TUESDAY, 21 MAY 2002 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:01.

The Deputy Speaker 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

Ms S D MOTUBATSE: Madam Speaker, I hereby give notice that I shall move on behalf of the ANC:

That the House -

(1) notes that in Ward 32 in the Makhado Municipality in the far north of the Limpopo Province, the ANC retained the seat with an overwhelming 96% of the vote;

(2) further notes that the DA, commonly known as the ``Defunct Alliance’’, received only 11 votes; and

(3) congratulates the ANC on its victory, which proves that despite the shouts of the DP, the ANC remains the political home of the vast majority of the South African people. [Applause.]

Mr S E OPPERMAN: Madam Speaker, I hereby give notice that I shall move:

That the House -

(1) notes the policy of the former National Party government to dump unwanted people far from the city centre;

(2) further notes the New NP/ANC Premier Peter Marais’s plan to remove 500 000 people to Atlantis;

(3) recognises that -

   (a)  unemployment in Atlantis is already a serious problem;


   (b)  the public transport system from the west  coast  is  hopelessly
       inadequate; and


   (c)  the roads are severely overcrowded; and

(4) calls on the ANC/New NP to explain exactly how and when they plan to build houses and schools, create jobs and provide transport for 500 000 additional people. [Applause.]

Mr A M MPONTSHANE: Madam Speaker, I give notice that I shall move on behalf of the IFP:

That the House -

(1) notes that the African Renaissance was one of the most significant initiatives of the new Government because it aimed at giving recognition to African institutions, cultures and mores in order that 300 years of colonial and apartheid legacy could be reversed;

(2) recognises that these imperatives are as compelling today as they were eight years ago;

(3) calls on the House not to obliterate institutions and centres of cultural and historical importance; and

(4) therefore calls on the House to invest in them and strengthen them so that the African Renaissance is given continuous impetus.

Mr G D SCHNEEMANN: Madam Speaker, I shall move on behalf of the ANC:

That the House -

(1) notes the rugby trials which were held in Pretoria on Sunday;

(2) recognises the abundance of young talent evident at these trials; (3) further notes that the absence of players who have opted out of South African rugby did not detract from the standard of play;

(4) recognises the right of players to play overseas; but

(5) condemns those players of questionable ability who cite racial quotas as the reason for leaving when they may fail to make the national team on merit. [Applause.]

Dr W A ODENDAAL: Mev die Speaker, ek gaan namens die Nuwe NP voorstel:

Dat die Huis -

(1) by monde van Agri-Suid-Afrika, kennis neem van die positiewe ingesteldheid van Suid-Afrika se kommersiële boere wat wil verseker dat grondhervorming in ons land suksesvol verloop en dat die onwettige, destruktiewe plaasbesettings wat Zimbabwe se ekonomie uiteindelik vernietig het, nie hier plaasvind nie;

(2) Suid-Afrika se boeregemeenskap gelukwens met hulle konstruktiewe betrokkenheid deur toe te sien dat genoeg geskikte landbougrond vir die vestiging van opkomende boere beskikbaar gestel word; en

(3) die boere se plan steun om ‘n nasorg-mentorstelsel in die lewe te roep waarvolgens ervare boere van die omgewing by wyse van kenmerkende gulhartige buurmanskap, beginnerboere met raad en daad bystaan om te verseker dat hulle hul suksesvol as deel van ‘n gelukkige boeregemeenskap vestig. (Translation of Afrikaans notice of motion follows.)

[Dr W A ODENDAAL: Madam Speaker, I will move on behalf of the New NP:

That the House -

(1) notes, by way of assurance from Agri South Africa, the positive disposition of South Africa’s commercial farmers who want to ensure that land reform in our country takes place successfully and that the unlawful, destructive occupation of farms, which finally destroyed Zimbabwe’s economy, does not take place here;

(2) congratulates the South African farming community on its constructive involvement by seeing to it that enough suitable agricultural land is made available to settle emergent farmers; and

(3) supports the plan of the farmers to create an aftercare mentor system through which experienced farmers from the area will, by way of typical genial neighbourliness, assist novice farmers by word and deed so as to ensure their successful establishment as part of a happy farming community.]

Prof L M MBADI: Madam Speaker, I will move on behalf of the UDM at the next sitting of this House:

That the House -

(1) notes the successful launch in the Eastern Cape yesterday of the Thuthuka Skills Project aimed at improving the quality and teaching of mathematics and accountancy for Grade 10 to 12 scholars, by providing study guides and giving additional support to their teachers;

(2) salutes the efforts of the South African Institute of Chartered Accountants, which has spearheaded this initiative;

(3) welcomes the R62 million that the Department of Labour has committed to this initiative; and

(4) notes that the Thuthuka Skills Project involves South Africans from all spheres of society, including UDM President Bantu Holomisa, who have in their personal and professional capacity joined in partnership to improve the skills base of the country and contribute to making South Africa a winning nation. [Applause.]

Mrs M M MALUMISE: Madam Speaker, I shall move on behalf of the ANC:

That the House -

(1) notes that skin-lightening creams containing hydroquinone are prohibited by law on account of their toxicity, their scarring effect on the skin and possible cancer-causing properties;

(2) further notes that on Monday, following the seizure of a truck transporting about four tons of skin-lightening creams from across the border, 12 people were arrested as a result of an intensive investigation by the organised crime unit, the Medicines Control Board and customs officials;

(3) commends the responsible agencies for the successful arrests; and

(4) warns all South Africans that the use of skin-lightening creams will result in scarring, disfigurement and possibly cancer. [Applause.]

Mrs R M SOUTHGATE: Madam Speaker, I shall move:

That the House -

(1) notes with concern the escalating gang violence in Lavender Hill in the Cape Flats where an eight-year-old child was killed, who is being buried today, and a four-year-old was injured recently due to stray bullets, as well as all primary schools in the area being forced to close;

(2) also notes that gang violence in the area has been allowed to escalate unabatedly, resulting in the children being constantly in fear of their lives and their education being negatively affected;

(3) further notes that the community members of Lavender Hill are furious with the Government, as nothing has been done to this point to alleviate this problem, while their children continue to die and live in fear; and

(4) calls on the Government to intervene immediately on behalf of the parents and children of Lavender Hill, before more children are allowed to die.

Mr D C MABENA: Madam Speaker, I shall move on behalf of the ANC: That the House -

(1) notes that -

   (a)  the executive Mayor of the City of Tshwane Metropolitan Council,
       Father Smangaliso Mkhatshwa, launched a huge housing project  in
       a soil-turning  ceremony  on  18  May  2002  at  Lotus  Gardens,
       Tshwane; and


   (b)  this project is driven by the Tshwane  Metropolitan  Council  in
       partnership with the  Gauteng  Provincial  Government  and  will
       empower communities, especially women;

(2) believes that -

   (a)  the implementation of this project  will  contribute  positively
       towards urban renewal in Tshwane; and


   (b)  this demonstrates  the  commitment  of  the  ANC  Government  to
       building a better life for all our people through the  provision
       of affordable housing;

(3) welcomes this project; and

(4) commends the provincial government of Gauteng and the City of Tshwane for ensuring that our people will have access to affordable houses. [Applause.]

Mr D K MALULEKE: Madam Speaker, I hereby give notice that I shall move:

That the House -

(1) notes that the DA has uncovered a secret bank account in Setsoto Municipality in the Free State that was used to buy groceries and supply ANC councillors with loans;

(2) notes that this unauthorised expenditure is a blatant misuse of ratepayers’ funds;

(3) therefore calls on the ANC to take the moral renewal of South Africa seriously by acting against councillors who abuse their positions in order to enrich themselves; and

(4) congratulates the DA councillors who play an important oversight role at local government level by ensuring that the ANC remains accountable for their malfeasance. [Applause.]

Mr M F CASSIM: Madam Speaker, I give notice that I shall move on behalf of the IFP:

That the House -

(1) notes that both this Government and all public institutions in South Africa are premised on the principles of democracy, transparency and accountability;

(2) further notes in the context of the above principles the intention of Sadtu to call a strike in respect of the intention of the department to institute a whole school evaluation system, because this was not linked to the development evaluation system;

(3) recognises that there are considerable merits in developing further the evaluation systems in our schools to achieve optimal results and maximum pupil growth;

(4) calls on Sadtu to engage on this matter with the department constructively and in the best interest of education in order that thorough evaluation takes place on an agreed upon basis; and

(5) furthermore calls on Sadtu not to resort to disruptive means which would impact negatively on the learners while all other avenues have not been fully explored.

Mrs N L NKABINDE: Madam Speaker, I will move on behalf of the UDM at the next sitting of this House:

That the House -

(1) notes with horror that the Minister of Education has recently reported that only 39% of HIV/Aids funding has been spent by provincial education departments;

(2) notes that this is not a new problem, since R10 million in unspent HIV/Aids funding had to be rolled over from the previous financial year;

(3) expresses its shock that the Eastern Cape education department has spent less than 6% of their HIV/Aids funding to date, whilst the Limpopo provincial department has spent less than 16%; and

(4) calls on Government, whilst an estimated one-third of teachers are infected with HIV, to intervene in this dire mismanagement at provincial level to prevent a large-scale catastrophe, which will undermine the education of our children. [Applause.]

Mr B A RADEBE: Madam Speaker …

The DEPUTY SPEAKER: Order! Hold on, hon member.

Mr D M BAKKER: Madam Speaker, on a point of order: In your allowing of motions, you skipped my party, the New NP, and gave the UDM a second opportunity before we had our opportunity. I just want to clarify that.

The DEPUTY SPEAKER: In terms of the list in front of me, I am still on track, so if there is a mistake somewhere, it is in the document itself and therefore will have to be clarified later and sorted out accordingly.

Mr B A RADEBE: Madam Speaker, I will move on behalf of the ANC:

That the House -

(1) notes that a R9 million project to compile a map of exactly what covers every piece of South African land was launched in Pretoria on Wednesday, 15 May 2002;

(2) further notes that this project will be critical for planning and reporting on the state of the environment, forest and water resource planning and management, spatial development initiatives, land reform programmes, local development and planning and rural development;

(3) believes that this initiative is a major boost to the country’s commitment to sustainable development and the maintenance of bio- diversity; and

(4) commends the responsible departments and bodies for undertaking and funding this critically important project. [Applause.]

The DEPUTY SPEAKER: Before I call the New NP, I would just like to point out that there might have been some mistake in compiling the list itself. That will be clarified and we will come back to the New NP about whether we owe them another opportunity.

Mr J DURAND: Madam Speaker, I shall move:

That the House -

(1) notes the declarations by Mr Carl Werth, previous regional chairperson of the DA in Gauteng North and leader of the DA caucus in Tshwane Metro City Council, that the DA -

   (a)  was built on a platform of treachery;


   (b)   is  a  right-wing  party  that  is  inevitably  becoming   more
       authoritarian;


   (c)  prescribes ethics and morals for the Government,  but  does  not
       apply the same standards to its own activities;


   (d)  in fact meant ``fight black'' with their ``fight back'' campaign
       and their black public representatives were  nothing  more  than
       window-dressing;


   (e)  often uses the ``K'' word; and


   (f)  has sacrificed liberal democracy on  the  altar  of  hon  Leon's
       ambition;

(2) further notes how hastily this prominent leader in the DA, who has received countless letters of praise from Leon, is now referred to as a thoroughly unprincipled man'',motivated entirely by resentment and a desire for revenge’’, by his own party; and

(3) predicts that many other prominent, principled DA leaders are also going to be called ``thoroughly unprincipled’’ after the crossing-of- the-floor legislation comes into effect. [Applause.]

The DEPUTY SPEAKER: Order! The time for Notices of Motion has expired, but I give the UDM an opportunity which they missed last time.

Mr J T MASEKA: Madam Speaker, I shall move on behalf of the UDM at the next meeting of this House:

That the House -

(1) notes with horror the gruesome details of the numerous murders committed by the Bruma Lake killers, that emerged during their trial;

(2) welcomes the several life sentences that were handed down by the judge yesterday, as an affirmation that criminal violence and brutality are not acceptable in our society; and

(3) congratulates the police investigators and the state prosecutors on their hard work and dedication, and urges them to continue to protect the lives and security of all South Africans. [Applause.]

                       VICTORY FOR EAST TIMOR

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

 (1)    notes that the struggle for  independence  for  East  Timor  has
     finally ended 450 years of foreign rule with  the  proclamation  of
     independence on Monday;


 (2)    believes that this is a significant victory for  the  forces  of
     democracy;


 (3)    notes that our Deputy President, the Honourable Jacob  Zuma,  is
     attending the independence celebrations  on  behalf  of  the  South
     African people, who have supported the struggle of  the  people  of
     East Timor; and


 (4)    wishes President Xanana Gusmao and his government a warm welcome
     to the community of nations and wishes the people  of  Indonesia  a
     peaceful and prosperous future as an independent nation.

Agreed to.

      CONGRATULATIONS TO BAFANA BAFANA ON 2-0 WIN OVER SCOTLAND

                         (Draft Resolution)

Mr M J ELLIS: Madam Speaker, I move without notice:

That the House -

(1) congratulates Bafana Bafana on their exciting 2-0 win over Scotland in their World Cup warm-up clash;

(2) believes that the hard work done by the team is paying off and that this victory bodes well for South Africa’s World Cup campaign; and

(3) wishes them well in their next match.

Agreed to.

                  CONDEMNATION OF THE US FARM BILL

                         (Draft Resolution)

Mr D H M GIBSON: Madam Speaker, I move without notice:

That the House -

(1) condemns the US Farm Bill as a major step backwards from free trade;

(2) recognises that the huge subsidies being given to US farmers - (a) make a laughing stock of trade negotiations at the World Trade Organisation; and

   (b)  ensure that developing  countries  will  be  unable  to  compete
       equally for markets; and

(3) calls on the US government to reconsider this ill-advised policy which seriously threatens commercial farming in southern Africa where increasing numbers of people are already facing starvation due to recent droughts.

Agreed to.

        PLANS FOR CAPE TOWN PARTNERSHIP TO ATTRACT INVESTORS

                         (Draft Resolution)

Mr M J ELLIS: Madam Speaker, I move without notice:

That the House -

(1) notes with approval the plans of the Cape Town partnership for attracting investment to the city, including -

   (a)  the marketing of sections of the city for specific activities;


   (b)  the development of  an  "e-city"  for  e-commerce  and  internet
       enterprises;


   (c)  the development of markets for informal traders; and


   (d)  the improvement of parking and security throughout the city; and

(2) agrees that this will enhance Cape Town’s ability to provide a good standard of living for its residents and help to attract tourists.

Agreed to.

      CONGRATULATIONS TO SAPS INVESTIGATORS ON RECENT SUCCESSES

                         (Draft Resolution)

Mr D H M GIBSON: Madam Speaker, I move without notice:

That the House -

(1) congratulates the South African Police Service investigators whose hard work and diligence in the Bruma Lake serial killings case led to an effective prosecution and resulted in long sentences for the two killers;

(2) welcomes the R800 000 Mandrax bust at Johannesburg International Airport as another small victory in the war on drugs; and

(3) hopes that there will be many more such successes in the fight against crime.

Agreed to.

                         APPROPRIATION BILL

             Debate on Vote No 31 - Trade and Industry: The MINISTER OF TRADE  AND  INDUSTRY:  Madam  Speaker,  hon  members,  chief executive officers and chairpersons of the DTI family  of  institutions  who are sitting up there - as members can see, our mass rally is on the right  - ladies and gentlemen, the work of the  DTI  covers  a  very  wide  range  of economic activities. It is not possible to deal with all of  these  in  this budget address. We have made available supporting information  and  we  hope that this will be of use to all members in their own constituency work.

As our new democracy develops we need to assess whether we are making progress in providing for a better life for our people. We have developed policies and implemented them. The effect of this process will be increasingly measurable. As I have stressed in previous budgets since 1996 the process we are undergoing is a profound structural change. The question is: Are we advancing? I believe that we are.

Today, I would like to pay tribute to South Africa’s entrepreneurs, to those people who take risks to create employment, generate value and contribute to our economic success. These are the people that are building new economic enterprises and they give us all cause for hope.

I would like to introduce to the House Ms Pinkie Luswazi, who is up there in the gallery. She is an entrepreneur from the Eastern Cape. [Applause.] Pinkie started her clothing business after-hours while studying, making school uniforms, matric dance dresses and wedding gowns. What she is wearing there is also one of her products.

Pinkie works with disabled women to equip them with skills that will assist them in gaining employment. Her entrepreneurial spirit has been given practical support by the DTI through training in export orientation and through export marketing assistance enabling her to market her products in France and the USA.

Another example is Bell Equipment, an enterprise that has grown from being a small engineering and equipment repair service into a globally competitive equipment designer, manufacturer, and preferred supplier of capital equipment across the world. Bell Equipment has exploited the benefits of participating in the DTI’s programmes.

A South African entrepreneur whose recent exploits in space have inspired us all is Mark Shuttleworth. By South Africa becoming part of the global economy an enterprising young man developed his innovative idea and sold it for a huge profit, helping to place South Africa on the global IT map and Mark in space. He also sits on the President’s Information Technology Advisory Council. Most members may have seen our exhibits next door, and will see that South Africa manufactures satellites. Maybe, one day, we will manufacture space stations.

Cobus Cronje, a mechanical engineer from the Cape, has re-engineered the technology of exhaust emissions so as to reduce fuel bills, breakages and downtimes. This is another example of South African ingenuity having global reach, as major truck manufacturers around the world adopt this home-grown innovation.

These entrepreneurs and the enterprises they are building, along with thousands of others like them, are the reason why I am so confident about the future success of our economy. The DTI, by providing the right products and services, helped make it possible for them to realise their goals and contribute to our national efforts to create a better life for all.

The incentives offered by the DTI have even added spice to my own favourite flame-grilled chicken, Nando’s. Nando’s has chosen to locate its new spice factory for worldwide distribution in South Africa.

The basic philosophy underlying the restructuring of the DTI is to ensure that we can develop the products and the offerings to our citizens that will facilitate the development of the people and enterprises. We need confidence in our economy. Scepticism is important in avoiding wild fantasies, but too much of it becomes a millstone preventing growth.

Our objective is to make an impact on the lives of ordinary people in the real economy. I would like to pay tribute to the Portfolio Committee on Trade and Industry and, of course, the select committee of the NCOP for the support they give us in highlighting the importance of the real economy in the lives of people. Not only do they spend considerable time in assessing this budget but they also hold hearings and investigations that are essential in increasing the level of knowledge and understanding of the economy and the challenges that we face.

We are now at a point where we can assess changes. Today we release a detailed and frank account of changes in the real economy. I believe that we can use this assessment along with the new strategy documents that are now being brought out to build a greater degree of consensus on economic issues and the path that the economy can take.

We have gone through a lot in the last few years. The report shows the extent of the changes and the challenges that remain. What emerges is that we now have a situation in the real economy that is the basis for equitable growth and development within a global economy. The DTI Budget Vote can advance this shared vision for our economy.

Building a consensus on economic policy is not easy. In 1994 the new democratic Government inherited an economy in crisis, inherently unstable and in long-term decline. Government took some tough, but necessary, policy choices to shift the economy onto a more sustainable growth path and to confront the challenge of delivering prosperity to all of our people while also repositioning ourselves as a nation in the global economy.

This involves, in part, opening up our economy to the forces of globalisation, and this presented us with a new set of challenges. At the same time the state was undergoing a fundamental transformation. South Africans had expectations about what the new democratic state would deliver in a relatively short period of time. These factors combined to reduce the level of trust between the union movement and Government as the former felt that fundamental policies were being changed.

In the case of business, there was a lack of confidence that the Government would do the right thing. We are now in a better position to assess what has happened. It is a relatively complex story, but all signs point to us having a strong economic basis to move forward. What is important is that we use this basis and do not get held back in long arguments about what should have been.

The economy we have today is fundamentally and irreversibly different to that which we inherited in 1994. The economy is stable and growing, albeit slowly, and our manufacturing base has proved to be robust and capable of competing in a global economy. Our restructured economy means that higher rates of growth can be attained. The active role adopted by the state through a set of macroeconomic and microeconomic reforms was instrumental in bringing about this economic restructuring. We started to engage with the global economy through our trade policies and our entry into the international capital markets.

Nedlac has played a significant role in getting us to this moment by keeping the key economic actors talking to one another in a constructive manner throughout the past seven years. There has not always been agreement but there has been contact, consultation and debate and differences have been aired.

This is fundamental to a democratic reform process. We need to build on this and consolidate levels of trust and a coherent economic strategy that has the committed support of all social partners. This would be a major instrument in the acceleration of growth and development. This should be our objective for the growth and development summit.

Government has strengthened its institutional capacity and understanding of how our economy works. Our attention must now turn to identifying the practical measures that need to be taken by Government, business, labour and civil society, to achieve our shared vision. Talk is cheap - we now need action!

Government has identified the steps that it will be taking to make our economic vision a reality. The President undertook to intensify the work that was started in 2001 to build the economic infrastructure and lower the cost of inputs through the managed liberalisation of the transport, telecommunications and energy sectors. These actions are contained in Government’s Microeconomic Reform Strategy, an integrated approach to removing the impediments to growth, employment and equity that fall within the direct purview of the state. We have provided hon members with a narrative of the Microeconomic Reform Strategy. I hope it will be useful as this is the first time that such a document has been made available.

As the Department of Trade and Industry we have taken the Microeconomic Reform Strategy to the members of the DTI group that are here today and to provinces, and are working with the Department of Provincial and Local Government to take the strategy to the municipal level. These Government structures are aligning their priorities and actions to the Microeconomic Reform Strategy, reflecting the advancement of co-operative governance in our country.

The contribution of different sectors to the country’s GDP has changed significantly. Primary production such as agriculture and mining now contribute much less to the economy than the tertiary or services sector. The tertiary sector now contributes almost two-thirds of our GDP. This is a shift that has occurred in most industrialising nations. This does not mean that agriculture and mining are unimportant. Indeed, we must focus our efforts on how to further exploit our endowments and the comparative advantage of these sectors through beneficiation and the developing of the value matrices that we spoke of in the Integrated Manufacturing Strategy.

However, it does signify, this change, that economic growth and new jobs are likely to come from the tertiary sector, and this has implications for human resource development, for the provision of telecommunications infrastructure and for investment patterns.

A second trend in our economy is the changing skills composition of production. There has been a dramatic shift in the demand for labour. In every sector of our economy highly skilled labour is in high demand and vacancies cannot be filled. At the same time the demand for unskilled labour has dropped in every sector. This has given rise to a mismatch between demand and supply conditions in the labour market. It has an impact on the patterns of unemployment and the resultant poverty that will need to be addressed by clear state intervention.

