Mr. Chairman, I understand that it is common practice in the Committee Stage on a Bill that one can look at it in general once again when discussing the first clause. I wish to do this for several reasons. Hon. members will recall that during Second Reading hon. members on the Government side as well as on the Official Opposition side were fully in favour of this Bill. They did not seem to have any problems with it in any shape or form. In fact, the NRP was the only party to attack the Bill, and we did that, I believe, fairly comprehensively.

Since that date there has been further Press comment on this legislation, and I want to point out to this House that it appears that the Government and the PFP are the only people who are in favour of the Bill in any shape or form. Every other section of commerce and industry who has anything to do with this Bill appears to have grave doubts. In this connection I should like to quote from The Cape Times of 18 April this year. Under the heading “Proposed third party changes criticized” the report states—

Mr. Chairman, on a point of order Is the hon. member allowed to quote a newspaper commentary on debates conducted in this House?

The hon. member is not allowed to quote directly from the newspaper unless it is commenting on speeches of hon. members.

Mr. Chairman, I abide by your ruling and I will not then quote directly from The Cape Times. However, I want to point out that the AA, the MIF, the S.A. Vehicle Renting Association and the insurance companies themselves all have difficulties with the Bill. I should like to ask the hon. the Minister whether he has received a telegram from the MIF in which a great deal of concern is expressed with the Bill. I happen to know that such a telegram was in fact sent to the hon. the Minister.

Did you arrange it?

No, I did not arrange it, but I might well have done. There is another document—not a Press cutting, but a release from the AA. I received it last week. May I quote from it?

The hon. member may proceed.

In this release the AA says—

This report goes on to make the suggestion which I made a Second Reading, which is—

That is what the AA has to say—

As I have said, new facts have come to light, and I now stress these facts.

Unfortunately I am not allowed to quote from the particular cutting what the MIF has said or what the S.A. Vehicle Renting Association has sad. However, the main contentions of the MIF appear to be that it is going to create numerous problems because it is going to place the obligation on the seller and the purchaser of a vehicle to notify the insurance companies concerned. As I pointed out at Second Reading this is going to create problems. The very third-party insurance companies who were contacted in this regard, people who are working with this business on a day-to-day basis, themselves say that the new proposals would in fact entail a considerable administrative work-load. Therefore I felt it would be right to draw the attention of this House to these facts. The opposition to the Bill is not only from the NRP. There is also a great body of people outside who object to this legislation. Firstly, there is also a great body of people outside who object to this legislation. Firstly there is the AA, who represent the motorists and who have to deal with the motorists’ problems on a day-to-day basis. Secondly there is the MIF, people who are selling the vehicles themselves, and, thirdly, the S.A. Motor Vehicle Rental Association, the people who rent vehicles. Then there are also the third-party insurance companies who issue third-party insurance tokens. All these people have considerable doubts about the Bill and I believe that this House would be making a grave mistake if it were simply to bulldoze the Bill—hon. members on the Government side have the power to do that—through Parliament. That, I believe, would be doing the motorists in South Africa a disservice.

Mr. Chairman, the speech just made by the hon. member for East London North was in actual fact a general discussion of the Bill itself. He alleged, inter alia, that we wanted t bulldoze this measure through the House. In the first place the hon. member asked me a question, to which I should like to reply briefly. He wanted to know from me whether I had received a telegram in this regard from the Federation of Motor Industries. The reply to that is that I did in fact receive a telegram from them. The specific points raised in it, were carefully considered by me. I subsequently replied to them. I pointed out to them that although I had carefully considered those points, I was of the opinion that they were not convincing enough to persuade me to deviate from the principle recommended by the commission, and that the advantages of that recommendation were so great that we should proceed with it.

While the hon. member himself stated that he wanted a general discussion of this Bill during the discussion of clause 1, I want to say that it appears to me as though the NRP, through the mouth of the hon. member for East London North in particular, now realize that they have made themselves somewhat ridiculous during the Second Reading. Because they made themselves somewhat ridiculous during the Second Reading by advancing arguments which were in fact absurd, regarding the heavy burden which would be placed on garages, etc., they are now trying to undo that by blowing up the importance of the Bill in the Committee Stage. The hon. member has an amendment printed on the Order Paper. That amendment concerns the point which he discussed at length during the Second Reading and which he has now raised again, regarding the so-called administrative burden which would be imposed on several people. We took cognizance of that in the Second Reading debate, and I want to state that it has no sense and value. In fact, I should like to state unequivocally that the procedure which we are now going to follow, because of the fact that third-party insurance will be linked to the vehicle and not to the person, will be a great advantage for administrative purposes. It will greatly facilitate the procedure for everybody.

Sir, I do not want to take the discussion any further now. I believe we should rather move on to the next clauses so that the hon. member may have the opportunity to move his amendment to clause 6, for that is actually the basis of his argument. The amendment to clause 2 is in fact merely consequential to the one which is to be moved to clause 6, in the event of the amendment to clause 6 being accepted. Consequently I suggest that we rather proceed to the discussion of that. I believe hon. members of this House, with the exception of the members of the NRP, are satisfied that this measure represents a great improvement, and that we should go through with it.

Order! Before I give the next hon. member the opportunity to speak, I should like to point out that I have allowed a broad discussion of the general principles of this Bill during the discussion of the first clause. I have allowed the first speaker to do so, but I am not going to allow it any further. Hon. members must now confine themselves to the contents of clause 1.

Mr. Chairman, as the first speaker on the PFP side, I, too, should like to make a few points in reply to the hon. member for East London North. The hon. member said in the first place that the PFP, the Official Opposition, had no problems with this legislation, and that we consequently supported it I just want to rectify that idea. We did indeed support this legislation in principle, because we believe that it effects considerable improvements. However, there are certain questions in respect of which even we experience problems. In fact, I pointed out a few of them. I put certain questions to the hon. the Minister as did the hon. member for Orange Grove. During this discussion we shall take those questions further. Consequently I should like to point out that our support of the principle of the Bill does not mean an unqualified acceptance of the measure. Nor is it a question of our not expecting any problems in connection with this legislation. We see this legislation as representing a fairly radical change. I am referring in particular to the matter of linking the insurance to the vehicle rather than to the owner. We see this as a radical innovation. We must therefore expect that there will be growing pains. A totally new principle is being introduced here and problems will arise, but I believe that these problems can be dealt with and that they by no means overshadow the essential advantages which this new system has. That is why we are of the opinion that we shall support this principle in any event, but that we shall be on the look out in future for problems which may arise as a result of this new principle.

Where are all your amendments?

Of course, we contacted some of the bodies who commented, according to the cuttings which the hon. member for East London North had here, we listened to their objections and we discussed these with them and with other bodies and persons as well. Their objections amounted to the following, inter alia, and at this stage I just want to mention the three major objections.

The first is the question of the change of principle. The point was raised that this could create new administrative problems. As was previously indicated by the hon. member for Orange Grove, there is no question of any increase in administration. At the most, it may result in the same amount of administrative work. It can only result in an increase in isolated cases. There is one interesting point which was mentioned by one of the companies which I contracted, and that is that at the moment, when an owner trades in his vehicle on a new one, he is obliged to pay 35 cents when he wants to reclaim money for the remaining period of insurance. They maintain that this motivates the car owner to inform the insurance company of the change of ownership of the vehicle. It is undoubtedly a good point. That motivation or incentive will no longer exist.

On the other hand the hon. member for East London North mentioned it as a problem that the onus of informing the insurance company no longer rested on the seller alone, but on both the seller and the buyer. We think that people who have dealings daily with the motor trade—not merely the person who buys or sells a car once or twice in his life—will be perfectly able to act responsibly, to inform the insurance company properly and to eliminate that problem to such an extent that it will in fact become quite insignificant.

A second important point of the people who objected, is the question of the claims consultants. Opposition speakers have already indicated that we do not think that this legislation makes any appreciable change to the position of these people, and we shall go into this further at a later stage. For that reason we have been able to reassure a considerable number of these people who had problems in this regard.

The third important problem—the others are all of minor importance—is the question of the position of national servicemen who are included in the benefits of this legislation during their basic training. The problem foreseen in this regard is that the motorist will never know whether the person is in fact a person who is undergoing his basic training and whether that person is a person who is a member of the active Citizen Force or of the commandos. Therefore, no certainty is being created for the motorist. This is another problem to which one will have to give attention. Nevertheless, one cannot say that extending the liability is a weakness. It is a good thing. Our colleagues in the NRP in fact supported that specific point as a good one, and in that regard we are going to experience this problem, a problem which was mentioned, inter alia, by some of the people who criticized the legislation. I think we shall have to deal with it as soon as possible in order to find a proper solution to the problems. At this stage, however, we have no reason to doubt our standpoint with regard to the principle of this legislation.

Clause agreed to.

Clause 2:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

My reason for moving this amendment is that it is our view that this Bill does not in fact make it clear whether the third-party token is valid or invalid when a vehicle has changed hands and neither the seller nor the purchaser of that vehicle has notified the insurance company. We know that, according to the Bill, if they do this, they are committing an offence. However, I am afraid that nowhere could I read into the Bill the fact that committing that offence does not invalidate the third-party insurance. I believe that this is really very important indeed. It must be spelt out perfectly clearly that the third-party token, which stays on the vehicle, remains valid until the end of the insurance period no matter how many owners the car has had during the course of a year and no matter whether or not they have done the correct thing of advising the insurance company that they have sold it or bought it. I believe that this amendment does make it clear that, if that offence is committed, the third-party token nevertheless remains valid.

Mr. Chairman, I am not prepared to accept the hon. member’s amendment. We have already discussed this matter fairly extensively. It is stated very clearly in clause 6 that the insurance will not be invalidated because of the failure on the part of either the seller or the buyer to notify the insurer of the change in ownership. Therefore it is not necessary to add anything. The hon. member also has amendments printed in his name on the Order Paper with regard to clause 6, and his amendment on clause 2 actually affects clause 6, because that is the clause which amends section 19 of the Act. The fact of the matter is that clause 6 makes adequate provision for the insurance not to become invalid as a result of the failure to report the sale of a vehicle. For that reason I regard the provision the hon. member seeks to insert into clause 2 as being unnecessary.

Amendment negatived (New Republic Party dissenting).

Clause agreed to.

Clause 6:

Mr. Chairman, on this clause I have two amendments on the Order Paper and I will come to those amendments in a minute. The hon. the Minister has just told me that clause 6, which we are now discussing, makes it perfectly clear that if an offence such as the one I have already referred to is committed, the insurance nevertheless remains valid. I have read this clause and, quite frankly, I hope that the hon. the Minister, when he replies, will explain to me exactly where it says this because I do not seem to find anything in this clause to show that that is in fact the case.

Let me say that we of this party do not like this clause at all. We shall seek to amend it so as to make it perhaps a little less unfortunate for the motor trade. However, whether it is amended or not, we do not like the manner in which the new method of insurance is being handled. We have suggested alternative methods, but unfortunately they are not alternative methods which once can bring into effect by moving amendments to this particular clause.

We feel that the best way to get out of the difficulty is probably to negative the clause altogether. Mr. Chairman, I accordingly move the two amendments printed in my name on the Order Paper, as follows—

1. (1) On page 7, in line 40, after “person” to insert:

1. (2) on page 9, in line 8, after “person,” to insert:

What these amendments seek to do is that when a person trades in his motor vehicle to a garage, which has trade number plates, there will be no need for that garage to inform the insurance company that they have the motorcar. The only time they have to let the insurance company know anything is when they sell the motor-car to the ultimate end user. It cuts out the in between stage and cuts out, I believe, unnecessary paper work when cars have been traded in by a garage which is going to hold them in stock for any period from a day to six months. Some time in the course of that period the vehicles are going to be sold. The garage is, in any event, covered as far as third-party insurance is concerned, by his trade number plates. As I have said, we believe that this will take off some of the administrative burden, both from the motor industry itself and from the insurance company, because it is going to cut the number of forms that they will be receiving in the case of vehicles being traded in.

I hope that the hon. the Minister will see his way clear to approve these amendments.

Mr. Chairman, first of all I want to reply to the problem raised by the hon. member. He stated that there was nothing in the Bill which indicated that the insurance would not be terminated if the provisions had not been complied with. If the hon. member consults the marginal note to clause 6, he will see that it reads as follows: “Termination of insurance and transfer of motor vehicle.” In Afrikaans it reads: “Einde van versekering en oordrag van motorvoertuig. ” If he reads the clause itself, he will see that it is clearly outlined in the clause under what circumstances the insurance is terminated. If the insurance is not terminated under those circumstances, it is not terminated at all. In other words, clause 6 provides specifically for the conditions under which the insurance is terminated, and these are the only circumstances under which the insurance can be terminated. If it is not terminated under those circumstances, it is not terminated. This would mean that the insurance would run for the year for which it had been taken out. I believe this point ought to be clear to the hon. member now.

The hon. member raised another point and this relates to the owners of garages who buy second-hand cars. He said in the first place that an additional administrative burden would be placed on them. In the second place he made the point that they had their own numbers, for which third party insurance had been taken out and that they could use those numbers. The hon. member asked me right at the outset whether I had received a telegram from the Federation of Motor Industries and I replied that I had. Let us clear up the matter now, otherwise there will be uncertainty later on. The allegation was made that I had received representations from the Federation of Motor Industries and that we had not given those representations the necessary attention. Let me put it clearly that they raised two points in that telegram. The first point concerned the matter of additional administrative work. I shall deal with that point in a moment and I shall do so briefly. The second point concerned the fact that certain car hirers—i.e. people who hire out cars, the firms Avis and Hertz for example—sold their cars after the cars had a certain distance on the clock, say, 20 000 km or 25 000 km., and that it would be a heavy loss to them if they were unable to reclaim the insurance. This is a point, however, that we have already discussed here. Any owner of a car who is worth his salt and who has taken out third-party insurance and who wants to sell his car at a time when three-quarters of the period for which the insurance has been taken out is unexpired, will, in his negotiations with the buyer, make provision for that investment of his from which the buyer will now derive the benefit.

I would like to know from the hon. the Minister whether he realizes, that these hire companies have to pay a considerable amount more for their third party than the buyer of an ordinary third party and, therefore when they sell their motor-car to a private individual, he has no need to have such an expensive third party. It is in fact worth considerably less to him.

The hon. member has got hold of a half-truth. This is an argument which one can advance because of the fact that that specific third party insurance costs a little more. However, it is not all that much more and the necessary adjustments can, in my opinion, still be made to a large extent. The fact of the matter is that a person who sells his motor-car need not necessarily lose. Perhaps there would be some loss, but it would be to a limited extent, as the hon. member indicated.

Another aspect in this regard which was raised in the telegram, was the administrative work which this entailed. How can one suggest that there will be more administrative work under these new circumstances than there is under the present circumstances? In terms of the present insurance measures, one’s third-party insurance lapses as soon as one’s ownership of the motor-car is terminated. If one sells one’s motor-car, one’s third party insurance lapses. In that case one has to apply for a refund and the buyer has to take out new insurance. He has to complete a form and apply for a new third party insurance disc which must then be written out for him. In terms of the provisions of the system obtaining today, all these procedures have to be followed. Apart from the fact that there are—as the hon. member for Green Point indicated—a whole lot of disadvantages involved in that system in that many cars remain uninsured, we are ensuring with the new system, that there will be insurance continuity, in other words that those motorcars will not be uninsured at any time. What procedures are we asking for? Suppose the hon. member and I negotiate and he sells his motor-car to me. In the course of our negotiations I shall ask him where he is insured and he will tell me that he is insured with Shield Insurance, or any other insurance company that is authorized to insure. Then we go to the insurance company or even to a garage where they should have a simple form which we can complete. If they do not have such a form, the hon. member and I can write a short letter which both of us will sign in our capacities as buyer and seller. This letter we forward to Shield Insurance, or to Santam or to whatever firm. That is all that happens. Now, how on earth can anyone argue that there is more administrative work involved in the proposed new procedure than under the old system? In any event, the new system has so many advantages that they completely outweigh the disadvantages. Because the hon. member foresees such administrative problems for the garages, he wants garages to be excluded. What this amounts to is that if one sells one’s motor-car to a garage, which has the plates which they use for their own motor-cars, they should be exempted from these provisions. Have you ever! In that case, if we were to accept the hon. member’s amendment, we would to a large extent merely be recreating the problems which we are trying to eliminate by these means. Surely we cannot accept it under these circumstances. The hon. member is quite correct in saying that garages do have the plates which gives third party insurance coverage. In future, however, garages need not have so many of these plates, because when a garage buys a motor-car in terms of the new system, and the motor-car’s insurance is continuous, the buyer can use the number plates on the car. This is so because that car is insured and consequently remains insured. I honestly do not see the point of this amendment. Great uncertainty would be created if this amendment were to be accepted, because it would have the effect of exempting garages from the provisions of clause 6.

Mr. Chairman, I wonder if I may take issue with the hon. the Minister on a few points he has raised in reply to the speech of my colleague, the hon. member for East London North. The hon. the Minister suggests that my hon. colleague claims that the motor trade must be left out. This is perhaps so, but for a very good reason. The reason is to be found in the fact that the motor trade as such consists of the franchise holder and the used car dealer. The used car dealer can be somebody who deals in the high quality used cars or somebody who deals in what we call in the trade the “banger”. We have certain slang terminology that we use in this respect. Very, bery often a person will come in and trade in his car with the franchise holder. The franchise holder is the dealer who has the franchise for, for instance, Ford, Chevrolet, Volkswagen or whatever it may be. That particular dealer may not want the motor-car which is traded in and he—what is called in the trade— “dealerises” it. He sends the car round to the second-hand car dealer who has to reply on the franchise holder for his stock. The second-hand dealer gives the franchise holder a price which is or is not acceptable, whatever the case may be, to the buyer. If the deal is concluded, that vehicle is taken into the franchise holder’s stock, and then immediately taken out of his stock and sent on to the dealer who bought it. I know this is what the hon. member for East London North is speaking about when he says that the provisions should only be applicable when the vehicle ultimately finds its way into the hands of a new owner who puts it on the road. It can frequently happen that a motor vehicle, believe it or not, can go from one, to two, to three, to four, to even five dealers before it ultimately <u>fin</u>ds a home. A motor vehicle can go around this country because it can be the sort of motor vehicle which has no sale potential, shall we say, in Durban, but has a ready market in the Cape or in Johannesburg. This is so, believe me. This does happen. We are trying to obviate the necessity for having in each instance, with each inter-dealer transfer, the two notifications by the seller and by the purchaser, and then again by the seller and by the purchaser, as each transaction takes place. Then we have the other type of dealer, the very large motor dealer. What comes to my mind is an organization like the McCarthy group, which is a tremendous organization in the motor industry. It has used car operations and new car operations, spread through the length and breadth of South Africa, under different trading names. What is now going to happen, is that each time they transfer stock or when they want to adjust and move their used car stock around—because this is the way to market used cars—they will have to go through with the proposed rigmarole with third party insurance.

With all respect to the hon. the Minister, he is not correct when he says that there will be no need to keep as many trade plates. One still has to keep the trade plates because the minutes the car is traded in, it has no licence and the first function of the trade plate is to give the vehicle a valid licence to drive on the road. So, there is no substance in the thought that the motor dealer will be able to reduce the number of trade plates he has to keep.

In regard to the transfer fee of 35 cents which has been spoken about, I should like to correct a possible misunderstanding. This fee of 35 cents is payable because of the revenue stamps on the transfer of a disc. So, it is 35 cents that is accruing to the State by way of revenue stamps. I should also like to add that applications for a refund of third party moneys are very few and far between. Nine times out of ten the application is for a transfer. A man will apply to have the third party transfered from his vehicle to his new vehicle. This applies to the buyer who trades in a second-hand car for another second-hand car, or the buyer who trades in his present car for a brand new car.

I should also like to turn my attention to hire companies. It is a myth to believe that any dealer is going to pay more because the car may have a third party disc on it which may still be valid for another three, four, five or six months. I want to point out to the hon. the Minister that hire companies, in the main, operate on what is known as a guaranteed “buy-back” basis. In other words, they will approach the dealer and say that they want to purchase 10 or 20 of his 1 600 cc motor-cars for sake of an example, and that they want him to give them a guaranteed repurchase price at the end of 20 000 or 40 000 km, whatever the case may be. Subject to the condition of a car—there are always certain conditions, such as there being no cracked windshields and the body-work being in an acceptable condition—a guaranteed “buyback” is negotiated. When that car arrives back at the motor dealer’s premises, is he now to adjust that buy-back to accommodate a third party disc? This is defeating the whole object of the exercise in the first place. I hope the hon. the Minister will see this point.

I do not quite follow that argument.

Let me rephrase my submission. If a hired vehicle on the scheme completes 20 000 km in a period of three months after 1 May, the third party insurance will be valid for another nine months, but there may be another vehicle, bought at exactly the same time, a vehicle which is hired out at Jan Smuts Airport and only does a few trips between Johannesburg and its base, with the result that it may take nine months before it completes 20 000 km, after which it then goes back to the dealer to be traded-in for the same amount of money as the first vehicle. One cannot adjust the negotiated repurchase price every month. I do not think it is fair and reasonable to expect dealers to adjust prices each month in order to allow for third party discs which are valueless to the dealer, because the dealer is not going to sell that car as a hire vehicle. It is then incumbent on the dealer to reclaim the moneys which are reclaimable on that third party disc. I submit to the hon. the Minister that this is not a very satisfactory state of affairs. It is not reasonable to expect the dealer to do this.

Mr. Chairman, I also want to react to what the hon. the Minister has said. If I understood him correctly, he seems to believe that if my amendment is accepted, the third party token on a particular car which the motor dealer has traded in will not be valid and that the trade plates’ third party will be valid. However, this is not the case. That disc will still be on the car. All that it is obviating, is that the motor dealer has to write to the insurance company to tell them what exactly has happened. The hon. the Minister does not seem to think that it will entail much more administrative work. However, I can assure him that that will be so. At the moment, if a person’s car is traded in on another car— dealers who are franchise holders do not buy cars but simply accept trade-ins—the dealer takes the disc off his old car, collects 35c from the customer, and issues a new disc. The same form is used as when any other disc is issued for money, but in this case payment is made with the old disc plus the 35c. Exactly the same form is used. One issues the third party on that form in exactly the same way as when one issues a brand new one when somebody is buying a car without a trade-in. Administratively there is no problem, because when the book of third party tokens is completed, it is sent back to the insurance company. One can also send it back every week with the amount of money involved and it goes through very easily. However, what is going to happen now? If Mr. Jones, for example, trades in his car, somebody, not necessarily the salesman, who might be a brilliant salesman but a clerical disaster, who is fairly responsible, must go and look at the third party token and note the disc number and the insurance company involved. These particulars, I may say, can fade. Having made a note of that number, he has to fill in a form and advise the insurance company. Then, when he resells the car, exactly the same procedure has to be gone through. This is work which the motor industry does not have to do at all at this stage. All that happens at present, is that the token comes back and a new third-party token is issued. It is the simplest thing in the world. All that I am trying to obviate in respect of this clause is that when a vehicle goes to a motor dealer, who is going to resell it in any case, there should be no need for these bits of paper to flow backwards and forwards. As my hon. colleague says, a car can pass through four, five or six hands in the course of a year while passing from one dealer to another. I ask the hon. the Minister really to give some serious consideration to this matter, because it will ease the situation for the dealers. Quite honestly, I cannot see that it is any skin off his nose, to use that colloquialism.

Mr. Chairman, what is the point of our talking about all kinds of other matters. All we have before us at the moment, and I think we should confine ourselves to that, is the hon. member’s amendment to clause 6. What the amendment amounts to is that the car dealer in possession of trade number plates should not be obliged to give the necessary notice. At the moment section 19(2) reads—

The hon. members wants it to read—

†In other words the motor dealer who is in possession of trade plates is excluded from giving notice to the insurer. He is not compelled to give notice to the insurer. That is all we have in front of us at the moment.

*Allow me to emphasize once again that I regard this as the most important recommendation of the Wessels Commission. It is in my opinion the most important recommendation of the Wessels Commission which is being embodied in the legislation. That commission made an in-depth inquiry into this matter, heard the evidence of several bodies and persons on the matter and came to the conclusion, on balance, that it had many advantages and that it would be better to change the system as it is being changed here. The hon. member argues that the car dealer does not take possession of the car in order to keep it as his possession as he wants to resell it, and consequently he should not be burdened with the rigmarole of having to notify the insurance company. That is what this whole argument is about.

Not entirely.

Possibly not entirely; it has other snags. The hon. member for Umhlanga referred to the possibility of the motor-car being passed on to another dealer and then again to another dealer, etc. The fact of the matter is that what we seek to achieve with this amendment is continuity of insurance, in other words, from the day that that insurance is taken out, it should be valid for that specific motor-car for the full year. That is what we have in mind. Now the hon. member wants us to create confusion where we should like to see order as far as this matter is concerned. If it is essential for a private individual to notify an insurance company of any change of ownership, then it is equally important for the car dealer to notify the insurance company. I make bold to say that the car dealer with his office and people working with motor-cars all day long is in a better position than the ordinary member of the public to notify the insurance company. I have already explained how simple it is. It is simply a question of a small form which has to be sent to the insurer, whomsoever the insurer may be. The insurer’s name appears on the disc which is fixed to the windscreen of the motor-car. Only the number of the disc has to be forwarded. That is all we are asking. My honest opinion is that the hon. member is now turning a simple matter into something unnecessarily complicated. The hon. member for Umhlanga in particular is complicating things unnecessarily. He has now mentioned to me a whole series of people who, in turn, become the owners of the motor vehicle.

They are there, you know!

All we are asking for, is that as soon as there is a change of owner,—it does not matter in what form—the insurer is to be notified of such change. I wish to point out to hon. members that this is absolutely essential. Within the space of a single day that particular motor vehicle may be involved in a serious accident. That is why we want continuity. That is why we also want the assurance that that motor-car is insured.

What about the trade plates?

I know everything about your number plates! [Interjections.] What the hon. member wants, however, is that the car dealer be exempted from the obligation to notify the insurer. That is something which I cannot accept.

Only when he trades it in, not when he sells it.

I cannot accept that. Whether a person becomes the owner of a motor vehicle because he has traded in another one for it, or whatever the circumstances may be, does not matter. It is a simple process and the insurer should please be notified of the transactions.

Amendment (1) negatived and amendment (2) dropped (New Republic Party dissenting).

Clause agreed to (New Republic Party dissenting).

Clause 8:

Mr. Chairman, I move the amendment printed in the name of the hon. member for Pretoria West, as follows—

During the Second Reading debate I indicated that this was an improvement. The hon. member for Pretoria West makes provision in this amendment of his for cases where an agreement has been reached or where there has been a court order.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 9:

Mr. Chairman, I should like to point out that this clause contains one of our very important objections to this legislation. Several hon. members on all sides of the House have already indicated that the inclusion of certain members of the Defence Force, and certain national servicemen in particular, is definitely a step in the right direction. In South Africa there is a growing measure of acceptance of the whole question by hitch-hiking by national servicemen, and the hon. the Minister of Defence made a certain announcement in this regard during the discussion of his Vote. He said that particular arrangements would be made by certain service organizations to regularize the position of these people instead of prohibiting the practice of hitch-hiking.

