JOINT WORKSHOP ON THE APPLICATION OF SECTION 139 AND THE NEED FOR LEGISLATION 2 November Role of SALGA with respect to municipalities under Administration

Presentation Outline Part 1 - Organised Local Government: Overview of the role of organized local government and the legislative framework within which it operates. Part 2 – SALGA: Background to the establishment of SALGA, it’s mandate and functions. Part 3 – Background: Interventions and Cooperative Governance: Factors currently influencing municipalities and reflection on Cooperative Governance. Part 4 – Interventions in Local Government: Overview and analysis of interventions in municipalities with proposals on the way forward. 2

PART 1 ORGANISED LOCAL GOVERNMENT 3

Organised Local Government As 283 municipalities, effective participation in the system of IGR requires that local government acts as a Collective (with a common vision). Organised local government is a vehicle to achieve the vision that local government acts as a collective. This imperative is recognized and entrenched in the Constitution and legislation (i.e. Organised Local Government Act, Systems Act, etc). There are not many of such Constitutional protections on the continent. Organised local government represents municipalities by articulating their interests and seeking to coordinate their policies and programmes with those of the other spheres. 4

Legislative and policy environment Policy and legislative environment summarised: Constitution provides that OLG:- - will take form of a national organisation as well as provincial organisations; -However, no prescripts as to the nature or institutional structure of the organisations; Organised Local Government Act: - does not put forward requirements as regards the legal nature of the “organisation” that is to be recognised. -Whether this “organisation” is a legal entity or not has no bearing on the recognition. -Minister’s recognition attaches to a group of municipalities, at provincial level, that have organised themselves in whatever way. 5

Legislative and policy environment Policy and legislative environment summarised (cont.): Systems Act includes a general mandate for OLG. This includes: –the development of common approaches for local government, –finding solutions for problems that relate to local government generally, –enhancing co-operation between municipalities, and –generally playing a meaningful role in intergovernmental relations. IGR Framework Act envisages that in respect of: –Issues and/or forums related to national government, OLG will be represented by the National Body which has been recognised by the Minister, i.e. SALGA; –Issues or forums related to Provincial government, OLG will be represented by the provincial organisation recognised by the Minister; –Issues or forums within the local government realm, municipalities will represent themselves. 6

PART 2 SALGA 7

Background SALGA was established in 1996 and recognised by the Minister in January 1997; SALGA does not have executive authority over its members; SALGA’s power over its members stems from its Constitution. SALGA is a Schedule 3A Public Entity (PFMA), and as such reports to the Minister for COGTA; A strong and effective SALGA lies at the heart of strengthening the local sphere of government to enable it to pursue a developmental agenda to fulfil the promise of the electoral mandate: to speed up the delivery of free basic services, build sustainable human settlements and viable communities, improve all public services, build infrastructure, create job opportunities and fight poverty. 8

Policy and Legislative Environment 9

SALGA’s mandate In line with its mandate SALGA has set out its role to: –Represent, promote and protect the interests of LG –Assist in the transform of LG to enable it to fulfill its developmental role –Raise the profile of LG –Perform its role as an employer body –Develop capacity within municipalities Our role can thus be summarized into four key functions: –Advice and support – policy analysis, research and monitoring, knowledge exchange and support to members. –Representation – stakeholder engagement; lobbying on behalf of local government in relation to national policies and legislation –Act as an employer body – collective bargaining on behalf of our members; capacity building and municipal HR –Strategic Profiling – building the profile and image of LG locally and internationally

OVERVIEW OF THE ACTIVITIES OF SALGA Undertaking internal governance activities to manage and provide oversight over the activities of SALGA Participating in mandatory inter- governmental structures and undertaking legislated responsibilities Providing services to members, including research and advocacy on key local government issues, and other direct support to municipalities Supporting the transformation and restructuring of the local government sector, including research and advocacy on key local government issues 110

R epresent Support Advise Governance & IGR ANALYSIS Infrastructure and Municipal Services Economic Development and Development Planning Municipal Institutional Development SALGA’s three key main roles cut-across to underpin its 5-Year Strategic Objectives & Programmes Strategy, Policy and Research Finance and Corporate Services VISION To be consultative, informed, mandated, credible and accountable to our membership & provide value for money Provincial Programmes SALGA’S ORGANISING FRAMEWORK Community Development OCEO 12

PART 3 BACKGROUND – COOPERATIVE GOVERNANCE and CONTEXT TO INTERVENTIONS 13

Cooperative Governance National (President & Cabinet) (NA & NCOP) Provincial (9 Premiers & Executives) (Prov Legislature) Local (283 Municipal Councils) Constitution provides for 3 Spheres, having specified powers and functions, but are:- Distinctive; Interdependent; and Interrelated Arrangement based on - respect for constitutional status, - non-encroachment on geographical, functional or institutional integrity, Section 139, should municipality be unwilling or unable to meet its obligations, province may intervene. 14

Factors currently influencing Municipalities Context - Interventions External Factors Demographic Patterns & Trends (in-migration; household growth; rural – urban migration; growth of informal settlements; farm evictions Macro- / micro- economic (unemployment; revenue base declining; tax evasion by businesses & foreigners) IGR (weaknesses in policy & Regulatory frameworks, voluntarism; fragmented support; Poor oversight; unfunded mandates) Internal Factors Political Management & Stability (intra & inter political conflicts; limited ability to develop & enforce by-laws) Professional administration & Management (lack of skilled staff; unqualified staff & appointments; conflict of Interest) Financial Management (lack of systems & controls) Accountability (poor mechanisms of community consultation & feedback; ward committees poorly resourced) 12

Context: Interventions Local government has been given a very broad and challenging set of responsibilities. Effective performance against its Constitutional mandate requires a coherent and co-ordinated set of support initiatives from the other two spheres of government. Provincial interventions in LG are an aspect of intergovernmental relations and as such must be exercised within the spirit of co-operative government as outlined in Chapter 3 of the Constitution. Constitution requires provincial governments to play an important role in monitoring & supporting LG (s155).