There has been a deepening of technology in our economy. This third trend is manifest in the rising capital-to-labour ratios in all sectors, despite the relatively high cost of capital. This suggests that cheaper capital may, in fact, exacerbate the unemployment problem that we face.

While export performance has been excellent, especially with respect to manufactured exports, South Africa’s share of global trade is falling and there is a spectre of rising protectionism following the imposition of tariffs on steel by the US and the truly incomprehensible Farm Bill recently introduced. These signs are nothing less than disastrous for the wellbeing of the global economy.

Aggregate levels of output in South Africa are not increasing rapidly, although South Africa’s manufacturing sector weathered the global downturn far better than many of its competitors, who experienced large contractions in production. This information is contained in the appendix of the Real Economy Report. There is bullish sentiment about the future performance of the economy. Manufacturing output, exports, investment rates and employment are all forecast to grow in the short term. We must work quickly to capitalise on this positive sentiment.

The Integrated Manufacturing Strategy published recently provides a coherent framework for our collective actions to convert these positive developments into sustained and high levels of growth and development.

The DTI has worked hard over the past two years to better equip it to contribute to the realisation of our shared vision. The basic structural changes in the DTI are complete. We have some fine tuning to do, and we have to consolidate new ways of working.

We will commence construction of the new DTI campus building soon and it will provide the new modern facilities that we need to complete our restructuring. The Council of Trade and Industry Institutions, Cotii, is functioning and, as I have indicated, many of the leaders of these institutions are here today. The presentations of the council’s organisations to the portfolio committee have provided, I believe, an insight into the operations of these very important institutions in our economy.

The DTI has done good work designed to tailor our product offerings to the needs of the changing economy. We are improving our response to the challenges of small business development and black economic empowerment. These last reviews have taken time, as they are not easy matters, yet they are fundamental.

Having completed the restructuring of the architecture of the DTI and the Integrated Manufacturing Strategy, we will shortly complete these two further important strategy documents on small business and black economic empowerment.

In line with the objectives of our restructuring, the DTI is meeting the needs of its customers. Madam Deputy Speaker … Sorry, Mr Chairman. It is always safer to check what is behind one. I suppose in the DA it must be really problematic, though. [Laughter.] [Interjections.]

In line with the objectives of our restructuring, the DTI is meeting the needs of its customers. Allow me to share with this House some of the highlights of this work.

The time taken to register a new company or a close corporation has fallen from 21 days to three days - an impressive improvement in efficient service delivery. [Applause.] In the previous financial year the DTI registered over 30 000 new companies and almost 90 000 close corporations.

In the area of trade regulation, approximately 20 000 import and export permits were issued and 3 000 import rebate certificates and 2 500 rebate permits were also issued. Over 100 tariff investigations were conducted. In a short time I will have the pleasure of placing before the National Assembly the International Trade Administration Bill. This Bill will establish a modern and independent regulator of international trade for the entire Southern African Customs Union. This will coincide with the conclusion of the lengthy Southern African Customs Union negotiations.

Market access opportunities continue to expand for South African enterprises. A significant achievement was the work done to secure an exemption from US tariffs on South Africa’s steel products. My particular thanks go to Deputy Minister Lindiwe Hendricks for the hard work she did in this regard. The wine and spirits agreement was concluded with the European Union and the DTI started to prepare itself for the Doha round.

Our delivery to small businesses continues to improve. Since its inception the Khula Enterprise Agency has generated 1 million jobs. In the previous financial year Khula issued R141 million in credit guarantees. Two thirds of this went to black-owned enterprises and almost 40% went to women-owned enterprises.

Manufacturing advice centres have opened in the Western Cape, Gauteng, Limpopo, North West and Mpumalanga. Through the work of the Manufacturing Advice Centre 28 000 jobs were created and 536 small businesses in the manufacturing sector have been assisted. To date Ntsika has supported 80 000 small and medium enterprises and has trained over 100 000 entrepreneurs. These are significant figures.

The Brain website has some 300 affiliates and is a key link with small business. In the packs that we gave hon members today we included a brochure on Brain. I would recommend that hon members have a look at it and see the affiliated organisations. There is a CD-Rom as well, and I think it will be clear to hon members that there is tremendous capacity to support manufacturing enterprises throughout South Africa.

The Coega Industrial Development Zone has been proclaimed and the operator appointed. Cabinet has also recently approved industrial development zones in East London and Richard’s Bay. The Strategic Investment Programme is now in place and the adjudicating committee for this programme has started to consider applications.

South Africa exported 106 000 fully assembled automobiles in 2001 and the auto industry accounts for 5,6% of GDP. This is not bad for a new democracy in an African country that has just emerged from a major period of social conflict. Trade and investment promotion and facilitation activities yielded R4,6 billion of foreign direct investment into South Africa and R1,2 billion of export orders. The Export Credit Agency is now fully operational.

I must admit, however, that the DTI has not always provided economic citizens with the most efficient or effective service. Last year in this House I gave an undertaking to investigate new marketing and distribution channels to improve our service, and I am confident that this is beginning to happen, as I believe hon members would have seen in the exhibition next door. Currently we are reviewing all our products and services for efficacy, as well as examining innovative ways to improve the delivery of these products and services, based on the findings of the DTI’s first annual customer survey.

Should hon members seek information from the DTI about its product offerings for any of their constituents, then I urge them to remember this number: 0861-the-DTI. I know that all hon members have cellphones. If they want to remember our number, 0861-843-384, all they have to do is spell 0861-the-DTI on the keys of their cellphones. This is very simple to remember, and I appeal to all hon members to use it for their constituencies. It is the number of the DTI’s new customer care centre, which I am pleased to announce became operational yesterday, with a dramatic increase in calls. If anyone wants to test it, it is available next door.

I would like to thank the portfolio committee for their usual thorough analysis of our budget. There are no major changes from last year, although I believe that our reporting on the outcomes is improving and that this trend will continue. A very useful summary of the budget and what it is designed to achieve is available to members.

I am particularly pleased at the massive improvement in the internal reporting that is now available to me on a monthly basis. This allows us to keep track of the most important dimensions of performance. I also believe that we can say with a great deal of pride that we are building a very professional DTI that is truly reflective of all our peoples. Hon members can see it there.

We have one area to address, and that is that we are below our target for the employment of disabled persons. We could claim technically that we still have time to achieve this target, but in all other cases we are far in excess of the target and far in advance of it, so this is an area that we will address.

I would like to pay tribute to the director-general and his team of top management. They are a wonderful team and are, for me, the embodiment of the new and vital South Africa.

The priorities for the DTI in the coming year are to further improve our service delivery of appropriate offerings and to forge strong partnerships for performance. The latter are collective actions that we need to take toward defined objectives. The importance of these partnerships was dealt with in the Integrated Manufacturing Strategy. Partnerships and collective action are the only mechanisms capable of taking us forward in the long run.

However, we will have to change some of our old habits. All the social partners face challenges in this new environment. Business has to develop new management practices and strategies to face the challenge of globalisation. Businesses have to form new and mutually beneficial compacts with their workers. They have to learn to work together for common ends as South African enterprises, even though they will still be competing with each other.

Our new economic path requires new ways of organising; it requires knowledge networks, the sharing of best practice and the diffusion of new technologies amongst enterprises. The weakness of organised business is an increasingly serious obstacle to progress. As a result of this weakness, our chamber movement is also weak.

It is critical that we understand the fundamental change occurring in production. The enterprise - be it a private company or a co-operative - is the basic agent of change in a knowledge-driven economy. However, its capacity to change is dependent on the collective success of many enterprises and the leadership given by the state. The success of the interaction between enterprise development and collective endeavour will lie at the very centre of our economic success.

It follows from this basic point that the union movement is faced with renewed challenges. If enterprises change, it is essential that the plant- based and enterprise-level organisation of workers must change in response. The union movement in South Africa must urgently return to its strength of plant-based unionism.

This does not mean that industrial unionism must change. It means that industrial unionism based on enterprise-level work and local shop-steward councils is the only basis of strength and service to members. If our unions do not meet this renewed challenge, they may fall into the fatal trap of trying to pressure the state to represent workers.

The recent gains in the achievements in collective bargaining of the SA Clothing and Textile Workers’ Union are to be truly welcomed and must now translate into stronger plant-based organisation in this priority sector.

We need to reinvigorate programmes like the Workplace Challenge. The DTI will also be running a trade-and-industrial-policy training programme on a biannual basis for shop stewards to build a greater understanding of our economy. The DTI will work to strengthen its partnership with unions. We need an economy based on decent work for all.

We need also to build new enterprise forms. This is essential if we are to ensure more equitable development and to add vitality to economic activities. The DTI is working with collective movements - trade unions, civics, the SA Communist Party - to develop co-operatives. These movements must, however, increase their efforts toward this end.

It is a matter of concern that there was an absence of strong voices from social movements in the recent public hearings on industrial strategy. We must strengthen civil society’s ability to engage in the economy and to take its rightful place in critical economic debates. We need it to join hands with the DTI in customising interventions and delivering the DTI’s products and services to our communities.

As the DTI we have a role to play in raising awareness about the workings of our economy. A key initiative in this regard will be the DTI entrepreneurial train that will be pulling into a station near you in coming months. The DTI entrepreneurial train will provide people in small towns and rural villages with an opportunity to spend time with business mentors, with officials of the DTI and with members of the trade and industry group.

The South African economy is poised to be a growth leader. It requires our confidence to ensure that this happens. The personnel and top management of the DTI will do all in their power to realise our vision of a growing and equitable economy that leads to development for all.

My thanks to the parliamentary committees, the DTI and Deputy Minister Hendricks - who, I suspect, is watching this on TV, and we all wish her a speedy recovery - for their support and hard work. It is a great privilege to be a Minister in such a fine and committed department. We will build a better life for all. [Applause.]

Dr R H DAVIES: Chairperson, economic history records few, if any, cases of former colonial or semicolonial countries having successfully promoted industrialisation or significant economic development without an active leadership role by the state. This role involves more than acting as a referee over the conduct of economic citizens or being sound managers of public finances, important though those tasks undoubtedly are. Those very few cases in history where developing countries have achieved even some modicum of success in promoting industrial development have all had in common states playing an active role in the formulation and implementation of strategies, in mobilising key stakeholders around these strategies and in providing resources and services to back them.

When the President announced at the opening of Parliament in 2001 a shift in the focus of economic policy from the pursuit of macroeconomic stability to microeconomic reform, the work of the Department of Trade and Industry was thrust to the very forefront of our efforts to promote the development- orientated growth which we have called for repeatedly since 1994.

It is not that the DTI was not extremely active in the period between 1994 and 2000. It had succeeded in promoting a sense of urgency about economic restructuring in the face of the challenges of globalisation, thereby contributing significantly to averting the very real threat of deindustrialisation that confronted our country in the early 1990s.

The department succeeded, too, in creating opportunities for a rapid increase in manufactured exports, which rose from 39% of total exports in the early 1990s to 51% in 2000. The department also laid the foundation for, and began delivery on, a series of other initiatives, notably on small business support, which a study commissioned for Khula claims assisted in creating or sustaining 788 000 permanent or temporary, formal or informal, jobs in small enterprises over the five-year period from 1996 to 2001.

What this shift in the focus to microeconomic reform highlights, in my view, is the necessity for the DTI to achieve a big leap forward both in its strategic capacity and in its operational efficiency.

The United Nations Conference on Trade and Development report for 2002, which was released last month, points to a worrying pattern of subordinated integration of the manufacturing sectors of developing countries into a still highly uneven and unequal global economy. The report points out that, and I quote:

While the share of developing countries in world manufacturing exports, including those of rapidly growing high-tech products, has been expanding rapidly, the income earned from such activities does not appear to share in this dynamism.

The information provided in the Integrated Manufacturing Strategy document, to which the Minister referred, appears to indicate that South African industry is far from being immune to the threat of becoming subject to just such a pattern of subordinated integration. The IMS document indicates that the export dynamism of our manufacturing sector was not matched by a proportional increase in incomes or value added, with manufacturing output increasing by only 1,8% per annum on average.

Moreover, as the IMS document acknowledges, and I quote: Job losses in manufacturing have tended to accelerate'' and the manufacturing sector has been consistently shedding labour’’. All of this, in my view, underscores an imperative for the DTI to work smarter, more strategically and more effectively to place our economy on the kind of growth path that we need to be on to raise incomes and enhance economic opportunities for our people.

The Rules of Parliament provide for parliamentary committees to deal with the legislation of the corresponding department, to exercise oversight and to engage on policy issues. The Portfolio Committee on Trade and Industry has been active in all of these activities over the past year. As this is a Budget Vote debate, I will concentrate largely on the issue of budgetary oversight. This year, our portfolio committee has engaged on this issue much more intensively than in the past. We have had, on my count, at least four meetings with the department on budgetary matters both here in Parliament and at the department’s headquarters in Tshwane. We have also engaged on budgetary matters with some of the Council of Trade and Industry Institutions.

The committee adopted a report which was published in the ATCs of May 13. That report records significant and welcome progress both in financial management and in aligning the department’s budget to its operational activities. A few years ago, DTI was noted for underspending its budget in some years by as much as 30%. That underspending has been significantly reduced, although at something like 10%, for 2001-02, it remains too high and points to issues that still need to be addressed. A feature of our budgetary oversight this year is that we received, at our request, a report on the extent to which the department had delivered on the output targets identified in the 2001-02 budget. Many indicators ranging from a significant reduction in the number of dropped calls to the shortening of the time that it takes to register a company or close corporation, to which the Minister referred, all point to a department which is operating more efficiently and effectively.

The restructuring exercise which was embarked on some years ago certainly seems to be paying off. A mood of commitment, hard work, seriousness and professionalism by an increasingly competent cadre of young professionals, most of whom are now from disadvantaged communities, is evident when one visits the department.

The next challenge in the budgetary oversight which we have identified together with the department is to link output performance to outcomes, and to monitor with convincing indicators the extent to which output performance has contributed to the achievement of the identified outcome goals of growth, employment and empowerment. Success in this respect will not just be a matter of developing reporting systems, it will provide us with measurable indicators on the extent to which the department is succeeding in rising to the challenge facing it and the economy. One of the major challenges in this regard, in my view, is the formulation and implementation of an industrial or manufacturing strategy to take us forward to the year 2014.

As indicated earlier, the DTI has released an integrated manufacturing strategy document. This document is still subject to further refinement and consultation. The publication of the IMS document was followed by two weeks of public hearings on industrial policy conducted by our committee and by our colleagues in the National Council of Provinces. We are in the process of preparing a report which, we hope, there will be an opportunity to debate in this House in due course. Today, I just want to say that we detected considerable agreement on some of the key themes in the IMS document on the need to facilitate and encourage dynamic linkages between traditional manufacturing and other sectors including services, as well as between formal and informal productive activity through integrated value matrix strategies.

There was also substantial agreement on the need to promote a shift from dialogue to collective action on the part of stakeholders, and for customised packages and support measures from the department. At the same time, some very real tensions arising not just from subjective positions of drafters but, more importantly, also from the objective circumstances that our economy finds itself in, also became evident. These included the tension between promoting competitiveness in existing manufacturing activities and promoting the development of new productive activities, particularly in the areas outside the established industrial centres and among disadvantaged people. This is partly linked to, but not reducible to, a tension between export-orientated sectors and those activities which, in the short and medium term at least, could be realistically expected to be largely confined to the domestic market.

Adjusting to a knowledge economy or applying knowledge is, of course, a major challenge in this era of informationalism. But, it does not mean quite the same at the two poles of those tensions that I referred to. For example, in the public hearings, we identified the need for the Industrial Development Corporation to adopt a more strategic approach, implying the injection of a higher knowledge component, in its efforts to give effect to its mandate in order to, and I quote:

… identify opportunities not yet addressed by the market in respect of its work to promote local economic development and support small and medium enterprises.

No one would seriously argue that we can afford to focus our programmes at any one of the poles of these tensions to the total exclusion of the other. But there are some very real questions of balance and priority.

I believe that there is now an urgent need for our policies to have a much more visible and direct impact on the income and employment opportunities of the masses of our people. My comrade MaNtuli is not scheduled to speak today, so I want to borrow her phrase for which she has become quite well known recently: Our policies cannot only be for the benefit of men in suits. The promotion of collective action across and up and down integrated value matrices must yield tangible benefits to the poor, workers, rural women and the disadvantaged people generally. Clearly, this is a challenge that will have to be responded to by more than manufacturing policy alone. It will require more effective empowerment; small, medium and micro enterprises and training programmes; and, indeed, policies to address the entire raft of issues identified in the Microeconomic Reform Strategy.

The DTI is also responsible for international trade negotiations. Looming large are the multilateral negotiations agreed to at the fourth World Trade Organisation’s Ministerial meeting held in Doha in Qatar during November last year. I do not have time to address this important topic in any detail today, but I do want to say that I believe that both we in South Africa and the developing world in general have much to do to ensure that the gains that the developing countries were able to secure in the Doha declaration - for which Minister Erwin deserves full credit for having played a leading role - are not swamped in the detailed negotiating processes by demands of vested interests in rich countries.

There are, in my view, some worrying signs that the demands or requests that developed countries are formulating to present in the detailed negotiating processes may have very little resemblance to the developmental principles that they claim to support. We should also be concerned, in my view, at the apparent willingness of some developed countries to cave in to the domestic protectionist lobbies in the very grandfather industries and sectors which a more equitable global trading system demands should be ceded to developing countries. The US Farm Bill, which was referred to in a motion by Mr Gibson earlier on and by the Minister, and the threat by the US to remove, at the behest of domestic lobbies, canned pears from the list of preferences available to South Africa under the African Growth and Opportunity Act are recent examples of this kind of protectionism.

The DTI clearly has a very full programme in the year ahead. Our committee also looks likely to have a busy year ahead. I would like to congratulate both the Ministry and the department on their achievements to date. I would also like to thank the Minister, the Deputy Minister - and I also wish her a speedy recovery - the director-general, the staff of the departments and, particularly, the officials assigned to the parliamentary liaison work for always having been available to us in the committee and for assisting us in carrying out our tasks. I look forward to further fruitful engagements in the year ahead.

The ANC will, of course, support Budget Vote No 31. [Applause.]

Mr N S BRUCE: Mr Chairman, we have just had an example of the ``Erwin and Davies law’’. The greater the time available, the greater the volume of hot air. [Interjections.]

Every now and then a tiny ray of light enlivens these somber budget debates. So I refer hon members to the report of the Portfolio Committee on Trade and Industry on page 2. It says that in the previous year, the department ignored half of its incoming telephone calls, but that last year it failed to answer only one third of them. What remarkable progress! All must be well, God is in his heaven, Marx is in his grave, the Speaker is on her throne, and the Ministry plans to move to a fancy new headquarters being built among the office glut in Pretoria. How reassuringly appropriate!

The good news goes on. Between 1996 and March last year, 789 000 jobs were created through a DTI agency, of which 70% are unlikely to be sustained. And that is a conservative estimate by Barney Pityana’s comrades at Unisa. It is on page 5.

The public accounts committee is being urged by the Auditor-General not only to consider departmental outputs, but to examine also outcomes. Alas, I cannot be exuberant about the latter as I have just been about the former. This country is about to face, for the second time within a decade, an upturn in the commodity cycle. This means that without any help from Coega Kevin, Judge Myburgh or Deutsche Bank, the rand could strengthen, inflation reduce, investment surge upwards and jobs begin emerging.

Last time we were in that happy position we contrived to miss the opportunity because there was not enough new supporting investment. So the rand lost half its value, inflation is heading to double digits by year end and the ranks of the unemployed and poor are steadily increasing. If we miss this upturn in this cycle, I can foresee a dollar costing at least R20, domestic prices rising at least 12% and more than 2 million jobs having been lost since the ANC came to power, and the girth of the Governor of the Reserve Bank expanding by another six inches.

So, we must measure the outcome of the DTI’s spending against what it has done, or proposes to do, to complement macroeconomic policy and encourage rising investment. Let me quote from the latest DTI news update entitled ``A Busy Year Ahead’’. This is what it plans: to hold a policy symposium; change the name of the Board on Tariffs and Trade to the Commission for International Trade Administration; introduce a new Liquor Bill; refine and clarify the role of its agency Ntsika, which created the 790 000 new but unsustainable jobs; send the Deputy Minister to examine the gender equality of the DTI; examine the funding of hawkers who need loans of R200 to R2 000; draw the various DTI quangos - SABS, CSIR, IDC, etc - into a council of trade and industrial institutions from whence it can be directed by bright young economists from the Get Ahead Foundation; turn the DTI into a Nando’s Chicken brand, all fat and feathers; and prevent private decision- making from leading investment by adopting an industrial manufacturing strategy that places too much emphasis on political convenience rather than economic utility.

What wonderful stuff for a leading industrial economy in Africa! But is it going to have a direct and salutary impact on fixed capital investment? This is what it needs to do: reduce the cost of doing business and encourage entrepreneurial activity by reregulation so that free trade is enhanced and there is less inappropriate Government intervention and increasing competition.

This will, if done properly, enhance the allocation of resources by markets, increase productivity and help adaptation to the global economy, which grew between 1960 and 1980, but up until then largely excluded China and India. Since their inclusion, globalisation has reduced the number of poor by 200 million.

The DTI needs to seek appropriate trade agreements with traditional trading partners and those whose economies are convergent with ours to reduce barriers and foster a rules-based international trading system. It needs to privatise its quangos - from the IDC to the CSIR - instead of attempting to build a ministerial empire. It needs to contain an inappropriate exuberance and not confuse circuses with communication. This is what global investors want to see. What will see them off is a whiff of arrogance, if the DTI thinks it can outwit markets, for it will be spitting against the wind and worldwide experience that will ultimately overwhelm it, and our entire internal economy.

The jobless, the poor and the indigent might then just as well head for the hopeless comforts of Harare, with a Cronin poem in one hand and a lotto ticket in the other. In short, the DTI is not delivering the outcomes that are even remotely appropriate to our economic situation. [Applause.]

Mr H J BEKKER: Chairperson, I reserve the right to disagree with the verbal diarrhoea of my hon friend and close colleague, the hon Nigel Bruce. [Applause.]

An HON MEMBER: Justify that!

Mr H J BEKKER: Yes, through the discussion, I will certainly justify myself.

The 2002-03 budget of the Department of Trade and Industry represents an increase of R400 million on the previous financial year. Much of this increase is due to an increase in the allocation to Programme 5 - the Enterprise Organisation, which consists of a range of transfers to business support initiatives. This programme represents 34% of the total of the DTI’s budget.

The DTI informed Parliament that the main reason for the increase in the allocation to Programme 5 was that it expected better take-up of the business support programmes. The IFP certainly hopes that the department is accurate in its expectations, not only for the sake of goal-driven and clear budgeting, but also for the sake of business, which definitely requires departmental support.

