ATC130910: Report of the Select Committee on Co-Operative Governance and Traditional Affairs on the Intervention in Mnquma Local Municipality – dated 10 September 2013
NCOP Economic and Business Development
REPORT OF THE SELECT COMMITTEE
ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE INTERVENTION IN MNQUMA
LOCAL MUNICIPALITY DATED 10 SEPTEMBER 2013
1.
Background
and Overview
1.1
The
Select Committee on Co-operative Governance and Traditional Affairs,
having considered the request made by the National Council of
Provinces (NCOP) on the 11 July 2013, to consider and report on the
intervention notice invoked in terms of section 139(1
)(
b)
of the Constitution at
Mnquma
Local Municipality by
the Eastern Cape Provincial Executive Council (PEC), reports as follows:
1.2
The Office of the Chairperson of the
NCOP referred the notice of intervention in the affairs of
Mnquma
Local Municipality to the
Select Committee of Co-operative Governance and Traditional Affairs,
in terms of the NCOP Rule 101,
for consideration
and reporting. The
Committee
took a decision during its meeting to conduct an
oversight visit to the above-mentioned Municipality on the 27 August 2013.
2.
Purpose
and Objectives of the Oversight Visit
2.1
The main objectives of the oversight
visit was to determine whether procedural requirements had been met
and to verify whether the PEC had used its
discretion appropriately, before
the Committee could recommend approval/disapproval
of the intervention to the NCOP.
Through the deliberations and interaction with internal and external
stakeholders, the Committee wanted to determine how the PEC was intending to
restore the fulfilment of the relevant obligations and ensure fulfilment in the
long term. The aim was to ensure intergovernmental checks and balances aimed at
guarding the integrity and efficiency of the intervention process.
3.
Composition
of the Delegation
3.1
The
delegation of the Committee was composed of the following Members of Parliament
and Officials: Hon MH
Mokgobi
, Limpopo (ANC); Hon AG
Matila
, Gauteng (ANC); Hon LPM
Nzimande, KwaZulu-Natal (ANC); Hon B
Nesi
, Eastern Cape (ANC); Hon MV
Manzini
,
Mpumalanga (DA);
Hon J
Bekker, Western Cape (DA); Hon MW Makhubela, Limpopo (COPE); Hon JJ Gunda,
Northern Cape (ID); Hon.
MMM.Zulu
, KwaZulu-Natal
(IFP); Mr NA
Mfuku
, Content Adviser (Committee
Section); Mr MT
Manele
, Committee Secretary
(Committee Section); Mr BM
Mahlangeni
, Committee
Researcher (Research Unit); Mr MC
Mbebe
, Procedural Officer
(NCOP) and Mr N
Mangweni
, Administration Assistant
(Committee Section).
4.
Introduction
4.1
On the 03
rd
April 2013, the Eastern Cape MEC for Co-operative Governance and Traditional
Affairs tabled a notice of intervention in
Mnquma
Local
Municipality
to the Office of
the Chairperson of the NCOP. In terms of section 139 (2)(b)(ii) of the
Constitution, the intervention must end if the NCOP does not positively approve
the intervention within 180 days since the intervention began, in this case
before the end of 15 September 2013.
5.
Problems Identified by the PEC
5.1
On the 19
th
March 2013, the Executive Council of the Eastern Cape Province resolved to
intervene in the Municipality as contemplated in terms of section 139(1
)(
b) of the Constitution. This follows a fact-finding
exercise that was done by the Provincial Department of Local Government and
Traditional Affairs. A report was then presented to the Municipal Council on
the 14
th
August 2012. The report revealed the following amongst
other issues:
5.1.1
The Executive Mayor, the Speaker and the Chief Whip (Troika) were divided, to
the extent that they always disagreed on
items to be placed on the Council
agenda.
5.1.2 There are two factions in the Council, with one
being led by the Executive Mayor and the other by the Speaker and the Chief
Whip each group is acting in opposition of the other.
5.1.3 The two factions are operating parallel and the
Municipality has two heads of administration, Mr
Pakade
who is considered as the Municipal Manager by the group led by the Executive
Mayor and Mr
Waxa
who is considered as the Acting
Municipal Manager by the group which is led by the Speaker.
5.1.4 The Executive Mayor has, from time to time,
contravened the provisions of section 36(5) of the Local Government: Municipal
Structures Act (Act No. 117 of 1998) which states that
a councillor may not hold office as speaker or executive mayor at the
same time.
In that, the Executive Mayor has usurped powers of the Speaker
by convening Council meetings.
5.1.5 The Speaker has, from time to time, contravened the
provisions of section 36(5) which states that
a councillor may not hold office as speaker or executive mayor at the
same time.
She has however, usurped the powers of the Executive Mayor by
attempting to change the signatories to the Municipalitys bank account.
Furthermore, on the 18
th
September 2012 Council meeting, it stripped
the Executive Mayor of his powers and imposed these on her in violation of the
law.
6.
