National Council of Provinces - 06 November 2001
TUESDAY, 6 NOVEMBER 2001 __
PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
____
The Council met at 14:02.
The Deputy Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS see col 000.
NOTICES OF MOTION
Mr L G LEVER: Chairperson, I hereby give notice that at the next sitting of the House I shall move:
That the Council -
(1) notes that National Police Commissioner, Jackie Selebi, informed Parliament that the SA Police Service needs 16 250 more police officers to stabilise the crime situation in the country;
(2) further notes that the Minister of Finance informed the Council that the provinces lacked the capacity to spend their combined R10 billion capital budget; and
(3) in the light of the aforementioned facts, resolves to debate realigning the national Budget accordingly.
Mr N M RAJU: Chairperson, at the next sitting of the House I shall move:
That the Council -
(1) notes with deep concern a media report in the Sunday Times on 4 November 2001, stating that teacher deaths due to HIV/Aids have rocketed by more than 40% in the past year, according to statistics compiled by the largest teacher trade union in South Africa, Sadtu; (2) welcomes the stated intention of Mr Willie Madisha, Cosatu and Sadtu president, to call upon the Government to declare Aids a national emergency as so many young teachers are succumbing to the epidemic; and
(3) calls upon the national Minister of Education to intensify the Ministry’s programme to raise awareness of the disease among the teaching fraternity and to create an environment where the stress of secrecy around HIV can be removed and where collegial understanding and empathy prevails.
Rev M CHABAKU: Chairperson, I humbly give notice that at the next sitting of the House I shall move:
That the Council -
(1) notes and appreciates the bold step taken by the Western Cape transport MEC, Piet Meyer, in distancing himself from careerists and opting for a route which will bring about greater stability in the province; (2) congratulates Mr Meyer on recognising that dignity is more important than salary and status; and
(3) welcomes Mr Meyer’s resignation and calls on all parties to remember that being constructive and refraining from pettiness will overcome the huge challenges facing this nation.
Mr K D S DURR: Mr Chairman, at the next sitting of this House I will move:
That the Council -
(1) calls upon the SA Police Service, the Financial Services Board, the insurance industry and the funeral industry to co-ordinate their efforts to put an end to racketeering in the industry and to act against grave robbers that dig up and recover coffins and resell them to an unsuspecting public; and
(2) notes that malpractice surrounding the funeral industry is causing trauma to many families and is giving the whole burial and insurance- related industry a bad name.
LEAKED MATRIC EXAMINATION PAPERS
(Draft Resolution)
Mrs J N VILAKAZI: Chairperson, I move without notice:
That the Council -
(1) notes with great sadness and shock the leakage of matric exam papers in some schools in Gauteng and Mpumalanga;
(2) further notes the negative implications of this matric exam scandal for the students involved, parents and the school as a whole;
(3) believes that the officials involved are enriching themselves by selling the exam papers and are destroying the morals and the values of our education system; and
(4) appeals to the Education department at all levels to see to it that this horrible act by people who want to enrich themselves by selling exam papers is stopped and that those involved are brought to book.
Motion agreed to in accordance with section 65 of the Constitution.
WORLD WILDERNESS CONGRESS AND NATURE CONSERVATION IN EASTERN CAPE
(Draft Resolution)
Me E C GOUWS: Voorsitter, ek stel sonder kennisgewing voor:
Dat die Raad kennis neem dat-
(1) die sewende Wêreld Wildernis Kongres die afgelope week luisterryk in Port Elizabeth ‘n aanvang geneem het;
(2) ongeveer R10 miljoen deur die Global Environment Facility belowe is vir natuurbewaring in die Baviaanskloofgebied in die Oos-Kaap;
(3) hierdie finasiële inspuiting broodnodig is vir toerisme, bewaring en werkgeleenthede in die Oos-Kaap; en
(4) hierdie area as gevolg van hierdie skenking as een van die voorste wildbewaringsgebiede in die land gereken sou kon word. (Translation of Afrikaans draft resolution follows.)
[Ms E C GOUWS: Chairperson, I move without notice:
That the Council notes -
(1) the magnificent opening of the seventh World Wilderness Congress during the past week in Port Elizabeth;
(2) that approximately R10 million was pledged by the Global Environment Facility for nature conservation in the Baviaanskloof area in the Eastern Cape;
(3) that this financial injection is highly needed for tourism, conservation and job opportunities in the Eastern Cape; and
(4) that as a result of this donation this area could be regarded as one of the premier wildlife conservation areas in the country.]
Motion agreed to in accordance with section 65 of the Constitution.
MEDIUM-TERM BUDGET POLICY STATEMENT
(Draft Resolution)
Ms B THOMSON: Chairperson, I move without notice:
That the Council -
(1) with regard to the Medium-Term Budget Policy Statement, notes the following:
(a) the statement will promote greater certainty and predictability
in our budget process; and
(b) the statement also outlines a bold programme of action for
national and provincial departments, municipalities and
Government agencies;
(2) congratulates the National Treasury of South Africa for the prompt release of its Medium-Term Budget Policy Statement; and
(3) also notes that the Budget Committee, which will bring together Members of the National Assembly and this Council, will deal with the Statement. Motion agreed to in accordance with section 65 of the Constitution.
SENTENCING FOR CHILD RAPE
(Draft Resolution)
Mrs E N LUBIDLA: Chairperson, I move without notice:
That the Council -
(1) notes that a Pretoria High Court judge, Judge Johan Els, has sentenced 30-year-old Albert William Nkosi, a father of two, to life imprisonment for raping a seven-year-old child in January last year;
(2) believes that the rape of young children is shocking and unacceptable;
(3) commends Judge Johan Els for setting a precedent for other judges and effectively implementing our minimum sentences legislation; and
(4) believes that rapists will now think that the consequences are more important than the act of rape.
Motion agreed to in accordance with section 65 of the Constitution.
UMZINYATHI COMMUNITY WATER PROJECT
(Draft Resolution)
Rev P MOATSHE: Chairperson, I move without notice:
That the Council -
(1) commends the Minister of Water Affairs and Forestry, Ronnie Kasrils, jointly with the Ethekwini Municipality for the grant of R27 million to the Umzinyathi community water project for water and sanitation which was launched yesterday; (2) recognises that this project shows genuine commitment by this Government to tackle poverty and unemployment; and
(3) pays tribute to all the parties involved in this constructive project and calls upon all South Africans to unite against poverty and unemployment so as to overcome this huge challenge together as a nation.
Motion agreed to in accordance with section 65 of the Constitution.
DEATH OF MATTHEW ``LOOP EN VAL'' MOTSHARATEU
(Draft Resolution)
Ms J L KGOALI: Chairperson, I move without notice:
That the Council -
(1) notes with sadness and shock the killing and sudden departure of the legend, Matthew “Loop en Val” Motsharateu; (2) notes that this is not the first time that heroes and heroines of our country are killed by criminals;
(3) remembers “Loop en Val” as one of the first black South Africans to be decorated with Springbok colours during the heyday of apartheid under difficult circumstances; and
(4) calls upon the community to assist the police in apprehending the perpetrators of this heinous crime so that they can rot in jail.
Motion agreed to in accordance with section 65 of the Constitution.
NEWSMAKER OF THE DECADE AWARD TO FORMER PRESIDENT NELSON MANDELA
(Draft Resolution)
Mrs E N LUBIDLA: Chairperson, I move without notice:
That the Council -
(1) notes with delight the honour of Newsmaker of the Decade which was bestowed on former President Nelson Mandela;
(2) believes that this award is a fitting tribute to the enormous contribution which Mr Mandela has made to nation-building and reconciliation in South Africa during the last decade and prior to that;
(3) further believes that the award was also made in recognition of the positive role he has played in securing international justice, peace and harmony; and
(4) joins in this celebration by congratulating Madiba on his award and thanking him for his unselfish, principled leadership and fatherly guidance which has enriched the lives of millions of children and people across the world.
Motion agreed to in accordance with section 65 of the Constitution.
COMPLETION OF TASK OF AD HOC COMMITTEE ON POWERS AND PRIVILEGES OF
PARLIAMENT
(Draft resolution)
The CHIEF WHIP OF THE COUNCIL: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:
That, with reference to the resolution adopted by the Council on 5 April 2001, the Ad Hoc Committee on Powers and Privileges of Parliament is to complete its task by no later than 31 May 2002.
Motion agreed to in accordance with section 65 of the Constitution.
INDUSTRIAL DEVELOPMENT AMENDMENT BILL
(Consideration of Bill and of Report thereon)
The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): I take this opportunity to welcome the hon the Minister of Trade and Industry.
The MINISTER OF TRADE AND INDUSTRY: Chairperson, colleagues in the House, this Bill makes certain relatively limited amendments to the Industrial Development Corporation Act. The most important of these amendments, from a practical point of view, is the extension of the mandate of the IDC to Southern Africa and other parts of Africa.
The Industrial Development Corporation is our premier development corporation and, I think, in world terms, would hold its own with its track record. In the period since 1994 it has accounted for approximately 10% of gross fixed capital formation in the economy, and last year alone accounted for 5,9% of gross fixed capital formation.
The IDC has undergone a number of changes, particularly since 1995-96, and I believe it is an improved organisation. We have modernised it in many respects and we are widening its mandate to take into account contemporary critical policies such as empowerment, support of small and medium enterprises and the support of our regional investment initiatives, such as SDIs and IDZs.
This Corporation, as many would know, is an old corporation, with the initial Act passed in 1940. There is clearly some scope for updating and modernising the Act. Our intention is that as the IDC has changed, we will, as I have indicated in the other House, consider further amendments to this Act at a later stage. Currently, however, we have limited them to a few specific areas which we believe are operationally important to get us moving, particularly, as I mentioned earlier, the investments in Africa.
I think we should bear in mind, however, when considering the Industrial Development Corporation, that it is a development financing institution that functions as a fully autonomous cost-recovery corporation. It is not an institution that is subsidised by the Government. This Government provided the initial capitalisation many years ago. It pays a dividend, it pays tax and functions as a development financing corporation. We expect it
- and this is its mandate - to undertake its activities in a correct, prudential manner, with a clear assessment of the economic and financial viability of projects. So we cannot expect at any time that the IDC would undertake a whole range of different activities. It is a full-cost financing operation owned by the state and it has proved, I think, to be a very effective instrument.
I would urge colleagues in this House to support these more limited amendments. They will allow us to undertake important projects in our neighbouring states, and in fact they will allow us also to undertake some important projects in Africa, that are currently under negotiation. This will, no doubt, support the New Partnership for Africa’s Development. The IDC can play a very important role in that regard. [Applause.]
Mr M V MOOSA: Mr Chairperson, first of all, I want to start by congratulating the Minister on introducing this Bill into Parliament this year. It indicates that we are constantly reassessing and reviewing our state corporations, and that we are looking at where the market opportunities are and what needs to be done with these corporations to achieve our overall national economic strategic objectives.
I would like to just quickly state, for the benefit of members of the House, that the IDC was formed in 1940 through legislation. It is an old organisation. One of its main objectives was to find opportunities in our market that were not exploited and to exploit those opportunities, strengthen and grow them in order to create jobs and so forth.
However, more recently, we found that there were a number of strategic things that needed to be done. For example, our economy is opening up into Africa. Can our corporations move into Africa to, firstly, build infrastructure, capture economic opportunities and participate in the economic development of the continent? With the amendments that we brought about in this Bill, we will be able to do so.
However, there are so many other things that have been added into this Bill which members, particularly those from the provinces, would be very keen to know about. For example, the IDC is now, specifically by law, empowered to promote economic empowerment of historically disadvantaged communities. By law, it is required to foster the development of small and medium enterprises in our country; to promote employment creation activities, particularly in underdeveloped areas; and to leverage foreign direct investment and so forth.
So, from that point of view, this is a welcome Bill. It is something that, certainly, takes us a long way towards getting the IDC to do the kind of things that we want it to do.
I just wanted to indicate that the IDC is probably the fourth largest state corporation in the country at the moment. It controls about R17,4 billion worth of assets, and it is the fifth largest income- generating corporation in the country. The IDC is earning about R630 million per annum for the country.
Already the IDC is involved in a number of SADC countries. They are involved in nine different countries in the SADC region. With this Bill they would be able to go beyond the SADC countries, all the way up into Africa. They are already involved in aluminium, mining, agriculture, manufacturing and tourism. With this Bill, hopefully, they will be able to go down the line into smaller sectors in the economy and get involved in those areas. Of course, the Bill now also empowers the IDC to move into the ICT sector.
Another little interesting statistic is that in the year 2000, for example, the IDC was responsible for creating some 17 500 jobs in this country, which is a phenomenal number of jobs from one particular company or organisation. Last year, 2000, some of their investment activities led to a R4 billion growth in exports, in our country.
However, there are a number of problems with this Bill of which the Minister is probably well aware. One, which he has already mentioned, is the fact that the Bill is really outdated. We know that the Ministry has started the process of reviewing this Bill and that the Minister has the intention of introducing a new IDC Bill into Parliament, hopefully next year. As Parliament, we are saying that we will really support him on that. We know that we need to modernise the legislation and the IDC in order to participate at an international level. We think that this is long overdue and we would certainly be supporting him on that.
Another area of the IDC that needs discussion by Parliament and policy- makers is: What is the balance between pure business principles that the IDC involves itself in on the one hand and the developmental activity it ought to involve itself in on the other hand? Sometimes, involving oneself in developmental projects does not necessarily generate profits. They generate profits in a different way. They might generate socioeconomic profits which are not calculable in financial terms or in terms of money which is rands and cents.
We need to start talking about how we see the role of the IDC as on the one hand operating on pure business principles because we want it to be a strong company that generates its own finance and sustainability. But, on the other hand, its primary objective was to develop certain sectors of the economy.
How do we engage in that balance? That discourse needs to start taking place more extensively at parliamentary level and at the level of policy, just to understand where we are going. For example, does the IDC have to hold on to some of the very large assets that it has at the moment? It has huge assets such as, for example, the Sasol assets, and a number of big corporations and companies where it has equity share holdings. Do we continue holding those share holdings or do we sell those and generate cash, so that we can use that cash to move into certain sectors of the economy where we need to spend that money in order to further stimulate the economy and generate growth?
Those are the kinds of debates that one would like to see starting to take place more and more. We note - something which is very encouraging - that the IDC has been spending more and more money over the past few years on black economic empowerment. In fact, between the year 1996 and 2001, the IDC’s spending on black economic empowerment increased by close to about 30%. That is very encouraging, and we hope that it continues. Hopefully, with this Bill, since the IDC will move into previously disadvantaged areas and SMMEs, it may be able to achieve that objective in a much greater way.
Finally, one just needs to say that the IDC is a fantastic resource in our country, because, firstly, it has developed a tremendous amount of skill over the years, and, secondly, it has financial, business and leveraging resources in our country. The provincial economic development programmes must take note of the IDC. I do not know how many of the provinces represented here today who have economic development programmes in their provinces have been speaking on a day-to-day basis with the IDC about what their economic development programmes are. If they have not been doing it, they must start doing so urgently.
The IDC has got skills, and it has indicated that it wants to engage in a strong relationship with provincial economic development programmes. For example, in Gauteng we have indicated together that we would like to see Geda - the Gauteng Economic Development Agency - starting to work much more closely with the IDC, even with regard to the Blue IQ, the Gautrain project and so forth.
There is no reason the IDC should not became a stakeholder and part of many of those processes. We know that they have been talking to the IDC. We encourage provinces to continue doing that and we hope that they will, so that our working together with the IDC at provincial level and perhaps at local government level as well should lead to greater achievement of the objectives of the IDC, and therefore of Government as a whole. With those few words, I would like to say that we are excited about the possibilities for the IDC. We think that this is the right way to go. We in the ANC certainly support this Bill and call on the whole House to support it. In fact, next year we want to engage the House again on further modernising the IDC. [Applause.]
The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Hon members, just before I proceed allow me to recognise and welcome a delegation from the Republic of Kazakhstan who are in the gallery. They are members of the lower house. You are welcome. [Applause.]
Mr J L THERON: Chairperson, we would like to congratulate the Minister on this Bill. We really think that it is very necessary at this time in South Africa. We need greater economic growth and more job creation, and therefore we like this Bill very much.
