Mr. Speaker, with reference to the speech I made on Thursday, 4th February, on the Insurance Amendment Bill, I used the following words, inter alia—

It has been brought to my notice that these words could imply that the persons concerned may be dishonest. I just want to state clearly that that was not my intention at all, and in order to remove any misunderstanding I should like to withdraw those words.

move, as an unopposed motion—

Agreed to.

I move—

That the Bill be now read a third time.

The Opposition will not vote against the third reading of this Bill, because out of approximately 80 of the clauses we find that we agree with practically all of them, except with the controversial clause we discussed on a former occasion, viz. Clause 57, which lays a prohibition on working according to the manual. We are strongly opposed to that clause, but we cannot vote against the whole Bill merely because of that one clause. We should like the hon. the Minister to note that the fact that we are voting for the Bill does not mean that we in any way condone the contents of that clause. The Minister should know that we feel that this total prohibition, without at the same time providing new measures for retaining the balance between the employer and the employee, will lead to injustice. In the first place, the clause as it stands now will be an injustice towards minorities in a particular trade union. In view of the fact that the employees of the Railways are divided into a few large groups, there must inevitably be people with divergent interests who are affected by this clause although they fall in the same group. We had that experience in the case of the Airways technicians. As we are now asked to approve the clause finally, it may again happen that a minority of a trade union has a serious grievance but that they will be unable to do anything about it because they must obtain a majority of the whole of the trade union before the matter can necessarily be referred to the State President for arbitration. We feel very strongly that the Administration of the Railways and Parliament should see to the interests of minorities, including minorities among the employees. Here the hands of minorities are tied and for that reason we cannot possibly vote for this measure. We can only express the hope that on a later occasion, after mature consideration, the Minister will come to Parliament with a measure again to restore that balance.

Secondly, we also feel—and this fits in very closely with the arguments advanced in regard to minorities—that in view of the fact that there cannot really be an identity of interests in the true sense of the word between all the members of one of the large recognized trade unions on the S.A. Railways, this argument of ours is infinitely strengthened. There may be people, as in the case we discussed previously, who really do not have the same interests. The Management itself indicated this in the letter in which a comparison was made between the Airways technicians and bedding attendants—people who have nothing in common. In that case we saw how things could go wrong and how the interests of minorities could be neglected. We deeply regret that in spite of all our pleas and arguments the Minister evidently refuses to recognize that they have some substance and wants to give no undertaking that he will investigate the matter to see how the balance between the interests of the Administration or the Management on the one hand and those of his employees on the other hand can be restored.

It becomes a very difficult task—and here I should like to express a measure of sympathy with the Minister—if one is at the same time the employer and the legislator. In regard to this Bill, and particularly this clause, the Minister finds himself in that position. He finds himself in a position completely different from that of private employers. Private employers must in these matters look to the Minister of Labour to settle disputes between themselves and their employees. But the Minister of Transport has the power, as a member of the Executive, to come to Parliament and himself to make laws and to make these arrangements, and there is no arbitrator. There is no third party to whom the railwaymen can refer their case as in the case of employees in private undertakings. Therefore we regret that the Minister in this case in the first place acted as an employer who protects his own interests, and not as a legislator who has to protect the interests of everybody concerned in the matter. We protest against that. The Minister should clearly understand that we are voting for his Bill, but that this should not be interpreted as if we in any way approve of this clause.

There is only one thing I want to add to what has been said by the speaker who has just sat down and that is in connection with the clause to which he has also referred, namely Clause 57 of the Bill. This clause tightens up considerably the provision contained in the original Act that was passed two years ago. I want to say this, Sir: The letter that was sent by the Administration to the Salaried Staff Association could be better described, I think, as one of the most costly letters written by the Administration in recent years …

By the Management.

Yes, written by the Management. One must make that distinction. It has been the most costly letter in that it has been estimated that it has cost the Airways something like R500,000 because of the go-slow strike by the Airways technicians. The point I want to make is this: The clause which has now passed the Committee Stage applies to all the staff associations. I think it becomes extremely important that the hon. the Minister should read a lecture to the management in respect of correspondence they enter into when disputes of this sort are in the offing. We have not had an opportunity of reading the whole of that letter, Sir. Extracts have appeared in the Press. The Minister has the whole letter before him. If the Minister can give us an assurance that he is quite satisfied that the letter was a good letter to be written by a management it will be something. But I would not be satisfied on that score if the extracts which appeared in the Press formed part of the letter which brought about this precipitated action by the Airways personnel. I would refer to it as the R500,000 letter because it was that letter which led to that precipitated action. My appeal to the hon. the Minister at this third reading is this: Because the legislation now contains this very strong prohibition against any sort of strike action by Railway personnel the Management should recognize, as well as the Administration, that it is most important that negotiations are conducted on as high a level as possible, that there should be no suggestion that because of the prohibitions which have been placed on railwaymen throughout the Service, the management can now take a very strong line in correspondence knowing that there can be no come-back. I believe that had the Management dealt with this matter on the basis of proper negotiations we would not have the difficulty we had. The courtesy campaigns we have had in the Railways and throughout the country should be emphasized and I think the Minister should take the earliest opportunity of saying to the Management: In future do not introduce anything of an offensive nature in correspondence that is likely to cause, as far as the staff is concerned, this type of reaction. Sir, we have had a costly lesson and it is now up to the Minister to see that he on his part does his level best to make sure that there will not be a repetition of this sort of difficulty in future. Because I am afraid that if that type of letter is to be written again there will be unpleasant consequences of some sort or another. I think the Minister should see that his own hands are clean and that the officials who fall under his control are most careful in their correspondence.

I think one should ask oneself what the reason is for the attitude adopted by the Opposition in regard to this particular amendment. In 1963 the Opposition supported the prohibition against strikes on the Railways. They agreed that workers in essential services should not have the right to strike. The Opposition agreed with that. As I said on a previous occasion, they wholeheartedly supported that provision which has already been embodied in the Industrial Conciliation Act for the last 40 years. In fact, they claim to be the fathers of that Act. In 1963, when a prohibition was placed on strikes, it included this form of strike, viz. the form of strike called “working to the manual”. The definition was very clear. It included any form of strike, whether it was a go-slow strike or not; any form of action causing delay in the carrying out of the work is regarded as a strike. That is how it was defined. The Opposition was satisfied with it. At that time they had no interest in so-called minority groups, because staff associations have been constituted in that way ever since Mr. Sturrock’s time. They have been constituted in that way for practically 25 years or more. But on no former occasion has the Opposition even mentioned the fact that various workers are grouped together in a particular staff association, workers who have no common interests. They never referred to that. I say that in 1963 they never thought of minority groups. Then they were not concerned about the grievances of minority groups, minorities which could not bring their complaints to the notice of the Minister or of the Management. Now what is the reason for the attitude they suddenly adopt to-day? It is the old reason, Mr. Speaker, viz. that there is no such thing as a principle to be found among the Opposition. It is just a question of expedience. What a certain newspaper man said of the Opposition in 1961 is still just as true to-day, if not more so. In 1961 that newspaperman wrote the following—

I say that still applies to-day, because the only reason for the behaviour of the Opposition today is that they think they can gain a few votes from the Airways technicians. Were it not for the fact that one of the trade union leaders in an interview made an appeal to me to withdraw this provision, they would have supported it wholeheartedly.

That is not true.

It is so. If it is not true, Sir, it shows how they betray their own principles, how it is not a question of principle with them, because there is no principle at stake here. The principle was already accepted in 1963 and was then supported by them. If the hon. member says it is not true, then it means that they were politically dishonest in supporting this principle in 1963. It means that they were politically dishonest in 1963 if to-day, on principle, they cannot support this provision. What does this provision say? It is simply to fill a gap in the law. The principle remains the same, viz. that no strike or go-slow strike will be allowed. This is simply intended properly to define a go-slow strike. Is that a principle? Hon. members opposite say they are not in favour of it; in other words, they subscribe to the principle that they are not in favour of this principle being extended to cover all cases of strikes. The hon. member for Yeoville (Mr. S. J. M. Steyn) talks of minority groups. I should like this House and the trade unions outside to understand very clearly that hon. members opposite favour the splintering of trade unions. They now stand for the splintering of trade unions, because their whole argument is that there were no proper negotiations with the minority group of a particular trade union. If there are negotiations with a minority group in a trade union, it means the splitting up of that trade union. The trade unions should clearly understand that the Opposition, in their eagerness to seek a little political support from the Airways technicians, favoured the splitting up of trade unions, because the arguments they advanced that the minority group which has a grievance cannot persuade the majority to take up that grievance has always applied. It applied in 1963; it has applied all these years. There are always minority groups in all trade unions who have grievances, and there has never been any difficulty in that regard in the past.

The Management did not play them off against one another.

One section has never been played off against the other because the artisans have always been prepared—I have now been negotiating with them for the past ten years—to bring the grievances of minority groups to the notice of the Minister and the Management, as happened in this case also. Here a recognized staff association, Salstaff, handled the case of the minority group and made representations to the Management. Where do hon. members get the right to say that the minority groups are being neglected by their trade unions?

I have never said so.

That is the implication. Sir, one can never pin down that hon. member; he is as slippery as an eel. As soon as he is driven into a corner, he jumps aside and says: I did not say it, but I meant it.

Trade unions should take notice of the fact that hon. members opposite are quite prepared that splintering should take place, in other words, that negotiations should be carried on with minority groups, which must necessarily lead to the breaking up of the trade unions on the Railways. That is what they favour, otherwise they would not have pleaded the case of the minority group in this way nor would they have been prepared to vote against this provision, the principle in regard to which was supported by them in 1963. I should just like the House and the country to understand this very clearly.

Motion put and agreed to.

Bill read a third time.

I move—

That the Bill be now read a second time.

Mr. Speaker, this is a very simple Bill. It is being introduced as the result of the decision of the S.A. Railways to withdraw their catering services from the airports and therefore to enable the Department of Transport to let these catering services to private entrepreneurs. Provision is also made that if no tenders are received from private entrepreneurs, the Department of Transport may itself undertake these services. We do not expect there to be no tenders. We expect that private entrepreneurs will be very interested and that they will be prepared to tender to provide these services.

Provision is also made that in the transit area liquor can also be provided to Bantu, i.e. in the international area, whereas that cannot be done in the rest of the airport. Furthermore, there are certain provisions in regard to the issue of regulations in connection with certain matters mentioned in the Bill. That is all that this Bill contains.

The hon. the Minister has briefly indicated the contents of this Bill. Even though it may go against the grain, after his speech a few moments ago, we on this side of the House will support it. We are in favour of the principle which this Bill introduces. Where service can be given through private enterprise, without harm to the travelling public of South Africa, and where it is in the interests of our economic system, that principle should be introduced. The Minister, in introducing the Bill, however, merely stated, as a blanket statement, that the Railways were withdrawing from catering at the major airports. I feel the House is entitled to more information than that blanket statement. The Minister has given no details or reasons; he has not indicated whether a profit or a loss has been made or suffered by the Railway Administration. He has not indicated what steps the Administration is taking to ensure that the travelling public will not be inconvenienced by this decision. We are entitled to seek an assurance from the Minister that every step necessary has been taken to ensure the maintenance of service, the quality of service, extent of service, and that no hardship will be imposed upon the public. For instance, is there any provision to prevent the successful tenderer from making exorbitant charges for the service he is rendering? Knowing that those services are essential to the travelling public and that the public have very little optionx2014;it is a monopoly so to say—an unscrupulous tenderer can, for instance, exploit that monopoly. I feel that the Minister has been far too haphazard and vague in the way in which he has treated this whole matter. Other members on this side will deal in more detail with the method of procedure the Administration has adopted in regard to tendering. Tenders were issued before this House has given the authority. The Minister did not tell the House that. He did not tell the House that tenders had already been called for, that the closing date for those tenders had already passed. This House is now being asked to pass empowering legislation …

We are governing.

That is typical. I think that interjection by the hon. member for Parow (Mr. S. F. Kotzé) must go on record. He says “maar ons regeer”! I want that to go on record as an indication of the attitude of that side of the House to this Parliament, this democratic Parliament of the people of South Africa. They are governing and this Parliament does not matter! [Interjections.] Listen to the support he is getting from his side, Mr. Speaker. I say that is clique government, that it is bureaucracy tending to become an utter dictatorship. We have no objection to this measure but we take the strongest exception to the attitude of that side of the House in treating Parliament with contempt. I say not only is the method followed a contempt of this House and a contempt of the rights of the members of this House, a negation of the system of government which we acknowledge as our system of government in this country, but the Minister’s introductory speech is also tantamount to contempt of this House. He made a blanket statement that this measure was necessary in order to put the services out to tender but he did not even take the trouble to give this House any information whatsoever in regard to the procedure to be followed or the guarantees which are necessary. The Minister very carefully skipped over the other leg of this measure, a leg which he is correct to introduce; but I think it is only fair that it goes on record that this second leg is necessary because the original 1962 legislation was badly drafted. That Minister introduced it and we had certain doubts about it at the time. Now without any explanation whatsoever the Minister asks us to pass a measure correcting his mistakes of three years ago. I think it is only right that the House should know that the Minister, when he introduced the Bill which is now being amended, introduced a measure which did not achieve the objectives it was aiming at. It was a measure which he must now correct because he drafted it in a manner which was unsatisfactory to fulfil the purpose for which it was introduced.

For instance?

For instance, the wording of the fly-over provision, the provision on which we had a great deal to say in this House and on which this side of the House had doubts. The Minister now has to change it because there is uncertainty as to whether or not they have the right to proclaim prohibited areas. Why did the Minister not know that when he introduced it in the first place? We accept the need for these amendments. All I want to point out is that that need has arisen because the original Act was not properly drafted. That is all, Sir. This Minister tends to come to this House and to expect us to act as a rubber stamp and to give him support for anything he wishes to put before the House to smooth his path as Minister. Where it is necessary, as this measure is necessary, we will give our support to the legislation. We will give him support to effect improvements where they are necessary, but in giving it we are not going to let the Minister get away with the sort of introductory speech he made this afternoon.

There are three clauses which amend the wording in the existing Act, merely because the original wording was unsatisfactory.

I want to raise one other aspect of the transfer of the catering services. The Minister said this was to facilitate the transfer of the catering services to private enterprise by tender. It is not just to transfer catering services; it is to transfer book-shop services, hairdressing services, cigarette kiosks, all the public services at the airports in question. The Minister’s statement that it is to transfer the catering services is incorrect therefore. That aspect, too, will be dealt with further by other members on this side of the House. It is in fact a transfer of all the services.

The question I wish to raise is to what extent the crew of the aircraft of South African Airways will continue to enjoy the catering services as they exist at the present time. In other words, what affect will this have on any refreshments or food which was previously supplied at airports to aircraft or crew and passengers in transit—or was all food and all supplies provided ex Jan Smuts? To my knowledge until recently—I have not noticed it particularly of late—there were some supplies loaded on aircraft from other areas. If supplies of catering material, whether they are light refreshments or meals, are to be provided for aircraft at airports which will in future be catered for by private enterprise, could the Minister tell us to what extent the Airways have made arrangements for them to continue to be able to get the necessary provisions and of the same quality as in the past? Mr. Speaker, we are very proud of the quality of catering on our planes. I have had the privilege of flying on quite a number of international airlines. I think South Africa can be very proud indeed of the quality of her catering for passengers, both internally and externally. We would like to be certain that that quality will be maintained and that there will be no reduction in standards.

The crew of planes have also had the facilities of service by departmental caterers. I should like to have an assurance from the Minister that under the new arrangement crews will not in any way be prejudiced. Where they have been getting free luncheons, meals or refreshments as part of their flying duties, we should like an assurance that they will continue to enjoy that privilege. Where they have enjoyed other benefits in the past because of the fact that the services were rendered by the Department, we would similarly like to have an assurance that the crew will not be prejudiced or in any way inconvenienced by the new arrangements which are to be made. It is equally important that our crew, as well as our passengers, should have the highest standard of attention possible. With those reservations with which we ask the Minister to deal we will support this measure. We shall watch closely the manner in which this power which we are granting is exercised by the Minister’s Department. We shall watch very closely the result of the tenders and the quality of service which is provided when those tenders are finally allocated. We are giving our support to the granting of the power to the Minister to introduce private enterprise into the service.

