Cabinet approval of s 100 intervention by the department of human settlements in the Nelson Mandela Bay Metropolitan Municipality

October 28th, 2015

By Brenda Wardle

This article is primarily aimed at examining whether the s 100 intervention approved by Cabinet earlier this year, and confirmed among others, by the Department of Cooperative Governance and National Treasury, is indeed an intervention as envisaged in s 100 of the Constitution.

It is trite and need not be restated that the Constitution is the supreme law of the land and that any law or conduct, which is inconsistent with it is invalid. It is further trite that the Bill of Rights binds the legislature, the executive, the judiciary and all organs of state. Further, everyone, in terms of s 33 of the Constitution, has a right to administrative action which is lawful, reasonable and procedurally fair.

The doctrine of ultra vires is now commonly expressed as the constitutional principle of legality. So while the government of the Republic of South Africa, in terms of s 40 of the Constitution, is constituted of the national, provincial and local spheres, these spheres, which are distinctive, interdependent and interrelated, must observe and adhere to the principles enshrined in the Constitution and conduct any and all activities in line with the parameters set out in, among others, ch 10 thereof.

Section 154(1) of the Constitution requires national and provincial governments to support and strengthen the capacity of municipalities to manage their own affairs. This support can be by way of legislative or other appropriate means. Section 41(f) of the Constitution further provides that all spheres of government (and organs of state) must respect the status, powers and functions of other spheres and that they shall ‘not assume any power or function except those conferred on them in terms of the Constitution’.

Section 100 of the Constitution, which is at the heart of this matter, deals with national supervision of provincial administration and ought to be relied on when a province cannot or does not fulfil an executive obligation in terms of legislation or the Constitution. In such instances, the national executive may intervene by taking any of the prescribed appropriate steps to ensure fulfilment of the obligation. Section 100 then further sets out both the substantive and procedural requirements to be met prior to, during and post the intervention. I submit that the intervention as approved by cabinet cannot possibly be an intervention in line with this section of the Constitution.

Another Constitutional provision dealing with intervention is s 139 and this section refers to the provincial sphere supervising local government. The provisions of this section mirror those in s 100 with concomitant substantive and procedural requirements. It is clear that these provisions too, are inapplicable.

Section 217 of the Constitution deals with procurement. The Public Finance Management Act 1 of 1999 and treasury regulations regulate procurement at national and provincial levels and the Local Government: Municipal Finance Management Act 56 of 2003 (among others) regulates procurement at local level. The values on which public sector procurement are based are, fairness, equity, transparency, competitiveness and cost effectiveness. However, nothing prevents an organ of state (including a sphere of government) from implementing procurement policies providing for categories of preference in the allocation of contracts, as well as the protection or advancement of persons or categories of persons disadvantaged by unfair discrimination.

It is important now, given the fact that the said intervention does not appear to be sanctioned by the Constitution, to examine the other legislative provisions which the Minister might have been alluding to.

The Housing Development Agency (the Agency), was established in terms of the Housing Development Agency Act 23 of 2008 effective 31 October 2008.

The purpose of the establishment of the Agency was to respond to the requirements of the comprehensive plan, by identifying, acquiring, developing land: And the disposal of land and land properties. It provides project management expertise. Schedule 4 of the Constitution, which is expanded on below, thus finds applicability.

Another provision that finds applicability is s 3(4)(h) of the Housing Act 107 of 1997, which states that the Minister of Human Settlements may establish and finance institutions for purposes of housing development and supervise the execution of their mandate. The operative words here being ‘supervise execution’ as opposed to pure ‘execution’ which is envisaged by the announced intervention.

In terms of sch 4 of the Constitution, housing is a functional area of national and provincial legislative competence. In terms of the Housing Development Agency Act, there is a need to accelerate the delivery of housing, and there is an urgent need for government to address the increasing backlog in respect of housing delivery together with the critical shortage of skills to provide housing in some provinces and municipalities. It thus becomes clear that the Housing Development Agency Act does envisage a situation where national government (in this instance) can play a critical role in order to ensure that effect is given to rights enshrined in s 26 of the Constitution.

Section 4 of the Act states:

‘The objects of the Agency are to –

(a) identify, acquire, hold, develop and release state, communal and privately owned land for residential and community purposes and for the creation of sustainable human settlements;

(b) project manage housing development services for the purposes of the creation of sustainable human settlements;

(c) ensure and monitor that there is centrally coordinated planning and budgeting of all infrastructure required for housing development; and

(d) monitor the provision of all infrastructure required for housing development.’

Section 5 – role of the Agency:

(1) The Agency must, in consultation with the relevant owner, identify, acquire, hold, develop and release state, privately and communal owned land for residential and community purposes for the creation of sustainable human settlements.

(2) The Agency must ensure that there is funding for the provision of all infrastructure that is required for housing development in which it is involved.

(3) The Minister may, in consultation with the relevant MEC, where there is lack of capacity in any organ of state to identify, acquire, hold, develop and release land for residential and community purposes for the creation of sustainable human settlements –

(a) advise the organ of state to conclude an agreement with the Agency to offer assistance in terms of the Agency’s skill and expertise; or

(b) direct the Agency to engage with organ of state with a view to conclude the agreement contemplated in paragraph (a).

(4) Nothing in this Act detracts from the power of a province and municipality to identify, acquire, hold, develop and release land for residential or community development without recourse to the Agency, in terms of their functions under the Housing Act 1997 (107 of 1997).’

Both the functions and the role of the Agency, as set out above, are critical when trying to decipher the meaning and extent of the approved intervention. It is pertinently clear that in instances, for example, where there is insufficient capacity, the Agency may offer assistance and that this assistance must end up in the conclusion of an agreement. If one has regard to the Level 2 Accreditation granted to the Nelson Mandela Bay Metropolitan Municipality in 2011 by then Minister Tokyo Sexwale, it thus becomes clear that the Metro indeed does have the requisite capacity.

Under the functions of the Agency in s 7 is reference to the Agency enhancing the capacity of organs of state in order to enable them to meet the demand for housing delivery and the Agency may, in terms of the same section, assist with housing developments which have not been completed within the anticipated project period.

The R 4,6 billion to be utilised in this intervention is quite a staggering sum. Assistance by the Agency, if carried out in line with the Housing Development Agency Act, would be legal, however, it is doubtful that an intervention that usurps the entire human settlements function, together with the control over a R 4,6 billion budget, derived mainly from government grants, would pass Constitutional muster and it is because of that, that I argue that the Minister of Human Settlements, and all those who concurred with and approved the decision, acted outside the prescripts of the law. The fact that an incorrect categorisation was afforded to the intervention, may merely be the tip of what appears to be an iceberg.

What does remain pertinently clear, as has been highlighted above, is that there was no s 100 intervention by the Department of Human Settlements in the Nelson Mandela Bay Metropolitan Municipality.

Brenda Wardle, LLM (Unisa).

This article was first published in De Rebus in 2015 (Nov) DR 16.