The DTI’s budget includes an amount of R1,32 billion which is set aside for incentives and offerings to business. This amount has increased by R320 million from the previous financial year. The IFP applauds the Minister and the department for allocating the additional funding.

There is, however, a lack of clarity about the exact programmes and allocations which are intended for support to small, medium and micro enterprises. It is often agreed that the SMME sector is a strong engine of economic growth and job creation. The IFP certainly agrees with this argument. But we would like to request the Minister to provide more details about the SMME programmes and particularly the support programmes to this House.

Khula Enterprise Finance provides loans and guarantees to the banks for business ventures. Keeping in mind the risk-averse nature of South African financial institutions, it seems shocking that Khula will only loan approximately R106 million and provide loan guarantees for about R406 million in the current financial year. This, to my mind, is too little to adequately support the emerging entrepreneurial sector of South Africa and it will have dire consequences for job creation and economic growth.

On top of its limited loan guarantee figures, it is clear that the recapitalisation of Khula is still a major concern. The DTI was requested to provide some R200 million two years ago, but to my mind it has applied only about R110 million to date. It would seem that the DTI has not made further commitments to recapitalising Khula in this regard.

One of the regulatory bodies under the authority of the DTI is the Micro Finance Regulatory Council, which deals with microlending matters. There is no doubt that a large section of the South African public requires the specific financial services provided by microlenders. Of course, they do not deserve the so-called loan sharks that are still operating, some of them with absolute impunity.

The IFP has always favoured a just, equitable and fair regulatory approach to microlenders and their customers. Nevertheless, it has become clear that bad debt is taking its toll on the industry, and not just on the smaller players. Witness the losses due to the bad debt at Absa subsidiary Unifer and the pressure placed on Saambou Bank by microfinancing debt provision and it becomes obvious that the financial services industry is facing a number of very serious challenges.

South Africa can ill afford instability in our financial services industry. Increasing bad debt resulting from microlending operations could lead to instability. In order to avoid the economic fallout from small bank failures, we should be asked whether microlending regulation should not be further strengthened and generally tightened up. The IFP would therefore call on the Minister to take the initiative and to launch a comprehensive review of the existing regulations in conjunction with all stakeholders. The Department of Trade and Industry, together with the Department of Finance, plays a vital role in creating the environment in which economic growth can be accelerated to double digit annual rates. It is no secret that South Africa has not achieved the higher economic growth rates envisaged by Gear. Most stakeholders would agree that the economic fundamentals are firmly in place, but where are the growth and massive job creation that are needed?

Recently, the idea of an economic growth summit or indaba bringing together Government, labour and business to discuss accelerating growth and job creation has received much public attention. In fact most stakeholders support this idea, but apparent squabbles between the ruling party and its alliance partners over fundamental policy differences have thus far scuppered plans to hold such a summit. It is absolutely imperative that we find ways of accelerating economic growth which, in turn, would lead to large-scale job creation.

The IFP is also greatly concerned about the lack of skilled workers in South Africa. Apart from the training, we simply will have to import skills to this country, whether we like it or not. The Director-General of Trade and Industry told us that most South Africans were so unskilled that they were unemployable without massive new training programmes and that there are severe shortages of highly skilled people to run key sections of the economy. This implies the need for a massive drive to recruit experts from abroad, and one would think that the easier this was made, the better it would be for the economy as a whole. This lack of skills is also being recognised by Labour Minister Mdladlana, who said that the rationale behind the National Skills Development Strategy and the introduction of a Skills Development Levy had been the increased demand for skilled workers, who are in short supply, and the fact that most unskilled people face long-term unemployment without that specific training.

The IFP therefore simply could not understand the insistence of the ANC on complicating and bureaucratising the skills importation clauses of the Immigration Bill. One can understand this perception from among hawkers, crafters and flea market stallholders, where foreigners threaten to squeeze out locals with their more exotic wares. But on the factory floor, laboratories and in some high-finance houses we do need skills which are just not available in enough numbers locally to help us keep pace with the changing world economy.

Die IVP was nog altyd ‘n kampvegter vir die regte van die verbruiker, maar ongelukkig word daar van Regeringskant nie genoeg gedoen om die verbruiker te beskerm nie. Verbruikersakehowe het nie dieselfde magte as siviele howe nie, maar het slegs die magte van ‘n tribunaal. Verbruikershowe kan beter beskerming bied.

In Australië word klem gelê op verbruikersbeskerming deur middel van die bemiddeling en billike handel. Verbruikersbeskerming is doeltreffend, omdat alle instellings wat vir verbruikersbeskerming verantwoordelik is onder die sambreel van ‘n kantoor vir billike handel optree. Ek stel voor dat ons na hierdie dinge kyk. (Translation of Afrikaans paragraphs follows.)

[The IFP has always been a champion of the rights of the consumer, but unfortunately not enough is being done from Government’s side to protect the consumer. Consumer affairs courts do not have the same powers as civil courts, but merely have the powers of a tribunal. Consumer courts could offer better protection. In Australia the emphasis is being placed on consumer protection by way of mediation and fair trade. Consumer protection is effective, because all institutions responsible for consumer protection act under the umbrella of an office for fair trade. I propose that we take a look at these things.]

The IFP will support the 2002-03 Budget Vote and we congratulate the Minister on what has been achieved here. [Applause.]

Mr C R REDCLIFFE: Chairperson, South Africa can be proud of many of its achievements over the past eight years; achievements in the political, social, human rights and economic spheres, particularly in respect of macroeconomic stability, increased discipline in financial management and an improved tax collection regime.

Yet we cannot deny that in critical areas of our economic development process, we have not progressed sufficiently. Here we think of job creation as mentioned by a number of speakers in the Department of Labour Budget Vote last Friday, the alleviation of basic poverty, the reduction in income and wealth inequalities and a more balanced geographic spread of productive activities. We know there is no simple panacea for these challenges. Most elements of the Government’s economic and social strategy impact on these problem areas, with gradual progress being made.

There is, however, one area which seems to impact very closely on virtually each of these listed problem areas, namely, the small business sector or the growth and spread of small, medium and micro enterprises, the SMMEs. It is also one of the key drivers in the Government’s Microeconomics Reform Strategy.

It is not possible to deal with the array of issues contained in the six programmes of the department within my allocated time. Therefore I will focus only on one subprogramme in Programme 3, namely the development of policies and strategies for SMMEs, also mentioned by other hon members.

The SMME community has in recent years witnessed with satisfaction a worldwide growing awareness of the importance of SMMEs to both the national and the global economy. There seems to be growing recognition that SMMEs are engines of growth and of job creation, that they are vibrant and innovative and that they are flexible and can adapt to changing circumstance. It is quite clear today that as a result of those virtues, SMMEs have become a central force in the economy and society.

Statistics suggest that small enterprises, as opposed to big business and the public sector, contribute about 40% to South Africa’s gross domestic product, about 54% to overall employment and about 20% to exports. In sharp contrast to the widespread shedding of labour in the public and corporate sectors, SMMEs have, over the past decade, maintained positive employment growth in most economic sectors.

Notwithstanding progress in many different areas of the economy, the small enterprise sector of South Africa does not yet reflect the characteristics found in Asian, European and American high-growth countries. An example one can cite is Japan, where 98% of all enterprises belong the SMME sector, whilst 80% of the total industrial labour force is employed in that sector.

In fact, we cannot deny a few rather disturbing trends. Small business in South Africa is still characterised by the dominance of micro and very small enterprises with only limited growth potential. Large segments of small business are not competitive, either with foreign competitors or with bigger firms. There is a lack of enterprise and business skills among a high percentage of the self-employed. The majority of SMMEs still complain about a lack of access to finance. SMME support structures and organisations are fragmented, with little or no uniform acceptable standards. In this context what is particularly disturbing is that duplication of services within all the provinces and turf wars between support organisations typify this support sector. According to a directory of SMME support organisations released by the Cape Town Unicity there are over 1 300 service providers in the Cape Town Metropolitan Area alone, in other words excluding the rural areas. Finally, there is a widespread lack of understanding of Government policies and support programmes.

Thus, while our small business sector is a lot more dynamic than those of many less developed countries in Africa and elsewhere, we are certainly not in the lead of small-business-driven countries. If we want to progress faster with respect to the goals mentioned earlier we have to mobilise our small business sector. This will require action in the public sector, in the private sector and in co-operation between them.

Let me stress this need to progress on both fronts at the same time, together with joint action in some areas. It is often suggested that Government has to step in to fill the gaps in the access to finance for micro enterprises in both urban and rural areas. Yet such complementary steps cannot be sufficient given the vastness of our country and the high cost of establishing a national network of offices for a new public institution. Banks of all kinds just have to also play a facilitatory role and the process of increasing the diversification of financial institutions has to continue in order to do justice to the different needs of SMMEs. [Time expired.]

Mr D LOCKEY: Chairperson, I rise to speak in support of the Vote on Trade and Industry. It is with great reluctance that I am going to waste a minute of my time to respond to the unfortunate speech by Mr Bruce.

Mr Bruce, once more, made a very destructive contribution in this House today. But one cannot blame him for his ignorance, because his visits to the Portfolio Committee on Trade and Industry are very infrequent, and the few times he attends these meetings he sleeps most of the time. [Interjections.] So he misses out on all the valuable reports on progress in the Department of Trade and Industry.

In a recent speech the CEO of McCarthy’s, Mr Brand Pretorius, singled out some people in South Africa as suffering from the ``doughnut syndrome’’. This syndrome is an obsession with the hole in the middle and a failure to see the sweetness that surrounds it. Today we had a prime example of a person suffering from this doughnut syndrome in the form of Mr Bruce. Mr Bruce can only see the negative and he cannot see any of the many positive things that are beginning to emerge in our economy. Mr Bruce can only make a contribution if he stops his arrogance and his destructive attitude and starts making a positive contribution in the debate on the many challenges that face our economy.

In February last year the President announced an integrated action plan aimed at addressing South Africa’s microeconomic constraints on growth and development. The Government has done a lot of work since this announcement and the DTI has played a pivotal role in working towards building our microeconomy, and the Minister, in his introductory speech today, has mentioned many of the steps taken by the department. I want to thank the Minister, the Deputy Minister and the department for the work that has been done so far. It is clear that there are still many challenges remaining, but we have made a concerted effort and we are hopeful that many of these outstanding challenges will be addressed in the months to come.

The most recent World Competitiveness Report ranks South Africa, the only African country to have made it onto this list, 39th out of 52 countries in the world. South Africa has emerged as one of the most competitive countries in areas such as the cost of electricity to business and the cost of living index. In a recent newspaper survey it was found that the cost of A-grade office accommodation in South Africa is 33 times cheaper than comparable accommodation in London.

In areas of export growth South Africa is rated the second most competitive country in the world, second only to China out of 52 countries. This is a remarkable achievement, if one takes into account China’s large population and the high level of foreign direct investment that has gone into that country. This year South Africa is going to export 165 000 fully built-up vehicles all over the world. We are exporting C-class Mercedes Benz vehicles to Japan, the auto capital of the world. Last night there was a report on the television news that there is congestion in Cape Town’s port because of the fact that our exporters are doing extremely well at the moment.

The credit for this success must go to the Government and the Department of Trade and Industry, which, through their tireless efforts, have worked over the last eight years to restructure our economy to make it more globally competitive and to ensure that we have market access through free trade agreements like, for example, the European Union-South Africa Free Trade Agreement.

There are also many challenges highlighted by the World Competitiveness Report. South Africa has fared poorly in areas such as attracting enough foreign direct investment. South Africa is still ranked 49th out of 52 in areas such as discrimination on the grounds of race and gender. South Africa also rates poorly in areas such as interest in science and technology, and economic literacy. We are not faring well enough in research and development spending compared to other emerging markets. There is therefore room for improvement in these areas.

The issues highlighted so far contain many of the opportunities but also the challenges that face our country today. This year’s budget debate takes place against the backdrop of a renewed focus on growing and developing our microeconomy. The department has recently introduced a comprehensive plan, the Integrated Manufacturing Strategy, aimed at enhancing our competitive strengths and addressing our shortcomings in order to make South Africa a world-class competitor. Gradually there is a consensus beginning to emerge on an industrial strategy; a strategy that will place us on a higher growth path with higher levels of investment and employment creation.

In this process there are areas that require some urgent attention, and the Minister has referred to some of these, such as the shortage of skills in our economy. A recent study by the World Bank in partnership with the Gauteng Metropolitan Council has identified the shortage of skilled labour as one of the main bottlenecks for business growth and development. Approximately 80% of manufacturing firms in this study reported extreme to moderate difficulty in finding people with professional and managerial skills. Seventy percent of firms reported extreme to moderate difficulty in finding people with service and craft skills.

The study inferred that if such shortages are experienced during periods of moderate economic growth, the situation is likely to get worse as the economy starts growing at a more rapid pace. Despite the shortage, the study found that only 35% to 45% of the firms surveyed provided training to approximately a third of their workforce. So there is clearly more that business can do to try to alleviate the skills shortages in this country.

We know that they are not making optimal use of the skills levy. A recent survey of major South African banks listed skills migration as one of the biggest challenges facing our economy. The director-general has also pointed out that there could be a shortage of up to 500 000 skilled workers in our economy. This is indeed one of the major challenges we are facing if we want to achieve high levels of investment and economic growth in South Africa.

In order to deal with the issue it is important to understand the key drivers of economic growth in today’s global economy. Manuel Castell summarised the key features of the new informational economy as follows:

The source of productivity and growth lies in the generation of knowledge, extended to all spheres of economic activity through information processing.

The new economy has increased the importance of occupations with high information content in their activity. The key challenge, according to Castell, is to organise a production system around the principle of maximising knowledge-based productivity through information, co-ordination and integration.

The new Integrated Manufacturing Strategy aims to achieve precisely these objectives. What is abundantly clear is that business and other agencies of Government will have to pull out all the stops to ensure that we overcome the challenge of skill shortages in our economy through training, curbing the outflow of skilled workers and attracting skilled migrants.

One also hopes that the new Immigration Bill that was passed by Parliament last week will assist in alleviating the looming skills shortage in our country. The reality is that skilled workers are the primary source of economic growth and development today. We must compete with all other countries of the world for this valuable resource if we are going to meet the challenges of global economy.

The second issue I wish to dwell on is investment in the underdeveloped areas of our economy. One of the key challenges we face as a country and as a government is to address the pervasive underdevelopment in the rural areas and in the townships. This is a fundamental requirement in creating a socially stable and economically equitable society.

Eight years into the democratic order, South Africa still rates poorly, according to the World Competitiveness Report, on issues pertaining to race and gender. We are still living in one of the most unequal societies in the world, and for as long as inequality persists, Mr Bruce’s arrogance will persist. Blacks still bear the brunt of the high unemployment levels experienced in this country. Rural black women are still the most marginalised group in South Africa today. As much as 47% of black women are unemployed compared to 14% of white women. A total of 40% of black men are unemployed compared to 7% of white men.

According to the Microeconomic Reform Strategy document by the department, economic weakness over the past few decades has led to declining living standards, high levels of racial, gender and geographic inequalities and high levels of absolute poverty. Our inheritance of low human development manifests itself in the following: GDP per capita has declined sharply since 1980 and has remained static over the past eight years; South Africa has experienced little or no improvement in the quality of our people’s lives as measured by the Human Development Index. This is in contrast to other newly industrialised societies, which have made progress in this area.

Poverty is particularly severe in provinces that fall outside the major metropolitan areas. A total of 50% of Free State households live in absolute poverty, and 45% in the Eastern Cape, 39% in the Northern Cape, 38% in the North West and 37% in Limpopo suffer the same fate. These statistics underscore the need for further interventions by Government and its agencies to assist with development projects in these underdeveloped areas.

During our budget hearings we had an opportunity to interact with the Council of Trade and Industry Institutions and debate their role in growing our economy. The IDC has a mandate to provide risk capital to a wide range of industrial projects, to identify and support opportunities not yet identified by the market and to invest in South Africa’s human capital in a manner that reflects our diversity.

The IDC has an excellent track record in supporting large industrial projects, but we need to see more involvement in the rural areas, among the historically disadvantaged communities. This would mean getting involved in areas of agricultural production, that is agroprocessing, to assist the rural households that are living in absolute poverty to become part of the mainstream of the South African economy.

We need the IDC to act as a development corporation and not as an investment bank when it comes to these historically disadvantaged communities. We have noted that the National Empowerment Fund Corporation is now fully constituted. The main objective of this fund is to facilitate the redressing of economic inequalities that arose out of past discrimination, and to provide historically disadvantaged individuals with opportunities to acquire shares and interests in restructured state-owned enterprises as well as in private businesses. This is a very important institution that must assist black empowerment companies to become part of the mainstream of South African business.

However, the current funding level of the NEFC is very low at R200 million and very little can be achieved with this funding. I therefore wish to appeal to the Minister to ensure that the NEFC is adequately funded to fulfil its mandate.

In conclusion, I wish to briefly address the issues confronting Nepad. Earlier this year the Nepad Implementation Committee finalised its programme. Its plans highlighted the need to focus on the many socioeconomic challenges that face our continent in the process of achieving growth and development.

The NIC adopted a comprehensive range of action plans covering the following: agriculture and market access; infrastructure development; information and communication technology; capital flow; and human development, including health and education.

Many of these challenges can only be addressed if the developed world accepts the need for an equitable, just and fair global trading system. If a significant portion of the US$1 billion a day the OECD countries are currently spending on agricultural subsidy is channelled into investments and trade infrastructure on the African continent, we can realise the dream of making Africa and its people part of the mainstream of the global economy.

I wish to thank the Minister and the President for the role they are playing in the G8, the World Trade Organisation and other multilateral organisations in working towards a fairer global trading system. This is our only chance to give the people of our continent an opportunity to create a better life for themselves. [Applause.]

Mr C T FROLICK: Mr Chairman, hon Minister and hon members, the Budget Vote of Trade and Industry should reflect the seriousness with which Government approaches its role in the economy, especially in these times of high unemployment and poverty.

While discussing this Vote this afternoon, it is apt to recognise that certain South African industries have shown phenomenal growth and resilience even against international competition. The motor manufacturing sector comes to mind. This confirms that it is, indeed, appropriate to have identified a knowledge-based economy for the future economic growth of South Africa. But this should not mean neglect of small business development.

The role of SMMEs as engines of job creation have been clearly articulated this afternoon and must not be underestimated. Neither should we argue that SMMEs cannot enter the sector of knowledge-based industries. It is a question of encouraging initiative and entrepreneurship at grass-roots level. South Africans have proven that, given the opportunity, they are indeed innovators of note.

Only last week the headlines here in Cape Town were dominated by reports of a small business owner who developed a new technology for motor exhaust systems. Not only did he develop it, he also clinched a multimillion rand export deal to the USA. These initiatives should be encouraged. This is a prime example of the ability of South Africans to create jobs and wealth. How many more entrepreneurs are out there, undiscovered and with untapped talent, owing to a lack of support and opportunities? There is no stronger mechanism available to the Government for true empowerment than SMME development.

The Vote before us details extensively the various strategies that DTI has at its disposal to stimulate trade and industry. The department has undergone a thorough and comprehensive internal restructuring process, and it is therefore expected that delays on its side should not continue to hamstring economic initiative.

For example, one need only look at the delays that have crept into the issuing of operating licences for industrial development zones. It is surely not unreasonable to expect streamlined and more effective administration from the Government’s leading department responsible for interaction with the business community. We therefore welcome the acknowledgement this afternoon that problems related to service delivery have occurred. We will support any measure that seeks to properly address these problems, and we are in particular support of the new hotline for members of the public as announced by the Minister this afternoon.

I want to pay attention to the role the department is playing in international trade. The WTO is the premier forum for international trade agreements, and South Africa, as the leading economic force in Africa, has an important role to play in that forum. In that forum not only do we represent ourselves, but we also carry the economic hopes and aspirations of SADC and the greater African continent. We cannot afford, especially in the context of Nepad, to neglect our duties at the WTO.

However, during a portfolio committee visit to the WTO it became apparent that South Africa has a variety of important duties to fulfil at the forum. We therefore call on the Minister to reconsider the current human resource deployment and support structure, so that our participation in this forum can be more effective. In the light of USA’s latest Farm Bill, which subsidises US farmers to the tune of billions of dollars for the next ten years, it is apparent that developing nations such as South Africa must increase their ability to negotiate at this level. It remains a matter of grave concern that South Africa and other developing nations are expected by the developed world to open up their economies, and to refrain from subsidies, while they themselves continue with these practices.

It is often our industries that provide jobs to unskilled and semiskilled workers that bear the brunt of this policy. In the final analysis, we must place the welfare and prosperity of our people first.

At the recent third annual African Business Development Conference in Port Elizabeth, concerns were raised about South African trade practices in the Southern African Customs Union, and how these may negatively impact upon members of the union. We hope therefore that the Minister’s comments this afternoon on the introduction of the International Trade Administration Bill will reflect and take on board the concerns of all members of the South African Customs Union.

Fortunately, all is not doom and gloom in the country. The UDM supports the Bill.

Ms C DUDLEY: Chairperson, hon Minister, the ACDP again registers the strongest objections against the Government’s policy on gambling. Exploitation of the poor is not acceptable under any name, and the lottery and casinos are no exception. Gambling has proven to be unprofitable and cannot be defended in terms of benefiting the economy. The revenue-raising ability of provinces was used as a carrot to con the public into thinking that vast amounts would be spent to alleviate poverty.

The reality, however, is that poverty has increased, and organisations working to alleviate suffering receive little or no assistance. National and provincial gambling boards have been set up and are costing millions. Provincial chairmen, for example, are earning in the region of R700 000 per year. National and provincial gambling board chairmen, in the light of the salaries received, should be required to publish their diaries. This would give the public some indication of what they are doing to earn such exorbitant salaries. Sadly, they are like vultures feeding on a rotting carcass, feeding on society’s weaknesses.

The gambling industry exploits man’s weaknesses, and, along with many other Government policies and legislation, undermines efforts towards moral regeneration. This new culture promotes greed and instant gratification, and undermines the need to study, family life, delayed consumption and frugality. Gambling is a direct attack on the family and fosters prostitution, money laundering, gangsterism, drugs and liquor, industries which also negatively impact on the spread of HIV/Aids and upon law and order.

The gambling industry is in real terms costing South Africans millions, if not billions. With profits often being realised outside the country, where is the benefit to the public? Temporary jobs and spending during the building phase, and jobs created within casinos and on gambling boards, benefit only a few, and mostly only for a short period, leaving the broader public far worse off, with a trail of brokenness and devastation in its path. This is a serious issue, which Government should not make light of.