As the hon. the Minister has indicated, what we are being asked to approve in this Bill is a policy similar to that applied by the Minister of Railways, a policy in terms of which the Railways is withdrawing from all activities which are not directly railway activities. As the Minister knows we on this side of the House concurred with that policy he announced a little while ago. The Minister has now introduced a Bill providing for the same principle in respect of our national airports. I am surprised at the gaps which the hon. the Minister left in his introductory speech, because the Bill is not all that simple. For example, when the Department puts the bar services at airports out to private tender it will not be necessary for the successful tenderer to apply for a liquor licence because, in terms of this Bill the liquor licence will be held by the Department of Transport. In other words, the liquor services that will be offered at all our main air terminals will be one of the most lucrative and profitable concessions that any company in this country can tender for. He will not be faced with the difficulty of obtaining a liquor licence and appearing before a liquor licensing court. Obviously it throws an entirely different light on all these services. This is not only a measure to empower the Minister to take these steps; it is apparently also an enabling measure. Because the Minister’s Department called for tenders in respect of these services at airports as far back as November last year. My information is that the closing date of those tenders was just before Christmas. I think it was 23 December. What puzzles me is that the hon. the Minister, in his introductory remarks, said it was generally expected that there would be numerous tenderers. If these tenders closed on 23 December, the Minister must surely be aware of the number of tenderers, and who they are, in respect of the tenders put out by his own Department, without any legislative authority, let me add. The passing of this Bill will give the Minister the necessary legislative authority to proceed with any tenders of that nature.

Let me take a closer look at the provisions of this Bill. We find that this new Section 6bis has two aspects. The one is that the Department of Transport can undertake these services itself or put them out to private tender. It is interesting to note that in subsection (b) of this clause, the putting out of the tender is in the singular, for all the services. Let me read the sub-section. It says—

In other words, the whole gambit. I took the trouble to look up this tender form and it has a very interesting aspect about it. It indicates that the power the Minister is seeking here is not only for a tenderer to make available these smokers’ requisites, reading matter, liquor and other commodities, but in fact, taking into consideration the criteria of three services—the three services laid down in the tender are (a) the provision of meals and other refreshments (b) the display and sale of certain articles of merchandise and (c) the sale of intoxicating liquor as defined in the Liquor Act—the tenderer is not asked to give those services, the tenderers in fact are asked to lease the entire premises of Jan Smuts Aerodrome in order to render these services, and a tenderer can either lease each aerodrome individually, or he can submit a tender for all the five aerodromes listed in the tender form that was put out by the Department of Transport.

Let us take the Jan Smuts Aerodrome, because I do not want to list all the available space at all the aerodromes. This is what the Department of Transport is going to lease at Jan Smuts: The main kitchen with associated office, change room and storage facilities; the transit kitchen (which I think answers the point raised by the hon. member for Durban (Point) who put the question to the hon. the Minister as to how the Airways are still going to be supplied with refreshments on the aircraft) …

They are not supplied from the transit kitchen, we have our own kitchen.

I am coming to that, but in the tender mention is made of the transit kitchen: then there is a third item, namely the main dining-room and service buffet, then there is the bar lounge with service buffet, then there is a bar with associated storage facilities, the coffee buffet, the bookshop with associated display windows, the cafeteria with associated service buffet, the cafeteria kitchen with associated storage facilities, and then also the non-White dining-room. In other words, this is not a tender for service to the public, this is a tender for the leasing of premises at Jan Smuts Airport, and the Minister has a discretion to decide whether the successful tenderer will be able to adequately render these services to the travelling public of South Africa. Now, obviously, Sir, as the hon. Minister well knows, the main interest is in the supply of liquor. The hon. Minister can tell us already who have answered this tender, what kind of firms, because obviously the biggest interest in respect of all these services is going to be in regard to the liquor trade at Jan Smuts Airport. I think the hon. Minister can also give us the information to-day if in fact those who have tendered for all these services are not in the main firms who hold liquor licences and deal in the trading of liquor. The question one must ask, and particularly members of this House, is in how far the interests of the public are protected and whether the right services are going to be rendered to the public, because that must obviously be the first direction. Now I cannot for the life of me see how a man who is interested in the liquor trade, who is interested in running a bar and a bar lounge and a service buffet, can have the same interests in efficiently running a cafeteria, or in efficiently running a bookstall, or any of these services listed in this tender. What I cannot understand is why tenders were not put out for the various services offered to the public at Jan Smuts Airport and why only a tender in regard to the leasing of the premises mentioned was put out. What puzzles me more is that the Minister made this statement in his introductory speech that he is applying a policy similar to that which he applies as Minister of Railways. I cannot accept that statement, because the policy that the hon. Minister follows in respect of Railways in regard to similar services at railway stations is to put out all these services to individual tenderers: the public or private enterprise will individually tender for a cafe, for a restaurant, for a bookstall, for a sweetstall, or whatever the service may be, but there was no effort on the part of the Minister of Railways to put out a tender in respect of all the railway premises throughout South Africa, or even the main railway termini in South Africa. So I ask why a policy of this nature is followed in this case. There are specialists in conducting efficiently a cafeteria. Why can they not tender for a cafeteria at Jan Smuts? Why must such a person put in a tender for the entire premises at Jan Smuts and involve himself in a liquor licence, in book trading, and all these other ancillary services which the public demand at these various airports? Mr. Speaker, the matter is not as satisfactory as it looks on the surface and when we come to the Committee Stage we will move an amendment. But as has been indicated by the hon. member for Durban (Point) we accept the principle that private enterprise should have the right to tender for these ancillary services at these various depots similar to the policy followed by the Minister in regard to railway stations.

There is one final question I would like to put to the hon. Minister. As far as the catering side of the services to the public at Jan Smuts Airport is concerned, there is of course no compulsion on the hon. Minister to put this out to private tender, because to my information the Railways are still in a position to continue those services at Jan Smuts or any of the main airports. The catering services of the Railways are not being disbanded, they are still remaining in existence, and what I would like to know: If the Railways have conducted an efficient service at these main airport termini, why can they not continue to do so under present circumstances? From what I understand they have not been entirely unprofitable to the Railway Administration. I would like some clarity on that particular point.

I think there must be a misunderstanding. The hon. member for Durban (Point) (Mr. Raw) is confusing the Department of Transport with the South African Railway Administration. The question he put must be directed to the Railway Administration, not to the Department of Transport. The hon. member probably knows that the national airports are controlled by the Department of Transport and not the S.A. Railway Administration.

Transport is handing over these services.

Yes, but the hon. member wanted to know why the S.A. Railways are withdrawing from the airports. It would be much more pertinent to put that question to the S.A. Railway Administration at the appropriate time. I can, however, give him the information that the reason is twofold: (1) Because the services are run at a considerable loss.

Except Jan Smuts.

Jan Smuts is run at a considerable loss, and that includes the liquor, the bar, the catering, the cafeteria and everything else, a loss of thousands of rand every year.

Did I not see in one of the papers that a profit was made at Jan Smuts last year? I saw something to that effect.

The hon. member must have seen wrong. The S.A. Railways are running all these catering services at the airports at a considerable loss. That is one of the reasons why the S.A. Railways have decided to withdraw their services from the airports. The second reason is the staff shortage. Those are the two main reasons why the S.A. Railways have decided to withdraw their services from these airports. As a result of that, the Department of Transport either has to operate these services itself, or it must let them to private enterprise. Those in short are the reasons why this Bill has been introduced.

The hon. member wanted to know whether the travelling public is not going to be inconvenienced. I hope not. The Department of Transport will have a measure of control in regard to prices and the quality of the services given to the travelling public. That is one of the conditions in the tenders.

What sort of control?

The Department of Transport will lay down certain conditions in regard to the standard of services and in regard to prices. I do not think the travelling public will be inconvenienced. As a matter of fact, I think that private enterprise might be able to give better service to the travelling public. Their overheads are not as high as those of the Railways, and when you have one firm concentrating on a particular catering service at a particular airport, it follows that there might be greater efficiency and that the service might be of a higher standard than that rendered in the past.

The hon. member was very concerned about the fact that I did not tell the House that tenders had already been called for. I see nothing wrong in that. Those tenderers were told that tenders were called for subject to the condition that Parliament would approve this Bill. There was nothing wrong in expediting the matter and to ask tenderers to tender in the meantime. When the Bill is passed by Parliament, the final allocation can be made.

The hon. member is also concerned about the fact that this amendment talks about “person”, in other words the singular, but according to my information the legal interpretation is that “person” also means the plural. If there is any doubt I am quite prepared to amend that in the Committee Stage.

The hon. member for Turffontein wanted to know why separate tenders were not put out for these services. Merely for one reason, that we had to make it as attractive as possible, and I do not think that any person will tender for the cafeteria as such, or for the diningroom only, if liquor rights are not included. In an attempt to give the best possible service to the public, and to get a tenderer who is not a man of straw, but who can actually run these services, that these services have been combined in the tender.

The hon. member for Durban (Point) wants to know whether the Airways will continue to obtain supplies at other airports. I can assure him that the necessary arrangements will be made.

Motion put and agreed to.

Bill read a second time.

I move—

That the Bill be now read a second time.

Hon. members have had the advantage of an explanatory memorandum in respect of this Bill and I am quite sure that I may claim that it is not a contentious measure. The majority of the clauses relate to safety provisions.

From experience gained since it came into operation, it is apparent that confusion is being caused by certain of the existing provisions of the principal Act. The provisions concerned are those in which Safety Convention Certificates and the Load Line Certificate are referred to in terms which do not correspond to the terms used in the International Convention for Safety of Life at Sea, 1948 (also known as SOLAS 1948), and the International Convention respecting Load Lines, 1930.

Further, during 1960 a new International Convention for the Safety of Life at Sea was framed to replace SOLAS 1948. This new convention is also known as SOLAS 1960 and it will come into operation early in 1966. It contains numerous departures from SOLAS 1948, for example, the names of the various safety certificates. The Republic’s accession to SOLAS 1960 is at present receiving attention and certain amendments to the principal Act are now necessary to enable the Government to take the necessary steps to give effect to its provisions.

The safety convention certificates now prescribed in the Bill are those appearing in SOLAS 1960 and the opportunity has also been taken to put right the matter of the Load Line Certificate. Provision is also made to reduce the number of safety certificates which are not convention certificates.

The amendment proposed in paragraph (a) of Clause 4 will enable citizens of countries, other than treaty countries, to take examinations in the Republic for certificates of competency. Numerous requests are being received from such persons who have not yet qualified for South African citizenship but who are resident in this country and who are serving in South African ships. The proposed amendment will enable such persons to better their positions. It will also contribute towards alleviating the present shortage of properly qualified persons to serve in our ships.

In regard to Clauses 6 and 7, there are citizens of foreign countries, or children of such citizens, who wish to undergo training and become cadets in South African ships or to be indentured to owners of South African ships. The proposed amendments makes such training or indenture possible.

I do not think that I need deal particularly with any of the other clauses of the Bill. I feel sure that the Bill will be welcomed by shipping interests and by anybody else who might be affected by its provisions.

I would like to endorse what the hon. Minister has said with regard to the Bill in general being an agreed measure, and I think we can assure him from this side of the House that in that regard we also feel with him that there is need for clarification, need for what one could almost call a fresh charter to bring into line with world conditions our own regulations regarding the control of shipping, particularly so because South Africa over the last few years has made tremendous steps forward both with regard to the number of mercantile craft operating from our ports, in and out, but even more important in regard to vessels of our own, vessels which are either registered under the South African flag, or in some shape or form form a portion of our growing mercantile marine. I am not referring only to the movement of ships, the actual operation of vessels, but also to progress in South Africa in recent years in ship construction. It is true that construction has been limited to a certain class and a certain size of ship, but it is also true that the smaller the vessel, the more difficult it is for the authorities responsible for the control of safety and the control of load-line conventions, and all the other things, which apply equally to them, to exercise such control and to see that the vessels are constructed and equipped in such a manner as to permit that necessary control in their building as well as in their operation. The measure before us does take cognizance of that development and provides in certain of the clauses additional powers and authority for our inspectors and those responsible for the control of shipping on our coast to see that there is built into the vessel (during its construction) and into its equipment (also during the period of construction) these things which are necessary in order that at a later stage when the vessel is operating as a sea-going proposition she can meet the requirements of the Bill with regard to safety and security at sea. Viewed from those two angles, I think the Bill is distinctly an improvement. However, I do not agree with the hon. Minister altogether that in general it is not necessary to enlarge on some of the other provisions. It so happens that some of the other provisions in the Bill from our own domestic point of view in South Africa, are in my opinion even more important than some of the more big-ship conventions and big-ship regulations governing those ships which travel all over the world. You see, Sir, over the last ten years the position with regard to the operation of smaller craft, operating around our coast, has changed beyond all recognition. Where one could see a dozen coasters or a few dozen small coastal or fishing craft in operation, and could regard the fishing craft as something which just operated in a harbour or in the vicinity of a harbour, today we have literally hundreds and hundreds of fishing vessels which as a result of the development of their type of trawling and the modern developments in that type of activity, have become sea-going vessels, vessels which carry quite a substantial crew, vessels which do journey, loaded or unloaded, for several hundreds of miles, port-to-port, either in search of their catch or taking their catch back to harbour. Moreover during the past few years we have developed and are still rapidly developing quite a new phase of sea-life in South Africa—I refer to the sea-diamond operations off our West coast, where a new type of vessel, also falling under these regulations, is now operating, vessels of a nature which the ordinary sea-going man, or the sea-going engineer never contemplated before—floating diamond mines and all the ancillary vessels which go with them. Consequently there is need for a far more effective control to be administered over those types of vessels even more so than in regard to the big sea-going vessels in which what may slip through the net in the South African ports, would be caught up, say, in a European port or elsewhere in the world. They have to face batteries of control in various ports. But our own coasting and fishery craft are controlled entirely in our own waters by our own people. And there the Bill before us does contain very marked changes. A few words altered here and there in the Act, now give the authorities responsible a control which they never had before, and a control which they definitely require in order to effectively operate.

I would like to deal first with the authority given largely both in the definitions and in Clauses 3 and 4 where in the one case dealing with smaller craft the Bill now introduces and inserts the words: “fishing boat” means “a ship engaged in sea-fishing for financial gain or reward”. Hitherto the words have been “for profit”. The words now will be “for financial gain and reward”. Although it seems a fairly innocent alteration. It is fairly innocent, yet it is a most important change because it will give our inspecting staff, our officials in control, just that extra bit of authority which they never possessed before. There was always an argument over what was covered by the definition of “profit”. Many of the inshore and ocean-going fishing craft operate on a share basis. The owner receives a certain portion of the catch. He does not actually receive money. There was always an argument as to how far that lets him escape through the net of control. That particular gap is being closed by this change in words. We on this side of the House support that improvement absolutely. Because there is no class of vessel which is more prone to disaster and has met with disaster even in the last few months than these craft. There were several disasters with fairly heavy loss of life, but where no provision had been made in our control regulations just through the flaw in regard to meaning applied to the word “profit”. You see, Mr. Speaker, we have vessels now going on long voyages, taking aboard a catch of anything up from 100 to 130 or 140 tons of fish; they leave port, but there is not a single record compulsorily kept of the number of people on board, or the names and addresses of the crew that operate in those ships. There is not a single crew member of those craft who is covered by insurance in any shape or form.

