J O BU RG A D V O CA CY G RO UP (J A G)

Working for best practice governance in the City of Johannesburg

Joburg Billing Crisis Campaign Information Leaflet for Residents and Businesses Please go directly to Page 7 for information on how to proceed in the case of an incorrect or disputed bill. Last updated: 24 August 2011

About the Joburg Advocacy Group (JAG) The Joburg Municipal Billing Crisis Campaign is a campaign of the Joburg Advocacy Group (JAG), an independent, non-aligned and voluntary civil society advocacy group, working for best practice governance, social justice and environmental protection in the City of Johannesburg.

The JAG Billing Crisis Campaign JAGs billing crisis campaign began on 13 November 2010 with the publication of an information leaflet for residents and businesses who were experiencing problems with their municipal accounts. Many had reported major errors on their accounts and extreme difficulties in trying to have these resolved. At that time, some residents had reported receiving interim electricity accounts as high as R23 000, quickly followed by letters of demand threatening to cut off their services if the "arrear amount" was not paid. (Many

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residents have subsequently received much higher bills - some as high as R6m - and businesses have reported similar instances of hugely inflated bills based on interim estimates). Others had reported being forced to pay admissions of debt for erroneous amounts in order to get the clearance certificates they required to effect transfer of a house or apartment that had been sold. Still others had reported that many months of payments have not been credited to their accounts, or that they had received abnormally high charges for water and other services. More concerning, city officials and the citys attorneys had been reported to be consistently demanding payment of these erroneous amounts under threat of cutoffs, legal action, blacklisting, the withholding of clearance certificates or, indeed, attachment of the property in question. All of the residents and businesses that had approached JAG had attempted to resolve these issues through the normal channels. However, repeated calls to the Joburg Connect "helpline", e-mails to Joburg Connect, e-mails to the citys accounts office, visits to the accounts office itself, visits to the citys walk-in centres and correspondence with various officials had left them unable to have the issues resolved. More often than not, they were simply told to pay their bills or suffer the consequences. Similarly, although the Public Protector had asked residents and businesses to log complaints about this and other service delivery situations, many residents reported that they had not even received acknowledgement of their complaints from the Protector's office, let alone any assistance. The issue had also been reported extensively in the media, but this had brought no effective relief. The information leaflet was therefore intended to provide residents and businesses with the information they needed to address their billing complaints directly with the city and with appropriate oversight bodies. However, by early January 2011, it was clear that the situation, rather than improving, was actually worsening.

Advocacy and Direct Action JAG therefore launched a full-scale advocacy and direct action campaign on 19 January 2011, beginning with an appeal to the Gauteng MEC for Local Government and Housing, Mr Humphrey Memezi, to conduct an official investigation into what had clearly become a billing crisis in terms of the Municipal Systems Act (see http://goo.gl/Gm2jw). Regretfully, no response was received.

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We subsequently sent considerable information on the billing crisis to the Department of Cooperative Development and Traditional Affairs, which later convened a summit of Gauteng Mayors, Municipal Managers and senior financial officials to address the issue of endemic billing problems in both the City of Johannesburg and in other municipalities in the province. The Minister also gave the city and the province until 18 February to produce a report on the crisis. According to the media, this report was, indeed, produced and was handed over to the Minister but, as at the time of writing, this report has still not been released. Since 19 January, JAG has also been conducting an intensive media campaign aimed at exposing the nature and extent of the crisis, and has received fairly wide coverage of the issue in the media. We have nevertheless been concerned that the seriousness of the situation is not being communicated and that, in some instances, information supplied to the media is purposefully not being reported, presumably for various political reasons. JAGs media campaign has been supplemented with regular information updates for residents and businesses on the groups web site (http://jag-sa.blogspot.com), Facebook page (Joburg Advocacy Group) and @JoburgAdvocacy on Twitter (billing crisis tweets are tagged #jbills), as well as with participation in various media debates. We have further approached the Johannesburg Chamber of Commerce and Industry (JCCI), the Law Society of the Northern Provinces (LSNP) and the Public Protector to ask these oversight bodies to conduct in-depth investigations into various aspects of the crisis. As for todays date, no acknowledgement has been received from the JCCI and the only response weve had from the Public Protectors office is to advise that the matter is being investigated. The LSNP has written to advise that it can only take action on complaints from affected residents and then that its jurisdiction only extends to professional sanction. It advises that any suspected or actual criminal misconduct must be reported to the SAPS. Recent Action We have further forwarded all e-mailed complaints addressed directly to JAG to the new National Consumer Commission (NCC), which came into effect on 1 April to enforce the provisions of the new Consumer Protection Act (Act 68 of 2008), and have recommended that all residents with unresolved billing issues escalate their complaints to the NCC immediately. We are unable to quantify how many complaints have been received or resolved by the NCC, but the commissions last media statement on the matter advised that it had received about 400 complaints and that approximately 60 of these had been resolved. As we are aware that many thousands of residents are affected by the billing crisis, we advise all affected residents to log complaints with the NCC so that the commission can obtain a full understanding of the nature and the extent of the problem. Investigators at the NCC are working very hard to resolve as many billing disputes as possible, and the NCC has recently announced that it will take very definite action against the City of Joburg if it is unable to rectify both individual disputes and the on-going high
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number of billing errors. The commission has, for instance, said it will take the city to the Consumer Tribunal if the current situation continues and that it could face fines of up to R1m for each unresolved case. Complaints to the NCC should, of course, be seen within the greater context of the total number of billing complaints. In February, the Mayor confirmed in a media conference that 8% of the citys over one million bills were incorrect. At the very least, this means that 80,000 residents at the time had incorrect municipal bills. The city claims to have reduced this number by 52,000 in subsequent months, but all attempts to verify this through both the city and the provincial MECs office have been unsuccessful. Further, new errors are being reported after every statement run, and both individuals and communities continue to report widespread billing problems, both to JAG and the media. In addition, there appears to be a trend of new errors compounding existing errors that is introducing a level of complexity into the system which mitigates against fair and just resolution of many billing complaints.