While bright lights and false promises blind and mesmerise many, it is worth noting the situation in other countries. In the Caribbean, for example, especially in Cuba, gambling, prostitution and related industries were the order of the day, which caused instability throughout the region, eventually resulting in revolution. The opulent, illusionary luxury created terrible resentment, and eroded values like hard work, study, family development and frugality. Even Great Britain has the strictest control over licences, and their target market is mainly expatriates and not citizens. Mature, stable societies, including France and Switzerland, do not open their doors to gambling, but localise and ring-fence it because they know it is not in the public interest. Others do not entertain it at all.

Even the USA limits gambling to specific locations and does not allow it to run like measles throughout the nation. The ACDP calls for a stop to this lunacy. At the very least there must be a moratorium until an assessment can be made of how the industry is impacting on South Africa. To date impact studies done, show clearly the negative effects on society.

Dr S E M PHEKO: Deputy Chairman, it is important for the people of this country that when Parliament debates the budget, we reflect also on the policies on which the budget is based, and is to be spent. I therefore want to start this debate by saying, when the wealth of three persons exceeds the combined gross domestic product of 48 countries, and the ratio of the richest and the poorest fifth of humanity steadily deteriorates from 30:1 in 1960, to 74:1 in 1997, then any talk about democracy devoid of the economic reality that affects the lives of our people in this country is at best shooting a mosquito for an elephant.

It is puzzling to note that the Department of Trade and Industry has made investment and market access the cornerstones of its aims and objectives. In a world where, between 1994 and 1999, Africa’s share of trade fell from 8% to 2%, it is imprudent to have the entire trade strategy on an equal global trading system based on technology monopoly, financial control of world markets, monopolistic access to the planet’s resources, media communications monopolies and the manufacture of weapons of mass destruction. This is not a system that will bring development and eradicate poverty in our country.

The investment rules supported by South Africa’s trade policy provide more investor protection for foreign investors. It removes all forms of domestic competition, so that there is a monopoly for the foreign investors, who are able to secure control and ensure that new African entrants are undercut. This brings a whole range of other dimensions regarding economic oppression, violation of labour rights and marginalisation of African businesspeople. This is what frequently accompanies trade liberalisation in this country.

Today, where African business once thrived, there is bankruptcy. African business has given way to foreign business. Many industrial countries profess to be against protectionism, but they are leading trade protectionists. Let us, for example, take the recent American Farm Bill. The increase of 67% in the subsidy for American farmers destroys any talk of competition and fair trade for Africa’s farmers.

Our country needs a national development strategy, which promotes regional and continental integration more than global integration. Countries which have bought into global integration orthodoxy are discovering that openness does not deliver on its promises. Some of these countries are South Korea, Malaysia and the People’s Republic of China itself.

To the PAC it is clear that the World Trade Organisation systematically protects the trade and economic interests of the rich countries. It is based on a paradigm that subjugates developing countries to take measures to accelerate their own development. The WTO raises inequality into a principle of decision-making. The WTO cannot possibly claim, therefore, to serve the interests of the poor.

The PAC therefore fundamentally opposes South Africa’s position of further expanding the scope and power of the WTO. This will only increase the inability of our country to bridge the widening gap between the rich and the poor. It will worsen the imbalances that already exist in the world trading system.

Mrs F MAHOMED: Chairperson, I wish to remind Mr Pheko that our development plan and programmes are definitely geared towards serving the interests of the poorest of the poor, in case he has not recognised that.

I wish to begin my speech in the name of God, the Most Gracious and Most Merciful. Apartheid was a system of racial capitalism, institutionalised racism and segregation which was enforced in all spheres of people’s lives. Even today, megabusinesses are still owned by white conglomerates as there was a deliberate attempt to marginalise people of colour. Our strategy is to promote a framework of sustainable and holistic development which is driven by the people.

It is imperative to understand the socioeconomic background, constraints and challenges that we face. Our country is characterised by glaring demographic, social and economic disparities. Our struggle for liberation has always advocated poverty eradication and sustainable development. Indeed, without economic liberty, prosperity can only be a dream.

We do see a paradigm shift, since 1994, where the South African disenfranchised people are taking up market opportunities. They are taking up ownership and exploiting economic development programmes which must, and should, improve the quality of our people’s lives.

Our country’s landscape is one of political stability which challenges us to seriously pay attention to issues of economic freedom. We need to ensure that women are not on the peripheries of the mainstream economy. We need to develop our human potential so that we are able to compete with global markets and get access to transnational and multinational business opportunities. Our capacity to invent and advance our innovative potential should be exploited to the maximum.

Indeed, since the first democratic elections of 1994, remarkable progress has been made towards establishing a free and democratic society which is based on respect for basic human rights and human dignity. Women are marginalised groups. They are excluded from transnational and multinational networks and subsequently denied access to contracts and megabusiness opportunities which might become available to private-sector conglomerates that are owned and dominated by men. Skills development is central to ensuring equality of opportunity. Therefore, fiscal shifts should take place in order to ensure that women are empowered to take up trade-related opportunities.

Knowledge about customs and antidumping regulations and trade and tariff regulations can only add value to the challenges that women face in corporate structures. They are the poorest of the poor. Most major financial institutions in South Africa do not know what it is like to be poor. The sophisticated high-rise banking institutions do not make women comfortable. At present we have the models of modern electronic banking in a land where many of our citizens still require electricity. Rural communities are dismally disempowered and disenfranchised. It is imperative that rural integrated development programmes should, hopefully, address this and measure input delivery to the poorest of the poor.

I would like to say to the hon the Minister that buzz words in his department indicate that a world-class institution which is service- orientated and delivery-driven is being created. I wish to point out to him that women in this country would appreciate it if they could have access to this world-class service delivery which will then be the engine of growth and sustainable development.

When I studied the incentives, I was pleasantly surprised that the Khula Start programme, which is based on microcredit outlets, specifically targeted women in the year 2000. It is reported that 89% of the beneficiaries were women and 11% were men. However, I would like to point out to the hon the Minister that it would be interesting to determine the value of the loans that they received. It is noted that Khula Start’s growth strategy aims at motivating banks to engage in mass-scale delivery by training bankers and marketers and providing a roll-out of credible mentorship. That would be really good. It also wants to research the package of innovative products to attract the participation of the financial industry. We do hope that this initiative will be effectively realised, as soon as possible.

The department has initiated a number of projects through the Ntsika Enterprise Promotion Agency and aspires to showcase the very best of South African arts and crafts. It hopes to create and consolidate partnerships with national and international supporters of the South African craft sector. The international handicraft expo, which took place in Milan in December 2001, brought in market opportunities for South African crafts and assisted the small, medium and micro entrepreneurs. It also clarified the way forward to export markets and took the necessary actions to ensure the survival and development of business.

I also wish to mention the future programme of Ntsika. The one that I would like to focus on is the women’s development programme, which aims to provide for the participation of businesswomen in resource management, therefore improving the economic growth of South Africa. The other issue that I would like to mention is the conference on women in business and management, which will, hopefully, address the needs and challenges relating to the growth of women in business and clarify the way forward. I suggest that we, as members, should diarise that, look for the dates and inform our constituencies.

It needs to be recognised that the Support Programme for Industrial Innovation, technology incubators and Technology through Women in Business should make quantitative and qualitative differences in the lives of women. Women are really tired of being on the peripheries. They should and must drive transnational and trillion-dollar business. Our supply-side measures could easily do that with the more deliberate focus on women entrepreneurship.

Women cannot be in mere survivalist industries any more. They should be in sustainable industries and should, actually, be now looking towards biochemistry, biotechnology and megaprojects of industry. They should explore our export marketing and investment assistance scheme in order to become highly skilled and globally competitive. Women must be empowered through being made part of trade agreements and included in international trade negotiations so that they are able to understand and influence important decisions which will, subsequently, impact on their lives.

We need to commend the restructuring processes in the department, especially the departmental and developmental programmes. The women cannot be invisible in major negotiations of multilateral and bilateral trade agreements, for example the European Union negotiations. They must serve on SADC, the World Summit on Sustainable Development and Nepad. These are fundamental and effective policy formulations which can be translated into realistic objectives. More women should and must be deployed to trade desks in our missions so that international experience will ensure that they are holistically exposed to international trade, and further exposed to the multilateral institutions such as the IMF, the World Bank, Unctad and others.

Sufficient exposure to institutions such as boards of tariffs which could support women’s initiatives to learn about customs, antidumping and tariff regulations is imperative. Access to finance is the major setback for women who want to be mainstream players in our macroeconomic structure. I wish to mention the fact that the Micro Finance Regulatory Council needs to effectively carry out its mandate to ensure that equity is realised for all South Africans, especially the poorest of the poor.

The department needs to be commended in that all sectors underpin, support and encourage the promotion of small, medium and micro entrepreneuring. It needs to be noted that the beneficiaries of these grants and subsidies for infrastructural development support, competitiveness and manufacturing promotion should also be women, the youth and the disabled. New entrants and women entrepreneurs need to readily access the department’s incentive schemes without difficulty, delay or marginalisation.

The challenge is for us all to take up the department’s exciting incentives such as the small and medium manufacturing enterprises programme, the skills support programmes, industrial development zones and spatial development initiatives. It needs to be mentioned that the Industrial Development Corporation will continue to focus on empowering emerging entrepreneurs and to support manufacturing, tourism, agroindustries and small-scale mining. It will also facilitate regional development in South Africa. New initiatives include telecommunications, information technology, retail and service sectors, government tenders and venture capital. It is interesting to note that only few women exporters use the various products and services, including financial and technical support. The export market investment assistance scheme could enhance black economic participation in all export sectors.

Technology through Women in Business is the Deputy Minister’s initiative and I must congratulate her on it. It aims to enhance and empower women by availing instruments of science and technology to women in business. It needs to be said that we need realistic output in regard to this developmental programme. I do believe that the budgets of all line-function departments should be planned in such a way that their fiscal spending consciously becomes gender-sensitised in their programmes. I think it is possible that economic empowerment, enterprise development and megaindustrial participation - nationally and regionally - can be realised if this takes place.

In conclusion, I would like to say that the rationale of effective fiscal spending should and must be translated towards realistic and tangible goals to eradicate poverty and underdevelopment.

We wish to welcome the department’s efforts in trying to establish the gender programme with a full-time programme manager. However, it needs to be expressed that all initiatives must be fully capacitated so that positive and realistic changes in the lives of women can occur. Our efforts must ensure that equitable access to resources, skills and programmes substantially reduces poverty.

I also want to say that we need to take cognisance of the fact that we must address global crises of unsustainability, poverty and moral degeneration, which cannot be dealt with just symptomatically without addressing more fundamental issues of ongoing processes constantly producing and reproducing certain patterns of imbalance. We need to achieve equity and justice and truly to improve the lives of women. [Applause.]

Miss S RAJBALLY: Chairperson and hon Minister, trade and industry are the heart of our economy. How can the importance of this sector be expressed? It is the centre of our national and international economic performance.

The MF congratulates the department on its efforts at promoting South Africa as a global competitor. However, we have to look earnestly at the beating our rand has taken over the past few months, and we cannot do that without raising an eyebrow of concern. Now we have been offered a number of reasons for its happening, but the concern is that we do not want a repeat.

We have a strong nation with immense talent and opportunities to make our mark. We have the potential to be a major global economic competitor. Our rand has a potential to be a strong currency standing firm against the dollar and the pound.

The rand issue is, sadly, accompanied by the high rate of unemployment. The MF notes the efforts, programmes and projects undertaken by Government and other role-players in creating jobs. However, the reality is that joblessness is still rife and it lends itself to horrific rates of poverty. It has taken into account that the department works hard at addressing the unemployment issue. The MF is concerned about the advancement of small business enterprises, and it is glad that the department has introduced the enterprise and industry development programme to sustain its development. It is important to note the difference in the market’s potential to perform, according to size, quality and many other circumstances. This might be too competitive for smaller markets. It is pleasing to note that the department is committed to instituting a fair, competitive and efficient marketplace in creating a better life for all citizens of South Africa.

We have domestic production that could place us at an advantage in international markets. The department has noted this potential via the international trade development programme.

The MF supports the Trade and Industry Budget Vote. [Applause.]

Mr P J NEFOLOVHODWE: Chairperson, the Department of Trade and Industry has, over the past years, put into place facilities that are meant to respond to the poor people’s needs in business. This development, coupled with the speed with which the department is able to register companies of people from the disadvantaged communities, is indeed commendable.

However, the participation of blacks in business activities is hampered by the lack of financial support from formal financial institutions. Commercial banks, in particular, are happy to receive the poor’s moneys in the form of savings and other types of accounts, but offer nothing in return. Because commercial banks are still conducting business as usual for blacks, Government should tighten its procurement policies to force banks to deal with the poor favourably.

On another front, the gambling industry, despite regulations that have been put in place, is far from bringing about meaningful and broad-based economic empowerment and transformation. Ninety percent of gamblers are black, particularly in the horse-racing industry. Yet this industry is still predominantly white-dominated and white-controlled. Surely blacks, being 90% of the supporters of this industry, should by now have a meaningful stake in it. To illustrate the point, Phumelela Racing and Leisure, which controls most of the horse-racing activities, has only 27,5% for empowerment groups. The black economic empowerment sphere of the department’s activity is still not well defined. Only a few blacks are enjoying the fruits of this empowerment opening. Finalisation of the policy statement, which can provide guidelines on what black economic empowerment is all about, is what is needed.

Azapo supports this Budget Vote. [Applause.]

Mrs B N SONO: Chairperson and hon members, we view the DTI’s budget under three headings: policy, systems and capacity. Policy is the starting point because it expresses, in broad terms, the department’s intention in respect of outcomes. By systems we mean the processes and instruments within the department which are geared towards implementing policy. By capacity we refer to the ability of the institutions concerned to take the policy in question through the delivery systems.

There are areas in which the DP feels that the department’s policies and strategies are inadequate. I want to highlight just two areas. The first one is unemployment. The fact that economic growth regularly falls short of the targeted 6% growth, coupled with our inability to create jobs, is deeply worrying. The second one is SMME development. We really need to debate this more thoroughly. Policy has to be formulated for the conditions under which it will be implemented. For example, what is the Government’s response to Agoa and Nepad? Agoa has huge policy implications for the economy.

With regard to systems, the committee had an opportunity to engage on budgetary issues with the DTI’s associated institutions. These institutions throughout the 2001-02 financial year devoted much attention to restructuring and policy reassessment. To the portfolio committee, it grew increasingly evident that internal transformation was being used as an important indicator of success rather than their capacity to serve the business community both equitably and efficiently. One can never restructure to be efficient when one does not have an end-user and consumer for one’s efficiency.

The idea is simple. For any given line function the department prepares a strategic plan looking at outcomes and outputs and service delivery indicators. The strategic plan fits directly into the Medium-Term Expenditure Framework. Once again the DTI’s performance is cause for concern in this regard.

With regard to capacity, the first law of empowerment is full employment. The BEE model as presented to Parliament is deeply flawed. SMME development is being integrated with black economic empowerment and with women entrepreneurs’ involvement. It is often assumed that SMME development is good for BEE or vice versa. The reality is much more problematic. Capacitating SMMEs is especially important in creating the critical mass that drives reform. Until the institutions of capital creation can be made available to the poor, this Government will continue to be frustrated in its efforts to encourage institutional capacities that benefit the poor.

A case in point is the National Empowerment Fund, which the DP views as a vital instrument. Its purpose is to empower the formally disadvantaged with venture capital. But the DTI used a once-off investment of R174 million to purchase a stake in M-Cell on behalf of the NEF. It will be allocated shares from privatised parastatals which it can then sell at a 20% discount to previously disadvantaged investors, some of whom are likely to be poor. What precautions are in place to ensure that proceeds from these sales are not exploited by speculators?

Lastly, should the DTI not be looking at such structural issues that keep people poor and unemployed and focus its attention on how to create opportunities that enable people to rise out of poverty? [Applause.]

Adv Z L MADASA: Mr Chairman, the policy of the DTI on trade and industry is based on the presumption of fair competition and a genuine free market. It is assumed that the ongoing liberalisation of our economy will yield efficiency, good returns and the reduction of poverty. In my view these presumptions, whilst they may be true in theory, in practice must be viewed with great circumspection.

Are the global markets free? The foremost proponents of free markets, the US and the EU, are pursuing protectionist policies that are inimical to fair competition and the promotion of free access by developing economies to the global economy. It is trite, for example, that the much celebrated success of the Airbus was achieved through direct or indirect undisclosed huge amounts of financial subsidies.

The US is backtracking from its stated support for liberalisation and is betraying the Doha agreement on the second round of negotiations by imposing restrictions on steel imports, even though they exempted us, and backing a monstrous form of subsidies in agriculture. The US is making a mockery of its stated support for free trade. We must be cautious before we fall into the snare of what looks like free trade. There is doubt that genuine free competition would bolster our economy, but the recent developments cast doubts on the developed countries’ commitment to eradicating poverty. We too must look at tariffs with regard to basic foods as a strategic political approach.

Protectionism by the US and EU has not benefited their own economies. In Germany unemployment is at its highest, and the US economy is struggling to recover from recession. Whilst not abandoning the objective of the democratisation of multilateral trade institutions and genuine free trade at global level, we must not ignore the advantages of focusing our attention on trading within the continent. We must work to secure preferential trade agreements within the continent and other developing economies. We must identify strategic trading partners in the continent and work hard to do business with them. Ultimately the power to compete globally resides in the size of an economy and its competitiveness and not so much in the ability to raise moral issues. We must promote rural agriculture. KZN and the Eastern Cape, for example, can feed the entire country and the region if policies are properly determined.

Looking at the local challenges, the DTI has restructured various units. Whilst I support this, it is my submission that the tempo is too slow. Unemployment is rising and our people can no longer wait for service delivery. The role of Ntsika and Khula in the development of small business is very urgent. Microlenders are unable to help small businesses because lending capital is too costly, we are told. Neither are big banks helping small business as they should because they consider the sector as infested with high risks. Therefore only the DTI can help the development of small business.

Although the underspending by the DTI is comparatively low, it is still unacceptable in the face of huge demands by this sector. Another issue that the DTI must address in our country to promote black economic empowerment is educating our people on the need for savings and investment. At the moment there is no such culture.

We support the Vote as the ACDP, although we are still concerned about the issue of gambling. [Applause.]

Ms C C SEPTEMBER: Chairperson, hon Minister Erwin, comrades and hon members, please allow me also some time to wish the Deputy Minister, Comrade Lindiwe Hendricks, a speedy recovery on behalf of the committee and express the hope that she will be back in the department and in Parliament soon.

In his address to the opening of Parliament on 8 February this year, President Thabo Mbeki drew our and South Africa’s attention to important matters requiring urgent attention. One, of course, was on the issue of microreform. The President informed us in his speech that Government would continue to work on reducing the level of poverty and developing our greatest resource, namely our people. Government would improve the quality of life of all our people, put this country on higher rates of economic growth, improve the efficiency of Government and of course involve as many of our people as possible in what is called the people’s campaign, or Vukuzenzele.

It is my view that all of us have learned from our mistakes in the past, and it is encouraging to see that attempts are being made towards sustainable economic development. The move from macroeconomic towards microeconomic reform is aimed at the alleviation of the poverty trap that underpins our economy. It sets some guidelines as to what citizens can expect from Government and from the DTI and in particular towards sustainable development for the majority of the people in this country. These guidelines set the platform on which to build a collective approach towards employment creation, equity growth and the necessary support of microeconomic reform measures that should be put into place. This platform, however, should be free of constraints on economic growth.

Our challenge in South Africa remains to overcome the legacy of the past and find creative ways of breaking the syndrome of what I will refer to as the Irish coffee situation in the economy. The Irish coffee situation is one where all the white is on top, with that lovely little bit of cream, and the vast majority of the blackness is at the bottom of the cup. We think people must enjoy Irish coffee in restaurants and not see it in the South African economy any more. We must alleviate and eradicate poverty.

Allow me to give some illustration of this and a present case study that we have done in Mitchells Plain on urban renewal. Here we want to illustrate how we can bring about microreform in this area. As members know, or some know, Mitchells Plain is located in the Cape Flats on the southeastern False Bay Coast. The area falls within the broader False Bay Coastal Park. The effective development and management of the coastal park is significant in creating direct economic opportunities and also indirect opportunities relating to tourism and informal training. This will necessitate the need to improve connectivity - connectivity which will improve the market’s ability and the ability in that area.

The area is situated on the Cape Flats aquifer, which is a future water source of metropolitan significance. The surviving dunes in this area and the landscape within the urban area provide topographical relief to the flat landscape we have there. The area falls within a very important coastal plain - a plain which is poorly connected, but is part of the area. Part of the area is also connected and located at what is called the Wolfgat Nature Reserve. All of this forms part of the very important broader False Bay Coastal Park.

Why do we need microeconomic reform in such an area and Mitchells Plain in particular? This area has over a million people squeezed into it due to apartheid policies. In that area the highest education level of about 80% of the adult population is below matric. Coupled to that, one finds in the same area, a high rate of teenage pregnancy. We are all well aware of the socioeconomic ills and the gangsterism in this area.

However, what is lacking in this area in order to take it out of that trap is the following: First of all, it does not have any local industrial base. The people that stay in the area need to commute very long distances for employment opportunities. The closest places where one can find opportunities for work are Epping, Capricorn Park, and Airport Industria. Many have, of course, moved much further than that.

Secondly, it has an inappropriate concentration of business opportunities, with most of them squeezed into what is called the Town Centre, a centre which is bursting at its seams with informal trading and poses a real fire risk more than anything else.

Economic development in this area is concentrated in Lentegeur, the Town Centre, as I said, Westgate Mall and the Westridge and Rocklands area. With regard to opportunities, as one looks around, the area next to the Town Centre, where there are vast tracts of open land, is quite a case in point if we want to talk about local reform.

Thirdly, the coastal resorts that we have in this area are completely underutilised and have no institutional structures to steer the creation of a False Bay Coastal Park. The abundant open space is, of course, costly to maintain, and this has created a breeding ground for criminal activity. It is, of course, threatened by the dumping in these areas. What one finds in Tafelsig today is an increased number of backyard shacks and squatting.

Unfortunately, the DA responded to all the challenges in these areas with what they call a Cape Renewal Plan, which involves the painting and cleaning of graffiti by gangsters on the walls in the area. It is a completely unscientific plan which is more geared to the planes that fly over Mitchells Plain, which will see that there are no more gangs in the area. It has not addressed the real issues. It is a typical response of a party that does not care about how one changes at a local level the economic situation of people in the area. We can only call on the DA to rather leave the brushes with which they are painting the walls and find some creative areas for new economic opportunities for the people in the area. [Interjections.]