Each time when we had a disaster, there is a call for public charity to support the relations and dependants of the men who have lost their lives whilst practising their calling, because there is no effective control. The time is long overdue for such a provision. I can quote two recent cases, one of which happened to be in my own constituency, cases where people lost their lives. In one case there were 50 dependants left, completely destitue. Your average fisherman has no reserve funds, he depends on his catch and this is mortgaged long before he catches it. There were 50 dependants left, absolutely destitute. The public, I may say, responded very well and as a result those dependants—some of whom were not born until months after their fathers had been drowned at sea—have been well looked after and will be looked after for several years yet to help tide them over the first five or six years after their loss. But that should not be necessary. Last week a fresh fund was started for the Pauline disaster, the boat that was picked up at Hout Bay minus its crew, some of whose bodies having been washed ashore since then. In respect of both those disasters there is still no accurate record of the people who actually sailed from port in those vessels. Although this amendment, using the words “gain or financial reward” may not altogether cover that point, I intend to put before the Minister a proposal which I hope he and his Department will be good enough to consider and which can fill this gap. I think it is most essential. The “drivers” as they call them, in other words, the skippers and the engineers are people who as a rule are in permanent employment of the owners, but even they are not covered by insurance. The reason for non-insurance has been that the crew was a “scratch crew” very often collected on the quay, and that therefore they cannot be covered by insurance. It should be perfectly feasible and I would ask the hon. Minister to consider it, to examine the possibility of some block insurance for a vessel, depending on the number of the authorized crew to be taken out, so that in the event of a disaster there would be some protection for the widows and children who are left after such a disaster instead of their dependance on charity. It seems feasible. We do it in regard to land services of various types. It is done in regard to bus services, road services, where you have a block insurance that covers so many passengers, and it seems feasible that something like that could be worked out for these fishing craft. The other suggestion I want to make with regard to that particular clause is this: These vessels now fall within the ambit of the Act by operating, as the amendment says, from any port or any area within the coastline of the Republic—that again is a useful extension of the previous definition. Now I want to ask the hon. Minister again whether he and his officials will not give some thought to the fact that everyone of those craft, the major ones at any rate, operates from some port, however small it is, either under the control of the Department of Railways and Harbours, or in some cases under the Department of Transport, and in many other cases under the Department of Fisheries.

In dealing with the particular question of effective control there may well be some difficulty in bringing together the interests of these three Departments, but that should not be insurmountable. At everyone of these small ports there is a state official in some shape or form known usually as the harbour master. He is conversant with the craft that operate from his port, he knows the people who operate them, he knows those who need a watchful eye perhaps more than these others who can be depended upon to take precautions, and I would ask the hon. Minister to consider whether it is not feasible that in terms of this Act and the legislation we are adopting now that these harbour-masters in some agreed manner should be made inspectors of the Department responsible for seeing that the safety regulations in regard to these craft are carried out, and for the observance of the other control that may be necessary for their safety. To me it seems a practical measure that can be done. The official is conversant with these vessels, he knows the sea and he knows the operation of those vessels, and in the majority of cases he knows the crews. It seems to me that there is an avenue where the Minister can bring some practical relief to his Department which is hoplessly overburdened with work, because they are so short-staffed. I ask the Minister to give consideration to that aspect, as well as to the other one of having some form of regulation making it necessary that the skipper of a vessel, before he leaves port, should leave with the harbour master a list of the names and addresses of his crew. That will only take a few minuts, whereas now we have to spend a fortnight or three weeks trying to find out who have been drowned. In the case of the first disaster, the Gay Flo, three weeks after the ship was sunk one of the men who was reported dead, and whose widow had already received relief, was found walking around in Port Nolloth; he had never been on board the ship at all. In the last disaster the same thing happened. One of the men who was reported drowned was not on board at all—it was afterwards reported that his death was exaggerated …

How do you exaggerate death?

Well, the report of his death was exaggerated. But a list of the crew would avoid such happenings. The Bill also provides fairly wide powers regarding the registration of officers and men, our own men as well as those registered in other countries but who have come to serve on our vessels. The Bill provides for registration for them, so that they can man mainly the larger class of vessel, the deep-sea coaster and our ocean-going ships. In other words, this Bill lays down a charter, but we must not be misled by the fact that we now have legislation to provide for these necessary things. The legislation is all right; that is the charter, but to bring that charter to life and to make it of any value at all, we have to have the trained staff to man the ships and the officials who are competent to see that these regulations are indeed carried into effect. We have nothing near the number of either of these groups required. I will deal, first of all, with the case of the officials who have such wide responsibilities and power—and the more one studies the Bill and sees the reports that they have to submit (and I speak here of personal knowledge because it was a part of my own job)—one wonders how on earth they are able to cope as well as they do with the overload of work they carry. I think it is imperative, if we are to make a success of this legislation—and we must make a success of it because we depend so much on sea transport both for our imports and exports—then we have to encourage into the profession—and I am dealing now with the officials—the type of man who is not only capable but who is prepared to make that his life’s work.

To-day we do not have nearly enough of them. I would ask the Minister to have their conditions of service overhauled and to see that the career is made sufficiently attractive for the men who have to do this work, and that they have the facilities at their disposal to carry out what is a very arduous task. I think those who have never done the work cannot realize what is involved in making a complete survey of a ship in order to give the certificates for which this Bill provides. It takes a few weeks’ work for a man to produce those results. The physical activity alone is tremendous, apart from the technical knowledge that is necessary. I think it is imperative that steps should be taken to encourage people to join that profession by improving the conditions and seeing that all the necessary facilities are at their disposal. We have been very lucky so far. We have had some excellent results from that body of people working under the most difficult conditions, but I think at the rate our shipping is growing, and the diversity of shipping we are now dealing with, it is imperative for us to take action in regard to this aspect also. At one time a Bill of this type dealt mainly with normal types of ocean-going vessels. To-day we are dealing with a growing number of bulk cargo-carrying ships, which present quite different problems from more conventional types of ships with holds that have to be stowed under certain well-known conditions. We have a steadily increasing tanker fleet visiting our ports. We are developing refineries which mean that loaded tankers now come into our ports transporting the raw materials to feed these refineries. It also means that they sail out of our ports, with the products of these refineries and requiring all the checks on load lines and the other safety factors that go with the operation of tankers, services which we now have to apply as the loading and sailing port of the tankers. These are all added burdens which will increase still further in future when the new refinery here at Cape Town is completed. We have provided for the letter of the law in this Bill, but side by side with that we must provide the personnel in order to translate those laws into practical action. Otherwise we will just be living in a fool’s paradise because we will have legislation which we cannot put into effect and there is nothing more dangerous than that. All these things need a lot of attention.

Let me come to the clause I mentioned a few minutes ago with regard to the people serving in the ships themselves. There again we have a growing problem. A country’s coaster trade should normally be manned by people of that country. Here is a vocation for South Africans, for sea-minded youngsters to take up. We are not getting them and we have not the facilities for training them. We have had the case of an ordinary trawler which mainly employees a Coloured crew with White officers, but has been lying idle in Cape Town harbour for weeks because they cannot get a crew to put on board of her. They are building new trawlers for South Africa overseas, and here in South Africa, but we are not building the crews to man them. The old General Botha used to train personnel, mainly officers, for the Merchant Service. But the training there has been changed over to meet the requirements of the S.A. Navy, and instead of turning out about 60 merchant marine cadets per annum as we used to do, at last year’s passing-out parade there were only 14 who passed out as Merchant Service officers. That is not enough. It is true that a new establishment is being built at Grainger Bay, but it is not yet in operation and will not be for some time. When it does come into operation we will have to make entry into that Academy sufficiently attractive to attract the boys we want. To-day they have to meet all their own expenses, but the country will have to help to pay the costs of training the personnel we need for our shipping requirements. The hon. the Minister of Defence is implicated in this to some extent. If ever the day comes when we have to face warfare, he will find that the coaster crews and the trawler fishing crews will be the people he will have to depend on for manning his increased number of minesweepers and small ships of that nature. If we do not have them on the trawlers he will not have them for the defence of the country. So there is a national aspect to it as well as the purely commercial one. We have to provide these people.

There is only one radio officer being trained at the moment in the Technical College, when the whole trend of ship control and the safety of life at sea is turning towards electronics. It is just too fantastic to believe that we have only one radio officer in training. Nobody has any interest in him until he is trained; until that stage he has to pay his own bills and most youngsters have not got the money or their parents cannot afford to give them that training. We have to give them encouragement. If it were not for the exemption clauses in our legislation, we could not have a coastal service to-day, because most of the men are appointed under exemptions. Many are not fully qualified people. They are people who hold the exemption certificates provided for in the legislation, to enable them to do the job because the properly qualified men are not here. We have one case of a coaster operating with a chief engineer who was formerly an ambulance driver. He may be doing quite a good job of work, but it shows how scarce these men are, and it is no good living in a fool’s paradise with a piece of legislation such as this. It is no good having the skeleton provided here in this Bill unless we put the flesh on that skeleton in the form of the necessary qualified manpower.

On the question of encouragement. In practically every other country, proper sea training is counted as portion of the national training scheme. A man who serves a period of 12 months in a merchant ship is that much more valuable to the S.A. Navy than a man who just goes on board. You at least start with a seaman. Overseas encouragement is given to such men by counting a certain portion of the time served at sea as credit against their national service. Consideration should be given to seeing whether perhaps something like that could not be done here in South Africa in order to encourage people to go in for these careers.

We come again to these fishing boats. Hardly a month goes by in the fishing season without some disaster happening, and we read of a fishing vessel sinking. A few hours after leaving port the vessel springs a leak and sinks. Most of the vessels are of wooden construction, with a very high freeboard. For months of the year all the upper portion is out of water and like all wooden vessels they shrink and the seams open. If that portion is pushed under water it starts to leak. If they get an extra good catch they overload and go down into the water well below the depth at which they are authorized to do. In many cases their decks are practically awash, and the portion of the hull which has been dried out leaks along the seams and lets in water. Then they find that the pumps do not work. These are features which the controlling officers will have to examine with a view to an improvement in design. The pumps will not work because they are completely blocked by a mass of compressed fish around the sump. Consequently the vessel sinks, and you lose a valuable ship with its cargo and 14 or 15 lives are jeopardized. These are features which all require examination, and they are all part of the safety provisions provided for in this Bill. It is impossible for the present staff to deal with all these things unless their numbers are augmented and the profession is made sufficiently attractive to get and retain the right people.

Take the life-saving equipment. On one occasion I had to sit as an assessor with a magistrate in an inquiry into the sinking of a large fishing vessel with considerable loss of life. This vessel ran ashore in a fog. According to the regulations, every ship has to carry a compass, by which they should have been able to avoid running shore. We found the compass stowed away right down in the anchor cable locker, covered in grime and dirt. It had probably not been used for years. It was in the way on deck, and therefore it was dumped down below. Unless you have the staff available which can periodically go aboard a vessel and inspect these things, that is the sort of thing that happens. The life-jackets are cumbersome. They take up too much room while fishing, so they are thrown into the engine-room or are stowed in some other part of the vessel where they are out of the way, and they are still out of the way when disaster strikes. There are modern inflatable waistcoats which one can wear while fishing, which either automatically inflate themselves on immersion or can be very easily inflated, and they take up very little room. I think we should see what improvement can be effected in that direction, and also the question of inflatable life rafts being used instead of the more cumbersome boats which are carried. These are things which will help to make it possible to administer these regulations, which at the present moment are being dodged and avoided by the very people in whose interest they are provided. They resent them because they feel they are obstacles in their way. It makes it more difficult for the control staff to exercise their control, and I believe there is much room for improvement in this respect. I commend these suggestions to the Minister, to go hand-in-hand with the provisions of the Bill, because without them I do not think we will get the full benefit that we could otherwise have got from the Bill.

All over the world control of this nature is probably the most intricate and the most difficult to administer, because you always meet with a barrier of resentment from the people you are trying to help. They regard it as an obstacle, and it calls for a big measure of discretion as well as mutual give and take and ability on the part of the staff who have to enforce these regulations. That is why I have suggested that we should make the conditions of work of the staff better. They have to work under very difficult conditions.

In conclusion, I want to say to the Minister that step by step and hand in hand with this legislation the Minister should cause inquiries to be made among his own people who know these problems far better than he or I. Let them examine the position and see what steps must be taken to remedy these various defects and to put life into the regulations. I have endeavoured to give this criticism I have given, purely in a constructive manner. I am not in any way antagonistic to the Bill, which I believe is a good one. I have done so in the best interests of the profession with which I have been associated all my life. We on this side of the House support the Bill as a step in the right direction, but we do urge that it should be followed up in every possible way to make it possible to carry out its more important provisions more effectively.

Mr. Speaker, the hon. member made an interesting and constructive speech. He dealt with quite a number of matters not strictly covered by the amendments in the Bill, but the suggestions he made will be brought to the attention of my Department. I can only say that in regard to the training of officers, that is a matter over which of course I have no jurisdiction. The hon. member knows that the new Academy which is being built at Grainger Bay is under the jurisdiction of the Department of Education. But I agree with him that we have an extreme shortage of sea-going personnel. I am one of the sufferers, because I am unable to get these men for my own harbour ships. There is a considerable shortage of personnel and as the result of that so many of our ships are running on exemption certificates, as the hon. member said.

As regards the officers and the personnel of my Department, the hon. member suggested that the conditions of service should be made more attractive. As he knows, they are public servants and in the Public Service it is very difficult to make an exception for one group of servants. But the conditions of service are fairly good compared to other people doing similar work. But I do not know whether making the conditions more attractive, or even increasing the salaries, will alleviate the acute staff shortage being experienced by the Department. However, the suggestions the hon. member has made are constructive and will be brought to the attention of my Department to see whether effect can be given to them.

Motion put and agreed to.

Bill read a second time.

I move—

That the Bill be now read a second time.

Mr. Speaker, as the result of the industrialization in many great cities of the world, there is increasing atmospheric pollution as the result of the use of coal, oil or petrol as fuels. The whole of the Western world has awakened in recent years in regard to this problem and the great damage caused by air pollution. Here in our own country it has been estimated that the annual damage amounts to R12,000,000. That is appreciable, yet it is only a drop in the ocean if one compares it with the tremendous damage being caused in a highly industrialized country like America, where it is estimated that the material damage amounts to between R1,500,000,000 and R4,000,000,000 per annum.

But apart from this material damage, there is also the damage done to the health of our population, and the awakening in this regard has been stimulated in South Africa by the discovery that lung cancer is not so much caused by smoking tobacco, or rather, that that cause plays a smaller role than is played by polluted air. As the result of research and investigations here in South Africa, I think we can accept to-day that the smoking of tobacco is one of the causes of lung cancer, but air pollution is an infinitely greater factor, according to the most recent investigation. Research workers have, e.g. pointed out that White South Africans are the heaviest smokers in the world, even more so than the Americans, but that the incidence of lung cancer amongst White South Africans is less than half of what it is in England. It has been ascertained here in South Africa by observation and surveys that British immigrants coming to South Africa have a death-rate 44 per cent higher than that of South Africans, even though South Africans are heavier smokers. In Durban, e.g. it has been ascertained that as the result of the smog there the incidence of lung cancer is twice as high as in Johannesburg. In Durban it has reached the high figure of one out of every six male deaths between the age of 45 and 64 years. Lung cancer is one of the most striking examples of the effect that air pollution has on the health of people, but that is not all. There are also other respiratory and chest diseases which are caused by air pollution. Everywhere in the civilized world steps are being taken and legislation is being passed as the only way of effectively combating air pollution. Here in South Africa a National Committee was appointed in 1955 in regard to air pollution, and representatives of the Government, the Provincial Councils, the local authorities, the C.S.I.R., and the mines and industry served on this Committee, and for years they carefully investigated this problem, and at the same time the steps being taken in other countries as well to combat the problem. As the result of this, they eventually submitted to us their recommendations in a very valuable report, and at the same time a draft Bill based on the Acts of other countries. The Department took that Bill and worked on it, and a few years ago it was introduced in this House, after which it was referred to a Select Committee under the efficient chairmanship of the hon. member for Kempton Park (Mr. F. S. Steyn). This Select Committee did much valuable work, and its work was so onerous that after the end of the session the Committee had to be converted into a Commission of Inquiry to continue the work during the recess. It did its work very thoroughly and reviewed the whole problem. It carefully considered the evidence of experts in all spheres, of Government institutions, the C. S.I.R., local authorities, the mines, etc., and also of persons prominent in this sphere. The Bill was then redrafted. This Select Committee and the Commission did very important work, particularly in regard to one aspect of the matter, because a new and important aspect of atmospheric pollution was included, namely the pollution taking place as the result of dust. From the nature of the matter, the Select Committee, in the light of its own experience, knowledge and common sense, had to make certain recommendations which I would like to commend to this House as being of great value to all of us. I also wish to avail myself of this opportunity of thanking the hon. members of the Select Committee and the Commission, both on this side of the House and on that side, particularly the Chairman, for the excellent piece of work they have done and also the Chairman for his efficient guidance. As I have said, from the nature of things, this is, for a great part, a new field we are entering upon. New problems will always crop up in future; new solutions will have to be found and we must not take it that the Bill before the House today is the final word.