The IDC is a self-financing state-owned development finance institution, whose primary objectives are to contribute to the generation of balanced sustainable economic growth in South Africa and to further the economic prosperity of all citizens.
The Industrial Development Amendment Bill seeks two major changes to the IDC: firstly, to extend the activities of the corporation beyond the borders of the Republic for the benefit of the Southern African region specifically and the rest of Africa generally, and, secondly, to foster the development of small and medium enterprises and co-operatives, thereby promoting the economic empowerment of historically disadvantaged communities and persons.
I first want to deal with the extension of the IDC’s activities beyond the borders of the RSA. I am sure we all agree that economic growth, job creation and economic integration are of critical importance to the Southern African Development Community, or SADC. Because of the good international standing of the IDC, it will be possible to channel international investment to sound business opportunities in the whole region.
Economic integration in the SADC region will create bigger markets and more jobs and enhance the economic viability of the whole region. Many more natural resource endowments and competitive advantages can be explored to the benefit of the region as a whole. Furthermore, it will be conducive to efficiency gains, promote the transfer of technology and skills, assist regional players in attaining economies of scale and, among other things, improve access to information. Regional integration and development will also enhance the visibility of individual countries as potential markets, as suppliers of goods and services and as global investment destinations.
It appears that the IDC has already progressively expanded its involvement in the SADC region as a catalyst for investment in productive capacity. If the IDC further uses its accumulated technical know-how and good international reputation to enhance the whole SADC region with economic growth and development, it can only be commended on doing so.
Now I want to turn to small and medium enterprises. The second major amendment to the Industrial Development Act endeavours to extend the scope of the activities of the IDC in line with the trade and industrial policy of the Government to stimulate small and medium enterprises, thereby promoting entrepreneurship. It is also proposed that the IDC be explicitly enabled to promote the economic empowerment of historically disadvantaged communities and persons. In this regard I can quote from the Bill:
… to foster the development of small and medium enterprises and co- operatives …
And -
… to promote the economic empowerment of the historically disadvantaged communities and persons …
These are very sound and necessary objectives for South Africa at the moment and definitely goals that the IDC should pursue in the current economic situation in South Africa.
One factor that will definitely also play a role is whether the IDC will be able to develop user-friendly services that can make a really big impact in this new market. New entrepreneurs are definitely not always capable of developing extensive business plans and doing financial planning that impresses everybody. The IDC will therefore have an extensive task in assisting new entrepreneurs in this regard, and these skills will also have to be developed and acquired.
But we all know that South Africa needs new entrepreneurs and new small and medium enterprises. We also know the necessity of promoting the economic empowerment of historically disadvantaged communities and persons. We therefore would like to wish the IDC well in their new endeavours and hope that the IDC will be able to stimulate the South African economy to higher growth levels and create lots of new, sustainable job opportunities.
As for the influence on Gauteng, the IDC’s new venture into stimulating small and medium enterprises intends to allow the corporation to promote smaller downstream and subsidiary economic undertakings. Benefits for Gauteng would include the complementarity that the IDC would bring for agencies such as the Gauteng Economic Development Agency, or Geda, and possible contributions to some of the major projects that are part of the strategic economic … [Time expired.]
Mr Z S KOLWENI: Chaiperson, hon members, Minister, distinguished guests, the Industrial Development Corporation operates under an Act that is, of course, relatively old. It was passed in 1940, when Jan Smuts was still the Prime Minister of South Africa. Certain of its provisions have become obsolete in our new democracy, hence the amendments which seek to modernise this Act.
Because it is also a wholly owned state corporation, it has a critical role to play in terms of commercially sustainable industrial development to the benefit not only of South Africa, but also of the Southern African region. In this respect, it would most certainly augment the objectives of Map, which, after broad consultation with leaders of the continent, was incorporated into the New Partnership for Africa’s Development.
Furthermore, this Bill has earned the unqualified support and respect of our alliance partner, Cosatu. I think that it is also proper to quote Cosatu’s proposed amendments from its submission:
Make employment creation an explicit objective of IDC; provide support for SMMEs and co-operatives; make provision for the extension of differential interest rates; develop a developmental focus and not only a narrow business orientation; broader developmental criteria for the selection of IDC investments; IDC investment projects must comply with labour legislation.
The committee supported the Bill but proposed a more comprehensive review of industrial policy, and the IDC hearings were proposed for next year.
Please, allow me to apply my mind to provincial gains and implications of this Bill. Due to retrenchments that took place in the South African economy, as from the 1980s, unemployed persons returned to their places of origin, that is, provinces. On the other hand, industrial activities are almost nonexistent in some provinces of the country.
The Bill extends the activities of the IDC in line with the trade and industrial policies of Government, with special emphasis on the promotion of small and medium entrepreneurial activities. The Government’s strategy of encouraging small businesses as engines for economic growth will, therefore, be enhanced by this proposed legislation.
The amendments support the economic empowerment of historically disadvantaged communities and persons. This will be beneficial for those provinces that are economically backward. A lack of entrepreneurial skills has been viewed by most researchers as one of the obstacles to unskilled emerging entrepreneurs in the country’s poorest provinces. Therefore, the support of economic empowerment for provincial communities would mean training and access to finance. This would go a long way towards ensuring economic activities which will translate into job creation, with the ultimate result being the eradication of deep-rooted poverty in some provinces.
According to the Human Sciences Research Council’s 1999 study, 41% of the South African population felt that the creation of employment should be the Government’s top priority. The legislation will address some of these perspectives by ensuring an enabling environment for employment creation. [Applause.]
Mr A E VAN NIEKERK: Chairperson, this morning in the programming committee
we had a short discussion on a specific word that was developed in
Parliament, namely covered''. I feel like saying that I amcovered’’ by
what the other members have said, but I want to elaborate a little.
The new Government really inherited a lot of problems in 1994, but they also inherited organisations like the IDC that have a record of success and we must build on that.
In artikel 1 van dié wetsontwerp word gepoog om die Nywerheid- ontwikkelingskorporasie se veld van bedrywighede uit te brei in ooreenstemming met die regering se handel- en nywerheidsbeleid met spesifieke verwysing na die bevordering van die Nywerheid- ontwikkelingskorporasie se aktiwiteit op die gebied van klein- en middelgrootte ondernemings.
Dit is dié gebied waarop ek meen die agb minister ook voel ons tot in dié stadium beter moes presteer het. Dit is die een afdeling wat ons land regtig sal bemagtig en armoede uit die weg kan ruim.
Ek is baie dankbaar dat dit nou ook, by wyse van die wysigingswetsontwerp, voorrang by die Nywerheid-ontwikkelingskorporasie geniet om daaraan aandag te skenk. Ons hoop die projek sal spoedig momentum kry. Die gedagte is om die NOK uitdruklik te bemagtig om die ekonomiese bemagtiging van histories benadeelde gemeenskappe en persone te bevorder, entrepreneurskap by klein- en mediumondernemings te kweek, in die werkverskaffingsbedrywighede in onderontwikkelde gebiede te belê en om die skep van kennisgegronde nywerhede en nuwe tegnologie-gegronde ondernemings aan te moedig.
Die Nywerheid-ontwikkelingskorporasie se beleid is gegrond op die vrye mark, met ander woorde op volhoubaarheid. Omdat dit op volhoubaarheid en nie net op die registrasie van projekte gegrond is nie, behoort die sukses baie groot te wees. Voorheen was daar ongelukkig talle entrepreneurs ten opsigte van projek-ontwikkeling, maar nie baie wat projekte kon begin en volhou nie.
Afdeling 2 van die wysigingswetsontwerp maak voorsiening vir die uitbreiding van die geografiese gebiede waar die NOK bedrywig mag wees en nywerheidsprojekte kan befonds. Dié wysigingswetsontwerp, omdat dit op gesonde vryemarkbeginsels gegrond is, het dus geen finansiële implikasies vir die staat nie.
Ek hoop ek het die agb Moosa verkeerd verstaan toe hy verwys het na die kapitale bates van die Nywerheid-ontwikkelingskorporasie wat miskien in geld omgeskep moet word. Ons moet net versigtig wees dat ons nie die gans wat die goue eiers lê, se nek omdraai nie. Na my mening stel baie van dié bates die Nywerheid-ontwikkelingskorporasie juis in staat om ander mense te bemagtig, geld te bekom en ook sukses in die handel en nywerheid te behaal.
Die Nuwe NP steun die wetsontwerp. [Applous.] (Translation of Afrikaans paragraphs follows)
[In section 1 of this Bill an attempt is made to extend the field of activity of the Industrial Development Corporation in accordance with the Government’s trade and industrial policy, with specific reference to the promotion of the activities of the Industrial Development Corporation in the sphere of small and medium enterprises. I think that it is in this area that the hon the Minister also feels that we should have performed better up until now. This is the one sector which will really empower our country and be able to eradicate poverty.
I am very grateful that now, by way of the amending Bill, this will receive priority in receiving attention from the Industrial Development Corporation. We hope that the project will gain momentum quickly.
The idea is to expressly empower the IDC to promote the economic empowerment of historically disadvantaged communities and persons, to nurture entrepreneurship in small and medium enterprises, to invest in the job creation activities in underdeveloped areas and to encourage the creation of knowledge-based industries and new technology-based enterprises.
The Industrial Development Corporation’s policy is based on the free market, in other words on sustainability. Because it is based on sustainability and not on the registration of projects, the success should be great. Unfortunately, in the past there were numerous entrepreneurs with regard to project development, but not many who could initiate and sustain projects.
Section 2 of the amending Bill makes provision for the expansion of the geographic areas in which the IDC may be active and can fund industrial projects. Because it is based on sound free-market principles, this amending Bill therefore has no financial implications for the state.
I hope I misunderstood the hon Moosa when he referred to the capital assets of the Industrial Development Corporation which should perhaps be converted into money. We must just be careful that we do not kill the goose which lays the golden eggs. In my opinion, many of these assets enable the Industrial Development Corporation to empower other people, to obtain money and also to achieve success in trade and industry.
The New NP supports the Bill. [Applause.]]
Mr P NGCOBO (KwaZulu-Natal): Chairperson, the provincial standing committee on the NCOP mandated us to support this Bill as tabled in the select committee on economic and foreign affairs, or any other further amendments.
Given the fact that the Government is committed to stimulating projects that will create jobs, this Bill came at the right time, because tourism is one of the most important industries that is poised to create the jobs that we need in our country.
The question of franchising is another area that needs our attention. These companies always ask exorbitant amounts and one finds that the entrepreneur gets almost nothing because the larger chunk of the returns goes towards the main company.
Previously disadvantaged individuals are hardly ever found in these areas because of the price structure. Whether we are talking about a motor dealership, fast food restaurants or service stations, all of them are out of reach for our people.
We are hopeful that the IDC will in future be sympathetic to our people if we are to bring them into the fold.
The question of corporate governance cannot be overemphasised. However, we are mindful of the fact that the private sector is always reluctant to implement the first King report. The second King report is already out, but people are very concerned about the recommendations in this report. People are saying it is onerous to the companies.
Lastly, we support this Bill because it is one of the economic tools that will be used by our private and public sector to do business in our Southern African region and the rest of Africa. The experience we have in South Africa can assist our brothers in Africa, which is preferable to depending on European countries that come to Africa just to maximise their profits without ploughing something back into the region. Africa needs to stand on its own if it is to realise the African Renaissance.
All Bills that are meant to repeal Acts that were passed before I was born are always commended. This is because transformation is an ongoing process.
Mr K D S DURR: Chairperson and Minister, the IDC deservedly has a good reputation nationally and abroad. It has earned this reputation over long years. This causes it to raise funds at competitive rates. Now we allow for the debt equity ratio, raising it to 100% from the current 75%. I understand that in real terms it is currently around 40%.
In a world where focus and sticking to one’s knitting is the thing, and where debt and risk control are paramount, particularly when one works in hostile or difficult environments, we see the IDC increasing its potential risk profile by diversifying and possibly losing focus.
Not only can the debt profile rise, but the IDC has been set up to work in a poor neighbourhood with all its problems. I am concerned that there may just be too many variables at once. It has a good track record and is good at bringing big locomotive projects to fruition, having done so successfully for many years. But I feel that we should be careful not to spread the IDC too thin, possibly weakening its creditworthiness, increasing its risks and reducing its focus.
On the positive side, the IDC has a great role to play. I hope that there are prioritised projects in South and Southern Africa before it ventures too far afield. It has a good, but not unlimited, capacity. We look forward to working with the IDC in the Western Cape.
The IDC cannot be all things to all men. It is good at large projects, locomotive projects with many downstream spinoff benefits. I believe that with medium-sized businesses it might do something good and already does. But I believe that the focus for small business should be elsewhere. It is certainly essential to do those things, but is this the place to do them? I am not sure.
The management skills for that kind of control are quite different to what one requires for running huge projects. Of course these things should be done, but is the IDC the vehicle? I know that the Minister has good judgment. I seldom disagree with the things that the Minister does. I am simply asking the Minister to consider these issues. In fact, we enthusiastically support the IDC, the department and the Bill.
Mr R Z NOGUMLA: Chairperson, I feel honoured to be able to speak today on this Bill. This Bill gives meaning to our vision as the ANC of what should happen to the continent in the area of economic development.
We believe as the Eastern Cape that one of the critical objectives of this Bill is to extend the mandate of the IDC so as to enable it to operate in the Southern African Development Community without restrictions. At present, it has 30 projects in operation in nine SADC countries. In the past, the IDC had to obtain permission from Cabinet on a case-by-case basis to do this. This aspect of the Bill has received broad support and will increase initiatives aimed at special development and economic activities amongst members of SADC.
Of particular significance is the amendment to section 3 of the principal Act. This section seeks to promote and finance new sectors of the economy, in particular the knowledge economy, ancillary and related areas of tourism, agro-industries and information technology. Moreover, it endeavours to promote economic empowerment of previously disadvantaged communities, and the development of co-operatives and small and medium enterprises, which are crucial and central blocks of Government’s economic development strategy.
This is important because it provides an essential means of poverty alleviation. Of course, poverty will not be eradicated only through small and medium business development. To eliminate poverty, the country needs a high level of growth to redistribute income, but until South Africa arrives at that point, small businesses provide a means for people to improve the situation of their families and communities.
Secondly, small business is one of the paths to black empowerment. Other paths include the training of black professionals and managers, and the establishment of substantial black-owned companies. However, for many black people who were deprived of opportunities in the past, entrepreneurship and small business development is an important option. Thirdly, small and medium enterprises increase competition in the economy. This, in turn, leads to lower prices and more competitive prices. So they improve living standards and create wealth.
Although the number of amendments to the Bill is, in fact, limited, they do however address important aspects. Some of these aspects are purely technical in nature, namely compliance with the Public Finance Management Act, for example when raising loans or borrowing money, and in the event of the issue of debentures. The Bill goes further to add provisions that cater for the implementation of procurement and outsourcing policies and programmes that would enhance economic empowerment.
The Bill also brings the Industrial Development Corporation in line with the sensitivities related to gender issues, with the substitution of the single reference to gender, namely ``he’’.
Overall, the department accedes that more changes, other than those accommodated in the scope of the amendments before us, should be deferred in order to allow for harmonisation of the Industrial Development Corporation and the Act.
We do, nevertheless, have positive indications from both the Department of Trade and Industry and the Ministry that, given the outdated nature of this Act, the process is already under way. [Applause.]
Ms M P THEMBA: Chairperson, hon Minister, colleagues, national Government has developed a macroeconomic policy geared towards rebuilding and restructuring the economy of the country. One of the basic principles of the policy is the linking of reconstruction and development, which should be an integrated process. This is where the public sector must play a major role, since it cannot be expected that the market would make such a structural transformation on its own.
The principles of this macroeconomic policy recognise the mutually reinforcing nature of urban and rural development, integrated to ensure that the needs of all our people are met in a balanced and equitable manner. Taking these broad guidelines into consideration, the province has developed its own industrial development policy guidelines within which we are operating.
These guidelines are the optional promotion of productive investment, beneficiation and export trade to achieve economic growth, through stimulating the development of the respective sectors according to competitive advantages and long-term sustainability; facilitating such economic growth with a view to stimulating entrepreneurial and income- generating opportunities and the resultant socioeconomic upliftment of the people; ensuring that the benefits of economic growth reach the broader community; facilitating a productive working relationship among labour, business and Government in managing the economy; the optimal development of the SMME sector, with a view to the integration of emerging entrepreneurs into the mainstream economy; facilitating the optimal transfer of science and technology; the optimal development and promotion of the province’s tourism sector as a potential source of entrepreneurial growth and employment opportunity; and ensuring sustainable industrial development through high environmental standards.