The Legal Context In the opinion of JAG, the current billing crisis may be construed to be in violation of both the Bill of Rights and various other Acts, as well as in violation of certain principles of common law. We record a few selected examples here to illustrate the point. (i) The Constitution In terms of Section 33 of the Constitution of the Republic of South Africa (1996) (contained in Chapter 2, The Bill of Rights), all citizens have the right to just administrative action, and the onus is on the state to ensure that the administration of all state functions is effective. The actual wording of this section of the Bill is as follows: Everyone has the right to administrative action that is lawful, reasonable and procedurally fair. Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons. National legislation must be enacted to give effect to these rights, and must:

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provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal; impose a duty on the state to give effect to the rights in subsections (1) and (2); and promote an efficient administration.

See http://www.info.gov.za/documents/constitution/1996/96cons2.htm#33 for more. (ii) The Municipal Systems Act Section 95 of the Municipal Systems Act (Act No.32 of 2000) reads as follows: In relation to the levying of rates and other taxes by a municipality and the charging of fees for municipal services, a municipality must, within its financial and administrative capacity (a) establish a sound customer management system that aims to create a positive and reciprocal relationship between persons liable for these payments and the municipality, and where applicable, a service provider; (b) establish mechanisms for users of services and ratepayers to give feedback to the municipality or other service provider regarding the quality of the services and the performance of the service provider; (c) take reasonable steps to ensure that users of services are informed of the costs involved in service provision, the reasons for the payment of service fees, and the manner in which monies raised from the service are utilised; (d) where the consumption of services has to be measured, take reasonable steps to ensure that the consumption by individual users of services is measured through accurate and verifiable metering systems; (e) ensure that persons liable for payments, receive regular and accurate accounts that indicate the basis for calculating the amounts due; (f) provide accessible mechanisms for those persons to query or verify accounts and metered consumption, and appeal procedures which allow such persons to receive prompt redress for inaccurate accounts; (g) provide accessible mechanisms for dealing with complaints from such persons, together with prompt replies and corrective action by the municipality; (h) provide mechanisms to monitor the response time and efficiency in complying with paragraph (g); and (i) provide accessible pay points and other mechanisms for settling accounts or for making pre-payments for services.

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(iii) The Intimidation Act Although the wording of the Intimidation Act (Act No. 72 of 1982, as amended in 1991 and 1992) is quite convoluted, it essentially makes it an offence to intimidate a person in any way, either by threat or by means of assault. (iv) The Municipal Finance Act The beginning of Section 64 of the Municipal Finance Act (Act No. 176 of 2004) reads as follows: 64. (1) The accounting officer of a municipality is responsible for the management of the revenue of the municipality; (2) The accounting officer must for the purposes of subsection (1) take all reasonable steps to ensure (a) that the municipality has effective revenue collection systems consistent with section 95 of the Municipal Systems Act and the municipalitys credit control and debt collection policy; (v) Common Law In common law, the current billing crisis in the City of Johannesburg may be regarded as being in violation of the legal principle of contractus non adempleti, which effectively makes it an offence to charge for goods or services that have not been delivered in terms of a contractual agreement. As the city has a de facto contract to supply services to ratepayers, which it is then permitted to charge for, the current situation may be considered to be in violation of that contract. A legal opinion on this issue can be found on the web site of the National Taxpayers Union (NTU) at http://www.nbusa.org/?p=429#more-429. Further, in terms of the eight consumer rights defined by the South African National Consumer Union (http://www.bizcommunity.com/Article/196/160/17811.html), the state is clearly not meeting the consumer's right to redress in this situation. It is also not meeting its own commitment to the principles of Batho Pele (see http://www.dpsa.gov.za/batho-pele/Principles.asp).

