Chapter 2: Legislation and governance frameworks
2.6. The framework of legislation
Table 1 below lists and explains the legislation and its nature and purpose relating to the provision of a framework for a modernised municipal financial system. The financial
implications of this framework can be derived from the nature and purpose of the legislation, which is explained in the second column of said table. The specific unit that is stated in the third column of the table serves to identify the unit that is primarily affected, or which is involved by way of input/output. The stipulated units are, however, not exclusively affected or involved. In fact, each position in a municipality is directly or indirectly affected by the legislation enumerated.
Table 1: Legislation providing a framework for a modernised financial system
Legislation Nature and purpose of the legislation Specific unit(s) affected/involved The Constitution
of the Republic of South Africa, 1996
The Constitution is the supreme law of the Republic; law or conduct inconsistent with it is invalid, and the obligations imposed by it must be fulfilled.
All units
Labour Relations Act No. 66 of 1995
The nature and purpose of the Act is to:
give effect to, and to regulate, constitutional labour rights;
give effect to South Africa’s obligations as a member of the International Labour Organization (ILO);
provide a framework within which trade unions, employer’s organisations, and employers can bargain collectively; and promote collective bargaining, employee
participation in decision-making, and the resolution of labour disputes.
Human resources unit
National Small Business Act No. 102 of 1996
The nature and purpose of the Act is to:
provide for the establishment of the National Small Business Council and the Ntsika
Enterprise Promotion Agency; and
provide guidelines for the organs of state, in order to promote small business in the Republic. Local economic development unit Basic Conditions of Employment Act No. 75 of 1997
The nature and purpose of the Act is to:
give effect to the right to fair labour practices referred to in section 23 (1) of the Constitution, by establishing and making provision for the regulation of basic conditions of employment; and
Human resources unit
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ensure compliance with the obligations of the Republic as a member state of the International Labour Organisation.
Intergovernmental Fiscal Relations Act No. 97 of 1997
The nature and purpose of the Act is to:
promote cooperation between the national, provincial and local spheres of government on fiscal, budgetary and financial matters; and prescribe a process for the determination of an
equitable sharing and allocation of revenue raised nationally.
Office of the Municipal Manager
Housing Act No. 107 of 1997
The nature and purpose of the Act is to: provide for the facilitation of a sustainable
housing development process;
lay down general principles that are applicable to housing development in all spheres of government;
define the functions of national, provincial and local governments, in respect of housing development;
provide for the establishment of a South African Housing Development Board, for the continued existence of provincial boards under the name of provincial housing development boards, and for the financing of national housing programmes.
Housing unit
Water Services Act No. 108 of 1997
The nature and purpose of the Act is to:
provide a framework for the provision of water supply and sanitation services to households in South Africa;
set the standards for the local and provincial agencies, and establishes the norms and standards for tariffs; and
set out the rights and duties of the State and of water services providers in monitoring water services, and promotes effective water resource management.
Water unit
Remuneration of Public Office Bearers Act No. 20 of 1998
The nature and purpose of the Act is to:
provide for a framework for determining the salaries and allowances of the President, members of the National Assembly, permanent delegates to the National Council of Provinces, Deputy President, Ministers, Deputy Ministers, traditional leaders, members of provincial Houses of Traditional Leaders, and members of
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the Council of Traditional Leaders;
provide for a framework for determining the upper limit of salaries and allowances of Premiers, members of Executive Councils, members of provincial legislatures and members of Municipal Councils; and provide for a framework for determining
pension and medical aid benefits of office- bearers. Local Government: Municipal Demarcation Act No. 27 of 1998 (Demarcation Act)
The nature and purpose of the Act is to provide for criteria and procedures for the determination of municipal boundaries by an independent authority.
Office of the Municipal Manager
National Water Act No. 36 of 1998
The nature and purpose of the Act is to provide for the fundamental reform of the law relating to water resources.
Water unit
Employment Equity Act No. 55 of 1998
The nature and purpose of the Act is to:
promote the constitutional right of equality and the exercise of true democracy;
eliminate unfair discrimination in employment; ensure the implementation of employment
equity to redress the effects of discrimination; achieve a diverse workforce that is broadly
representative of our people;
promote economic development and efficiency in the workforce; and
give effect to the obligations of the Republic as a member of the International Labour
Organisation.