We need to understand how industrial policy works. Our challenge remains that of how to extend a growth strategy to encompass the people in these areas and townships. It is not worthwhile responding to the hon Ellis. As the ANC, we need to end the dual society that we have in places like Mitchells Plain, a typical Irish coffee kind of a situation, an economy with high poverty, unemployment and a lack of economic advancement.

How do we link macroeconomic policy with the microeconomy of Mitchells Plain? We trust that this budget will assist us in extending the notion of job creation in Mitchells Plain, Mdantsane, KwaMashu, Uitenhage, Phoenix, Galeshewe and Pokwane to the natural collectives that exist in our townships, a plus to us as the ANC. We think that we must tap this collective spirit into our townships. If we mobilise this collective spirit, this community togetherness, for the economy, we will not talk about solitary traders selling cigarettes all over the place in little corners.

I would like the comrade Minister to note that we can mobilise these communities and give them resources to develop an industrial policy for these local areas like Mitchells Plain and others and the many other destitute communities which the banks, of course, see as risk areas. They require skills and management training so that they can put together business plans. When we develop in these areas it is best to develop in order to expand productive activity and not just merely cigarette trading activity that will not add any value.

This direction that we will take will give true meaning to the ANC’s slogan, ``Make it happen where we live.’’ Make it happen where we live, where people can have skills to build roads, to have appropriate technology for their small businesses, where there can be refuse removals, where there can be many more repair shops, etc, where supply-side measures can be directed and redirected in meaningful micro form to activities in these areas.

In essence, ICT, technology in general, innovation and knowledge-intensive services should be aimed at the current basic needs. In this we are not implying that we should not export. In fact, we are saying that export should take place but that the budget should reflect a balance between priorities: for example, between the growth in ICT and the retention of job sectors.

Furthermore, there should be a synergy between the framework and the understanding of South African industrial development. The industrial policy requires of the DTI to pay particular attention to sectoral development, in terms of both competition and collective action, which we have already put together through full consultations with labour, Government, business and, of course, civil society at Nedlac. We welcome the process as a committee that has started with the Presidential Jobs Summit sectors, the coming WSSD and, of course, the coming growth summit.

We would like to improve, as said earlier, the position of women and of the rural poor, enhance growth throughout the Southern African region and in so doing break the cycle of poverty that we have around us. We welcome further engagement and initiatives in the department. We trust that we will have no more Irish coffee situation in our country but will rather be able to make it happen where we live.

Let me return very quickly to the hate speeches that were made by certain members. I think it is appropriate, as some of the members have already said, that we understand why the DP behaves as it does. Interestingly, a member of the DP says that the poor are increasing, and then starts talking about the dollar that will cost R20. We must understand why he is interested in the dollar going up. It is because his constituency is more in Britain than it is in South Africa. [Applause.]

On the other hand, he says that the solution in overcoming poverty is to reduce the cost of business. He says nothing about how to reduce poverty in the area. It is very interesting to see that the two of them really seem to be talking from opposite sides. Of course, one cannot blame the one who sleeps in meetings more than anything else and does not have anything positive to say.

Maybe we should tell Mr Nigel Bruce what Vladimir Lenin can offer him in this area. But, of course, he would be so shocked to hear what Lenin said to him that I do not think it would be worthwhile educating him here. Let me rather ask him to try to find a better way to represent his constituency, Britain.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon member, before you leave the podium let me deal with your reference to hate speech''. In South Africahate speech’’ has a particular context. I think it would be inappropriate to consider that a statement made in the House could be construed as hate speech.

Ms C C SEPTEMBER: I withdraw that, Chairperson. [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, as I call upon the hon the Minister of Trade and Industry I would like to commend to you the display of the DTI in the Old Assembly. I think you should not miss the opportunity of seeing what the DTI has to show you. [Applause.]

The MINISTER OF TRADE AND INDUSTRY: Chairperson, I thank you for the wise comments which you have just made.

Chairperson, colleagues in the House, I would like to thank those parties that have supported our vote and I also want to particularly thank the speakers for the serious way in which they have gone about their remarks. I believe the economy is crucial to all of us. It is not the property of a political party or Government. It is the very lifeblood of our existence, and we should treat it seriously.

It is for this reason that I am somewhat bemused that the comments from a major opposition party are really so unthought-out and merely reflective of cliches and dogma from the past. This does not really help and, I think, it merely earns disrespect for the party whose spokesperson makes those points.

Let me comment on some of the matters raised. We take the advice, insights and comments made by many members, but I would like to use this occasion to make a few further remarks. I think that the question of the growth summit, relating to what the hon Bekker said, is not a question of differences but a question of practicalities. We are looking to make this a practical summit, one where people will have a chance to reflect. We want people to come to that summit with a clear understanding of what it is that they can do and what the commitments can be in doing that. For practical purposes this summit would only take place towards the end of this year. I think this is something to which we should all contribute and work towards.

Let me also indicate that, from Government’s point of view, we fully support the Minister of Home Affairs in his objective of ensuring that we have skills in this economy. My department and his have worked together and will continue to work together. We are very conscious of the need for skills and we will ensure that the economy gets those required skills, both through our internal training and by bringing in skills from outside, which is an unavoidable requirement for this economy.

I wish to quickly indicate that with regard to small business, and the comments made by the hon Redcliffe, I think it is correct that there are duplications at times and we would accept that. But I would not think that the multiplicity of service providers is a bad thing. I think it is a good thing. We may from time to time want to check on the quality of those providers.

But, again, I would draw his attention to some of the documentation that we have made available to him. I would suggest that he look at the pamphlet that comes from the Brain website and from the Manufacturing Advisory Council and also, increasingly, start using the call centre and customer care centre that we have put up. There is a wealth of advice and I think that is good for small business.

I would like to thank the hon member Lockey for his very thoughtful inputs. On the skills shortage, I think we should bear in mind that this is a structural problem, but it is not an insurmountable problem. What we have been able to do, in the case of many particular investments, is to work with the local educational institutions to bring about a rapid increase of skills. The new Immigration Bill specifically allows for corporate permits, which will help us in that respect as well, to bring skills in behind investments. So in the short term we can certainly do many things.

Let me make a comment about the National Empowerment Fund. Basically, this fund has not as yet had those assets that come from the restructuring of state assets put into that fund. This is in large measure because it seems from our discussions with Treasury, and from the hon member’s own comments, that we may well need to adjust some of the emphasis and focus of the empowerment fund. We are currently working to modify the proposals around the National Empowerment Fund. I am confident that these proposals will lead to a much more effective and very important institution unfolding in the coming months around the National Empowerment Fund.

I will just indicate that with the industrial development zones these are not delays. The IDZs are thoroughly canvassed and very closely looked at. We comply with environmental management legislation and we demand of all levels of government that are associated with the IDZs that they give us a clear commitment to what they will do. We scrutinise the applications carefully. A tremendous amount of work goes into them and I would rather err on the side of caution, so that we get the thing thoroughly done, than rush matters just for the sake of my looking good as the Minister declaring IDZs. Our job is to create a good service in the IDZ, not to make the DTI look good.

The hon member raised issues about our trade practices in the customs union. I would be very keen to hear those. I think that South Africa conducts itself very well in trade, particularly with our neighbours, and as far as we can with the customs union. I am very pleased to say that we have reached an agreement with our partners in the customs union. I believe that it is the most advanced form of economic integration in Africa and that it may well become a role model. We are very excited and very pleased about it. It is probably the first time in Africa that a truly supranational body will deal with certain matters. In the new customs union agreement it will be the customs union that deals with tariff setting and, I think, that is a great step forward for all of us in the region.

I respect the views of the ACDP and the hon member Dudley on gambling. This is her right and I respect those views. I would say to her that, as Government, we are concerned about regulating this industry in the tightest manner possible. I have, just a matter of days ago, consulted with all my colleagues in the provinces and the Premier of KwaZulu-Natal and asked them to consider certain important amendments that we feel we should make to the Act. I am very hopeful that the hon member’s influence will be brought to bear and that my colleagues in the provinces will accept this proposal. It is imperative that we do regulate the industry more effectively.

However, for those of us who are more human and less pure than the ACDP and do gamble, I want to draw to their attention that I think the lottery has been a success. We distributed R200 million, which is the largest distribution for good cause that has ever been achieved in this country. In the coming year we will distribute far more. [Applause.]

We certainly can make an impact on the wellbeing of our people through the fallibilities of humanity. So I am a bit torn between the two hon members as to whether we should or should not continue with gambling because it does give us some good-cause money. But I think the reality is that people like myself are fallible and we do gamble. I never gamble in South Africa as the Minister in charge. [Laughter.] Let me just indicate to my comrade from the PAC that our legislation does not favour foreign investors over South African investors. This is a wrong perception. It is not correct, and it is really a slight on South African business leaders, particularly black business leaders, to suggest that they are not capable of dealing with foreign competition. They most certainly are and the dominant force in the South African economy is South African businesspeople.

With regard to women, we are very pleased that this has been highlighted. One point that no one mentioned, which I would like to bring to all members’ attention, is the South African Women’s Entrepreneur Network. We had hoped to launch it last month and we will launch it in June. It is an exciting initiative. It will be facilitated by the DTI. The Deputy Minister, hon Hendricks, has been very much a driving force there, and I was very reluctant to launch it in her absence. [Applause.]

I personally believe that South African women have shown time and again that they are very important components of the South African economy. I have no problems about the vitality, the drive and the initiative of women. The points the hon member makes about giving them access to information on finance are correct. But what we are actually seeing in practice - there is no question about this - is that the dominant leadership of the new enterprises is logically from women.

The second speaker from the DP spoke about the African Growth and Opportunity Act. We are doing a lot in terms of Agoa and South Africa has been very successful.

I would agree with the hon member September that there seem to be two different DPs when it comes to supporting black economic empowerment.

It was suggested by the ACDP that our assumption is a free- market one, and that is not correct. I think we are more realistic than that.

My congratulations to the hon Corrie September. This is the kind of approach that we must all take. Each one of us in this House should be a leader in our local economies. If one is not, one is failing one’s constituency. Really, one can do it and, there is much more cause for hope than there is for depression. There is tremendous hope out there that we can get things moving. The new DTI that we are trying to build will help members as much as we possibly can. But every area has an economic possibility. We must break from this depressing mind-set that everything is wrong and we cannot do anything. We can do tremendous amounts and the people that we brought here today, the people that we are working with, have shown time and again that South Africa will succeed.

My last point is that I would like to draw to the attention of this House that there has been concern about the plastic industry. This is completely unwarranted. We really must stop this kind of scare tactic. I am working very closely with my colleague the Minister of Environmental Affairs and Tourism and we will draw up specifications. There is no question that we are going to try to destroy this industry.

What we will do is to put in place a very good provision to regulate these plastic bags. We will put in a revenue-raising mechanism to bring about programmes to collect the bags and we will bring in programmes to recycle them. There are no disasters looming here. We must stop this nonsense that in order to make short-term points we keep preaching disasters in this economy. This economy is not a disaster. It is a great success. [Applause.]

Debate concluded.

                           POINT OF ORDER

                              (Ruling)

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! I now need to make a ruling. On Wednesday, 8 May 2002, the hon Mr J J Dowry raised a point of order in regard to a notice of motion given by the hon Mr A J Botha. Mr Dowry asked whether it was parliamentary for a member to say that, and I want to quote: ``Other members of the House are being bribed to serve in certain posts’’ - quoted as translated.

I said then that I would rule on the matter after I had checked what was said in the notice of motion. I have now had the opportunity to study the notice of motion and wish to rule on the matter.

The words Mr Botha used, and I quote as translated: ``… to bribe elected public representatives to betray their constitutional undertaking for personal gain’’, must, in the context of the notice of motion, refer to the New NP members of Parliament as referred to in the same notice of motion. This is an unacceptable attack on such members’ integrity, and I must, therefore, ask the hon Mr Botha to withdraw those remarks.

Mr A J BOTHA: Chairperson, I withdraw the remarks. [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Order! As the unparliamentary remark renders the notice of motion out of order, on the Speaker’s authority, the said notice of motion will not be printed on the Order Paper. [Applause.]

             LAND AND AGRICULTURAL DEVELOPMENT BANK BILL

                       (Second Reading debate)

The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Chairperson, let me illustrate the Land Bank and its activities practically. On Saturday I was in a place called Groot Marico, where Herman Charles Bosman used to go as a teacher and where Oom Schalk Lourens used to live. It is far away, in the North West province.

A certain group from the Bafokeng people received restitution of land that they were driven away from in 1935. It is a huge project, this restitution. The land loan was somewhat over R7 million, for the land to be bought back. The whole Government package was about R11 million, in terms of the restitution. We were there and the people were joyful. And then I saw this white guy walking around in khaki clothing. I was wondering, since he stuck out like a sore thumb, what he was doing there. So I went up to him. When I came closer I saw all kinds of small insignia on his clothes. On looking closer - I cannot see very well - I saw he was from the Land Bank, and that he was Mr Leon Steenwert, and he was walking there among the people.

Half of those people have not worked for many years, they are unemployed. Now they are getting their land restored. So I started looking for the representatives of the other banks, the man from Absa, the lady from Standard and the man from First National, and none was to be found.

So I was thinking that a land bank is a good thing. No other financial institution will go down there except the Land Bank. That is what we have in the Land Bank, an institution that does not cost the taxpayer a cent. It is actually funded by its commercial activities in agriculture. In other words, any farmer who is paying back a loan to the Land Bank can say with pride, ``I am paying back my Land Bank loan. I am assisting in empowering the developing sector in agriculture. I am assisting with land reform because the interest I pay will be used for this purpose’’.

Now this new Land and Agricultural Development Bank Bill that we are bringing here is actually the result of intensifying and extending the developing functions of the Land Bank. It actually comes as a result, partly, of what the Strauss commission, some few years back, recommended, that the Land Bank continue to provide access to its existing clientele, but with its main focus being the new development finance system. It should include financial support to new clients, especially the beneficiaries of land reform programmes.

Furthermore, the Land Bank’s wholesale function must be fostering rural financial institutions, and we hope that the village banks are going to grow stronger with assistance from this wholesale function of the Land Bank.

However, this is something not very popular. We have some resistance to the preferential treatment that the bank provides because, it is argued, this makes the bank unequal before the law. Now I want to say that we have corrected what the Constitutional Court asked us to do, and that had mainly to do with two sections of the old Land Bank Act. According to the old Act, there was a provision that the Land Bank did not need to use the normal courts when it went to court to demand payment of loans owed to it. That has now been corrected.

But what we need to know is that the Constitutional Court was quite explicit, in the person of Judge Mokgoro, who said that she agreed and accepted that the preference given to the Land Bank was an important form of security in the absence of contractual security between the Land Bank and its debtor clients. She said, and I quote, ``that the instant removal of such security would prejudice the bank’’. In other words, the court held that it was reasonable that the statutory security should not be removed. Its present forms of security should be preserved.

We do have some opposition from the Banking Council and from the banks, which took us to court on those matters, on the grounds that the provisions of the Land and Agricultural Development Bank Bill should not be in conflict with the provision for equality before the law. I am convinced that the Bill as presented before this House does not exceed the parameters of the standards laid down in the Bill of Rights and especially in the limitations clause in section 36.

The equality clause demands equal treatment of all, but that is based on the argument that the Land Bank and other banking institutions are equal. Our submission is that they are not. The Land Bank has a different role. It is not the same as other banks in a lot of instances. For example, it has a development role, in terms of which it may enter into high-risk operations, lending to the developmental sector.

It must assist in land reform programmes, and it is doing that. We hope to intensify, with this new Bill, the developmental activities of the bank. What is wrong with subsidising small and emerging farmers from the commercial sector of farming? What is wrong with that in principle? Some of the banks say no, Parliament must fund these developmental functions. We must tax the people of this country to assist emerging farmers. That is what we should do, and the Land Bank should stay out of commercial farming operations, because that is where the commercial banks should be able to pick the cherries, to get the good clients only, those which are not any risk at all.

What we are doing is not wrong. Some people argue that, no, one should strictly separate the commercial activities of the Land Bank from the developmental activities, and Parliament must then fund the developmental activities, and not the commercial activities. I think since 1912, the Land Bank has played a major role in the development of agriculture in South Africa. It has produced this strong commercial agricultural sector. This would not have been possible without the developmental functions of the Land Bank all these years.

We are saying the Land Bank cannot withdraw from development now; it must be strengthened. We need more development functions of the Land Bank. The point is that no other bank is exposed to the developmental sector of agriculture; no other bank is doing that. They were not walking in the veld in Groot Marico near Pela, where we were on Saturday. They were not there. No one else will do this; only the Land Bank will do this and it must do more of it.

Some people have argued that when the Land Bank concentrates only on development work, it leaves all the strong interest-generating work to commercial financial institutions. My submission is that those arguments are not based on constitutional reasoning, nor on developing reasoning. Those arguments seek to eliminate the Land Bank as a competitor, to reduce the bank to an institution which offers grounds to recipients depending on the generosity of Parliament and funded by the taxpayer. We cannot accept that position.

This is an institution that has proven itself over the years. This is an institution that still has a future of great significance in developing this extremely important sector of agriculture, and we are going to stand firm. We are not going to let this powerful institution dissipate.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Minister, your time is about to expire.

The DEPUTY MINISTER: I will end. We know that, for example, in housing we have now instituted policies which will compel financial institutions to set aside a prescribed portion of home loan funding for middle- and low- income households. In agriculture we do not need it; we have got the Land Bank. [Applause.]

Mr N H MASITHELA: Chairperson, as I was walking to this podium, I was told that I have been given five minutes extra, on top of the 15 minutes I have, so I must use it profitably.

Chairperson, the Land and Agricultural Bank of South Africa, commonly known as the Land Bank, was established by the Land Bank Act of 1912. This Act was repeatedly repealed and eventually replaced by the present Land Bank Act of 1944. Beyond any reasonable doubt this Act is outdated, especially to meet the challenges of this day and age.

Also, the recommendations of the Strauss Commission identified the need for the Land Bank to continue with its primary focus on agriculture, and to broaden considerably its role as agent of the Department of Agriculture and Land Affairs.

Substantial transformation also needed to take place in the structures of the bank, for it to be in line with the challenges and needs of today. The transformation of the bank as a development financial institution is ongoing.

The need therefore existed for an Act to adequately provide for the role the bank needs to play in the development of the country, as well as to enable support of Government programmes concerned with land reform and agrarian development in agriculture, including, amongst other things, the complete eradication of inequalities.

This Bill will enable the Land Bank to be supportive and to collaborate with other financial institutions, rather than to be competitive and hostile to them. The Bank will increase access to and participation in agriculture, enhance profitability and competitiveness, and also improve sustainability in the agricultural sector. This Bill therefore seeks to push further the frontiers of poverty and move closer to liberating the agricultural communities from the scourge of poverty and underdevelopment.

It is because of the above stated facts that the Constitutional Court, in the matter between the First National Bank of South Africa versus the Land and Agricultural Bank of South Africa, in 2000, held that certain parts of the Land Bank Act of 1944 were unconstitutional, and the invalidity of certain parts of the Act were suspended for a period of two years.

Part of this Parliament’s and Government’s responsibility is to comply with and respect decisions of the courts. We conceded and worked towards rectifying whatever was seen not to be in line with the Constitution.

In his state of the nation address in February 2002, the hon the President stated:

Decision-makers across the globe have accepted the reality that the global struggle to eradicate poverty and underdevelopment is fundamental to the wellbeing of human society.

The same reality was repeatedly reiterated by the Minister of Finance, Mr Trevor Manuel, in his Budget Speech.

With the passage of this Bill, this House will be confirming what the President said. This Bill will make development a way of life for our people as it will develop emerging farmers and rural entrepreneurs who have traditionally been denied access to credit, while striving to be the leading provider of world-class agricultural financial services by incorporating a development mindset within its business practices.

We hope that the bank will definitely assist the aforementioned categories of our people to lift from their shoulders a portion of the intolerable burden of poverty and underdevelopment often referred to by the President.

In anticipation of the passage of this Bill, the Land Bank has already shown commitment to the development of emerging farmers, by putting aside R200 000 for the training of extension officers in Bethlehem, Bloemfontein and Kroonstad. These officers will provide quality advice to well- established farmers and emerging farmers in particular. In Bethlehem, the bank has already had a success story, of Mr Cindi, a father of four, who did not see himself doing anything else but farming, if only there were a person or institution which would show enough confidence in him by lending him money. With other financial or lending institutions not willing to lend money to people with no collateral or security, there was no way that he could see a realisation of his life-long dream.

We must take cognisance of the fact that during the wide and extensive discussions and consultations which were conducted by the portfolio committee, one of the stakeholders, namely, the Banking Council, failed to convince the committee that commercial banks are willing to fund emerging farmers and entrepreneurs who have no collateral or security. But the Land Bank extended to Mr Cindi a loan which he started from a basic level of R250, and for which he saved and established a good financial record for himself. He has now used R18 000 as his present closing balance in the Step- up Programme. This is payment for the plot which he has purchased to start his farming business. Mr Cindi is now the proud owner of seven cows and has his eyes set on becoming a commercial farmer. He also created employment for people in the area. The Bill, therefore, in a way, gives the bank the exclusive right of funding of any agricultural project or aspect.

It will also be noted that a major objective of the Bill is to balance the inequalities of the past in so far as inequality in ownership of agricultural land, land distribution or even economic development and development amongst the historically disadvantaged persons are concerned. It is also essential for us to concede that it is important for our people to benefit out of this development.

This Parliament and Government, particularly, undertook to provide a better life for all our people. The passage of this Bill will do exactly what we said regarding especially previously disadvantaged communities. Clause 3, therefore, also introduces the focus on agrarian reform and land redistribution, equitable ownership of land, food security and access to land both for agricultural purposes and for entrepreneurs.

Clauses 26 and 31 of the Bill list the functions and activities of the bank and also stipulate some of the areas of the operation of the bank. Clause 31, especially, highlights examples of the projects and equipment for which the loans or funding could be acquired. Amongst many other issues, it deals with equipment and the establishment of dams. But the list should not be seen as an exhaustive one. It should not be in the minds of the members of the board that this list is exhaustive and that, therefore, anybody who wants to get funding for any other agricultural development issue that is not listed cannot be funded. I think that the board should be prepared to fund those particular issues.

On the other hand, clause 38, inter alia, enables the bank to act as an agent for development. This could be for purposes of distributing relief money in the case of floods or other disaster relief. Given the expertise and resources at the bank’s disposal, it is also empowered to act as an adviser to Government. The bank’s board of directors should ensure that a comprehensive public relations strategy is formulated and implemented which will ensure that all activities and services offered by the bank are communicated to all and sundry and benefit our communities so that …

… Mme Mma Mofokeng ya maane Bethlehem, a tsebe hore ha ba hlabolla tsa bolemirui, o tla kgona ho fumana seo a se hlokang. [… Mrs Mofokeng, who is a resident of Bethlehem, should know that whenever she wants to develop agriculture, she will be able to acquire whatever she needs.]