The Select Committee concentrated on four aspects of atmospheric pollution. The first is atmospheric pollution by smoke, smoke for example, from stoves, chimneys, industries, etc. In the second place it concentrated on atmospheric pollution by noxious gases, particularly gases caused by chemical and industrial processes. In the third place it concentrated on atmospheric pollution by dust and in the fourth place on atmospheric pollution by motor vehicle fumes.

May I just briefly outline the general principle of the Bill to hon. members. Smoke is, in the first place, the most visible form of atmospheric pollution. The problem is not so difficult that it cannot be solved by a local authority. That task is consequently entrusted to local authorities in this Bill but where a local authority is not able to solve the problem in its own area, or where such an authority neglects to do so, the State is empowered to undertake that function and to ensure that a stop is put to atmospheric pollution by smoke in the area of that local authority. This measure is only applicable to areas which have been declared smoke control zones. An area is only declared a smoke control zone when the Minister of Health, after consultation with the Minister of Economic Affairs, and with the permission of the local authority, decides to do so. The local authority and the controlling bodies will then tackle the problem of atmospheric pollution by smoke by trying to improve the fuel burning appliance or the chimneys or of eventually making smokeless fuel available to the community where circumstances may demand it.

The second cause of atmospheric pollution is noxious gases, and gas is difficult to combat because it is invisible. Sir, may I refer to a case in Durban as an example. A few years ago an odour was noticeable at a certain time of the year in Durban North, an odour which was really extremely unpleasant but which disappeared at times. Investigations were conducted over a period of years but it was impossible to determine what caused it. After further careful investigation it was discovered that it was caused by a gas which was emitted in a neighbouring river 20 to 30 miles away, and which only travelled up the valley at certain times of the season and, peculiarly enough, travelled all along the coast as far as Durban North. All that was determined after years of investigation. I mention that to show hon. members how difficult the problems is of controlling noxious gases. This is the reason why it is not left to local authorities but to the State which has far wider powers. But it is also a difficult problem for another reason, namely, that very often these gases which are emitted originate at manufacturing industries,.

industries manufacturing cement or metals or chemicals and where the process is often complicated and far more difficult to solve. However, where you are dealing with large local authorities which have the machinery at their disposal, authorities which are efficient enough, these powers can also be conferred upon them to exercise the necessary control. A whole list of processes which will be controlled in an area which has been declared a control zone appear in the Second Schedule to the Bill. I refer, for example, to the manufacture of phosphate fertilizer, sulphuric acid, hydrochloric acid and any other acids or leading works which cannot be started in a particular area unless permission has been obtained. Such permission will only be given after due regard has been had to the situation of such an industry—whether it is situated on a high or low level; for what purpose the area is used; whether there are suburbs, etc. All those are factors which will be taken into account. Where such an industry is already in existence the controlling authority has not got the power simply to close that industry; it first has to instruct that industry to employ the best available methods to combat pollution.

The third form of atmospheric pollution is particularly found on the Witwatersrand where there are mine dumps. We know that mine dust is dangerous, particularly mine dust which consists of extremely fine particles of silica, particles which are so fine that they are about.5 of a micron or even smaller. We know that down in the mines they cause pneumoconiosis. Those fine particles in the form of silt are then pumped into big dams where the silt eventually dries. But the silt only becomes a nuisance in those dams after the mine has closed down. When the mine has ceased to operate those dams dry out and you get what you get all over the Rand to-day. With the slightest breeze you practically have a cloud of dust over the whole area. If you look carefully you will notice that the fine haze in the air consists of fine dust particles, particles which are often the most dangerous.

The question which arises is this: If miners down in a mine run the risk of contracting pneumoconiosis does the danger not exist that the public, who often come into contact with clouds of this fine silica dust, may also contract pneumoconiosis? It is for this reason in particular that we have to take precautionary measures. In certain cities on the Witwatersrand it has really become such a big problem that industries in those cities have informed us that unless steps are taken to put an end to it they will simply have to close their industries; that they will simply not be able to continue with their industries there. This applies to all industries which do fine work, industries which manufacture fine parts, light industries such as the electronic industry. Here you are actually dealing with three problems; you are dealing with the sins of the past; you are dealing with mine dumps which have come into existence in various parts of the country, because of mines which have now ceased to operate. They have closed their doors and now you have the mine dumps which are creating an extremely big problem to neighbouring cities. That is the one problem and the question is how can it be solved.

The second problem arises because of the sins of the present time. It is true that there are mines or crushing industries to-day which cause dust and which have already become a nuisance. That is not such a difficult problem to tackle because you know what you have to contend with and you can immediately apply measures to that person that will make him prevent that dust in the best possible way.

Then there is the problem of the future, namely, where mines cause huge dumps to came into existence without taking precautionary measure to prevent those dumps constituting a very big problem in South Africa within five or ten or 20 years. The question is what is the solution for the future?

Those then were the three problems which the Select Committee dealt with and in respect of which they found a very logical and acceptable solution. Their solution is more or less this: If there are sand heaps or industrial processes which constitute a nuisance at the moment the person responsible must apply the most practical method in order to put an end to it. If anybody creates a sand heap which may possibly become a nuisance in future, he is also the person who must to-day already take steps to prevent the possibility of a nuisance. In order to avoid the necessity of creating laborious machinery in order to be able to hold the owner of a mine or other industry responsible for every little heap of sand, the law provides that it will normally be applicable in the case of sand heaps of 20,000 cubic yards or more.

The second problem the Select Committee tried to solve in the following manner: Where the Government Mining Engineer estimates that a mine will close down within five years he notifies that mine that it may cease its operations but that it cannot dispose of its assets until such time as provision has been made for sufficient funds to finance the necessary steps to prevent its activities from causing a nuisance. In the third place they tried to find a solution in those cases where the owner had already disappeared and where nobody could be held responsible. The Committee suggested that all the bodies could be held responsible jointly—the entire community—the State in the first instance, the local authority, the person who owns the land at that stage. For the rest, if the State should feel convinced that industries are neglecting their duty in regard to the combating of dust a Dust Control Fund will be established. Every industry which causes dust will then have to pay a certain amount into that Dust Control Fund. The contributions payable by the industries into that fund will vary from industry to industry. That fund will then contribute towards the costs of the combating measures.

The fourth cause of atmospheric pollution is motor vehicle fumes. As hon. members will realize the pollution of the atmosphere by fumes is only a problem in those areas which are thickly populated, in other words, the areas of local authorities. You do not find this problem so much on the platteland. It will then be possible to declare any area which falls under a local authority a control zone in which motor vehicle fumes have to be controlled but we need the co-operation of the local authorities in this respect. It will be the local authorities that will have to ensure that oil and smoke fumes do not become a nuisance. Such an area will only be declared a control zone after consultation with the Administrator and the National Air Pollution Advisory Committee. The local authority will then be the body to exercise control but, as in the case of smoke, if the local authority neglects to do its duty, it does not mean that the public will be at the mercy of the arbitrary action of the local authority but there, too, the State can step in and take the necessary steps to combat the smoke fumes. The manner of combating is reasonable. When a local authority has the power it will act in the following way: When there is a motorcar which emits fumes in excess of the requirements laid down, the local authority will be able to notify the owner that he must have his motor-car seen to. The motor-car is then examined by the local authority and if it is found that it emits excessive smoke the owner will be instructed not to use it until such time as it has been put into good working order. It seems simple but yet effective.

And if they are buses belonging to the local authority?

Then the State will step in. That is why I say the public will not be placed at the mercy of local authorities because if a local authority refuses to do its duty the State can step in.

There are perhaps another few points in the Bill in connection with the machinery that will be introduced to combat atmospheric pollution which will interest hon. members. The first element of this machinery is, of course, the local authority. Local authorities are big organizations to-day with efficient officials. They often have considerable funds at their disposal. They are in the first instance the bodies who will combat smoke and motor vehicle fumes in particular. But then you have the second machine and that is the machinery of the State. In the case of the State machinery everything revolves round one important official, the chief atmospheric pollution official, an expert, a person with high technical qualifications who will be appointed to exercise supervision over the whole country.

The Railways and the State occupy a peculiar position in this Bill. To a certain extent the law is applicable to the State and to a certain extent it is not applicable to the State. It is indeed applicable to the State as far as dust and motor vehicle fumes are concerned but it is not applicable to the State as far as smoke and gases are concerned. But strangely enough the Railway Administration is the body responsible for causing smoke. One can say that the law is not applicable to the Railways but it is indeed applicable to it because it provides that when a local authority complains that the smoke caused by the Railways constitutes a nuisance. The Minister concerned has to make a note of it and at the end of the year he has to submit a report of all the complaints made against him and the steps he took to eliminate the nuisance. That report will then be tabled in this House. The House will thus always be able to examine the position and in that way to ensure that the Railway Administration does its share under this Act. In actual fact, therefore, it would almost appear as if the Railways and the other State Departments do indeed fall under this Bill.

That in short, Sir, is the entire object of this Atmospheric Pollution Prevention Bill. It is a very practical measure. It is a measure which contains many sound principles. As I have said I do not believe this will be the last word on the prevention of atmospheric pollution but I do hope that, with this Bill, we will be taking a major forward step to meet the problem of atmospheric pollution.

I have listened with interest to the hon. the Minister who introduced this Bill on air pollution. We had hoped that it would be introduced last year, but unfortunately we had to wait for its introduction until to-day. We have therefore lost the best part of a year before seeing this piece of legislation on the Statute Book. However, this side of the House welcomes this Bill and we are going to support it.

I want to take this opportunity of joining the Minister in congratulating the Chairman of the Select Committee on the excellent manner in which he conducted the affairs of this committee. I think the members of the Select Committee played their part to the best of their ability and gave him every support during the deliberations of the Select Committee. What happened on the Select Committee was really an example of how the two sides of the House can work together when a matter of this sort, a matter requiring the attention of the experts, has to be investigated as quickly as possible. I think the Minister will and does appreciate the work that was done by the Chairman and the members of the Select Committee.

At this stage I think it would be convenient to move—

That the debate be now adjourned.

Agreed to, debate adjourned.

When this debate was adjourned I had drawn the hon. the Minister’s attention to a series of letters sent during the past three years to the hon. the Minister of Finance, the hon. the Minister of Transport and a number of other hon. Ministers, including the Minister of Justice. I make no apology for having brought those letters to the notice of this House.

Who wrote them?

The letters were written by a certain Mr. H. B. Sammel, who is quite prepared to allow his name to be disclosed.

In spite of the fact that the hon. the Minister was in possession of a number of very unsavoury allegations of malpractices in his Department, up to now he has not given this House any assurance that he is prepared to have them publicly investigated. Sir, we have asked the hon. the Minister to appoint a judicial commission of inquiry to go into the collapse of all nine insurance companies concerned, as well as certain other financial institutions, because the collapse of these companies is the main cause of dissatisfaction in the mind of the public. The hon. the Minister has not been prepared to give us the assurance that he will allow the terms of reference of the commission of inquiry to extend to all those other nine insurance companies. He has said that he is confining the inquiry to the Parity Insurance Company only. We maintain that is wrong. I want to tell the hon. the Minister of Finance that these letters are in the possession of the Financial Press and of various newspapers in this country. Rumours are circulating which are doing the Minister’s Department a terrific amount of harm in financial and insurance circles, as to whether the contents of these letters are factually correct. I think it is advisable in the interests of the financial structure of South Africa, that the Minister should allow a full investigation, not only into Parity’s affairs, but into the collapse of all these companies and the unsatisfactory features which have arisen from time to time. I want to tell the hon. the Minister of Finance that if he is not going to heed this public outcry, if he is not going to accede to the public demand for a full investigation of everything connected with the collapse of 13 financial companies in the last three years, those facts will become available to the public. I would like to suggest in all sincerity to the hon. the Minister of Finance that it is more satisfactory, in the interests of the economy of the country, to have these investigations carried out in a proper manner by a judicial commission of inquiry.

I want to suggest to the hon. the Minister that if it were not for the fact that the situation in this country is such that the Government can play on the fears of the public, and threaten the electorate with a “swart gevaar”, this issue might well lead to the downfall of the Government unless the Minister agrees to the request to institute a full inquiry into the collapse of these companies. Sir, Mr. Profumo in England did very much less than what is alleged to have taken place in the Minister’s Department. Profumo was the victim ol human weaknesses …

What are you insinuating?

… but he nevertheless resigned, and we ask the hon. the Minister to call for the resignation of the Registrar of Insurance; and his own resignation if he is not prepared to allow all the allegations which have been made, and the facts which have been disclosed in this House—and there are many more, Sir—to be properly investigated.

It is only due to the sense of duty of the Press in South Africa, particularly the financial Press, that the public has been fully and competently apprised of what has been going on.

It is asked how a debacle of this nature can be allowed? How can this whole chain of liquidations go on without having a searching inquiry. They are all interlinked. The pattern is the same. Each time the Registrar of Financial Institutions has said: “I will increase the capital”. He has given them more and more time to carry on. The capital of Auto Protection Ins. Co. Ltd., was increased by R110,000 on 30 March 1963 and 11 months later that company was placed under juridical management. The same thing happened in the case of the Provident Insurance Company. The Registrar said: “We will increase the capital of this company; we will keep it going.” It then went insolvent, and the public were the losers. The public lost to the tune of R30,000,000 because of all these various collapses. The same pattern was followed in the case of Parity. The Registrar gave them permission to increase their capital from R230,000 to R500,000—an increase of R270,000. A year later this enabled them to put their hands on R8,000,000 of the income of the public in the form of insurance premiums, and to go insolvent! Sir, I put it to the hon. the Minister of Finance: Is there anybody in this House that would not make R270,000 available in November of one year in order to lay his hands on R8,000,000 of premium income in May of the next year—to do legitimate business—never mind the unsavoury business that Parity did. And the hon. the Minister and his Department made themselves a party to that type of financial machinations in spite—and I throw this accusation at the Minister—of the Registrar of Financial Institutions knowing this whole pattern was the exact same pattern which was followed in all the other cases of those companies which went insolvent.

In the case of Parity I think the hon. the Minister has this responsibility: When he was warned of what was taking place, he allowed the situation to go on. As far as those poor motorists who thought they were covered were concerned, all that was covered was the left-hand corner of their windscreens, and that for a very, very short period indeed.

I have said that certain of these companies seem to have led a charmed life, and that is the main basis of my argument against the hon. the Minister and his Department. I would like to prove that in one particular instance. On 7 November 1962 in the case of Auto Protection, the Minister was advised that it had no reinsurance treaty. He was advised that it had not had a reinsurance treaty since April 1962. That company went into liquidation on 30 March 1963. Will the Minister tell us whether an inspector ever investigated the reinsurance treaty of the Auto Protection Insurance Company? Will the Minister also tell us if it is not a fact, that the reinsurance treaties of practically all the other insurance companies were investigated? But not that of the Auto Protection Company, Sir! Why not? Why was it leading such a charmed life?

What happened in the case of the liquidation of the Auto Protection Insurance Company on 30 March 1963? How did it come about that one week of “private” negotiations was permitted by the Registrar of Financial Institutions with the Cramer organization; providing, (a) firstly, for a small increase of capital, (b) the company to discontinue its motor vehicle insurance business but, (c) the company to be able to carry on all other business? Seven months afterwards the company went into liquidation! But what is more serious, Sir, is this: How was it that the Registrar made application to Court asking that Auto Protection should discontinue its third-party insurance business when he had no right, in terms of the Act, to do so? The only person who could do that was the Minister of Transport. Why did the Registrar not do what you, Mr. Minister, did in the case of Parity? Why did he not say that Auto Protection could do no further motor vehicle insurance business of any nature whatsoever? Why did he give it permission the very next day to have advertisements in all our national newspapers saying that Auto Protection was still continuing with any third-party insurance business that was in existence at that time, but that it could not do any new business? What was the position in the minds of the public, Sir? Any person who had an Auto Protection disc on his vehicle, and who was involved in an accident, could never be paid out because the Registrar know that that company was insolvent. But he allowed it to continue with its existing unexpired third-party business when he had no right to do so. I maintain that that application which the Registrar made to Court was a fraud, and I use that word advisedly, because he did not disclose the true facts when he made that application.

You use strong language.

Yes, I am using strong language and I am asking that these matters be investigated by a judicial commission of inquiry.