Human resources unit
State Information Technology Agency (SITA) Act No. 88 of 1998
The nature and purpose of the Act is to establish a company that is responsible for the provision of information technology services to the public administration. Office of the Municipal Manager Local Government: Municipal
Structures Act No. 117 of 1998 (Municipal Structures Act)
The nature and purpose of the Act is to:
provide for the establishment of municipalities, in accordance with the requirements relating to the categories and types of municipality; establish criteria for determining the category
of municipality to be established in a specific area;
define the types of municipality that may be established within each category;
provide for an appropriate division of functions
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and powers between categories of municipality;
regulate the internal systems, structures and office-bearers of municipalities; and
provide for appropriate electoral systems. Skills
Development Act No. 97 of 1998
The nature and purpose of the Act is to:
provide an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce;
integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Authority Act No. 58 of 1995;
provide for learnerships that lead to recognised occupational qualifications;
provide for the financing of skills development by means of a levy-financing scheme and a National Skills Fund; and
provide for, and regulate, employment services.
Human resources unit
Rental Housing Act No. 50 of 1999
The nature and purpose of the Act is to:
define the responsibility of the government, in respect of rental housing property;
create mechanisms to promote the provision of rental housing property;
promote access to adequate housing, by means of creating mechanisms to ensure the proper functioning of the rental housing market; make provision for the establishment of rental
housing tribunals;
define the functions, powers and duties of such tribunals;
lay down general principles governing conflict resolution in the rental housing sector; and provide for the facilitation of sound relations
between tenants and landlords, and, for this purpose, to lay down general requirements relating to leases. Housing unit Local Government: Municipal Systems Act No. 32 of 2000 (Municipal Systems Act)
The nature and purpose of the Act is to:
provide for the core principles, mechanisms and processes that are necessary to enable municipalities to move progressively towards the social and economic upliftment of local communities, and to ensure universal access to essential services that are affordable to all;
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define the legal nature of a municipality as including the local community within the municipal area, working in partnership with the municipality’s political and administrative structures;
provide for the manner in which municipal powers and functions are exercised and performed;
provide for community participation;
establish a simple and enabling framework for the core processes of planning, performance management, resource mobilisation, and organisational change that underpin the notion of developmental local government;
provide a framework for local public administration and human resource development;
empower the poor, and ensure that
municipalities put in place service tariffs and credit control policies that take their needs into account by providing a framework for the provision of services, service delivery agreements, and municipal service districts; provide for credit control and debt collection; establish a framework for support, monitoring
and standard setting by other spheres of government in order to progressively build local government into an efficient frontline
development agency that is capable of integrating the activities of all spheres of government for the overall social and economic upliftment of communities, in harmony with their local natural environment; and
provide for legal matters pertaining to local government. Promotion of Access to Information Act No. 2 of 2000 (PAIA)
The nature and purpose of the Act is to give effect to the constitutional right of access to any
information held by the State, and to any information that is held by another person, and that is required for the exercise or protection of any right(s). Office of the Municipal Manager Promotion of Administrative Justice Act No. 3 of 2000 (PAJA)
The nature and purpose of the Act is to give effect to the right to administrative action that is lawful, reasonable and procedurally fair, and to the right to written reasons for administrative action, as
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contemplated in section 33 of the Constitution Promotion of Equality and Prevention of Unfair Discrimination Act No. 4 of 2000
The nature and purpose of the Act is to:
give effect to section 9, read with item 23 (1) of Schedule 6 of the Constitution, so as to prevent and prohibit unfair discrimination and
harassment;
promote equality and eliminate unfair discrimination; and
prevent and prohibit hate speech.
Human resources unit
Local
Government: Municipal Electoral Act No. 27 of 2000
The nature and purpose of the Act is to regulate all municipal elections held after the date determined in terms of section 93 (3) of the Municipal
Structures Act. Office of the Municipal Manager Municipal Performance Management Regulations, 2001
The purpose of the Regulations is to set out in detail the requirements for municipal PMSs. The regulations must entail a framework that describes and represents how the municipality’s cycle and process of performance management, including measurement, review, reporting and improvement, will be conducted. Office of the Municipal Manager Broad-Based Black Economic Empowerment Act, No. 53 of 2003
The nature and purpose of the Act is to:
establish a legislative framework for the promotion of black economic empowerment;
empower the Minister to issue codes of good practice and publish transformation charters; and
establish the Black Economic Empowerment Advisory Council. Finance unit Local Government: Municipal Finance Management Act No. 56 of 2003 (MFMA)
The nature and purpose of the Act is to:
secure sound and sustainable management of the financial affairs of municipalities and other institutions in the local sphere of government; and
establish treasury norms and standards for the local sphere of government.
