Call for Simplification of Laws to Solve Municipal Entities’ Governance Challenges
20 August 2013
CALL FOR SIMPLIFICATION OF LAWS TO SOLVE MUNICIPAL
ENTITIES’ GOVERNANCE CHALLENGES
Municipal entities—utilities owned by municipalities that deliver
services like water, power and sanitation, or provide for economic and social
development in communities—pose a set of governance challenges for local
government. However, underlying these challenges is a legislative framework
that is unnecessarily complex.
"One of the main challenges faced by municipal entities—and local
government generally—is the plethora of legislation that must be taken into
account,” said Joseph Maluleke, executive chairman of attorneys Rooth &
Wessels. "To be effective, the law needs to be easy to understand and simple to
apply. At present, just working out how to comply with all the relevant
legislation is a battle for lawyers—municipal managers and other officials are
at a real disadvantage. I believe that the cause of good governance would be
greatly advanced if parliament would simplify the legal framework within the
local government sphere.”
Maluleke was speaking at the launch of a discussion paper on the
governance challenges faced by municipal entities. The paper was produced by
the Public Sector Working Group of the Institute of Directors in Southern
Africa (IoDSA), sponsored by PwC.
"Good governance is an antiseptic in a contaminated environment,” he
said.
Christoph Braxton, a member of the Working Group and an associate
director at PwC, confirmed Maluleke’s point about the legal complexity by
noting that 88 percent of municipal entities had findings related to compliance
as stated in the Auditor-General’s General Report on Audit Outcomes for Local
Government 2010/11, an increase on the previous year’s 73 percent, while 37
percent of these findings related to sustainability challenges. "Governance can
help to overcome these challenges,” he said. "Rigorous oversight is needed to
ensure that municipal entities deliver services aligned to the municipal
strategy but within the ambit of their governance framework.”
The paper identifies four key governance challenges for municipal
entities: how to act as extensions of their municipalities rather than
independent service providers; how to deliver services in an efficient,
effective and transparent manner; performance monitoring; and collaboration
with municipalities to achieve economies of scale.
Speaking at the same function, Andries Nel, newly appointed deputy
minister for Cooperative Governance and Traditional Affairs, said that he
welcomed the initiative. "We need to be open and honest in taking stock of the
challenges we face in order to plan better,” he said. "The National Development
Plan emphasises the importance of dealing with local government effectively.”
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