We believe that by implementing these policy guidelines we should be able to achieve the following objectives: a substantial increase in the net national investment, especially in manufacturing, job creation and meeting basic needs, as well as the enhancement of technological capacity to ensure that, as part of the restructuring of industry, South Africa emerges as a significant exporter of manufactured goods.
Industrial expansion should follow from the extension of infrastructure to urban, peri-urban and rural areas, while trade policy must introduce instruments to promote the export of manufactured goods in general. Industrial policy must support and strengthen those internationally competitive industries. The strategy must strengthen and broaden upstream and downstream linkages between the burgeoning mineral-based industries and other subsectors of industry.
All of this looks good on paper, but to practically implement it is not that simple. The one problem that we have in our province is the lack of a medium-sized industrial base. We do have large industries which do not really need financial assistance. Then we have macro and small industries which are mainly assisted by NGOs or donor funders. The problem, however, is the lack of finance for the medium-sized enterprises. We believe that we should target medium-sized industry for development and grow it into a competitive global player.
We all know that the commercial banks in South Africa are very reluctant to get involved in this sector due to the so-called risk factor. In the past the IDC were also only involved in megaprojects and were not geared for the smaller projects. Usually these megaprojects were also not labour-intensive and the ratio of capital to jobs was totally skewed.
We are glad to note that the IDC are now realigning themselves to also promote the economic empowerment of the historically disadvantaged communities so as to foster the development of small and medium enterprises and to promote employment-creating activities particularly in underdeveloped areas. This will assist in developing medium-sized businesses and prepare them to be acceptable for the numerous joint venture proposals that we receive from foreign investors.
The other area is our linkage programme into foreign countries. A number of our small and medium enterprises are doing business with multinational companies in neighbouring countries, for example Mozal in Mozambique. A lot of work in Mozal has been outsourced to either South African companies or joint ventures between Mozambican and South African companies. One of the main obstacles here has also been the lack of financing.
It therefore brings joy to see that the IDC is now also spreading its activities to the Southern African region and the rest of Africa. This will assist the industrial development in this region tremendously and will definitely contribute to the success of the linkage programme between our neighbouring countries.
Kuyasijabulisa kakhulu nyalo kubona i-IDC seyisabalalisela umsebenti wayo eSifundzeni sase-Afrika leseNingizimu. Loko kutawusita kakhulu ekutfutfukisweni kwetimboni kulesifundza lesi. [Saphela sikhatsi.] [Tandla.] (Translation of Swati paragraph follows.) [It is a great pleasure for us to note that the IDC is now spreading its work throughout the region of Southern Africa. That will help a great deal in the industrial development of this region. [Time expired.] [Applause.]]
Mr J P GELDERBLOM (Western Cape): Chairperson, the Industrial Development Amendment Bill and Industrial Development Act are an important step in the future economic development of the country. In essence, they pertain to the changing priorities regarding the Industrial Development Corporation in line with Government economic priorities. The main amendments relate to the following area: promotion of the historically disadvantaged. If this large part of our community is left out in the cold there can be no long-term prosperity in our country.
I am convinced that there is an abundance of untapped entrepreneurship in this community. The development of small and medium enterprises is the place to start growing our economy. It is out of such enterprises that success stories are born. No major corporation started off as major. They all grew from humble beginnings.
To encourage the creation of new knowledge-based industries, we in the Western Cape have already started this process and our White Paper on the knowledge economy has been published for comment. We hope to pass a Bill through the provincial parliament in the near future to implement procurement and outsourcing policies and programmes.
It is also pleasing that the amendment calls for the mandate of the Industrial Development Corporation to be extended to the entire Southern African region. We, in the Western Cape, are committed to playing a responsible role in the improvement of the lives of all the people in Southern Africa. We cannot sleep peacefully if our neighbours are left behind in the economic development stakes. The Western Cape supports the Industrial Development Amendment Bill and the Industrial Development Act.
Mr S L E FENYANE: Chairperson, allow me to state at the outset that this Chamber passed the Constitutive Act of the African Union. The objectives of that Act were, inter alia, to achieve greater unity and solidarity between African countries and the peoples of Africa, to accelerate the political and socioeconomic integration of the continent in order that Africa be well positioned to face, in an organised way, the challenges posed by globalisation.
In sync with the letter of the above objectives, the Department of Trade and Industry has introduced in Parliament the Industrial Development Amendment Bill. The objects of this Bill state without any equivoque, that the amendment will extend the activities of the corporation beyond the borders of South Africa for the benefit of the Southern African region specifically and the rest of Africa generally.
This is a timely intervention by the South African Government precisely because countries bargain successfully in multilateral institutions if, and only if, they submit their resolutions as collectives and trade blocs.
We have spoken at length about the African Renaissance. It is, in my opinion, about time that we begin to move away from policy formulation to practical implementation of theory. We have to make Africa, our continent, attractive to us first, then we will be able to sell it to the rest of the world. We must try everything in our power to socialise African communities to derive more value from what they already own, and to utilise their assets in a manner that is sustainable and in a manner that secures our survival and livelihood over time.
For far too long Africa has existed to help other countries to prosper economically - at it own expense. We should not, in reference to other countries, evince the spirit of the words of John Ball, ``the mad priest of Kent’’, who wrote:
Good people, things will never go well in England so long as goods be not in common, and so long as there be villains and gentlemen. By what right are they whom we call lords greater folk than we? On what grounds have they deserved it? Why do they hold us in serfage? If we all come of the same father and mother, of Adam and Eve, how can they say or prove that they are better than we, if it be not that they make us gain for them by our toil what they spend in their pride? They are clothed in velvet and warm in their furs and their ermines, while we are covered with rags. They have wine and spices and fair bread; and we oat-cake and straw, and water to drink. They have leisure and fine houses; we have pain and labour, the rain and wind in the fields. And yet it is of us and our toil that these men hold their state.
Africa deserves better, and the usefulness of South Africa’s aid as a partner, a participant and not a pariah cannot be overemphasised. This Bill is an instrument for South Africa to play a pivotal role in the economic revival of Southern Africa and the rest of Africa. I would like to emphasise that what the department is proposing in this Bill is not without precedent. The United States of America spearheaded the formation of Nafta amid fierce political opposition and resistance. The World Bank, through its IRDP, helped resuscitate the economies of Japan and other European countries after World War II. Japan itself helped in the resuscitation of the economies of the South East Asian countries. That is why today we have cars in South Africa that come from South Korea. That is because of the help of Japan.
The European Union itself would not have been where it is today if Germany, Britain and France had not been prepared to sacrifice economically for the benefit of other poorer member states. The challenge that is facing us is to pass this Bill forthwith, roll up our sleeves and get down to work.
We definitely cannot, as Gunter Pauli has argued, expect the earth to produce more. We need to act prudently and do more with what Africa, in this context, produces naturally. Then and only then can others take us seriously. If we do not do that, Africa will forever be known as a sleeping giant which has enormous potential. We do not deserve this label, which is as moribund as it is necrophilic. We deserve better. The ANC supports this Bill and we would like to urge others to follow suit. [Applause.]
The MINISTER OF TRADE AND INDUSTRY: Chairperson, I thank the members of the House for their comments, and support for the amendments.
Members raised a number of issues, and I would just like to comment on some of them. Firstly, I would like to say a little bit more about precisely what the IDC does, because this has been a question that a number of members have raised in one or other way.
I think the starting point we should all have in mind is that without Government itself having to raise taxes or borrow money, we have, in the Industrial Development Corporation, a major instrument to carry out and support investments, and go into partnerships with international investors. This is a very crucial exercise. As I indicated in my opening remarks, we are looking at close to 10%, in any one year 6% or 7% of investment.
The IDC can only do that if it operates in an effective way. So it would be a pointless exercise for us as a country to place obligations on the IDC that would make it more difficult to raise money in the capital market or would make it a partner in which people did not have confidence. This question of confidence is very well illustrated in the Mozal project that the hon Themba talked about.
We should bear in mind that no other international financing agency was prepared to finance a project in Mozambique because of the overall risk profile of Mozambique. But major international corporations such as Mitsubishi in Japan and other European financing agencies were prepared to come in if the IDC came in. Now this indicates the confidence that people have in the IDC. I think we need to be very clear. As Government our mandate to the IDC is very clear, that one must operate effectively in areas that will develop the economy. If we want other developmental matters to be dealt with, we do two things. Firstly, we have allowed the IDC to set aside certain funds that it has, instead of paying them to us as a dividend, which it uses on a grant or support basis. So in certain circumstances, in order to develop a particular area or project, it will have those kinds of funds. In addition to those funds, it has support from the European Union for similar types of projects. But generally speaking, overwhelmingly the IDC is not a grant- making body - it is an equity body or a lending institution.
The second thing that we have done, which members may have picked up recently in the media, is to begin to encourage the IDC to work with other financing agencies of the state. We have an MOU, and we are starting with the first pilot project in the Lebombo SDI. This is an MOU between the IDC, DBSA, Khula and the Department of Trade and Industry in the form of the enterprise organisation. In this way we can bring together different types of financing, with each of these organisations specialising - the hon member Durr is correct - in where they are the most effective.
The IDC is a very good project-financing organisation. It finances either with equity or with loans. So by bringing them together we get the best of all worlds. I think we need to bear this in mind when we discuss issues. The other thing that I would like to stress is that one of the most important parts of the IDC is that it is run by an excellent board on a mandate from the Ministry, and we do not interfere in these specific projects. We work on a very clear basis, and that is that if the investment is large, then the IDC approaches me as the shareholding Ministry to ask what my views are on the matter. The same applies to the private sector. Any company with a subsidiary would expect that subsidiary to consult them on a major new initiative or investment. If it is a change in policy or they feel that it may not be in the mandate, they consult the shareholder. This is important because it allows the IDC scope to have some flexibility. I do not give them instructions about their holdings on shares, unless it is a big change.
In response to the question the hon Moosa raised as to whether they should hold their mature assets or not, we should not lock them too much into a straitjacket. These can be very important sources of finance. They are also a stability in the portfolio and an income earner. We therefore do not want to lock them too tightly into that - that is something we leave largely to the discretion of the board.
The provincial developments programmes, which a number of members, such as the hon member Ngcobo, hon Themba and hon Moosa have mentioned, are very intersting programmes that are developing. What we have done with the provincial governments is to go through each provincial plan with them, and we will be reporting nationally on all of these plans. Hon members will find that the IDC has played an active role in many of these plans, and we are facilitating further action that will be taken. A week and a half ago we met with the mayors of the six metros and looked at their plans and programmes, because these are very interesting and exciting programmes in which the IDC can play a role too.
Members mentioned tourism, and I think this is interesting. The IDC was not involved in tourism before, but we expanded its mandate, and I think that members will find in most provinces some very interesting projects which they are involved in. There is one project, which is a series of projects, which basically looks at the whole coast of South Africa and sees how we can improve the tourist infrastructure of our entire coast. What members will see over the next year or year and a half is a series of announcements of port developments, which means that the IDC will invest in new ports.
We will build small ports that could be used mainly for tourism and recreation, but also can open up certain economic possibilities. For example, the project in Port St Johns would be an upgrading and development of the port. There is a project in KwaZulu-Natal, Princeton in Port Shepstone. It is also an upgrading and development of the port.
Those who know their economic history will know that both of those places had small ports and once upon a time they were trading ports as well. We are going to open this up for recreation and trade. It is an exciting set of possibilities which shows how we can expand the tourism infrastructure just on that coastline. There are a number of other projects too that we are working on, but I think that this is an exciting set of possibilities that we can deal with.
Let me make two quick points on the scope that the hon member Durr raised on SMMEs. It is correct. The IDC works on a mandate. It has business units, it cannot just go and do anything at once. So it has to find business units that we monitor and it reports on. He is correct that we cannot just do everything. It cannot be everything to everyone. That is not going to work. It is a focused and well-managed investment project financing bank.
We have to bear in mind that the IDC does not deal with the very small enterprises. It basically deals with small and medium enterprises. Those who are familiar with the Small Business Development Act will know the different sectors will define different sizes as small or medium, and the IDC mainly focuses on what would be fairly large small companies, if I can put it that way, and medium companies. It does not deal with micro or very small companies. We do not want to get into that area, for the very reason that we have indicated. This is not the expertise. It is a different financing operation altogether.
The IDC finances through equity or loans for specific enterprises where it can assess what is happening over time. It is not a general financier. That is a different operation. That is banking. The IDC is not a bank, it is a project financier. This is an important point we would like to make.
I would like to very quickly comment on the last two points. I am pleased that we have introduced co-operatives into the amendment. This is something that we do not utilise sufficiently in South Africa across the wide front. Members will recall that in South Africa agricultural co-ops have existed, but not very much else.
In the Department of Trade and Industry we do have a project now. We are working with a number of organisations to see if we cannot expand co- operatives in various ways. Co-operatives are very interesting. There can be many different things, such as co-operatives of women in rural areas or around marketing crafts. These are things that we will look at more closely and we have mandated the IDC to look at that.
Many of the members mentioned sectors that we have expanded to. I think that it is important that we have expand into franchising, IT and tourism. These are critical sectors. To have kept the IDC exactly where it was before would not have been a useful exercise.
Lastly, one can see that the IDC can play a very critical role in some industries. South Africa should be and is a producer of steel. We need to be competitive on this, but anybody who is watching this industry worldwide will know that it is a tremendously difficult time for the world’s steel industry.
We are fortunate to have the IDC, which can be a player in assisting the restructuring. We are very pleased as Government with the recent conclusion of the negotiation between the IDC and Iscor, because basically what that is giving us is the prospect of a world competitive and stable steel company in South Africa. That is an existing prospect.
As we work further the next round of discussion will be a bit wider in the steel industry to rationalise some of the processes in steel so that we can stabilise South Africa’s steel capacity and, in fact, get it to be an industry that will continue to grow. One can see that the IDC can play many important roles.
I would like to thank members for this amendment. I look forward to next year’s discussions where we will go further on this very important institution that belongs to all South Africans. [Applause.]
Debate concluded.
Bill agreed to in accordance with Section 65 of the Constitution.
MERCHANDISE MARKS AMENDMENT BILL
(Consideration of Bill and of Report thereon)
The MINISTER OF TRADE AND INDUSTRY: Mr Chairperson, this is a relatively technical set of amendments.
As I think the Council has seen, we are continuously refining this family of legislation which deals with intellectual property, trademarks, counterfeit goods, etc. We have done that for two basic reasons: firstly, to ensure that our commercial environment is more secure, that we have defined these issues very clearly, but, secondly, as we bring ourselves into line with the international practice, to make changes as we meet our obligations in terms of the various World Trade Organisation agreements. We need to make these changes.
These are relatively technical clarifying matters distinguishing between different dimensions of this merchandising marks body of legislation - between a trademark, a device, a common name, etc. These have to be more clearly defined and I think that one sees them in the definitions being clarified very much more effectively.
The issue of, for example, well-known trademarks is one, we felt, we should clarify in the legislation. Many of the members may well remember the well- known public case of the issue of McDonald’s earlier on in the new democracy. We need to clarify these issues because the national law does cover the concept of a well-known mark.
I would like to conclude by thanking the select committee here in the NCOP because their sharp eyes and hard work picked up some amendments which they are proposing which, I think, are absolutely correct. I would like to thank them for the work done. It shows just how important hard-working committees are. [Applause.]
Mr M V MOOSA: Mr Chairperson, just for the sake of the House, the issue of trademarks is something that, sometimes, sounds like something for big business people really, but in fact more often than not it is something that affects small businesses in our constituencies, small business which are operating out there, small businesses which are making T-shirts or caps, for example, or somebody who is trading with Nike shoes at Park station.
When one goes to Park station and sees somebody selling Nike shoes one thinks that this is an original and says, ``Gosh! when I went to the shop up there, they cost R300, but this chap at Park station is selling them for R40’’. Somebody is cheating somebody.
