members of SASCOC in any event if the Sport and Recreation Bill becomes law (see paragraph 2 above);

 

4.8.3     Membership renders members subordinate to SASCOC and members are required and bound to comply with its constitution, regulations and rules and any directives issued by SASCOC from time to time;

 

4.8.4     SASCOC may also make rules in relation to the colours and emblems of national members and, notably, also to amendments to the constitution of members which are contracts in private law and can only be amended by members (clauses 7.1.2 and 7.1.6 of the Articles of Association).

 

4.9        The powers of SASCOC in terms of its Articles 8.3.1.3 are draconian and unlawful, ie to enquire into the administrative and/or financial affairs of Members, and where necessary, to recommend corrective measures in this regard, and if these measures are not implemented to make recommendations to take over the administrative and/or financial affairs of the Member until these are placed on a satisfactory footing;

 

            SASCOC therefore has the right to put a Member under Judicial Management and to act as Judicial Manager, without a Court Order or appointment by the Master of the High Court and therefore contrary to the provisions of the Companies Act in the case of Companies.

 

4.10      Thus, by virtue of the proposed amendments to Act 110/98 and the taking up of unqualified membership of SASCOC, the professional National Federations leave themselves open to a loss of control and autonomy in the financial and other administration of their codes of sport across the board and therefore also on the professional level.  This situation is compounded by the prejudicial provisions taken up in the Draft Regulations 2006 (which are pending publication).

 

4.11      SARU finds it noteworthy in the above regard that the main object of SASCOC in its Memorandum of Association "is to promote and develop high performance sport in the Republic of South Africa as well as to act as the controlling body for the preparation and delivery of Team South Africa and all multi-sport international games including but not limited to the Olympics, Paralympics, Commonwealth Games, world games and All Africa Games".

 

4.12      It appears to us that the Constitution of SASCOC has been constructed mainly with track and field sports and the like in mind without proper consideration having been given to the particular and different position of the National Federations which control professional sporting codes such as Rugby Union, Association Football and Cricket.

 

4.13      In our view the activities of SASCOC should be confined to those matters dealt with in paragraph 4.11 above whilst the principle of autonomy should apply to the National Federations which govern professional sporting codes in the Republic.  Our position is that these bodies are best suited to this task and should be free to act accordingly.

 

5.         CONCLUSION

 

5.1        It is clear to SARU that should the provisions of the Sport and Recreation Bill become law, this will provide statutory powers under which SASCOC will take effective control of the affairs and constitutions of the National Federations.  By this means the autonomy and control – including financial control – over their own particular codes of sport would in effect be largely excluded in favour of SASCOC.

 

5.2        The promulgation as law of the provisions of the Bill as they now stand will be detrimental to the financial interests and autonomy of the National Federations of South African professional sports in general and of SARU, SAFA and the UCB in particular.

 

5.3        SARU can discern no sound or good reason for the substitution of SASCOC as a functioning Ministry of Sport and Recreation in lieu of the Department.

 

5.4        Such a structure does not appear to SARU to be in the interests of South African sport in general or of the professional and other codes of sport in the Republic in particular.

 

5.5        It is to be expected therefore that a strategy must be formulated in relation thereto by SARU and the other National Federations which are adversely affected and this strategy directed at bringing about the requisite amendments to the Act

to take cognisance of and give effect to the particular established rights and international status of the National Federations concerned.

 

5.6        Furthermore, SARU is advised that the provisions of the Sport and Recreation Bill are unconstitutional and ultra vires in many respects and these provisions will be illegal if enacted.

 

5.7        In summary, the Sport and Recreation Bill, 2006 requires urgent attention and concerted action by SARU and its brother National Federations.

 

5.8        It is suggested that the Bill be referred to Parliament’s legal advisors for more detailed advice and further guidance.

 

 

SOUTH AFRICAN RUGBY UNION