The amendment contained in the clause, is in fact aimed at protecting both national servicemen who hitch-hikes and the motorist who gives him a lift. The position of the motorist who picks up a hitch-hiking serviceman, will be facilitated by this amendment.

The objection that was raised, concerns the fact that there is no way in which the motorist can make sure that the person whom he picks up is in fact a national serviceman. Apart from that, there is also the question as to whether the national serviceman being given a lift, is in fact in service in terms of the provisions of the Defence Act of 1957, to which reference is made in the clause. Therefore the motorist has no certainty that he would be covered by the third party insurance if he were to be involved in an accident while having such a national serviceman as a passenger in his motor-car.

I must concede that I could not think of any sensible amendment which would grant the motorist this certainty. I cannot see what reference to other provisions in the Defence Act can be inserted into the clause or can be deleted from the clause in order to solve the problem. I should like to know from the hon. the Minister whether he has given his attention to this aspect, and, if so, whether he has a solution to the problem.

Naturally we shall support this innovation as we see it as a welcome improvement, but we must concede that the objections raised by certain bodies and persons, are undoubtedly valid.

Mr. Chairman, I think this is a valid objection on the part of the motorist. The hon. the Minister of Defence also went into this aspect fairly comprehensively during the discussion of his Vote. He indicated that there was cooperation on the part of the oil companies and that certain places would be set up at which national servicemen could be picked up by motorists. He also indicated that prior notice would be given as to the various places at which national servicemen could be picked up, etc. I cannot remember whether the hon. the Minister made specific reference to the identification of those who qualify. Of course, the very thing that is at issue here is the question of the identification of such national servicemen. In so far as this does pose a problem, it is in my opinion not my problem. I feel nonetheless that administrative arrangements could quite easily be made so that national servicemen who qualify in terms of the provisions of the clause, and who want a lift, would be able to identify themselves to the satisfaction of the owner or the driver of the motor-car as someone who is covered by the provisions now being inserted into the legislation. I expect the Department of Defence to make the necessary identification documents available to those servicemen who wish to make use of these facilities so that the motorist may be satisfied that the man he picks up qualifies in terms of this legislation and may consequently safely be given a lift. If such administrative arrangements cannot be made, I believe motorists will be hesitant to give lifts to national servicemen.

Clause agreed to.

Clause 10:

Mr. Chairman, I move the amendments printed in my name on the Order Paper, as follows—

1. (1) On page 11, in line 38, to omit “refuses or fails”;
2. (2) on page 11, in line 39, after “(i)” to insert “unreasonably refuses or fails”;
3. (3) on page 11, in line 43, to omit all the words after “insurer” up to and including “final” in line 47;
4. (4) on page 11, in line 48, after “(ii)” to insert “refuses or fails”;
5. (5) on page 11, in line 48, after “request” to insert “and cost”;
6. (6) on page 11, in line 52, after “(iii)” to insert “refuses or fails”.

I discussed the amendments during the Second Reading debate and I believe that they will meet with the approval of the Committee. The amendments are mainly concerned with the fact that the proposed section 23(1)(c)(i), provides that the matter may be referred to the Minister if a person fails or refuses to have himself examined. In my opinion it would be better not to have the responsibility to settle the matter resting on the Minister, but to insert the word “unreasonably” in subparagraph (i) so that if a dispute arises, that dispute will have to be settled by the court.

As a result of the insertion of the word “unreasonably”, there are consequential amendments as far as the rest of the clause is concerned. I think hon. members are fully au fait with the implications of those amendments. Basically the amendments involve the same principle.

Mr. Chairman, the hon. the Minister is quite correct. We do, in fact, support his amendment. I, in turn, should like to move the amendment printed in my name on the Order Paper, as follows—

1. (ii) any person who at the commencement of this Act is practising as a claims consultant and has been accepted by the MVA Fund to deal with authorized insurers and is also a member of the South African Association of Public Loss Assessors; or

I sincerely hope he will likewise be motivated by my argument to support my amendment involving claims consultants.

I want to deal with this subject again, although I did so during the Second Reading debate. As such I should like to refresh hon. members’ memories about the arguments raised. I am reminded of an argument put forward by the hon. member for Orange Grove who said (Hansard, Friday, 14 April 1978, col. 4714)—

I then asked him whom they would advise and he replied—

We do not argue with that. I agree with that entirely, but the point is that one is taking away a part of the livelihood of these claims consultants by virtue of the fact that one is now forcing them to work through attorneys. These people have been able to work on their own in the past, so what one is doing is giving them the old half an egg. One might, of course, say “’n halwe eier is beter as ’n leë dop” but that is not the argument. We are still taking from them the income to which they have been accustomed. This is my argument. An hon. member on that side of the House, the hon. member for Pretoria West, interjected by saying (col. 4729)—

This is, of course, precisely what these claims consultants have attempted to do by virtue of the establishment of their association and by virtue of the fact that they have had this association going now for six years. It is a small association, it is true, but it has, as I said in my Second Reading speech, a fidelity fund. It is therefore a move towards better things. It is, in fact, an attempt to put their house in order, so I feel that this argument falls by the wayside. I think that we must take note of the fact that these people are trying to do the right thing.

I also take exception to the fact that the hon. member for Brakpan said the following (col. 4733)—

By way of interjection I then said—

That is quite right. We want to write them all off, because the harm that is being done to people who get injured and to the descendants and dependants of people who get killed, exceeds this probable injustice to those claims consultants to a great extent.

I find this an extremely difficult line of argument to follow. The hon. member for Brakpan is suggesting that the claims consultants are doing this harm to people who are injured, to their descendants and to the dependants of people who get killed and that the harm they are doing exceeds the probable injustice being done to the claims consultants. He is thereby admitting that there is an injustice being done to claims consultants, which is indeed the case. Must we assume—I want to raise this argument again—that all these people are rotten eggs? They are not. The hon. member went on to refer to “the unrealistic fees which the claims consultants charge for services rendered” (col. 4735). I want to point out that claims consultants submitted, together with the articles of their association, viz. the Association of Public Loss Assessors, their tariff of fees to the MVA Fund. They also included a copy of the articles of their association as applied some six years ago. Their tariff was also submitted to the Wessels Commission. None of these bodies has to date criticized the tariff, and the costs involved can be checked with anybody.

How many claims consultants stick to that tariff?

I thank the hon. member for Yeoville for that question. As I have said, I am not pleading for all the claims consultants. I am pleading for those who do in fact “stick to that tariff” as the hon. member for Yeoville phrased it in his question to me. I want to point out that it has been brought to my notice that—

That is the provision I propose to have inserted—

For the benefit of the hon. member for Yeoville, the members of the association are the ones who do in fact stick to that tariff of fees. That association is now restricted to eight individuals who are employed by five firms. My amendment is to insert the following—

It is the members of the South African Association of Public Loss Assessors who do in fact stick to those fees.

In the course of my Second Reading speech, the hon. member for Mossel Bay put the following question to me (col. 4730)—

Sir, I am not an attorney and I do not profess to be one, but I have got the information the hon. member was seeking. I refer him to the following cases: The Transvaal Law Society v. Friedland; The Transvaal Law Society v. Heyman; and The Society of Advocates v. Cigler. Those are three cases I can refer to.

The hon. the Minister, in his reply to the Second Reading, said—and I quote (col. 4745)—

It is for the five firms which, as stated in my amendment, belong to the South African Association of Public Loss Assessors that I am making this appeal. The hon. the Minister went on to say (col. 4745)—

Sir, my amendment is also seeking to discourage “fly-by-nights”. My amendment is not seeking to encourage “anybody to put up his board”, as somebody put it, and claim to be a claims consultant or a public loss assessor. My amendment also seeks to get rid of the “fly-by-nights”. I am trying to do the right thing here. The hon. the Minister went on to say (col. 4746)—

That also happens amongst the attorneys.

It may also happen amongst attorneys, but there are only eight people and five companies we are dealing with—that is all. Surely we can apply the same rule to them as was applied to the chiropractors. A certain number of chiropractors were allowed to continue with their practices until such times as their practices died out. That was the “grandfather clause”. When they die out, that will be the end of it, unless legislation in this country has altered by then and the chiropractor is once more allowed into the country.

I like the chiropractors.

There you are, what a wonderful fellow we have in the hon. the Minister of Agriculture!

They cured me.

Order! We are not discussing chiropractors now.

Mr. Chairman, I will accept your ruling but the people for whom I am appealing are in business and are rendering a service. The hon. the Minister himself talks about people who render a valuable service.

The hon. the Minister replied as follows to my arguments (Hansard, 14 April 1978, col. 4745)—

I subsequently found that there are now eight—

I want to say to the hon. the Minister that I know one firm which employs 25 people. If they have to put up the shutters, that is the end of it. I know the hon. the Minister is going to say to me that they can still carry on. They cannot carry on in the manner in which they are now conducting their businesses. Those who have been conducting sound, solid businesses cannot carry on—with all the respect in the world to the legal profession— if that profession can take the cream off the top then they are going to leave the claims consultants with only a percentage of their current income. This is a retrograde step for these people. They will have to pull in their horns and they are not going to be able to operate in the way in which they do at the moment.

Surely the hon. the Minister will see the reasonableness of my argument and will see that we are not doing any harm by allowing these few people to continue doing business, to continue to operate as they are operating, under—and I must stress this—the hon. the Minister’s direct control via the MVA Fund. He is controlling them and he can put them out of business. In terms of the amendment that I have moved he can put them out of business at any given moment in time through the MVA Fund because that Fund must approve of them at all times. If any one of them does anything or steps out of line in any direction whatsoever, the hon. the Minister has the final say.

Mr. Chairman, in considering this clause, one has to take cognizance of clause 1 as well. That concerns the amendment that has been effected with regard to “special circumstances”. The objector can no longer plead as an excuse the negligence, ommissions or ignorance on the part of himself or on the part of the person acting for him. In other words, whereas third-party insurance work and the handling of third-party claims was specialized work in the past, it is now specialized work par excellence. In the past, the injured party or a dependant of a deceased person could still plead as an excuse the negligence of his representative, and the Appeal Court then granted him leave, in the event of prescription, to proceed with his claim. Now, if a minor mistake slips in somewhere—and I do not know whether that hon. member has seen what form MVA 13 looks like, and whether he realizes how many traps there are in the road in which a person can get ensnared—he will realize that it has become particularly specialized work and that it is exactly that. If a mistake is made in any case owing to negligence, omission or ignorance, whether on the part of the injured party himself or of his representative, it is fatal, because in that case that person no longer has any legal remedy. No matter how sorry one might be for the number of claims consultants to whom the hon. member referred, one cannot accede to their request, and I have great respect for the fine manner in which he pleaded for these people.

Furthermore, these people are not specialized and trained as regards all the problems one may encounter in connection with third-party insurance, nor as regards the court cases which may arise from third-party insurance. In the second place, their fidelity fund is not covered by a statute of this House. As far as costs are concerned, there are also no assessed costs in respect of which one can appeal to some person or body that can defend one if one is charged too much.

The hon. member will say that these people who remain, are honourable people, and I shall concede that. But my argument is that the interests of the person who may suffer as a result of negligence, omission or ignorance on the part of the claims consultant, outweigh that consideration.

I want to point out that it is only a small aspect of the activities of a claims consultant which is being affected by this. It is not as though it is necessary to close down his business. Evidently that hon. member does not know how insurance companies make use of claims consultants to help them with the tracing of witnesses and the investigation of events.

Evidently he does not know either to what extent attorneys make use of those people’s services. In other words, the claims consultants have to assist insurance companies and attorneys, and in addition they still have their other work which they normally do. In the circumstances I want to suggest that the consideration that outweighs all others in this regard, is the interests of the injured party, especially in view of the amendment to section 1 of the principal Act. Therefore I am unable to support the proposed amendment.

Mr. Chairman, we on this side of the House support the amendments as proposed by the hon. the Minister. In so far as the amendment moved by the hon. member for Umhlanga is concerned, I would like to say that it is clear that he has shifted his ground considerably since the Second Reading debate and has softened and changed his arguments somewhat. The hon. member has conceded largely to what the hon. member for Orange Grove has said on our behalf.

The amendment was on the Order Paper at the time when I took part in the Second Reading debate.

I am not referring to the hon. member’s amendment; I am quite aware of it. The hon. member’s argument is that we are putting the public loss assessors and insurance assessors out of business and that we are whipping off the cream from their earnings so that they will have to close down. Furthermore he has argued that only attorneys can act in such a matter. With great respect, I think the hon. member has gone a little out of line …

Are you an attorney?

Yes, I am an attorney.

I thought so.

That is why we must do what the hon. member suggested the other day. It is a pity that the hon. member did not take his own advice when he said: “Shoemaker, stick to your last.” The issue is not whether there are rotten apples or rotten eggs amongst the assessors or not. I have nothing against the insurance assessors or public loss assessors whatsoever and I do not believe anybody on this side of the House has. I also do not believe that we intend taking away their livelihood or supporting measures for the taking away of their livelihood. That is a side issue and has nothing to do with this matter at all. The hon. member for Umhlanga has argued that only attorneys are permitted to act and, with great respect, the hon. member fails to understand what this legislation does and what it says, because he fails to understand one important distinction. He fails to understand what it is to institute a claim and the difference between instituting a claim and an action. What we are discussing here, is instituting a claim and not an action. Only an attorney of the Supreme Court or the person himself can institute an action. In the Supreme Court such an attorney requires a power of attorney to do so. In the magistrate’s court he does so on the instructions of his client. What we are dealing with, is the instituting of a claim, in relation to section 25 of the principal Act. I want to draw the hon. member’s attention to section 25 which gives the procedure—

If the hon. member took the trouble to look at the MVA 13 form, he would have found that it is one of the most important documents in this regard. This is the document upon which the whole claim is based either to the extent that the insurance company are going to settle the matter on submission of the claim, so that one does not have to go to court, waste a lot of expense on long litigation over a long period, or to the extent that it forms the subject matter of the case which comes before court and upon which the issues before court are decided. The form wants to know, for example, where the accident occurred, the details of how the accident occurred, who was injured, the nature of their injuries, the full medical report substantiating the injuries, the loss or damages, patrimonial losses, general damages, the loss of earnings, the medical expenses involved. All this information has to be computed and worked out properly and this requires the skill of experts. Very often attorneys have to consult the advocate who is acting in the case and they have to take an enormous amount of evidence in order to prepare the claims form.

All this legislation is doing now, is to state that only an attorney can file the claim in terms of the provisions of section 25 of the Act. Nothing else is changed by this Bill. If the hon. the Minister thinks that he is passing legislation which is going to exclude the public loss assessor or claims assessor from in any way acting in this matter, he is making a grave mistake. There is nothing in this law or any other law I know of to prevent an injured person, a third party insurance victim, from going along to an insurance assessor to discuss with him and to consult him about the full details of his claim. In actual fact that assessor, or the public loss assessor, can fill in the form if he has to. He can hand it to the third party, i.e. the person who has been injured, and in terms of this legislation the person himself can go along to the insurance company and file the claim himself. So, where are we shipping the cream off and where are we denying this man the action? The only physical act is the actual handing in of the claim and there is nothing to stop it from happening.

I agree with the hon. member for Brakpan. I want to tell him that in my 29 years of practice I have never used a public loss assessor or a claims consultant in so far as a third party victim is concerned. However, my colleagues who act for insurance companies do use these people and then advise the insurance companies. I want to point out that there is nothing in the legislation to stop these people from continuing to act for insurance companies. These companies can employ 50 people, let alone 25 people. They can keep their doors open and continue to operate in this way. So, what are we arguing about? What is all the fuss about? With the greatest respect, we on this side can really see no merit in the amendment which has been proposed by the hon. member for Umhlanga.

Mr. Chairman, the hon. member for Hillbrow wants to know what the fuss is about. The fuss is obviously about the fact that in this Committee we are faced with a situation where the attorneys are standing up one after the other …

And you are a claims assessor.

I have got nothing to do with claims assessors. [Interjections.] The attorneys are standing up one after the other, putting in a good case for the attorneys.

That is an improper suggestion.

The hon. Whip can take a point of order on it if he feels it is an improper suggestion.

You are coming very close to it. [Interjections.]

The hon. members are seriously talking about not whipping the cream off. The argument of the hon. member for Brakpan is that the insurance companies use claims consultants. He also said that attorneys use claims consultants because they are experts in their fields.

I did not say that.

Are you the hon. member for Brakpan? I said that the hon. member for Brakpan said so. If the hon. member has to be the hon. member for Brakpan as well as the member for Hillbrow … [Interjections.] The hon. member for Brakpan also went on to say that he could not see that there was any good to be derived from these eight people and five companies remaining in business because there was a possibility that some damage or some harm could befall somebody as a result of the actions of these five companies. I submit in all humility that if there has been no problem up to this date through the careers of these eight people and these five companies, why must we now stand and point a finger at them and say that they may do something wrong and that therefore we must take their livelihood away from them? The other day I mentioned the case of a company—I did not mention the company by name, but I mentioned evidence that was given in the Wessels Report—and the hon. member for Tygervallei said: “Yes, but that is the swallow.” My response to that is: Then why wring that swallow’s neck? If that company is the swallow in the summer, why take it and wring its neck? These people are doing a decent, honest job. I have absolutely no truck with them. I have nothing to do with claims consultants. I have no part in their business and I do not understand anything of their business, other than the fact that I know from my experience in the motor trade that there have been some rotten ones.

However, what I am against here is the gross unfairness of the situation, whereby we want to take away the livelihood of a small group of people who are desperately trying to put their houses in order, who are desperately trying to make what is known as an honest “buck”. This is what they are trying to do. They are trying to do no more and no less and I do ask that they be permitted to continue as they have done to date, i.e. at the discretion of the hon. the Minister of Transport.

Mr. Chairman, we have covered this field fairly comprehensively. In the Second Reading, especially, it was one of the important matters under discussion. To me it is important that this is a recommendation of the Wessels Commission. I have referred to the amendment linking the insurance to the motor vehicle as probably the most important recommendation of the Wessels Commission which is being embodied in this proposed legislation. Well, I think the recommendation we are discussing at the moment is the second most important. To me, it is important that this commission, which did its work over a period of time and heard evidence from all the different bodies and persons, came to a conclusion and recommended the course of action for which we are making provision here. That is important to me. I must say in all fairness that I am of the opinion that in principle, apart from the recommendation by the Wessels Commission, it is correct that the Act be amended as is being envisaged in this Bill, and that the hon. member’s amendment be rejected. The fact of the matter is that the type of work done in terms of the Motor Vehicle Insurance Act, is not normally done by the man in the street without qualifications. There are people without qualifications, training and obligations who tty to act as negotiators to settle a case. The most important objection in principle which I have to that, is that the person who acts as a negotiator, has only one object in mind, and that is to persuade the various parties to come to an agreement, because he knows that he cannot take further action unless the parties come to an agreement. Does any hon. member of the NRP want to allege that these are the ideal conditions under which a negotiator can act? He is only intent on getting the parties to come to an agreement. In other words, he must try to persuade his client, the person in whose interests we are acting here, viz. the injured party, to submit. If not, he cannot come to an agreement. This is, to me at least, a very important factor. I have sympathy with these people. I have received representations from various bodies and persons. The hon. member for Klip River handed me a memorandum today which I—it is my duty—shall study in depth before I introduce the Bill in the Other Place. If I am convinced by this memorandum, I can move an amendment in the Other Place. For the present, however, I feel that this is a recommendation by the Wessels Commission and that I must accept it. I want to draw the attention of the hon. member for Umhlanga to the fact that the Association of Claims Consultants, as well as their tariffs, has never received official recognition from either the department or the MVA Fund. The hon. member now wants to place the man’s approval in the hands of the MVA Fund, and yet, on several previous occasions, they submitted memorandums to me requesting me not to negotiate with a particular claims consultant as we were having so much trouble. If the hon. member now wants to leave the matter in their hands and they refuse to negotiate with the people, they are out in any event. Therefore, surely, it is not a sensible amendment which the hon. member has moved. Therefore I have to persist in refusing to accept the hon. member’s amendment.

Mr. Chairman, in its report and recommendations the Wessels Commission was determined, of course, that the claims consultants should virtually be removed altogether from the field of third-party insurance. I want to contend, however, with reference to what was said by the hon. member for Hillbrow, that this is definitely not the case with this legislation; that it has to bring the claims consultant a certain measure of reassurance after the recommendations they have read in the Wessels Commission’s report. In this regard, I want to ask the hon. the Minister to give us his opinion in connection with this matter. The hon. member for Hillbrow gave a very clear exposition of our views on the effects of this legislation.

Not one of us disagrees with him.

If the hon. the Minister is in full agreement with the hon. member for Hillbrow, then I am satisfied. Then that means that the only physical action which these people could previously perform and were allowed to perform but can now no longer perform, is to hand in the MVA 13 form; but the position that they may act on a consultative basis both prior and subsequent to the institution of the claim and that they may act as negotiators on behalf of the claimant, is not being affected in any way. That position is not being changed at all.

In connection with what was said by the hon. the Minister, I just want to state that on account of the manner in which the claims consultants levy their tariffs, they actually find themselves in a position where they have to enforce a settlement. They must bring about a settlement between the claimant and the insurer at all costs. If this is so, I think this legislation will do very little to resolve this situation, because I maintain, once again with reference to what was said by the hon. member for Hillbrow, that these people can still act in an advisory capacity. They can still give advice; they can still fill in a man’s form for him and do many other things. He must just hand in the MVA 13 claim form himself, and even thereafter, they can still act. They can, in fact, do everything together with the claimant before the case actually reaches the stage where summons has to be issued. Consequently I just want to sound the warning that the danger still exists that the claims consultant’s tariff depends on their ability to effect a settlement. In this connection I want to suggest at once that the only way in which the problem in this regard can be solved, is to have their tariffs calculated as tariffs are calculated in the legal profession, i.e., the same tariffs, whether or not they are successful. Therefore I just want to sound a warning that in this respect these problems will remain until such time as the claims consultants themselves do something about the matter. I want to suggest that they are the most suitable people to deal with this problem. One can only hope that the association which they have established and the discipline which they want to impose upon themselves, will seek to eliminate this problem so that this argument may not be used against them in future, and so that this accusation may not be levelled at them, neither in practice, nor in theory.

Amendments moved by the Minister of Transport agreed to.

Amendment moved by Mr. B. W. B. Page put and the Committee divided.

As fewer than 15 members (viz. Messrs. G. S. Bartlett, G. de Jong, D. J. N. Malcomess, R. B. Miller, G. N. Oldfield, B. W. B. Page, P. A. Pyper, W. V. Raw, W. M. Sutton and N. B. Wood) appeared on one side,

Amendment declared negatived.

Clause, as amended, agreed to.

Clause 11:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

1. (1) On page 13, in lines 20 to 22, to omit “of the occurrence which caused the bodily injury or death in question” and to substitute:

   upon which the claim arose

2. (2) on page 13, in line 31, to omit all the words after “curatorship” up to and including “question” in lines 35 and 36.

I just wish to explain briefly what my amendment involves. In the first place it concerns the date from which prescription is calculated. By means of the proposed amendment we wish to calculate it from the date of the event. After further consideration, however, we decided to leave the position unchanged, namely a period calculated from the day on which the claim arises. The Act therefore remains unchanged with regard to this aspect.

As far as minors too, are concerned, I explained during the Second Reading debate that what we envisaged was to provide that within six months after the events—this is in the case of a minor—notice would have to be given in which case prescription would only be calculated from the date on which the minor attained his majority. On due consideration of the matter we decided that provisionally we would leave this, too, unchanged. It is possible that the claims of certain people could be prejudiced thereby. This is a risk we did not wish to take. In fact, therefore, the amendment provides in both cases that the position remains as it stands at the moment, in terms of the Act.

Amendments agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, we have now dealt with the Second Reading as well as the Committee Stage of the Bill and this is the last opportunity that we in this House shall have during this session of Parliament to discuss the amendments which have been made today because, as sure as I stand here, the hon. the Minister is going to have to come back with amendments to these amendments. Nothing that either the hon. the Minister or hon. members on that side have said has succeeded in deviating me from my original contention. I do not think that I am being pig-headed as far as this Bill is concerned because I believe that is what is going to happen. The fact that the AA, the Motor Industries Federation and the insurance companies all find difficulties with the Bill must surely make some sort of an impression on the hon. the Minister and his officials.

Without any doubt—I want to repeat what I have said during my Second Reading speech—the effect of the Bill is going to be that it will cost a section of the motoring public, and especially the buyers of new motorcars, a lot of extra money. Without any doubt this is going to happen. I myself have been in the new car business for something like 24 years and I therefore know inside out what happens in the motorcar business when it comes to a new motor vehicle franchise and people are buying new vehicles every day of the week. I have been involved in these businesses, businesses with a tremendous turnover of up to R30 million per year. A lot of motorcars must of necessity be involved if one were to achieve such turnovers, and it stands to reason that lots of trade-ins are also involved.

I can foresee, as a result of this legislation, tremendous administrative problems. I can foresee, as I have said, that for the new car buying section of the public this legislation will have the effect that they will be involved in the payment of more money. I can foresee, as I have said before, forms floating around South Africa willy-nilly with a tremendous problem being created for the third-party insurance companies themselves in trying to establish where the car is, to whom it belongs, whether it is roadworthy and whether they should insure it. I see nothing but problems with this particular Bill. As I said, I am prepared to predict that we are going to have amendments to this, and if the hon. the Minister and his department are honest they will admit that we are going to have those amendments within a fairly short period of time. I say this because I believe that once this Bill is put into operation, the nightmare is going to start, and within a very short time what are at the moment a few faint calls are going to rise to a clamour and an outcry against what this Bill is doing.

The basic concept behind this legislation was, according to the report of the commission, to attach the third party insurance to the vehicle and not to the person. I said in my Second Reading speech that we have no great objection to this and that it could be done, but the way this Bill envisaged doing it is the wrong way. Let me reiterate. There are other countries which have their third party token and licence token in one disc. There are ways and means in which this can be done practically, and this must be so because it is done in other countries of the world. Why then do we not do it in South Africa? Why do we have to have all this tremendous rigmarole, with all this going from one car to another, with forms flashing around the country, when we can, in fact, do it in a way which I believe would create far fewer problems.

I am afraid, however, that in the discussion of this Bill it has become apparent that the hon. the Minister intended, as I said earlier, to bulldoze it through despite all the objections that have been raised by the AA, this party and others. One saw the same sort of thing happening with the Railway budget where he forced through increases in prices, imposing these increases on the South African public. I believe that that hon. Minister must give this Bill serious reconsideration before he takes it to the Other Place. I think that he should hold discussions with the AA and should perhaps call into being a Select Committee so that there can be contact with the AA, the insurance companies and the MIF because I am afraid that what we are accomplishing here today is not something we are going to be very proud of in the future.