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Administrative and Civil Redress for Residents and Businesses Residents and businesses that have complaints about their municipal accounts, or whose accounts are in dispute, are advised to take the following steps: Log a complaint with Joburg Connect (011 375 5555) and record the reference number of the call. It is also advisable to log a complaint with the city via e-mail at joburgconnect@joburg.org.za. If you have not logged a complaint before, this must be your first step, as all other steps depend on you having done this and on you having an appropriate reference number. NOTE: None of the other e-mail addresses given to us by the city are functioning any longer (including statements@joburg.org.za, Billing_Queries/joburg.org.za@joburg.org.za and revenuequeries@joburg.org.za) and it seems the city is only responding to mails sent to joburgconnect@joburg.org.za. Follow up on both complaints within seven days and, if you are unable to have the matter resolved within 14 days, approach your ward councillor for assistance. The names and contact details of all new ward councillors are available here: http://www.scribd.com/doc/57019787/New-Ward-Councillors-in-the-City-of-Joburg. Contact your councillor's party office for his/her individual phone number:ANC: 011 834 5973 / DA: 011 242 8800. NOTE: Please continue paying an average amount based on the bills you received in the three months prior to the dispute, as disputes can take months or even years to resolve and this will mitigate against you receiving a large actual bill once the dispute has been resolved. If your ward councillor is unable to assist you, log an official dispute with the city. This is a legal step and the city cannot dismiss the dispute until it has been resolved. There is no cost involved and sample dispute documents can be found on the web site of the National Taxpayers Union (see http://www.nbusa.org/?p=400). We suggest that you take your disputed accounts and two copies of your dispute document into the office of the City Manager personally, that you ensure the copy you leave behind is date stamped and signed by an appropriate official, and that you obtain a similarly signed and stamped copy to verify receipt. Also, in terms of national energy regulations, the city may not disconnect electricity supply to a property where an official dispute with regard to a municipal account has been lodged. Further, water supply may never be fully disconnected (although the flow may be restricted in a genuine case of nonpayment), as this is in violation of the Constitution. If your electricity is cut while your account is in dispute, you may lay a complaint with the National Energy Regulator (NERSA) by calling 012 401 4600 or by e-mailing info@nersa.org.za.

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You may also apply for a court interdict to compel the city to supply you with a correct municipal bill or, where your electricity has been illegally cut off, to compel reconnection. This can be done through any practicing attorney. Costs vary, so we suggest that you ask for a detailed outline of the procedure to be followed as well as of the associated costs before applying for an interdict. Your attorney should apply for the interdict with costs, which means that if the interdict is granted, the city will have to pay your legal costs. If you are intimidated in any way by attorneys acting on behalf of the city, you may lay a complaint with the Law Society of the Northern Provinces. Contact details are available on the societys web site at: www.northernlaw.co.za. Remember, attorneys acting on behalf of any company, organisation or government department must supply you with a correct statement of account on request and cannot intimidate you into paying a disputed account. If you are unable to have your dispute resolved using these methods, log a complaint with the Public Protector. This can be done by calling toll-free on 0800 11 20 40. Complaints can also be made by means of a letter addressed to the Public Protector, Private Bag X677, Pretoria, 0001. Please keep copies of all correspondence. NOTE: Do not log a complaint using the online complaints form on the Public Protectors web site. We have been advised by the office of the Public Protector that this form hasnt been working for two years.

If you do not receive an acknowledgement of your complaint, please follow up regularly and persistently. As of 1 April, you can also log a complaint with the new National Consumer Commission. The commissions toll-free call centre number is 0860 266 786. You can also send complaints through by e-mail to ncc@thedti.gov.za or you can fax complaints to 0861 515 229. NOTE: If you have been blacklisted without cause, you should report this to the NCC immediately and ask for a speedy investigation into the issue.