However, the fact of the matter is that the person who has been cheated is the consumer. Because, at the end of the day, if one is purchasing a particular product with a particular trademark on it, one wants to be known to be wearing this fashionable item. One buys it because of its fashionable quality and so forth. One goes home to wear it for one day and put it in the washing machine. It comes out the next day not looking like Nike anymore. It looks like ``isikorokoro’’ [acrook] or something else.
The reason why a lot of this legislation is being put in place is, firstly, to protect consumers who are out there purchasing and engaged in the marketplaces, particularly our small entrepreneurs who are emerging all over the show. The reason is to protect the consumers who are dealing with entrepreneurs like that to ensure that, at least, consumers know what they are buying. But the second thing is that small business entrepreneurs sometimes buy commodities from big wholesalers and think they are buying the genuine product, because the big wholesaler is supplying these things, some trademark or the other, like Nike, as I said.
They then go to Park station to sell it. Then the inspector or the police come there and say they are selling an illegal product and they confiscate their goods. And when they do that, those people’s entire capital of their business gets taken by the police and, at the end of the day, they remain poorer than if they had not tried at all, because they were trying to do some business. There are many operators out there who are trading in this kind of way and members will find in their constituencies that this thing is happening.
It is important for us as a country to make sure that our businesses that are operating out there, no matter how big or small they are, are doing so in a way that respects the trademarks and trade descriptions of other businesses, because that is what creates a stable trading environment. If we do not do that as members of Parliament in our constituencies we will simply create an environment in which no big company would want to trade, because they cannot be sure that when they trade here their trademarks, products and so forth will be respected. That is on the one hand. On the other hand, our own businesses are trading in other parts of the world. They are taking commodities out to other parts of the world that have specific names, trade descriptions, trademarks and so forth. We would expect our businesses to be treated in the same way in those other countries. We would expect our commodities and our products to be respected in the same way so that our jobs in this part of the world are protected. In that kind of way, we need to make sure that we create this regulatory environment in our country that says when one buys a Nike product, whether one buys it from a street vendor, a big wholesaler or from Edgars, it is a Nike product. If it is not a Nike product, please do not put that name on the product. Call it something else, develop another name or trademark. Who knows, maybe if one is a successful businessperson, that will become the Nike of the future. That is very important about this thing.
During the process of the Bill we discovered that there was a particular clause in the Bill that was not drafted, as the Minister says, in a way that was conducive for a good Bill. In fact, the clause would have deleted the entire amendment of what a trade description is and we have decided to raise that with the Ministry. In agreement with the state law advisers and the Ministry and so forth, we took out the entire clause 2 in the Bill that had come through from the National Assembly. Of course, that also meant that the National Assembly’s amendment had to be put out with the whole of clause 2. We did that and, as the Minister has indicated, it was a process of consulting with the department, the law advisers and so forth, and it seems to have improved the Bill.
One final thing that is a matter of concern - I suppose the hon the Minister can respond to this when he replies and I think also generally - is the question of the Paris convention, according to which we are asking, in terms of this Bill, for people to respect the coat of arms, the colours of the flag and so forth, of various different countries. I think it is very important that when one puts a flag of a different country on the back of one’s car, or even before one produces it, one must have the permission of that country and so forth to do that.
But there are certain issues, for example in our restaurants. If one goes to a Portuguese restaurant, they will be flying a Portuguese flag outside or have a lot of memorabilia inside to create the ambience of that country whose food they are displaying or supplying. In the same way, one finds many bars that do that, many places that display the flags of different countries to associate the product that they are supplying with the culture to which they subscribe which appends to that particular country’s flag and emblem.
One finds that that is taking place throughout the country. In fact, wherever we go, throughout the country, we do find from time to time - I am sure all members have seen this - the flag of some country or other in some place where one goes to eat, drink or even to do one’s shopping.
One is a little bit concerned as to how the clause 14 amendment would be implemented. Are we going to first make the country aware of this new provision which says that one may not put up the flags, memorabilia and so forth of other countries without the necessary authority of either the Minister or a person inside the country, as well as the authority of somebody outside the country?
There are a number of clauses there, about four of five. Clause 1(a) relates to authorisation in writing by or on behalf of the Minister; clause 1(b) relates to a competent authority in the Republic or in the convention country; clause 1(c) relates to whether putting up a particular emblem or flag is also going to associate control and warranties. For example, if one is selling Portuguese food and, therefore, puts up the Portuguese flag in one’s restaurant, does that mean that one is getting genuine Portuguese food? I think clause 1(c) would address that kind of thing. Clause 1(d) would address abbreviations and so forth.
The CHAIRPERSON OF COMMITTEES: Hon member, your time has expired. Mr M V MOOSA: In conclusion, I just want to say that we support this Bill. We think that it is very important for our economy, but some of these things may need some clarification. [Applause]
Mnr A E VAN NIEKERK: Voorsitter, baie dankie vir die geleentheid. Ek wil die agb Moosa bedank vir die verduideliking wat hy gegee het, want dit is belangrik dat ons duidelikheid kry oor wat handelsmerke werklik is. Die Nuwe NP steun die doelwit van hierdie wetsontwerp, en ook die toepassing daarvan.
Dit is tog belangrik om uit te brei op wat die agb Moosa gesê het, naamlik dat wanneer ons agterkom dat ‘n produk nie die ware Jakob is nie, ons nie moet wag vir die polisie of die Regering of iemand om die persoon aan die dag te bring nie. Ons as gewone burgers het ‘n verantwoordelikheid om die soort van bedrog aan die man te bring en dit self te gaan aanmeld, want andersins ondersteun ons dit, en dan brei ons die soort van bedrywighede eerder uit tot nadeel van onsself en die handel in die algemeen. Iets wat vir my ongemaklik is, en ek hoop die agb Minister kan vir ons duidelikheid gee oor hoe dit anders gehanteer kan word, is dat wanneer daar wel groot hoeveelhede klere, skoene en dies meer gekonfiskeer word, en dit in die tydvak waarin ons ‘n klomp armoede het, dit dan uitgebrand word. Erens sê my gevoel vir my dat dit verkeerd is, in die lig van die groot armoede in ons land, dat klere, kos en dies meer, verbrand word.
Ek verstaan die probleme wat daarmee gepaard gaan. Is daar geen manier waarop ‘n mens daarby kan verbykom en dit sinvoller kan aanwend tot voordeel van die arm mense in ons land nie?
Die voorgestelde wysigings verwys ook na handelinge wat op valse handelsbeskrywings neerkom, en die onwettigverklaring van sodanige aktiwiteite. Ons steun dit. [Applous.] (Translation of Afrikaans speech follows.)
[Mr A E VAN NIEKERK: Chairperson, thank you very much for the opportunity. I want to thank the hon Moosa for the explanation he gave, because it is very important that we get clarity about what trademarks exactly are. The New NP supports the aim of this Bill, and also the implementation thereof.
It is surely important to elaborate on what the hon Moosa said, namely that when we realise that a product is not the real McCoy we should not wait for the police or the Government or someone else to bring the person to book. We as ordinary citizens have a responsibility to eradicate this type of fraud and to report it ourselves, because if we do not then we support it, and then we extend this type of activity to our own disadvantage and that of trade in general.
Something which makes me feel uneasy, and I hope that the hon the Minister can give us clarity on how we can deal with this in some other way, is that when large quantities of clothing, shoes and so forth are confiscated the goods are burnt and this at a time when we have great poverty. Somewhere my feelings tell me it is is wrong that clothes, food and so forth are burnt in the light of the great poverty in our country. I understand the problems which go with that. Is there no other way in which one can get past this and apply it more meaningfully to the advantage of the poor people in our country?
The proposed amendments also refer to dealings which amounts to false trade descriptions, and the declaring of such activities as illegal. We support this. [Applause.]]
MR M J BHENGU: Chairperson, I think it is perhaps proper that one should congratulate the chairperson of our select committee, the hon Mr Moosa, on the way he actually piloted the Bill. I think one should also thank the Minister for the way he has explained it, together with Mr Moosa.
I think, therefore, that one has to emphasise the fact that the control of trademarks in our country is very important. It actually makes a lot of sense that we should prohibit the unauthorised use of our national symbols, particularly our national flag and things like that. I would imagine that if we do not have such control measures in place, we would have a situation in which people would use these national symbols to such an extent that the essence, the dignity and sovereignty of our country would be demeaned. So I think one should congratulate the Minister on that.
The technical amendments were very clear and straightforward, and the IFP actually supports the Bill. [Applause.]
The MINISTER OF TRADE AND INDUSTRY: Chairperson, I wish to very briefly illustrate, regarding some of the questions that have been raised on the issue of trademarks, one other reason why it would be good for members and respected leaders of the community to stress this again. If one takes the example of a small caterer, manufacturer of clothing or whatever, as one develops the quality of one’s product one tries to give it an identity. As that identity comes, it has value to one because people learn to respect and value the quality of that product. That is the real origin of a trademark; that is, if I develop something and its quality is accepted by the market, then I can put my mark on it.
As we develop our small and medium businesses, crafts and all sorts of cultural dimensions, we should not underestimate how important that will be. If nobody respects that, we are going to have a problem because then there would be no incentive to improve our product and capture its value. So I think that this is a very practical issue about the development of our economy. As more people participate in the economy, we need to understand the value of these marks, devices, etc.
The Paris convention is an important convention because, basically, what it says is that if a member state confers the status of a trademark on a product, other member states should respect that. I think that is an important thing.
With regard to flags, as the hon Moosa has indicated, it can be difficult. But what one is looking for here is what the hon Bhengu said, that the flags of countries should be treated with a degree of respect and decorum. If one reads our flag, for instance, it tells one how to fly it, what goes on top, what is at the bottom and how it should look. That is really the purpose of trying to do it. Because of the excitement around our own flag, one would recall that it was everywhere. One does not want to stop that, but it must be treated with decorum.
This provision really depends a lot more on people complaining rather than us enforcing it. I think that if we see that our flag, for example, is used without respect for it, it is within one’s rights to complain. We will then act against those involved. Equally, if a tourist comes here from Portugal or somewhere and sees that someone in South Africa is treating their flag with disrespect and a lack of decorum, they can complain and we will act against that. That is more the way we should see this. It is an attempt to make it possible to protect.
It is quite true that the Counterfeit Goods Act is linked to this Act in that one can seize the products, and all members made mention of that. Practicalities dictate how we should deal with these products. For example, many of the products seized comprise electrical equipment, shaving products and all those kinds of things. Thus, one cannot just go and give those products to the poor.
What we are really talking about here is clothing and so on. However, the difficulty is that when one seizes these things, it might be all size 11 shoes or all size 20 jackets. So it is really not so practical to give them to the poor as people would expect. Although seizure is under the Customs Act, for people who bring such products under the wrong duty it is a bit easier.
What we do is that we do not allow these products to easily go back into the market. But for recent floods and stuff like that, we have authorised that our emergency relief centres can use them. But we have to watch it because if one puts it back into the market it will start being traded. So, generally speaking, we destroy the product. We are looking at a project, with the union movement, to break up the clothing and use it for other products. But, in certain circumstances, we do use these seized goods for relief work.
I thank members for supporting this and for the sharp eyes they had in checking the Act. [Applause.]
Debate concluded.
Bill, subject to proposed amendments, agreed to in accordance with section 75 of the Constitution.
GAS BILL
(Consideration of Bill and of Report thereon)
The DEPUTY MINISTER OF MINERALS AND ENERGY: Chairperson, hon members, allow me to introduce the South African Gas Bill which is a regulatory framework for the gas industry in South Africa. Owing to the significance of gas to our people, our economy and our prosperity, I think I should indicate why such a Bill is necessary. The Bill is a realisation of at least two components of Government’s White Paper on Energy Policy released during December 1998. The first is about increasing energy security through diversity of supply, and the second states that a gas regulatory authority will be established to implement a minimal regulatory regime consistent with the orderly development of a competitive gas industry through granting licences for the transmission, storage, distribution and trading of piped gas.
Over the past few years the use of coal gas has expanded rapidly from approximately 25 million gigajoules in 1994 to approximately 40 million gigajoules in 2000, a growth of approximately 60% in just six years. This growth is indicative of the potential for the expansion of the gas industry in South Africa.
Currently, the development of the gas industry in South Africa is expected to be undertaken primarily in the private sector. Such investments are large. For example, envisaged cross-border gas transmission pipelines can cost in the order of US $500 million. In order to manage the risk, investors have requested regulatory certainty from the Government.
Such certainty will facilitate investments in both the upstream and downstream sectors of the gas industry. Not only will such regulatory certainty ensure investments and orderly development in South Africa, but it will also lead to regional development. Internationally, natural gas is recognised as the fuel of the 21st century. The use of natural gas is rapidly expanding worldwide. It has a number of environmental advantages compared with fossil fuel, such as oil and coal. Not only does it burn cleaner, producing less smoke and sulphur oxides, but it also produces less carbon dioxide per unit of energy, and therefore has less of an impact on global warming.
With the established the need for a gas regulatory regime, the Gas Bill has been subject to a comprehensive consultation process. I would like to walk hon members through the main aspects of that consultation process in chronological order.
A gas policy working group was formed during May 1994, whose work was superseded by the White Paper process during 1995. A SADC report titled ``Study of the economics of natural gas utilisation in Southern Africa’’ was released during June 1995. A team from the World Bank made two visits to South Africa. A senior official of the US department of energy visited South Africa on three occasions to advise on gas policy, as we are quite aware that the US is ahead in terms of gas. Eighteen written submissions on gas were received for the gas component of the draft White Paper. A team from the International Energy Agency made two visits to South Africa. Two contiguous gas workshops were held during October 1996.
During February and March 2000, the department had two further workshops attended by about 65 representatives of stakeholders. In addition, my department has held a large number of individual meetings and briefing sessions with stakeholders. May I now turn to the objectives of the Bill. The gas industry conforms to the criteria of natural monopoly. Under monopoly conditions, players, especially consumers, expect a certain amount of protection from abuse.
As Government, we have set the following objectives: the orderly development, operation and provision of gas services, the key being the transmission infrastructure; ensuring the provision of gas as soon as possible at the lowest possible price; promoting competitive markets by facilitating gas-on-gas competition through third-party access to transmission pipelines; and balancing conflicting interests between consumers and suppliers.
The purposes of the Gas Bill are to promote the orderly development of the piped gas industry; to establish a national regulatory framework; to establish a national gas regulator as the custodian and enforcer of the national regulatory framework; and to provide for matters concerned therewith. The Gas Bill is limited to piped gas and covers neither gas in cylinders and reticulation, nor upstream gas matters, as we all know - those are addressed in the Minerals and Petroleum Development Bill which is under consideration.
I will now address some of the features of the Bill. I mentioned earlier on that the Bill does not cover reticulation. In terms of section 4(b) of the Constitution, gas reticulation is a local government matter and I believe hon members have an interest in that. Gas reticulation is not defined in the Constitution. But, in the Gas Bill, it is defined by a general operating pressure of less than two bar gauge. Clause 10 addresses a number of important safeguards to ensure both the independence of the gas regulator and the fairness of its decisions.
With regard to regulatory infrastructure, the Cabinet has decided to investigate the possibility of rationalising or consolidating the various regulators. This could be done on various levels such as shared facilities, a common secretariat, cross-membership of regulatory boards or combined regulatory boards such as an energy regulator. My department is currently investigating this matter.
Clauses 11(5) and (6) of the Bill ensure that the necessary flexibility is retained to implement the decisions of Cabinet in this regard. Clause 12 deals with the funds of the gas regulator. It is anticipated that the gas regulator will have to be established, using appropriations from the National Revenue Fund, to be followed by funding from levies imposed under separate legislation.
Licences will be required for the gas facilities of transmission, storage, distribution, liquefaction and regasification or the conversion of existing infrastructure into such facilities. Separate licences will be required for the activities of construction, operation and trading in gas. Such licences are issued for a period of 25 years or a longer period, as the gas regulator may determine.
Clause 36 makes provision for the Mozambique Gas Project. Investors in a fledgling industry need assurance of their investment. Therefore, in the absence of a specific piece of legislation, the Ministers of Trade and Industry and of Minerals and Energy agreed with Sasol on certain issues pertaining to a natural gas transmission pipeline, between Temane and Pande gas fields in Mozambique and Gauteng in South Africa.