Appointment and Functions of the
Administrator
6.1
Mrs V
Zitumane
has since been appointed as the Administrator for
Mnquma
Local Municipality, to perform the disregarded obligations as stipulated within
the following terms of reference:
·
assist
the Municipality to ensure that all Council meetings are convened in accordance
to the applicable provisions of law and all resolutions are properly taken,
processed and implemented.
·
ensure
that there is
effective general administration within
Mnquma
Local
Municipality.
·
facilitate
and monitor the finalisation of disciplinary hearings of the suspended
officials to their logical conclusion.
·
facilitate
withdrawal of all pending cases instituted by the Municipality where
councillors are parties to proceedings, as resolved at a Council meeting of 06
March 2013.
·
facilitate the appointment
of competent managers to act in positions left by senior managers that have
been granted leave of absence, as stipulated in section 56 of the Local
Government: Municipal Systems Act (Act 32 of 2000), and to assist the
Administrator in the execution of their respective functions.
7.
Oversight Visit to
Mnquma
Local Municipality
7.1
On the 27
th
August 2013, the delegation of the Committee had
interactive and robust engagements with the internal and external stakeholders
of the Municipality. The thrust of the discussions was to
encourage constructive debate and support the levels of
meaningful public participation at every level that is at the centre of
co-operative governance and intergovernmental relations.
8.
Presentation by the Ministerial Representative for
Co-operative Governance and
Traditional
Affairs
8.1
The Deputy
Director-General for Developmental Local Government who was representing the MEC
for Local Government and Traditional Affairs, indicated that there was
instability in the Municipality on matters of governance, due to the non-
sitting of the Council meetings. There was division among councillors and that
led to eight High Court applications. The Troika was divided to the extent that
they always disagreed on the items to be placed on the Council agenda.
8.2
The
Council resolved to freeze the primary bank account of the Municipality, and
this resulted in the Municipality failing to meet its financial and contractual
obligations. However, the Department did intervene and resolved the matter. The
Council also resolved on the 06 March 2013, to request the MEC to intervene in
the affairs of the Municipality in terms of section 139(1
)(
b)
of the Constitution.
8.3
On the
19
th
March 2013, the Department introduced the appointment of Mrs V
Zitumane
as Administrator of
Mnquma
Local Municipality. She assumed duties on the same date for a period ending 18
th
September 2013. Since her appointment there has been a high level of stability
within the Municipality. The Troika meets to discuss Council agenda, and it
proceeds normally with high level of valuable debates. Lastly, the Municipality
has managed to turn the tide and there is more focus in achieving the set
objectives of delivering services to the community of
Mnquma
.
9.
Structure
of the Report
9.1
This
report is structured based on the basis of the Key Strategic Performance Areas
of the Local Government Strategic Agenda, which are: Municipal Transformation
and Organizational Development; Basic Service Delivery; Municipal Financial
Viability and Management, as well as Good Governance and Public
Participation.
(A).
Municipal Transformation and Organisational Development
9.2
Administrator:
It was reported that
administratively and politically there is significant stability since the
intervention, although there are still some obvious traces of resistance to
stability. What is of significant importance was the number of staff complaints
that are emanating from labour relations and labour disputes which are dating
back to many years without being
resolved.
Equally,
the underlying currents of instability in the Municipality also relate to gross
non-compliance with municipal legislation, policies and code of conduct.
9.3
All positions
that have been vacated by the section 56 managers who were sent on a paid
leave, and subsequently dismissed by Council, have been filled by acting
incumbents and such appointment may be reviewed based on performance. There are
various acting appointments which will be dealt with once the organogram has
been approved by Council. These positions have been advertised, after
discussions with the Department of Local Government and Traditional Affairs and
interviews have commenced during the third week of August 2013.
9.4
It was reported
that Council meetings were sitting in terms of the Rules, and the agenda is set
by the Troika. Five special meetings have taken place thus far and one ordinary
meeting. Council resolutions are subjected to quality assurance before they are
signed by the Administrator and the Speaker of Council, and ultimately
confirmed by the Council.
9.5
Municipal Council:
During the Extra
Ordinary Council Meeting held on the 06 March 2013, the Council resolved to
accept the intervention in terms of section 139(1
)(
b)
of the Constitution. On the same meeting, the Council resolved to grant the
Municipal Manager and three section 56 Managers leave of absence for a period
of three months, with immediate effect.
Thus leaving the
institution without its top management.
9.6
SAMWU:
The South African Municipal
Workers Union supported the placement of the Municipality under administration.
They further acknowledged the progress made thus far by the Administrator.
Hence, they recommended the intervention to continue until the section 57
manager positions have been filled. On skills transfer, an appeal was made
that the Administrator should ensure that there was skills transfer and
mentoring of staff, to ensure that the intervention gains are not compromised.
(B).
Basic Service Delivery
9.7
Administrator:
In terms of infrastructure
development and strategy, road
regravelling
has
started in many wards, and continues on a weekly basis in different wards.
There are intensive efforts on cleansing and refuse collection, and the Municipality
has requested additional support of refuse trucks from Amatole District
Municipality to intensify the cleansing effort. The Municipality is also
repairing street lights in town and in the townships.
