NOTE TO CHAIRPERSON: PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES

DATE: 31 JANUARY 2007

FROM G HOON [PRINCIPAL STATE LAW ADVISER]

RE: CLAUSE 4 OF SOUTH AFRICAN AIRWAYS BILL [B35-2006]

1. In terms of clause 4 of the abovementioned Bill the Minister of Public Enterprises may convert South African Airways (Pty.) Ltd. into a public company after the company has been transferred to the State. The Bill does not prescribe any requirements that have to be met before such conversion can be effected. I have been requested to investigate whether or not the Bill can be amended to either create a framework indicating under which circumstances conversion would be allowed or to require approval by Parliament as a prerequisite for conversion.

2. In Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1988 (2) SA 374 (CC), in paragraphs 56 to 59, the Constitutional Court stated that it "seems central to the conception of our constitutional order that the legislature and executive in every sphere are constrained by the principle that they may exercise no power and perform no function beyond that conferred upon them by law". In terms of section 85(2) of the Constitution of the Republic of South Africa, 1996, the Minister exercises executive authority amongst other things by "preparing and initiating legislation" and by "implementing national legislation except where the Constitution or an Act of Parliament provides otherwise"(my underlining). In terms of section 44 of the Constitution national legislative authority as vested in Parliament confers on the National Assembly amongst other things power "to pass legislation with regard to any matter, including a matter within a functional area listed in Schedule 4, but excluding, subject to subsection (2), a matter within a functional area listed in Schedule 5".

3. I can find nothing in the Constitution or any other law preventing Parliament from creating a framework indicating under which circumstances conversion would be allowed or from requiring approval by Parliament as a prerequisite for conversion.

4. I you want me to draft something once you have settled `policy please let me know.