The basis of the agreement between the Government of the Republic of South Africa and Sasol Ltd was signed during October and November 2000 by the Ministers of Trade and Industry and of Minerals and Energy and Sasol.
The definitive agreement was approved by Cabinet on Wednesday, 19 September
- The agreement between the Government and Sasol is referenced in clause 26 of the Gas Bill. The terms of the agreement relate to the conditions of licences scheduled to be issued to Sasol regarding the following matters: exclusive rights and periods granted in respect of the transmission and distribution of gas; third-party access to the transmission pipeline from Mozambique and to certain Sasol pipelines; prices charged by Sasol for gas; Sasol’s obligation to supply customers, distributors and reticulators with gas; and the administration of the agreement by the gas regulator.
The agreement binds the gas regulator until 10 years after natural gas was first received from Mozambique, which will be during 2004. Besides addressing the legislative requirements for the development of the gas industry, Government has also entered into a cross-border gas trade agreement with Mozambique to facilitate the movement of natural gas across the border. A similar agreement is being negotiated with Namibia.
Gas is a small but rapidly expanding industry in South Africa and the southern region. This Bill is essential legislation to promote the orderly development of the piped gas industry, to establish a national regulatory framework, to establish a national gas regulator as the custodian and enforcer of the national regulatory framework and to provide for related matters.
Allow me to introduce this Bill to the NCOP. [Applause.]
Mr M V MOOSA: Chairperson, you are going to get sick and tired of my voice today, as this is the third speech I have made in one afternoon. It is unbelievable! I did not realise you loved me that much.
Energy is one of the most fundamental aspects of human development. One cannot do anything without electricity or some form of energy. Any manufacturing process, anything one wants to make, anything one wants to cook, anything one wants to eat, anything one wants to build, whatever one needs to do, one needs energy.
In South Africa, one of the primary sources of energy has always been coal. In fact, electricity in this country is generated primarily by burning coal. Some hon members, some of the ``magogos’’ who are here, the old ladies and gentlemen, will remember that once upon a time one used to get gas in certain areas. I know some townships and suburbs of Johannesburg had gas reticulating through them. Instead of using electricity, one could use gas to cook and heat up the house, and so forth. For some reason that industry never took off, mostly, perhaps, because it is cheaper to generate energy through coal. Gas has always been more expensive.
A new era is dawning in this country. With this Bill we are looking at the possibility of utilising gas as a source and form of energy in a very big way, as the hon the Deputy Minister has indicated. Many people are speaking of gas as the energy source for the 21st century and there are very good reasons why they say that.
One of the most fundamental reasons is because of all the new sustainable development and environmental arguments. Next year, during the Earth Summit, hon members will hear that one of the biggest problems with the way in which energy is being used at the moment is, firstly, that we are wasting energy and that we do not use it efficiently.
Secondly, although we use energy, we destroy everything else to generate that energy. When we generate energy out of coal, we destroy the atmosphere and we do a whole range of things.
Gas is one of the cleanest forms of energy, it is much more efficient, is prone to less wastage, and so forth. At the same time, it can do a lot of what some of the other energy sources can do, and more.
What is more interesting is that gas, as part of the infrastructure and economic development of Southern Africa, has become a fundamental part of the future of economic development in this part of the world.
Not so long ago two huge gas fields were discovered in Mozambique, the Pande and the Temane gas fields.
After that a huge gas field was discovered in Namibia, called the Kudu gas field. That gas field is being operated and owned by a consortium of Shell. More recently, a few months ago, members would have seen Tokyo Sexwale all over the media. This was because a massive gas field was discovered just off the west coast near Saldanha Bay. It is called the Ibhubesi Gas Field. Apparently there is enough gas in that gas field to supply the energy needs for the city of Cape Town for the next 300 years. But I do not know anything about gas.
Some of these developments are becoming very exciting from the way in which we are going to develop the needs and infrastructure of Southern Africa. The gas pipeline that the hon the Deputy Minister mentioned will be built by Sasol at a cost of R10 billion from the Pande and Temane fields all the way down to Sasolburg. It will be used by Sasol plants. Sasol plants are being converted over time to utilise gas. This is because up until now they have utilised coal. In fact, they will be building new plants alongside Sasol that will also utilise gas.
The Kudu and Ibhubesi gas fields are going to be building pipelines that go all the way down past Cape Town, all the way to Mossgas. From Mossgas they will build those pipelines all the way to the Eastern Cape and to Port Elizabeth. This means that from both sides of the country we will have very powerful energy sources in the form of gas that will go to different industrial parts. This is a fundamentally significant and important development.
This is important because some argue that, for example, the war that is taking place between the United States and Afghanistan has to do with gas that has been discovered in that particular region of the world, which includes Afghanistan and Uzbekistan. There was a newspaper article this Sunday by a man called Pilger who said that the main reason for the war is energy, oil and gas. There have been arguments about that fact that the war against Iraq was about oil. We know that there is terrorism in the world, and we condemn it, but we also know that countries do things sometimes for economic expediency. It may very well be that this journalist who wrote about this may be correct. We do not know.
There are a number of things that need to happen for gas to become a successful source of energy in this country. The one thing is pricing. We have to ensure that the industry prices gas in such a way that it is accessible to all the people of our country. Secondly, it is vital that the industry ensures that the usage of gas is accessible to small and medium enterprises and therefore the reticulation process of this gas must be competitive and much wider than just the big players that are involved in the gas industry at the moment. It is very important that those two fundamentals are addressed.
One of the things that we were unhappy about is the way in which the agreement had been signed with Sasol regarding the Mozambique gas field. The prices for the gas were going to be determined on a basket of six European country prices. Now we know what the forex situation is like. We know for a fact that this agreement has been signed and there is nothing we can do about it. But, at the end of the day, it is going to mean that as Sasol argues, production costs are done in dollars, but we know that the bulk of the production costs will be in rands. We do not see why these resources should be so expensive.
We have expressed our displeasure about this in the committee, but we understand that the agreement has been signed and we can do nothing about this. However, we hope that the pricing mechanisms of the gas fields that are being developed in other parts of the country are going to be competitive. We also hope that if other gas fields are discovered in the region which will supply the area where the Sasol gas fields are found, they will be priced more competitively than the gas that will come from Temane and Pande. We hope that this competition is introduced in the industry because this will allow gas to be consumed on a massive scale and be utilised effectively.
The Bill creates a gas regulator. The gas regulator will basically comprise five non-full-time members who will, on an ongoing basis, look at what the public interest is. Some of the powers that the gas regulator has, if I may just go through them very quickly, are to ensure that it issues the licences for the construction, the conversion, the infrastructure, the distribution and the reticulation of the gas. Secondly, the regulator will be making sure that sufficient information is gathered about the industry and is supplied to those who need it. It will ensure consultation with the Government and will ensure the regulation of prices. Outside the agreement on Pande, of course prices will have to be regulated in a whole range of the other ways and the gas regulator will be involved in that.
We know also that the gas regulator will have powers to expropriate land, where necessary, in order to ensure the success of these pipelines and infrastructure. The gas regulator will be required to promote competition in the industry. It will also have to make sure that there is optimal use of gas as a resource in this country; and there is a whole range of other powers that it has.
One of the most interesting and important powers that the gas regulator has is that it will act in the public interest. The gas regulator has been given the power in this law to act in the public interest, not in the interests of one company, not in the interests of one player in the industry, but in the public interest in everything that it does. In the public interest could mean that the regulator has to balance economics, in other words, the cost of building a pipeline and the cost of the industry itself, with the interests of consumers and with members and me as people in the public eye.
These are some of the things. I see that the Chairperson is beginning to make flirting eyes at me, which means my time is up. [Laughter.]
I want to thank the hon the Deputy Minister and the department for their co- operation. We want to let hon members know that Mr Crompton never came to our committee to brief us, but was involved every day in the National Assembly process. We want hon members to take that up with Mr Crompton. Apart from that, we were very happy with the process from the department - we were happy with the engagement. We made one little amendment, which hon members might have seen. It is insignificant. It was really a technical amendment, but it just cleans up the law a little bit. Apart from that, I call on the House to support this Bill. [Applause.]
The CHAIRPERSON OF COMMITTEES: Order! Hon Moosa, now you have let the people know that I gave you an extra second. [Laughter.]
Mnr A E VAN NIEKERK: Voorsitter, die agb Moosa het nou vir ons ‘n breedvoerig prentjie geskilder oor die groterwordende gasbedryf in Suid- Afrika en alles wat dit behels. Hy het nie genoeg tyd aan die wetsontwerp as sodanig bestee nie omdat u hom nie genoeg bykomende tyd gegee het nie.
Ek wil enkele punte verder uitlig. Die Gaswetsontwerp sal die wetlike raamwerk skep waarin die groeiende gasbedryf kan funksioneer. Dit maak ook voorsiening vir die instel van ‘n onafhanklike Gasreguleerder, soos genoem.
Ons het met enkele doelstellings begin en ek wil daarop uitbrei. Dit sluit in die volhoubare, ordelike en doeltreffende ontwikkeling en bedryf van gasvervoer, die verskaffing en bevordering van bergings- en verspreidingsgeriewe en om belegging in die gasbedryf te vergemaklik, om maatskappye in die gasbedryf wat deur histories benadeelde Suid-Afrikaners besit en beheer word, deur middel van die toeken van lisensies te bevorder ten einde hulle in staat te stel om mededingend te kan word.
Verder, om die ontwikkeling van ‘n mededingende mark vir gas en gasdienste te bevorder, om die handel in gas tussen Suid-Afrika en ander lande te vergemaklik en om bekostigbare en veilige toegang tot gas te verseker.
Fyner besonderhede van die wetsontwerp behels die skep, funksies, samestelling en pligte van die onafhanklike Gasreguleerder en daarom gaan ek nie daarop uitbrei nie.
Die fondse en finansiële rekords van die onafhanklike Gasreguleerder waaroor die Ouditeur-generaal verslag sal doen en verslaglewering deur die onafhanklike Gasreguleerder self, word ook duidelik omskryf.
Daar word in besonderhede ingegaan op die aktiwiteite waarvoor ‘n lisensie benodig word, die wyse waarop aansoek vir ‘n lisensie gedoen moet word, die voorwaardes vir die toekenning van ‘n lisensie, wysigings aan lisensies en redes vir die intrek van ‘n lisensie.
Maar, aangesien die begroting van die Departement van Minerale en Energie nie vir die skepping en bedryf van ‘n gasreguleerder voorsiening maak nie, sal die departement vir ‘n bykomende R2,1 miljoen voorsiening moet maak. Voorsiening sal ook gemaak moet word vir die daaropvolgende finansiële jare wat dit nodig gaan wees om die Gasreguleerder te bedryf. Ek is seker daar is ‘n goeie verhouding met die Minister van Finansies om dit wel reg te kry.
‘n Wye veld van ondernemings en entiteite wat belanghebbendes in die gasbedryf is, en mag wees, is tydens die formulering van hierdie wetsontwerp geraadpleeg. Daarom is ons tevrede om hierdie wetsontwerp te steun. (Translation of Afrikaans speech follows.)
[Mr A E VAN NIEKERK: Chairperson, the hon Mr Moosa has just sketched a detailed picture of the growing gas industry in South Africa and everything that it entails. He did not devote sufficient time to the Bill as such, because you did not afford him sufficient additional time.
I want to further highlight a few points. The Gas Bill will create the legal framework within which the growing gas industry can function. It also provides for the establishment of an independent gas regulator, as has been mentioned.
We started with a few objectives and I would like to expand on them. They include the sustainable, orderly and effective development and operation of gas transmission, the provision and promotion of storage and distribution facilities and to facilitate investment in the gas industry, to promote companies in the gas industry that are owned or controlled by historically disadvantaged South Africans by means of licence conditions so as to enable them to become competitive.
Furthermore, to promote the development of competitive markets for gas and gas services, to facilitate the gas trade between the Republic and other countries and to ensure affordable and safe access to gas.
Greater details of the Bill entail the creation, functions, composition and duties of the independent gas regulator, and that is why I am not going to expand on it any further.
The funds and financial records of the independent gas regulator, about which the Auditor-General is going to report, and reporting by the independent gas regulator him or herself, are also clearly defined.
There are details of the activities for which a licence is required, the way that application should be made for a licence, the conditions for the allocation of a licence, amendments to licences and reasons for revoking a licence.
But, since the budget of the Department of Minerals and Energy does not provide for the creation and operation of a gas regulator, the department will have to provide for an additional R2,1 million. Provision will also have to be made for the subsequent financial years that it would be necessary to run the gas regulator. I am certain that there is a good enough relationship with the Minister of Finance to succeed in achieving this.
A wide field of enterprises and entities that are stakeholders in the gas industry, and could well be, was consulted during the formulation of this Bill. We are therefore satisfied to support this Bill.]
Mr J L THERON: Mr Chairperson, the official opposition will support the Bill. [Interjections.]
The gas industry is set to enter a period of rapid expansion based on the new natural gas fields of the West Coast and in Mozambique. For several decades South Africa has had a relatively small gas industry based on gas produced from coal. If one looks at the market share per energy carrier, gas is at about 2%, oil products at 32%, coal at 28% and electricity at 22%. A further approximately 90% of electricity is coal fired, deepening the reliance on coal in the energy equation in South Africa.
With the successful gas exploration projects in and around South Africa, namely the Temane and Pande gas fields in Mozambique as well as Forest and Kudu off our West Coast, gas has the potential to become a significant player in the energy equation of South Africa. Once these gas fields are being fully exploited, gas contribution is set to rise to 7%, the norm for industrialised countries being between 15% and 20%.
As a result of the discovery of economically viable gas fields in Mozambique and off the West Coast of South Africa, it has become necessary to provide a framework for the development of the industry which will facilitate investment in the industry as well as ensure safety and environmental standards for the pipeline gas industry.
With regard to the objectives of the Bill, the official opposition … [Laughter.] … also subscribes to these objectives: to promote and develop transmission, storage and distribution facilities and trading services, to facilitate investment in the industry and to ensure safe transmission, storage and distribution of gas … [Interjections.]
Mr A E VAN NIEKERK: Chairperson, on a point of order: On the official speakers’ list we have Mr Nelson Raju. I just want to enquire whether the official opposition kicked him out, and whether he has been replaced. [Laughter.]
The CHAIRPERSON OF COMMITTEES: Order! He may answer you during tea time, because the list issue is mine, not his.
Mr J L THERON: We support the objectives of the Bill.
With regard to the national gas regulator, the Bill establishes an independent gas regulator, setting out the constitution, powers, functions and methods of operation of the gas regulator.
One of the primary problems of the pipeline industry is that there will only be one transmission line from the Sasol gas fields in Mozambique. Therefore, the challenge was to provide a regulatory environment that would ensure third-party access should other fields come on stream and, hence, encourage competition in the industry. One of the principal objects of the Bill is to encourage competition in the industry.
With regard to the gas licences and registration, all companies or institutions transmitting, distributing and reticulating gas will be required to register with the regulator and obtain a licence. The Bill provides for the methodology for obtaining the licence and sets out conditions for the granting of licences. Mechanisms for enforcement are put in place.
With regard to the financial implications for the state, the Department of Minerals and Energy’s budget does not provide for the establishment and running of a gas regulator. Therefore, when the Gas Act is promulgated, the department will require an extra R2,1 million to run the gas regulator per year. This is a small investment, but this is the type of investment that we need for new ventures to stimulate our economy and to create new sustainable jobs.
In conclusion, natural gas will not only broaden the energy mix but could also provide a cost-efficient and environmentally friendly source of energy for South Africa. It is the tabling of this Bill that gives an investor such as Sasol the confidence to proceed with a R10 billion investment, an investment which will kick-start the industry.
Finally, we believe that this Bill will deliver specific benefits to Southern Africa, such as major investments in infrastructure, contributions to economic growth, new job opportunities, economic empowerment of the historically disadvantaged, increased access to new technologies, skills training, and an increased tax base. We therefore must support this Bill. [Applause.]
Mr Z S KOLWENI: Chairperson, Deputy Minister and hon members, I must first state that when we talk about this gas or ``tlakatse’’ in our communities, it somehow creates confusion because one needs rather to be talking in the vernacular for people to understand better. Nevertheless, there is very little room to do that in technical Bills like this one.