Mr. Speaker, the hon. member said that during the discussion of the Third Reading of the Bill he was as convinced as ever that this standpoint was correct. All I want to say is that that applies to me as well. I am as convinced as ever that the dangers and spectres he sees are in fact not spectres at all. It is obvious that the hon. member is here to make out a case for the garage owners. His aim is to make things as easy for the garage owners as possible …

No, the purchasers.

… without perceiving all the other benefits involved here. The hon. member said that I should have to come back to the House with amendments. If that is necessary then I shall of course do so. I promise the hon. member here and now that if it should be necessary then I shall come back to this House. At the end of his speech he said that a Select Committee should be appointed. How ridiculous, to want to take recommendations of the commission before which all the different bodies gave evidence, to a Select Committee!

But not on this Bill.

How ridiculous can one get! The points to which the hon. member objects are the very points which were recommended by the Wessels Commission. That is why I say that it is totally ridiculous to think that this should now go to a Select Committee. The hon. member said that we were bulldozing the legislation through Parliament, but in a Parliament of 165 members only eight are opposed to it! Am I, then, the man who bulldozes it?

There are 10.

Yes, but they were not all present. If the others had also been here, there would have been 10. However, there were not 10 today. Only eight voted against the Bill. Nevertheless he says that I am the person who wants to bulldoze it. [Interjections.] I think that in so far as administrative problems, such as those to which the hon. member referred, may occur, we can attempt to solve those administrative problems to a large extent with a little co-operation, by means of negotiation with the third party fund, the garages and everyone concerned. Legislative provision does not have to be made for all administrative problems. Such problems can also be solved administratively. I believe that if any problems of that nature occur—at this stage I am unable to foresee them—we can try to solve them administratively.

Question agreed to (New Republic Party dissenting).

Bill read a Third Time.

Mr. Chairman, we have now reached the Committee Stage of this Bill and, as was discussed during the Second Reading debate with reference to the interim report made by a Select Committee which later became a commission of inquiry, the basic principle is to protect the purchaser who in good faith purchases, with honest money, land which is to be used for residential purposes in the case where, through no fault of the purchaser, the seller becomes insolvent or, in the case of a company, is liquidated. One remembers that the case of Glen Anil was investigated and that thousands of purchasers became losers as a result of the collosal, gigantic failure of that company with its extensive assets. Such purchasers need protection.

The Bill before us proposes certain amendments to the principal Act. Let me deal with those amendments. There are actually two amendments, both to section 14 of the principal Act. The first is to amend subsection (3) which relates to land which has been purchased under a deed of sale where that land is not encumbered by a mortgage bond. Subsection (4) relates to such land which is encumbered by a mortgage bond.

Let me deal first with subsection (3). What is happening here is that we are agreeing that the person concerned has a right to obtain transfer, but under certain circumstances. What are those circumstances? There are two sets of circumstances involved: Firstly, where he has paid the full balance of the purchase price; and, secondly, where he has not paid the full balance of the purchase price. Dealing with the latter part first, the purchaser is now faced with two alternatives in that he may, having been given notice in terms of the previous subsection that he has to make payment within the period of six months as stipulated there, be called upon to pay either the balance of the purchase price owed by him on that particular stand or “all such costs of sequestration and administration, including any endowment to be made in terms of any law to any person in respect of such land, whichever of the two amounts may be the larger”.

My difficulty lies with the words “whichever of the two amounts may be the larger”. The purchaser is in fact obliged to pay the larger amount. He now has to get in touch with the trustee or liquidator and establish which amount is the larger; the amount he owes under the deed of sale or the amount he owes in costs of sequestration and the other costs levied against him, including endowment. It may well bee—and I think in most instances it will be—that the latter one, the larger amount, is going to be far more than the amount he is owning in terms of the deed of sale.

On what basis do you say that?

On the basis that one is given a clear alternative because one must either pay the outstanding balance or—and I am quoting from clause 1 of the Bill—

Surely that is clear enough? Where it is larger it does not pay him and it is therefore not a proposition for him to do so. We do not only deal with Glen Anil because if one interprets this clause strictly, it means that this person can be made to pay all the costs of sequestration. What about the other purchasers? What if there is more than one purchaser? What if there are 16 000 or 1 600 purchasers? If they exercise their prerogative in terms of the alternative should they not all be called upon to pay their pro rata share? Why must one person—as the clause can be interpreted—be called upon to pay all the costs of sequestration?

One may then have the situation where it is not a company that sells land. It may be a person or a company that had one stand for sale who has gone insolvent. Having sold that one stand to the person, he is sequestrated for reasons other than dealing in land. He may owe money which he has borrowed and has not repaid or there may be a hundred and one other reasons. Such a person or company may have a host of other creditors. Why must such a person be called upon to pay all the costs of sequestration if his failure to maintain the land has been brought about through other reasons?

Mr. Chairman, I hope you follow my amendment because clause 1 will then read as follows—

That “and” must not now be coupled to the “or”. This “and” must be a separate thing, which he is in any event called upon to pay—

Instead of the words “as well as for the signing of all the documents required in connection with transfer” I suggest the words mentioned in my amendment be inserted, the reason being that the cost of transfer includes all documents in connection with the transfer. If one looks at the tariff of conveyancers, who render an account for the purpose of a transfer, it specifies “all costs of transfer, including all documents necessary to obtain transfer”. These words are accordingly completely superfluous and I do not believe we should write words which are superfluous into any legislation before this House.

The other situation is where one has no choice—under the same clause—where the purchaser has paid the full balance of his purchase price and the only “or” he is left with, is the cost of sequestration. I believe that if there are other purchasers they must share these costs on a pro rata basis and each one must pay his share of the costs of sequestration, which is a preferent claim in these circumstances.

The second set of circumstances which we come to in terms of the new section 14(4) is the encumbrances which exist where there is mortgage bond. I refer to my amendments in this regard which appear on the Order Paper and the same principles which I attach to subsection (3), apply here. However, I have difficulty with the subsection because in this instance the choice given to the purchaser is of such a nature that I cannot see how a purchaser is going to exercise any choice at all. With respect, Mr. Chairman, I cannot see that this clause was designed to help the purchaser. The only one who is going to benefit, is going to be the building society. What earthly hope has a purchaser who is called upon to pay the outstanding balance on a mortgage bond? If we do not specify that payment be made on a pro rata basis any one person must pay the outstanding balance on the whole mortgage bond. Surely it has to be on a pro rata basis if he does exercise this option? In addition to that, he must pay all the costs of sequestration and administration, including any endowment, which is usually 15% of the purchase price, “in terms of any law to any person in respect of such land”. Here again the choice is that if the purchaser does not pay that he must pay the outstanding balance in terms of the agreement plus interest to date, whichever is the larger as well as the costs in connection ever is the larger as well as the costs in connection with transfer. Here my amendments apply in the same manner as in the previous subsection. The object of my amendments, Mr. Chairman, is to put this on a fairer basis so that one purchaser is not saddled with all the costs. In the second instance I really cannot see the import of what we are doing.

The proposed new subsection (5) now states that if a person has paid more than the purchase price, he is entitled to get back the difference “from the person from whom he acquired the right to claim transfer of the land”. This is, however, the person who is insolvent or the company that has been liquidated. How is one going to claim back this difference from an insolvent person or from a liquidated company? At the best one can be a concurrent creditor and get back 15c in the rand or whatever the company can pay out. That is all that is being established in this regard. What right is therefore being granted to the purchaser who, in good faith, has acted in this manner? We support the Bill in so far as the principle is concerned of giving a man the right, as opposed to an obligation, to obtain transfer, but to my mind the benefits really come from the proposed new subsection (3) and I would like the hon. the Minister to explain to the House what advantages there are for the purchaser in terms of the proposed new subsection (4). I therefore move the amendments which appear in my name on the Order Paper as follows—

1. (1) On page 3, in line 28, to omit “all”;
2. (2) on page 3, in line 30, after “land” to insert:

   , pro rata to the claim

3. (3) on page 3, in line 31, after “and” to insert “in addition thereto”;
4. (4) on page 3, in line 32, to omit all the words after “transfer” up to and including “transfer” in line 34;
5. (5) on page 5, in line 15, to omit “and all” and to substitute:

   pro rata to the claim and

6. (6) on page 5, in line 17, after “land” to insert:

   pro rata to the claim,

7. (7) on page 5, in line 19, after “bond,” to insert:

   pro rata as aforesaid,

8. (8) on page 5, in line 22, to omit all the words after “transfer” up to and including “transfer” in line 23;
9. (9) on page 5, in line 28, after “land” to insert:

   pro rata to the claim

Mr. Chairman, the hon. member for Hillbrow has moved amendments which go considerably further than the ones which I have on the Order Paper. I would now like to move the amendments which appear in my name on the Order Paper, as follows—

1. (1) On page 3, in line 29, after “administration” to insert:

   as relate to such land

2. (2) on page 5, in line 16, after “administration” to insert:

   as relate to such land

The intention of both amendments is to establish quite clearly that there should be a release figure. When a person, as the hon. member has stated, with good money has purchased a portion of ground which falls into the general layout of a particular township, as for instance in the Glen Anil case, the problem is to set a release figure at which a person can pay either the outstanding amount or, if he has paid the complete amount, obtain release of his ground. To my mind it is inevitable and it is also accepted that such a person will have to pay certain additional costs which would be his share. The purpose of my amendments is therefore to establish that he pays only his share of any additional costs that might be involved. I think the amendment was fairly well motivated during Second Reading and it is also fairly self-explanatory now.

Mr. Chairman, I want to say at once that I accept the amendments as moved by the hon. member for Mooi River because in my opinion they constitute an improvement to the legislation we are at present considering. However, I shall have to discuss the motions of the hon. member for Hillbrow in more detail. With all respect to the hon. member, I do not believe he grasps what the legislation seeks to do. In clause 1 of the Bill it is proposed that certain subsections of section 14 of the Sale of Land on Instalments Act be replaced by amended subsections. Before I explain further, we must consider what the existing section 14(3) and (4) seeks to do. We must also determine what other legislation is amended, apart from the legislation we are now considering. The existing section 14 provides, inter alia—as the hon. member himself said—that when land sold under a contract is registered in the name of a company being liquidated or any person whose estate is being sequestrated because he is unable to pay his debts, that land shall be transferred into the name of the person who has the right to claim transfer of the land.

Arrangements are then made to the satisfaction of, on the one hand, the liquidator, and on the other, the trustee, concerning the payment of the outstanding balance under the agreement, plus interest to the date of registration of transfer. As far as the liquidation of a company unable to settle its debts is concerned, the legal provisions—the hon. member must please listen to this—with regard to insolvency are, in the nature of the matter, as far as is appropriate adapted mutatis mutandis with regard to any matter for which special provision is not made in the Companies Act, 1973. What, then, in fact happens in the case of the existing section 14(3) and (4)? Land sold under a contract forms part of the assets of the company. When the company is then liquidated because it is unable to pay its debts, this land sold under the contract forms part of the assets in the estate of that company. The legal provisions relating to insolvency then apply to the assets of the company. What then happens, and what are the provisions which apply here? The legal provisions relating to insolvency which apply to this company in liquidation require that the liquidator of the company has to distinguish between assets of the company which comprise the free residue and the assets which are subject to some encumbrance. In terms of the Insolvency Act of 1936 the free residue in the case of a company liquidated because it is unable to pay its debts, comprise those assets of the company which are not subject to any right of preference or preferent claim on the basis of a special mortgage bond, legal hypothec, pledge or right of retention. That is according to the Insolvency Act and that Act also applies to companies in liquidation.

In terms of section 97.

Yes, of course. However, in point of fact, the new sections 14(3) and (4) proposed in clause 1 amend the Insolvency Act in this regard. That is what I am trying to impress upon the hon. member. The assets of a company which is liquidated because it is unable to pay its debts, or the insolvent estate, is put into the two classes mentioned in terms of the Insolvency Act because certain collections and payments are debited to the proceeds from each class. Where land is sold under a contract by a company which is liquidated because it is unable to pay its debt, then, if it is not encumbered by a mortgage bond, that land— and this is important—forms part of the free residue of a company. Before section 14(3) of the Principal Act of 1971 came into operation, the liquidator of the company which was being liquidated because it could not pay its debts and which had sold land on instalments, could reject the contract in question. This was a right the liquidator had before section 14(3) came into operation. Then, if the land was not encumbered by a mortgage bond or there was no preferent claim on the land, it became part of the free residue of the company, without there having to be any preferent claim at all against proceeds.

Let me take it another step further for the hon. member. The mentioned section 14(3) which now stands to be amended by the Bill as proposed by me, changed the legal provision to which I referred with reference to the Insolvency Act. In what respect did it change the legal provisions? The position was changed because the liquidator of a company which has been liquidated no longer has the right summarily to reject the contract. In terms of section 14(3) the liquidator must direct the purchaser to take transfer and that land, as already mentioned, must be transferred into his name if certain requirements are complied with. These requirements relate to the payment of the outstanding balance. However, the possibility is not excluded that in this set of circumstances, that to which I have now referred, the liquidator could reject a contract with the permission of a court of law if the collection and payments to be debited against the proceeds of the free residue are greater than the proceeds to be paid in. In those circumstances there is no protection for the purchaser under the provisions of the existing section 14(3). I should like to repeat that: Where there are insufficient funds in the company in liquidation, a liquidator can apply to the court for the cancellation of this contract and then the purchaser has only a concurrent claim for the part he has already paid.

He gets preference.

Of course. What I am trying to explain is that there can be circumstances in which there is insufficient free residue to pay the costs. In such circumstances the liquidator may apply for the setting aside of that contract, and there is no protection for a purchaser who is at present protected in terms of section 14(3). The amendment of section 14(3) which I now propose in the Bill—the hon. member must accept it as it reads at present—is the insertion of the following words—

The largest amount provides for the supplementing of the free residue, or else the protection contained in the proposed section 14(3) is meaningless. The amendment reads further—

The hon. member knows a great deal about property and township development. Nevertheless it is a fact that in any event, the payment of the endowment is, in the normal course, in terms of the contract of sale, transferred to the purchaser, to be repaid to the seller. In practice this is by no means a new element. The hon. member knows as well as I do that if we do not make arrangements for the payment of the endowment, the purchaser will not get the endorsement to his contract which the local authority authorizes to grant transfer, and we should once again be making the provisions of section 14(3) totally useless.

What will be the effect of this insertion into section 14(3)? It will have the effect that the purchaser who wants to take transfer of land in terms of section 14(3) must, in the case of the company liquidated because it is unable to pay its debts, make arrangements to the satisfaction of the liquidator of the company to comply with the requirements laid down in this proposed amendment. To qualify this again, I want to say that this requirement must be complied with if the outstanding balance plus the interest in terms of the contract is less than the liquidation and administration costs, including the endowment. In other words, if the outstanding balance is insufficient in terms of the contract, the purchaser will have to supplement the free residue to the extent that the liquidator incurs expenditure to grant him transfer of the land in question. That is all that this amendment entails.

I shall accept the two amendments as printed on the Order Paper in the name of the hon. member for Mooi River. I think his proposed qualification of “costs of administration” by the words “as related to such land” to some extent satisfies the argument of the hon. member for Hillbrow because what he wants to do, in any event, is to limit the contribution to be made by the purchaser in question to that specific property he is able to claim.

What about the cost involved in the sequestration?

That is in any event the case in terms of the Insolvency Act. I want to say once again that the amendment of the hon. member for Mooi River clearly qualifies that it applies to both. I therefore accept both the amendments of the hon. member for Mooi River.

I now wish to deal with the amendments by the hon. member for Hillbrow. I understand his arguments, but nevertheless I must give legal effect to the amendments I am moving. If I were to delete the provision relating to all the expenses, the matter would be taken no further because then only the sequestration and administration costs would remain. The restriction proposed by the hon. member for Mooi River is the only one which specifically limits them to the land which the contract concerns. I now want to refer to the second amendment of the hon. member for Hillbrow. I accept with pleasure amendments which will improve the legislation. However, what the hon. member proposes is that I should insert a section pro rata to the claim. However, in section 14(3) there is no question of a claim whatsoever. All that is at issue in section 14(3) is the circumstances in which a purchaser of land by way of contract can obtain transfer of his land.

If he wants to.

Yes, if he wants to. But there is no question of a claim. In other words, the insertion “pro rata to his claim” says nothing and means nothing. I think what the hon. member had in mind was quite probably the value of the land. But that is not a claim. I repeat: In terms of section 14(3) as it reads at present, and in terms of the amendment proposed in clause 1 of the Bill, there is no question whatever of a claim which could limit the contribution.

Amendment No. 3 by the hon. member for Hillbrow proposes that the words “in addition thereto” be inserted after “and”. What does this mean? It brings us no further. It does not make the clause any clearer. Consequently its acceptance would in fact be meaningless.

The hon. member’s amendment No. 4 seeks to omit the words “as well as for the signing of all the documents required in connection with transfer” from the new proposed subsection (3). If the others are not acceptable then this, too, falls away. The hon. member will concede that point. The same argument I used in regard to amendment No. 2 applies to amendments Nos. 5, 6 and 7, namely that to insert “pro rata to the claim” is meaningless because there is no question of a claim in the section in question.

Amendment No. 8 of course, falls away since I am unable to accept the other amendments.

It is also desirable that the wording of the new proposed subsections (3) and (4) should conform. I think that here we must bear in mind that the words in question were inserted in section 14(4) at the insistence of the building societies. I do not think it would be advisable to amend them. The hon. member asked what they meant. In the first instance, he knows that we are dealing here with circumstances, in terms of section 14(4), in which there is in fact a preferent claim against the property. I think he agrees with that In the second place he knows that when more than one property is encumbered by a mortgage bond and one is transferred, that specific mortgagee can refuse to free that property from the mortgage itself unless the outstanding part of the mortgage is paid.

I said at the outset, and I wish to repeat now, that this legislation does not seek to eliminate all the problems we encounter in respect of the sale of land on instalments. Secondly, I indicated that the commission should continue with its work, and if they want to submit interim reports which I could give effect to in legislation, then I am prepared to do so. I therefore want to ask the hon. member to co-operate with me in this specific regard. The legislation being considered here is interim legislation and merely envisages giving effect to an interim report of the commission.

Mr. Chairman, I thank the hon. the Minister for his concise reply to the amendments which have been moved. Obviously he is sharing some of the difficulties which we in these benches have outlined. Also, we accept that this is an interim measure. However, the point which I wish to make, is that as far as bonds are concerned, one is obviously in the hands of the mortgage bond company, because pro rata they will decide on what amount they are required to release portion of the bond to release a portion of the land which is encumbered by them. One is entirely at their mercy as far as that is concerned.

I wish to return to one other matter which is covered by clauses 3 and 4, namely the costs of sequestration and administration. I think the hon. the Minister will know from his own practical experience that we are talking about costs of administration and sequestration, and we are dealing here with a report from the commission which dealt with Glen Anil. I want to suggest to the hon. the Minister that we are now talking about costs of administration and liquidation of something like R1½ million if one is going to talk about the costs of administering Glen Anil. Bearing in mind the hundreds of stands which they have in the various townships, how is this really going to assist anyone as far as that is concerned? We want to try to be practical with what we are trying to effect by this legislation and to be realistic when it comes to the costs. That is why I hope the hon. the Minister will regard this as entirely an interim measure and that by means of the Select Committee or the Commission we shall be able to continue with the work.

Finally, I should just like to say that as far as the amendments proposed by the hon. member for Mooi River are concerned we have no difficulty with them, so we shall support them.

Amendment (1) moved by Mr. A. B. Widman negatived and amendments (2), (3), (5), (6), (7) and (9) dropped (Official Opposition dissenting).

Amendments moved by Mr. W. M. Sutton agreed to.

Amendment (4) moved by Mr. A. B. Widman negatived and amendment (8) dropped (Official Opposition dissenting).

Clause, as amended, agreed to (Official Opposition dissenting).

House Resumed:

Bill reported with amendments.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, there is not much I can add at this stage. I think we have discussed the matter fairly fully and that the amendments have been dealt with in detail. I only wish to call upon the hon. the Minister to see to it that the committee which is sitting to investigate this should investigate not only the question of the Glen Anil insolvency, but also the question of private individuals who are sequestrated for other reasons, sequestrated, not because they are land-owners, but because they landed themselves in debt on account of other reasons. The only worthwhile asset they may have in their estate is in fact the land. Therefore, if he wants to take transfer, the purchaser will now be called upon to pay all the costs of administration and of sequestration, costs which are really going to be for the benefit of perhaps many other creditors who have nothing to do with the land itself. I believe this is something which requires investigation. I sincerely trust that we will be able to come to the rescue, more completely and more definitely, of those purchasers who have paid all this money, and particularly to the rescue of purchasers of residential stands in terms of this legislation.

Finally, I want to appeal to the hon. the Minister to consider a widening of the existing Act to include companies apart from persons for purposes of protection in terms of the Act itself. That means that a private individual living in a house he has purchased, should, for the sake of convenience and for tax reasons, also be protected by legislation of this nature.

Mr. Speaker, the last point which the hon. member referred to was that in his view it was necessary that the legislation should lay down that an owner who bought land on instalments, entered into the contract in the name of a corporate body and not necessarily in that of a natural person. I suggest that this is something to which the commission could profitably give attention.

I think it is necessary that I should repeat that the legislation was never intended totally to eliminate the risk people run when they buy land on instalments. It is really not possible to do so, and the protection which the legislation affords is therefore, in the nature of things, of a limited nature. I must point out that when it is found that in an estate, or in the case of a company in liquidation, debts cannot be settled and that the only asset there is, is the land which has been sold on instalments, the hon. member will surely realize that someone must pay the administration and/or liquidation costs. In terms of the provisions of the Companies Act, such an unencumbered asset is included in the free residue, and in the nature of the matter, administration costs have preference as far as the free residue is concerned. When the free residue is too small, so that the administration costs cannot be paid from it, but the purchaser has to obtain transfer of his land, the rest of the administration costs must be paid in. That is all that the clause lays down.

I should like to address an invitation to the Official Opposition. They do not serve on the commission, but I invite them to make representations to me to arrange for the appointment of certain representatives.

I shall consider such representations.

We shall make such representations.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

I want to point out that Government Notice R1038 of 25 June 1969, promulgated in terms of the Regulation of Monopolistic Conditions Act, 1955 (Act No. 24 of 1955), prohibits retail price maintenance.

In a recent court case, persons who are liquor retailers, were charged with having contravened that notice in that they had allegedly acted in a manner which was calculated to compel or had the effect of compelling or inducing a reseller of alcoholic drink to maintain indicated prices for liquor.

I wish to stress that the relevant point here is that retailers had tried to have an indicated price maintained by persuading people to sell at a fixed price, as distinct from the concept that the supplier had tried to do so.

In the court case, which was heard in the Witwatersrand division of the Supreme Court of South Africa, it was found that the prohibition of retail price maintenance could not be made applicable to retailers. The finding is based on the fact that with the possible exception of paragraph (iii) of section 2(1) of the Act, the consequences of a monopolistic condition as envisaged in paragraphs (i) to (vii) of the Act in question, are all of such a nature that they can only be brought about by a supplier of merchandise. Paragraph (iii), to which I have already referred, deals with the enhancement or maintenance of prices. Furthermore, it was also the view of the court that retail price maintenance was a practice fairly generally applied in commerce by suppliers. On the grounds of an analysis of the factual position, the court came to the conclusion that individual and collective price fixing which the Board of Trade and Industries had investigated at the instance of the Minister, could only be applied by suppliers of merchandise.

The notice by which price fixing was prohibited and to which I have already referred, i.e. No. R1038 of 1969, was there fore declared valid by the court in so far as it concerned suppliers of merchandise, but not in respect of dealers themselves.

The practice of price fixing by dealers is, however, just as undesirable as the practice thereof by suppliers, because this practice has the same harmful effect on the public— regardless of whether the practice is applied by the suppliers or by the dealers.

It has accordingly become necessary to amend the Act in order to make retailers subject beyond all doubt, to the prohibition of retail price maintenance as has indeed always been the intention, and has in fact been the case in practice until the decision by the court.

†As hon. members know, certain commodities are exempted from the prohibition on resale price maintenance contained in Government Notice No. R1038 of 25 June 1969. These exemptions were originally granted on a preliminary basis to provide for an opportunity for further investigations into the possible effects of the withdrawal of the exemptions in respect of the commodities concerned.

Investigations in this connection are being carried out from time to time by the Board of Trade and Industries, and since it may be found in future that the maintenance of the exemptions are no longer in the public interest, it is necessary to provide the necessary authority for the withdrawal of the exemptions. A provision to this effect is therefore included in the Bill. The withdrawal of any of the relevant exemptions will, of course, only be considered on the recommendation of the board after an investigation of the relevant practice in respect of any of these particular commodities.

Mr. Chairman, the broad principle at stake here, is that of free competition in the economy. That is a principle which we in these benches strongly support. In the nature of the case, we can therefore have no objection in principle to the legislation. Furthermore, it is also clear to us that the intention should always be that the prohibition of retail price maintenance should also be applicable to retailers. It is obvious that what we have here is a technical problem in the legislation—a problem which is to be rectified by clause 1 of the Bill. We therefore have sympathy with what the hon. the Minister wants to do, and we are quite prepared to support him in this respect.

The concept of price maintenance is not quite so simple. I have already stated that we go along with the principle that it should be prevented. From what the hon. the Minister has just said, all the indications are that he and his department are also watching the details of the cases concerned very carefully. Special cases may arise here and there, but otherwise we again stress our support for the principle that there should be free price competition at all levels of economic life.

†I want to deal for just a moment with clause 2 of the Bill. This is where it was thought that it might well be necessary to grant exemptions, and the hon. the Minister informs us that he is asking for a power which he may or may not use, depending upon the outcome of the investigations that are being made by his department. We confess to a certain curiosity about the trend of these negotiations, but the hon. the Minister may have his good reasons for not giving us more information than he has already. These commodities are, in different ways, important ones in the economy, and if there is to be any change, again it must have been very carefully weighed up. We would appreciate, if such an opportunity occurs, a chance to apply our minds also to what is to be done. Because the movement is, however, again in the direction of the principle which we wish to support, we have no objection and shall support the Second Reading of the Bill.

Mr. Speaker, we are grateful that the hon. member for Parktown has no problems with the principles of this legislation and that price maintenance also be made applicable to the retail trade. Nor do we find fault with the viewpoint of the hon. member that the implementations of this legislation should not harm free enterprise in South Africa. We also wish to confirm that.