Sir, I have referred to the powers of the Registrar. I have referred to the fact that the hon. the Minister of Finance never took the necessary steps to clip the wings of the Registrar, and to take sufficient power unto himself. I want to call, as an alibi for this contention of mine, a person no other than Mr. C. Cosmo Monkhouse, B.A., F.I.A., General Manager and Chief Actuary of the South African Life Insurance Society who, when he gave evidence before the Select Committee on the subject of the Insurance Bill 1942, said the following—

He goes on—

That is another criticism we level at the hon. the Minister of Finance in his handling of his Department. [Time limit.]

Once again in this House, as we had last week, we have had general accusations levelled at the Minister of Finance and the Registrar of Financial Institutions, accusations which have hitherto not been substantiated by any facts. I want to start with the last allegation made by the hon. member for Springs (Mr. Taurog). As I understood him he alleged that the Registrar had too much power. Mr. Speaker, I was under the impression that the argument so far has been that the Registrar should have had greater power so that he could have acted more expeditiously in such cases. The hon. member for Springs now says the power of the Registrar is too great. That is actually his objection. In other words, he can no longer hold the Government responsible for the Registrar not having had the necessary power because he says the power of the Registrar is too great. It usually happens, when the Government comes to this House with legislation to put a stop to unsound activities, that it is that side of the House who object to it. Even in 1962 when the Government provided for the appointment of inspectors that side of the House, although they supported it, did so without any relish. The hon. member for Constantia (Mr. Waterson) was one of them. At that time the hon. member for Constantia said too much power was being given to the Minister and the Registrar of Financial Institutions. Having objected to the powers that were given, they maintain to-day that those people do not have sufficient power to take action in cases where it is necessary! When we provided for the appointment of inspectors in 1962 to inspect financial institutions the hon. member for Constantia said the following, inter alia. I just want to say in passing that it was due to the appointment of those inspectors that timeous action was taken in the case of Parity about which there is such a hullabaloo to-day. On that occasion the hon. member for Constantia said the following, inter alia—

In other words there were grave doubts as to the power to inspect. The hon. member for Springs complains to-day that no inspections were carried out. That is the Opposition we have always had in the past, an Opposition which speaks with two voices. On that same occasion the hon. member for Port Elizabeth (South) (Mr. Plewman) said the following—

Mr. Speaker, that is the sort of thing we have to contend with in this House. Whenever the Government wants to create security for the public it has to contend with opposition from that side. But when anything happens they do not refer to their opposition when the Government wanted to create security but they want to lay the responsibility at the door of the Government where it does not belong. I want to say right at the outset that the attacks which have been made here have certainly been the most unnecessary and most improper attacks ever made in this House in respect of any matter.

I want to refer to the hon. member for Constantia. The hon. member was the first speaker to take part in this debate after the hon. the Minister. He was the first speaker on the Opposition side. The hon. member for Constantia did not say a single word about this Bill itself except that they were going to support it. He is not bent on ensuring that we place good legislation on the Statute Book; that is not his object. He availed himself of the opportunity to try to make political capital out of the matter. He was the first speaker on the Opposition side and at least the person whom we expected to go a little into the merits of the case, to criticize a little or to recommend in what way it could be improved because are they not supposed to be so-called concerned about the welfare of the public? Are they not so-called concerned about what happened to Parity? They are sorry for the public who have suffered as a result, are they not?

Are you not concerned?

“Not so-called”.

I expected them to start complaining. The Minister introduces legislation and not one of them has so far discussed it. Not one of them has hitherto taken the trouble of saying: This legislation can still be improved in this or that respect. If they are concerned about the public they must consider the merits of this legislation. But they say nothing about it. On the contrary they abuse the position in that they make a personal attack on the Minister. The hon. member for Constantia is suffering from an illness; he suffers from political frustration. The hon. member still belongs to a group which is in the process of disappearing from our horizon—he still belongs to the old jingo group. [Interjections.] That is true. That is why the hon. member acts the way he does. We can only be grateful that that kind is no longer born; and they are no longer imported. When he made his speech he said the hon. the Minister should have taken drastic action. When I asked him what he suggested that drastic action should have been he did not tell us that the Minister should have done this or that which we would have expected a responsible Opposition member to have done, but he said he hoped that if I dared to speak in this House the House would not listen to me. In response to an interjection at a later stage he said: I admit that I know nothing about this legislation; I know nothing about these matters. Sir, do not doubt those words; the hon. member for Constantia will admit that he uttered them. That is the person who was the first to speak on the Opposition side! Not only was it the first person to speak on the Opposition side who said that, but the shadow Minister of Finance. It was the shadow Minister of Finance who boldly admitted in this House that he know nothing about the matters which came under the Minister of Finance. Furthermore, Sir, that hon. member himself was Minister of Finance prior to 1948. You can now imagine, Sir, what kind of Minister of Finance we had prior to 1948!

We have now had these attacks on the Minister in respect of Parity. As I understand the position there are only two ways in which anything can be done about it. If the Opposition wishes to criticize the way in which the Government has handled this Parity matter I think there are two respects in which they can criticize. The one is that there should already have been legislation which gave the Minister, through his Department, greater powers to take better and more expeditious action. There should have been more legislation. I think, however, that as far as improved and more effective legislation is concerned, the Opposition has not yet made out any case. Because, as I pointed out a minute ago, whenever the Government comes forward with legislation to place greater powers in the hands of the Minister and his Department, the Opposition have doubts about it. The only real criticism they can have is that action should have been taken sooner. But is there one hon. member on that side of the House who will tell me that had the Minister taken action in 1963 the public would have suffered less? Let us understand each other well. The Opposition has one complaint only and that is that action was not taken timeously; action should have been taken earlier. The hon. member for Springs and others know that the only line of action is to apply to court for the liquidation of the company.

Why did they leave the restrictions on the assets?

I am referring to Parity and the attack made by the hon. member in that regard. The reasons why they did so have already been explained by the hon. the Minister of Finance and that was in respect of particular shareholdings which were purchased. As I have said, the only way in which action could have been taken was to apply for liquidation. I challenge any hon. member opposite to tell me in what respect the public, or anybody else, would have suffered less had action been taken in 1963 and not in 1964. [Interjections.] No, Mr. Speaker, I do not think this is a matter which lends itself to questions. Normally I am never unwilling to reply to questions. Hon. members opposite know that the Registrar of Financial Institutions cannot go to Court if he is not in a position to convince the Court that that company is in an insolvent position, in other words, that its liabilities exceed its assets. How can the hon. member for Springs, who ought to be a sensible person, say action should have been taken in 1963 when the Registrar had in his possession a certificate, an estimate, from three various auditing firms, Barton, Mayhew, Ryder & Co., Clothier, Poole & Dreyer, and van Zyl and Scheepers, to the effect that the liabilities did not exceed the assets? They submitted a document to the Registrar which commenced as follows—

I lay particular emphasis on the words “our” and “we” because those three firms had signed that document although one of them, the original auditors, stated at the end that they still had their original doubts. But in spite of that I emphasize the word “we”, because three firms of auditors had investigated the matter and came to the conclusion that the assets exceeded the liabilities to the tune of over R300,000. If that was the position how can any hon. member opposite expect the Registrar to have gone to Court with such a document and asked for the liquidation of that company? Surely that would have been a completely absurd and ridiculous act. You simply cannot do it. Surely a certificate or evidence by auditors is precisely what the Judge has to rely on for the very basis of his consideration of the matter. And that was the evidence of the auditors the Registrar had before him.

The hon. member also objected to the fact that the capital of the company had been increased. He was not correct in that regard either. Parity formerly had a capital of R100,000. At that time and afterwards their reserves stood at R169,000. It was then agreed with the Registrar that the capital of Parity, which was doing big business, would be increased. The capital was then increased to R500,000.

Was that enough?

Mr. Speaker, that is another question. I am not under cross-examination and I shall make my speech the way it suits me. The capital was increased to R500,000. The reserves of R169,000 were converted into capital and in order to increase it to R500,000 an amount of R231,000 was brought in from outside. But the hon. member for Springs does not say to the Registrar: Thank you very much; you acted wisely at that time. I want to put another question to the hon. member for Springs—I think he is listening to me. Perhaps I can still convince him. Suppose for a moment that due to the action of the Registrar in having had the capital increased to R500,000 at the time, and suppose for a moment there had been doubts previously and that there was a possibility of an application to court, Parity did do sound business afterwards, does the hon. member not think that the Registrar, in having acted the way he did, had done a wonderful service to South Africa? Or does the hon. member for Springs think there is only one thing the Registrar has to do and that is to push the company under as soon as possible irrespective of the consequences it will in any case have for motor-car owners? The hon. member must remember that there were doubts in 1963 as to the position of Parity. I admit those doubts existed but after further investigation that arrangement was made by the Registrar. Had the company been liquidated at that time the public would have landed in the same difficulties in which it landed recently. But instead of that a valiant effort was made to save the company. The capital was increased and an undertaking was entered into in terms whereof the premiums would in future be the same as those of other companies. Had the company remained in operation after that surely it would have been of great benefit to the public. But hon. members opposite do not want to understand that; they only want to liquidate. They do not realize that irrespective of when you liquidated, you would in any case have had the same repercussions you have just had. The moment you liquidate there are thousands of people who are without third party insurance. That would also have happened in 1963.

That is why I say that the attacks we have had against the Minister and the Registrar are really so unfounded that it is not worth while listening to them.

Unlike hon. members opposite I wish to say a few words about the legislation itself. Various principles are introduced in this legislation. First of all I want to say a few words about Clause 17 which provides for the appointment of agents. We are aware of the fact that in the case of any insurance company who does third party insurance it has agents throughout South Africa, as it were. They have their agents in every small town. I think the provision which is made here in respect of the paying over of premiums collected is a very good one. It is provided that the money should be paid over to the company within six days and within 45 days where it is held in a trust account. Where it is held for a longer period—the maximum is 90 days—a proper guarantee has to be issued in respect of such moneys. That is a very good provision. But the object is really only to protect the company as far as the collection of premiums on its behalf is concerned. I should like to draw the attention of the House to a problem which also existed in the case of Parity. Do you know what happened there, Sir? There are so many ways in which problems can arise that it is hardly possible to introduce legislation to close all the loopholes. In the case of the Parity insurance company they decided to open agencies at various places in South Africa. They there upon established Parity Agency. Cape Town, for example; they established Parity Agency, Bloemfontein, Parity Agency, Pietermaritzburg. In that way they established 14 different companies, ten of which belonged solely to Parity Holdings. You will remember, Sir. that Parity Insurance belonged solely to Parity Holdings, in other words. Parity Holdings was actually the parent company and Parity Insurance was an out-and-out filial of Parity Holdings. They established various Parity agencies all over South Africa, ten of which belonged solely to Parity Holdings. The remaining four belonged partly to Parity Holdings and partly to outsiders. I want to explain the implication of the establishment of these various agencies, namely, that the shares in those agency companies were not held by Parity Insurance; they were held by Parity Holdings. It is alleged (how far this is true I do not know and I shall not, therefore, go into the question of whether it is true or not; I am only discussing a problem I wish to put before the Minister for consideration) that a large commission was paid to those agencies on all premiums collected; the figure of 15 per cent and even 30 per cent has been mentioned to me. What it was makes no difference, but it is alleged that a large commission was paid to those agency companies. Suppose for a moment it was 15 per cent, which is too big a commission in the case of third party insurance, it means that the profit made by way of that big commission bypassed Parity Insurance and went to Parity Holdings and that Parity Insurance itself, the company which had to undertake the insurance and make a success of it, had to hand over to the parent company a large share of its premiums. In other words, an unreasonably large portion of the premiums by-passed the insurance company and went to the company which was actually the owner of the insurance company. In that way a portion of the premiums due to the insurance company was diverted to another company. That was what happened in the case of Parity. The Registrar of Financial Institutions then discovered that. I want to bring this to the notice of the hon. member for Springs who has few good words to say about the Registrar of Financial Institutions. He contacted them immediately and told them to rectify the position instantly. He told them that he did not object to their establishing agency companies but that those agencies had to belong to the insurance company so that if a big commission was paid with the result that large benefits flowed from these agency companies, the insurance company would benefit and not another company. Has the hon. member for Springs ever thought about saying “thank you” to the Registrar of Financial Institutions for what he did there?

That will come to light at the investigation.

Yes. but why do hon. members talk if all these things will come to light at the investigation; surely in that case it is not necessary for them to make the fuss they are making merely to catch a few votes for the Provincial Council election! In that case they could surely have waited. I think the Registrar of Financial Institutions did a very sensible thing there and he did it timeously. He deserves our appreciation for what he did. But he went further than that. The moment he heard that things were not 100 per cent right he caused the necessary investigation to be made. It is precisely as a result of that investigation and the appointment of inspectors that the affairs of Parity were brought to light: they may otherwise still have been in the dark. I want the hon. the Minister and members of this House to consider the problems which still exist and the possibility which exists to act improperly as Parity did. I ask myself whether we should not do something more. We are dealing with legislation at the moment. We are providing that the money should be paid over properly to the insurance company by the agents but should we not do something more in order to prevent agencies from manipulating funds which comprise the premiums people have paid! I admit I have no obvious solution to offer, but having brought it to the notice of the House I think we should give serious consideration to it.

I just want to say a few words in connection with another matter and that is in respect of the gilt-edge securities short-term insurance companies now have to provide to the Registrar. Sir, you must remember that it is provided in this legislation that it must be an amount of R100,000 or 10 per cent of the premium income of the company during the previous year, whichever is the larger. But that is not all that is provided for. That by itself would not really mean much. What is of value and of great importance in this legislation is the fact that that amount for which provision is made by means of gilt-edge securities and which must really be kept in reserve, as it were, is left out of account when the insolvency or otherwise of the company is at issue. Just think of a big company with an annual premium income of R5,000,000. That is not impossible because during the past years Parity had a premium income of nearly R8,000,000. If a company has a premium income of R5,000,000 it means that R500,000 of the assets of the company will be left out of account when the financial position of that company is under consideration. I ask myself what the implications of that can be. On the one hand it means that those interested, the policy holder, the public, the motor-car owner, will to a great extent be protected. That does not mean that that company cannot also be liquidated; as a matter of fact I think it means it would be easier to liquidate that company because when the question as to whether or not it is to be liquidated is considered, one-tenth of its premium income is left out of account and the consideration will only be based on nine-tenths of its premium income. It is good, therefore, on the one hand to protect the public and to ensure that money is kept in reserve, as it were, to pay future claims against the company but on the other hand it creates the possibility of a company being placed in liquidation when its liabilities do not in actual fact, exceed its assets. If you were to ask me Sir, which is the greater evil, to liquidate too soon or to liquidate too late, I would say the greater evil is to liquidate too soon. In point of fact the Registrar is not given a choice. If the Registrar leaves out of account that one-tenth which is kept in reserve and only takes the remaining assets into account when judging whether or not the company is solvent, he has to judge it in that light. If he then finds that the company is in such a position that its liabilities exceed its assets, he has to take action. He can do nothing else, otherwise there will be a terrific outcry here and elsewhere in the country. But the position can easily arise where, because of the reserves, action is taken too soon, the company is put in liquidation, and it pays out 100 cents in the Rand in respect of claims. I put that to the House for its consideration. I think it is essential that we protect the interests of the public but I want to point out that it is perhaps a bigger evil to act too soon. It is more wrong to place a company in liquidation too soon than too late.

It is not necessary to liquidate. Something else can be done.

I know something else can be done, but the important step is to place the company in liquidation, and when we talk about liabilities and assets the abject is to take action. If the Registrar of Financial Institutions finds that there is a company whose liabilities exceed its assets he cannot remain quiet; he has to do something. I merely feel that, although it may be necessary on the one hand, we should also realize that, if we liquidate too soon, we suffer all the disadvantages of a liquidation in addition to ruining a company which may otherwise have continued to exist and harming a number of shareholders and other interested parties.