PART 4 INTERVENTIONS IN LOCAL GOVERNMENT 17

Interventions in LG Ultimate purpose of 139 intervention should be to assist a municipality to become sustainable & self-sufficient, able to: –perform the functions assigned to it by the Constitution and other legislation efficiently and effectively; –has the ability to raise the revenue due to it; –ensure that short-term actions are aligned with medium-to long-term planning. There should be a broad agreement that both national and provincial governments are committed to ensuring the stabilisation of the LG environment to such an extent that interventions are exceptional and not regular occurrences.

Service delivery failures? Curiously, failure to fulfil service delivery obligations as set out in sections 152 & 153 of the Constitution has never triggered an intervention. Reasons for this include: –Lack of monitoring systems relating to service delivery –Greater urgency of governance and administrative issues Few, if any, interventions have been successful in the sense of capacitating the municipality when the province leaves. Intervention in Butterworth in 1999 a case in point – same problems still exist

Challenges General conclusions can be drawn from section 139 interventions –Provinces lack capacity to monitor and support LG in terms of personnel, funds, institutional knowledge and expertise –Some interventions could have been prevented if early warning systems (s105 Systems Act mechanisms and processes) had been in place (Warrenton and Tweeling for eg.) –Effectiveness of interventions are highly questionable: are they curative or simply take-overs without the necessary skills transfers?

PART 5 SALGA’S ROLE IN INTERVENTIONS 21

SALGA in Interventions A decade ago, SALGA recognised the need for and initiated a process to craft an approach to section 139 interventions. That process commenced during October 1998 and culminated in a workshop on ‘Provincial Support and Supervision of Local Government’ on 12 and 13 March The workshop generated consensus around the following points: –prior to interventions, there must be statutory recognition of the role and consultation with Organised Local Government; –there must be an obligation to report regularly to Organised Local Government and to the provincial standing committee; –a need to establish permanent IGR structures at provincial level with a view to provide for consultation on identification of problems, terms of intervention, reporting mechanisms and appointment of an administrator; –interventions must be preceded by measures to support and strengthen local government; –an urgent need for a regulatory framework to capacitate provinces to deal with interventions; and –a commitment that SALGA must be the principle organ to draft the required framework.

Analysis of Interventions Statistical analysis of data over the past three years point to an increase in the number of municipalities annually coming under section 139 interventions. Mechanisms, processes and procedures in terms of s105 of the Systems Act are often overlooked in favour of a s106 investigation and or a s139 intervention. These interventions suggests that provinces are struggling with their constitutional commitment to support municipalities. Interventions have become a real threat to the institutional integrity of local government.

Analysis of Interventions There is a clear need to protect municipalities from interventions that reach beyond that which is constitutionally permitted cannot be overemphasized. Provinces should fulfil their statutory and constitutional obligations to LG before contemplating interventions & provincial legislatures should play stronger oversight role to ensure incremental approach is followed. Any intervention should be solution-oriented and seek to minimise encroaching on the institutional integrity of local government.

Suggested Approach In our view, three main principles need to guide provincial interventions in municipalities. –Firstly the assumption of responsibility should be a measure of last resort in a process of provincial supervision which should normally commence with review and monitoring of a municipality, followed by steps to strengthen & support. –Secondly the integrity of LG as a sphere of government exercising original powers should be respected as clearly delineated in the Constitution - this should protect municipalities from provincial interferences with municipal legislative functions. –Thirdly the aim of the intervention should be restorative rather than punitive.

IGR Approach Little evidence of provincial legislatures exercising oversight over Prov Executive’s actions in terms of s139. More targeted support and intervention is req’d from provinces – should not wait for a total collapse. Intervention should be seen as a measure of last resort, where the problem cannot be resolved through ordinary intergovernmental processes. Provincial Executive must ensure that there is a sound exit strategy after an intervention, with provincial OLG and districts having a key role in supporting/ rebuilding the municipality towards sustainability.

Role of SALGA Need to minimise interventions by ensuring that all municipalities have access to adequate training, capacity building, funding and support systems to enable them to perform their functions & manage their administrations effectively – not least from the other two spheres of govt. As a legitimate voice of LG, SALGA will continue to provide leadership and strategic guidance to its membership during interventions through robust advocacy, representation, and supporting and strengthening municipal capacity. Through its interaction and representation of its membership, SALGA will continue to engage the national legislative process to ensure the institutional integrity of LG on the one hand and the efficacy of interventions aimed at restoring service delivery on the other.

Way forward Need for a consistent approach to interventions –S34 of Structures Act now inconsistent with the Constitution: against overall checks and balances scheme of s139(3). –Require legislative amendment to the Structures Act An incremental approach to 139 (1) interventions should be encouraged, as proposed by the CoGTA Guidelines, even though provinces now have a choice in terms of Constitution. –ie. Directive first, followed by assumption and if that fails, dissolution of council Need stronger IGR approach to interventions (Role of SALGA and District Municipalities); Appointment of appropriately skilled and experienced administrators

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