Mr. Speaker, we live in a changing world. It is changing faster by the day. Legislation— and especially legislation of this nature— must therefore be adapted from time to time. It must be clearly understood that the original Act was not intended to be an anti-monopolistic Act: it was merely intended to regulate monopolies. The title of the Act indicates that very clearly. The Act therefore had to be made applicable only where there were mergers or cartels which would be harmful to the community. In view of the many problems encountered throughout the world to make legislation of this nature function properly, the 1955 Act was based on the premise that we should accept a very wide definition of monopolies. That is perhaps one cause of the problems which exist. I wish to add, however, that experience has shown that it is sometimes the case that the narrower one makes the definition, the greater become the possibilities that loopholes are again created, especially in the sophisticated business world with which we have to deal. That, then, is why we have the other principle in the Act, viz. that a special expert court should give a verdict in this field. That was of course mainly in consequence of the experience in America with the implementation of their legislation.

It is quite interesting to look at the long way which legislation of this nature has come in America and the number of times it has had to be adapted there because it was not functioning properly. America was naturally very anti-monopolistically orientated, even in the previous century. In 1899, they passed the so-called Sherman Anti-Trust Act which did not work very well. As early as 1914 it had to be adapted by the Clayton Act and after that again in 1922 by the Capper-Volstead Act, and in 1926 by the Co-operative Market Act. Every time, efforts made to close the loopholes in the Act and every time, other loopholes were again discovered. The reason why the Americans found it difficult to get legislation of this nature to function properly, is, in my view, that they availed themselves of the ordinary courts to make this legislation function. Personally, I believe that in respect of legislation of this nature, there should be a special court of experts who know the background to the entire matter.

In England, one encounters a different situation. There, they did not really concern themselves much about monopolistic legislation. In the nature of things, they did not have so many problems either, because from as far back as the Industrial Revolution, they had operated a system of so-called laissezfaire. Only in 1948 did they introduce the British Monopolies Restrictive Practices Act. It seems to me that after that, many countries in the world solved their monopolistic problems by socialization.

In Germany, we have the interesting phenomenon that since the previous century, they have had the so-called Kartell Courts which of course, were, in effect, specialized courts. Consequently, when we passed the original legislation in this connection in South Africa, we made use of the experience gained in other countries in an effort to pass the most effective legislation possible. But as I said in the beginning, conditions in the world change so fast that it is not always practicable to keep up. Let me just quote an interesting example. When the original legislation was introduced in 1955, the then Minister gave a list of commodities which were regarded as of a monopolistic nature. It is interesting to look at that list. Looking through that list, I find precious few of those articles falling under that category today. I only mention a few, because it is a very long list. The first is explosives. That is perhaps an item which still falls in that category today. Others are fertilizer, iron and steel, lead pipes, copper tubes, chains, paper, cigarettes, soap, wire cables, electric cables, bicycles, bicycle tyres, motor-car tyres, driving belts, etc. Of these articles, there are today very few which fall under this Act. That only goes to prove the necessity of keeping a constant check on legislation of this nature. I do think, however, that the problem is that we should really have an entirely new Act. I am very pleased to learn that the hon. the Minister is already thinking along those lines. I think it is imperative that legislation of this nature should keep pace with modern circumstances because—as I have already said—we are dealing with highly sophisticated business methods which are calculated to dodge the limitations of such legislation.

The Bill before us is concerned purely with the amendment of Government Notice R.1038 of 1969. Although the argument has been presented somewhat more widely, I believe that the amendment before the House proves that we should again look very carefully into the whole structure in order that we may have legislation which is adapted to modern circumstances, as we know them today. Legislation of this nature does not seek to bring about unnecessary interference by the State. On the contrary, I think that legislation of this nature rather protects the capitalistic system, because it is aimed specifically at polishing the ugly side of capitalism to make it more acceptable to our people, because if mistrust were to occur in this regard, they might ultimately reject the entire system. The good characteristics of the system should therefore be retained. A monopolistic condition is not necessarily something which is wrong because there may be particular circumstances in which something of this nature can be to the benefit of the country and its people. There are, however, particular circumstances for which provision must be made scrupulously in the new legislation. We should like very strongly to support this temporary and timely amendment which is before us today.

Mr. Speaker, the hon. member for Newcastle says he considers a new Act to be necessary to deal with this particular situation of monopolistic conditions. I am not sufficiently in touch with that side of the argument to be able to comment on that aspect, but I do agree with him that the question of retail price maintenance is something that has to be watched very carefully indeed in any sort of free society or free economy, because the fixing of prices and the cornering of a market by large organizations is definitely something which cuts across the whole free market philosophy and can have a vital effect on people moving into the free market economy. We have in this country the Black population particularly …

What about the tyre manufacturers?

There are certain strategic products, if one may put it that way, which the hon. the Minister believes in controlling that way. I am not arguing with the hon. member for Yeoville about it. However, what I am saying is that the retail price maintenance system is something that has to be watched very carefully indeed.

The hon. the Minister mentioned a Supreme Court case in the Transvaal. As I understand it, there were actually two cases, a magistrate’s court case and a Supreme Court case. The Supreme Court had the effect of invalidating the magistrate’s court case, and this has now led to this legislation. I will ask the hon. the Minister to comment, but this strikes me as a very odd way of legislating because one is taking powers here to validate a Government Notice in terms of an Act. Surely it would have been better to amend the Act itself so that the definition of “persons” to whom that Act is to apply could have been either broadened, changed or altered rather than bringing about…

A relief of the Bottle Store Act.

If the hon. member wants a relief from the Bottle Store Act, he can move it as a private member’s motion next year. The Bill states that—

It really seems to me as if the hon. the Minister has gone an awful long way around to get to where he was intending to get. I ask for his comment on the fact that legislation could have been much more elegant and much more easily introduced if the definition in the principal Act had been amended. What is happening now in terms of this Bill, is that there was a getting together of resellers in an attempt to pressure another reseller. The Act and the Government Notice, as I understand it, applies to a relationship between a supplier and a reseller. What is happening now, however, is that the notice is now being applied to all groups of resellers preventing them from doing something which the Act requires shall not be done by a supplier and a reseller. We shall support the Second Reading of the Bill, but I still think there could have been another way in which the hon. the Minister could have achieved his purpose.

Mr. Speaker, we are grateful for the support of the hon. members of the Official Opposition and also of the NRP in this matter because, as the hon. member for Newcastle said, there is considerable unanimity on the control of monopolistic conditions among all hon. members on this side of the House and also on that side of the House. None of us really quarrel about the principle. It is in the interests of the general public that there should be protection in this connection, and that people who are in defenceless position, should not be exploited. In view of this agreement in principle on the matter it is, in my view, obvious that the legislation which deals with it—I agree with the hon. member for Newcastle that complicated legislation is necessary to close all the loopholes—should close all loopholes as effectively as possible. The public expects this from us. The verdict of the court on the matter has clearly shown that there is indeed a loophole in this particular notice and in the legislation, and, as we have heard, the loophole was in connection with retailers. The existence of monopolistic conditions among retailers would be just as undesirable to the public as those among suppliers. Everyone concerned with this matter, will agree with me that in the normal course of events, we understood this notice and the legislation to be applicable to the ordinary retailer as well and not only to the suppliers. The court has found now, however, that the measures are only applicable to the supplier, and therefore it is a good thing that the hon. the Minister is introducing these amendments so that there can be no doubt about any of these matters. The public expects that of him, and he therefore owes it to them to introduce these amendments.

The hon. member for Parktown expressed a measure of concern over the possibility that the hon. Minister could also make the provisions of the legislation applicable to the commodities set out in paragraph 2.2 of Government Notice No. R1038. The commodities referred to there are petrol, tubes and tyres, as well as books and periodicals. At the time when these exceptions were made, it was stated very clearly that it was a purely temporary measure and that the Board of Trade and Industries would look into the matter again. That is even how it appeared in the Government Gazette in which it was promulgated. I quote the following from Government Gazette No. 2374 of 28 April 1969—

According to my information and according to a statement by the hon. the Minister on 7 February this year, that investigation has in the meantime been completed by the Board of Trade and Industries. I quote briefly from the statement—

It is clear that only a preliminary exemption was given at the time, that the entire matter has in the meantime been investigated again and that after thorough consideration the Board of Trade and Industries has come to the conclusion that this matter should be looked into again. For that reason, clause 1(b) has been included in the Bill so that the hon. the Minister may now have the right to withdraw this concession if he deems fit. We gladly support the Bill.

Mr. Speaker, I rise to thank the hon. members for their support of the principle contained in the Bill. Incidentally, I also wish to thank the hon. member for New castle for his interesting contribution on the historical course of legislation of the same nature and trend in other countries.

In the first place, I want to discuss the provisions of clause 1. I want to say at once that I myself believe that the present legislation in its overall set-up does not go far enough to ensure the goals which were initially envisaged with the present legislation. Under the present legislation, broadly speaking, one can only look at an existing situation. The hon. members will understand that it is often far more difficult to unravel an existing set of circumstances than it is to prevent a specific set of circumstances. For this reason I want to associate myself with the hon. member for Newcastle by saying that it is essential that we should re-examine in this House the entire question of the effectiveness of the existing legislation in respect of monopolistic conditions. I think, furthermore, that it also essential that we should formulate a proper policy for competition in this country. With that in mind, I appointed a commission of inquiry—initially under the direction of the late Mr. Chief Justice L. C. Steyn; and after his death, under the direction of Dr. Mouton, who is a member of the Board of Trade and Industries. Virtually every sector in the financial and economic life of our country was represented on this commission and they submitted a unanimous report with recommendations to me. I intend—provided I can iron out all the problems—to introduce an entirely new Bill on this matter during the present session.

The hon. members will realize, however, that it is delicate legislation because it has an effect on the entire, broad spectrum of our economic life. For that reason one should introduce and handle legislation of this nature with the greatest degree of circumspection. I want to give the assurance however that I shall introduce this legislation at the earliest possible juncture. It is expected that that legislation will comply with the standpoints of the hon. member for Newcastle, and I also think that hon. members on both sides of the House will welcome that legislation—in principle at least, because I think that if we really want to consolidate the system of free enterprise in our country, we should strip it of those elements which lead to malpractices and abuses.

The hon. member for Mooi River said that he thought I had come a long and in fact a roundabout way to reach my goal.

†I should like just for a moment to refer to the principal Act, the Regulation of Monopolistic Conditions Act, No. 24 of 1955. Section 2 of the Act reads—

And then the Act enunciates the various monopolistic conditions and then qualifies those conditions as follows—

1. (i) restricting the output or disposal of any commodity; or
2. (ii) limiting the facilities available for the production or distribution of any commodity; or
3. (iii) enhancing or maintaining prices; or
4. (iv) preventing the production or distribution of any commodity by the most efficient and economical means; or
5. (v) preventing or retarding the development or introduction of technical improvements or the expansion of existing markets or the opening up of new markets; or
6. (vi) preventing or restricting the entry of new producers or distributors into any branch of trade or industry; or
7. (vii) preventing or retarding the adjustment of any branch of trade or industry to changing circumstances.

In view of this particular section of the Act the learned judge found that, with the possible exception of three, these provisions relate to the production and supply and not the retail trade. The only way in which I could, at this stage, make the notice of 1969 applicable to the retail trade, is by including subsection (1) in this Bill. I hope the hon. member understands that.

*As far as clause 1(b) is concerned, I just want to explain that we are not dealing with a new principle here, but that we are merely changing the procedure. In terms of the existing provisions of section 6(5) of the Regulation of Monopolistic Conditions Act, the Minister may, by notice in the Government Gazette, declare any business practice which has been the subject of an investigation by the Board of Trade and Industries, to be unlawful and may prohibit it, unless it is subject, wholly or in part, to exceptions which he may deem fit, provided two conditions are complied with. Firstly, the notice shall be approved by a resolution of both Houses of Parliament and secondly, the Minister shall, not less than one month before the date on which the first of such resolutions was taken, have published the terms of the notice in question in the Gazette, together with a statement of his intention to submit that notice to both such Houses for approval. This is the notice in connection with the question of books to which, inter alia, the hon. member for Verwoerdburg referred. But the Act does not make specific provision for the manner in which such a notice, which I may introduce here, can be amended. The provisions of section 10(3) of the Interpretation Act of 1957 are now applicable. It reads—

Any amendment which I may now wish to effect to Government Notice R1038 of 25 June 1969, can therefore only be effected after an investigation by the board and if the procedure in (a) and (b), to which I have just referred, is followed. Hon. members will be able to understand what a roundabout procedure I now have to adopt to do a simple thing.

Clause 1(b) of the Bill now provides that the Minister may by notice in the Gazette declare that the prohibition referred to in paragraph 1 of the said notice shall also apply with reference to any commodity referred to in paragraph 2(2) of the notice, viz. petrol, tyres and tubes, and books and periodicals, including newspapers. The proposed amendment will now entail that the responsible Ministers may declare that the notice is applicable or not applicable to any of those commodities. If there are any commodities apart from the three to which I have referred, I have to again adopt the existing procedure and again refer the matter to the Board of Trade and Industries for investigation. In other words, I am merely trying to simplify the machinery at my disposal so that I need not take decisions in such a roundabout way.

I thank all the hon. members for their contributions.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, I just want to make one or two observations with reference to what was said during the Second Reading debate. We thank the hon. the Minister for the explanations he has furnished and, as we said during the Second Reading, we are satisfied with the legislation and we do not intend opposing it. If you will permit me, I do not think I should allow this opportunity to pass of saying something by way of reaction to the generalities which we have heard—first from the hon. member for Newcastle and then from the hon. the Minister himself, about other legislation in this same connection which may still be introduced. During the Second Reading I already clearly stated our standpoint on the principle of free competition. In connection with any possible future legislation, we shall, however, have to be very careful to ensure that in our efforts to protect competition, we do not go too far with control measures so that we do not perhaps throw the baby of the free market system away with the bath water of price maintenance or other malpractices. A balance ought to be maintained between the protection of the economy against malpractices and the extent to which one grants powers to the bureaucracy—if I may put it that way—to interfere in free competition and the free trade. We therefore want to reserve, very clearly, our position in respect of any future legislation.

With these few words it is a pleasure for me to support the Third Reading of this Bill.

Mr. Speaker, I do not think that this is the time to discuss the proposed legislation, except to say that I do not think that there is a difference in principle in viewpoints between me and the hon. member for Parktown. The question is merely to what extent one applies legislation which one introduces, without defeating the objectives for which one introduced it in the first place. In this connection, the hon. member for Newcastle was quite correct in his remarks during the Second Reading. Not all monopolies are necessarily harmful. It can of course be harmful when there is more than one, one of which is effective and the other not. I have had the experience, for example with price control, that one subsidizes the inefficient one and pushes up the profits of the better one even further. If it had been only a single manufacturing institution, I should most probably have preferred far more effective control. With these few words I just want to say that we are not committing ourselves in respect of any other legislation except that which is now before us for consideration.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

I hope this legislation will meet with the same favourable reception as the legislation which we have just dealt with, even with the cooperation of the hon. member for Yeoville.

The Trade Practices Advisory Committee which was established in terms of the Trade Practices Act, 1976, began its functions on 1 April 1977. In carrying out its functions in terms of the Act, it has become clear that certain amendments to the Act are necessary to enable this committee to function more effectively.

†Firstly, the committee found that it was called upon to investigate alleged undesirable trade practices for which expert knowledge was required. Accordingly the committee considered it necessary that provision be made in the Act for the appointment of temporary members to assist it with certain of its investigations. It was also considered that this procedure would expedite and facilitate the finalization of investigations to the benefit of the people concerned.

*Secondly, the advisory committee consists of members who come from various parts of the Republic. Therefore, it is not desirable for general meetings of the committee to be held more than four or five times a year, especially with a view to the costs involved. In any event, it is also often not possible to finalize matters at a meeting. In practice, however, it quite often happens that matters requiring urgent attention are submitted to the committee. If immediate attention can be given to these matters, they can be dealt with more quickly. It is therefore considered important that provision should be made in the Act which will enable subcommittee to investigate such matters and subsequently present with comprehensive information the full advisory committee, so that the committee may then finalize the relevant matters at the next general meeting without unnecessary delay.

†In the course of the execution of its functions the Trade Practices Advisory Committee found that some doubt existed in regard to the interpretation of the provisions of the Act concerning the giving of benefits and the regulation of advertisements. In terms of the provisions of the Act the committee can only investigate trade practices in general, but it is not empowered to attend to matters relating to the giving of benefits or to advertisements which allegedly are against the public interest. The committee, therefore, recommended that the Act be suitably amended to enable the committee also to investigate matters in connection with benefits and advertisements.

*These bottlenecks in the Act—bottlenecks which were brought to my attention by the Trade Practices Advisory Committee— impose limitations on the committee, limitations which I feel complicate its functions unnecessarily. I am satisfied that the proposed amendments to the Trade Practices Act, 1976, are essential to ensure the efficient functioning of the Trade Practices Advisory Committee and to enable the committee to carry out its work effectively.

At this stage I just want to point out that I intend moving an amendment to clause 3. I should just like to explain it for the benefit of hon. members. It comprises a mere improvement and not a change in the principle. The amendment of section 6(1) of the principal Act—this is contained in clause 3 of the Bill—comprises the deletion of certain words in the abovementioned section in the principal Act. It may be argued that the deletion of the relevant words may make it possible for the Secretary for Trade to request virtually any information from any person. However, this is not what I intended should happen. I therefore intend moving an amendment in terms of which that power will be limited. Therefore I now inform hon. members that I will move this amendment in order to give the relevant provision a more limited interpretation. I shall provide hon. members with copies of my proposed amendment while the Second Reading debate is still in progress.

Mr. Speaker, the hon. the Minister need not be concerned that we shall oppose the Second Reading of this Bill. However, having said that, I do not want to leave him under the impression that we are entirely happy or satisfied either with this piece of legislation or with his handling of trade practices matters. Let me say right at the outset that when the Trade Practices Bill became the Trade Practices Act in 1976, it was done after a considerable amount of work by a large number of people. When it passed through its final stages in this House it received the blessing, certainly, of those of us who are sitting in these benches.

We were full of hopes in respect of that piece of legislation. We considered it to be a tool for dealing with exploitation. Therefore, the question I have to put to the hon. the Minister today is: What has he actually done since this piece of legislation became law?

If I may remind him of some of the things that he said he thought he would have done, I want to do so now. He said, for example, when we dealt with trade practices, that there was a whole series of trade practices which he felt needed investigation. He listed these and I took him at his word because in a whole series of seminars in which I spoke I told the public that this was what the Minister intended doing. Now, because the hon. the Minister has submitted this Bill, it is not only his credibility that is at issue; it is mine, too, since I believed him when he told us all that in the House. I certainly cannot let the occasion go past and let the hon. the Minister get away with it in the sense that he can introduce another piece of amending legislation and not tell us what he has done. I must try to get from him a basis as to what he is now going to do about these things. Let me give some examples as to what the hon. the Minister has said. He said he was going to deal with multiple and multiple level selling; he was going to deal with the despatching through the post of goods which have not been ordered, with the request that they be returned within a specified time; he was going to deal with the offering of discounts to a purchaser if he should find more purchasers; he was going to deal with the activities of door-to-door salesmen, particularly the issue of a cooling-off period which was going to be introduced in another piece of legislation and so I can go on. With great regret I have to ask the hon. the Minister whether, while we look at this legislation, something is not really going to happen.

The hon. the Minister periodically tells us in this House that he believes in the free market system and that he believes in free enterprise. Yet, on the other hand, while he is prepared to assist those of us who believe that exploitation has to be fought, he introduces this type of legislation in order to assist in this battle. We also find—I have watched the Government Gazettes relatively carefully—a notice has appeared on one issue. That, however, is about as far as it has gone.

What is really going to happen? I think we need to state very clearly what the position is so that there should be no misunderstanding between us. South Africa is faced today not only with a political challenge, but it is also faced with an economic challenge. There are many people in South Africa who are being offered an alternative to the free enterprise system and who are being told that the free enterprise system is not seen as a system which gives opportunity, but as a system which is weighted against the ordinary man and in favour of the already rich. The vigour, the challenge and the benefits of the free enterprise system are not seen, but only the disparity of wealth, the exploitation and the ugliness are portrayed. If free enterprise were to survive—the hon. the Minister says he believes in free enterprise—then its protagonists should market it. The best marketing method will be for its champions to reform it from within and not under pressure. There are many people who criticize State interference. There are people who, at the slightest action by the State, raise the spectre that the free market mechanism is being interfered with. If, in fact, the system were to survive, then reforms would be necessary.

The most essential legislative action that has to be taken, and the most essential action that has to be taken by the Government, is that we have to restore the equality in bargaining power between the different levels of society. With this legislation the whole concept of trade practices acts as an instrument which can be used in order to restore the balance of bargaining power.

If one can avoid exploitation, one removes one of the weapons of those who seek to destroy the type of economic system that exists in South Africa. If the hon. the Minister is given the tools by the House, then he has to account to this House as to whether he has used those tools or not. I ask the hon. the Minister now: Is he prepared to see to it that the tools which have been given him in order to stop exploitation are used or is he prepared to sit back and to say that he now has a piece of legislation and there it is?

There are things that redound the hon. the Minister’s credit. I can give an example. There is a situation that was drawn to his attention in regard to the activities of some people in connection with the furniture trade in the Eastern Cape and I say to his credit that on having it pointed out to him, he has immediately taken action. I want to see more of that action because I believe that in the situation we are in in South Africa, the onslaught on the economic system and the danger to the security of South Africa as a result of some other economic system being held out as being very much better than this one, are as great as the political onslaught, and the responsibility for dealing with that onslaught lies in part, if not to a very substantial degree, with the hon. the Minister in this particular respect. When he contemplates the hon. the Minister of Defence watching other people off-loading things elsewhere, he should bear in mind that he has a responsibility in regard to the defence of South Africa as well, and that responsibility lies right here in putting a stop to exploitation.

Let me ask the hon. the Minister a very simple question. We are going to have a general sales tax in South Africa. His party has the majority and that party is going to impose that on us shortly. What is he doing now, and how is he using the mechanism of this piece of legislation, to avoid the exploitation—or certainly the endeavours at exploitation—which will come about as a result of the introduction of that sales tax? What is he going to do? There is already something in this Bill before us which, I believe, could be used, and that involves the power to deal with advertisements. There is a power to act quickly being introduced into this legislation. I therefore ask the hon. the Minister to tell us, when he replies to the debate, how he is going to use this piece of legislation to make sure that there is no exploitation in regard to the general sales tax when it is imposed. I think that that is an important matter.

Let me now deal with the specific provisions of the Bill. We have no quarrel with the concept of the appointment of subcommittees. It would, in fact, assist the workings of the committee. We have exactly the same attitude to the question of advisers. We shall therefore give that particular provision our support.

I now come to clause 3. I appreciate the fact that the hon. the Minister has indicated that he does not want to cast his net as wide as he has indicated in the Bill. In that respect he has, to some extent, taken the wind out of my sails as far as my criticism of this particular provision of the legislation is concerned. We have previously had confirmation of the fact that the hon. the Minister and his department will, in the practices they adopt, allow the normal rule to apply which was laid down in the case of Heimann Maasdorp and Barker v. the Secretary for Inland Revenue, and in fact no incriminating questions will be required to be answered. Subject to the proposed amendment, saying what the hon. the Minister has said it will say, we shall support this particular provision.

I now come to clause 4. I do not know whether I missed it, but I found very little said, in the hon. the Minister’s speech, about clause 4. This clause deals with the trade coupon position. What has happened until now, if I may put it in summary form, is that when a coupon has been related purely to cash or to something that has been manufactured by the person who issues the coupon, and the related provisions in regard to the supply of the coupon have applied, the issuing of the coupon has been considered legitimate. Now, however, even if it is legitimate, in terms of the provisions of the Act as it reads at the present moment, if the hon. the Minister is of the opinion—and it is his opinion that is now decisive and not the wording of any piece of legislation—that it is—

he may prohibit it. In other words, what may happen is that a businessman may be indulging in a perfectly legitimate practice, which is strictly in accordance with the Act and which relates to cash or to goods produced by him, but the hon. the Minister can nevertheless, at his discretion, put an end to that even though the person concerned has gone to considerable expense in order to market the particular item. I would have imagined that that would have necessitated some considerable explanation, on the part of the hon. the Minister, indicating why he wanted this power. Even though I was listening very carefully, however, I heard no such explanation. In my view businessmen are entitled to know what they can do and cannot do. If there is an undesirable practice in operation in regard to the issuing of coupons, a practice which involves cash or the presentation of products manufactured by the particular concern, that should be made known and legislation could then be introduced to deal with the matter. However, since people may spend a tremendous amount of money on a certain trade practice and may then lose that money even though they have acted quite legitimately, it does not appear to me to be the correct course of action.

While I am on the subject, I should like to raise with the hon. the Minister the question of a scheme I saw advertised the other day, a scheme in terms of which, instead of cash, the intention was to present defence bonds. What is the hon. the Minister’s attitude towards that? Would he in these circumstances regard defence bonds or bonus bonds as being equivalent to cash or would he regard that as being undesirable and ban it? Before commenting further on it, I should like to hear the hon. the Minister’s reaction to that particular matter.

I want to come next to the amendments to section 17 of the Act. Some of these amendments are, of course, consequential upon the fact that the Minister is now being given the power to deal with trade coupons which, although they are legitimate, he may in his discretion declare illegal. Then there are also certain other amendments to this section. There is one very interesting amendment which, again, the hon. the Minister did not deal with. On page 7, line 33, of the Bill one reads—

Whereas before the wording was “in the interests of such persons or consumers”, businesses are now included. It is important to know what motivation the hon. the Minister has for that. What is fascinating here is that the Select Committee debated the very issue of whether the word “businesses” should be included or not. The committee came to the conclusion that that should not be included. The Minister supported that. What is then the reason for this sudden change? This is in essence—there should be no misunderstanding about this—a piece of legislation aimed at protecting the consumer. Why then is the accent being laid elsewhere and why is this approach being adopted?

Then there are the amendments which provide that one may now also have provisional restrictions in respect of advertisements. I would imagine that that might well be useful in regard to sales tax, as I have already indicated. If that is the intention, we will certainly support it.

We have problems in regard to section 17 as a whole, as the hon. the Minister knows. We have problems in regard to the question of hearing and evidence. Those matters have been debated before and are not actually dealt with in the Bill and therefore we cannot vote against the relevant amendments because of those objections. I merely want to indicate that our objections in regard to the aspect of audi alteram partem, etc., have not fallen away: the position is simply that they are not before the House at this point in time.

Lastly there is clause 7—again the hon. the Minister did not deal with this.

Here a new principle is introduced, one which, again, we did debate in a different context in the Select Committee. It relates to the question whether there should be general rules applied to the public as a whole, to a trade as a whole or to specific areas; or whether one should be able to deal with individuals. Unless there are very good reasons to the contrary, our attitude is that one must not give specific individuals exemptions from the law. Laws must apply to everybody; in their treatment they must be universal. That is one of the fundamental concepts of the law. I do not see why there should be any differentiation and why provision should be made to “exempt any person”. According to this provision, a specific person can be exempted “from any of or all the provisions of this Act”. I find that very difficult to accept. The rule of Roman-Dutch law taught to the hon. the Minister and to me is that laws are applied generally to the community and that exceptions are not made for individuals. Again, I should like to hear from the hon. the Minister why this is introduced, because in our view it does not appear to be a sound principle. I have dealt with the objections to particular provisions but those are mainly committee objections. As far as this legislation is designed to stop exploitation of the consumer, it obviously will have our support at the Second Reading.

