ex abundanti cautela ‘from an excess of caution’ climate change financing workshop 12 december...
TRANSCRIPT
Ex abundanti cautelaEx abundanti cautela‘from an excess of caution’ ‘from an excess of caution’
Ex abundanti cautelaEx abundanti cautela‘from an excess of caution’ ‘from an excess of caution’
Climate Change Financing Climate Change Financing WorkshopWorkshop
12 December 201212 December 2012Jaap de VisserJaap de Visser
Three themes
mandatesmandates legal impediments surrounding legal impediments surrounding
partnershipspartnerships opportunities for green opportunities for green
procurementprocurement
Mandates conundrum
Schedules 4B and 5BSchedules 4B and 5B of Constitution of Constitution list City’s constitutional powerslist City’s constitutional powers
Three types of confusionThree types of confusion
1.1.We can’t do it because We can’t do it because somebody else somebody else can can (e.g. electricity generation, housing)(e.g. electricity generation, housing)
2.2.The laws The laws limitlimit our power (e.g. building our power (e.g. building regulations and SWH by-law)regulations and SWH by-law)
3.3.Nobody knows Nobody knows whether we may do it whether we may do it (e.g. waste to energy)(e.g. waste to energy)
Mandates and unauthorised expenditure mandates discussion dominated by mandates discussion dominated by
fear for unauthorised fear for unauthorised expenditureexpenditure
but but MFMA links unauthorised expenditure MFMA links unauthorised expenditure
to the budget (to the budget (not to mandates)not to mandates) practice is different (e.g. grants-in-practice is different (e.g. grants-in-
aid / municipal libraries are not aid / municipal libraries are not ‘unauthorised expenditure’)‘unauthorised expenditure’)
mandates discussion should mandates discussion should revolve around revolve around lawful budget lawful budget and not and not fear for unauthorised fear for unauthorised expenditureexpenditure
Interpretation of Schedule 4B / 5B Interpretation of Schedule 4B / 5B competencies must be informed by:competencies must be informed by: Bill of RightsBill of Rights (municipality must help (municipality must help
realise environmental rights – s 24)realise environmental rights – s 24) Constitutional objects of local Constitutional objects of local
governmentgovernment (promote healthy (promote healthy environment)environment)
City may City may adopt its own definitionsadopt its own definitions of 4B / 5B competencies in by-laws as of 4B / 5B competencies in by-laws as long as they don’t contradict other lawslong as they don’t contradict other laws
Partnerships – overview of applicable legal frameworks
Municipal Systems ActMunicipal Systems Act Provision of service by private company Provision of service by private company
on behalf of municipality on behalf of municipality ‘external ‘external service delivery mechanism’service delivery mechanism’
Systems Act defines “municipal service”Systems Act defines “municipal service” Systems Act defines external Systems Act defines external
mechanism (i.e. private company or mechanism (i.e. private company or outside NGO)outside NGO)
Decision making procedure - Systems Act requirements1.1. review how the service is review how the service is
currentlycurrently provided provided
2.2. process for process for considering considering external mechanismexternal mechanism (with full (with full council approval)council approval)
3.3. feasibilityfeasibility study study
4.4. competitive competitive biddingbidding
If the partnership amounts to If the partnership amounts to Public-Private Partnership Public-Private Partnership further further requirements in MFMA/PPP Regsrequirements in MFMA/PPP Regs
Regs define PPP, e.g.:Regs define PPP, e.g.: applies only to contracts with private applies only to contracts with private
partiesparties not just municipal functions but any not just municipal functions but any
activity within competence of activity within competence of municipalitymunicipality
MFMA – PPP Regulations
feasibility studyfeasibility study prescribed community and IGR prescribed community and IGR
consultationconsultation council approvalcouncil approval
S 33 MFMA: 3-year rule
Contract that goes Contract that goes beyond 3 beyond 3 yearsyears:: further community / IGR further community / IGR
consultationconsultation consider specific consider specific criteriacriteria council determines that municipality council determines that municipality
will secure financial / economic will secure financial / economic benefitbenefit
Partnership affects municipal assets? Disposal of assets? / granting of Disposal of assets? / granting of
rights to use, control or manage rights to use, control or manage assets?assets?
Asset Transfer Regulations Asset Transfer Regulations (consultation and IGR procedure)(consultation and IGR procedure)
Criticism
overregulation – cumbersome and overregulation – cumbersome and expensive, overlapexpensive, overlap
bias towards internal mechanismsbias towards internal mechanisms NGOs-partnerships subject to NGOs-partnerships subject to
competitive biddingcompetitive bidding 3-year rule particularly frustrating3-year rule particularly frustrating
energy partnerships - return on energy partnerships - return on investment takes timeinvestment takes time
Context for defensive interpretation Criminalisation of poor financial Criminalisation of poor financial
managementmanagement Personal liability of city officialsPersonal liability of city officials Fear for political reprisalsFear for political reprisals Hype around ‘clean’ auditHype around ‘clean’ audit
From defensive interpretation to progressive interpretation most requirements do not affect most requirements do not affect
discretion – they’re discretion – they’re proceduralprocedural consider benefit of consider benefit of council council
decisiondecision lowers risk of loosing lowers risk of loosing court battles (PAJA may not apply)court battles (PAJA may not apply)
don’t readily assume that all don’t readily assume that all procedures are applicableprocedures are applicable Diggers v City of MatlosanaDiggers v City of Matlosana ConCourt in ConCourt in Giant Concerts CC v
Rinaldo Investments importance of importance of definitionsdefinitions of PPP, of PPP,
‘external partnership’, transfer of ‘external partnership’, transfer of asset etc.asset etc.
S 78 MSA: only if it’s a municipal S 78 MSA: only if it’s a municipal serviceservice
PPP Regs: only if it’s a private PPP Regs: only if it’s a private companycompany
Asset Regs: only if asset is sold or Asset Regs: only if asset is sold or rights to use/control/manage is rights to use/control/manage is transferredtransferred
SCM always applicable to the sale SCM always applicable to the sale of assets?of assets?
SCM always applicable to sale?Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others [2012] ZACC 28Sale of municipal land “by private bargain” to investor Complaint: s 217 (Procurement) applicable“Giant never gave substance to its complaint that the process should have involved competitive tendering by even minimally showing in the review proceedings that it had the capacity to make a competitive alternative proposal”.Space to respond to unique proposals?
Progressive interpretation of s 33 MFMAS 33(1)(c) – council must determine S 33(1)(c) – council must determine that a long-term contract brings:that a long-term contract brings:
a)a)significant capital investmentsignificant capital investment
b)b)significant financial benefit; orsignificant financial benefit; or
c)c)significant financial economic benefitsignificant financial economic benefit
Significance of Significance of distinction between distinction between a) and b)a) and b)
Green procurement
Legal framework permits allocation of Legal framework permits allocation of preference points for purposes preference points for purposes related to climate change mitigationrelated to climate change mitigation
Broaden effect of green procurement Broaden effect of green procurement by using environmental by using environmental standards/certificationstandards/certification
Green procurement may ameliorate Green procurement may ameliorate restrictive effect of SCMrestrictive effect of SCM
In sum
re-orientation around City re-orientation around City mandates away from singular focus mandates away from singular focus on unauthorised expenditure on unauthorised expenditure towards properly planned/budgeted towards properly planned/budgeted projectsprojects
combination of (1) combination of (1) lobbylobby against against overregulation and (2) overregulation and (2) progressive interpretationprogressive interpretation