The bank, as a development arm of Government, should assist in ensuring that its loanees also promote the socioeconomic conditions of their employees, more especially in the rural areas. The passage of this Bill will undoubtedly be one of the major key delivery mechanisms of the social upliftment of our people. It will also sustain the economic development of our commercial farmers and therefore the bank will indirectly contribute to the social responsibility of Government and the people. Farmers, therefore, will now cease allowing farmworkers to live in appalling conditions on their farms. The bank is now also going to be seen to be playing a pivotal role in uplifting the agricultural economy of our country, which in turn will contribute to the overall economy of our country.

The portfolio committee was very pleased with the contributions that were made by different stakeholders. Generally, almost all of them applauded the Bill as a step in the right direction. We must, however, also express gratitude for the contributions and efforts that were made by members of the board and the departments in ensuring that the committee takes steps to move ahead towards the passage of this Bill.

The National African Farmers’ Union commended the Bill and said that if the Bill were not passed, that would bring negative consequences for emerging farmers, whilst the village banks said that the Bill would definitely assist in the growth of the economy of our country and also assist in their development as banks. If we delay the passage of this Bill, it will cause dire strains for their development.

I would also want to thank my predecessor, Comrade Chief Patekile Holomisa. He played a pivotal role towards the passage of this Bill by ensuring that this committee was going in the right direction. [Applause.]

Dr A I VAN NIEKERK: Chairperson, the Land Bank has played a very important role in the development of agriculture in South Africa. It financed farmers and agricultural co-operatives throughout the good and difficult years. It also established the very important principle in financing agriculture: The bank used 80% of the productive value of a farm or agricultural industry as collateral and not the market value of the farm or industry as the base to secure a loan. According to the Bill, this sound principle is to be continued and should not be deviated from to finance primary, secondary and commercial agriculture.

The other function of the Land Bank, according to the Bill, is to finance developing agriculture and supply money to the new small and part-time farmers who do not have the collateral in the form of an established productive value for their enterprise in the making. This is where the Land Bank capital will be at risk, and it is where the function of the Land Bank will be tested severely.

Die sukses van die Landbank sal ook bepaal word, indien daar sterk betrokkenheid bly by die finansiering van kommersiële landbou, waar die nodige fondse gegenereer sal word om die ontwikkelingslandbou te finansier. Nuwe toetreders tot die landbou sal nie maklik ‘n sukses maak, as daar nie voldoende goedkoop ontwikkelingskapitaal vir hulle beskikbaar is nie. Sulke fondse kan alleen kom, indien die staat voldoende fondse beskikbaar stel in dié verband. Een swakheid is dat fondse vir ontwikkelingslandbou en kommersiële landbou nie afsonderlik gehou word nie.

Ten opsigte van droogtehulp aan die landbou wil ek graag by die Minister verneem of die fasiliteit steeds by die Landbank beskikbaar sal wees om, in oorleg met die Minister van Finansies, geld wat in die landbou verdien is in goeie jare, vir die Landbank en ander banke te kan belê en eers in die jaar van opvraag belas kan word. Sekerheid oor hierdie aspek is noodsaaklik. Ons staan weer voor ‘n El Niño-siklus van ongure weersomstandighede en indien veeboere hulle vee moet verkoop, om die droogte te oorleef, behoort die staat by gebrek aan enige ander droogtemaatreëls in hierdie stadium hierdie fasiliteit aan boere beskikbaar te stel. Dit behoort vir alle boere te geld. [Tyd verstreke.] (Translation of Afrikaans paragraphs follows.)

[The success of the Land Bank will also be established if a strong involvement remains in the financing of commercial agriculture, where the necessary funds will be generated to finance developmental agriculture. New entrants to agriculture will not easily be successful if sufficient low- cost development capital is not made available to them. Such funds can only be generated if the state makes sufficient funds available in this regard. One weakness is that funds for developmental agriculture and commercial agriculture are not kept separately.

With regard to drought relief to agriculture I would like to know from the hon the Minister whether the facility will still be available from the Land Bank of, in consultation with the Minister of Finance, investing money, which was earned in agriculture during the good years, for the Land Bank and other banks, and only having it taxed in the year of withdrawal. Certainty in this regard is essential. We are again awaiting an El Niñ-o cycle of terrible weather conditions and if stock farmers must sell their livestock in order to survive the drought, the state should, due to the lack of any other drought measures at this stage, make this facility available to farmers. This should apply to all farmers. [Time expired.]]

Mr G B BHENGU: Mr Chairman, Deputy Minister and the House at large, we are here today to witness another hallmark in the history of our country by debating and ultimately passing the Land and Agricultural Development Bank Bill.

This Bill has clear and indisputable objectives: to promote, facilitate and support the equitable ownership of land and the removal of the legacy of the past racial and gender discrimination by providing financial services to those who need such redress and support.

We note that in the past the previously disadvantaged farmers could not access enough agricultural land because of the unattainable collateral requirements. It is true that when an equation is effected, the tilting end must come even, so that the sloppy end should come up too.

Therefore, reform and redress always have amusement and sadness, since the unevenly juxtaposed elements are brought even. We acknowledge that redress, when looked at only from an economic angle, does not make sense. But when it is looked at from a social angle, it is beyond financial or economic calculation.

The lives of our people need to be developed. The communal land systems should work for the betterment of our people, and as such, those who want to contribute together for their common good in order to access land must be assisted financially. The financial support given to these people is not thrown into a bottomless pit, but there will be legal guarantees in terms of clause 30 (1) (a) and (b) of the Bill to solicit payback or make good the situation of indebtedness.

It is also not true that all the debtors will be a risk, and it is not fair to believe that all of them will go down. In fact, most of them will rise to the occasion to grab this seemingly remote chance to contribute to their and the country’s economic development. The lending bank will therefore not go down, but it will be sustained.

Third World problems need Third World solutions and understanding. Not that we want a laissez faire attitude, but for reform to take place, there must be a starting point. This Bill therefore serves as a starting point in trusting that the agricultural loan recipients will honour their commitment even if they do not provide economically viable collateral.

To allay the fears of those people and institutions that believe that the Land and Agricultural Development Bank is seemingly concerned about developmental activities instead of being a profit-driven agency, something must be done. We may be obliged to allow the bank to have two main administrative divisions in its set-up - the market-driven division and the development capacity division.

As things roll out to normalisation and the previously disadvantaged debtors stand on their feet, the development capacity division may have to slowly fade into a merger with the profit-driven division.

The amendments to the Bill, as reflected in clause 29 on the substitution of debtors, provide that even if the debtor has an attachment execution order by an ordinary creditor against his or her property, the bank has a statutory preferential right to the proceeds of the sale over the ordinary creditor’s right. Clause 34 of the Bill also gives gives some protection to the ordinary creditor to recover his or her debt should there be any surplus flowing from such sales and preferential rights accorded to the bank.

Therefore, as the IFP, we believe that every possible avenue has been explored to allow the bank to carry out two main functions, that is, ensuring that it is a profit-driven entity, and facilitating the removal of past discrimination and developing the aspirant farmers. The IFP supports the Bill. [Applause.]

Ms O R KASIENYANE: Chairperson, hon Deputy Minister and hon members, never has a Bill united agriculture and the banking sector in our democracy as the Land and Agricultural Development Bank Bill has, for no one within the two sectors has opposed it. Rather, our committee has just received inputs from these sectors supporting the Bill and suggesting improvements and changes here and there.

What is of significance is the fact that all those who made submissions supported the need for this new legislation and the changes to the Land Bank.

This Bill is a milestone for our department, especially for those of us who come from the rural areas. The need for a bank that will service our rural masses within the agricultural sector cannot be overemphasised, for it is the rural people who do not possess title deeds for the land that they plough. The establishment of the Land and Agricultural Development Bank will give them hope that we, as members of Parliament, do care about them. Had this Bill been passed in 1994, the Taung irrigation scheme in the North West would have been safe from decay. Farmers would have been assisted accordingly. But, as the saying goes, better late than never.

It is through this Bill that even rural village banks will be able to access funding in the form of grants or wholesale funding. The Government will also be able to utilise the infrastructure and capacity of the bank when it has to distribute emergency aid to our farmers.

Our Government has constantly been criticised by organised farmers for not subsidising them, hence their unfavourable competitive position in relation to European Union farmers. I believe that the favourable interest rate which farmers will be able to get from the Land Bank will, to some extent, counter this disadvantage and will assist in making our farmers competitive.

In trying to consolidate its financial muscle, and in line with the Income Tax Act, the bank must be allowed to accept deposits from all farmers within the agricultural sector. This will instil loyalty and will build goodwill within the farming community. This bank will be a one-stop shop for farmers. Our President said that South Africa was divided into two societies. This Bill also proves him right. It was clear from submissions by the Banking Council of South Africa that they were at pains to cling to their vested interests and privileges. Submissions from black farmers’ organisations were crying out for the immediate implementation of this Bill. However, we are practical men and women. We do not care whether the cat is black or white; so long as it can catch mice. Surely, this Bill is addressing the legacy.

The mistake that the Banking Council is making, is to try to equal the unequal, to compare the incomparable. The exemption of the Land and Agricultural Development Bank Bill from certain statutory provisions which apply to ordinary banks is there because the Land Bank is not a commercial bank. It is a vehicle that our Government is going to use to address the financial needs of our poor people. The Bill also gives the Land and Agricultural Bank preference over the creditors, and this is because it is the only institution that will overlook normal collateral requirements. In other words, the Bill is giving the Land Bank both the responsibility and the authority.

The suggestion by the Banking Council that the development mandate of the Land and Agricultural Development Bank should end at R200 000 is laughable. We do not know whether the Banking Council is implying that the development cannot be up to R2 million or more. I suggest that they should revisit the objects of the Land Bank so that they can understand the development mandate of the bank better.

The Banking Council must also tell us what it has done to address the market that this Bill has been aiming to attend to since 1994. For it is not the profit margins of the banks that are at stake here, but our moral obligation to uplift the lives of the people and address the past imbalances. Agri South Africa must be grateful for this Bill as it will enable this sector to cross the Rubicon. For the first time white farmers will not have the stigma of enjoying privileges that black farmers do not enjoy, and black farmers, of course, will now be able to graduate from being subsistence farmers to being commercial farmers, because through this Bill the Government is making sure that it is taking charge of the empowerment of black farmers. This country must, within five years, have sizeable numbers of black commercial farmers, and to that end this Bill is imperative. To organise black farmers, we say to them that this is a challenge to them, to teach their members about the opportunities the Land Bank now offers so that their members should not be the victims of ignorance.

Jaaka nngwe ya maitlhomo a molawana o e le go tlogela tsa maloba tse di maswe ditshwana le kgetololo ya mmala le bong, bomme ba rona jaanong, segolobogolo bao ba nang ka metse kwa magaeng, ba tlile go dira ka phutologo ba sa gadime morago. Ba tla be ba itse gore ba na le kemonokeng le tlhotlheletso. Gape go na le lefatshe la temothuo la bone. Diprograma tse di tlabeng di batsweledisa pele di tla be di le teng foo.

Tlhotlhoetso ya me go bomme ke gore ba gatele pele, gonne go na le bokamoso jo bo botoka. Ga jaana, ga ba kitla ba utlwa maipato a go tswa ditheong tsa polokelo tse dikgolo tse direng di tshwanetse go thusa ka matlole go balemerui. Se se tsenya tlhobaetso ya gore tlhwatlhwa e, e kwa godimo go ka thusa balemerui, segolobogolo bao santseng ba gagaba. Jaanong re tla bona bomme ka bantsintsi ba tsenela dikgaisano tsa molemerui wa ngwaga wa maemo a a kwa godimo. Go bomme rare ditšhono ke tseo, me a re di tsweletseng pele, re se salele kwa morago, me le rona re kgone go kokoroga. [Legofi.] (Translation of Tswana paragraphs follows.)

[Since one of the objectives of this Bill is to redress the ills of the past such as racial and gender discrimination, our women, especially those who live in rural areas, will be free to work with determination. They will be assured that they have support and influence. There will be agricultural projects aimed at their development.

I would like to encourage women to work hard for a better future. The excuses of the big banking institutions, which claim to finance the farmers, will not discourage them. The fact that it becomes difficult to assist farmers, especially emergent farmers, with funding, is of great concern. We will see an increase in the number of women entering the ``farmer of the year’’ competitions. We appeal to women to seize these opportunities to improve their lives, and thus live with their heads held up high. [Applause.]]

Mnr A S VAN DER MERWE: Mnr die Voorsitter, agb Minister, Adjunkminister en agb lede, dit is die eerste wetsontwerp wat gefinaliseer is onder voorsitterskap van die nuwe voorsitter, mnr Masithela. Ek wil hom gelukwens met die nuwe verantwoordelikheid wat hy ontvang het. Hy kan staatmaak op my steuning, solank hy in belang van die landbou en grondsake optree. Vir my as ‘n boer is alle sake wat die landbou raak ‘n eerste prioriteit.

Ek dink as ‘n lid van een van die opposisiepartye wat moontlik die langste saam met adv Holomisa werk, wil ek hom graag bedank vir die wyse waarop hy die portefeuljekomitee gelei het. Dit het maar selde gebeur dat die verskillende sienings van verskillende partye nie deur hom versoen kon word nie. Dit is te danke aan die wyse waarop hy die komitee gelei het. Hy was altyd kalm en beredeneerd, sodat lede meer geneë was om konsensus te bereik. Ons sal hom mis.

Die landbou in Suid-Afrika het ‘n Landbank nodig. Die Strausskommissie het ook aanbeveel dat die Landbank toegerus moet word om die doelwit te bereik om die ongelykhede van die verlede aan te spreek en ‘n program van regstelling daar te stel. Die Landbankwet van 1944 is bykans sestig jaar oud. Die behoeftes van landboufinansiering het wesenlik verander en was dit nodig om dié wetgewing te moderniseer. Verder het die Grondwet artikel 34 van die ou wet van 1955 ongrondwetlik verklaar en moes die artikels voor 9 Junie 2002 verander word. Ek sal teen die einde hierna terugkom.

Die landbou het ‘n finansier nodig wat die landbou se probleme verstaan en hom sal instel om aan die behoeftes, eiesoortig aan die landbou, te voldoen. Daar is boere wat op een hektaar grond of minder ‘n inkomste wil verdien, byvoorbeeld deur groente of enige akkerbouproduk te plant. Hulle het egter nie fondse nie.

Die Landbank het reeds ‘n skema daar gestel wat aan hierdie behoefte voldoen. Die bank leen R500 teen ‘n baie hoë rentekoers. Wanneer dit terugbetaal word, kwalifiseer die kliënt vir byvoorbeeld R1 000. Die kliënt bou dus ‘n kredietrekord met tyd op deur sy of haar getroue terugbetalings. Ek was bekommerd oor hierdie skema. Na my mening was die rente te hoog en die lening te riskant. Met ons besoek aan die Landbank in Januarie was my verbasing groot om te verneem hoe suksesvol die skema is. Na my mening is die persentasie slegte skuld baie laag vir sulke hoë riskante lenings. Ek haal dié tipe lening op om te illustreer dat daar besondere behoeftes is by nuwe toetreders tot die landbou. Dit illustreer die behoefte wat daar is vir ‘n instelling soos die Landbank.

Net spesiale voorskrifte en beskerming stel ‘n instelling soos die Landbank in staat om sy spesiale opdragte deur die wetgewing ná te kom. Ook bestaande boere benodig ‘n instelling soos die Landbank. Ek wil dankie sê vir die groot rol wat handelsbanke speel in die finansiering van die landbou. Die banke sal nooit bedreig word deur dié beskermingsmaatreëls nie. Dit het ook nooit in die verlede die handelsbanke bedreig nie. Die bedekte dreigemente dat hulle sal onttrek aan die landbousektor, hoop ek is nie ernstig nie. Dit sal ‘n tragedie wees.

Die Landbank kan nie die handelsbanke se plek inneem nie. So ook kan handelsbanke nie die rol vervul wat die Landbank moet inneem nie. Om die landbou in Suid-Afrika te ontwikkel en uit te bou, moet die twee instansies liewers hande vat. Dit is beter om dit wat pla met tyd te verwyder as om te onttrek aan ons gesamentlike taak om Suid-Afrika te laat werk.

Ek wil tog net na klousule 32 verwys. Ek verstaan wat die klousule wil bereik deur lede van ‘n vereniging aanspreeklik te wil hou. Die Landbank moet egter onthou dat hy die lening goedgekeur het en moet toesien dat daar betyds opgetree word, eerder as om lede wat lankal uitgetree het, aanspreeklik te hou. Miskien moet ons kyk om die aanspreeklikheid na die direksie en die uitvoerende bestuur en bestaande lede oor te dra, eerder as na uitgetrede lede. Die Nuwe NP steun die wetsontwerp.

Ek wil egter ‘n ernstige versoek rig dat wetgewing betyds geskryf of herskryf word. Ek weet nie wie verantwoordelik is vir al die vertragings nie. Die hofuitspraak het ons genoeg tyd gegee om hierdie wetsontwerp te verander. Ek meen dat dit onbedagsaam is om weens onnodige vertragings ‘n wetsontwerp soos hierdie een deur die portefeuljekomitee te wil jaag, want om onnodige druk op die komitee te plaas, beduiwel net gesindhede. Ons wil nie dit graag in die landbou hê nie. Dit is ook vir my onaanvaarbaar dat ‘n hoofrolspeler in die beplanning van die landbou in Suid-Afrika eers op 25 April 2002 die voorgenome wetsontwerp ontvang het. Dit is vir my onverstaanbaar. [Applous.] (Translation of Afrikaans speech follows.)

[Mr A S VAN DER MERWE: Mr Chairman, hon Minister, Deputy Minister and hon members, this is the first Bill to be finalised under the chairpersonship of the new chairperson, Mr Masithela. I want to congratulate him on the new responsibility that has been entrusted to him. He can rely on my support as long as he acts in the interests of agriculture and land affairs. To me as a farmer every matter that affects agriculture is a foremost priority.

I think that as a member of one of the opposition parties who possibly worked with Adv Holomisa the longest, I would like to thank him for the manner in which he led the portfolio committee. It was seldom that he was unable to reconcile the different viewpoints of different parties. This is thanks to the way in which he led the committee. He was always calm and reasonable, so that members were more inclined to reach consensus. We shall miss him.

Agriculture in South Africa needs a Land Bank. The Strauss commission also recommended that the Land Bank should be equipped so as to achieve the objective of addressing the inequalities of the past and to introduce a reconstruction programme. The Land Bank Act of 1944 is almost 60 years old. The requirements of agricultural financing have changed dramatically and it was necessary to modernise this legislation. Furthermore the Constitution declared section 34 of the old Act of 1955 unconstitutional and the articles had to be amended before 9 June 2002. I shall come back to this towards the end.

Agriculture requires a financier that understands the problems of agriculture and one that will attune itself to complying with the needs that are unique to agriculture. There are farmers who want to earn an income from one hectare of land or less, for example, by planting vegetables or crops. They do not have the money, however.

The Land Bank has already introduced a scheme to comply with this requirement. The bank lends R500 at a very high interest rate. When it is paid back, the client qualifies for R1 000, for example. The client therefore in time builds up a credit record through his or her faithful repayments. I was concerned about this scheme. In my view the interest was too high and the loan too risky. Upon our visit to the Land Bank in January I was very surprised to learn how successful the scheme is. In my view the percentage of bad debt is very low for such high-risk loans. I am making mention of this kind of loan to illustrate that there are exceptional requirements among new entrants to agriculture. It illustrates the need that exists for an institution like the Land Bank.

Only special conditions and protection can enable an institution like the Land Bank to comply with the special instructions by legislation. Existing farmers also need an institution such as the Land Bank. I want to say thank you for the major role that commercial banks play in the financing of agriculture. The banks will never be threatened by these protective measures. Nor did they ever previously threaten the commercial banks. I hope the veiled threats that they would withdraw from the agricultural sector were not meant seriously. It would be a tragedy.

The Land Bank cannot take the place of the commercial banks. Neither can commercial banks play the role that the Land Bank must play. To develop and expand agriculture in South Africa the two institutions should rather link hands. It is better to remove what is disconcerting over time than to withdraw from our joint task of making South Africa work.

I nevertheless want to make reference to clause 32. I understand what the clause desires to achieve by holding members of a society liable. The Land Bank must remember, however, that it approved the loan and that it should ensure that action is taken timeously rather than holding liable members who retired long ago. Perhaps we should look at transferring liability to the directors and executive management rather than retired members. The New NP supports the Bill.

I want to make a serious plea, however, that legislation must be written or rewritten timeously. I do not know who is responsible for all the delays. The court’s findings gave us enough time to amend this Bill. I think it is imprudent to rush a Bill such as this one through the portfolio committee owing to unnecessary delays, because placing unnecessary pressure on the committee only bedevils attitudes. We do not want that in agriculture. It is also unacceptable to me that a main role-player in planning of agriculture in South Africa only received the proposed Bill on 25 April

1. This I cannot understand. [Applause.]]

Mr D G MKONO: Mr Chairperson, hon Minister and hon members, I am honoured to take part in the debate on this Bill on behalf of the hon Abram, our spokesperson on agriculture and land affairs, who is unable to be here today due to other parliamentary duties, in Pretoria, as a member of the Joint Standing Committee on Intelligence.

The Bill before us must be seen as an important empowerment measure. The Land Bank was originally brought into being to assist in resolving the poor white problem and to place white people in commercial agriculture. It contributed in no small measure in advancing that cause. With the advent of democracy in 1994, its focus had to change. Millions of our people were excluded from this sector. Historical imbalances still exist and our people are yearning to enter the agricultural sector. The Land Bank thus became the central and pivotal instrument which could help them in their lives and turn into reality the frustrations and dreams of our people. This amending Bill is but a small step towards realising that goal.

The majority of our people do not have access to financing. For them the reality is that commercial banks provide an umbrella where it does not rain. The Land Bank has created a product which is called the step-up loan, where a small amount is borrowed without any security and, when it is fully repaid, the borrower may borrow a high amount and, in this way, build up a credit track record. The Land Bank has developed several products, all aimed at providing access to finance for the benefit of the previously disadvantaged communities.

Whilst it is currently involved in assessing rand grants, this Bill goes a long way towards providing a one-stop service to our people. The Bill also provides for the Land Bank to promote joint ventures in agri-related enterprises, a new feature which can only benefit new entrants. Whilst the Land Bank will be able to continue serving the interests of commercial agriculture, it will now be able to fast-track the agricultural sector plan in so far as it relates to its sphere of activity.