At this stage, we suggest that you also send a copy of your complaint/s to the Department of Cooperative Development and Traditional Affairs, which is tasked with dealing with service delivery in local government. Complaints may be logged with either the national office or any of the regional offices (a full list is available at http://goo.gl/IAlNZ). The telephone number for the national office is 012 334 0600 and the fax number is 012 334 0603. Regretfully, very few government officials have listed e-mail addresses, and where they do have them, correspondence is seldom acknowledged. You may also contact the SA National Consumers Union, a voluntary organisation dealing with consumer issues, for advice and assistance. The unions postal address is PO Box 27852, Sunnyside, 0132 and its e-mail address is sancu@sabs.co.za. The union can also be reached on 012 428 7122, and faxes can be sent to 086 672 8585. The SANCU web site is at http://www.sancu.co.za/.

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Residents Associations (RAs) also have the option of declaring a collective dispute with the city. Sample documents can be found on the web site of the National Taxpayers Union (see http://www.nbusa.org/?p=400). Further, RAs may choose to join the NTUs rates campaign should they wish to do so. Over 30 NTU-affiliated residents associations are currently withholding rates due to the non-delivery of services, and one of the most active of these is in the community of Sannieshof in North West (see http://www.facebook.com/group.php?gid=94041694787&v=wall). Rates campaigns are best conducted under the auspices of the NTU, which has already set a number of legal precedents in this regard. It is advisable for RAs considering a rates campaign to become members of the NTU (at a rate of R20 per household per year), as this will give them access to the unions extensive knowledge base, as well as both legal advice and support. In larger cities, rates campaigns are best conducted by individual RAs at suburb level, as this has proven to be more effective than trying to organise a city-wide campaign.

You may, at any time, institute a civil suit for damages suffered as a result of a billing dispute. You should follow the same steps as those you would follow when applying for a court interdict. You may also join the class action lawsuit against the city initiated by DA Councillor David Dewes should you wish to do so. He can be contacted by e-mail at victorian@icon.co.za or by calling him on 082 453 9846. If you are approached to pay a financial incentive to have your municipal dispute resolved, please report this to the Anti-Corruption Hotline on 0800 701 701. You may do this anonymously.

Criminal Charges Residents and businesses may wish to lay criminal charges in the following instances: If you are intimidated in any way by a city official, by a contractor working on behalf of the city, or by attorneys working on behalf of the city, obtain the name of the official in question and lay a charge of intimidation against him/her at any SAPS station in terms of the Intimidation Act of 1982. If you are compelled by anyone representing the city to pay a disputed and/or unproven amount under threat of cut-offs, legal action, blacklisting, the withholding of a clearance certificate, the attachment of your property or violence of any kind, this is criminal extortion, and you can again lay a charge at any SAPS station to this

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effect, as indicated above. You can also contact the SAPS Commercial Branch for advice by calling 011 870 5312 or mailing commercial.hq@saps.org.za. If you have evidence to suggest that it is the citys policy to compel you or any other residents to pay disputed amounts under threat, or that there has been a general instruction for staff to do this, this is system-based criminal extortion, and you should contact the SAPS Commercial Branch about this immediately. The branch has the kind of specialist resources to investigate this kind of crime, and it apparently has a 98% conviction rate. NOTE: In this case, should you wish to lay a charge, the respondents you would need to name would be Executive Mayor Parks Tau, City Manager Mavela Dlamini and MMC for Finance Geoffrey Makhubu. If you suspect any fraudulent activity on your account, please contact the SAPS Commercial Branch for advice on how to proceed. Finally, if you have been unable to resolve your dispute despite repeated attempts, you may lay charges against the city for violations in terms of the Municipal Systems Act (refer to the sections quoted on pages 4 and 5 above for details). In this case, you would need to name Executive Mayor Parks Tau and Finance MMC Geoffrey Makhubu as respondents.

Unfortunately, it is JAGs experience that residents and businesses can no longer rely on city processes, the Gauteng Department of Local Government or, indeed, on the Public Protectors office to have their billing disputes resolved. We have addressed this issue at all levels of government - including with the Presidency - so everyone who needs to know about the issue has been fully informed. However, the only effective course of action we can recommend at this point is: Apply for a court interdict to prevent cut-offs if you require one urgently; Escalate any unresolved disputes to the NCC and request an urgent investigation of your case; Consider getting your local residents association to join the National Taxpayers Union, which will assist your community to establish a campaign of withholding rates in protest against this and other kinds of poor service delivery in the city.

No matter which course of action you decide on as an individual, it is important to bear in mind that concerted and consistent collective action by a large number of people is the only way in which the billing crisis and other serious service delivery and financial management issues affecting the people of the City of Joburg will be addressed.

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So if you have been affected by the billing crisis, become an active citizen and TAKE ACTION NOW!

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