Strong potential exists for significant growth in our local gas industry. Although there is a relatively low level of known domestic gas resources, it is probably because our gas industry is on the brink of significant expansion, owing to natural gas field discoveries in South Africa and in our neighbouring countries.
In fact, our prospects for sustained natural gas production received a major boost in March 2000 with the discovery of offshore reserves on the West Coast of South Africa, with an estimated recovery reserve of 3 trillion cubic feet of natural gas.
The recovery of these reserves of natural gas has raised the prospect of increased domestic and foreign investment in our natural gas reserves. Foreign investors include two major US-based oil corporations, which have bought significant shares in our natural gas and oil exploration initiatives. These investments also had positive spin-offs for black economic participation with black empowerment groups, such as Mvelaphanda Holdings and Egoli Empowerment Holdings which have benefited from increased foreign investment.
The recent expansion of our natural gas industry exposes us to a number of challenges. The most important of these challenges is the creation of an adequate legal and regulatory framework for the industry, which will prevent the monopoly aspect and level the playing fields to enable participation by companies in the gas industry that are owned and controlled by historically disadvantaged South Africans.
The main thrust of this Bill is to establish an appropriate climate to facilitate the development of the industry. It is, therefore, appropriate that some kind of oversight mechanism over the gas regulator should be contained within the Bill. I am happy to say that the Bill does indeed seek to do this. It sets out strict requirements for the appointment of members of the gas regulator and carefully sets out the duties of such members. The Bill prohibits, for example, a person who has any relationship with a company engaged in the gas industry from being appointed to the gas regulator.
Furthermore, members of the gas regulator must act in a manner that is required and expected of a person placed in a position of trust, and they must act independently of any undue influence. They also must recuse themselves from any matter pending before the gas regulator in which they have a direct or indirect interest.
Finally, I am confident that this Bill will contribute to the orderly development of our gas industry, and will ensure that the industry significantly contributes towards our national objectives of economic growth, job creation and social development.
The DEPUTY MINISTER OF MINERALS AND ENERGY: Chairperson, the microphone system shows its age.
I would like to point out and assure the members of this House that we are definitely going to take all the issues that they have raised on board.
In response to hon Moosa, who raised the question of pricing with regard to the gas industry, as members are quite aware, we see this as one of the major social factors to improve the lives of our people. Hence, we want to make sure that it becomes competitive, but also efficient because sometimes competition might work negatively. In this particular instance, we are going to ensure that it works to the advantage of our people. We hope that the regulation, the establishment and the discovery of the gas itself will broaden the market, as we all know that we come from a past where gas was never a major player in the energy sector.
One also needs to bear in mind that if we reflect back, we had hoped that when we dealt with the question of poverty alleviation, one of the key areas which was going to be utilised for the benefit of the poor in our country was gas. But when one looks at the current situation, it could not happen because of the nature of the structure of gas. It is also very expensive for our people. Hence, if that had to happen, only business was going to benefit from this. We are addressing this through the Bill and also in practice.
Hon Moosa raised the question of Mozambique and the Sasol agreement. We are aware about the concerns in terms of competition and monopoly. It is one of those issues which we have to deal with. I think one must acknowledge that we were dealing with the question of Mozambique and the Sasol agreement, and ourselves as Government without a regulatory system; hence there was nothing to guide us. Maybe that might have contributed to the current problem we are facing. But we hope that the future will be completely different from what the situation is right now.
I also agree with the member that we hope that given the way we have formulated the regulator, we will be able to act in the interests of our people more than in the interests of big business, and also be able to allow small businesses to have access to this particular industry without being squeezed.
We are quite aware of members’ concern regarding the amendment. We are going to take this on board. We will make sure that we address this matter of section 21. We hope that this will meet members’ needs and concerns as the NCOP, but also generally as legislatures. I just want to say also, as I talk about this, that I have noted members’ concerns about Dr Crompton. We will raise this with him.
The question of the concerns of members of the NCOP needs to be attended to, but I have also indicated that there is a portfolio committee sitting tomorrow, and I have informed members of this committee from the NCOP that it will be important for them to be part of that. I do not know the schedules of members, but it will be important for them to attend the portfolio committee briefing around the amendment, so that they are also on board with regard to this particular issue. I was not aware that there was this kind of problem; it was just out of an instinctive feeling that it would be important for both Houses to come together at the committee level.
I agree with Mr Van Niekerk regarding his concern about Mr Raju on the question of an additional budget, which has some financial implications for our current budget. But as the hon member knows, this is one of the areas beyond our control and, unfortunately, as we all know, our budget operates within a system or a framework which wants work first.
One does not come up with one’s future or one’s dreams. One has to outline exactly on what one is going to spend the money. As we were going through the budget process, unfortunately we could not justify why we had to get more money. But we hope we will manage to create a regulator which will be effective and be able to deliver without any financial problems or constraints impacting on its performance. We hope we will manage that quite well.
Regarding Mr Kolweni’s comments, I agree with him on the question of the language. It is one of the issues on which we might have to create public awareness amongst our people. Coming from the township as I do, I know that in the past when one talked about gas, one meant electricity, coming from a power station. Regarding these kinds of issues I agree with Mr Kolweni fully.
In order for our people to be involved in our communities, we really have to make an effort, and I think all of us have a responsibility in educating our communities in ensuring that they understand the differences between electricity and gas, as we call it ezilalini [in the villages. Although they use it in the townships, they do not call it gas, but we call it gas in the villages.
It is our task to make sure that entering the gas industry and markets is successful, and that our people understand it in a much better way. We have to educate them so as to show them the difference, and we must also go to the extent of addressing the needs of our people, as we have indicated. Not only should we do that, but we must also be able to reflect on the differential cost-effectiveness of the gas industry and the ultimate objective of the Government.
I think if all members take part in this process we will be able to educate our people and the gas industry will be a success. I think our vision of gas as the energy of the 21st century will be realised and become a reality through our involvement and our commitment to our communities.
Debate concluded.
Bill, subject to proposed amendments, agreed to in accordance with section 75 of the constitution.
DIPLOMATIC IMMUNITIES AND PRIVILEGES BILL
(Consideration of Bill and of Report thereon)
The DEPUTY MINISTER OF FOREIGN AFFAIRS: Chairperson … [Interjections.] She is heckling, Chairperson. Protect me.
The CHAIRPERSON OF COMMITTEES: I will.
The DEPUTY MINISTER: Chairperson, hon members, with the birth of our democracy in 1994, there has been an impressive increase in our international relations, both with other countries and with international multilateral institutions, including the United Nations and its numerous specialised agencies. Today we have 110 diplomatic missions and 46 consular offices in South Africa. In addition, 18 offices of international organisations and specialised agencies have been opened in South Africa.
With such an extension of our diplomatic relations with states and organisations alike, it soon became clear that the Diplomatic Immunities and Privileges Act of 1989 was totally inadequate and outdated.
As members are well aware, South Africa also hosts international conferences and meetings more frequently than ever before. Several major conferences, including the UN’s conferences, have taken place in South Africa since our return to the international community in 1994.
These include Unctad, the NAM Summit, the Commonwealth heads of government meeting and, more recently, the World Conference against Racism, and next year we will host the World Summit on Sustainable Development.
All of these conferences, which were attended by thousands of delegates from abroad, required conferment of immunities and privileges on the participants. This is an aspect that was not provided for in the existing Act, and much to the frustration of many international organisations, we were forced to follow time-consuming administrative processes to be able to confer specific immunities and privileges on the participants of these meetings. In this regard, the Act was in dire need of change.
The present Act was also found to be noncompliant with many of our international obligations. As is known, South Africa is a party to the two Vienna conventions to this issue. However, the present Diplomatic Immunities and Privileges Act incorporates only some of the provisions of the Vienna conventions as part of South African law.
Recently Parliament approved South Africa’s accession to the 1946 Convention on the Privileges and Immunities of the UN and the 1947 Convention on Privileges and Immunities of the Specialised Agencies. In terms of these conventions, South Africa is party thereto and is under the obligation to take the necessary steps to give legal effect to the provisions thereof.
One of the major shortcomings of the present Act is the ad hoc manner in which the granting of immunities and privileges to international organisations and specialised agencies has been done. The ad hoc approach gives rise to a situation in which not all international organisations are treated in the same manner.
The lack of uniformity in treatment makes the administration and regulation of international organisations and specialised agencies in South Africa very problematic and, therefore, urgent attention had to be given to this.
In line with all of this, it became necessary to bring the Act in line with South Africa’s international obligations under these conventions. It became clear that the present Act had to be repealed and be replaced by the proposed Diplomatic Immunities and Privileges Act of 2001.
We have done extensive research on the whole issue of granting immunities and privileges in other countries. We have had extensive discussions and consultations with other national departments. They have all supported this Bill.
It is clear that we will achieve four major objectives through this Bill which will finally place South Africa on a par with other countries that conduct their international relations in line with accepted international rules and practices.
The Bill will give effect to South Africa’s existing international obligations, synchronise the ad hoc practices that exist at present when it comes to the regularisation of international organisations and, lastly, lessen the time consumed in administrative processes that currently hamper the effectiveness of the administration of immunities and privileges.
In conclusion, it is our contention that the Diplomatic Immunities and Privileges Bill of 2001 that we are discussing here today will finally place South Africa in line with international practice concerning the granting of immunities and privileges to diplomatic and consular missions and their members, to the UN and specialised agencies, and to other international organisations.
Through this Bill South Africa will also have complied with its international obligations under the various conventions to which we are party and prescribed the way in which immunities and privileges are to be conferred on the various subjects of international law.
We wish to thank the NA and NCOP, as well the relevant portfolio committees that gave such attention to this Act and made very important changes which enabled us to present a final Bill which is far better than the first draft that we presented. [Applause.]
Mr A E VAN NIEKERK: Chairperson, if the hon Moosa agrees not to use all his speaking time, I am prepared just to say that we agree to the Bill. [Applause.]
Mr M V MOOSA: Chairperson, I was going to read the whole Bill for the Chair. It is 65 pages long, and I hope the Chair will bear with me. No, I was not going to take long either. I think that the Deputy Minister has very extensively covered all the content that was required to be covered in respect of the speech that I had written down and prepared to read out here today.
However, I just need to say a few things. Firstly, I think that with legislation like this we have clearly made a statement both to the people in our country and to people all over the world. When one passes legislation like this, then one knows that that has happened, that South Africa has arrived. That is really what legislation like this is all about.
What this Bill does is that it puts in place a world-class law, I think probably one of the best in the world at the moment: a world-class piece of legislation that affords all the privileges and immunities for any foreign person who comes here to be constructive and on friendly terms to enjoy. For people who come here and commit crimes it is really tough. But what we have done is put together a law here that says: Feel free in our country. Feel free to come here and participate and engage in the processes of our country and the world, because we recognise the rights and immunities of all citizens and countries of the world when they come and participate here.
It is very important that we do these kinds of things because, for example, the Earth Summit next year - I address this to Mr Ackermann - is going to be the largest conference ever held in history, anywhere in the world. It is going to be held in Johannesburg in September 2002. This conference is going to attract 60 000 to 70 000 delegates, journalists, protestors, NGOs and all sorts of people into one province; between 60 000 and 70 000 people over 10 days. It has never happened anywhere else in the world, and we have to protect those people who come to our country to participate in these conferences.
We have friendly organisations such as the United Nations, and others operating at all levels, whether health, education, trade or economics. There is the World Trade Organisation, and there are diplomats, ambassadors, consuls and consul-generals and so forth. We protect them in this country and we want them to know clearly that we protect them and they have the immunities that they deserve when they come to this country.
We also know, regarding many of the countries whose representatives we
protect here, that we receive the same protection in those countries,
because we have diplomats in those countries. We have missions all over the
world. We have economic and political missions in every corner of the world
and we receive those protections and we afford them the same protections in
this country. With those few words I want to ask the House to support the
Bill.
I just want to bring one little matter to the attention of the hon the
Deputy Minister. [Interjections.] There is a definition in this Bill of
member of a family''. If he has seen this definition he will be very
worried, because he knows that the Indian community is very big. If one
includes all relatives, as the Bill does by saying that any other
unmarried child or other family member officially recognised as a dependent
member of the family’’ may be given diplomatic immunity here, one can
imagine what big families the Indians will bring here when they come. He
knows what I am talking about, when I talk about an extended family.
I was just hoping that he would take care of that particular clause and put some regulations in place, so that we clearly understand what we mean when we refer to other members of the family, it could be 600 people whom we have to give diplomatic immunity to. But that is the only problem and concern we have with this Bill. Otherwise we think it is a fantastic Bill and we really support it and we ask the House to vote for it. [Applause.] Debate concluded.
Bill agreed to in accordance with section 75 of the Constitution.
CONSIDERATION OF REPORT OF SELECT COMMITTEE ON ECONOMIC AFFAIRS - COTONOU PARTNERSHIP AGREEMENT
Mr M V MOOSA: Chairperson, the Deputy Minister of Finance is going to take my salary away if I do not act fast. This Cotonou agreement is about 100 pages long. It relates to a whole range of co-operation: economic, social, political and capacity-building co-operation between the European Community countries and the countries of Africa, the Caribbean and the Pacific.
It is a very good agreement. One will not be able to explain it in the two minutes that I have been given, so I simply want to ask the House to endorse it. It is one of those many international agreements that are opening up markets and resources internationally, and are making it possible for South Africa to do the kinds of things we do, to serve our people, to alleviate poverty and to generate wealth in this part of the world. So I want to ask the House to support the Cotonou agreement. [Applause.]
Debate concluded.
Report adopted in accordance with section 65 of the Constitution.
FINANCIAL INTELLIGENCE CENTRE BILL
(Consideration of Bill and of Report thereon)
The DEPUTY MINISTER OF FINANCE: Chairperson, hon members, the Financial Intelligence Centre Bill is placed before this House today so that it may consider the introduction of an extensive anti-money-laundering regime through our legislation. The Financial Intelligence Centre Bill is the result of a thorough process of discussion, research and drafting over the past four years. What we have before us, we believe, compares with the best and most comprehensive anti-money laundering legislation anywhere in the world.
The Bill is the product of a comprehensive process involving the SA Law Commission, a task team appointed by the Ministry of Finance, all major stakeholders in South Africa, and international bodies such as the Financial Action Task Force, the Commonwealth Secretariat, the UK National Criminal Intelligence Services, the US Department of Justice and the US Treasury, Australia’s Financial Intelligence Unit and the Australian Transaction Reports and Analysis Centre. Accordingly, the Bill draws extensively on international best practice, and provides our Government with the tools to play an important role in combating all manner of money- laundering activities.
This Bill complements the Prevention of Organised Crime Act, which was adopted by Parliament in 1998. The Poca, as we call it, specifically criminalised money laundering and required suspicious transactions to be reported to the Commercial Crime Branch of the SAPS. But Poca fell short in so far as it did not establish a dedicated financial intelligence unit to interpret those reports or to monitor compliance with those reporting obligations. Nor did it impose the relevant ``know your client’’ training and record-keeping obligations on those sectors which are believed to be the most susceptible to money laundering. These deficiencies are rectified by the Financial Intelligence Centre Bill.
As defined in the Bill, ``money laundering’’ means an activity which has the effect of converting the proceeds of unlawful activity, of disguising the nature and source of this hot money and the ownership thereof. Typically, the laundering process is broken down into three phases: first, placement - when the illegal or dirty money is placed into the financial system; second, layering - when the criminal tries to obscure the link between the funds and the illegal activity through a number of complex transactions to obscure its true origin; and third, integration - when the funds are reintegrated into the financial sector again, so that it appears to be legitimate or clean money, and in so doing, it ends up as profit for the criminal.
After the funds have been cleaned, the criminal often moves the now legitimate funds into mainstream economic activities, such as business investments, real estate or luxury goods. They normally buy very expensive things for cash.
However, money laundering and the legislation introduced today take on a new meaning in the wake of the post-September 11 attacks on the US and the events unfolding in the Middle East. No longer can money laundering be understood only as hiding and moving the proceeds of unlawful activity such as drug trafficking. It must include those funds which are intended for terrorist activity as well.
The problem with money laundering is that it has a corrosive effect on a country’s economy, its government and its social wellbeing. It distorts business decisions, increases the risk of bank failures and creates liquidity problems in financial markets. Due to the quick flow of hot money, it takes control of economic policy away from government, thus making sound policy decisions difficult to achieve. It harms a country’s reputation, and exposes its people to crime syndicates, drug trafficking, smuggling and other criminal activity.
