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)).
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