Mr. Speaker, my speech is going to be very brief. Firstly, from this side of the House I want to express our pleasure and satisfaction at the fact that the hon. member for Yeoville supports this legislation on behalf of the Official Opposition. This is legislation which was discussed very thoroughly in this House two years ago and it is also legislation which was referred to a Select Committee. The legislation was accepted unanimously in this House—if I may use a stereotyped expression—without any opposition from the then Official Opposition.

However, the hon. member for Yeoville alleges that nothing has happened in respect of this legislation. It is not in my power to give the House an account of what allegedly happened in the past. The only statement I want to make is that according to the arguments which were used two years ago, this type of legislation, according to the arguments which were used two years ago, is the type of legislation which is not established basically to protect the consumer alone. This legislation is there to protect both the consumer as well as the person who provides the service to the consumer, and to lay down certain norms within which he can operate.

As regards the application of the legislation in practice, I want to say that the issue is not only prosecution. One of the primary objectives of the application of such legislation, is educational in nature. One does not only want to prosecute, but in the process of prosecution one wants to teach as well, because one wants to educate the general public as well as the commercial world so that they know what is expected of them and what procedure they should adopt when this legislation applies to them.

From our side we are glad to support the measures which the hon. the Minister wants to introduce, especially as regards the subcommittees for investigating specialist problems arising from this legislation. We should also very much like to support the idea that the information which the Secretary of the department needs to apply the legislation, should not necessarily come from the commercial world alone, but that he should also obtain it from the consumer. Therefore we shall also support those provisions.

The hon. member for Yeoville mentioned two other objections. He pointed out the possibility that the hon. the Minister may grant certain exemptions as regards certain persons and certain assets. It is our humble opinion that legislation should be elastic if one wants to apply it well. I think the measures which are being introduced— especially as regards clause 4 as well as the very last clause, clause 7—are aimed at building more flexibility into the legislation and in this respect we are also very pleased to support this principle.

We on this side of the House therefore want to support the legislation very enthusiastically.

Mr. Speaker, once again this afternoon we have been treated to the enjoyable spectacle of the Official Opposition siding with the Government. I want to tell them immediately that they need not have any fears, because we shall be on the same side as themselves and the hon. the Minister in supporting this legislation.

You have seen the light!

I think they are relieved now they know there is not going to be any division, because I think they were a little bit uncertain as to whether they were going to get the hon. member for Yeoville back here once he had sat in the ministerial bench over there.

As far as the Bill is concerned the hon. member for Yeoville ranged far and wide in terms of the origins of the Bill and what it was all about. I wish to limit myself purely to the actual provisions and the clauses of the Bill. With regard to clause 3 on page 5 of the Bill, the hon. the Minister said that he was going to move an amendment during the Committee Stage. It will be very interesting to see what this amendment is all about, because 3 is one of the provisions which we were not particularly happy about as it seemed to us to be incredibly wide. In fact, the fine for breach of the provisions of this clause amounted to R2 000. We therefore felt that the provisions of this clause were particularly wide. We are, of course, fully in favour of the committee having the power to co-opt, because in this way they will be able to operate more efficiently, and we support the provision 100%. The rest of the provisions are mainly tidying-up provisions. I thought that we would experience some problems in regard to clause 4 on page 5 of the Bill, but further on we see that the Minister has certain powers subject to the provisions of section 16 and, according to that section, he can only do this on the recommendation of the committee. This is, to our mind, the way it should be. For the rest, the clauses are mainly tidying up provisions, until we come to clause 7 on page 9 of the Bill. In this instance we believe that the hon. the Minister is taking extremely wide powers unto himself. We would like to probe this particular clause and ask the hon. the Minister to perhaps give us more information about what he proposes to do here. The proposed new section 21A as inserted by clause 7 of this Bill reads as follows—

This is a very wide power that the hon. the Minister will be getting, and I must confess that I would have preferred to see that instead of doing this after consultation with the committee, he perhaps could have done it on the recommendation of the committee. I think there is an important difference there in that if he does it on their recommendation, certainly a number of minds will be at one on the particular issue. I would like the hon. the Minister to react to this when he replies to the debate. For the rest we support the Bill.

Mr. Speaker, I am rising to thank hon. members once again for their support of the legislation. Of course, this type of legislation is the kind which one would rather discuss in detail during the Committee Stage because it is technical legislation.

Naturally the contribution which the hon. member for Yeoville made to the debate forces me to react to certain aspects which he raised. I do not think we should have any doubt about what we in this country want to achieve in regards to our economic system. We are often blamed from both sides for the standpoints which we allegedly hold in this regard. On the one hand we are often accused of not actually being real followers or supporters of a free enterprise system. Often, too, we are accused of intervening in the sphere of the private sector on too many levels in too many cases. On the other hand, we are also accused of not doing so to a sufficient extent. Over the years it has been my experience that when one brings legislation of this kind to the House, or legislation which authorizes one to deal with specifie practices or malpractices, we are accused of intervening in the system. On the other hand, we are also accused of not taking sufficient action to restrain the people who exploit others within the scope of the system.

We must have no doubt about the fact that there is always a sensitive balance when specific action by the State is in fact more of a hinderance than serving a useful purpose. I want to repeat my standpoint: I believe that the development which has taken place in this country, came about as a result of the system which we support. I want to add that if we in South Africa want to have further development, there is only one foundation on which it can take place, viz. that of a free economy with the profit motive as the incentive for people to develop and to grow. I think it is a credit to South Africa and the businessmen of our country that they have been able to make a contribution over the years to the economic development here which is comparable with the best in any other country in the world. I want to emphasize at once that since we want to retain the system, we must of course protect our people against themselves in the first place and we must also protect those people who do not understand the actual concept. Of course there are people who exploit others. In fact, in a recent conversation with a new foundation I said that if we could succeed in eliminating the small number of exceptions who exploit other people, usually the uninformed, there would be less tension between the population groups in South Africa. In this specific connection I endorse the standpoint of the hon. member for Yeoville. However, he will also understand that there must be a meaningful combination of the various objectives which we want to achieve in this specific regard.

The hon. member said that I owe the House an explanation about what I did with the legislation which was passed in 1976 as an instrument of protection. He added that he had not yet seen anything of this protection. With respect I want to tell the hon. member that he did not read very carefully, because one of the most important matters which I said we must investigate—the hon. member mentioned it—was the question of multi-level marketing. If the hon. member had taken another look, he would have discovered that we gave attention to that.

The hon. member referred to the question of complaints about furniture dealers. I want to tell him that my department and myself have been negotiating over a period of several months with the Furniture Manufacturers and Dealers Association on the question of certain codes of conduct. However, this is not the only facet or component of trade and industry with which we are continually holding discussions and getting some actions accepted. I want to emphasize one thing—and I make no apology for doing so—and this is that legislation of this nature must be used as a last resort and not as the first. Of course, I think it is wrong to the damn trade and industry sectors of South Africa in general terms as a result of the behaviour of the small minorities which we are dealing with. I hope I have the general support of the House in this specific connection.

The hon. member went on to ask me what my standpoint is going to be on the question of the general sales tax which will come into effect as from 1 July. I think the hon. member is aware of the fact that no one may, without permission add this tax to merchandise on the market which is subject to price control. In other words, there are specific means at our disposal for preventing this. On the other hand, the hon. member will also remember that the hon. the Minister of Finance has already stated the standpoint that his tax may not necessarily be added to the prices of commodities. We shall use our inspectors to ensure that the public will not be exploited as a result of this. Of course, I cannot give the hon. member an indication of the methods or the mechanisms at this stage. The hon. member knows just as well as I do that I cannot do this now.

The hon. member also referred to clause 3 …

Mr. Speaker, may I ask the hon. the Minister whether he intends to have any regulations to prescribe the form of advertisement in so far as it pertains to the general sales tax?

Mr. Speaker, my reply to that question is that I have no specific form in mind at the moment, but in terms of the Bill before us I have the power to prescribe it and for that I shall consult with the Advisory Committee. I think it is the obvious road to travel when one has to do something of this nature. I have indicated to the hon. member that I am prepared to limit the scope of clause 3. I have given hon. members a copy of the proposed amendment, which I think is acceptable to them. I shall therefore leave it at that.

*I should like to refer to clause 6 and to the question of the trade coupon. I want to explain that the motivation for the amendment of section 11 of the principal Act by means of clause 4, is to make provision, on the proposed basis, enabling the Trade Practices Advisory Committee to initiate an inquiry, in certain cases where it may be deemed necessary, into the giving of documents referred to in section 10 and 11 of the principal Act—the two sections must be read together—because it has already become clear from the functions of the committee that the granting of such powers to the committee is an essential requirement for the effective application of the Act. I want to explain what circumstances led to the committee recommending to me that we should make the amendments to the specific clause. Hon. members are aware of the fact that section 11 of the principal Act provides for exceptions to the prohibitions of section 10, which deal with giving a document which includes the issuing of trade stamps with the provision or rendering of goods and services. In practice it has become clear that there is a great deal of uncertainty about the interpretation of section 11 of the principal Act. In this specific regard I want to refer to an example. This uncertainty is reflected in the Burlington Hosiery Mills, S.A. (Limited) v. Arwa (Limited) case. As part of its promotion campaign, Arwa sold some silk stockings together with a coupon. This coupon entitled the bearer to certain privileges in respect of hotel accommodation. However, I do not think that they needed their silk stockings during their stay. Burlington Hosiery’s request that Arwa should cease the above-mentioned practice, succeeded, but in turn Arwa advised its legal adviser to appeal against the decision. The appeal has since been dropped and a question mark of uncertainty hangs over these circumstances now. This particular case, to which I have just referred, as well as various similar cases, were referred to the Trade Practices Advisory Committee, but as the Act reads at present—the hon. member is aware of this— this committee is not empowered to investigate these matters for technical reasons. The technical reasons are that sections 10 and 11 of the Act contain a specific prohibition with exceptions to that prohibition. The specific prohibition can therefore not be amended in terms of the general authorizing provisions of the Act. The proposed amendment will now state the position clearly and we shall be able to do so now. I hope it is clear to the hon. member why we are amending that section.

My department and the Trade Practices Advisory Committee have received quite a number of objections to the issuing of trade stamps, in recent times in particular. Hon. members are aware of this new phenomenon. The problem is that issuing trade stamps was prohibited by the Trade Coupon Act, but allowed in terms of the Trade Practices Act. The committee considers it essential for this practice to be investigated urgently in order to determine whether the issuing of trade stamps is in fact in the public interest. The proposed amendments to the Act make the necessary provision for such investigation by the committee. It is an authorization which the committee does not have at present.

The difference between the proposed amendment of section 11 of the Act and the summary prohibition of certain practices as described in section 10 of the Act—at the time when the Act was being considered, it gave rise to the exceptions in section 11—is that the entire democratic procedure as described in section 16 must now be followed in order to have any practice prohibited. The decision about imposing a prohibition no longer rests with the Minister. The Minister will act on the recommendation of the Trade Practices Advisory Committee. I may just mention for your information that the committee experiences similar problems in regard to its authority to investigate advertisements, and consequently we envisage dealing with this specific problem by means of the proposed amendment of section 17 of the Act.

The hon. member for Yeoville went on to ask why we introduced the words “or businesses” in clause 6, which amends section 17, while they debated the entire principle of businesses on the Select Committee. However, circumstances may arise where undesirable practices may arise which are detrimental to businesses, too, and which may consequently have a detrimental effect on the interests of consumers. That is why the section is being amplified in this specific connection.

After that the hon. member, as well as the hon. member for East London North, referred to clause 7, which inserts a new section 21A into the principal Act. It pertains to the question of exemption from provisions of the Act. This recommendation comes from the Trade Practices Advisory Committee which alleges that they need the specific section in order to apply the Act effectively. I have no objection to the idea that an amendment may be made and that the process may take place vice versa, in other words, that the Trade Practices Advisory Committee comes to me with this specific problem. I am pleased to consider it. Hon. members must please give me an opportunity to contact the committee, because they are the people who deal with the practical application of the Act.

I think I have replied to the general arguments of hon. members and I want to thank the hon. member for Wonderboom for his contribution.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 3:

Mr. Chairman, I move the following amendment—

Mr. Chairman, this amendment deals with the problem which we had in regard to this matter and we shall support both the amendment and the clause.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 4:

Mr. Chairman, I listened attentively to the hon. the Minister’s explanation as to why this amendment was needed. I have one difficulty which I should like to put to the hon. the Minister and I hope that he can deal with it. If he is correct that the main purpose of this amendment is to create certainty as opposed to uncertainty then what should be the procedures that persons who intend to indulge in this kind of activity should be permitted to come to the committee right at the outset and obtain a ruling as to whether this is valid or not. Then, what will in fact be done, is that the committee will be used instead of the courts, because if one has a law in terms of which it is clear that one could either have cash or something which one produces oneself, then, if somebody wants to argue about what that means, the normal procedure to follow is the courts. Let us take, for example, the stocking case to which the hon. the Minister has referred. If somebody wants to indulge in an activity which is doubtful in so far as the interpretation of the law is concerned, he must take the consequences of the possibility of litigation. However, what the hon. the Minister is saying now, is that he does not want the courts to have that position, because then he has uncertainty. The hon. the Minister gave the example of the case which was decided and which subsequently went on appeal. The appeal was abandoned. Therefore there is uncertainty.

Now, there is no uncertainty about the law. It is merely that people are uncertain as to what the law is. The law is certain. If somebody then decides not to go to the Appellate Division, that is his own problem. I see two problems in relation to clause 4. The first one is that it does not provide for machinery in terms of which a man who wants to indulge in a particular scheme, which he thinks is legal, can go to the committee and state what he is proposing to do, asking the committee whether he is entitled to do it. The second uncertainty is that what he is doing is to substitute, or seeking to substitute, the committee, and the Minister that follows the committee, for the courts. That, I think, is undesirable.

The way I read this new amendment does not convey to me that one is creating a situation in which one is removing uncertainty. To me it means that uncertainty is created because what is said is that even though it is perfectly legitimate to give a trade coupon for cash, if the committee feels and if the hon. the Minister feels, they can say it is still invalid. Now, if anything creates uncertainty, that certainly creates it. That is why, unless there is some more reasonable explanation forthcoming, I regret that we in these benches cannot support this particular provision.

Mr. Chairman, I should just like to explain that the clause to which the hon. member for Yeoville has just referred— clause 4—is intended to amend section 11 of the principal Act in two respects. In clause 4(a) it is proposed that the wording which precedes paragraph (a) of section 11 of the Act be replaced by an amended wording. The proposed amendment to the wording involves the insertion of the proviso “Subject to the provisions of subsection (2)” and arises from the consequential addition to section 11 of a new subsection (2) by clause 4(b) of the Bill. Let us take a brief look at clause 4(b). It proposes to add a new subsection (2) to section 11 of the principal Act. In my reply to the Second Reading debate I explained to the hon. member what considerations applied with regard to the amendment of section 11 of the principal Act. The proposed new section 11(2) will give the Minister the authority to prohibit the use of trade coupons or impose conditions in this regard on the recommendation of the advisory committee, by notice in the Gazette.

At the moment, the use of trade coupons is prohibited by section 10 of the Act—subject to the exceptions mentioned in section 11 of the principal Act. That I have explained to the hon. member. However, the hon. member is suggesting that I am now placing the advisory committee, and by implication myself, in the place of the courts by means of this provision. The whole principle of the legislation surely has certain meanings. These are to determine whether undesirable practices are taking place. The evaluation of what is undesirable or not is not entrusted to the courts by the legislation—i.e. the principal Act and the amendments. On the contrary. In terms of the Act there is a Trade Practices Committee which has to advise on what is desirable and what is undesirable. Therefore, the principle contained in the principal Act is now being made applicable to trade coupons and advertisements as well. With all respect, I cannot understand the hon. member’s point of view. He suggests that in the light of the amendment I am trying to place myself and the Trade Practices Committee in a position which would normally be occupied by the courts. I quoted the relevant case to argue about the legal uncertainty which exists.

We now come to the question to whose discretion it should be left to decide what is desirable and what is undesirable with regard to trade coupons and advertisements. I believe that in terms of the general standpoint which he adopted when he endorsed the principles of the legislation during the Second Reading debate, the hon. member will surely not object to the fact that I am asking the legislation to be amended with regard to this new phenomenon so that the Trade Practices Committee can also act in this regard. I pointed out, inter alia—the hon. member will remember—the problem we now have with the question of the issue of stamps. I received an inquiry in this regard to which I replied by saying that after the amendments have come into operation—that is if they are accepted by the Committee, and afterwards by the House—the Trade Practices Committee will be able to make a recommendation to me in this regard if they regard it as undesirable. Then I shall act. I am asking the hon. member to support the amendment in these circumstances.

Mr. Chairman, I regret that the hon. the Minister has not dealt with all the problems that I have raised. The first problem with which he has not dealt is: What is the situation of a man who intends embarking upon a scheme which in fact is a valid scheme in terms of section 11(c)(i), (e) or (f); in other words, it is a cash scheme, for example? Such a man will not know, once this Bill has been passed, whether after he has embarked upon such a scheme, the committee will not perhaps recommend that it ought to be prohibited. He also does not know whether the hon. the Minister will perhaps support such a recommendation. How can such a man, before he incurs the expenditure, know whether it is going to be valid or not? What he can do at the moment is that he can look at the law. He can decide that in terms of the law it is valid. He can then get legal advice and be prepared to fight it through the courts in order to support himself. At the moment he is in the realms of uncertainty and that is why I ask the hon. the Minister how such a man can deal with the situation. The logical way, I think, with respect, it can be dealt with is that there should be a provision in terms of which a man who intends embarking upon a scheme is entitled to submit to the committee particulars of the scheme. The committee should then submit a recommendation to the Minister and, should he agree to it, the scheme would be a valid one. I think this is something the hon. the Minister ought to consider because it will enable businessmen to plan their campaigns without this uncertainty creeping into it. That to my mind, however, much the policy may change, seems to be an essential corollary to what is now being done.

Mr. Chairman, I should like to say at once—I shall dwell on this briefly—that there is a prohibition in terms of section 10 which is qualified by the provisions of section 11 of the principal Act. The hon. member is submitting quite correctly that one can reasonably presume that if one complies with the proviso of section 11, one is safe with the trade coupon. I think that is the argument the hon. member is submitting to me. The whole idea behind the legislation is that people are free to trade as they wish. The methods they employ to promote their interests are, in the first place, something about which they have to decide for themselves. Because abuses do arise from time to time, however, the legislation exists to let a different body judge whether a particular practice is desirable or undesirable. I sympathize with the hon. member’s problem. I am prepared to look at it, but I have another practical problem. My practical problem is that if I allow the Trade Practices Advisory Committee to become mainly a committee to which people who want to indulge in a particular trade practice have to refer for approval, disapproval or amendment, I will not be able to work with a temporary committee. At this stage, however, I shall merely say that I will consider the particular aspect to which the hon. member referred and that I shall see whether there is a method to solve the problem which he identified.

Clause agreed to (Official Opposition dissenting).

Clause 6:

Mr. Chairman, since clause 4 has been passed, I do not think there is any point in arguing the consequential amendments and I must therefore just abide by the decision of the House. I do not therefore intend to argue the issue although our view remains as it is.

I now want to come, however, to the insertion of the words “or businesses”. If the hon. the Minister had it in mind that one would here be considering the interests of such persons and consumers and businesses, there would be a collective situation. The present position, however, makes it possible to consider either the interests of the persons concerned or of consumers or of businesses. Let us look at what this applies to. This firstly applies to a prohibition on the giving of benefits in respect of the leasing or sale of goods. That is the aspect we have just debated. To my mind, however, the issue that is going to motivate the committee, or should motivate the committee, is that involving the interests of the consumer, not the people who are trying to issue the trade coupons. So on the assumption that what we have just passed is valid, it is obviously only the consumers’ interests which are affected.

The second relates to a trade practice. Let us look at the main provisions of the legislation and at the position in respect of the prohibition of trade practices. I have always believed, and the hon. the Minister has always believed, that we are dealing here with a piece of legislation that is intended to be consumer protective. In other words, it is not intended to be business protective. The hon. the Minister is nodding his head, so we are agreed on that.

Thirdly there are the relations between trade practices, involving relations between businesses and persons engaged in sales. Here I am referring, for example, to the multilevel selling situation or the rendering or provision of a service. So all of those are consumer matters. Reference is made, in fact, to “the relations between businesses and consumers”. I do not believe, however, that this is a piece of legislation for the protection of businesses, and the hon. the Minister agrees. It is obviously not so. So in this particular case it seems to me that it is illogical to include the words “or businesses” in this particular provision. I therefore ask the hon. the Minister whether he would not reconsider the matter so that we can make it quite clear that this legislation is intended to protect consumers. It is consumer protection legislation. If the hon. the Minister has a valid reason why he wants “or businesses” in, I should, with respect, like to hear it because I have not yet heard it.

Mr. Chairman, I do not think that the hon. member for Yeoville and I disagree. Let us just see how clause 6 amends section 17. I want to refer specifically to the proposed new subsection (1)(b)(ii)(bb), because that is where the hon. member’s problem arises. That deals with a trade practice which may injure “the relations between businesses and consumers” directly or indirectly. The operative part of this provision makes it quite clear that the Secretary may, on the recommendation of the committee and for a period not exceeding six months, by notice in the Gazette take certain steps in certain circumstances. The functional and decisive part is that a certain trade practice may injure “the relations between businesses and consumers” directly or indirectly. That is the principle, and he and I both agree with that. Thereupon a set of circumstances is determined which may occur and which may injure those relations. The provision then reads—

That specifically refers to the trade practice which “may directly or indirectly injure the relations between businesses and consumers”. That is what it says here, and that is why I do not have a problem with it. However, I should like to say to the hon. member once more that I am prepared to see whether the hon. member’s supposition is right with regard to what it says there and, if necessary, to amend it in the Other Place. I shall talk to him about this again.

Mr. Chairman, I have a problem in deciding whether to move my amendment or to rely upon the hon. the Minister’s remark that he will deal with this before he takes it to the Other Place.

You can rely on me.

I think the practice is that, if a Minister gives one such an undertaking, it is only right that one should accept that, and in that spirit I do so. I shall give the hon. the Minister the amendment I had in mind and not move it formally.

Mr. Chairman, I just want to give the hon. member the undertaking that if he gives me his amendment, I shall consider it and if I cannot accept it, I shall let him know.

Clause agreed to.

Clause 7:

Mr. Chairman, in regard to this clause, again, the hon. the Minister said he would seek some advice and consult on this matter. I take it that the hon. the Minister will do that before he takes the Bill to the Other Place. We shall rely on his undertaking.

Mr. Chairman, I can give the hon. member that undertaking. I just want to explain that the exemptions to which this provision refers were requested by the Trade Practices Advisory Committee. They are of the opinion that a particular prohibition in a particular set of circumstances may prejudice a specific business although the business concerned has no part in the undesirable practice. However, I shall look at this again and I shall contact him again in this regard.

Clause agreed to.

House Resumed:

Bill reported with an amendment.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, there is one last point I wish to make. The hon. the Minister mentioned the example of multilevel selling. As I have indicated, he also dealt with furniture traders in the eastern Cape. Besides that, he has also had other discussions. However, the important thing in regard to the issue of exploitation is that the Minister must be seen to be taking steps; he must be seen to be restoring the same level of bargaining power in the community. Private enterprise can only survive if equality in bargaining power exists in the community. That is why the hon. the Minister must be seen to be acting and that is why we are pleased that a piece of legislation, which is consumer-protection legislation, can go through the House with the support of all parties.

Mr. Speaker, I should like to refer briefly to the fact that the hon. member for Yeoville has referred to the Port Elizabeth furniture dealers for the second time in this particular debate. I should like to add my congratulations to the hon. the Minister that he is taking action to investigate the so-called malpractices which have been occurring in that area. However, I should also like to make the point that I do not believe that Port Elizabeth is the only place where these things are happening. If the situation were to be investigated in Port Elizabeth only, one would, perhaps, view the matter from a very narrow angle and it might also give people the impression that Port Elizabeth was the only place where these malpractices occurred. I think it would be a good idea if the hon. the Minister would perhaps widen the scope of this inquiry a little so that it is not just Port Elizabeth that comes into disfavour as far as malpractices are concerned. [Interjections.]

Mr. Speaker, I am not sure whether the hon. member for East London North is requesting that I extend the investigation to East London. [Interjections.]

*Mr. Speaker, I just want to point out that this is not the only legislation directed at the protection of the consumer. The hon. member for Yeoville referred, amongst other things, to the whole question of door-to-door sales. However, the hon. member is aware that there is another Bill which was referred to a Select Committee which was later converted to a commission. The Bill also applies to the whole question of sales, but more specifically the question of credit sales. That is legislation which we will consider at a later stage. It would appear that we are creating a set of laws. This is legislation which will consist of the various laws aimed at different circumstances. We will try and make this legislation as effective as possible by adapting the relevant laws from time to time.

Question agreed to.

Bill read a Third Time.

Mr. Chairman, I have already indicated, during the Second Reading debate, that I was going to move certain amendments. To acquaint you, Sir, and hon. members with what these amendments actually entail, I must point out that they are aimed at one thing only and that is to bring about a better balance in the proposed Church Square Committee, especially with regard to the predominant influence and authority of the Department of Public Works in this Church Square Committee. The amendment appearing in my name on the Order Paper is aimed at having the chairman of this Church Square Committee elected by members of the committee, instead of being appointed by the hon. the Minister of Public Works. That is the essence of the matter. Hon. members will observe that the Church Square Committee, as it is to be constituted in terms of the amendment effected in the Other Place, and in terms of the Bill and the proposals contained therein, will consist of 11 members of whom six will be Public Servants, while five will not be Public Servants. The latter members will be a representative of the city council of Pretoria, two architects and two experts appointed by the hon. the Minister.

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

Mr. Chairman, when the Committee adjourned for supper, I was explaining our motivation for the proposed amendment pertaining to the constitution of the Church Square Committee. I do not intend to take up much of time of the Committee, but I just want to inform hon. members on that side that the feeling in Pretoria regarding this matter is very strongly and one-sidely opposed to certain plans proposed by the authorities. I do not want to go into the pros and cons of any of the plans, for this in my opinion, is not the right place to discuss them. I think the Church Square Committee is the ultimate place where these matters should be discussed on their merits and I intend to resign myself to that. I want the hon. the Minister to consider that with six Public Servants in a committee of 11—and therefore the predominant number—it seems unfair that the chairman should also be appointed by the hon. the Minister and that he should also be an official. The Public Servants are consequently in a majority on the committee, the chairman will also be a Public Servant and then the Cabinet would still have the final say on the recommendations of the Church Square Committee. The only point at issue in this regard is that the hon. the Minister and this committee if possible, should see to it, that a committee is constituted which will enjoy the trust of the public of Pretoria so that if it perhaps takes an unpopular decision, that would be accepted as coming from an impartial committee of experts. That is the whole motivation for the proposed amendments.