We have already had legislation in the past, such as in 1962 and 1964, and we are to-day again coming forward with legislation. But I am afraid that all the loopholes in respect of this matter have by far not yet been closed. There is still the question of the investment of funds. You must realize, Sir, that an institution like Parity had a premium income of nearly R8,000,000. That amount of R8,000,000 is only paid out over a period of three years. It is only three years later that all the claims made in a particular year are finalized, with the result that a company like that has enormous amounts of money at its disposal, enormous amounts of money which have to be invested from time to time. We know there are people who are anxious to have access to those funds in order to acquire other powers as also happened in the case of Parity. That is why I say it is practically impossible to visualize all the legislation necessary to close all the loopholes in this respect. But, as far as I am concerned, I feel we are, indeed, making a valiant attempt here to do so, and I want to express the hope and confidence that, in respect of this legislation, we shall be more successful in future than we have been in the past.

I listened as attentively as anybody in this House to the hon. member for Ceres (Mr. S. L. Muller), and I was thinking as he spoke that he, as a man who has some experience in these matters, both as a legal practitioner and, I believe, as a director of a company which is interested in the field of insurance, more particularly third-party insurance, that he, at least, would have come with some concrete suggestions—that is what we are always being asked for—as to how this Bill could be improved. Remember, Sir, that we have criticized not only the background, not only the “motivation” (as the Americans would call it) of the Bill, but also the Bill itself. The hon. member concluded on this note“that this is a fine Bill”but he is absolutely certain that it will not close all the loopholes. That was the gist of what he said. Mr. Speaker, with his experience of these matters, I would have thought that he would have taken the obvious step, and that is to suggest amendments, or that he would have placed amendments on the Order Paper, as the hon. Minister himself has done. But he leaves the whole matter up in the air, and rather than come forward with those concrete suggestions, which, as I have said before, are always expected of the Opposition—although they are the Government, and they say “We alone will rule;” instead of that he spent the greater part of his time alibiing either for the Minister of Finance or the Registrar. In fact, at one point he said that we, the Opposition, were rather ungracious because we did not say “dankie” to the Registrar. And why should we say “dankie” to the Registrar, I ask of the hon. member? Because he did away with a certain practice in regard to the collection of insurance premiums by companies owned by Parity which, according to the record, …

Tell me, do you know the word “dankie”?

Any day that I have occasion to use the word “dankie” as far as the Government is concerned, I will put it up on that building on the Foreshore where advertisements run all the time, in letters 16 feet high. Any day, at my own expense. But I am the last person to say “dankie” to the hon. Minister or the Government for this Bill, for several reasons.

Sea-lawyer!

There we come to the subject of sheep farming again. The first reason, Sir, is that the record is as messy as it is massive—in fact, I saw some of the documents that the hon. member for Ceres held up just now, but I have the doubtful distinction of having even more documents, and I am seriously thinking of answering a request from a certain researcher at the University of the Orange Free State, who asks all Members of Parliament to provide him with documents which may be of political historical interest, by turning the whole lot over to him as soon as we get a good enough Bill. Here in the record there are facts galore to prove two salient points: (a) that there was something wrong in Parity, (b) that it was known to the Minister and the Registrar. And if we are going to quibble over the date, I would remind the House that the hon. member for Ceres himself said this afternoon: “I admit that these things were known to the Registrar in 1962.” Well, I go one better: If I had the time at my disposal, I would prove that these things were known to him in 1961, and even before that time. Be that as it may, I will take the word of the hon. member for Ceres as a colleague whom I respect, and let us say then that the Registrar only became aware of the situation in 1962. From that starting point we are asked to follow the action of the hon. Minister of Finance and of his colleague, the hon. member for Ceres, and do a skating act over the whole thing, over this glossy, highly polished ice-surface they put over the sorry mess it conceals, and come to 1964, and at the end of 1964, of course, we find that certain action was taken. But if we were to adopt that attitude on this side of the House, we would be as guilty of neglecting our duty in this matter as are hon. members on that side of the House, because their plain duty, if you look at the plain facts, unpalatable as they may be to certain persons, in or out of this House, was to come to a certain conclusion and on that conclusion to base their opinions about this Bill. No alibi for anybody, whether on this side or on that side. In that context, of course, we find that whatever the hon. member said about the resources at the disposal of the Registrar, the method by which he could have dealt with Parity, only tells half the story. I do not say that in disparagement of him. He did the best with a bad case, from his point of view. He kept on harping on the subject of liquidation. He says: If Parity had been liquidated a year earlier, as could have been done, the position of the policyholders would have been worse than it is now, where the company was liquidated in December 1964. He harped on that fact, Sir, as if liquidation was the only weapon in the armoury of either the Minister or the Registrar. But we know very well, as he should know better than I—I have to remind him that I am only a sea-lawyer, and he is a practising lawyer—that there are several other procedures open to the Registrar or the Minister before he performs the last rites, as it were, in regard to an insurance company, and that is liquidation. There is the first one: Prohibition, prohibition in so far as dealing with the assets of the company concerned. What is the position there? I want to deal with the clause of the Bill which covers this point, but not adequately. The hon. member for Ceres, as well as the hon. member for Sunnyside (Mr. Van Zyl) told us a great deal about this matter the other day. In fact, Sir, he quoted from an auditor’s report and he quoted correctly, because I was following the document in front of me. He neglected to say that he was the auditor who signed that report.

I quoted from the petition.

The hon. member did not say so yesterday, but in any case this is a quibble. The petition included these documents. I have got the photostats here. Mr. Speaker, please do not allow these people to mislead you. The simple fact of the matter is that a prohibition was placed on Parity by the Registrar in October 1962, and the effect of that prohibition was, as it can be in terms of the present law and the amending legislation, that the company concerned could not deal with its assets.

The sea-lawyer is talking.

Mr. Speaker, that prohibition placed on the company by the Registrar was placed there for a certain reason, and the reason was that he was aware, or was made aware, or he woke up to the fact one morning, that all was not well in the state of Parity. So he said: Before they do away with all their assets, which is possible, I am going to prohibit them from moving any of their assets. Does the hon. member for Cradock (Mr. G. F. H. Bekker) understand that? It is like not being allowed to move your sheep from one kraal to another, and it was open to the Registrar at all material times to maintain that prohibition. And so, when the hon. member for Ceres tells us that the position would have been worse if the liquidation had taken place a year earlier than it did, he is not telling us the whole story. What he should have said to us was this: If the Registrar had not removed that prohibition, then all the assets of which Parity so proudly boasted in full-page advertisements and which were there at the time, would have been available. They were there at the time because the Registrar satisfied himself that they were there at the time. Then, under the prohibition, all those securities would still have been there. I challenge that hon. member for Ceres to tell the House that after the liquidation proceedings have been completed and the company has been wound up (in a sense it is then dead and buried) that there will still be all these assets. I challenge him to assure us of that. Look at this advertisement: “The solidarity of Parity” is the heading. Then it goes like this “These facts speak for themselves. Last year assets exceeded R3,000,000, assets now exceed R4,990,000. Assets exceed liabilities by over”—not the R300,000 which was found as a result of a dispute over technicalities between one firm of auditors and another—not the R300,000, but “assets exceed liabilities by over R3,000,000”.

Who was responsible for that document?

Parity, obviously.

Why then blame the Government?

I do not want to insult the intelligence of the hon. member for Ceres, but surely he has grasped this point—that at a certain stage of these unfortunate proceedings, the assets were there. That is why the Registrar used his powers at one stage to prohibit the dealing in those assets, and he froze those assets in the interest of the security of the policyholders. What happened next? A year later, for no good reason …

When was that advertisement published?

In October 1962. I do not want to bore the House with every detail. If I have to read all these documents, as I have read them privately, I would need 12 hours. But not one fact speaks for the Minister, or for the Registrar. I am trying to be fair to the hon. member for Ceres, who made this point over and over again: Would you have had the Registrar liquidate Parity a year earlier and in fact ruin, or ruin earlier, all these unfortunate policyholders? The simple issue is that at a certain stage all those assets which an insurance company should have had, and should have, were there—the Registrar know it. He froze them by the prohibition.

Now I come to the position that arises a year later. A year later, for no good reasons that I can find in these documents, almost whimsically, almost as an act of grace which a man would perform on his birthday when he feels good and dishes out cigars, the Registrar lifts the prohibition on Parity. Does the hon. member for Ceres deny that?

No.

Now we are making progress. The Registrar lifts that prohibition, and I think it was the hon. Minister himself who told us in another context that the reason which was given to him for the removal of this embargo was that the board had been reconstituted. Exactly what that means in financial terms it is difficult to understand, because when a company has been allowed to use its resources in the way that Parity was allowed to use them, it helps little if you bring the Archangel Gabriel onto the board—the money simply has disappeared.

What about the sea-lawyer?

I want to ask the hon. member for Cradock whether he will assist this House by explaining to us how this Bill can be improved. I am prepared to sit down immediately if he will deal with one single clause in this Bill, and say how we can close one loophole of the many loopholes which the hon. member for Ceres admits will continue to exist even if we accept this Bill.

Order! The hon. member for Cradock must not make these continuous interruptions.

Sir, I am thinking of “My Fair Lady” where Higgins sings “I’ve grown accustomed to her face”. I have grown accustomed to his face, but I shall never grow accustomed to his voice, Mr. Speaker.

The point is that in this tremendously complex and complicated company set-up, which was deliberately created in order to provide people who were naive enough to accept this set-up, this facade, with some kind of specious reasoning so that they could say, perhaps before, or perhaps after the event: We were misled, we did not know. Behind all this lurks somebody, known to the Minister now, possibly known to him before in another unfortunate context, who had set out obviously to deprive the policyholders and the creditors of that company of its resources. I will give you some idea, as I think the hon. member for Ceres could have done if he had so chosen, of what went on behind the scenes. This was the so-called Parity Pyramid: At the top was a company called “Fraternitas Beleggings (Edms.) Beperk”, a very fine Afrikaans title. “Fraternitas”—you know, brother to brother. From that stemmed a sort of family tree—I would not want to be a member of this family, but it looks like a family tree“ and you come down to the next generation, as it were, which is “Waghan Investment (Pty.), Ltd.”, and then they changed that to Growth Investment and Finance Co. (Ltd.), which owned 1,153,839 shares in Parity Holdings out of a total issued share capital of 1,888,574 shares. Imagine that! And they still owned some more through a subsidiary, but this one company owned 1,100,000 shares out of 1,800,000, approximately—I am simplifying it for the benefit of the hon. member for Cradock.

Now we come down to a couple of side-issues. On the one side was a firm of attorneys which had plenary powers to settle claims, and was being paid money without any justification or without any record to the tune in one case over a period of five months of R273,000 for which the books only reflected, shall I say, an account, for R40,000. To the right of that same tree and at more or less the same level is a company called “Helsa”. It should have been spelt with two “l”, but Helsa Trust (Pty.) Ltd. owned the other 220,669 shares in Parity Holdings. Now “Helsa” could be for example Heller South Africa, or some thing like that, but nobody apparently twigged it in the Registrar’s Office when they got to know this fact. Then, Sir, below this little cartel, as it were, below this layer of cottonwool, we come to the next company, a big one this time, right down the middle of the family tree: Parity Holdings Ltd. and Parity Holdings holds all the issued shares in the Parity Insurance Company Ltd. But that is not enough. From the Helsa Trust Company there is still a little subsidiary, straight down the line as it were, called Premium Investment (Pty.) Ltd. which company had the sole and exclusive right to arrange all the investments of the funds of the Parity Insurance Co. for a very substantial commission. Imagine, Sir, if they were to deposit on short-term, say, R2,000,000 in a building society, they would charge a very fancy commission just for writing out the deposit slip. And who do you think owned that company? Would the hon. member for Ceres like to guess?

I know.

Then why did he not tell the House, to save me the breath? On the other side of the family tree we come to one of the subsidiaries of Parity Holdings. “Parity Drive-In Claim Service (Pty.) Ltd.” This company had a business. The business was to assess all the motor comprehensive insurance repairs for which Parity Insurance paid them a fee, as well as between 15 and 25 per cent commission on the cost of spare parts. Sir, one has to hand it to some people: Whoever figured out this scheme was not prepared to leave the policyholder with a single cent of his money.

Then below Parity Holdings, we come to the insurance company at last, Parity Insurance Co., Ltd., which was the facade—complete with “Parity Centre”, the name up in neon lights, and, of course, full-page advertisements in all the papers in regard to its resources—and then that company owned 12 subsidiary agency companies. As the hon. member for Ceres rightly said, nine were wholly owned and three were owned by them as to 24 per cent.

I want to deal now, not with this shambles—that is the only word for it—but with the Bill itself. The Minister has come forward with Clause 3, in which he seeks to amend Section 4 of the principal Act. This gives the Registrar power to decide whether a person is entitled to carry on a certain class of insurance business, and then the Minister’s amendment says that no person shall be registered under this section if the direct or indirect control over its affairs by virtue of shareholding or voting power, power to appoint directors, or otherwise, may, in the opinion of the Registrar, react to the detriment of the policyholders. I therefore ask him what I think is a perfectly reasonable question: How does he envisage that the Registrar is going to find out who is in direct or indirect control of its affairs if he is confronted possibly with a situation like this, where there are 21 companies involved?

How can you prevent it?

I have never suggested that one can compel all the rogues in South Africa to stay their hand, as it were, and not touch the insurance industry, but I do suggest that if you put legislation on the statute book it should be something which can be implemented, otherwise we will come back here next year, or in two years—time, with another story about another crash which affects another 450,000 people, and we will be told: But you cannot close all the loopholes, so how can the Registrar deal with the situation? [Interjections.] Dealing with another question, the question of the estimate of the auditors of the liabilities of a company, Clause 7 (7) reads as follows—

The auditor must, therefore, attest such statement’

and this is the salient point—

Now this is my difficulty. If at a certain stage of the proceedings the Registrar had taken seriously the report of the auditors of Parity, Barton, Mayhew and Ryder, who reported categorically that the company was insolvent…

On what date was that report?

In 1963. They reported that the company was insolvent. If at that stage the matter had been dealt with purely on that basis, then I maintain again that never would that prohibition which the Registrar in his wisdom—and very correctly—placed on the company, have been lifted. But unfortunately, because the company kicked against the point of view of their own auditor, who, after all, had his own living to consider—he was not throwing a good client away light-heartedly, he felt in all conscience that this company was insolvent—they were then allowed to call in another two firms of auditors, Clothier & Poole and Van Zyl & Scheepers. Unfortunately these two firms—and I say that they have every reason to stand by their opinion—and particularly Van Zyl & Scheepers, said that they took a different view of the liabilities of the company, and therefore they came to the conclusion that in fact there was not a shortfall of R694,000, as per Barton, Mayhew & Ryder, but, adding back certain over-provisions, they came to the conclusion that there was a surplus of R300,000. If one of those two outside auditors had come down on the side of Barton, Mayhew & Ryder, it would have been two to one for the insolvency of the company. Whose fault is it then that—and I am not putting the blame on any one of those firms—in the case of one of those audits the auditor unfortunately came to the conclusion that Barton, Mayhew & Ryder were wrong and that they, the new auditors, were right, and by a two-to-one majority they out-voted Barton, Mayhew & Ryder? The hon. member for Ceres did not mention this when he spoke of “we”. He used the term “we” as if all three firms of auditors had confirmed that they found the surplus position.

Why did they sign the document?

Barton, Mayhew & Ryder signed the document as one of the three firms which investigated, but why did the hon. member for Ceres not read the last page of the report, where they say—and I wish to stress it—that this report, as well as the previous opinions, are based on estimates, and that the accuracy of the opinions naturally depends on the accuracy of the estimates. But here is the sting, and this is what the hon. member for Ceres apparently did not read. They say that at this stage they are unable to alter the opinions previously expressed by them. They say they adhered to the original opinion, which was that this company was insolvent. [Interjections.] Clothier & Poole and Van Zyl & Scheepers agreed in regard to certain estimates and that the company might be in the black to the extent of R300,000, but Barton, Mayhew & Ryder insisted that they were right, regardless of the fact that the estimates might be wrong, and they said that they were unable to revise the opinions previously expressed by them. Therefore this clause, which deals with the opinions of an auditor, I think, must be regarded by the Minister in a very different light. He should amend it in such a way that the moment the auditors of a company—and I repeat that the auditor himself is the last person to damn his own client; I do not know what the audit of an insurance company is worth, but it may be R20,000 a year and they are, therefore, the last people to tell the Registrar that their client is insolvent’—the moment they raise the slightest doubt about the liquidity, let alone the solvency, of their own client, that is when the balloon must go up, and that is when the Registrar has to step in, immediately. That is my first point.