The Land Bank’s current loan book stands at R16 billion, which represents approximately 50% of South Africa’s agricultural loan book. The bank aims to fast-track peaceful and orderly land redistribution and offers grants from R20 000 to a maximum of R100 000, depending on the applicant’s own contribution. I urge our people to empower themselves by making use of these facilities.

The promotion of joint ventures will now see many of our people entering agribusiness in developing value-added products. These are some of the numerous opportunities in this sector and, in terms of the provisions in this Bill, we will be able to kickstart it. The Land Bank will have to actively pursue, as an agent for the Departments of Agriculture and Land Affairs, viable means of kickstarting rural development so that rural people will find it attractive to remain in there and help stabilise rural communities. It can also, in co-operation with the Tourism Board, help develop agritourism.

HIV/Aids is also wreaking havoc, especially in rural areas where several of the eldest children in households where both parents have died have assumed the mantle of responsibility. Ways will have to be found to empower these young people towards self sufficiency. It stands to reason that commercial banks have expressed dissatisfaction with some of the provisions in this Bill. Our problems are unique and we need to find unique solutions. The Bill before us aims to address that by financing commercial farmers.

The commercial banks seldom lose out. Our people who face tremendous odds cannot be served by commercial banks in this sector. They can never provide products … [Time expired.]

The CHAIRPERSON OF OF COMMITTEES: Order! Can we lower our voices, please. The noise level is rather too high.

Mr P H K DITSHETELO: Mr Chairperson, the proposed amendment to the Land Act, Act 13, of 1944, was necessary in the light of the Strauss commission’s recommendations. These recommendations, also supported by the court ruling, necessitated the existing amendments to the Act.

The most important principle of the Strauss commission was its emphasis on access to finance by emerging farmers. We have in the past and present advocated that the bank adopt flexible and realistic funding criteria including the mechanism of recovering its debts from the emerging commercial farmer’s loan advanced to them. We all know that agriculture is the backbone of our economy, employing mainly the poorest of the poor in rural areas. It is this sector that we need to support financially.

With the democratisation of our country the role of the Land Bank became a focal point of discussion as to how the bank was geared in meeting the new challenges of providing access to its facilities for all South Africans irrespective of their background. It is not a secret that many black farmers in the past were funding their farming operations from their personal savings without any help from financial institutions.

There are also reasons advanced as to why the bank would not fund certain projects as initiated by the emerging farmers. The question of risk and security appears to be the key determining criterion as to whether or not a loan will be granted. With regard to those who are funded by the bank, it is revealed that they are unable to meet their payment obligations in time, and those who succumb to bankruptcy are exposed to the bank’s ruthless debt collection methods. To us it is not so much about the collection of debts but about the manner in which clients are treated.

Therefore, the Bill with the current amendment will, to a large extent, address the constitutional requirements of the Act to comply with the court ruling. Above all, the Bill will be a first step in empowering the bank to carry out its new mandate to empower aspirant and existing farmers. The UCDP supports the Bill. [Time expired.] [Applause.]

Mr N W MUDAU: Chairperson, my point of departure derives from our mandate after our people spoke for the second time in the history of South Africa. The mandate was a very clear one. It was to better the lives of our people. As a member of the ANC, which is an agent for change, I can say that we have the responsibility of carrying out this mandate and doing so successfully without failing our people. We will continue to give priority to agriculture in all our work that involves the economy.

Following the Strauss commission report in 1997, the Land Bank had a mandate to deracialise the agricultural sector and to ensure that the resources for emerging farmers were made available. Lessons have taught us that financial assistance on its own is insufficient and that rural development and poverty alleviation do not come from throwing money at the problem. Instead an inclusive package to customise products, with technical and non-technical skills transfer as well as continuous monitoring and support, is essential for effective capacity-building.

The committee is happy about the decision taken by the Land Bank board of directors, which, after realising the above challenges, set aside money in order to achieve the following objectives: to make skill - and capacity- building programmes available to emerging farmers; to contribute to agricultural education by providing bursaries to students wishing to make a contribution to rural upliftment; to fund certain programmes at educational institutions aimed at rural upliftment for the agricultural sector.

I am sure that the hon members in this House will agree with me that young people are the future of their motherland and the hope of the nation. Therefore I could practically say that there cannot be any integration without education.

Allow me also to mention briefly some of the projects and products of the Land Bank that are also aimed at poverty alleviation, job creation and the empowerment of the previously disadvantaged.

The Land Redistribution for Agricultural Development programme was officially launched in August 2001 at the Nkomazi irrigation scheme in Mpumalanga. Through the LRAD, the Land Bank, acting as an agent of the Department of Land Affairs, is to fast-track peaceful and orderly land distribution. Beneficiaries are able to access grants to purchase land and loans to start agricultural or agriculturally related businesses on their newly acquired land. Individuals can get a grant from a minimum of R20 000 to a maximum of R100 000, depending on the individual’s own contribution.

Through the Step-up repayment scheme the Land Bank encourages individuals to make a shift from being job-seekers to becoming job-creators, thereby creating job opportunities in their communities. Under this scheme the bank has already lent R117 million to over 70 000 clients who are mostly women.

This reflects a commitment to create entrepreneurs who will uplift communities and eradicate poverty. What is interesting in this is that the clients attend seminars before the applications are processed.

Therefore there is a need for a massive awareness campaign programme on the products of the Land Bank by the bank itself and by hon members, particularly when we do our constituency work, to make sure that our people are aware of these products, the system itself, and how to acquire those loans.

Perhaps we should also look into the question of getting satellite offices of some kind in the far rural areas which would assist those communities up there.

There is a great need to encourage our people to form agricultural co- operatives with the assistance of the Land Bank. Clear guidelines need to be developed for the targeted groups. One is mentioning these because co- operatives have historically been important in transforming the rural economy. It is therefore important that the Land Bank’s mandate must include the promotion of co-operatives.

The Land Bank is simply too important a body in terms of food security and the rural labour market to allow it to be raided by an emerging rural bourgeoisie that enjoys preferential access to political levels and this easy financing. This is why the Land Bank must include in its mandate the promotion of collectively and co-operatively owned enterprises based on land use. The Land Bank must become a strong and sustainable rural people’s lending institution.

Therefore this Bill must make it possible for the Land Bank to develop and become such an institution. In future this may require the undertaking of major restructuring that may transform the bank’s current viability and operating style. The Bill must not close off such possibilities for the bank.

There is a need to look to other countries for advice and support - countries such as the Philippines, with their diverse range of rural and other banks. We also have to look more seriously at our own models, such as the Investment and Financial Services Association Ltd and the village banks. [Applause.]

Dr M S MOGOBA: Chairperson, the PAC supports this Bill. The objects of the new Land and Agricultural Development Bank Bill read like the objects of the PAC. For us the question of ``equitable ownership of agricultural land, in particular the increase of ownership of agricultural land by historically disadvantaged persons’’ - these are the exact words of the Bill - is, actually, the core issue of transformation.

If one got into a car and drove from Pietersburg to Pretoria; or from Pretoria to Durban or Cape Town, etc, one would realise that South Africa is a large country, with vast expanses of land. But on both the right-hand and left-hand side of the car, for all the kilometres and hours of travelling, one would see land which the previously disadvantaged persons do not own or occupy, in sharp contrast to shocking overpopulation in the locations, resettlement camps and villages.

The purpose of this Bill is to address that anomaly. It is a basic transformation and development Bill. To bring about change among poor people is easier said than done. We need to bring resources and opportunities of development to the vast majority of the population of this land. We should all support this Bill, not only as we debate and pass it, but, more importantly, as it enters the implementation phase. Our future as a country depends on the work of this bank. We in the PAC, I repeat, support this Bill.

May I, in the last minute, congratulate the new chairperson of our committee, Mr Masithela, but in a very special way thank the outgoing chairman. I thought it was one of the best things that the ANC ever did to get a chief to head this committee, because there is a real tie-up between the land and the work of a chief.

Mr S B FARROW: Chairperson, the Bill before us today is the result of the recommendation of a Commission of Inquiry led by Strauss into the provision of rural financial services. The commission released its report on 18 September 1996 and Cabinet approved the recommendations on 6 August 1997. As a result of a Constitutional Court ruling which has been addressed here by previous speakers, in the case First National Bank of South Ltd v Land and Agricultural Bank of South Africa, Sections 34 and 55 of the Land Bank Act were judged unconstitutional. These sections had to be amended or replaced before 9 June 2002, so there was nearly a two-year period allowed to escape invalidation.

Sections 34 and 55 provided remedies for the Land Bank against defaulting debtors, permitting the Land Bank to recover debts without recourse to a court of law and other legal processes. This, in effect, conferred a form of statutory preference on the bank.

Two years later, the resultant passage of the Bill, since the Minister announced the intention to introduce it to the House, has been, to put it bluntly, nothing but rapid.

The portfolio committee received the Bill in its original form on 24 April. Many stakeholders did not have the full opportunity to put forward their concerns within the two meetings of the portfolio committee, and many amendments had to be made. The DA appealed for the Bill to be presented again in its amended, clean form, and for a clause-by-clause type of approach to be taken, only to find that this opportunity was not possible because of the attempt to get the Bill into the processes of Parliament. Today we sit in this House debating the Bill, not really having had time to properly apply our minds to its final content, which we received at 12 o’clock today.

Two particular matters raise concern. The first one is how the Land Bank will operate within the framework of the Financial Services Board Act in the light of its dual role as a profit-orientated financial institution on the one hand, and a development institution on the other. In this regard, the Strauss commission recommended that they support the need for a financial institution with both wholesale and retail activities, and the responsibility to dedicate special attention to the needs of land reform programme beneficiaries.

In order to foster an integrated approach to both urban and rural development, the commission further considered it essential to create an entity to co-ordinate and guide the activities of development finance institutions. In this regard they have proposed the establishment of a development council, which should, in terms of statute, secure the co- ordination of national finance institutions across South Africa under the Department of Finance.

In identifying the need for direct grants during the establishment phase of its new responsibility, this grant should be assessed at the outset and annually thereafter, on a three-year cycle. That is what the Strauss commission said. The grant should be administered through a separate line budget, thus keeping apart the profit-orientated finance activity from the development one, and I think the Deputy Minister alluded to that. Now I know that this could be perceived as operational detail, but unless these aspects are clearly defined upfront, the Land Bank could, once again, because of statutory privilege, be challenged in the courts. This aspect was strongly argued, as it was quite rightly said, by the Banking Council, which referred to the three reports that emanated from the SA Law Commission, including the Strauss commission, which concluded, that, inter alia, the statutory provisions that provide preferential credit status to the Land Bank should be dropped.

I am not a legal person, but one has to take into consideration some of these submissions when passing legislation in this House. Although we in the DA respect and agree on the concepts of the Bill in bringing about equity and levelling the playing fields in regard to historically disadvantaged farmers, it seems inappropriate to have to pass legislation that could have legal recourse and therefore require further amending, merely because we have not done a thorough or professional job.

The second issue which I would like to raise as a concern is the need for this Bill to be harmonised with the strategic plan for agriculture, which was released by the President at the end of last year. This plan clearly mentions the need to devise innovative financial instruments to help new and existing farmers manage the effects of high interest rates on cash flow, the importance of financial institutions’ being globally competitive, innovative substitutes for collateral, and the establishment of locally based and micro financial institutions that include financial service co- operatives and village banks. Yet the Bill eludes these and other issues.

At a portfolio committee meeting these issues were tabled by Agri South Africa, and it was agreed that as an annexure to this Bill a code of good practice needs to be drawn up, which will cater for these concerns raised.

I would further argue that in terms of good governance, protocols should be entered into with the Departments of Agriculture and Land Affairs to ensure that certain actions relating to land settlement, land reform and restitution are addressed by this Bill.

We are informed today that some 669 000 hectares of state land has been or is in the process of transfer, and it is imperative that once ownership is acquired, the bank offers a package service to these emerging farmers, including capital, extension, marketing and risk-management, because without these one is going to end up with a lot of failures.

If we as members of Parliament in this House want to see this piece of legislation work, then it is imperative that we ensure that the bank meets its objectives, and in so doing be in a position to be held accountable for its actions. The DA hopes and trusts that the piece of legislation before us today meets up to the expectations of many of our disadvantaged rural communities who wait in anticipation to become part of land ownership, sustainable agrarian reform and development in South Africa. The DP supports this Bill.

I would just like while I have a few seconds here, to raise an issue relating to the remuneration of many of the senior managers and the CEO of this bank, which created so much controversy last year or the year before. In terms of clause 17, I think, the onus now lies on the Minister to actually look at those issues to ensure that we are not getting these highly paid executives in the office of a parastatal of this nature. [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! May I just call the House to better order. I think too many of you are carrying on a debate concurrently with the person speaking.

Miss S RAJBALLY: Chairperson, the issue of land still haunts South Africa. The injustices of the past, the Group Areas Act, the eviction of people, the robbery of land from the inhabitants of South Africa resulted from the era of colonialism and apartheid.

Our Government seeks to compensate those losses with equity. This Bill also seeks to assist in correcting the injustices of the past and to bridge the gap. It promotes equitable ownership of agricultural land by increasing the ownership of such land by historically disadvantaged groups. It also mobilises the dormant potential of those who have slogged on such farms and have the knowledge to run them but were never allowed to make profit out of that knowledge.

The MF is glad that this Bill serves to institute agrarian reform and land restitution, programmes to facilitate farming and agricultural enterprises among the historically disadvantaged.

Although our Constitution has outlawed racism and discrimination, it is sad to note that the presence of these is still felt. We have media coverage of a number of incidents that visibly exhibit them. Through Bills such as this one, Government may pick through the many sectors with a fine-toothed comb to eradicate completely racism and its horrible cousin, discrimination, from our society.

This Bill assists in working that comb through the agricultural sector in eradicating the past racial and gender discrimination evident in this sector. The MF supports the Land and Agricultural Development Bank Bill. [Applause.]

Mr P J NEFOLOVHODWE: Chairperson, one of the imbalances we inherited from the past is access to finance and land by black people. This phenomenon is still with us today.

The Land and Agricultural Development Bank Bill seeks to remedy a situation where the majority of black farmers and would-be farmers are not able to access finance and land for agricultural production. Azapo supports this Bill because fundamentally it seeks to establish a bank whose objective it is to effect change in the patterns of landownership by increasing ownership and participation in the agricultural sector, as well as providing financial support to historically disadvantaged poor people.

To Azapo any acceleration in efforts that facilitate the equitable ownership of agricultural land and other forms of land will always get our support. When this Bill becomes law, for the first time, black people will have a friendly bank where the agricultural needs of black people can be catered for.

The participation of the majority of our people in agriculture will indeed increase our capacity to feed the nation. For the first time in the lives of the majority, there will be at least one bank in our country that can claim to serve the agricultural needs of the poor. There is no other bank in this country that serves the interests of the poor. [Applause.] Dr E A SCHOEMAN: Chairperson, colleagues, in his most recent annual report, Eskom chairman R J Khoza conceptualises the Africa of the new millennium, and states, inter alia, the following:

An Africa more excited by its future than by its past. An Africa whose scope for growth is limited only by its imagination. An Africa that has successfully translated its concepts of humanity and communal relations into vibrant co-operative models of governmental, institutional and individual relations. An Africa whose intellectuals are nurtured by indigenous founding principles and insatiable enquiry. An Africa that redefines the term ``emergent’’ from one of condescension and derision to one of economic, political and cultural vibrancy, and technological prowess.

He then goes on to say that Africa needs business leadership, and I quote:

… whose defining features are probity, humility, integrity, compassion and humanity; that demonstrates competence, tenacity and a sense of efficacy; that practises introspection and self-renewal; that strongly believes that the locus of control for Africa’s future is within Africa herself; that does not consume seed capital but invests for the generations to come; and above all else, that is visionary!

In many ways this also encompasses the vision of the Land Bank in its pivotal developmental role within South Africa’s agricultural sector. The realisation of the dreams of a democratic South Africa in 1994 could never be seen or experienced as a goal in itself. It was but a beacon on the road towards the attainment of a fair and just, democratic, nonracial, and nonsexist society. Before this goal is attained, we as the torchbearers of the political consciences and aspirations of the people, have not succeeded.

The equitable redistribution of land and broadening the base of commercial agriculture are fundamental to the success of a national democratic revolution. Sustainable agricultural practice will enhance the lives of rural people. Progress in this regard will determine if the prophets of doom, who predict a Zimbabwe type of land reform in South Africa, are proved correct or not. The Land Bank will play an essential role in this regard. Farms repossessed as a result of payment default must be earmarked for redistribution.

The Land Bank Act, Act 13 of 1944, provided for the establishment of an institution providing financing services advantageous to bona fide - and one can read, ``white’’ - farmers in the old South Africa. After 1948 the Land Bank became, with rare exception, an instrument of the government rewarding those who belonged to the right party, or better still, who belonged to the right secret organisation. The Land Bank and the Agricultural Credit Board were all but in name exclusive institutions, legalising rewards to the party faithful.

A study of land transactions prior to the announcement of the Orange, or as we know it now, the Gariep Fish River Project, and the subsequent appropriation of land destined for irrigation, should make interesting reading. Similarly, the beneficiaries of land and property acquired under apartheid legislation, more often than not, had an inside track within government.

Hoe traumaties dit ook al mag wees, moet hierdie waarhede openbaar gemaak word. Dit help nie om die huidige Regering oor die korrupsie wat bekend gemaak word deur die waghonde wat hy self ingestel het te verdoem nie, terwyl die institusionele korrupsie van die ou regering onder die mat gevee word. (Translation of Afrikaans paragraph follows.)

[Traumatic as it may be, these truths have to be made public. It is no good running down the present Government in respect of the corruption that is being uncovered by the watchdogs appointed by it, while the institutional corruption of the old government is being swept under the carpet.]

Enough about the past. What is of importance is that since 1994 the Land Bank has become a positive instrument for change. The bank is now accessible to all, white and black, those previously advantaged or disadvantaged. The process gained momentum under the guidance of former CEO Helena Dolny, and she deserves our commendation for her positive leadership in the transformation of this institution.

Despite amendments to the Land Bank Act, Act 13 of 1944, in 1995 and 1998 it became apparent that the old Act could no longer stand the test of time. The Constitutional Court ruling underlined this imperative. This Bill, when enacted, will undoubtedly provide the basis for the Land and Agricultural Development Bank to play its rightful role in the rural development of South Africa.

In a broad definition of its mission, the Land Bank as a financial institution slots in where the commercial financial institutions are either unwilling or unable to become similarly involved. It is an institution established by Government which will, in line with ANC policy, be instrumental in creating a just and equitable society in the rural areas, and we do not apologise for that. [Applause.]

It is accepted that commercial banks have a significant involvement, in the vicinity of R11,172 billion, in the agricultural sector. This interest, however, is virtually exclusively limited to the commercial sector. In relation to the total business of these institutions, it is, however, relatively minute, plus-minus 2%.

In its presentation to the portfolio committee, the Banking Council of South Africa insisted on the level playing-field principle and threatened recourse to the Constitutional Court and the closure of branches in rural areas, if the Bill was not amended accordingly.

Enough has been said about the so-called offending sections regarding exemption from the long-term insurance Act, statutory pledges, remedies on default, general operations, immovable property, preparation and execution of documents, exemption from stamp duties and other fees, evaluations - and transitional matters.

The countries of the developing world are in general forced to compete on an unlevel playing field against the developed countries. Agriculture in particular is subjected to unfair discrimination. Massive subsidies are given to farmers both in the EU and the US. In the latter, we just heard, increased subsidies amount to $180 billion over the next few years. On the contrary, the liberalisation of agriculture in South Africa has resulted in one of, if not the, most deregulated agricultural sectors in the world.

Incidentally, I would like to congratulate our former Minister, Comrade Derek Hanekom, for being honoured with an award from the Free Market Foundation for his role in freeing the agricultural marketing sector. [Applause.]

In this environment, it is demanded by Sacob that there be a levelling of the playing field and that transformation within agriculture must proceed. With respect, there is no way that our emerging farmers, whom we want to assist to become the commercial farmers of tomorrow, can be subjected to the ravages of the market economy. Special financing and marketing measures are indispensable for their progress and survival.

The motives of any person or institution opposing this must be questioned. The involvement of commercial banks in the micro- lending business was clearly not for the upliftment of the previously disadvantaged sector, but for the harvesting of envisaged massive profits in the short-term, high- interest, high-risk sector. That they burnt their fingers might be a bit of poetic justice.

The acid test for commercial banks is the mere fact that their interest on small deposits is completely eroded by excessive banking costs. My message to them is that they should get their house in order before attacking a credible institution such as the Land Bank and threatening court action.

Approximately 41%, which is R13,7 billion, of the commercial agricultural debt is owed to the Land Bank. This involvement of the bank counterbalances its exposure in the emerging sector. Obviously, its more secured loans assist in the ability to provide loans in the developmental sector. This dual role of the bank cannot be separated. Accordingly, it is to be welcomed that the portfolio committee was unanimous in its acceptance of an amendment which was put forward by Agri SA to state, in the preamble of the Bill, that one of the objectives of the bank is to promote a competitive and profitable agricultural sector.

The Land Bank - under the chairmanship of Mr Sam Mkhabela and the CEO, Mr Monwabisi Fandeso, and his management team - is geared to meet the challenges facing agriculture in South Africa. They are relatively young, energetic and visionary. They are part of the new generation of professionals of whom we are justly proud. [Applause.] They are prepared to work hard and smart to ensure a better life for all, especially our rural poor. [Applause.]

The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Mr Chairman, I would like to first of all thank all those who participated in this debate for their support of this Bill. Now that he has succeeded in passing his test here, I would also like to extend my congratulations to the new chairman of the committee, Mr Masithela, who is my old friend from the Free State. [Applause.] From my side, I would also like to thank the previous chairman for the great role that he has played in this committee and for the excellent way in which he has done his work.

Let me answer a few of the matters that have been raised by the speakers. Dr Kraai van Niekerk suggested that additional funding should be found, through Parliament, in order to cater for development. In actual fact, the Bill already makes provision for that in clause 22 (1) (d). Should it become necessary, it is a policy decision that has to be taken by the Government and Parliament. The provision is there to take care of the situation, should additional funding be necessary.

He also asked about the practice by which, in terms of the income tax law, farmers sell cattle during the times of drought, for example, and then invest in the Land Bank, and whether that will continue. I can gladly confirm that that will continue. There is no intention to work on that matter and amend that arrangement in the Income Tax Act. It is a very advantageous system. We need it in South Africa. By the way, Dr Van Niekerk asked to be excused and said that he would not be present at this stage, understandably, for certain personal reasons.