If the hon. the Minister finds it possible to accept that amendment, together with the amendment already accepted in the Other Place, it will greatly contribute to restoring the confidence of public opinion in Pretoria in the committee on Church Square. I do not know whether the hon. the Minister is conscious of the fact that one day 6 000 people on Church Square alone signed a petition in protest against certain plans—I do not want to define the plans—which were in the air at that time. In the 30 years that I have lived in Pretoria, I cannot think of any time when the public of Pretoria showed so much interest and took such a definite stand as they did on this issue. Therefore I thought it my duty—and this party supports me in this matter—to propose an amendment to the clause. [Interjections.] I therefore move the amendments printed in my name on the Order Paper, as follows—

1. (1) On page 3, in line 36, to omit “who shall act as chairman”;
2. (2) on page 5, in lines 26 to 33, to omit subsection (3) and to substitute:
3. (3) The members of the committee shall elect from among their number a chairman and a deputy chairman.

Mr. Chairman, as I have already stated in my reply to the Second Reading debate, I am not prepared to accept the amendment of the hon. member for Johannesburg North. The hon. member himself conceded that I have displayed an accommodating spirit by proposing an amendment in the Other Place to the effect that while I was prepared, in the legislation as originally published, to appoint one member from outside, I am now prepared to appoint two members from outside. It is true that there are two members from the Department of Public Works serving on the Church Square committee. The member whom I appoint as chairman, is there because of his administrative competence and the other one whom I appoint is there because of his professional competence. What is more: The Chairman of the committee has certain administrative duties to fulfil and it is simply inconceivable that he would be able to fulfil these duties in collaboration with the Department of Public Works if he himself is not attached to the department. I do not intend to take up too much of the time of the Committee and I want to conclude by saying that under the circumstances I regret that I am unable to accept the amendment.

Amendment (1) negatived and amendment (2) dropped (Official Opposition dissenting).

Clause agreed to.

House Resumed:

Bill reported without amendment.

Bill read a Third Time.

Mr. Speaker, I move—

I thought it proper to suggest after the First Reading of the Water Amendment Bill that the Bill be referred to a Select Committee in order to clear up the proposed amendments to the Water Act, No. 54 of 1956, and the principles involved therein. Hon. members are also referred to the Explanatory Memorandum I tabled, in which the reasons for the amendments are set out.

Hon. members will notice that the Select Committee recommended certain amendments with which I concur. I think, however, that the possible deletion of subsections 63(9) and (10) will have to be reconsidered in the future. In the nature of the case it is clearly unnecessary for me to deal with the proposed amendments as a whole in this House, since explanations are contained in the Explanatory Memorandum.

However, I think it is desirable to bring a few matters to the attention of hon. members. As far as the repeal of section 23A as proposed in clause 2 is concerned, hon. members will notice that it has been further amended, i.e. by the repeal of section 23A at a date to be determined by the State President in the Government Gazette. The reason for this is that regulations which are to be made in terms of the Health Act of 1977 were only published in the Gazette in draft form on 27 January 1978. Comments were invited from interested parties. The regulations have not come into effect yet.

To exercise control and to prevent water pollution as a result of the operation of animal feeding systems it is necessary to retain this clause temporarily in the Water Act. Fortunately, since the insertion of section 23 A in the Act in 1971 it has never been necessary for me to implement the provisions thereof and the Department of Health is in any case, better equipped to combat this type of pollution. However, there will still be continuous liaison between my department and the Department of Health in this connection.

As regards the amendment of section 26 as proposed in clause 3 I want to give hon. members the assurance that notwithstanding the possible exemption as envisaged in the amendment, the aims of the provisions from sections 21 to 24 inclusive will be implemented. In South Africa we cannot afford to pollute such a scarce natural resource as water and it will be the constant aim of my department and I to prevent it. In cases where it does happen for some reason or other, action will be taken without fear or favour. Moreover I want to issue a warning at this stage. Should the proposed amendment be accepted by Parliament, it should not be regarded as an invitation that I shall grant exemption without further ado as regards the requirements laid down in the regulations to prevent pollution. It has to be proved beyond question by an organization that requests it, for instance a mine, that if the requirements should be adhered to strictly, it would for instance require such a large capital outlay that it would be impossible for it to continue its activities or, for example, that due to its particular position it is not possible in practice to adhere strictly to the requirements. Of course the provisions of the Act to which I have referred, have still to be complied with.

I also want to refer the House briefly to the proposed amendment of section 63. The Select Committee that considered the amendments, also duly considered this. I fully agree that the creation of uneconomical farming units should be restricted, but I think that the provisions of the Subdivision of Agricultural Land Act, 1970, which is being administered by my hon. colleague, the Minister of Agriculture, establishes more direct control over the subdivision of agricultural land, while in terms of section 63(8) which we now seek to repeal, indirect control only is being exercised. My department has made a number of attempts to publicize the provisions of this particular section and also had a circular sent, by way of the Law Society, to all lawyers. In spite of this, cases still occur where people buy or sell existing properties in good faith and consequently find that they have lost all water rights in terms of the Act. This happens because there is no restriction of the registration of the transaction in the Deeds Office.

To illustrate the position, I can point out the hypothetical case of someone who owns three separate pieces of land, each listed as 8 ha, and then sells one. There is no prohibition of the transfer at the Deeds Office and the Department of Water Affairs may only get to hear about this after the completion of the transaction. Then the two remaining pieces with a total listing of 16 ha, as well as the sold piece with a listing of 8 ha, are then listed, in any case, as less than 17,2 ha. In terms of the Act they then have to be excluded from the schedule, which makes them dry land with a value of, for example, R200 per ha; i.e. R4 800 as compared with a value, before listing, of, say, R2 000 per ha irrigated land, or a total of R48 000. The seller as well as the purchaser are therefore penalised with a depreciation of R43 000, which is totally untenable. By the time the Department of Water Affairs gets to hear about the transaction, it is often financially impossible for the seller or purchaser to cancel the transaction and re-establish the former position.

†I wish to refer hon. members to the amendment of section 79 as proposed in clause 13 and would like to stress the fact that I am in favour of land being sold by an irrigation board by public auction. However, in certain cases it is justified that land be sold out of hand. I would like to assure hon. members that permission as envisaged in the proposed amendment will not be granted without careful consideration and with a view to the exceptional circumstances of the case. I am aware that members of the Select Committee were of the opinion that in cases where approval is granted to an irrigation board for the sale of land other than by public auction, particulars of such sale should be reported to Parliament.

I would, however, like to point out that an irrigation board is a body corporate capable of suing and being sued in its corporate name and that in cases of other similar bodies it is not required.

The amendment of section 169A as proposed in clause 18 is with a view to making the existing legislation more efficient. Hon. members will recall that this provision was incorporated in the Water Act in 1975. The principle to the mandatory insertion of a line on the layout plan of a new township or extension thereof, indicating the likelihood of a maximum flood level within certain periods of time, was decided upon after careful consideration by the then Select Committee which considered the amendment Bill. The proposed amendment now before the House contains no new principle. I want to make it clear to hon. members that the provisions of this section are solely aimed at drawing the attention of an authority responsible for the approval of the establishment or extension of townships to the fact that part thereof is subject to possible inundation. It should be obvious that the Department of Water Affairs can accept no responsibility for the insertion of such lines on layout plans and that it is exclusively the responsibility of the township developers. The department has particulars on flood frequencies which it will make available on request to assist township developers with the insertion of the flood lines.

*Sir, I have tried to elucidate the important aspects of the legislation briefly.

Mr. Speaker, as the hon. the Minister has told us, this Bill has already been to a Select Committee. It is an omnibus Bill and contains a number of provisions which relate to the Water Act, No. 54 of 1956. I must say that sending it to a Select Committee was, in a non-political matter of this nature, the right thing to do. In the Select Committee we managed to thrash out any differences there might have been and a Bill was returned to this House which is largely an agreed measure. Some of us had reservations about certain aspects of the Bill, but as it has been returned to the House with various amendments, I think it is a Bill worthy of the support of all sections of this House.

As the hon. the Minister has said, clause 2 gives the Department of Health certain responsibilities in relation to pollution of private and public water under certain circumstances. I think one should just stress at this stage—this is something which we did mention in the Select Committee—that this in no way absolves the department from their responsibility when it comes to water pollution. I am sure that the hon. the Minister is aware of this responsibility and should therefore have no problems. He did refer in his introductory speech to clause 3, which enables the Minister under certain circumstances, to absolve people of any responsibility they might have under the Water Act if he is of the opinion that such compliance will be unduly onerous. Again, I should like to stress to the hon. the Minister that we believe that these powers should only be used in exceptional circumstances. We believe that the law should stand for everyone. It was with a certain reluctance that I accepted this clause in the Select Committee, but I was finally persuaded that there were circumstances that would make it necessary for this particular concession to be made and for the Minister to step in. I think that these circumstances are very rare indeed, and I should like to stress to the hon. the Minister that in the main we hope that he will insist on compliance with every aspect, and only in circumstances which are extremely onerous would we suggest that we make use of this provision.

In this Bill we also deal with other matters, for example the constitution of water courts and flood levels. We are all aware of the somewhat unusual floods we have had in recent years. I believe there is a general feeling that the public must be protected. When township land is sold it should not be land which could be flooded. I believe that the new clause will to some extent protect the public from this sort of thing. At least, the public will be aware of what they are buying if they buy land that could be inundated by floodwaters.

One matter with which I am not entirely happy concerns clause 13. This is the clause which deals with the right of the Minister to give approval for the selling of irrigation board assets, not by public auction, if he considers it necessary. I believe it is a principle of our public life that if Government property is sold—in this case it is somewhat less than Government property because these irrigation boards are corporate bodies—and if any assets belonging to them are sold it should be sold by public auction. We do not believe that there are exceptional circumstances. We think that, obviously, on occasions it might cause slight hardship. However, we believe it is stretching the powers of the Minister a little too far by giving him the right to rule that property should be sold not by public auction. Again, I would like to hear the hon. the Minister’s comment on this. He did say that this would certainly not be granted except in exceptional circumstances. He also disagreed with the contention that had been expressed in the Select Committee that perhaps it might be necessary to report such exceptional circumstances to Parliament.

The hon. the Minister said that an irrigation board was a body corporate, and as such it should not be necessary for it to report to Parliament about any of its activities at all. I am not in total agreement with that. I do believe that it would not be a great onus on the department or on the irrigation board concerned to submit a report on the matter. The Minister, in making his ruling, could well, after the circumstance, report to Parliament that he had done so. This would give Parliament the right of reviewing his decision and I do believe that it is necessary for Parliament to have the final word in matters of this nature.

All in all, as I said earlier, this is a Bill that deals with a multiplicity of matters already contained in water legislation. We in these benches will support it at Second Reading.

Mr. Speaker, I should like to take this opportunity of expressing my appreciation to hon. members on the Government side as well as on Opposition side for the co-operation we had from them in the Select Committee with regard to this Bill. I believe that this is one of the spheres in which we can usually relegate politics to the background. It is a sphere in which we are dealing with the kind of problems which, as our country develops and because of new circumstances, from time to time compel the Department of Water Affairs to revise water legislation and to amend certain aspects thereof. I want to tell those hon. members, who made a good contribution, that we appreciate their co-operation.

Mr. Speaker, I should like to avail myself of this opportunity to deal briefly with some of the clauses of the Bill and to refer to some of the provisions which are important to us. I refer, in the first place, to clause 12, which provides for the deletion of a part of section 63 of the principal Act. The amended Bill, as submitted by the Select Committee, provides for the deletion of subsection (8) thereof. In the original Bill provision was made for the deletion of subsections (8), (9) and (10), but that provision has been amended and only subsection (8) will now be deleted. Subsection (8) is the provision with regard to the necessary excluding from the schedule of land if a subdivision takes place as a result of which the subdivided pieces of land are smaller than the required minimum size. In the past this provision gave rise to particular problems, especially in the case of State schemes. As a result of this, the Department of Water Affairs often found itself in the position where it had to impose an extraordinary punishment, if I may call it that, in the case of such a subdivision. It often happened that such subdivisions were not quite as senseless or undesirable as they seemed at first. I am thinking, for example, of cases where people insisted, in cases where they owned pasture, on giving their various sons to whom they bequeathed land a portion of river land or irrigation land as well.

In such cases the land was bequeathed in terms of a will, and we had to deal with a situation where the land, although it was divided into economic units if one took the whole set-up into account, was divided into uneconomic units as far as river land or irrigation land was concerned. The hon. the Minister often considered such cases very sympathetically and used his discretion, because he realized that the basic requirement with regard to the maintenance of an economic agricultural unit was being complied with. Therefore I want to express my appreciation for the fact that the Select Committee reacted positively to this and relieved the Department of Water Affairs of the responsibility to impose the very heavy penalty of excluding valuable irrigation land from the schedule, with the result that very little of its actual market value was left. We trust that this particular aspect will in future be handled by the agricultural department concerned, and I am convinced that they have the officials and the necessary technical knowledge to be able to do this properly. This will also largely eliminate problems which presently have to be dealt with by the Department of Water Affairs and the hon. the Minister and which do not actually belong to them. I also want to express my gratitude and appreciation on behalf of my own constituency, which has often had to deal with this type of problem, for the fact that we have been able to get this far.

As regards the point mentioned by the hon. member for Orange Grove, with reference to clause 13, I want to say that in my opinion his doubts are not very well-founded. There are cases in practice where it is really not necessary to implement the existing provision. I think it is quite correct that the hon. the Minister should be able, in cases which are actually of a trifling nature, to give permission for an irrigation board to dispose of a particular property without necessarily having a public auction. I merely want to point out that I personally know about a case where such a party merely wanted to obtain right of thoroughfare and had to obtain a certain piece of land for that reason. He had no interest in it except for the fact that he wanted right of thoroughfare. When he had obtained that, he had to face the problem that if he had to sell it again by public auction, he would obtain a lower price than he could otherwise get for it. In other words, he would have lost on that transaction by public auction. However, this right is not being granted to irrigation boards unconditionally. In this case it is merely a provision which reads: “… except with the approval of the Minister and subject to such conditions as he may consider necessary …”

Why should it not be reported to Parliament?

I want to say to the hon. member that he should note that it is a question of discretion which is being given to the hon. the Minister. It is not any subordinate who will be able to act in such a case. The hon. the Minister will have to look at it, he will have to take a decision and if he feels that there may be circumstances to which he may not be doing justice or which will encourage irregularities, he will definitely not approve it. However, I want to give the assurance that these circumstances really do arise in practice. I mentioned an example and it was not an imaginary example. It really happens.

One could still report it to Parliament.

In that case I am convinced that it is necessary for the hon. the Minister to have the discretion.

There is another point I want to refer to as well. That is the question of town planning and town layout below the high-water mark of streams and rivers. In recent years we have seen a great deal of this, and I think innocent people have often suffered major losses because of the fact that townships were built in places which were actually within reach of the floodwaters of certain rivers. The man in the street who wanted to become a houseowner and who has bought a property—it is often someone who only buys property once in his life—is very hard hit when he has unwittingly entered into such a transaction without knowing or making sure about the possibilities of flooding. During recent years we have often had flood conditions. This year, too, we were faced with such conditions with the floods in Pretoria. Therefore I think that it is very important and necessary that there must be a provision in the legislation— as there will henceforth be—that the 50-years floodline should be indicated on such a township layout.

At least it will give people a reasonable opportunity to improve their choice with regard to the particular stand where they are going to settle and on which they are going to spend money. It would be very wise if people were to find out about this when buying such a stand, and, if necessary, decide to build above the floodline.

I merely mention these few points with regard to the Bill to indicate that we are dealing here with the requirements of daily life and the circumstances of the times, circumstances which always require revision of the Act to enable the Minister and the department to do their work as well as possible in the interests of everyone involved. Therefore I gladly support this Bill.

Mr. Speaker, the Water Act is a very complicated piece of legislation. The hon. the Minister has therefore been very wise in having followed the practice which has been established over a period of many years in this House, the practice of legislation which deals with such an important right to the public being dealt with by a Select Committee. It is, of course, only right that the more intelligent members of the House should be put on this Select Committee. [Interjections.] Of course, we appreciate the right to serve on it. There is no doubt about the fact that this particular legislation before the House has shown the Department of Water Affairs as having had, in at least two instances, a rare sense of prevision because in this Bill there are two amendments, one in relation to health regulations and one in relation to the subdivision of land, in respect of which the Department of Water Affairs has been substantially ahead of other State departments. I think that that is something that is very much to their credit. As regards the question of health regulations, I can hardly emphasize enough how very serious this is. It happened in my constituency very recently that two dams below one of the feed-lots, and containing washings from the feed-lots, were breached in a storm. As a result the contents were washed into the dams of neighbours further down. One can imagine the consternation of those persons when they found that their drinking water contained washings from the feed-lots? Many years ago the Department of Water Affairs took the necessary powers to control the setting up of feed-lots and to make sure that under normal circumstances this would not happen. Now the Department of Health has issued regulations in this regard and members of the Select Committee were able to look at those regulations. This would not have been possible if the matter had been debated in the House in the normal way. I think that referring this kind of legislation to a Select Committee is the ideal way of dealing with it. Similarly, as regards the subdivision of land, the Department of Water Affairs saw the implications of the uneconomic subdivision of land many years ago, whilst the relevant Department of Agriculture only introduced the necessary legislation later on.

We welcome the assurance of the hon. the Minister in relation to the provision which is made for varying conditions laid down to prevent the pollution of water. We have had the cast-iron assurance that where an undue onus is placed on people, the standard of the water obtained from dumps or any other source like that will not be any lower because of any relaxation the hon. the Minister may allow in respect of any requirements he lays down to prevent pollution. I think that this is terribly important. At one stage the Select Committee was concerned that the standard may be lowered because some people feel themselves unduly prejudiced. However, we received the assurance that this was not, in fact, the case and that alternative requirements could be laid down where it was merely a physical consideration like distance from a stream and things of that nature and that therefore it would still be possible to cope with that particular problem.

In respect of the question of the auction, I agree with the hon. member for Orange Grove in that I cannot see the hon. the Minister’s problem in reporting to Parliament because the action taken must be approved by the Minister. It is the Minister’s authority that will be imprinted on the action the irrigation board seeks to take. I therefore do not see that the board is required to report to Parliament. The Minister himself and his department give their approval to such action and therefore the department should be required to report to Parliament.

The particular circumstances that arose in this case were almost beyond the bounds of belief. One can hardly believe that a thing like that could, in fact, happen to a person. Certainly, we can hardly see it happening again. It is not the sort of thing that will happen every now and then. I can hardly see it happening more than a couple of times in five or six years. Therefore I do not see it as placing an impossible onus on the Minister to undertake to report the matter to Parliament. The argument that the irrigation board is a corporate body and so on I really cannot accept because, while they will make the application, the Minister will have to put his seal on it to make it happen. Therefore I do not see that the hon. the Minister has a particular problem as far as that is concerned.

We will therefore support the Second Reading of this Bill and we comment again on the wisdom the hon. the Minister has shown in referring this matter to a Select Committee.

A rare wisdom!

Mr. Speaker, I rise merely to thank the hon. member for Mooi River for the support he and his party gave to this legislation and perhaps to cross swords with him a little with regard to his last statement about the question of public auctions and the discretion or judgment in this connection which is conferred on the hon. the Minister in terms of this legislation. In the first place I merely want to remind the hon. member that it is nothing unusual that the hon. the Minister may exercise his discretion or judgment. It is something one sees in much of the legislation before the House. In the second place, examples were given in the Select Committee to show why such a provision was necessary. There are, therefore, good reasons why this provision is being proposed, i.e. to facilitate the practical implementation of the measures concerned. The hon. member also referred to health legislation. I believe that we were persuaded that the health legislation which our medical colleagues examined carefully last year is in fact much more suitable for these particular cases. This amendment is therefore being proposed in order to eliminate duplication.

Finally, I should like to thank the hon. member for Piketberg for the able manner in which he conducted the business of the Select Committee.

Are you the Minister?

I thought the hon. member for Mooi River was going to do it. As far as the hon. member for Mooi River and the hon. member for Orange Grove are concerned, he showed great patience and handled them wisely.

Mr. Speaker, I, too, rise to associate myself with the thanks my hon. colleague conveyed to the chairman of the Select Committee, the hon. member for Piketberg. It was the first time I had the privilege of serving on such a committee and to me, as one of the people who dealt with this in practice and implemented the laws, it was an experience to see how laws are made. In the light of the amendments now before the House it is interesting to delve into history a little, because one comes across amendments dealing with very interesting facts. In this regard I refer to the proposed deletion of section 23A of the principal Act. That section deals with the prevention of pollution of water. It is interesting that the first “placaat” or Act which was promulgated in 1655 by Jan van Riebeeck in the Cape and which dealt with water, was an Act which dealt with the prevention of pollution of water. We have therefore come a very long way with the steps required from time to time to ensure that water to be used for various purposes is kept clean and not polluted. The deletion of the section concerned results in the health legislation of the hon. the Minister of Health, as well as the regulations published on 27 January 1978, coming into effect as general health regulations. It is interesting, too, that we as farmers get to know about these regulations in this way, because in the general health regulations which also deals specifically with the prevention of water pollution, there are quite a number of regulations which affect the farmer as well. They are the regulations with regard to the feed lot systems, dairies, etc. There are, in fact, quite a few regulations of that nature relating to the farmer and his profession.

From our side we also want to support the hon. the Minister in amending the Water Act in this way. There were certain amendments which I should have liked to discuss with the Secretary of Water Affairs, but the legislation came upon us so quickly that I shall have to discuss that matter with him later on. I want to express my thanks to Dr. Kriel and the other officials for their willingness to see us at any time when we have approached them to discuss legislation. I also want to refer to the objections raised by the hon. member for Mooi River and the hon. member for Orange Grove with regard to the amendment envisaged by clause 13. There are different ways in which sales may take place, not necessarily only by public auction. It is often in the interests of someone—in this case in the interests of the irrigation board concerned— that there should in fact be an opportunity for selling out of hand. For example, it also often happens that the Master of the Supreme Court has the power to allow assets or property to be sold out of hand and not necessarily by way of public auction. There is not, therefore, a strong case for us to take away that power which is being conferred on the hon. the Minister.

Mr. Speaker, I want to express my appreciation for the unanimity among and the cooperation of hon. members. This, of course, arises out of the Select Committee which was appointed, and therefore I also want to use the opportunity to convey my appreciation to those hon. members who served on the committee, for the changes they effected. I want to say here that legislation concerning the Water Act should in the future, as in the past, be referred to a Select Committee for consideration. The legislation then then comes back to the House after changes have been effected and minor matters, which might otherwise have passed unobserved, noted and dealt with. There is, therefore, great advantage to be derived from this system. Therefore I want to convey my sincere thanks to the Select Committee.

I should now like to discuss a few arguments advanced by hon. members with regard to the provisions and clauses of the legislation. The hon. member for Orange Grove once again emphasized our responsibility with regard to water pollution. I was told by my department that after they had studied the proposed regulations of the Department of Health, they were of the opinion that the proposed regulations were in order and they had proposed a few minor amendments to them. I think hon. members who served on the Select Committee know about that, and we are satisfied that the Department of Health can handle the matter. It is still the case, however, that my department actually remains the responsible department when water is polluted and therefore we will not hesitate to act in this connection, in close co-operation, if necessary, with the Department of Health.

A few hon. members had problems with regard to the provisions of clause 13 of the legislation, which deals with the sale of assets of irrigation boards. I tend to agree with hon. members that one might run a risk in this regard. I want to say, however, that before one decides that legislation is necessary, one should look carefully at what has happened in practice. During the past year we had quite a few—not many—cases where an irrigation board came together to sell part of a property because it would be to its benefit if the property were sold. The hon. member for Piketberg quoted an example in this connection. We now have an irrigation board that owns property and wants to sell part of it for its own benefit. But there might only be one person who can buy that piece of property, and if the irrigation board now tries to sell the piece of property by public auction, there may be no one else who wants to buy that piece of land. I remember the case where an irrigation board had to plead with my predecessor to allow them to make a plan to dispose of a piece of land. My predecessor said that the Act stipulated that they had to sell the piece of land by auction. Their defence was that if they were to sell the piece of land by auction, a certain man would buy it since no one else was interested in it. Hon. members can therefore understand that there are practical problems in this connection.

†Both the hon. members for Mooi River and Orange Grove do not feel quite happy about not reporting back to Parliament. Hon. members are always pleading for efficient government, but now they are, by acting in this way, making it inefficient. [Interjections.] They want too many legal provisions for a very ordinary and simple situation. Before hon. members get too excited, I want to tell them that I am prepared to discuss the matter again to see whether we can formulate some method whereby we can report this sort of thing to Parliament. I do not think the problem is insurmountable. A method can be found. I shall talk to the Secretary again, and if I find that it is possible without causing too much work and trouble I shall make the necessary amendment in the Other Place.

*I want to take another look at the provision. I do not believe that one should be too clever, and although I feel that hon. members are harping too much on that minor matter, and that it might be better to leave the provision in its present form, I do promise to look at it again.

I also want to refer to the deletion of section 63(8) of the principal Act, to which the hon. member for Piketberg referred, and say to hon. members that this clause caused me, as the Minister, very grave problems. The hon. member for Mooi River said that this clause has been in existence for many years and has served a useful purpose. What it boils down to, however, is that although the legislation does not stipulate it, one has to apply very severe penal clauses to people who unwittingly sell this type of land. Afterwards one finds out that the land was registered at the Deeds Office and the department or the irrigation board is then obliged to withdraw the water rights. I have had about ten such cases during the past year. One can only condone such cases and allow it to carry on. Therefore I am very glad to have had the cooperation from hon. members to delete this section.

Another matter which is somewhat sensitive is the question of the floodline which has to be indicated. Clause 18 provides for this. I really hope that township planners will regard this matter seriously, because during the floods we have had in recent years, this matter caused serious problems. People are shown a township plan with plots with a beautiful view, for example, of a little stream. The township planners do not, however, tell people that once every 10 to 20 years, houses on those plots can be flooded.

As was the case at Morlettaspruit in Pretoria.

There were many other cases besides that one. It happens very easily, and then people suffer severe damage. Then they run to the Government and ask the Government please to help them.

The station at Delareyville has also been flooded on occasion.

