Ex abundanticautela‘from an excess of caution’ Climate Change Financing Workshop 12 December 2012 Jaap de Visser email@example.com
Three themes • mandates • legal impediments surrounding partnerships • opportunities for green procurement
Mandates conundrum Schedules 4B and 5B of Constitution list City’s constitutional powers Three types of confusion • We can’t do it because somebody else can (e.g. electricity generation, housing) • The laws limit our power (e.g. building regulations and SWH by-law) • Nobody knows whether we may do it (e.g. waste to energy)
Mandates and unauthorised expenditure • mandates discussion dominated by fear for unauthorised expenditure but • MFMA links unauthorised expenditure to the budget (not to mandates) • practice is different (e.g. grants-in-aid / municipal libraries are not ‘unauthorised expenditure’)
mandates discussion should revolve around lawful budget and not fear for unauthorised expenditure
Interpretation of Schedule 4B / 5B competencies must be informed by: • Bill of Rights (municipality must help realise environmental rights – s 24) • Constitutional objects of local government (promote healthy environment) • City may adopt its own definitions of 4B / 5B competencies in by-laws as long as they don’t contradict other laws
Partnerships – overview of applicable legal frameworks Municipal Systems Act • Provision of service by private company on behalf of municipality ‘external service delivery mechanism’ • Systems Act defines “municipal service” • Systems Act defines external mechanism (i.e. private company or outside NGO)
Decision making procedure - Systems Act requirements • review how the service is currently provided • process for considering external mechanism (with full council approval) • feasibility study • competitive bidding
If the partnership amounts to Public-Private Partnership further requirements in MFMA/PPP Regs • Regs define PPP, e.g.: • applies only to contracts with private parties • not just municipal functions but any activity within competence of municipality
MFMA – PPP Regulations • feasibility study • prescribed community and IGR consultation • council approval
S 33 MFMA: 3-year rule • Contract that goes beyond 3 years: • further community / IGR consultation • consider specific criteria • council determines that municipality will secure financial / economic benefit
Partnership affects municipal assets? • Disposal of assets? / granting of rights to use, control or manage assets? Asset Transfer Regulations (consultation and IGR procedure)
Criticism • overregulation – cumbersome and expensive, overlap • bias towards internal mechanisms • NGOs-partnerships subject to competitive bidding • 3-year rule particularly frustrating • energy partnerships - return on investment takes time
Context for defensive interpretation • Criminalisation of poor financial management • Personal liability of city officials • Fear for political reprisals • Hype around ‘clean’ audit
From defensive interpretation to progressive interpretation • most requirements do not affect discretion – they’re procedural • consider benefit of council decision lowers risk of loosing court battles (PAJA may not apply)
don’t readily assume that all procedures are applicable • Diggers v City of Matlosana • ConCourt in Giant Concerts CC v Rinaldo Investments • importance of definitions of PPP, ‘external partnership’, transfer of asset etc.
S 78 MSA: only if it’s a municipal service • PPP Regs: only if it’s a private company • Asset Regs: only if asset is sold or rights to use/control/manage is transferred • SCM always applicable to the sale of assets?
SCM always applicable to sale? Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others  ZACC 28 • Sale 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 MFMA S 33(1)(c) – council must determine that a long-term contract brings: • significant capital investment • significant financial benefit; or • significant financial economic benefit Significance of distinction between a) and b)
Green procurement • Legal framework permits allocation of preference points for purposes related to climate change mitigation • Broaden effect of green procurement by using environmental standards/certification • Green procurement may ameliorate restrictive effect of SCM
In sum • re-orientation around City mandates away from singular focus on unauthorised expenditure towards properly planned/budgeted projects • combination of (1) lobby against overregulation and (2) progressive interpretation
Thank You firstname.lastname@example.org www.mlgi.org.za