9.8
There has
been a recent engagement with ESKOM, to ensure the intensification of
electricity in rural areas. A meeting was arranged with the Deputy Minister of
Water Affairs on the 30 August 2013, to discuss service delivery priorities
like boreholes in areas that are in dire need of water and sanitation.
9.9
National
African Federated Chamber of Commerce
(
NAFCOC):
NAFCOC submitted that the Department of Local Government
and Traditional Affairs was dealing with the symptoms, and not the causes of
the challenges in the Municipality. Business has been requesting monthly
performance reports from the Municipality, and to date, it has received none.
It was observed that the payments of rates were very low, and business does not
see the point in doing business in
Mnquma
since there
is no service delivery in the area. Further, NAFCOC requested the extension of
the intervention.
(C).
Municipal
Financial Viability and Management
9.10
Administrator:
The Municipality has a
sound financial
base,
however it is mainly dependent
on government grants. The CFO has been instructed to issue an expression of
interest for the development and implementation of a Revenue Enhancement
Strategy. In addition, statutory reporting is done accordingly and roll-overs
are committed to projects and are currently being utilized.
(D).
Good Governance and Public Participation
9.11
Administrator
:
The relationship between and
Council and the administration has improved. The Council meeting are now stable
and this is reflected in unanimous voting on agenda items. Equally, public
participation has been revived and being driven from the Speakers
Office,
and this includes engagement with various
stakeholders, e.g. Ward Committees.
9.12
The
Audit Committee meetings are sitting and were very effective. The Committee is
briefed by the Administrator on progress, including sensitive matters like the
forensic audit.
(E)
Local
Economic Development (LED)
9.13
It
was reported that all LED projects were currently under implementation and
supported by the Municipality. The LED
strategy would be updated once the spatial
development
framework is updated and completed. The Municipality has appointed
four cooperatives for cleaning, and two of
them have already started and the location
was
very clean due to this initiative. The model has been piloted in Butterworth
and
would be extended to
Ngqamakwe
and
Centane
.
10.
Committee Observations and Opinion
10.1
Experts consider learning to have happened
when skills and knowledge are gained
can
be leveraged for further advancement, and in order to build more complex
skills and knowledge. The Committee is
of the opinion that, since the Municipality was
without its top management, the Administrator should focus
on developing and
transferring skills to
the staff in order to rehearse their capacity to transfer their
learning and skills across multiple
domains, contexts and areas of application, and in
response to service delivery challenges. This ability to
transfer skills allows for
flexibility
in meeting service delivery requirements and performing tasks in the
Municipality.
10.2
Theres a historical understanding of what
has happened and what is happening in the
Municipality.
Theres a lack of leadership in top management, and there are acting
Directors. In looking forward, a concern then
arises about the picture and stability of
the
institution beyond the intervention period.
10.3
Where Municipal staff members and
councillors have been implicated in cases of
fraud
and corruption, the Hawks should be brought in for the successful prosecution
of
those
cases. This matter should be speeded up.
10.4
It was observed that some Councillors were
irresponsible and not disciplined in the
way
they conducted themselves during the meeting with the delegation from
Parliament. The Committee is of the opinion
that n
ational
legislation, such as the
Local
Government: Municipal Structures
Act,
sets out how
municipal councillors must
behave.
The Code
of Conduct for municipal councillors sets out certain ethical and
other standards to ensure the integrity
of councillors.
The conduct of some
councillors
raised questions on
their seriousness in their commitment in providing leadership to
the Municipality.
10.5.
The Committee
has noted with concern the inherent and illicit tendering and adjudication
discrepancies in a contract concluded to handle and tackle road and streets
infrastructure. Whereas the contractor was appointed at a cost price of R18m,
it transpired however that
the this
company was paid a
total of approximately R68m. This amounts irregular and fruitless expenditure
that needs to be investigated.
11.
Recommendations
11.1
Having
conducted the oversight visit to
Mnquma
Local Municipality
and interacted with all relevant stakeholders, the Select Committee on
Co-operative Governance and Traditional Affairs recommends as follows
:
11.1.1
The NCOP
approves the intervention in terms of section 139(1
)(
b)
of the
Constitution in
Mnquma
Local Municipality for a period of six months, after
the
adoption of this report.
11.1.2
The
Minister for Co-operative Governance and Traditional Affairs should
approach the Hawks to pursue criminal
investigation in all cases of financial
irregularities
and fraud in
Mnquma
Local Municipality, as a matter
of urgency.
A progress report in this regard should be forwarded to the
NCOP within three
months after the
adoption of this report.
11.1.3 The Administrator should fast-track the process
of appointing skilled personnel,
in
order to facilitate the transfer of skills and to ensure continuity and stability
in
the Municipality.
11.1.4
The Eastern
Cape MEC for Local Government and Traditional Affairs should
table quarterly progress reports to the NCOP
and the Provincial Legislature on
the
status of the intervention in the Municipality, including the challenges
encountered.
Report to be considered.
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