Yes, that is another case. Two or three years ago, as the hon. member for Mooi River says, we had problems with the pan at Delareyville. We had to act urgently and quickly. We had to obtain special funds and move pumps to pump out that pan, because when we realized what was happening, the station at Delareyville and the grain silos were disappearing under water. That is the type of problem we have and therefore I want to express the hope that these matters will be regarded seriously. In times of sparse rain people tend to think that this type of problem cannot arise, and then overnight there is terrible damage and major problems. One cannot take care of everything with the proposed amendment, but I do think that it will make a contribution. It is not a new principle, but only an extension in order to simplify matters. This is a sphere in which we try to afford our people security and protection.

I do not want to enlarge on this. As I have said, the Bill was referred to a Select Committee where it was discussed in detail and where unanimity was reached. Therefore I do not think it is necessary to enlarge on this.

I have mentioned a few matters and I should like once again to express my sincere thanks to hon. members, especially the hon. members for Eshowe and Marico, who served on the committee and who have expressed their opinions once again in this House. The hon. member for Marico said that he still has problems with the Water Act and I want to point out to him, as to the hon. member for Mooi River said, that this is not always an easy Act. The hon. member will have to take the next six months to study this Act properly. Maybe he can also discuss it with the department. They have a very good knowledge of the way in which this legislation works. I think it is always a good thing to see whether one cannot improve legislation, and if the hon. member has suggestions to make, we will consider them carefully and will probably appoint another Select Committee to see whether the hon. member’s opinion of certain matters is correct.

That is all I want to say and I want to conclude by saying that I hope that the improvements will be as sound in practice as we now conceive them to be. Usually we say how well we have worked, but afterwards find out that certain problems do, in fact, still exist.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, I merely rise to say to the hon. the Minister that with regard to clause 13 it was our intention earlier to vote against it, but that in view of his assurance that he will have a look at it and discuss it with the law advisers before it goes to the Other Place, we are happy to support it. Perhaps this is an opportunity to say a word of thanks to the chairman of the Select Committee, the hon. member for Piketberg. It was during the discussion of this clause that his patience and forbearance came to the fore. The hon. member for Eshowe has also pointed this out.

Mr. Speaker, I want to conclude by thanking hon. members for their co-operation.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

Mr. Speaker, during the course of today we have received certain information regarding the Orders of the Day, and this is completely unexpected.

Question put,

Upon which the House divided:

Ayes—100: Albertyn, J. T.; Badenhorst, P. J.; Ballot, G. C.; Barnard, S. P.; Bodenstein, P.; Botha, C. J. van R.; Botha, J. C. G.; Botha, P. W.; Clase, P. J.; Coetsee, H. J.; Coetzer, H. S.; Conradie, F. D.; Cronje, P.; Cruywagen, W. A.; De Beer, S. J.; De Jager, A. M. van A.; De Klerk, F. W.; Delport, W. H.; De Villiers, D. J.; De Villiers, J. D.; De Wet, M. W.; Du Plessis, B. J.; Du Plessis, G. C.; Du Plessis, P. T. C.; Durr, K. D.; Durrant, R. B.; Du Toit, J. P.; Geldenhuys, G. T.; Grobler, J. P.; Hartzenberg, F.; Hayward, S. A. S.; Henning, J. M.; Herman, F.; Heyns, J. H.; Hoon, J. H.; Horn, J. W. L.; Janson, J.; Janson, T. N. H.; Kotzé, S. F.; Kotzé, W. D.; Krijnauw, P. H. J.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Ligthelm, N. W.; Louw, E.; Louw, E. van der M.; Malan, G. F.; Malan, W. C. (Randburg); Marais, J. S.; Marais, P. S.; Morrison, G. de V.; Mulder, C. P.; Muller, S. L.; Myburgh, G. B.; Nel, D. J. L.; Niemann, J. J.; Nothnagel, A. E.; Olckers, R. de V.; Palm, P. D.; Potgieter, S. P.; Pretorius, N. J.; Raubenheimer, A. J.; Schlebusch, A. L.; Schoeman, H.; Schoeman, J. C. B.; Simkin, C. H. W.; Snyman, W. J.; Steyn, D. W.; Swanepoel, K. D.; Swiegers, J. G.; Terblanche, G. P. D.; Theunissen, L. M.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, J. H.; Van der Merwe, S. W.; Van der Spuy, S. J. H.; Van der Walt, A. T.; Van der Watt, L.; Van der Westhuyzen, J. J. N.; Van Heerden, R. F.; Van Rensburg, H. M. J. (Mosselbaai); Van Rensburg, H. M. J. (Rosettenville); Van Vuuren, P. Z. J.; Van Wyk, A. G; Van Zyl, J. J. B.; Venter, A. A.; Viljoen, P. J. van B.; Vlok, A. J.; Vosloo, W. L.; Wentzel, J. J. G.; Wessels, L.; Wilkens, B. H.; Worrall, D. J.

Tellers: L. J. Botha, J. P. A. Reyneke, N. F. Treurnicht, A. van Breda, J. A. van Tonder and V. A. Volker.

Noes—20: Bartlett, G. S.; Dalling, D. J.; De Jong, G.; Lorimer, R. J.; Marais, J. F.; Miller, R. B.; Myburgh, P. A.; Oldfield, G. N.; Page, B. W. B.; Pyper, P. A.; Raw, W. V.; Schwarz, H. H.; Sutton, W. M.; Suzman, H.; Swart, R. A. F.; Van Rensburg, H. E. J.; Widman, A. B.; Wood, N. B.

Tellers: B. R. Bamford and A. L. Boraine.

Question agreed to.

Mr. Speaker, I move—

The history of the Cape Town Foreshore, which was later named after Roggebaai—the small fisherman’s beach which disappeared when the land was reclaimed from the sea— officially began when the late Gen. Hertzog launched the construction work on the new Cape Town harbour on 10 May 1938. On that occasion, Gen. Hertzog also expressed the wish that the land which would be reclaimed through the building of the new harbour should be utilized, not only as an extension of Cape Town, but also to create a monumental gateway to South Africa.

The planning of the reclaimed area, of the adjacent Railway land and of the municipal area concerned took several years, and prominent town planners, the Railways Administration and the City Council took part in it. Only in 1949 was the final plan, called the Cape Town Foreshore Plan, tabled in Parliament.

The late Advocate Strydom, then Minister of Lands and later Prime Minister, took active steps to come to an agreement with the city council for the implementation of the plan. In 1950, an agreement was reached between the State and the city council of Cape Town concerning the financial basis on which the Foreshore would be developed, and in the same year the Cape Town Foreshore Act, 1950, was passed by Parliament.

In his speech in this House the late Adv. Strydom said, among other things, that the Government wanted the gateway envisaged by the foreshore plan “to be large, to be monumental, to be worthy not only of Cape Town, but of the country as a whole”.

†The Cape Town Foreshore Board, which was established by the Cape Town Foreshore Act, 1950, consists of five members, three of whom are appointed by the State President and two by the city council. To this board was entrusted the responsibility to implement the Cape Town Foreshore Plan. This included the laying out and construction of streets, parks, gardens and open areas and also the selling of building lots. In this respect I must mention that the board has sold 72 building lots at a total price of more than R9 million. In order to ensure proper control over the development, rules relating to, inter alia, the siting, construction, erection, maintenance and control of buildings and other improvements on the foreshore, were made and enforced by the board.

The Foreshore Board has now been in existence for close on 28 years and has nearly completed all of the work required for the future development of the area. The indications are that the final work will be completed by the end of this year when it will be possible to abolish the board. The streets, parks, gardens and open areas will be transferred to the city council, who will also accept responsibility for the further implementation of the foreshore plan.

The 29 building lots which have not been sold will be disposed of, as and when the demand so requires, in terms of the State Land Disposal Act, 1961.

In view of the proposed abolition of the board it has become necessary to amend the Act and to repeal the powers of the board. The foreshore area will be included in the municipal area of Cape Town and will come under the jurisdiction of the city council. In terms of the agreement to which I referred earlier, any balance of revenue accruing from the sale of land after full provision has been made for the obligations of the board shall be divided between the city council and the State. Provision is accordingly being made in this Bill for the city council to continue to share in the proceeds of the sale of land. The 29 building lots which have not been sold have a municipal valuation of approximately R15 million and the city council therefore stands to gain considerably from the sale of these lots.

*I cannot conclude without conveying the Government’s sincere thanks and appreciation to the dedicated people who have been members of the board over the years. We appreciate what they have achieved on the foreshore, and although the scheme is not yet completed, a Gateway to Africa has already been created of which not only Cape Town, but the whole country may rightly be proud.

Mr. Speaker, when the Van Riebeeck Festival was held in 1952, tents were put up from the place where the Sanlam building is now situated to the place where the Van Riebeeck statue stands today. No buildings had been erected at that stage. When one thinks of the development which has taken place since then, to convert that area into a splendid Gateway to Africa, it is a pleasure to thank the people who have worked on this project for 28 years, and the Foreshore Board in particular, for the work which has been done up to now.

Mr. Speaker …

If you oppose this legislation, you will be in trouble!

Order!

Mr. Speaker, with your permission I want to object very courteously to the fact that this amending Bill has come up for discussion while the arrangements which were made actually required me to take part in the proceedings in the Other Place …

No, you are quite wrong; you ought to know better.

Sir, I was informed through my Whips this afternoon that because the hon. the Deputy Minister would not be here this evening, this amending Bill would stand over until tomorrow.

Having said that, I want to indicate at once that we on this side of the House support this amending Bill. We do so because we believe that the Foreshore Board, which was established in 1950 and which had to implement a master plan which had been approved as far back as 1949, has performed its task with a large measure of success. I say “with a large measure”, because there is a feeling among many experts in the field of architecture in Cape Town that the plan, or its implementation, has not quite succeeded in making this new Gateway to Africa as impressive as had been hoped. A good deal of criticism has been expressed against the board’s planning and the implementation of that plan, and if I may, I should just like to point out a few of these small problems which did in fact arise.

In the first place, experts allege that the new Foreshore, which is large—in fact, I understand it to be 66 ha in extent—does not form an absolutely integral part of the old mother city of Cape Town and there could have been better planning in this respect to integrate it more successfully with our proud mother city. That is the one problem.

There is a further problem. Because of the way in which the land in the harbour area of Cape Town has been developed, the harbour is very largely cut off from Cape Town itself. Sea ports have a special character all over the world and the harbour areas have a special attraction for the people of the cities concerned, for the country and of course for tourists. Therefore it is a pity that the harbour area has largely been cut off from Cape Town itself as a result of this development.

A third problem, in my opinion, is the fact that the south-easter, which has been blowing in Cape Town with unabated strength since before the days of Jan van Riebeeck, was not sufficiently taken into consideration in planning the Foreshore. There are experts who maintain that it has been established by means of studies that wind tunnels which were created by the new buildings which were erected could perhaps have been eliminated to a large extent. I mention these problems and shortcomings because I feel that we may be able to learn a lesson from them.

Of course, there are many other large areas, and some smaller ones, which are also going to be developed from scratch, either inside cities or alongside new cities which are going to be built. If we failed to express these criticisms, therefore, we might be neglecting a golden opportunity to bring these aspects to the attention of those who will be concerned with the planning of those new parts.

Mr. Speaker, just before I sit down, I want to refer, with your leave, to another new part of town. Actually it is a very old part of Cape Town which is, however, going to be redeveloped. I am referring to District 6. I should like to draw attention to the fact…

Order! I do not think that would be quite in order.

Mr. Speaker, thank you for having at least allowed me to go as far as I did, because I expected you to rule me out of order there. However, I just wanted to make the point in connection with that area. We therefore take pleasure in supporting this Bill.

Mr. Speaker, the hon. member for Wynberg is worried about the fact that this foreshore is actually cut off from Greater Cape Town and that its development has been such that it has not been properly integrated into the Greater Cape Town plan. I think this legislation will do much to solve that problem, for the very reason that it provides for the abolition of the Foreshore Board and at the same time for the paying over of certain funds which had been at the disposal of this board to the city council concerned. The Minister made it quite clear in his Second Reading speech that the jurisdiction over this area will fall mainly under the municipality of Cape Town. It can therefore be integrated into the Cape Town municipality’s planning for Greater Cape Town because it will now be an integral part of Greater Cape Town. If need be, therefore, it will be possible to develop it into the “Eye of Africa”, if I may put it that way. Therefore the hon. member’s problem is in fact being solved by the Bill which is before the House.

Order! The Transvaal must not carry off the Foreshore to the Transvaal as well.

Mr. Speaker, if you are ruling the Transvaal out of order, what are you going to say about those of us who come from Natal? This Bill is disestablishing a board which has done an exceptionally good job in the circumstances over the past 28 years. However one feels about modern architecture, there is no doubt about it that the Foreshore is a striking section of Cape Town and will stand for many years as a monument. It is not something that is going to become outmoded, and the people who have done the planning should be congratulated and deserve the thanks of the House. As I understand it, 87 erven have been sold by the board over the past 28 years.

The hon. the Minister has mentioned that there are 29 erven remaining to be sold, besides which there is a certain amount of open space which will be utilized by the city council for parks, or whatever development they wish to undertake there. It would appear that from now on it would be rather expensive to keep the board going and that it would, in any event, serve no real useful purpose. What I am not quite sure about, however, is why the hon. the Minister did not hand over the entire area to the city council of Cape Town. What is happening is that the State will dispose of the land after which an arrangement will be made between the department and the city council to hand over, in consultation with the Minister of Finance, certain of the funds to the city council. I think it might well have been done the other way around, so that the city council could get the whole thing in one shot—“finish en klaar”. A payment could have been made to the State out of the funds of the council in respect of the money realized on the property. It does seem to me that there might have been an easier way of doing it, particularly in view of the fact that the works the city council has contracted to complete on behalf of the board have not yet been completed. As I understand it, those works will not be completed before the end of this year and may even extend into next year. There are therefore still development works in progress for which the city council is responsible.

With these few words I should like to support the Second Reading of the Bill.

Mr. Speaker, the hon. member for Wynberg felt that he had not had time to prepare himself for discussing this matter, but in fact he made such a good speech that he obviously did not need any more time. I do not intend to praise him unnecessarily, because I know that the Opposition will support all three stages of the Bill in any case. That is just by the way.

Do not be so sure of that.

Why not?

Because you must not mess around with the Order Paper.

The hon. member need not cross swords with me about that.

*The hon. member said that the harbour area was cut off from the city. He also said that it seemed to him that there had been a problem with the planning, because the buildings were placed in such a way as to create wind tunnels. The hon. member must bear in minf the position of 28 years ago. No one knew 28 years ago that the Trust Bank was going to erect a building of 30 to 35 storeys there. Development takes place gradually. Twenty-eight years is half a lifetime. When I took part in the Van Riebeeck Festival as a young boy in 1952, no one was able to tell me that a Nico Malan theatre would be erected there. All these things have come into being as the area developed. The hon. member for Wynberg, and also the hon. members for Bethal and Mooi River, must remember that along the city councillors served on the Foreshore Road and that a city engineer was also present at all times. Then there is the question of the Golden Acre. Hon. members will remember the controversy about that: the question whether it should be auctioned, whether tenders should be called for, whether it should be built upon at all, etc. All these matters have been pondered over the past 28 years. When one looks at what has been established today, I feel that there is nothing wrong with it.

†The hon. member for Mooi River asked why we cannot transfer all the land to the Cape Town city council. However, they are represented on the Foreshore Board in accordance with a recommendation by these people. The State also gets a stake in this. The ruling is that, as all land is controlled by the Department of Agricultural Credit and Land Tenure, if a plot is sold in future the city council will get a portion of the proceeds of the sale. The value of the land still to be sold amounts to R80 million, and I would say about 50% of this would go to the city council. This legislation flows from a decision of all the responsible parties. They all agree with it. I therefore cannot see why we should transfer all the land to the Cape Town city council. I wish the co-operation between the PFP and the Department of Agricultural Credit and Land Tenure would be as close and warm as it is between the Cape Town city council and the Foreshore Board.

You do not really hope so.

I thank the hon. member for enabling the measure to go through unopposed.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Third Reading

4 Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, the hon. the Minister pointed out that when he attended the Van Riebeeck Festival as a young boy 28 years ago, he could not have imagined that the Nico Malan Opera House or the Trust Bank building would be erected the way we see them today. However, I want to point out in all humility that the master plan—at any rate, this is how I understood it—which was approved in 1949, made provision in detail for the kind of building that was to be erected, the height the buildings should have, the open sites there should be and the number of gardens, palm trees, etc., there should be. That was the master plan, Mr. Speaker, but perhaps that plan was not worked out absolutely correctly on the basis of expected development. Perhaps they did not ask the available experts to take part in the planning. I do not know what the situation was. However, the point I want to make is that it is very unusual for such a large open space to be made available in a major city, because it may happen in one out of a hundred cases that the city is afforded the opportunity of planning something from scratch to create something fine and splendid for that area. For this reason, the area was in fact referred to as the “Gateway to Africa”, because it was a grandiose idea. The point I want to make, however, is that the scheme did not work out the way one would have wanted it to, and that it is a pity that this is so.

I understood that the sites which are still available occupy approximately 5 ha or 6 ha, that they have a certain value depending on the current economic situation in South Africa and that the city council of Cape Town would receive two-thirds of the proceeds from the sale of that land. The hon. the Minister said that it would be approximately 50% of the purchase price. I do not know which it will be, but I just want to record that I had understood that two-thirds of the proceeds would accrue to the city council.

Mr. Speaker, if one bears in mind that the long-term planning of the area extended over a period of 28 years, the view taken by the hon. member for Wynberg is fairly correct. When one looks at the original plans, I agree that at that time there was a vision of what the extension of Adderley Street could look like. However, when one goes to Barclays Bank, for example, and one tells them that they have to erect a building of a specific height, they say that they have paid a specific amount for the plot and that their architects and consultants have a specific building in mind. One cannot plan 28 years ahead. A minor example is the fountain in Adderley Street. When hon. members drive down Adderley Street at the moment, they will see that the fountain has been covered with sheets of corrugated iron. I do not know how many times that fountain has been worked on. The original planning provided for pumps to be installed under the water. At the moment, the fountain is being completely replanned. However, I still think it is wrong, because the south-easter plays havoc with that water, so that one simply cannot have a fountain there. When the fountain is working again one day and there is a strong south-easter blowing, people will ask: Why do we have a fountain there? The statue of Diaz is still standing up in the Gardens. That statue was presented to the South African Government by the Portuguese Government at that time on the understanding that the statue with its pedestal would be put up on the Foreshore. But nothing has come of that yet. It still remains to be done. When it is completed one day, it will be a splendid sight.

However, our economy is in a state of recession; there is no life in the building industry and certain projects are being held back. We are doing what needs to be done, and it is the hon. member’s right to criticize it, but to tell me today that I must plan 28 years ahead is unfair, for that is not so easy. If the hon. member would have a look at the original plans, he would see that for practical reasons there were great deviations from those plans. The city council and the Foreshore Board planned together throughout and there was no question of any difficulties or disagreement in this connection. It was a pleasure to co-operate with the people precisely because they took a positive attitude. Standing on the Foreshore boulevard and looking up Adderley Street—the hon. member was still a very small boy in 1952, but perhaps he can imagine it …

I was there.

Then the hon. member is much older than I thought. When we older people think of what there was and we compare it with what has been established since, it really is splendid.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

The Abuse of Dependence-producing Substances and Rehabilitation Centres Act, 1971, has been on the Statute Book for more than seven years now, and during this time we have had ample opportunity to evaluate its functioning. Let me say at once that if there has ever been legislation which was placed on the Statute Book in time, it is certainly this Act.

As many hon. members will still remember, in 1971, when the Act was passed, the drug menace was washing over the Western world in dangerous waves, and the toll which it took of Western youth indeed caused grave concern in responsible circles. At one stage, in fact, it caused the President of the United States of America to cry out: “If we do not destroy the drug menace, it will surely in time destroy us.”

At that time the tip of the iceberg had also begun to show itself in South Africa and there were unmistakable signs that we would have to act without delay. We did so, and I think that in so doing we spared ourselves the tragedy which took place in some other parts of the world.

When we adopted the measures we did adopt in 1971 it was not the intention, of course, that these measures should remain in force indefinitely, regardless of the circumstances. After all, it goes without saying that the circumstances of a specific time determine what measures are necessary at that time to make it possible to deal with the specific problems of that period. Therefore this presupposes that legislation will from time to time be adapted and improved in the light of prevailing circumstances.

As far as this Bill is concerned, my contention is that since 1971 there have in fact been significant developments on the drug scene. In the first place I think that, if the circumstances of today are objectively compared with those of 1971, we must inevitably conclude that the intensity and urgency of the drug problem has in general diminished and abated perceptibly throughout the world. Admittedly the dangers which it presents are still real, but it would appear that the pendulum is moving away from the crisis point.

In the second place I believe that the measures which we adopted at the beginning of this decade were not without their effect and in the case of the abuse of a substance such as dagga, for example, generally had a dramatic beneficial effect. The number of prosecutions in respect of this substance dropped by 46,47%, from 40 935 cases in 1971 to 21 909 cases in 1976.

Now I know that there are those who will contend that this drop does not prove anything because the problem has merely been driven underground by the measures which we adopted. But I want to argue that the matter is not quite as simple as that. The fact of the matter is that, while statistics indeed show a noticeable drop in the number of dagga offences in general, there is really no concrete evidence for the underground theory.

But this is just by the way. I do not think it is necessary to hold a debate on this theory on this occasion. I am satisfied and convinced that we have made progress in combating the dagga problem.

There is a further consideration in the present connection. Before I elaborate on this, however, it is important to point out that the definition of “deal in” in the principal Act, does not, as is often thought, have as its object only to relate to acts performed in connection with the sale of dependence-producing substances. The underlying purpose of this definition is to bring acts relating to the making available of such substances within the purview of the provisions in question, regardless of whether or not the making available of such substances entails any financial or other benefits for the person dealing in them. It follows, therefore, that the mere supply of such substances is considered to be dealing in them for the purposes of the Act. What is more of course, if the supply of such substances is not included in this definition and if supply is not otherwise made punishable, we would simply be leaving an only too convenient loophole which would enable unscrupulous drug pedlars to escape.

This process of dealing as defined by the Act consists, however, of acts which frequently differ in degree of reprehensibility. Admittedly the drug addict who offers his friend a dagga cigarette in the process of social intercourse is encouraging the evil which the Act wishes to combat because he is making a prohibited dependence-producing substance available to another person, but the degree of reprehensibility of his deed is on a different level to that of the drug pedlar who does so for gain or another more reprehensible motive for example. I am therefore of the opinion that, as far as punishment is concerned, the former offender in the example which I have mentioned, falls into a somewhat different cadre to the one in which the other offender to whom I referred falls, and that it is appropriate that the court ought to be placed in the position where it is able to take action of a different kind in suitable cases against offenders of this kind.

Of course we have always regarded dagga in a somewhat different light from other drugs, but are still of the opinion that the dagga menace, particularly in so far as it is frequently the precursor of more dangerous substances, should not be underestimated. We believe that the noticeable decrease in the number of dagga offences have also, to a certain extent, helped not only to keep the number of offences in connection with other drugs in check, but has even caused them to diminish by 29%.

However, I want to make it very clear tonight that the fact that we are relaxing the measures relating to dagga offences should not be seen as a sign that the dealing in and possession of dagga may once again be resumed or continue unchecked. On the contrary. The need for strict discipline in regard to the drug problem, including the dagga problem, is as strong as ever. For that reason I want to stress that in this Bill, too, the maximum penalties for dagga offences remain high and remain as they are in the existing legislation. With that we wish to illustrate that offences of this nature should not be lightly regarded, and even if we are now removing the obligation to impose minimum penalties and are creating the opportunity to impose suspended or deferred sentences in certain cases, it remains a fact that the high maximum penalties remain applicable and in that way we want to demonstrate that this remains a very serious matter. It goes without saying that if we are now going to relapse into the dangerous zones of the past, the relief which is now being effected will again have to be reconsidered.

The Bill with which we are dealing here today does not contain a similar relaxation of the penalties prescribed in respect of the other drugs, and this aspect is not really at issue in this debate. I know that there are some of us who will nevertheless want to comment on this in some way or another. This is not the occasion to debate this subject, and I do not want to elaborate on this. I want to content myself with saying that in our opinion the time is not ripe to relax the provisions in respect of the other substances as we are now doing in regard to dagga, even though we have had a noticeable decrease in the number of offences in connection with what are known as hard drugs. In my opinion the risks in this regard are still too great to undertake similar steps.

Nevertheless I think that we are with this Bill demonstrating our willingness to consider this legislation from time to time and to make the necessary adjustments. But we are not prepared to relax our vigilance, because what is at issue here for us, as it was at the time when the Act was placed on the Statute Book, is the most precious possession of all our peoples in South Africa, viz. the youth.

I should also like to give hon. members the assurance that we are not, in combating the problems in this regard, particularly in regard to dagga, staring fixedly at legislation as our only hope for solving the problem. On the contrary. As far as dagga is concerned, we cherish the hope that at some stage in future a way will be found of controlling and eradicating the dagga plant, biologically or otherwise, and that we will possibly in this way get rid of it, particularly by preventing the difficult problems which dagga causes. Something of this nature, I think, is not beyond the realms of possibility and I trust that it will become a practical and economic reality in our time still.

I do not think it is necessary to give a further detailed explanation of the Bill before this House because it is in fact self-explanatory. In short, what it amounts to is that the prescribed compulsory penalties in respect of offences in connection with dagga, are being done away with and that the discretion of the courts in connection with the imposition of suspended or deferred sentences is being restored.

Mr. Speaker, on behalf of the Official Opposition I want to say that we welcome the Bill which is before us. We support it because we feel that it is not only necessary, but also essential. If I may say so, we believe it is long overdue. I think the hon. member for Houghton will be pleased today. This is a feather in her cap. She, more than anyone else, will agree that the Bill is long overdue. It is, in fact, a pity that the existing Act was put on the Statute Book in the first place, because had hon. members listened to her in 1971, they would never have gone ahead with it. Just to refresh the memories of hon. members, I want to quote what the hon. member for Houghton said in 1971 (Hansard, 6 May 1971, col. 6103)—

The only response the hon. member had from the House was when the hon. the Minister of Social Welfare and Pensions said—

When the hon. member for Houghton said that she had read the Bill, he replied—

The hon. member for Houghton then went on to say (Hansard, 6 May 1971, col. 6104)—

The hon. the Deputy Minster of Social Welfare and Pensions then said (Hansard, 6 May 1971, col. 6105)—

What do we find today? We find that we are doing exactly what the hon. member for Houghton said we should do. If I may say so on her behalf, I think she can say: “I told you so!” She mentioned at that stage too that the Bill was being rushed through with undue haste. I think this is quite correct because round about 1970 the Grobler Commission sat and took a lot of evidence from all organizations which were involved with the drug problem. I do not think the report had even come out—the evidence was still being considered—when the Bill itself was promulgated. It did not then take into consideration the representations made by people who were involved in this problem, that dagga in fact should be looked upon in a certain way and that a distinction should be made, as in this legislation a distinction is made between the pusher and the person who actually possesses the drug or is using the drug. In saying that, I want to make it quite clear—and I say these words carefully—that getting rid of a bad law does not make dagga a good drug. I stand by those words. As to its effects, harmful or otherwise, I shall deal with that presently.

