Section 75 of the Municipal Finance Management Act 56 of 2003 (MFMA) deals with, “Information to be placed on websites of municipalities”. Section 75(1)(e) explicitly requires accounting officers to place “all service delivery agreements” (SDAs) entered into by a municipality on its website. The City of Cape Town, and its accounting officer, City Manager Lungelo Mbandazayo, has failed and refused to do so.
This failure and refusal mean that the City of Cape Town, and in particular its accounting officer, are not complying with statutory law. In addition, this non-compliance on Mbandazayo’s part means he is also in breach of the annual performance agreement he is required to enter into with the city. This is because that agreement states that “provisions of the MFMA, in relation to the responsibilities conferred on an accounting officer”, form part of the performance agreement.
The Social Justice Coalition (SJC), has highlighted the city’s non-compliance with Section 75 of the MFMA to no avail since 2012. The organisation has found that not one of South Africa’s eight metros – not Cape Town, Buffalo City, Ekurhuleni, eThekwini, Johannesburg, Mangaung, the Nelson Mandela Metro, or Tshwane, are in compliance. The SJC, however, is based in Cape Town and campaigns for justice and equality alongside poor, working-class communities, particularly those that live in informal settlements, in Cape Town. As a result, the organisation has focused on the City of Cape Town’s non-compliance.
In 2019, in spite of the fact that all SDAs by law should be publicly available, the SJC submitted a Promotion of Access to Information Act 2 of 2000 (PAIA), request for copies of the service delivery agreements between the City of Cape Town and companies paid to undertake refuse removal in Khayelitsha.
The city refused to grant the SJC access to the SDAs. The city based its refusal on Section 36(1)(a) of PAIA. This section deals with the mandatory protection of commercial information of third parties. The SJC felt the refusal held no merit.
As a result, on 5 September 2019, the organisation wrote to the city manager and the executive mayor requesting that all of the service delivery agreements entered into by the city be made publicly available in order to ensure compliance with the MFMA.
In the letter, the SJC cited legal precedent from the Supreme Court of Appeal, which pointedly stated that: “Once [an organ of state] enters into a commercial agreement of a public character … the imperative of transparency and accountability entitles members of the public, in whose interest an organ of state operates, to know what … an agreement entails.”
In a letter of reply, however, Mbandazayo supported the city’s earlier refusal of our request for access to information on the specific SDAs around refuse removal. He too, incorrectly, cited sections of PAIA for the refusal. As for all other SDAs, he claimed that the city “can only make contract versions, which pass legal scrutiny available on our website”.
In his letter, Mbandazayo provided the SJC with a link to where the “contract versions”, which seemingly had passed “legal scrutiny” and so had been made publicly available, are. For 2018, there was one contract, for 2014 one, for 2011 three, for 2008 one, for 2004 three and for 2002 one. For context, according to the city’s demand (procurement), plan for the 2019/2020 financial year, the city aimed to procure 362 “goods, services and works”, through SDAs in the year alone.
Writing for the majority in the Constitutional Court, in the matter of AAA Investments(Pty) Ltd v Micro Finance Regulatory Council and Another, Justice Yacoob stated: “Our Constitution ensures … that government cannot be released from its human rights and rule of law obligations simply because it employs the strategy of delegating its functions to another entity.”
Section 195 of the Constitution requires that government be accountable and that it actively fosters transparency. The section explicitly states: “Public administration must be accountable”, and “Transparency must be fostered by providing the public with timely, accessible and accurate information.”
Read together, the above means that simply because the government has chosen to outsource, or contract its functions out to third parties, doesn’t mean that documents, including SDAs, entered into with those third parties –
which includes the scope of work to be delivered by them, shouldn’t be made public.
In Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency (SASSA) and Others, the Constitutional Court found that once a company concluded a contract for the rendering of public services: “It too became accountable to the people of South Africa in relation to the public power it acquired and the public function it performs. This does not mean that its entire commercial operation suddenly becomes open to public scrutiny. But the commercial part dependent on, or derived from, the performance of public functions is subject to public scrutiny, both in its operational and financial aspects.”
The above makes it abundantly clear that the law and legal precedent is consistently in favour of transparency. The above also makes it abundantly clear that the City of Cape Town’s prioritisation of the “commercial interests” of service providers, performing public functions paid for from public coffers, over its responsibility to be transparent in its dealings and accountable to the public, won’t withstand legal challenge.
Now, if a legal challenge becomes necessary because the city continues to be non-compliant, Mbandazayo would have to account to the residents of Cape Town for the legal costs incurred by the city during such litigation.
In the interim, the SJC will raise the general, nationwide non-compliance to Section 75 of the MFMA with the office of the Auditor-General. Residents of municipalities across the country have a right to know what services should, by agreement, be delivered to them, the scope of the services to be delivered, what standard of service they can expect and what those services cost. This is a key tenet of public participation. Public participation is a key tenet of our constitutional dispensation. Non-compliance must amount to the issuing of a qualified audit. DM
Dalli Weyers is Head of Policy and Research at the Social Justice Coalition.