Office of the Municipal Manager (as Accounting Office) Finance unit Division of Revenue Act (annual)
The nature and purpose of the Act is to provide for the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 20xx/xx financial year, and for the responsibilities of all three spheres pursuant to such division. Office of the Municipal Manager (as Accounting Office) Finance unit Local Government: Property Rates Act
The nature and purpose of the Act is to:
regulate the power of a municipality to impose rates on property;
22 No. 6 of 2004
(Property Rates Act)
exclude certain properties from rating in the national interest;
make provision for municipalities to implement a transparent and fair system of exemptions, reductions and rebates through their rating policies;
make provision for fair and equitable valuation methods of properties;
make provision for an objections and appeals process; and
amend the Municipal Systems Act, so as to make further provision for the serving of documents by municipalities.
Prevention and Combating of Corrupt Activities Act No. 12 of 2004
The nature and purpose of the Act is to:
provide for the strengthening of measures to prevent and combat corruption and corrupt activities;
provide for the offence of corruption and offences relating to corrupt activities;
provide for investigative measures in respect of corruption and related corrupt activities; provide for the establishment and
endorsement of a Register in order to place certain restrictions on persons and enterprises convicted of corrupt activities relating to tenders and contracts;
place a duty on certain persons holding a position of authority to report certain corrupt transactions;
provide for extraterritorial jurisdiction in respect of the offence of corruption and offences relating to corrupt activities.
Office of the Municipal Manager Intergovernmental Relations Framework Act No. 13 of 2005
The nature and purpose of the Act is to: establish a framework for the national
government, provincial governments and local governments, to promote and facilitate intergovernmental relations; and
provide for mechanisms and procedures to facilitate the settlement of intergovernmental disputes.
Office of the Municipal Manager
Electricity
Regulation Act No. 4 of 2006
The nature and purpose of the Act is to:
establish a national regulatory framework for the electricity supply industry;
to make NERSA the custodian and enforcer of the national electricity regulatory framework;
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to provide for licences and registration as the manner in which generation, transmission, distribution, reticulation, trading, and the import and export of electricity are regulated; and
to regulate the reticulation of electricity by municipalities. Local Government: Municipal Performance Regulations for Municipal Managers and Managers Directly Accountable to Municipal Managers, 2006
The purpose of the Regulations is to seek to set out how the performance of municipal managers will be uniformly directed, monitored and improved. The Regulations address both the employment contract of a municipal manager and of those managers who are directly accountable to municipal managers, as well as the performance agreement that is entered into between respective municipalities, municipal
managers and managers who are directly accountable to municipal managers. Office of the Municipal Manager Human resources unit Municipal Fiscal Powers and Functions Act No. 12 of 2007
The nature and purpose of the Act is to:
regulate the exercise by municipalities of their power to impose surcharges on fees for services provided under section 229 (l) (a) of the Constitution; and
provide for the authorisation of taxes, levies and duties that municipalities may impose under section 229 (l) (b) of the Constitution.
Finance unit
National Land Transport Act No.5 of 2009
The nature and purpose of the Act is to: further the process of transformation and
restructuring the national land transport system initiated by the Local Government Transition Act No. 209 of 1993;
to give effect to national policy;
prescribe national principles, requirements, guidelines, frameworks and national norms and standards that must be applied uniformly in the provinces, and other matters contemplated in section 146 (2) of the Constitution; and
consolidate land transport functions and locate them in the appropriate sphere of government.
Transport and roads unit Local Government: Municipal Systems Amendment Act No. 7 of 2011
The nature and purpose of the Act is to: amend the Municipal Systems Act;
make further provision for the appointment of municipal managers and managers directly accountable to municipal managers;
provide for procedures and competency criteria
Office of the Municipal Manager
Human resources unit
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for such appointments, and for the consequences of appointments made otherwise than in accordance with such procedures and criteria;
determine timeframes within which performance agreements of municipal
managers and managers directly accountable to municipal managers must be concluded;
make further provision for the evaluation of the performance of municipal managers and managers who are directly accountable to municipal managers;
require employment contracts and performance agreements of municipal managers and managers who are directly accountable to municipal managers to be consistent with the Act;
require all staff systems and procedures of a municipality to be consistent with uniform standards determined by the Minister by regulation;
bar municipal managers and managers who are directly accountable to municipal managers from holding political office in political parties; regulate the employment of dismissed
municipal employees;
provide for the Minister to make regulations relating to the duties, remuneration, benefits and other terms and conditions of' employment of municipal managers and managers directly accountable to municipal managers;
provide for the approval of staff establishments of municipalities by the respective municipal councils;
prohibit the employment of a person in a municipality if the post to which he or she is appointed is not provided for in the staff establishment of that municipality;
enable the Minister to prescribe frameworks to regulate human resource management systems for local government, and mandates for
organised local government;
extend the Minister's powers to make
regulations relating to municipal staff matters; and
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make a consequential amendment to the Municipal Structures Act, by deleting the provision dealing with the appointment of municipal managers.