Due to increased activities by authorities in developed nations, crime syndicates are shifting their activities to less regulated emerging markets, especially those that are in the process of opening or liberalising their own markets.
The cumulative effect of laundering activities is to destabilise the foundations of a nation’s financial system. Money laundering diminishes the tax revenue to the fiscus and thereby indirectly harms honest taxpayers. It makes government’s tax collection procedures more difficult. The loss of untaxed revenue generally means higher tax rates for law-abiding citizens and corporates than would be the case if the untaxed proceeds of crime were legitimate.
Therefore, with this Bill we intend to interrupt the cycle used by organised criminal groups to benefit from illegitimate profits. We shall use the Bill to maintain the integrity of the South African financial system, which we have struggled so hard to build.
The object of the Bill is to introduce mechanisms and measures aimed at preventing and combating money-laundering activities. It sets up an anti- money-laundering regime which encourages voluntary compliance and self- regulation by institutions which otherwise may be exploited for money- laundering purposes. To this extent, the Bill complements and works with the Prevention of Organised Crime Act, as I said earlier on.
The Bill establishes a Financial Intelligence Centre, which will co- ordinate policy and Government’s efforts to counter money-laundering activities. The centre will be located outside the Public Service, but within the public administration in terms of section 195 of the Constitution. It will be accountable to the hon the Minister of Finance and will be funded directly from the national Budget.
The centre will bring together all financial intelligence data into one single repository for analysis, before passing this information on to the law-enforcement agencies for further investigation and prosecution. The Financial Intelligence Centre is being established for financial intelligence gathering and analysis. It will receive reports from accountable institutions. It will then process, analyse and interpret the data before passing this information on to the law-enforcement authorities who, in turn, will use it for further investigation, and ultimately prosecution. The centre itself will not be an investigative body. The function of investigating suspected criminal activity will remain with those authorities who are tasked with this function under the Constitution.
The centre will be headed by an appropriately qualified director. A relatively small staff complement is intended, which will be made up of a full-time core, with others drawn by way of secondment from other Government departments such as the Police Service, the National Prosecuting Authority and the SA Revenue Service. Others will be recruited for their specialised skills, such as their proven ability for analysing financial data and forensic work, or for their legal and investigative skills.
The Bill also creates new legal categories of accountable and reporting institutions, which refer to the companies and businesses we consider to be most vulnerable to money-laundering activities. These include banks, life assurance companies, foreign exchange dealers, casinos, and even estate agents. They will be required to implement internal administrative systems to ensure that they know their customers, report suspicious and certain cash transactions, keep records of their customers and the transactions that they were involved in, appoint compliance officers, and train employees to comply with the provisions of this Bill.
The battle against organised crime and money laundering cannot be won by Government and public bodies alone. To be effective, anti-money-laundering policy requires a partnership between Government, the private sector, and supervisory and regulatory bodies which operate in the financial sector. This partnership is given practical expression in the Bill through the establishment of a Money-Laundering Advisory Council. The council will facilitate public-private co-operation and will advise on the development of appropriate anti-money-laundering policies. Although the council will not have any executive or regulatory powers, it will be necessary for the hon the Minister to consult with the council before issuing regulations or exempting any accountable institutions from the provisions of this legislation.
Schedule 2 of the Bill provides a list of supervisory bodies, which include the Financial Services Board, the Reserve Bank, the Registrar of Companies, the Estate Agents Board, the Public Accountants and Auditors Board, the National Gambling Board, the Johannesburg Stock Exchange Securities Exchange, and the Law Society of South Africa. Each supervisory body will be responsible for supervising compliance by accountable institutions, which fall within their jurisdiction, with the provisions of this Bill. They must investigate referred acts of transgression and may take steps to remedy the matter. In the event of the supervisory body not taking such steps, the Financial Intelligence Centre can take appropriate measures to do so.
Central to the proper functioning of the Financial Intelligence Centre will be the information technology system that it utilises. This will enable the Financial Intelligence Centre to receive reports from accountable institutions and develop databases of stored information.
Over time, large volumes of data will need to be sifted through and analysed for names, links and networking patterns. This information will then be fed through to the investigative agencies for them to carry out further work. These information technology systems will require careful scoping in the months ahead.
However, we will want to avoid reinventing the wheel by spending hugely on development costs when proven software has already been developed for this kind of work. Therefore, the National Treasury is already in discussion with other financial intelligence units in this regard.
The Treasury has assembled a regulations drafting team which has the brief of providing the final details to this Bill. We also intend drafting the regulations in the sequence that we expect the legislation to be enacted. Therefore, those regulations dealing with customer identification and record-keeping requirements will be prepared first and then followed by requirements for reporting information.
This Bill makes it possible for these regulations to be implemented only after consultation with the centre and the Money-Laundering Advisory Council. Therefore, these two bodies will be established as soon as possible. It is anticipated that the first phase will be from June next year, when banks will be required to know their clients and to start reporting suspicious and unusual transactions. Full implementation will be completed three years hence, once electronic transaction reporting from all accountable and reporting institutions has been phased in.
Chapter 5 of the Bill identifies a range of offences and imposes very onerous penalties in the event of transgressions by accountable institutions. Thus, a person found guilty of any of these offences is liable to imprisonment for a period not exceeding 15 years or a fine not exceeding R10 million. The Bill sends out a very clear message that we are serious about implementing an anti-money-laundering regime in this country.
The anti-money-laundering regime brought about by this Bill is substantially in compliance with the 40 recommendations set out by the Financial Action Task Force on Money-Laundering, which is the de facto international co-ordinating body for anti-money-laundering practices. In this regard, South Africa will seek a close working relationship with and an affiliation to the task force.
The centre will also liaise closely and share information with the 55 counterpart financial intelligence units elsewhere in the world. We shall also seek to work closely with and support countries in the region to ensure that anti-money-laundering co-ordination in the region can be at its highest.
The legislation before hon members today is amongst the most comprehensive anti-money-laundering legislation anywhere in the world. It draws on international best practice and gives South Africa the means to combat all manner of money-laundering activity. We are serious about identifying those who are involved in this activity and bringing them to book. [Applause.]
Ms Q D MAHLANGU: Chairperson, the Deputy Minister has dealt very extensively with the contents of the Bill. I am not going to waste hon members’ time by going through those details again. When the committee was being briefed about the Bill, one of the things mentioned was a detailed implementation plan which has been championed by the National Treasury. I am going to talk about those implementation issues. We need to move with speed to ensure that institutional mechanisms for an effective anti-money-laundering regime are in place, and critical to these mechanisms will be co-operation between law-enforcement agencies.
The experience of the United Kingdom and that of the United States of America show that without that co-operation, co-ordination and sharing of information, the centre will become ineffective. That is very important.
For example, it took the United States of America seven years to achieve full co-operation between its law-enforcement agencies. In our country it is vital that we ensure that these institutions are co-operating and co- ordinating.
The supervisory board, as an accountable institution, must begin the process of putting in place a compliance mechanism, including the appointment of compliance officers, and the education of their employees, recognising that these employees are at the coalface of transactions and must therefore be enabled to recognise the unusual and suspicious transactions that the Deputy Minister has talked about.
Lastly, there are a few other issues that I want to talk about. According to the Medium-Term Budget Policy Statement that was tabled last week by the Minister of Finance, the Financial Intelligence Centre is one of the Government’s priorities for the 2002 budget. Its aim is to assist in the global efforts to combat money-laundering.
I want to commend the department and the National Treasury. Even at the stage of piloting the legislation through Parliament, the department has already started the implementation plan. During the briefing we were told how this Bill is going to be implemented.
We are looking forward to the appropriation of funds to start this centre. We request Treasury to keep Parliament abreast with the progress and difficulties during the implementation process of this Bill.
May I call upon members of this august House to support the Bill without amendments, as the select committee requested. [Applause.]
Mr A E VAN NIEKERK: Chairperson, I did hear ``the honourable’’, but it was very faint.
Opbrengs uit onwettige en misdadige aktiwiteite word wêreldwyd deur misdaadsindikate aangewend om verdere misdaadaktiwiteite te finansier en sodoende die bose kringloop voort te sit.
Ten einde die oorsprong van hul geld te verdoesel, maak misdadigers en misdaadsindikate gebruik van ‘n stelsel wat as geldwassery bekend staan. Onwettig verkreë geld word nie deur die algemeen erkende finansiële instellings gekanaliseer nie, maar word op onwettige wyse in kontantvorm omgeskep. Suid-Afrika het nie die euwel vrygespring nie en het dié wetsontwerp nou baie dringend nodig. Die doel van die wetsontwerp is die skep van ‘n finansiële intelligensiesentrum wat daarop gerig is om die opbrengste uit onwettige en misdadige bedrywighede en ander agterdogwekkende transaksies te identifiseer en om die verdoeseling van sodanig verkreë geld deur middel van geldwassery te bestry.
Dit is ‘n hoogs tegniese en komplekse wetsontwerp wat in die Huis aan die ander kant met behulp van die portefeuljekomitee op justisie deurgetrap moes word, ‘n proses waartydens ‘n groot hoeveelheid wysigings aan die oorspronklike konsep aangebring moes word.
Aangesien geldwassery internasionaal ‘n hoogs gesofistikeerde bedryf geword het, moes ons in Suid-Afrika ook daartoe oorgaan om van gesofistikeerde stelsels gebruik te maak. Alleenlik op dié manier kan plaaslike georganiseerde misdaad se suurstof afgesluit word.
Die Finansiële Intelligensiesentrum sal onder meer verantwoordelik wees vir die insameling van inligting vanaf alle finansiële instellings in beide die openbare en die private sektor waar groot kontantbedrae in transaksies gebruik word, waar elektroniese oordragte na en van Suid-Afrika gemaak en waar agterdogwekkende transaksies beklink word. Dit sal kragtens dié wetsontwerp die plig van sodanige instellings wees om dit onverwyld aan die FIS te rapporteer.
Die agb Minister het verwys na die boetes van R10 miljoen en die tronkstraf van 15 jaar, wat net daarop dui hoe belangrik dit is dat hierdie misdade vasgevat moet word, en dat daar ernstig daaroor besin is. Die Finansiële Intelligensie Sentrum, FIS, word gefinansier deur die fondse wat jaarliks deur die Parlement toegewys word, deur enige verdere toekennings wat deur die Regering aan hom gemaak mag word, en deur enige ander fondse wat hy wettiglik mag verkry. (Translation of Afrikaans paragraphs follows.)
[Proceeds of illegal and criminal activities are used throughout the world by crime syndicates to finance further criminal activities and in so doing perpetuate the vicious circle.
In order to cover up the source of their money, criminals and crime syndicates use a system that is known as money laundering. Illegally acquired money is not channelled through the generally acknowledged financial institutions, but is illegally changed into cash.
South Africa has not escaped this evil and this Bill is now a very urgent necessity. The objective of the Bill is to create a Financial Intelligence Centre aimed at identifying the proceeds of illegal and criminal activities and other suspicious transactions and to combat the covering up of money obtained by those means through laundering it.
This is a highly technical and complex Bill that had to be thrashed out in the House on the other side with the assistance of the justice portfolio committee, a process during which a large number of amendments had to be made to the original draft.
Since money laundering has become a highly sophisticated industry internationally, we in South Africa also had to go over to using sophisticated systems. In this way alone can the oxygen of local, organised crime be shut off.
The Financial Intelligence Centre will be responsible, inter alia, for collecting information from all financial institutions in both the public and the private sectors where large amounts of cash are used in transactions, where electronic transfers are made to and from South Africa and where suspicious transactions take place. In terms of this Bill it will be the duty of such institutions to report it to the FIC immediately.
The hon the Minister made reference to the fine of R10 million and the prison sentence of 15 years, which indicate just how important it is that these crimes should be combated, and that this was given serious consideration. The Financial Intelligence Centre, FIC, is financed with the funds that are allocated by Parliament annually, with any further allocations that may be made to it by the Government, and with any other funds that it may acquire legally.]
I take for granted that this does not include hot money at all.
Die Auditeur-generaal sal ook jaarliks oor die FIS se finansiële rekords verslag doen. Ons is tevrede om hierdie wetsontwerp te steun. [The Auditor- General will also report annually on the financial records of the FIC. We are happy to support this Bill.]
Mr J L THERON: Chairperson and hon Deputy Minister, the Bill before us is complex, but we want to commend the Ministry and the department on this piece of legislation. The official opposition will support the Bill as amended.
The Bill establishes a Financial Intelligence Centre and a Money-Laundering Advisory Council which will assist in the identification of proceeds of unlawful activities and the combating of money-laundering activities. The method of operation will be to work with accountable institutions, supervisory bodies and reporting institutions to report unlawful activities and money-laundering.
I want to turn to the objectives and functions of the Bill. The principle objective of the centre is to assist with the identification of the proceeds of unlawful activities and the combating of money laundering. Furthermore, it is to make information collected available to investigation authorities to facilitate the administration and enforcement of the laws of the Republic and to exchange information with similar bodies in other countries on money laundering and similar offences.
To achieve these objectives, the centre must process, analyse and interpret information, inform, advise and co-operate with investigation authorities, monitor and give guidance to accountable institutions and supervisory bodies and retain information for the period required in the Act.
It is clear from the mentioned objectives and functions that law-abiding citizens will subscribe to and abide by these. The centre will thus carry out its main activities by gathering information from the private and public sectors and disseminate it to the appropriate law- enforcement agencies.
The staff of the centre will obviously be selected very carefully to enable them to meet these sets of objectives. The staff of the centre will also be carefully screened for security purposes and will have a high security clearance. The centre and the advisory council will be financed by money appropriated by Parliament annually and by grants made to it by the Government. Parliament will thus have an oversight role and see to it that the money is well spent and that taxpayers are getting value for their money.
On the money-laundering control measures, the Bill places a heavy responsibility on the various accountable institutions such as banks, foreign exchange dealers and stock exchanges. It requires them to know their clients and report all suspicious and unusual transactions. The onus is thus placed on the accountable institutions to identify suspicious and unusual transactions.
Mr A E VAN NIEKERK: Chairperson, on a point of order: Can we just get the official opposition’s name under the picture of the hon member speaking now. [Laughter.]
The CHAIRPERSON OF COMMITTEES: Order! Hon member, there was nothing out of order in your speech. Those are logistics which we will deal with here at the Table. Please proceed, hon member.
Mr J L THERON: Thank you, Chairperson. I do not think it is necessary to respond to that.
On the offences and penalties, money laundering is a serious and growing problem internationally involving sums amounting to hundreds of millions of US$ each year. South Africa is no exception. An accountable institution which fails to identify persons, fails to keep records, fails to report suspicious and unusual transactions, fails to send reports, fails to comply with requests from the centre or misuses information will face heavy penalties. The Bill provides for severe penalties: up to 15 years or R10 million, as mentioned previously, for offences committed.
Like the taxation legislation, it provides for abnormal invasions of privacy in respect of financial dealings.
In conclusion, as the Bill is complex tens of hours were spent in the joint finance and justice portfolio committee meetings and a large number of amendments have been made to the Bill, which was tabled. Nevertheless, it has the support of the financial services industry and of all parties in the committee. We therefore support the Bill as amended. [Applause.]
Mr T B TAABE: Madam Chairperson, it is my pleasure once again to address this House, the occasion being the passing of the Financial Intelligence Centre Bill in this Chamber this afternoon. There have been references from certain members in this House - I do not know if these references are parliamentary - one reference being to the effect that I should be called a cowboy, a reference by the hon member Raju from the wounded opposition. [Laughter.]
On a much more serious note, I thought I needed to outline what the key objective of this Bill is, which objective basically is an attempt on the part of all of us to combat money-laundering activities in our economy.
I thought I was also going to take the opportunity to explain in quite succinct terms what is understood by money laundering. But the task has been made much easier by the hon the Deputy Minister. So, I will not really dwell much on that, except to say that hon members should be accorded the opportunity to assist those, like the hon member Raju, who might not necessarily understand this concept of money laundering and those who find it quite technical. Money-laundering, in the most simple of layman’s terms, in the language of the hoi poloi, refers to disguising dirty money to make it appear legitimate. I am sure the hon member Raju has benefited from this most simple of explanations of the concept. [Laughter.]