Then he should not be allowed to call in a second opinion?

No, I am talking about the prohibition. He can call in all the opinions he likes, as long as the assets remain frozen. I would like the hon. member for Vereeniging to understand that one of our major complaints is that the Registrar had this Parity company where he wanted them. He had imposed this prohibition—but what did he do then? For reasons entirely unconnected with financial or any other relevant considerations, he relaxed his grip, and let the company carry on at the expense of the public of South Africa. That is our complaint.

Now I want to come to Clause 17, which provides for the handling of premium money by agents, and I am extremely sorry that it is there. In the light of what the hon. member for Ceres himself has said this afternoon, we have ample evidence about the manner in which this company and others have dealt with premium money, which obviously is the foundation of their whole economy—the money must come into their possession intact, and as quickly as possible. I am sorry, therefore, that the Minister has seen fit to leave any number of loopholes for the brokers and insurance agents. He provides, firstly, in sub-section (2) that every agent, broker or other person who receives such premium on behalf of such insurer shall, within six days of receipt thereof, transmit the amount thereof to the such insurer. Now, had he stopped there, I would have said that this was really a good clause. But then he goes on to say—

never mind the security he can give, he can hang on to the money for 90 days. I think that period far too long and unhealthy. I want to suggest that the Minister would do himself and his Registrar and the country a service if he deleted everything that comes after 2 (a) (i). The company or person who acts as an agent for an insurance company has no reason for not transmitting the money which the insured hands over to him, within six days. Can anyone in this House tell me why an agent, who incidentally gets a fat commission, should not be able, the moment he gets the money, or every day when he balances up, to send his principal the cheque? Why give him all this time? Why look for another Parity or another Auto Protection?

Clause 19 deals with the question of reinsurance. Now remember, Sir, that even after the rot had set in as far as Parity is concerned, if this company had taken up the contract of re-insurance which they were able to take up at a certain stage for about R400,000 to R600,000. the people who would have been holding the baby to-day would not have been the 450,000 South Africans, but some big reinsurance company in London, like Lloyds, which can afford to lose millions. But they did not take up that contract, although they had the option up to November 27 1964, for the re-insurance of their risk—with the result that the Parity policyholders were left holding the baby. Here is the clause which deals with this situation. It says—

But this clause does not say it must be done “promptly” or “immediately”. I do not know what it means when it says “a former insurer shall re-insure”. Does it mean that it is in the discretion of either the insurance company or the registrar to allow a certain period of time to elapse before the company covers itself by way of re-insurance, or does it mean, as I hope it means, but fail to see in this clause, that the company must immediately take out re-insurance cover?

Now. if I have the time, I should like to deal with the question of curatorship. [Time limit.]

Mr. Speaker, after this debate now having been in progress for many hours. I have reluctantly come to the conclusion that quite a lot of dirty linen is being washed here. It is always very easy to be clever after the event. Here two accusations are now being laid at the door of the hon. the Minister, as has just been done by the hon. member for Hospital (Mr. Gorshel), firstly that there was something wrong with Parity, and secondly, that the hon. the Minister know it but did nothing. There is none so deaf as he who will not hear. We have had explanations ad nauseum now that the hon. the Minister in fact took action and took important steps, but one can never make a law so watertight that inventive scoundrels cannot evade it. Now the hon. the Minister particularly comes along with this legislation in order to try to give the public, which has to pay insurance premiums, more safety.

The hon. member for Hospital spoke about steps other than liquidation which the Minister could have taken in order to call Parity to order at that stage. That is precisely what this Bill now provides in Clause 22. Provision is now being made for what the Registrar can do when an insurance company does not conform. Without placing that company in liquidation, the Registrar now has the power, in terms of Clause 22, to prevent the company from accepting new business, and thereby he can protect hundreds of thousands of policyholders. Here the powers are being given to the Registrar to prohibit that company from doing new business until such time as it complies with the prescriptions of the Registrar.

I should like to say something in general about this Bill, because if there is one class of business people with whom we should have much sympathy in these days when we need capital for our expanding economy, it is insurance companies. We are fortunate in this respect, that we have many active insurance companies in this country which have tremendously stimulated the savings potential of the public. It is a well-known fact that in this country we save about 25 per cent of our national income, and our insurance companies contribute largely towards making this high percentage of savings possible. In these days, when we need much new capital, we should not restrict these companies but we should encourage them further to expand this important work of capital formation. Therefore I welcome the principle in the Bill that on the one hand larger guarantees are asked for, but on the other hand not guarantees so large as to make it impossible for companies to carry on their business. Everybody realizes to-day that short-term insurance, and particularly third party insurance, is very unpopular with the insurance companies. We should therefore not lay unnecessary stumbling blocks in the way of insurance. I welcome, in the case of long-term insurance, where we think mainly of life insurance, the deposit required being increased from R50,000 to R100,000, but I also welcome the fact that the Registrar is given the power, in particular cases where these companies cannot provide those funds immediately, to grant a postponement to them and to allow them to make those funds available gradually. I once again want to emphasize that the work of these companies is very necessary to assist us to obtain the necessary capital. They are par excellence the people who have taught the public to save. With the people’s monthly, quarterly and annual contributions in the form of premiums, they help to create capital. Therefore I heartily welcome this Bill and I want to express the hope that the hon. the Minister will see to it that this clause which provides that the Registrar can exercise his discretion will be applied very cautiously. Because third party insurance is so unpopular among the insurance companies to-day, it seems to me that we should rather seek elsewhere the solution to the problem, namely to extend the principle of no-claim bonuses also to third party insurance.

It unfortunately remains a fact to-day that many people using the road do not care how they drive or what happens, because the third party insurance premiums are particularly low. If we can extend the principle of no-claim bonuses to third party insurance also, it will encourage many more people to drive carefully. The number of accidents will be greatly reduced and the claims will be infinitely lower. Nothing can ruin an insurance company more easily than these tremendously high claims. Unfortunately I realize that the Minister who has introduced this Bill has no control over that, but I also realize that he can talk to his colleague, the Minister of Transport, and try to evolve a plan to introduce this urgently necessary principle of no-claim bonuses also in regard to third party insurance. Unless we do so, our people will continue to drive recklessly. We must remember that in this country we unfortunately have to deal with a very large percentage of motor vehicle drivers who have not yet attained the level of civilization to drive decently and to consider other people on the road.

CA or CY?

No. neither. We mostly find this type of person in other places. The unforunate thing is that that type of driver hardly ever has the ordinary form of motor insurance. He relies on third party insurance, where this principle of no-claim bonuses does not apply, with the result that this type of man becomes increasingly reckless. Therefore I want to plead with the Minister that he should consult his colleague and make this principle applicable also to third party insurance because that, in the final result, is the greatest problem in our short-term insurance. If the two of them could find a solution to it, much of his legislation would not even be necessary. But I should like to give my full support to this Bill because it is a very honest and well-considered attempt to prevent what has unfortunately happened. But I want to repeat that it is always much easier to be clever after the event than to foresee all the consequences beforehand.

Mr. Speaker, I can appreciate the cautious approach to the subject of the debate which the hon. member for Paarl (Mr. W. C. Malan) has. The facts disclosed by the hon. member for Hospital (Mr. Gorshel), if they have done nothing else, have certainly indicated how complicated the problem of third party insurance has become and how serious the position is now. It has indicated also that the Minister in particular should take a very liberal view in regard to the scope of the inquiry by the Commission he is about to appoint. But what the debate undoubtedly has established so far is how essential it is that there should be a tightening up of the law of insurance, and how regrettable it is that it has taken the hon. the Minister such a long time to come before this House with the Bill he has now presented to us. Nothing that has been said by hon. members opposite has helped in any way to excuse the long delay by the Minister to strengthen his control over the insurance companies. I use the words “long delay” deliberately because almost every speaker on this side of the House has indicated that it has been apparent for three years or longer that some of the legislative safeguards in the existing legislation are outmoded or ineffective in the light of modern practice. Such action as the Minister may have taken under the existing law certainly has not given the public adequate protection.

Other speakers have referred to the fact that the critical eye of the financial press has for longer than three years been focused on the inadequacy of the Minister’s control, and also on the breakdown of public confidence in his ability to stop the rot that has set in. That critical eye of the press was right, as circumstances have indicated, and the Minister was wrong in being as dilatory as he has been.

I myself, in 1962, warned the Minister that a chilly wind of insecurity was blowing through the financial structure of many of these insurance companies and affiliated financial houses. When the hon. member for Ceres (Mr. S. L. Muller) comes along and indicates that there is an exaggeration of the delay and criticizes the hon. member for Constantia (Mr. Waterson) for raising this matter here, I want to point out that the gravamen of the complaint of the hon. member for Constantia was not that there was delay in placing some companies under liquidation. That is a matter for the courts and hardly one for debate in this House. But what the gravamen of the hon. member’s complaint was was that the stable door had not been closed, or even put ajar, before so many horses had already bolted. That was his complaint. And nothing that has been said by anyone on the benches opposite has given any explanation as to why some of the salutary provisions of the present Bill should not have been introduced at an earlier stage. If that had been done, the Minister might not have saved the collapse of some companies, but he certainly would have halted unprofitable business from being expanded, and he would also have reduced the repercussions that have resulted in the insurance world over the past three years. Hon. members have already indicated that what has happened over the past three years really ranks as a national disaster. The toll of collapses of this type of business was six in 1962, three in 1963, and four in 1964. Sir, those are the circumstances which justify this side of the House in stating that public confidence has been shaken and public concern aroused not once but 13 times during the past three years. I think the Minister should realize that what is particularly disturbing to the public is the fact that the same names have appeared over and over again as the persons involved in the management of the concerns which have collapsed during this period. That is an indication of the seriousness of the problem and how wide the scope of the enquiry ought to be.

Sir, I should have liked to have ignored the remarks of the hon. member for Sunny-side (Mr. Van Zyl)—and when I refer to remarks made by him I refer to remarks made in respect of persons outside the House, not inside the House. I say I should have liked to have ignored those remarks and treat them with the contempt that they deserve. I can only add that I cannot deprecate too strongly the fact that an hon. member shields behind the privileges of this House in order to make personal attacks upon individuals, attacks which he would not dare to make outside this House. I say it was contemptible behaviour and it should be treated with contempt.

Order! Contemptible behaviour on whose part?

On the part of the hon. member.

Order! The hon. member must withdraw the term “contemptible behaviour”.

Then I say it was very sorry behaviour.

Order! The hon. member must withdraw that term.

I meant to withdraw it. Sir. and I do withdraw it. I say the hon. member’s behaviour can only be described as very sorry behaviour which deserves to be treated with contempt.

Sir, arising from the remarks made by the hon. member there are two points, however, which I feel must be pursued. The first is that it is now common knowledge that the hon. member himself was on the pay-list of Parity and that he occupied a fiduciary position towards the company as well as its policyholders. He was there not merely to check figures; he was there also to vouch for the probity of financial administration within the concern itself, and yet he has the effrontery to come to this House and raise matters which I feel he should have dealt with in his professional capacity rather than in his political capacity across the floor of the House. In those circumstances I can only say that according to the hon. member’s own showing there were certain matters which escaped the attention of the auditors of Parity, and it seems to me that he is the last person who should fling mud about in this House.

The second point that I want to deal with, arising from his remarks, relate to the Commission of Inquiry which is to be set up by the hon. the Minister. I do hope that the terms of reference of the commission will be wide enough to enable it to inquire into the systems of audit not only of Parity alone but of the other 12 companies which met with a disastrous end during the last three years. I think it is very important that the proposed inquiry should cover that aspect of the problem as well because, as I have already indicated, one feature that is particularly disturbing to the public is the fact that the same names have so often appeared as persons in control of some of these concerns which have collapsed. I think that is an indication that something must have been wrong not only in the system of financial administration but also in the system of audit.

Sir, there is a public demand for a widening of the terms of reference of the commission of inquiry, and for the reasons I have given I support the pleas which have been made from this side of the House by the Leader of the Opposition, and by other speakers, that this inquiry should not be limited to the one company. I hope that the hon. the Minister will reconsider this aspect and deal with it in those terms.

I do believe that the Bill itself contains some very salutary provisions, and I believe too that the enforcement of those provisions will help to restore public confidence in insurance houses generally. Moreover, such enforcement should also make it possible to ensure that weaknesses in particular classes of business are revealed long before the financial strain on the company itself becomes incurable. Sir, the giving of power is one thing; making effective use of that power is a very different thing, and in that regard I want to stress again that nothing is so dangerous and nothing is so damaging to public confidence in financial institutions as safeguards which appear on paper to be adequate but which for some practical reason or other are found to be completely ineffective. In other words, it would be quite futile for us in this House to legislate and to grant safeguards such as those contained in this Bill unless the departmental staff required for the enforcement of those provisions is available when the Bill becomes law, and unless that staff is not only adequate in number, but is also competent in skill and experience to meet the needs of the times. I do not think we can overstress this staff aspect. I think past experience has been disturbing to members on both sides of the House. This aspect calls for very careful consideration by the Government and by this Minister in particular. I hope he will be able to give us some reassurance in that regard which will be better than those we have already received from him.

The hon. the Minister outlined the main provisions of the Bill, and this is certainly not the time to discuss them in detail, but there is one aspect with which I would like to deal in principle. The obligations which are placed in terms of Clause 6 on existing insurers to deposit with the Treasury money or approved securities of a pre-determined aggregate value, form the basis of this whole new system of financial protection for the public. In that regard it seems quite clear to me that time of compliance is of the essence. It means, as I see it, that (a) deposits should be made within a reasonably short period after the Bill becomes law and (b) that the period allowed to one insurer to make this deposit should not materially differ from the period allowed to any other insurer. So far as the first requirement is concerned, I think the provisions of the Bill are adequate. Sub-section (2) fixes three months after the date on which the Bill comes into operation as the time within which deposits must be made. But I think the second requirement is not satisfactory. The time limit is left too flexible and the power granted to a single individual to extend the period is quite too arbitrary to be satisfactory. The provision to which I refer is that the deposit can be made “within such further period as the Registrar may allow”. Sir, I accept that a measure of flexibility may be necessary at the transition stage and that therefore someone will have to exercise discretion in that regard, but in the circumstances with which we are dealing and in the light of past experience I believe that there must be some statutory safeguard against any arbitrary extension of the period within which the deposit can be made. As I have said before, I am concerned here with principle and not with details. The principle I am looking to is that which is already included in this Bill, the principle of invoking the consent of the Minister in certain instances where safeguards against administrative hesitancy or leniency may be required. Sir, a type of executive safeguard is already part of the pattern of this legislation if you examine Clause 14 on page 24, for instance, or Clause 22 on page 30. I hope that the hon. the Minister will give some consideration to this matter and concede the principle in regard to Clause 6 as well in so far as an extension of the period is concerned. As I have indicated, past experience has shown that administrative lenience in matters affecting the financial protection of the public must be controlled and I suggest that it must be controlled at ministerial level in order that final accountability in that regard can come to Parliament itself. This House is concerned at this stage with the principle that there must be accountability to this House where possible, and this is an instance where accountability can be made to this House provided the final responsibility rests with the Minister and not with the Registrar.

There are other provisions in the Bill which will have to be discussed, but there will be a further opportunity to do so and I leave the matter there.

There are two major tragedies which have struck the Republic of South Africa in the past few months. The one great tragedy was the fact that the Parity Insurance Company went bankrupt, as we were informed early in October or November. The collapse of Parity was a great shock to our country. The hon. the Minister took certain measures to cushion the shock and to come to the assistance of Parity policy-holders over Christmas time. Certain insurance companies were prepared to take over the responsibilities of Parity, and to those companies we want to express our thanks.

But the second shock that we have experienced is the fact that the United Party is now trying to make a political football out of the collapse of Parity. The hon. the Minister comes here with legislation to close loopholes in the existing legislation, but we find that the United Party makes a political football of this tragedy. The hon. the Minister has told us that the Registrar did everything in his power, within the limits of his own powers, to exercise supervision over this company, but the Opposition refuse to accept the hon. the Minister’s word and they now drag this matter into the political arena.

We are dealing here with what is a tragedy, but what is the spirit in which the Opposition approach this matter? The Opposition have certainly gone out of their way to wash dirty linen in this House, but instead of making the washing whiter, the Opposition have only succeeded in clouding the issue more and more and in grovelling more and more in the mud.

