To regulate, or not to regulate

Questions abound when it comes to the future of the Transport Appeal Tribunal (TAT), writes SHARMINI NAIDOO.

The intention of regulatory policy is to support economic growth and serve public interests. According to the Organisation for Economic Co-operation and Development (OECD), “regulations are indispensable to the proper functioning of economies and societies – they underpin markets, protect the rights and safety of citizens, and ensure the delivery of public goods and services”. The resultant effects are market growth, job creation, the building of vital infrastructure, and sustainable development for the country. To be effective, the review and determination of public policies should be an inclusive and meaningful process. It should derive and carefully consider input from all stakeholders before taking decisions to meet its objectives, rather than just relying on political whim.

In South Africa, the Department of Transport (DoT) is responsible for formulating policy and legislation for rail, pipelines, roads, airports, harbours, and intermodal operations of public transport and freight. Its powers enable it to set a strategic direction for subsectors, assign responsibilities to public entities, and set and monitor the implementation of norms and standards to regulate the transport industry.

One of the many pieces of legislation that governs the transport industry – and in particular the bus industry – is the National Land Transport Act (NLTA), which regulates and monitors the transportation of public passengers for reward. The NLTA Amendment Bill is intended to bring the NLTA up to date, provide for the conclusion of public transport services contracts; prescribe criteria and requirements for municipalities to enter into public transport services contracts, and amend other transport-related legislation to bring it into line with the Act.

The Transport Appeal Tribunal (TAT), which allows for a dispute resolution process for the transport industry, will be affected by these changes. The TAT will have jurisdiction over appeals that emanate from decisions made by the Provincial Regulatory Entities (PREs), the Cross-Border Road Transport Agency (C-BRTA) / Regulatory Committee, National Public Transport Regulator (NPTR), and Municipal Regulatory Entities (MREs) in respect of the application, renewal, transfer, or amendment of permits.

The draft regulations propose the following:

1. Affected parties (irrespective of whether they objected at the time that the permit was granted) may now lodge objections.
2. Parties will now to be able to appear in person, or have legal or other representation at the TAT.

In addition, the draft regulations include the fees that will be payable and the conditions for refund.

In considering an appeal in terms of subsection (1), the TAT is “bound by applicable transport plans”. Transport plans are currently in various stages of development in different parts of the country. Many are, in fact, at a very “high level”, with insufficient detail. It is unclear how this will be considered as a factor in granting, refusing, or amending operating permits.

In terms of S10 of the Broad-Based Black Empowerment (B-BBEE) Amendment Act, every organ of state and public entity must apply any relevant code of good practice issued in terms of the BEE Act in a number of situations. These include when determining qualification criteria for issuing licences, concessions, or other authorisations regarding economic activity in terms of any law, and/or developing and implementing a preferential procurement policy. With the Transport Charter Council planning to ensure that this clause is upheld by the authorities, we await word on whether these types of disputes will also be heard by the TAT.

It also remains to be seen whether or not the TAT’s powers will extend to hearing appeals for illegal practices conducted in the industry, such as when bus operators holding valid operating permits issued by the PRE are forced to pay taxi associations a fee when undertaking charter or other services.

Meanwhile, on the BEE front, the second round of engagements has commenced on the ITSB Charter Codes alignment process. The following principles will be applied by the Charter Council on the Scorecard:

• The proposed Sector Codes must address all elements in the Generic Scorecard.
• The proposed Sector Codes will use the same definitions, principles, and calculation methodologies to measure compliance and beneficiaries as those used in the Generic Codes.
• The proposed Sector Codes may deviate from targets and weighting, provided the targets are over and above the minimum targets and only where deviations are justifiably based on sound economic principles, sectorial characteristics, or empirical research.
• The proposed Sector Codes may deviate from thresholds or introduce a new element only where deviations are justifiably based on sound economic principles, sectorial characteristics, or empirical research.
• The proposed Sector Codes may introduce a new additional element for the measurement where such addition is justifiably based on sound economic principle, sectorial characteristics, or empirical research.

It has been categorically stated that there will be NO transitional period provided for the implementation of the Sector Codes. This may pose a challenge to the bus and coach sector, as the current Sector Code (although old and outdated) was gazetted in terms of S9 (5), which made it compulsory to comply. Therefore, the industry’s readiness and ability to move to a new Sector Code will have to be considered, especially if permits will not be granted in terms of S10 of the Act.