The House probably knows that money, particularly in liquid form, is extremely mobile and convertible. With the advent of financial liberalisation and information technology in the age of globalisation, new avenues are created for money-laundering activities in the economy. And, as such, criminals have taken advantage of these new scenarios in order to hide the origins of their illegal earnings.
The point has to be made that when an illegal activity generates substantial profit, the individual or group must find a way to control the funds, without attracting attention to the underlying activity or persons involved. Perpetrators of these illegal activities do this by disguising their sources, and then changing their form or moving the funds to a location where they do not attract attention. The result of these transactions is that laundered money becomes indistinguishable from legitimate money.
If control over access to the financial system is strong, the financial system will not be an attraction to the money launderer. Accepting bribes becomes much more difficult if anti-money-laundering measures are instituted. The presence of large-scale and ubiquitous illegal syndicates has a corrupting influence on governments, especially on law enforcement and border control officers. Our experience in South Africa best attests to this reality. Moreover, this also gives rise to the perpetual growth of illegal business and reduces the potential growth of legitimate business.
This vicious cycle of growth in illegal syndicates is therefore perpetuated. Although money-laundering is, by its very nature, an underground activity, rough estimates are provided to give a sense of the scale of the problem.
The IMF, for example, has stated that the aggregate size of money laundering in the world could be somewhere between 2% and 5% of the world’s GDP. Using the 1996 statistics this would be between US$590 billion and US$1,5 trillion. The lower figure is probably equal to the economy of a country as big as Spain. There is also evidence to suggest that the impact of money laundering is so large that macroeconomic policy-makers, like ourselves, must give it serious consideration.
The Deputy Minister made reference earlier on in his own words to money laundering having a corrosive effect on the economy, and much detail was given in this regard.
As a member of this committee on finance, I am keen to refer to the relationship between the macroeconomy and money laundering. It is well documented in terms of what economists and financial analysts have said in relation to how money-laundering could distort economic data, macroeconomic analysis and policy-making.
The following are some potential macroeconomic consequences of money laundering, such as inexplicable changes in money demand; additional pressure on inflation; inexplicable changes in asset prices and interest rates; effects on savings resulting from induced changes in income distribution; greater prudential risks to bank soundness; contamination affects on legal-financial transactions; greater volatility of international capital flows; greater volatility of exchange rates owing to unanticipated gross cross-border asset transfers; a rapid reduction in foreign exchange reserves; and the erosion of confidence in financial markets.
The opportunity to launder money could promote private economic welfare for some; while monumentally undermining social welfare in any economy. Public policy considerations, therefore, suggest an antilaundering role for financial institutions involved in prudential banking supervision, financial statistical reporting by the business and banking community, and the installation of appropriate legislation by governments.
In this light, clause 2 of the Bill proposes quite clearly the establishment of an institution to be known as the Financial Intelligence Centre. The details were made available in this House by previous speakers. The objectives, again, I think the hon the Deputy Minister and other members have dealt with in terms of what this centre is going to be doing.
I think I must also mention that greater care should be taken in designing the form of interventions that may be necessary by Government, from time to time, against money-laundering practices to minimise the negative consequences for macroeconomic efficiency. Anti-money laundering reforms can be effective only when both the international community and domestic leaders agree and support reforms. If these reforms are not implemented, both corruption and money laundering will continue regardless of actions directly aimed at curtailing them. Our democratic Government has obviously displayed an honest and visible commitment to fighting money laundering, organised crime and corruption. I think there cannot be an iota of doubt, I am sure on the part of members of this House, in terms of agreeing with us that …
The CHAIRPERSON OF COMMITTEES: Order! Hon member, your speaking time has expired.
Mr T B TAABE: Chairperson, this legislation demonstrates the tangible commitment on the side of Government to ensuring that, indeed, we are able to flush out these hyenas who are criminals, basically, from the face of the earth in this country.
In conclusion, Madam Chair, it is …
The CHAIRPERSON OF COMMITTEES: Hon member, your time is up. [Laughter.]
Mr T B TAABE: It is heartening to note that members in this House have actually supported the passing of this Bill. [Applause.]
The DEPUTY MINISTER OF FINANCE: Chairperson, let me thank all the members who have participated in the debate. Like the hon Taabe, I would also like to acknowledge the fact that all the parties have supported this Bill.
I would like, perhaps, to make just one or two points. Firstly, I am glad that the hon Taabe elaborated on the possible macroeconomic effects of money laundering. If one is to have a financial system which is highly infiltrated by these kinds of funds, then one is likely to have some of the effects that the hon member has referred to. I think the whole issue really concerns the role of money in society, in our lives and in everything that happens, whether it is trade or whatever. I think it is good that the hon member has actually highlighted the issue of the macroeconomic effects of money laundering.
The issue of protecting the integrity of our financial system is of utmost importance. I must say, in this regard, that there are initiatives that we are engaged in, not just in relation to money laundering but generally to try to establish in the Southern African region an environment of sound financial institutions and services. In this particular regard, we are also going to be co-operating with other countries in the region to make sure that there is in the region this kind of environment. A lot of things that we do are not as beneficial if right next door to us the very opposite of what we are doing is taking place. The issue is that we should take a regional approach so that we can ensure that we establish a region which has certain features: no money laundering takes place here, inflation is low, interest rates are low and financial institutions are sound. These are some of the things that we aspire to. There is a whole range of initiatives to try to ensure that we achieve those objectives.
Perhaps the final point that one needs to make is that the regulation of financial institutions and services, historically, has tended to focus either on individual participants or on institutions. But today the role of technology is such that there is much greater connectivity between services, institutions and individuals. So regulation, I believe, must begin to take cognisance of the role of technology and seek to understand that role, so that our regulation can be properly tuned to ensure that we are also able to use technology to the advantage of our regulatory objectives.
I think that the implementation of the Financial Intelligence Centre Bill is going to be a very interesting exercise, because it actually brings the role of technology into the centre. We will be looking forward to the experience of putting in place the mechanisms for fighting money laundering.
There is another big project that we are going to be engaged in in the next year. This is the whole issue around establishing a single regulator in South Africa. There is a lot of fragmentation in our regulatory environment in South Africa. We have made a policy pronouncement that we will be establishing a single regulator.
There are many reasons for this. One of them is the emergence of complex organisations. For example, Old Mutual is involved in banking, insurance, asset management and all sorts of activities.
Therefore how does one regulate an entity like that, when one’s regulatory framework is as fragmented as ours is here in South Africa? Those are the two big projects that we are going to be engaged in, that is, implementation of the Financial Intelligence Centre and the establishment of a single regulator. Let me, once again, thank all the members for participating in the debate and supporting the legislation.
Debate concluded.
Bill agreed to in accordance with section 75 of the Constitution.
PENSION FUNDS AMENDMENT BILL
(Consideration of Bill and of Report thereon)
Mr M I MAKOELA: Chairperson, on behalf of the official ruling party … [Laughter.] … it is a pleasure for me to introduce the Pension Funds Amendment Bill - B22B - 2001 - before the House, which is the Bill which proposes to amend the Pension Funds Act of 1956.
Currently a registered pension fund may grant housing loans to its members, if the rules of the funds so permit. However, the Bill of the House proposes, among other things, that in addition to the above-mentioned scenario, the pension fund may provide a guarantee to lending institutions such as banks or mutual banks which grant housing loans to members of the fund against the pledge of the members’ withdrawal benefits. This will allow members to enjoy favourable conditions of housing loans as the above specialised institutions are usually better equipped to administer such loans.
Over and above that, the Bill will contribute towards the Government’s vision of housing for all, by extending the concept of home ownership to include those people who previously could not qualify for loans, because the properties for which they or their spouses obtained right of occupation or ownership were not under a lease agreement or registered in their name in their deeds office as required.
Also, the maximum 30-year period for repayment of the housing loan, as proposed in the Bill, is subject to the condition that the loan may not exceed one third of the total value of the member’s benefits at retirement while providing for a situation of default by a member, thereby making sure that if retirement comes before full repayment of the loan, the member will not lose all his or her retirement benefits.
If one was born and raised in previously disadvantaged areas then one would appreciate the obstacles that people have to overcome in their efforts to try and access housing loans from the established banking institutions, because of their status and earning power. It is clear that the Bill, as a piece of enabling legislation, will improve the situation and enable more people to access housing loans under reasonable conditions and experience the joy of becoming home owners and, with that, improved conditions of living.
With these few words, I present the amending Bill before the House for adoption.
Debate concluded.
Bill agreed to in accordance with section 75 of the Constitution.
STOCK EXCHANGES CONTROL AMENDMENT BILL
(Consideration of Bill and of Report thereon)
The CHAIRPERSON OF COMMITTEES: Order! Our apologies, members. What is in front of me is ``Mr J L Theron’’. Table staff, please sort this out. [Interjections.] Mr Raju, somebody on that side of the House says you have been reinstated. [Laughter.] Mr N M RAJU: Madam Chair, although I am a member of the official opposition under a powerful leader, this House will note that I do not intend to be controversial. [Interjections.] [Laughter.] It is my pleasure to read the statement on behalf of the Select Committee on Finance with the full concurrence of all committee members.
The Stock Exchanges Control Amendment Bill amends section 40 of the Stock Exchanges Control Act of 1985. This Bill seeks to enable the stock exchange to regulate price stabilising mechanisms in its rules or listing requirements.
The proposed amendment to section 40 is of particular interest to Telkom, whose advisers have indicated to the Financial Services Board that at the time of Telkom’s envisaged listing they will seek to implement some type of price stabilising measure in respect of Telkom’s shares on the day of listing and thereafter for a limited period. Telkom was the first major South African-owned enterprise to be selected for a public listing. The initial public offering, or IPO, was initially expected to be listed within the current financial year, but according to Treasury officials the IPO is now expected to be listed in the 2002-03 fiscal year.
Price stabilisation is practised internationally in many countries, such as Australia, the UK and the US, and was by Old Mutual, for example, at the time of its listing on the London Stock Exchange. The proposed amendment of section 40 will be necessary to assist Telkom in proceeding with its existing plan. It is now for the House to adopt this Bill. [Applause.]
Debate concluded.
Bill agreed to in accordance with section 75 of the Constitution.
The Council adjourned at 17:29. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
MONDAY, 5 NOVEMBER 2001
ANNOUNCEMENTS:
National Assembly and National Council of Provinces:
- The Speaker and the Chairperson:
(1) The Joint Tagging Mechanism (JTM) on 5 November 2001 in terms of
Joint Rule 160(6), classified the following Bill as a money Bill
(section 77):
(i) Adjustments Appropriation Bill [B 82 - 2001] (National
Assembly - sec 77).
National Council of Provinces:
- The Chairperson:
The following papers have been tabled and are now referred to the
relevant committees as mentioned below:
(1) The following papers are referred to the Select Committee on
Economic Affairs for consideration and report:
(a) Partnership Agreement between the Members of the African,
Caribbean and Pacific Group of States of the one part, and the
European Community and its Members States, of the other part,
signed in Cotonou on 23 June 2000, tabled in terms of section
231(2) of the Constitution, 1996.
(b) Explanatory Memorandum on the Partnership Agreement.
(2) The following paper is referred to the Select Committee on Local
Government and Administration:
Report of the Department of Public Service and Administration on
the Use of Consultants in the Public Service, September 2001.
(3) The following paper is referred to the Select Committee on
Social Services:
Report and Financial Statements of the Film and Publication Board
for 2000-2001, including the Report of the Auditor-General on the
Financial Statements of 2000-2001.
(4) The following paper is referred to the Select Committee on
Finance:
Government Notice No R.851 published in the Government Gazette No
22653 dated 6 September 2001, Draft Regulations published for
public comment as required by section 91(4) of the Public Finance
Management Act, 1999, made in terms of section 91(1)(b) of the
Public Finance Management Act, 1999 (Act 1 of 1999).
(5) The following papers are referred to the Select Committee on
Security and Constitutional Affairs for consideration and report:
(a) Treaty between the Government of the Republic of South
Africa and the Government of the Kingdom of Lesotho on
Extradition, tabled in terms of section 231(2) of the
Constitution, 1996.
(b) Treaty between the Government of the Republic of South
Africa and the Government of the Kingdom of Lesotho on Mutual
Legal Assistance in Criminal Matters, tabled in terms of
section 231(2) of the Constitution, 1996.
(c) Explanatory Memorandum on the Treaties.
(d) Statute of the Hague Conference on Private International
Law, tabled in terms of section 231(2) of the Constitution,
1996.
(e) Explanatory Memorandum on the Statute of the Hague
Conference on Private International Law.
(6) The following paper is referred to the Select Committee on Land
and Environmental Affairs:
Report and Financial Statements of the South African Veterinary
Council for 2000-2001.
TABLINGS:
National Assembly and National Council of Provinces:
Papers:
- The Minister of Housing:
Report and Financial Statements of the Department of Housing for 2000-
2001, including the Report of the Auditor-General on the Financial
Statements for 2000-2001.
National Council of Provinces:
- The Chairperson:
Results of the Proceedings of the 106th Inter-Parliamentary Union
Conference and Related Matters, held at Ouagadougou (Burkina Faso) 9 -
14 September 2001.
COMMITTEE REPORTS:
National Council of Provinces:
-
Report of the Select Committee on Economic Affairs on the Gas Bill [B 18B - 2001] (National Assembly - sec 75), dated 31 October 2001:
The Select Committee on Economic Affairs, having considered the subject of the Gas Bill [B 18B - 2001] (National Assembly - sec 75), referred to it, reports the Bill with a proposed amendment, as follows:
CLAUSE 21
- On page 11, in line 35, to omit all the words after “area” up to and including “determine” in line 36.
-
Report of the Select Committee on Economic Affairs on the Diplomatic Immunities and Privileges Bill [B 40B - 2001] (National Assembly - sec 75), dated 30 October 2001:
The Select Committee on Economic Affairs, having considered the subject of the Diplomatic Immunities and Privileges Bill [B 40B - 2001] (National Assembly - sec 75), referred to it, reports that it has agreed to the Bill.
-
Report of the Select Committee on Economic Affairs on the Industrial Development Amendment Bill [B 32B - 2001] (National Assembly - sec 76), dated 31 October 2001:
The Select Committee on Economic Affairs, having considered the subject of the Industrial Development Amendment Bill [B 32B - 2001] (National Assembly - sec 76), referred to it, reports the Bill with amendments [B 32C - 2001].
-
Report of the Select Committee on Economic Affairs on Cotonou Partnership Agreement, dated 30 October 2001:
The Select Committee on Economic Affairs, having considered the request for approval by Parliament of the Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000, referred to it, recommends that the Council, in terms of section 231(2) of the Constitution, approve the said Agreement.
Report to be considered.
-
Report of the Select Committee on Finance on the Provincial Tax Regulation Process Bill [B 51D - 2001] (National Assembly - sec 76), dated 5 November 2001:
The Select Committee on Finance, having considered the subject of the Provincial Tax Regulation Process Bill [B 51D - 2001] (National Assembly - sec 76), referred to it, reports the Bill without amendment.
TUESDAY, 6 NOVEMBER 2001
ANNOUNCEMENTS:
National Assembly and National Council of Provinces:
- The Speaker and the Chairperson: The Minister for Agriculture and Land Affairs submitted the Wysigingswetsontwerp op Veterinêre en Para-veterinêre Beroepe [W 66 - 2001] (Nasionale Vergadering - art 75) to the Speaker and the Chairperson on 6 November 2001. This is the official translation of the Veterinary and Para-Veterinary Professions Amendment Bill [B 66 - 2001] (National Assembly - sec 75), which was introduced in the National Assembly by the Minister on 6 September 2001.
National Council of Provinces:
- The Chairperson:
Bills passed by National Council of Provinces on 6 November 2001: To be
submitted to President of the Republic for assent:
(i) Diplomatic Immunities and Privileges Bill [B 40B - 2001]
(National Assembly - sec 75).
(ii) Financial Intelligence Centre Bill [B 1B - 2001] (National
Assembly - sec 75).
(iii) Pension Funds Amendment Bill [B 22B - 2001] (National Assembly -
sec 75).
(iv) Stock Exchanges Control Amendment Bill [B 75 - 2001] (National
Assembly - sec 75).