Do you want to whitewash Parity?

Mr. Speaker, insurance is a matter which is very close to the heart of every individual in this country. It plays a very important role in our national life. One can definitely say that insurance is an indispensable requirement for economic stability and for the progress of any modern country. Insurance, whether it be short-term insurance or long-term insurance, plays a very important role in the life of the ordinary citizen. Insurance makes it possible for him to become financially independent. Insurance is the only form of investment which brings peace of mind to the individual. Insurance, whether it be in the form of a life insurance policy or a policy insuring one’s house or one’s motor-car, plays a very important role in our lives from day to day; it has become part of the way of life of every man and every woman, and that is why the legislation that we place on the Statute Book in regard to insurance must be so effective that the man and the woman in the street will have confidence in that legislation. Sir, in one respect I agree with the hon. member for Port Elizabeth (South) (Mr. Plewman) I hope and trust that these people who are responsible for the collapse of these companies and whose names so regularly appear as members of boards of directors, are going to be brought to book. I hope that we will be able to get legislation in this country under which proper steps can be taken against persons who go out of their way to find loopholes in the Act with a view to enriching themselves at the expense of the lowly paid. The Companies Act ought to be amended in such a way that such persons will never have the right again to serve on the board of directors of a company, because they are the people who are responsible for all the injustice that is done to the less-privileged persons of this country. They are responsible for it, and not the hon. the Minister of Finance or the Registrar, as has been suggested here. That is why we are grateful for the fact that the Minister has announced that he is going to appoint a judicial commission of inquiry to investigate this whole matter. I am also very grateful for the fact that the hon. the Minister, in reply to a question by the hon. the Leader of the Opposition, said that the commission would also go into the question as to whether the Office of the Registrar of Financial Institutions has done its duty. If mistakes were made, then my plea to the hon. the Minister is that these mistakes should be rectified. We cannot allow incidents of this nature to take place every year. But, Sir, the Opposition must also display a sense of responsibility in this matter: they must not come here and wash dirty linen across the floor of the House, as they did in this case. When we deal with important legislation such as this, let us discuss the Bill clause for clause on its merits. Take the hon. member for Hospital (Mr. Gorshel). The hon. member made a fine speech, but did he bring us one inch nearer to a solution of this problem? We can spend our time much more usefully in this House by discussing the clauses of the Bill one by one rather than by washing dirty linen here. Do we give any reassurance to the public when we have the sort of debate that has been conducted here with regard to this matter? Have we gained the confidence of the public? No, on the contrary, we have only sown more suspicion in the minds of the public and we are stirring up the public against our insurance companies. Sir, the members of the public took out insurance in good faith; they were under the impression that they had a permanent asset, but it now appears, after all the debacles of the past few years, that their investments are in danger. My plea to the hon. the Minister is that we should place on our Statute Book the most stringent legislation that we can devise as far as third-party insurance is concerned, because it is compulsory insurance. Sir, the State is the servant of the public and the State must see to it that legislation such as third-party insurance legislation is strictly applied. I want to ask the hon. the Minister this evening whether he has adequate legislation to give the necessary insurance cover to the public. If new, far-reaching measures are needed, then the Minister must not hesitate to introduce such measures. I want to ask the hon. the Minister whether the State has sufficient trained officials who can act timeously and energetically to safeguard the money of the public. Is the Department so equipped that we can clamp down on offenders like greased lightning where it appears to be necessary? Sir, members of the public reluctantly take out third-party insurance, and here I want to put forward a very serious plea to the hon. the Minister and the Government. The hon. member for Paarl (Mr. W. C. Malan) has pleaded here for the introduction of a no-claim bonus. I want to ask the hon. the Minister whether third-party insurance is not responsible for the alarmingly high number of accidents which take place in the Republic of South Africa. Does the person who has third-party insurance cover not feel perhaps that he can do as he pleases and that he may drive recklessly because he has practically been divested of all responsibility? Has the time not come for the State to give its serious attention to the question as to whether it should not accept the responsibility for third-party insurance so as to give the members of the public the security that they are anxious to have. The public looks to the State for protection, and I can give the hon. the Minister the assurance that members of the public feel hesitant about third-party insurance. They take out third-party insurance but they do not know from time to time whether they have any protection. We are told that the insurance business is one of the most difficult businesses; it is impossible to determine from time to time whether an insurance company is solvent be cause everything is based on estimates. My plea is that we should look after these people who feel to-day that they do not have adequate protection. We are grateful for what the Minister is going to do to restore public confidence in insurance companies, because members of the public are definitely not happy about the circumstances which prevail at the present time. My plea to the Minister is that we should appoint this judicial commission of inquiry immediately, that the commission should commence its inquiries and submit its report as soon as possible, and, if possible, that legislation should still be placed on the Statute Book this Session in order to make sure that the public will not be exploited again by certain people in this country who are only out to fill their pockets and to rob the less-privileged from time to time of their hard-earned money.

The hon. member who has just sat down made some constructive suggestions, but he said in the earlier portion of his address to this House that the first shock was the failure of Parity and the second shock was the politics played on this side of the House. I suggest that he might have made his remarks in the first instance to the hon. member for Pretoria (Sunnyside) (Mr. Van Zyl). However, I do not propose to dwell on that.

The next question we have to ask ourselves is whether the Bill goes far enough. The hon. member for Brakpan (Mr. Bezuidenhout) has suggested that the Bill does not go far enough. He has suggested that the commission of inquiry should decide whether or not the State should undertake third-party insurance. I think the Minister will concede that that is outside the scope of this Bill, but since the hon. member has raised this matter, and has raised it with your permission, Sir, I want to point out that it does not necessarily follow that if the State undertakes third-party insurance, then all will be well. Those of us who have had experience in dealing with the Workmen’s Compensation Commissioner know that in many cases a long time elapses before claims are paid. I can recall a case where a woman lost her husband …

Order! The hon. member cannot go into that.

Sir, I thought that since you allowed the previous speaker to develop his case for State insurance, I would be allowed to give him an adequate reply, However, in view of the fact that I may not reply to him, I leave it at that.

I think the country would be ill-advised to accept that all is well just because a Bill has been placed on the Statute Book. The Minister knows as well as we do that the placing of a measure of the Statute Book is no guarantee, and the public would be foolish to accept that the mere fact of placing a Bill on the Statute Book is going to ensure that all is going to be well with third-party insurance or any other kind of insurance from now onwards. The success of any measure depends upon its successful administration, not only by the Minister and by the Department and by the departmental officials, but by the insurance companies, the auditors and all parties concerned. If the Act is going to be administered successfully, then I suggest that the Minister will have to make sure that he has adequate facilities.

Then, Sir, we have this position: We have a Registrar of Insurance, a Deputy Registrar, and one or two assistant registrars, with a staff of some 30 or 40 people. That is the Department which deals with financial institutions. The Department has to deal with insurance companies, pension funds, friendly societies, banks, building societies, stock exchange and unit trust schemes. I suggest that this is a very formidable load to ask a department with such limited staff to carry. Successful administration of the Act depends upon regular inspection, it depends upon information obtained from returns from time to time, it depends on the rapid following-up of returns, and a close examination of those returns.

Throughout the discussion during the past few days on this Bill it has become clear that it is those companies which get into difficulties which are inspected last. The company which is efficiently run, the company which submits its returns regularly is as a rule not the company which fails. It is the company which is dilatory, the company which does not maintain adequate staff, the company which tries to undercut rates and which does not provide an adequate service which gets into difficulties. A long list of such companies has been given to the Minister during the course of this debate. If we are going to have any measure of success with this legislation it is essential that the Minister has adequate staff in order to close the gaps he is seeking to close by this legislation. In the course of his earlier remarks the hon. the Minister has indicated that this Bill provides for the third party insurance to be a separate department. In the existing Act there is provision for short-term and long-term insurance and now. in terms of this Bill, third party insurance becomes a separate section. It is necessary in terms of the Bill before us to keep all third party insurance business separate. The assets must be kept separately and the premium income as well. So those interested and the Minister’s Department will be able to see whether the Act is being complied with. For that reason it is essential that the Minister has adequate staff to ensure that the Act is being complied with. From what we have seen so far. Sir, I do not think any member on either side of the House can say that the history of the past two or three years has been such that it has added lustre to the name of South African financial institutions. We are all jealous of the good name of South Africa’s financial institutions. I do hope the hon. the Minister will accede to the request from this side of the House that the terms of reference are as wide as possible and that they do not cover only one institution. I hope the terms will be as wide as possible so that we will get a full inquiry. What we want is not only a good Act but good administration. We want the assurance that our financial institutions will have as good a name as those in any other part of the world. Our leading insurance companies—I do not want to mention any names—can hold their own with any financial institutions anywhere in the world. When we get one or two firms which do not comply with the law, one or two clever individuals who are over-smart and dodge the law, they are the ones who give South Africa a bad name. Those are the people who have to be controlled. No matter who it may affect, whether it affects his own Department or anybody else in South Africa’s financial life, we hope the Minister will have a judicial commission of inquiry with terms as wide as possible. If the result of that inquiry shows that not only is existing legislation but the legislation before us inadequate then I hope the Minister will come before this House next Session with amending legislation so that any further gaps can be closed. We assure the Minister that we will give him every assistance in closing those gaps. It is essential, Sir, that we have sound legislation, legislation that will not allow of the debacle we have seen in the institutions already referred to. I think when the heat and dust raised by many of the things which have been said in this debate have died down and the Minister has had an opportunity of studying the history of these institutions and sees what has happened over the past two or three years he will appreciate that it is not just legislation that is necessary but goodwill on the part of all South Africans to see that the law is complied with, and not only that the law is complied with but that the spirit of the law is complied with. I do hope he will enjoin the insurance companies to follow up the spirit of the law. The spirit of the law is not to oppose claims whenever they are made but as far as possible to meet claims when they are just. The hon. member for Brakpan (Mr. Bezuidenhout) made a good point when he suggested that some of the claims were made just because people felt that insurance covered their own recklessness. There is the type of person who does not worry about a car accident because he accepts the position that the insurance company will pay. In some cases there is a lack of responsibility on the part of certain individuals because they know they are covered by insurance. In consequence the public suffer. As a result of that attitude the public suffer because it increases the total of claims against the insurance companies and that has the effect of increasing the average of insurance risk which, in turn, is followed by an increase in premiums which the public must bear. A great deal has to be done if we are going to ensure that the premiums are as low as possible in order to lower the cost burden on the shoulders of the public and that the claims are as fair as possible. Finally, the companies concerned must conduct their affairs in such a way that they do not suffer the losses which have been instanced in the case of this particular company where some 400,000 South Africans have suffered because of mismanagement or bad handling or a variety of reasons as have been made public over the last few months. The Minister will realize that with an Act of this kind it is essential that the public be fully protected.

In this connection I draw the Minister’s attention to Clause 35 of the Bill which provides that any amount standing to the credit of the insurer concerned in an account in an office may be deposited with a banking institution. An insurance company must deposit money with a banking institution, and, as the hon. Minister knows, the Banking Act was amended recently and a “Banking Institution” also includes a hire-purchase bank. I am just wondering if there is that measure of security where the insurance funds can be deposited in a hire-purchase bank? It seems to me that there is a measure of risk when money is deposited in an institution of that kind, a greater risk than in the case of an ordinary commercial bank, and I wonder if the public is sufficiently protected because the Minister already excludes discount banks; discount houses are excluded for this purpose, but banking institutions generally are covered by this section. I hope that the hon. Minister in the course of his reply, or when we are dealing with the matter in Committee, will indicate whether or not he is prepared to consider the exclusion of hire-purchase houses in so far as this legislation is concerned. It is essential that public confidence is restored in these insurance houses and insurance companies, and for that reason I hope that the hon. Minister before considering any suggestion about state interest in insurance companies, about the State taking over this insurance business, will give the insurance companies and give the public the opportunity of having some period of experience of the working of this Act, and I hope that any gaps in this Act, if there are any major gaps, will be indicated by the commission of inquiry whose terms of reference will be as wide as possible so that public confidence in financial houses as a whole in South Africa can be restored.

I wish to say only a few words to-night because in any case I cannot complete my speech. In regard to the last point raised by the hon. member for Pinetown (Mr. Hopewell), and also the hon. member for Brakpan (Mr. Bezuidenhout), I again wish to emphasize that no legislation is able to take over the management of a private undertaking. It means that we now want the State to take over the full management of a private business, and that is what we cannot do, not in a country like South Africa which is proud of being a country where private initiative prevails. Unless we turn the third party insurance into a State undertaking, we cannot have the measure of control asked for here. In the Select Committee last year this specific point was particularly discussed, and they were opposed to third party insurance being taken over by the State. Therefore we simply cannot expect, if we do not take those powers, to be able to give a full guarantee to the public and to policy-holders. One should like to do so, but it would be dishonest of me to say tonight that this legislation will now give a full guarantee. I cannot say so and I dare not say so. What one can in fact say is that this legislation, just like that of 1962 and 1964, will make it more difficult for the dishonest person to deceive the public and policyholders.

There are many aspects to be taken into consideration in regard to an industry of this nature. There is the control, the management, which one cannot restrict completely; there is, as the hon. member has said, the auditors on whom one is almost completely dependent. The hon. member will agree that in regard to short-term insurance it is practically impossible to lay down fast rules. The trouble is that the principal way in which one auditor differs from another is in the estimates of obligations. It is not the same as in the case of an ordinary business, where at the end of the year one gets one’s statements and can decide as to the financial position of the company, because one has all the information at one’s disposal. Towards the end of the year one has the company’s premium income, but one still does not know what the claims against the company are. A certain amount of the claims have been paid out, but many claims are pending and have not yet been disposed of, and further, there are still certain claims in regard to accidents which took place during the year and which have not yet even been lodged. Now one has to make an estimate to see whether the company is solvent or not, an estimate of matters in regard to which one as yet has no clear realization. The only yardstick they have is not an actuarial yardstick, but a quite unscientific yardstick which is called “claims experience”. That is what one has to go on, and it is a completely subjective test, and one which may differ from year to year, and which may differ from one auditor to another. That is the difficulty the Registrar has to cope with. I have pointed out time and again that here one auditor submits a report. Then there is a further investigation and two other auditors give just the opposite opinion. In this particular case of Parity, the Registrar throughout did everything in his power to ensure that nothing wrong should be done. He had his doubts, his suspicions, but in April 1963 Parity itself instituted an investigation by high-standing persons, an investigation which was done by an auditor, Clothier, Poole & Dreyer, and an actuary, Mr. N. G. Levy, and an attorney, Mr. George Cook. They told those people: Come and investigate this company as independent people who have nothing to do with Parity, because the Registrar’s mind is full of doubt—”to ease the mind of the Registrar of Insurance who by his correspondence clearly indicated that he lacked confidence in the economic position and management of your company.” I have already pointed that out. He wrote two letters a month to them on an average and he persistently worried them—“particularly in view of the fact that both rumours and the general attitude adopted by the Registrar seem to imply that the accounts of Parity are not correctly drawn up, that the reserves are inadequate and, in short, that Parity was not a successful concern.” The investigation was instituted in 1963 and in September they completed their report. It was signed by Mr. Poole, and this is what they found: “We are satisfied that your company is being run on sound economic lines and that there is no reason whatsoever why it should not continue to make adequate profits.” And they found that on 31 December of the previous year, 1962, there were intact capital and reserves to an amount of R1,025,000. In September this report was issued, and in December the auditor of Parity comes along and says that there is a shortage as at 30 June. In January two other auditors come along and say no, there is a surplus. After the event hon. members are now all very clever and say that was wrong, but could the Registrar at that time have known what we in fact know now? I have been waiting here for one thing, among all the accusations that have been made against the Registrar. I was waiting for something specific, something I could investigate. I was waiting for the Opposition to tell me what the Registrar could and should have done but did not do. You know, Sir, he cannot do everything. His powers are also limited. I was waiting to hear from one of the hon. members who spoke here what the Registrar did not do, and what he could and should have done. Unless I have that information, it is surely impossible for me to reply to all the questions and wild allegations made here.

But I think, Mr. Speaker, this is perhaps a suitable opportunity now to move—

That the debate be now adjourned.