The National Council of Provinces (NCOP) has passed four Bills at its plenary sitting today, namely, the Financial Sector Law Amendment Bill, the National Forests Amendment Bill, the National Environmental Management Laws Amendment Bill and the Civil Aviation Amendment Bill.
The Financial Sector Laws Amendment Bill forms part of the Financial Sector Regulation Act (FSRA) of 2017, or “Twin Peaks”, regulatory reforms introduced in 2011, which covers the conduct and transformation of the financial sector. The major purpose of this Bill is to address banking risks, failures and weaknesses and mitigate impacts of financial crisis. More importantly, it seeks to address the shortcomings of the current financial legislation, partly necessitated by the lessons learnt from the 2008/09 global financial crisis and domestic experiences, and to enhance the South African Reserve Bank’s (SARB) financial stability mandate and to expand its objective for depositor protection.
Among other things, the Bill proposes the introduction of a new Chapter 12A to the FSRA, which will establish a framework for resolution of designated institutions and a deposit insurance scheme. This is aimed at creating a resolution framework to ensure that the impact of a failure by a bank, or systemically important financial institution, is managed in an orderly manner. The Bill also proposes that the process of resolution takes place under the management and control of the SARB, which will be the Resolution Authority. It further proposes the establishment of a Deposit Insurance Scheme, which includes a Corporation for Deposit Insurance and a Deposit Insurance Fund, as well as the creation of a creditor hierarchy to ensure depositor protection in an event of liquidation and adherence to the “no creditor worse off” principle.
The Select Committee on Finance facilitated an extensive public consultation process on the Bill and concluded that it supports the objectives of the FSRA, under which the current FSLAB falls. The report states that these objectives seek to maintain stability of the financial system; maintain soundness of regulated financial institutions; protect consumers of financial products and services; increase access to financial products and services; and combat market abuse and financial crime.
The report further states that the outcomes of these objectives are expected to benefit society in general, including retail financial customers; financial institutions and their shareholders; poorest households; small medium and micro enterprises (SMMEs) and rural development programmes. A copy of the report is available here(link is external) (from page 128).
The NCOP also passed the National Forests, National Environmental Management Laws, and the Civil Aviation Amendment Bills. These three pieces of legislation are among the Bills that were initially introduced during the fifth Parliament and were revived by the National Council of Provinces in the sixth Parliament.
The National Forests Amendment Bill was before the Select Committee on Land Reform, Environment, Mineral Resources and Energy. The committee facilitated extensive public participation on the Bill, including calls for written submissions and public hearings held by the provincial legislatures.
The Bill is aimed, among other things, at amending the National Forests Act of 1998 in order to provide for clear definitions of forests and woodlands and the public ownership of these spaces to increase promotion and enforcement of sustainable forest management; and to control and remedy deforestation.
Among the approved important amendments include the new definitions of the “destruction of natural forest” with the meaning “any action where one or more trees in a natural forest is felled or caused to die, or the undergrowth removed, for the purpose of land use or resource use” and “woodlands”, which now means “a group of indigenous trees which are not natural forest, but whose crowns cover at least 5% of the area they occupy, and which may, in a degraded state have a crown cover of less than 5%; or any vegetation type declared by the Minister to be a woodland by notice in the Gazette.” A copy of the report is available here(link is external) (from page 2).
The NCOP also passed the National Environmental Management Laws Amendment Bill, which was before the Select Committee on Land Reform, Environment, Mineral Resources and Energy. The Bill seeks to amend a number of provisions to provide for clarity on matters and textual amendments that fall under various related Acts, such as the National Environmental Management Act of 1998; the National Environmental Management: Protected Areas Act of 2003; the National Environmental Management: Biodiversity Act of 2004; and the National Environmental Management: Air Quality Act of 2004, to name the few. The committee consulted extensively on the Bill, including calls for written submissions and the facilitation of public hearings, which were held by provincial legislatures. A copy of the report is available here(link is external) (from page 165).
The fourth Bill passed by the NCOP is the Civil Aviation Amendment Bill that seeks to amend the Civil Aviation Act of 2009, including provision for operational independence of aircraft accident and incident investigation; rectifying provisions about establishing the South African Civil Aviation Authority (including giving it environmental protection oversight function and providing for it as a preferential creditor in respect of any money, fees, charges or levies collected on its behalf).
Upon a thorough consultation process through public hearings and written submissions, the NCOP’s Select Committee on Transport, Public Services and Administration, Public Works and Infrastructure received sufficient submissions from a number of various relevant stakeholders and recommended the Bill be considered with the recommended amendments being effected.
The Bills will now be sent to President Cyril Ramaphosa for assent.
Source: Government of South Africa