However, what is essential, is to say that we basically support the principle of the Bill because it restores a discretion to the courts that are dealing with these cases. It also does away with the mandatory sentence. We are against mandatory sentences of any kind and we are against fettering the discretion of the judges and the magistrates who have to hear the cases. Every case is different and the circumstances must be taken into consideration in each and every case. I particularly want to stress the necessity for drawing a distinction when dealing with dagga, because when we speak of dagga we do not speak of something that can be measured easily, something which is empirical. We are dealing with a substance which is habit forming. We are dealing with a substance which is dependence producing. Dependence can be psychological and it can be physical, or it can be both. In this case it is psychological and it is not physical. But each case presents its own problems. A tolerance factor develops from the smoking of dagga itself, and with that tolerance one has to consume more and more, which then increases the consumption and the tolerance. Then, when one stops taking the drug, withdrawal symptoms take effect with grave results to the psychotic state of the individual, accompanied by nausea, vomiting and other physiological effects which the victim suffers. That is what happens in reality. Why it is so essential to distinguish dagga is not just because of the dagga, but because of the plant itself. Experiments have been carried out with the dagga plant itself. Here I wish to pay tribute to Prof. Offenmeyer, one of the leading pharmacologists in South Africa at Potchefstroom University, where these experiments took place. I was party to these experiments where in fact different soils were taken from different parts of South Africa and the same variety of dagga plant was planted under laboratory conditions at the Potchefstroom University. It was shown that although treated in the same way, the dagga plants grew at different rates and produced different quantities, depending upon the soil in which they were grown. The psycho-active component of dagga is a substance known as delta 9 tetrahydrocannabiol, which I shall refer to hereafter as THC. This is the psycho-active drug upon which the dependence and tolerance thereafter develops and which is the harmful ingredient in the dagga itself. The THC content of the plants which were experimentally planted was measured at different times of the day, and the THC content was different on the same plant at different times of the day. Furthermore, the THC content of the dagga plant itself varied if it was taken from the stem, the leaves or the root of the plant. Therefore, all these differences have to be taken into consideration and it cannot simply be said that one is smoking dagga. The THC content of plants from America, Mexico, South Africa or the Middle East is completely different. As for the consumption of dagga, it is of such a nature that the African population, for example …

What is the point of what you are saying? Are you for the use of dagga?

Do you want a dagga control board? [Interjections.]

I think the hon. the Minister is well acquainted with control boards. As far as the consumption of dagga is concerned, the African population do not as a rule smoke pure dagga, but mix their dagga with ordinary tobacco. Then, again, certain sections of the youth will mix Mandrax with dagga, or they will mix LSD with dagga, and smoke it in order to create a better impression or to go out on a bigger “trip”. The differences in this regard are so important that the courts have to take them into account. This legislation came about because of the sort of bombshell …

Are you speaking from experience?

Mr. Chairman, I am speaking from experience.

We thought so all along!

Mr. Speaker, unfortunately I have not been on a “trip” like those hon. members, but I have seen the victims of this drug because I have been associated with a rehabilitation institution. Then there is also the question of the actual effects of dagga on whoever uses it. An important factor is that some people smoke it regularly; some people smoke it once a week, others once a month, and it is the extent to which it is smoked that is decisive in this respect.

The Domino method has been widely discussed and there are various reports on it. I have here a report to Congress from the Secretary of the United States Department of Health, Education and Welfare. In connection with experiments carried out, it is stated in this report, as follows—

This then is the result of experiments carried out in the United States. One of the latest books on this subject, a book which, I think, only appeared about a week or two ago, deals extensively with drug offences. The author of the book is T. D. Reed, a senior Pretoria magistrate who also lectures on this Act at the Department of Justice. In this book he quotes from the book by David Wilkerson, What every Teenager should know about Drugs. Incidentally, David Wilkerson is also the author of the well-known book The Cross and the Switchblade. In one particular quote from Wilkerson’s book it is stated that—

He says that, according to Wilkerson, this is so because dagga is widely reputed to be harmless, whereas this is not the case. Of the estimated 20 000 drug addicts councelled by Wilkerson’s organization, 90% admitted to having started on dagga, graduating later to stronger drugs containing chemical components with dangerous qualities. Wilkerson is then quoted as saying—

This point of view is widely supported among South Africans, for example …

Does Helen believe that chap?

Oh yes. This is supported by Dr. M. Sacks, a psychologist, and by Prof. Botha, who warned that users of dagga may develop tendencies towards aggression and violence. It is also supported by Prof. Offenmeyer, to whom I referred earlier. He revealed that although dagga primarily attacks the brain cells it also adversely affects the liver, the kidneys and the lungs. It accelerates the heartbeat, causing a concomitant drop in blood pressure. He stated that the excessive use of dagga could cause a loss of conception of time, could cause the eyes of the user to become inflamed, or even infected, and could make him restless and sleepless and cause cramps. It could also cause short-term loss of memory and hallucinations.

This report was also referred to Dr. Levin of the S.A. Defence Force, who carried out extensive tests on our own army trainees. In his tests Dr. Levin established that the use of dagga revealed clear psychiatric deviations, while a small percentage suffered a lapse of memory.

Richard Nixon, former United States President, in fact appointed a commission of inquiry into the use of dagga. The commission was headed by one Shafer. Congress voted $1 million for this commission, a commission that sat for a year doing a complete study on the phenomenon of marijuana. I am quoting now from page 65 of the commission’s report—

This is why a discretion had to be introduced and also why changes had to be introduced enabling the courts themselves to give consideration to the matter.

I think we all saw the explosion that took place in the ’sixties. We saw South Africa awake to a drug problem and we became very sensitive about the matter. Recently there was the murder of two young boys in Hillbrow. At that stage there was the similarly disturbing death of a young girl, Glenda Ratner, a girl of 14 years of age who died of an overdose of drugs. Suddenly we woke up to the fact that the late ’sixties was revealing what had hitherto been hidden underground, a drug problem. We saw young children of eight, nine and ten years of age smoking dagga and then going on to other drugs. We saw them in the night clubs at two and three o’clock in the morning. Very soon some of them went on to heroin and then we realized that we really had a problem. We have to see the problem, however, particularly the problem of dagga, in its correct context and perspective. We must keep our heads in order to see that we deal with the problem properly.

The hon. the Minister says the problem has not gone underground, but I respectfully beg to differ. It did go underground because of the minimum sentences imposed by this Parliament. As a result the prices of the drugs went up because they became more difficult to get. It therefore became more difficult to deal with the problem. I would have liked to have seen this regarded as an illness which had to be reported to medical officers of health. The youngsters, however, were dead scared to come forward because they knew of the heavy penalties involved in the use of dagga and other drugs. We therefore did not help the problem in any way at all as far as any clinical approach or rehabilitation is concerned.

There are probably many reasons for the situation. We are living in a post-war period of prosperity and in an affluent society. I think we were shocked, however, when people from wealthy homes—professional people—became involved with drugs. Heavy penalties were imposed in the USA. People were shocked that the children of members of Congress were involved, and because of the heavy sentences prevailing in certain States like California, where a girl got five years for possessing one dagga cigarette, the police did not want to implement the laws and prosecutors did not want to prosecute either. The children consequently developed a rebellious attitude, as much as to say: “Well, the law is not for us because we can play the fool with it.” Because there was a law that was not imposed, resentment instead of co-operation was engendered in the children themselves.

There is also the increasing breakdown of traditions controlling families and neighbourhoods, the expanding influence of the mass media with the strong emphasis on violence, for example the shows on TV and films. There is also the impending threat of war and annihilation. When the matter was being investigated by the Shafer Commission, chaps were going to fight in Vietnam. Obviously their attitude was, to a large extent, that they did not know whether they were going to live until tomorrow. Their attitude was consequently that they might as well get onto drugs and have their “fix”, as the saying goes, because they did not know what tomorrow would bring.

This poses a problem for us as well because we are also fighting in South Africa. We have young men on our borders and we have a duty to protect them by seeing to it that we have an honest overall approach to this matter.

The courts found great difficulty in dealing with the Act itself. I took the trouble, a number of years ago, to do a comparative study of the law. I compared the Act, as introduced in 1971, with the legislation in 19 different countries. I have the analysis here but I obviously cannot put this to the House now. I can say, however, that there is no country in the world that has a minimum sentence in the way we have it in this country. It is true that in Greece and Turkey they have the death penalty, but nowhere is there a minimum sentence imposed. This is where the distinction lies.

Now let me refer to the treatment aspect. When the law came out, the Transvaal Provincial Division, the Natal Provincial Division and the Free State Provincial Division of the Supreme Court each appointed three judges. I am pleased to say that the hon. member on my left was one of the hon. judges who dealt with the case of Esther Nkosi and others.

The Shangase case was dealt with by the late Mr. Justice Harcourt and others in Natal. They had to interpret what was meant by special circumstances as far as this was concerned. The factors which the courts found should be taken into consideration were the age of the accused and, in particular, the conditions relating to their cultural, physical and mental background, the factual context in which the crime was committed and what the motive for the crime was, the limited quantity and nature of the dependence-producing substance itself, the absence of previous convictions, whether or not the accused was in regular employment and had dependants, the local conditions and incidence in the area where he was, any pressures that had been exerted on the person, and a limited and transient consideration, the question of the application of the law itself and the probable effects upon the accused over the long term. The youngsters must be taken into consideration. If they are going to be imprisoned and have to share a goal with hardened criminals who are in gaol for other offences, they are going to react differently.

As regards dealing, the difficulties entailed in this respect speak for themselves. Let me give an example with reference to the definition of dealing. Three people might be sharing a dagga pipe or a dagga cigarette. A passes it on to B who in turn passes it on to C. If a policeman walks in while the pipe or cigarettes is being passed on from B to C, B will be guilty of dealing in terms of the Act and will be subject to a minimum sentence of five years. C will be guilty of possession because he will have been found with a dagga cigarette. Yet it is customary for youngsters smoking dagga to sit in a circle and each have a puff at the cigarette. In this instance the minimum sentence that must be imposed on the dealer is quite ridiculous. How can a dealer of this nature be compared with a person who grows the substance and who brings sacks and sacks of dagga into a township or other area for the purpose of selling it and who makes thousands of rand? I may say that the high price one pays for dagga is also due to the fact that these people have had to go underground. The sentence is the same in both cases. The discretion of the courts was, in terms of the existing Act, taken away in order to deal with this. That is the difficulty.

There is another aspect involved. There is the innocent person who starts off on dagga and who then becomes dependent upon the smoking of dagga. That person may get to the stage where he is unable to work and maintain himself. Not being able to get a job, he will not be able to get money to buy the drug and, that being the case, he may end up in the hands of the runner and become a runner himself. He may start running for a dealer. Such a person, who is actually an addict himself and who is not a dealer, then runs for the dealer who remains out of the way and makes thousands of rand. If the runner is caught, he is treated as a dealer in terms of the law and will have the minimum sentence of five years imposed on him by the courts. Is that right? Yet this is what has been done for seven years. Consequently, we must look again at the definition of dealing. It is no good doing only what has been done in terms of this Bill. What has been done is welcome, but we must go much further.

Why?

For the very reasons I have mentioned. Perhaps the hon. member does not understand what I am saying. If that is the case, I cannot help it. I have tried my very, very best to explain the reasons for saying it.

I now wish to deal with the sentence that can be imposed. The Viljoen Commission of Inquiry into the Penal System dealt with this matter and on page 89 of its report, paragraph 5.1.4.3.72, one reads the following—

That matter is the subject of an amendment which the hon. member for Houghton and I will be bringing before the House. In this amendment we will be following the recommendation of the Commission who, in paragraph 5.1.4.3.74 of the report, even go so far as to suggest—

Our amendment will take these recommendations into account.

As far as sentences are concerned, I think we should give the courts a lead. If necessary, we might well at a later stage consider penalties on the following basis. Firstly, as regards possession, some sort of measure should be applied. Where there are no extenuating circumstances in terms of section 7 of the Act a sentence of, say, five days for every cigarette found may be imposed. Then, for every ten cigarettes, a further five days may be added. In other words, there will then be some sort of standard. As in the case of exceeding the speed limit, where the fine increases as the speed gets higher, so the fine would increase with the extra possession of the plant itself. To my mind that should be done.

The second sort of offence that should be dealt with, is in relation to a dealer. We have no sympathy for dealers who are genuine dealers, as opposed to an addict himself, who should be sent to a rehabilitation centre. If such a dealer sells to a young person, he should get an increased sentence. I would think that most of us, at our ages, should be able to look after ourselves, but a child of eight, nine or ten years of age can easily be persuaded. If that pusher persuades a child of eight, nine or ten years of age to take dagga or drugs, then I believe the younger the person he persuades, the more severe the sentence should be, because they are putting that youngster on to a particular road. In the USA a law exists which states that if you sell drugs to a person three years younger than yourself, there is an increased penalty. Those are the sort of things which this House should consider. It is also, to my mind, no good talking about the offences in respect of dagga without there being a proper education programme and without there being proper rehabilitation in this regard. We must get to the root of the problem and we must educate the people according to that. We have “jeugweerbaarheid” and I am pleased that the Transvaal schools—I am not sure about the other provinces—are in fact teaching pupils the qualities of dagga and other drugs. This is a very good thing and I think we should encourage this practice at schools. Allegations are made that where experiments with dagga and other drugs take place—quite frankly, I think most of us experimented in this way with cigarettes when we were youngsters at school—it is done chiefly because it is the “in” thing and because of the availability of dagga. Not every one of them carry on using dagga thereafter. They might try it once and then throw it away, but on the other hand they might become weekly users, monthly users or chronic users. That is why an education programme must be brought about in this regard.

What main centres do we have in so far as rehabilitation is concerned? As the hon. the Minister will know, there is Magaliesoord, Bloemfontein and a place in Natal for the Indians. We do not have sufficient centres, however, for all. There are also private clinics like the ones in Durban and Johannesburg. The youngsters are sent to these clinics by the courts in order to keep them out of gaol. At these clinics they attend an education programme, are subjected to medical treatment and they experience withdrawal symptoms in order to help them to get rid of their need for the drug itself. What we need in these circumstances, are proper rehabilitation centres to which these youngsters can be sent. Like many other organizations of this nature, which are suffering from a lack of funds to maintain welfare services, these institutions also suffer from a lack of funds. I believe the hon. the Minister should give some attention to the rehabilitation centres that are being run in South Africa in order to see that they are properly staffed and properly run. They cannot be staffed properly and they cannot be run properly unless they have adequate funds to do so. Those are the reasons why I say that a new concept in so far as the treatment of drug addicts is concerned, has come to the fore over the years. The new concept is based on the principle that there is in fact a common denominator, as 95% of people who use alcohol …

Order! The hon. member has made his point and is now not being completely relevant to the Bill. He has gone wide, and I have allowed him to do so, but I think he has now made his point and must come back to the Bill.

Mr. Speaker, I was merely concluding by saying that there should be a proper education programme and that new concepts in regard to the whole treatment of drug abuse should take account of the principle that the more users there are, the more drugs abusers there will be. If, for instance, 95% of people use alcohol, 6% to 8% of them will become alcoholics. In the same way, it can be stated that the more people there are who use marijuana or dagga, the higher the percentage of drug abuse there will be. It is therefore clear that as far as the rehabilitation of the people is concerned, it cannot be based on the rehabilitation and the education of the individual; the process has to be taken into the family. Rehabilitation of a family, for instance, takes place at a centre like Phoenix House. I am pleased to be able to tell the House that 50% to 60% of the follow-up cases at this institution have proved to be successful. For those reasons we on this side of the House are happy to support the Bill … [Interjections.] … and we trust that this Bill will be the forerunner of other non-controversial legislation which the hon. the Minister will bring to the House in order to remove some of the injustices which exist on the Statute Books of South Africa today.

Mr. Speaker, to begin with, I want to convey my congratulations to the hon. the Minister who introduced his first legislation here today. I want to express the hope that it will be the first of a long series of legislation which the hon. the Minister will introduce here to good effect.

The hon. member for Hillbrow supported the Bill, but in accordance with the typical “Yes, but” attitude of the PFP which we have also seen so often in connection with other Bills relating to penalties which aim to combat crime. The hon. member quoted from a book to show what a detrimental, addictive effect dagga can have on one, but then went further and alleged that the penalties for dagga offences were too heavy and wanted to prescribe to the courts how they should deal with such offences on technical points, whilst, according to the legislation before us, the discretion is left entirely to the courts.

I want to dwell for a moment on the pitiless grip which the abuse of drugs or habit-forming substances has on the permissive communities of the modern world. The disquieting way in which these substances penetrate all layers of the population without respect of persons and the tragic traces of ruin and destruction which they leave behind them, have become disturbing phenomena among several nations of the world in our time. The Act of 1971, which is now being amended, definitely had a sobering effect as far as South Africa was concerned, although hon. members allege that it forced the problem underground. For instance, it was discovered that 31% of the American soldiers in Vietnam during the war then had some drag addiction problem. Four out of every five soldiers killed had heroin and other habit-forming substances in their possession.

Until relatively recently, we in South Africa were still fairly free of drag addiction of sufficient extent to give rise to concern. However, there was a fairly sharp increase in the abuse of drags during the ’sixties. This abuse increased to such an extent that in one year alone, in 1971, there were almost 40 000 court cases in which dagga played a role. According to the findings of a commission of inquiry into the abuse of drags in 1970, the Government saw fit to pass legislation in 1971 to create effective measures to exercise control over drags. The legislation was aimed at restricting the unscrupulous pedlars in particular. If we look back today, we see that this legislation undoubtedly succeeded in its purpose very well. As early as the first year in which the legislation was in operation, there was a drop of 10% in drag offences and, as the hon. the Minister said, a drop of 42% in 1976 in comparison with the number of offences in 1971. As I have already said, some of the hon. members will allege that the problem has gone underground. There are other factors which probably played a role, for instance the fact that the police were able to carry out more efficient raids with the help of helicopters in order to eradicate the dagga plant in South Africa. However, it is as plain as a pikestaff that this legislation played a very important role in decreasing the drag problem in South Africa. In the amending Bill at present before the House, the maximum penalty of 25 years for a second or later conviction for drag peddling, remains in force. Only the minimum penalty in the case of dagga falls away, so that the minimum penalty is therefore now left to the discretion of the court. As a result of the large measure of success achieved through this legislation, we discovered that during the 27th session of the United Nations Narcotics Commission, which was held during February 1977 in Geneva, the Republic’s highly effective control over habit-forming drags was praised by the secretariat of the International Narcotics Control Board. I think this is a great achievement for our country.

I think that the discretion which is now being left to the courts, is necessary because in the meantime we have also made progress in dealing with and rehabilitating the early cases of addiction in particular. As we know, it often begins with the first dagga cigarette or two and then later on it leads to more serious addiction.

I should like to refer to the treatment of drag addiction in South Africa, especially to the brilliant results the S.A. Defence Force has achieved in treating national servicemen who are drag addicts at Greefswald. Their success rate was 64% in comparison with a success rate of only 5% to 7% in other parts of the world. I think it is a pity that this base can no longer be used for this purpose due to its strategic position on our border. It is a pity, because the circumstances there are very well suited to treating these people effectively.

The compulsory minimum penalty now falls away and in practice, the court can now use its own judgment to adopt a more scientific approach towards this disease which attacks both body and soul, as is the case with alcoholism. This will be to the advantage of these unfortunate young victims. They are often people who have been led astray. It occurs in particular amongst our Black population, amongst whom dagga smoking is often just as socially acceptable as the consumption of alcohol amongst the Whites. We must concede that alcohol is just as much a drug as dagga. Addiction to it can be just as catastrophic for one’s mind and body. In fact, in South Africa there is much more misery, sorrow and blatant contravention of the sixth commandment—“Thou shall not kill”—as a result of alcohol than as a result of dagga. In fact, these drugs result in a destruction of the mind and the body. The normal pattern is that the alcoholic later goes on to the use of dagga and not vice versa. Experience has taught us that dagga addiction sometimes begins with an ordinary smoke on the quiet or alcoholism with a drink or two and later progresses to an irrevocable addiction which may be accompanied by dagga, in an attempt to escape from this life to a false paradise with illusions of carefree delight, adorned in the most beautiful of colours and rhythms, and accompanied by spectacular mental ecstasy when it comes to the so-called hard drugs, for instance LSD, especially the new LSD-25, an odourless, tasteless and colourless drug of which 50-thousandth of a gram is required to produce a reaction in a human being.

The use of drugs by man is almost as old as the hills. Opium, which is obtained from the opium poppy, was described as far back as 5 000 years before Christ. The early inhabitants of what is now Iraq were the first nation amongst whom the use of opium was described. The opium plant was then known as the “plant of pleasure”. Even in those times medical practitioners used this plant to relieve pain. The well-known morphine and codeine are derivatives of these natural opiates. Apart from these natural opiates there is also a multitude of sleeping pills, barbiturates and non-barbiturates, of which Mandrax is the most important and well-known in South Africa and which has already been totally banned here. There is a long list of so-called tranquillizers, of which hundreds are available on the South African market. I had a look at the drug list and saw that there were no fewer than 62 brands available in South Africa. These 62 substances are grouped into only seven types of chemical compounds. Apart from the tranquillizers there are also the stimulants, like the amphetamines— Purple Hearts—which are fortunately totally banned in South Africa and to which this Act still applies as strictly as before. Ironically, these substances could still be sold across the counter a few years ago because we did not realize that they were extremely detrimental to man.

On this occasion I cannot but address a word of warning to our medical practitioners and patients. The injudicious prescription and use of these sleeping pills and tranquillizers in particular may lead irrevocably to dependence and addiction. An increase in the use of these substances can ultimately lead to the damage and destruction of brain cells accompanied by reducing the normal functioning of the brain. Therefore, these are dangerous substances when placed in the hands of man. There is no doubt that these substances do have a place in medicine, but they can also have treacherous consequences.

I want to stress that the apparent concession being made in this Bill only affects the minimum penalties which may be imposed for dagga offences, for very specific reasons, as the hon. the Minister indicated. The Government does not intend to have a lenient approach to this matter; it only intends handling this problem sensibly and correctly. All the other habit-forming substances to which I have referred are still subject to the strict provisions of the 1971 legislation. The Government cannot and may not allow the will, resistance and the strength of our nation’s spirit to become sapped, to fade and be obscured in these times, in which we are waging a struggle for survival in Africa. If the morals and integrity of the young people of our nation can be undermined successfully—and after all, they are the people who are most exposed to this drug onslaught—it will make our nation—indeed any nation— powerless against an onslaught from outside. It is well known that it is used by international Marxism in its onslaught on the west. The hon. member for Witwatersberg pointed out very effectively last week that it is used by the Marxists against the West. Let us be prepared for this at all times and continue to use this legislation as a watch-dog to protect our nation from the treacherous consequences of drug addiction and the unscrupulous criminal actions of the drug pedlars.

Mr. Speaker, the hon. member for Pietersburg is a medical practitioner, and we indeed listened with interest when he dealt with the dangers of dagga and other drugs, particularly the hard drugs, indicating that sometimes the use of dagga could start a person on that slippery path towards taking more dangerous and potent drugs. We in these benches would like to take the opportunity of thanking the hon. the Minister of Social Welfare and Pensions for introducing this legislation because it is a constructive piece of legislation. We should also like to congratulate him on being appointed as the responsible Minister, and we indeed wish him well with this new responsibility which he now has on his shoulders as far as this portfolio is concerned. We are pleased that we are able to support, at Second Reading, a Bill of this nature which has been introduced by the hon. the Minister of Social Welfare and Pensions. We see this legislation as being necessary and we realize that there have been difficulties in connection with the 1971 legislation.

When the 1971 legislation came before this House, those of us who were in the House supported the legislation during its various stages because we believed it was a necessary step to take with the growing danger of drug abuse that had appeared, not only in this country, but also throughout the world. We did have an opportunity of studying the Grobler Commission report which dealt with the question of drug abuse, especially as far as the White group is concerned. I hope, at a later stage, to be able to indicate that we in these benches believe that further research and investigation is required as far as the use of dagga is concerned, particularly amongst the other race groups.

The legislation before the House consists of only three clauses, but they are nevertheless important because, as the hon. the Minister has indicated, the discretion of the courts will now apply, as far as sentence is concerned, without a mandatory minimum sentence. This legislation will therefore only be applicable to those cases involving dagga. We are in favour of this matter being left to the discretion of the courts. This is one of the main reasons why we believe this Bill must be supported at Second Reading. We would also like to see the other parts of the principal Act which deal with minimum sentences being amended so that full discretion will be granted to the courts.

I should now like to deal with the question of the proviso added to section 2A of the principal Act. In 1973, when the 1971 Act was amended with regard to cases dealing with the suspension or postponement of sentences and discharge with caution or reprimand, those of us who were in the House at the time opposed the 1973 legislation on those grounds.

But not in 1971.

No, it was not the 1971 legislation, it was in 1973. Perhaps the hon. Chief Whip of the PFP was not listening, because I indicated a few moments ago that those of us who were in the House at the time supported the 1971 legislation.

Why?

Please allow me to first finish my sentence. It seems to me the hon. members of the PFP are really anxious. I indicated a few moments ago that the 1971 legislation followed recommendations which were made in the Grobler Commission report which was tabled in this House in 1970.

[Inaudible.]

I have just mentioned that it did not deal with dagga. I am sorry, Mr. Speaker, but it seems that I have to keep on repeating everything. [Interjections.] It was a pity that the report did not deal with the question of dagga and also did not deal with the other race groups. I have already mentioned that point. However, at that time we believed that the 1971 legislation was necessary to counteract the serious situation which was developing, and it developed not only in South Africa but throughout the other parts of the world as well. We therefore felt that strong legislation was necessary to act as a deterrent, particularly to those people who were dealing in hard drugs such as heroin, etc. The legislation that was passed by this House was indeed an attempt to cope with that problem, and as such we supported it. We believed that it was necessary to take these urgent steps to try to combat that problem. It is not a case of our having regretted supporting that legislation in 1971. That legislation was necessary. Today we have an amendment before the House dealing with the discretion of the courts and the question of dagga. [Interjections.] The hon. member for Houghton is continually interjecting about dagga. It was interesting to listen to her colleague, the hon. member for Hillbrow, who, in his speech, highlighted the dangers of dagga and the harm that can be caused to the health of people by the use of dagga. He took a very strong line against dagga. He is a man who has had a great deal of experience, and I bow to his experience in this particular field. He made a very good speech indeed about dagga.

The hon. member for Pietersburg also dealt with the dangers of dagga, and I also hope to be able to indicate to this House the extensive evidence which has been tabled, in various forums and at international conferences, with regard to dagga and drug dependence, evidence highlighting the dangers of dagga.