Can someone explain to me why I'm getting negative approval for "Not Leading Political Parties in System". 

This is my current senate breakdown:

This is the current breakdown of my system:

My approval break down are as follows:

I understand the negativs for everything but the Not Leading Political Parties in System. It seems to me that I have the political parties in the system, so why is the negative approval being generated for this? Does this mean I don't have a Governor assigned to the system who is alligned to one of those parties?

Yes but did they all win? it doesn't matter if the votes are there, there are only 1-3 Senate seats. No Senate seat, no representation.

Hence why Democracy gets three, it minimizes the Disapproval from not being represented by representing the three most popular parties instead of the two most popular.

Yes, in the images above the ecologists are the leading party. It seems like having a governet on the system that is the ideaology type of the leading faction is the solution to thsi issue. I need to test more though

From what I see I suspect you're playing Horatio, and you have their ecologist dictatorship.

Of your 12 representatives, only the 4 ecologists are represented in your senate, the other 8 are the ones penalizing your approval. IIRC this is also a penalty specific to dictatorship, or at least worse here.

I made this guide, then I tested a bit of this, so there is better explained differences between governments.

This is why the dictatorships have the 'encourage [ideology]' infinite improvements.