Could I just, then, thank Mr Bhengu for referring to the question of communal land in his speech.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, especially the members of the Deputy Minister’s own party, you should be giving your own member the maximum amount of support rather than continuing with your own debates.

The DEPUTY MINISTER: Mr Chairman, they are discussing what I am saying here. [Laughter.] [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! If they are, then I think that they are well within the order of the House. But, if not, they are outside of the orders.

The DEPUTY MINISTER: Mr Chairman, I wanted to comment about what was said by Mr Bhengu regarding the communal land system. He said that there, the Land and Agricultural Development Bank Bill must work for the betterment of our people. Yes, I think that we must definitely find methods in which the Land Bank’s services may be used for their purpose in communal areas. I do believe, however, that certain other legislation must first be considered by Parliament before we can really talk about a technique that works. The point is: We must get a result there.

Regarding the contribution of Comrade Kasienyane, with special reference to Taung, I would like to say that I know the area and I just do not want to die before Taung has been re-established as a full productive area. [Applause.] We must work there. Could I just say that, in brackets, there is a lot of detail around the Land Bank. Hon members should know that, regarding women, the Land Bank has a microfinancing scheme which accentuates its development role and which is called the Step-up programme. Under that scheme, I believe, some R170 million has been lent to 70 000 clients, most of whom are women. It is a special product which is used a lot by women. The interesting thing is that the repayment rate of that scheme is 86%, which is excellent given the area in which work is being done. [Applause.] Women pay their debts, apparently - they do. So I would like to thank Ms Kasienyane for her observations around the democratisation of the Land Bank. It is not only for whites any more.

I think that I must make my comments and conclusion because, apparently, my time is running out. Mr A van Niekerk commented a lot about the problem of the delays in this Bill. Could I just state it as a fact that the Bill was delivered to the state law advisers on 31 July last year. We got it back in October, which is a long time. It was not the individual legal adviser who sat on the matter for so long but, apparently, some delay has been experienced in the administrative procedures pertaining to the state law advisers. I do believe that we must, in a co-operative fashion, work through the Speaker and the state law advisers to address this problem. I also think that the Whips in Parliament should take some initiative.

I actually wanted to reply to every member who spoke but it will not be possible. Regarding the matters which Mr Farrow addressed, I would like to say that the Financial Services Board did not raise its concerns in the portfolio committee. They were addressed and solved by our team, together with the Financial Services Board, outside of that procedure. Mr Farrow asked that a percentage which should go towards development must be indicated in the Bill, and another percentage which will go towards commercial work. I do not think that that is possible at all, because it is not a legal matter at all. It is a financial matter which must receive attention from time to time regarding how one balances developmental and commercial financing. It depends on financial circumstances. One cannot fix it in the Bill for all time.

By the way, I would like to indicate to Mr Farrow that the code of conduct is not an annexure to the Bill. It must still be developed. The remuneration of the CEO and other high officials of the Land Bank is, of course, a matter which will receive the closest attention of the Minister.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Deputy Minister, start to conclude now. I have given you a little more time. Please, do conclude now.

The DEPUTY MINISTER: Thank you, sir, I will conclude. Regarding the remuneration, we must bear in mind that the loan book of this bank is about R16 billion, and that does reflect on the type of remuneration that should be earned. But I am sure that the Minister has a keen sense of what the bank must attain and what type of personnel is needed for that.

I do thank the members for the debate. Thank you, Mr Chairman. [Applause.]

Debate concluded.

Bill read a second time.

The House adjourned at 18:20. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                         MONDAY, 20 MAY 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Minister for Agriculture  and  Land  Affairs  submitted  the
     Wetsontwerp op die  Land-  en  Landbou-ontwikkelingsbank  [W  12  -
     2002]  (National  Assembly  -  sec  75)  to  the  Speaker  and  the
     Chairperson on 17 May 2002. This is  the  official  translation  of
     the Land and Agricultural Development  Bank  Bill  [B  12  -  2002]
     (National Assembly - sec 75), which was introduced in the  National
     Assembly by the Minister on 15 March 2002.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Water Affairs and Forestry:

 Annual Report and Financial Statements of the  Lepelle  Northern  Water
 Board for 2000-2001.

National Assembly:

1. The Speaker:

 (1)    Fourth Report of the Working Group on the African Union


     Part 1: Activities of the Working Group


     A. Introduction


     The Working  Group  was  established  on  16  November  2001  by  a
     resolution of the National  Assembly.  The  primary  focus  of  the
     Working  Group  was  to  consider   the   implementation   of   the
     Constitutive Act of the African Union.


     B. Objectives of the Working Group


     The brief of the Working Group is to:


          *   Consider Parliament's participation in the  implementation
              of the Constitutive Act of the African Union  and  suggest
              appropriate procedural mechanisms for this.
          *   Determine the involvement of Parliament in  assisting  the
              South African government in the process of  implementation
              of the African Union.


     C. Meetings of the Working Group


     The Working Group met on 15 January  2002,  14  February  2002,  27
     February 2002, 28 February 2002, 7 March 2002, 18  March  2002,  30
     April 2002 and  10  May  2002.  The  Working  Group  established  a
     Planning Team to address detailed planning and  technical  matters.
     The Planning Team held its first meeting on 19 February  2002.  The
     Working Group met with members of the  Inter-Ministerial  Committee
     on the African Union on 28 February 2002  to  discuss  the  African
     Union.


     D. Seminar on the African Union


     A seminar on the African Union was held on 1 and 2 March  2002,  in
     cooperation with the Africa  Institute  of  South  Africa  and  the
     Institute  for  Global  Dialogue.   Members   of   Parliament   and
     representatives from the Departments of Foreign Affairs  and  Trade
     and Industry attended the seminar. The objectives  of  the  seminar
     were to:


          *   Acquaint Members with the African Union (AU).
          *   Allow Members to engage with the challenges posed  by  the
              implementation of the Constitutive Act.
          *    Encourage  Members  to  consider  the  participation   of
              Parliament in the process of shaping the evolution of  the
              AU.
          *   Discuss the role of South Africa in the implementation  of
              the Constitutive Act.
          *   Share knowledge and insight with the  research  institutes
              and Government Departments present.


     Part 2- Record of Working Group Discussions


     E. Summary of Seminar Discussions


     Following its reports to  the  National  Assembly  on  27  February
     2002, 12 March  2002  and  18  March  2002,  interaction  with  the
     members of the Inter-Ministerial  Committee,  deliberations  during
     the aforementioned meetings, including the seminar on  the  African
     Union and the debate on the African Union on 12 March 2002  in  the
     National Assembly,  the  Working  Group  wishes  to  highlight  the
     following  considerations  regarding  the  establishment   of   the
     African Union and the implementation of  the  Constitutive  Act  of
     the African Union.


     1. Political Considerations


     Consideration should be given to, amongst others,  issues  such  as
     what  constitutes  a  conducive  political  environment,  political
     integration, ceding sovereignty, and human rights.


     (a)     Political Environment
          *   In the transition from the OAU to the  AU,  membership  to
              the AU is open to all Member States of  the  OAU  (Article
              27).  In the future,  consideration  should  be  given  to
              whether to maintain  this  principle  of  inclusivity  for
              Member  States  whose  political  environments   are   not
              conducive to the attainment of the objectives of the AU.
          *   Mechanisms need to be developed to encourage Member States
              to  create  and  maintain  political   environments   that
              promote democracy and good governance.


     (b)     Political Integration


          *   Political integration may be seen as a means through which
              African States are  empowered  to  face  their  respective
              challenges.  The  AU  can  be  perceived  as  an  evolving
              structure responding to the challenges facing Africa.
          *   There is  a  need  to  bridge  historical  and  linguistic
              divisions  in  Africa   in   order   to   promote   unity,
              solidarity, cohesion and cooperation among the peoples  of
              Africa and African States.


     (c)     Ceding Sovereignty


          *   The Constitutive Act provides  for  political  and  socio-
              economic integration and a common  defence  policy,  which
              could impact on the  sovereignty  of  States.   Thus,  the
              constitutionality of ceding  sovereignty  with  regard  to
              these issues raises some concern.
          *   South Africa may need to consider the principles and terms
              of ceding its sovereignty in a way that  does  not  impact
              negatively on the human rights of its citizens.  A  phased
              and strategic approach may be necessary.


     (d)     Human Rights


          *   In respect  of  human  rights,  it  may  be  necessary  to
              consider an appropriate role for the Commission  on  Human
              and Peoples' Rights in relation to the AU.
          *   With regard to the Charter on Human and  Peoples'  Rights,
              it is noted that there  have  been  many  developments  in
              international human rights law, since the adoption of  the
              Charter in 1987.  A review of  the  Charter  to  establish
              congruence with current human rights law thereby  ensuring
              the effective promotion and protection of human rights  as
              envisaged under Article 3 of  the  Act  may  therefore  be
              required.


     2. Legislative Considerations


     Some of the key legal considerations include the following:


          *   Legal implications
          *   Drafting and interpretation
          *   The Court of Justice
          *   The Central Organ
          *   International Intervention
          *   Organs of the AU
     (a)     Legal implications


          *   Legal opinion received from the South  African  State  Law
              Advisers indicates that the Constitutive  Act  of  the  AU
              does   not   conflict   with   domestic   law.     Further
              consideration may need to be given to whether the  Act  is
              consistent  with  International  law  and  South  Africa's
              international obligations.
          *   Whilst the  Constitutive  Act  does  not  have  any  self-
              executing provisions, Member  States  may  be  obliged  to
              harmonise existing, or enact new domestic  laws  in  order
              to  give  legal  effect   to   the   provisions   of   the
              Constitutive Act.
          *    South  Africa  may  need   to   consider   amending   its
              Constitution  to  accomodate  its  obligations  under  the
              Constitutive Act.


     (b)     Drafting and interpretation


          *   Attention may need to be paid to  inconsistencies  in  the
              drafting  of  the  Constitutive  Act.   The  'soft'  legal
              drafting in Article 3(c), (l)  and  (n)  compared  to  the
              definitive legal drafting in  Article  9(a),  for  example
              may create some ambiguity and vagueness in the Act.
          *   There appear to be no contradictions  or  ambiguity  among
              Articles 4 (a), (g), and (h). Article  4(h)  dealing  with
              grounds for intervention by the Union in  the  affairs  of
              Member States should take into account Article  3  (h)  in
              respect of reference to the promotion  and  protection  of
              human  rights.   Consideration  may  be   given   to   the
              expansion of  the  grounds  for  intervention  to  include
              violations of human and peoples' rights.
          *   To  facilitate  democratic  decision  making,  checks  and
              balances may need to be built into the  Constitutive  Act.
              In this light, the quorum for Assembly decisions may  need
              to be re-examined,  particularly  with  regard  to  policy
              decisions and issues relating to ceding sovereignty.
          *   The Act needs to be revised  to  reflect  gender-sensitive
              language.


     (c)     Court of Justice


          *   It is suggested that  the  Protocol  makes  the  Court  of
              Justice the supreme  institution  for  the  protection  of
              peoples and human rights.  In terms of the  South  African
              Constitution however,  the  Constitutional  Court  is  the
              supreme  court  protecting  basic   human   rights.    The
              consequences of deferring  or  referring  matters  to  the
              Court of Justice may need to be considered.
          *   With reference to Article 3(h),  it  is  likely  that  the
              Court of Justice will make decisions based on the  African
              Charter which may have become outdated in terms  of  human
              rights.   The  South  African  Constitution,  being   more
              recent, is more in line with international  best  practice
              in  this  regard.   Also,  the  equality  clauses  in  the
              African Charter and the  South  African  Constitution  are
              different.  The Court of Justice will  therefore  function
              from  a  different  legal  basis.   This  may  cause  some
              tension. Mechanisms may be  required  to  regulate  issues
              that can be brought before the Court of Justice.   Further
              discussion is required regarding the jurisdiction  of  the
              Court of Justice.
          *   While South Africa has extended the right to class actions
              to organs of civil society in the interest of the  public,
              many countries do not make a similar provision.  Thus,  if
              the Constitutive Act  provides  for  class  actions,  some
              Member States would need to pass domestic laws  to  comply
              with their obligations in terms  of  this  Act.   Concerns
              were raised about the possibility of foreign NGOs  funding
              class actions in different Member States to  advance  non-
              African agendas.


     (d)     Central Organ


          *   It is envisaged that the Central Organ will be established
              through  Article  9(1)(d).   Since  this   represents   an
              important organ, consideration may need  to  be  given  to
              its establishment by the principal  Act  under  Article  5
              and  not  by  the   Assembly   under   Article   9.    The
              relationship between the Central Organ  and  the  Assembly
              of the AU may therefore need to be redefined.
          *   The intended focus of the  Central  Organ  is  safety  and
              security.  The extension of the role of the Central  Organ
              to  all  matters  of  human  security  may  need   to   be
              considered.
          *   The relationship amongst the Central Organ, the Conference
              on Security, Stability,  Development  and  Cooperation  in
              Africa (CSSDCA), the Conflict  Management  Centre  of  the
              OAU and the UN needs clarification.


     (e)     International Intervention


          *   Whilst the need for intervention as envisaged by  the  Act
              is acknowledged, it may be necessary to  ensure  that  any
              form of  intervention  occurs  within  the  parameters  of
              public international law.
          *   South  African  representatives  to  the  AU  need  to  be
              vigilant in ensuring  that  the  AU  does  not  adopt  any
              provisions that will impact negatively on  South  Africa's
              international obligations.  An  audit  of  South  Africa's
              international obligations is envisaged.


     (f)     Organs of the AU


          *   Whilst the Act provides for the establishment  of  various
              organs, specific time frames for their  establishment  are
              not set. The  lack  of  defined  time  frames  may  impact
              negatively on the implementation of the Act.
          *   The Act is also unclear regarding the separate powers  and
              functions of the different organs.  There  is  overlap  in
              authority of some organs  thus  making  it  unclear  which
              organs would have jurisdiction over what matters.


     3. Economic Considerations
     (a)     General


          *   The AU envisages accelerating efforts to promote  economic
              integration in Africa.  This raises the central  issue  of
              the   appropriate   strategy   for   promoting    economic
              integration.  The conventional trade integration  approach
              focuses on removal of tariff and regulatory  barriers  and
              moving from Free  Trade  Area  to  Customs  Union,  common
              market  and  economic  union.   This  approach  has   been
              criticised as inappropriate to  developing  countries  and
              regions where  major  trade  barriers  often  derive  from
              underdeveloped  production   structures   and   inadequate
              infrastructure.   Premature  moves  to  "high"  levels  of
              trade integration, e.g. a continent-  wide  customs  union
              will therefore not necessarily  contribute  to  addressing
              key challenges facing the continent.
          *   Economic regeneration of Africa requires that priority  be
              given to development  integration,  which  is  not  solely
              focused on conventional trade integration.   This  implies
              combining  efforts  to  promote  trade  integration   with
              sectoral   cooperation   in   key   infrastructural    and
              productive  sectors.   Addressing  developmental  backlogs
              therefore serves as  the  basis  for  promoting  effective
              trade integration.  This  will  also  emphasise  political
              cooperation at  an  earlier  stage  than  in  conventional
              trade integration programmes.
          *   Tensions  exist  between  these  two  paradigms,  both  in
              existing sub-regional programmes and in  the  Constitutive
              Act.
          *   The terms of reference regarding the Economic, Social  and
              Cultural  Council  (ECOSOC)  in  the  African  Union,  its
              relationship with sub-regional  economic  bodies  and  the
              specialised technical committees needs to be clarified.


     (b)      Economic  integration,  infrastructural  development   and
          sectoral cooperation


          *    The  case  for  a  developmental  approach  to  promoting
              economic integration in Africa  arises  from  the  reality
              that many  of  the  major  barriers  to  promoting  intra-
              regional  trade  arise  not  from  tariff  and  regulatory
              barriers but  from  underdeveloped  production  structures
              and inadequate infrastructure.
          *   The integration strategy needs to build on what exists  in
              sub-regions  and  should  strive   to   improve   sectoral
              cooperation as well as capacity building  in  sub-regional
              organisations.   Developments  such  as  the   forthcoming
              Cotonou Economic Partnership negotiations will  underscore
              the  need  to  develop  strategies  for  trade   relations
              between sub-regions: options include a continental FTA  or
              preferential agreements between sub-regions.
          *      Infrastructural     development     like     transport,
              telecommunications and information technology may need  to
              be prioritised.  NEPAD may be  considered  an  appropriate
              programme in this regard.
          *   African countries have similar  trade  patterns  based  on
              exports of primary products to the  North.   Intra-African
              trade is  therefore  very  limited.   The  European  Union
              envisages  reciprocal  trade  agreements  between  African
              regions and Northern trading blocs.  These could  lead  to
              a situation where South Africa finds  tself  trading  with
              African countries outside the SADC region on  worse  terms
              than e.g.  the  European  Union.   Hence,  integration  in
              Africa  is  not  happening  in   a   vacuum:   There   are
              developments at  global  level  that  are  re-shaping  the
              terrain.
          *    It  may  also  be  important  to  define   the   economic
              partnerships that are likely to benefit Africa.   Engaging
              institutions  like  the  G7  in  order  to  maximise   the
              benefits of globalisation also needs to be addressed.   It
              is therefore necessary to think strategically in order  to
              face the challenge of globalisation.
          *   It may be necessary to address the causes and consequences
              of cross-border  migration,  particularly  of  labour  and
              goods.


     (c)     Monetary Union


     Regarding the establishment of an African Central Bank, if this  is
     read as meaning monetary union, this may not  be  feasible  in  the
     short term given that Africa has more than 50 different  currencies
     with very unequal values.


          *   The establishment of an African Central Bank should not be
              viewed as  an  attempt  to  prematurely  promote  monetary
              union.
          *    Continent-wide  monetary  union  may  be   considered   a
              legitimate long-term objective.
          *   Consideration may need to be given  to  co-operation  with
              existing monetary union  arrangements,  such  as  that  in
              West Africa and the common  monetary  area  between  South
              Africa, Lesotho, Swaziland and Namibia.
          *   A focus on promoting  cooperation  between  central  banks
              similar to the Finance and Investment Sector  Coordinating
              Unit of SADC could be a model for early activity.


          4.  Resource Considerations


          The  financial  and  human  resource  implications   of   the
          establishment  and  sustainability  of  the  AU  need  to  be
          determined.


          *   Detailed cost analyses for each organ of the AU, including
              infrastructure,  personnel  and  operational  costs  would
              need to be developed.
          *   Sources and sustainability of funding  would  need  to  be
              determined.
          *   One of the reasons for the financial  constraints  of  the
              OAU may be the inability of some member countries  to  pay
              their membership fees. This may  be  largely  due  to  the
              fact that member  countries  also  hold  membership  of  a
              number of other organisations,  which  require  membership
              fees. Article 23  of  the  AU  Constitutive  Act  aims  to
              regulate this.


     5. Pan-African Parliament


              To give effect to the provisions under  Article  3(g)  and
              4(c) of the Constitutive Act,  the  establishment  of  the
              Pan-African Parliament may need  to  be  prioritised.   To
              this  end,  the  Presiding  Officers  could   engage   the
              Executive to establish a role for African  Parliaments  in
              the African Summit in July 2002.  Parliaments  would  need
              to determine the appropriate approaches and mechanisms  to
              foster  public  awareness  and  engagement   with   issues
              concerning the establishment of the African Union and  the
              implementation of the Constitutive Act.


              In terms of the Protocol, the following  may  need  to  be
              considered:


          *   Article 2 of the  Protocol  states  that  the  Pan-African
              Parliament is established  by  Member  States.   This  may
              conflict with  the  provisions  under  Article  5  of  the
              Constitutive Act and Article 7 of the Abuja Treaty,  which
              establish the Pan-African Parliament as one of the  organs
              of the AU and of the OAU respectively.  Article 5  of  the
              Constitutive Act can be considered as the legal basis  for
              the establishment of the Pan-African Parliament.
          *   In terms of Article 4, 5 Members, at least 1 of whom  must
              be a woman, shall represent each Member State in the  Pan-
              African Parliament.  Compliance with  this  provision  may
              need to be monitored since many  African  Parliaments  are
              male dominated.
          *   Under Article  5(2),  the  Assembly  shall  determine  the
              beginning of the first term of office of  the  Pan-African
              Parliament.  This may impact on the  independence  of  the
              Pan-African Parliament since the Assembly  may  delay  the
              first sitting if it is not in the  best  interest  of  the
              Assembly.
          *    Notwithstanding  the  provisions  under  Article   33(2),
              consideration may need to be given as to whether the  Pan-
              African Parliament Protocol should be  ratified  in  terms
              of Article 7 of the Abuja Treaty  or  Article  17  of  the
              Constitutive Act.
          *   The Protocol may need to include a provision defining  the
              relationship  between  the  Pan-African   Parliament   and
              national and regional Parliaments of Member States.


     The following consideration is raised in terms of the  Draft  Rules
     of Procedure of the Assembly of the Union with regards to the  Pan-
     African Parliament:


          *   Rule 19  refers  to  amongst  others,  attendance  of  the
              President of the Pan-African Parliament  at  the  sittings
              of the Assembly.   The  nature  of  participation  of  the
              President at such sittings would need to be clarified.


     Part 3. Progress on recommendations of 3rd report


          *   The Speaker has requested parties to  nominate  additional
              Members to serve on the Working Group.
          *   The Minister of  Foreign  Affairs  has  signed  the  "Pan-
              African Protocol" -Protocol  to  the  Treaty  Establishing
              the  African  Economic  Community  Relating  to  the  Pan-
              African  Parliament.   According  to  the  Department   of
              Foreign  Affairs,  the  Protocol   will   be   tabled   in
              Parliament for ratification once  Cabinet  has  considered
              it.
          *   The Speaker has communicated with the Secretary-General of
              the SADC Parliamentary Forum  with  a  view  to  promoting
              early ratification of the Protocol by the members of  SADC
              and of other Parliamentary formations on the continent.
          *   The Speaker regularly engages with the Executive regarding
              the  nature  of  Parliamentary  participation  during  the
              Inaugural Summit of the African Union in July  2002.   The
              Working  Group  will  meet  with   the   Inter-ministerial
              Committee on the African Union before  the  AU  Summit  in
              July 2002.
          *   The Speaker has written to the Minister of Foreign Affairs
              with a view to establishing the response of the  Executive
              to the second reports, dated  27  February  2001,  of  the
              Portfolio Committee on  Foreign  Affairs  and  the  Select
              Committee  on  Economic  Affairs,  respectively,  on   the
              Constitutive Act of the African Union.


     Part 4. Recommendations


     F. Recommendations


     It is recommended that:


          *   Parliament mandates the Presiding Officers  to  convene  a
              meeting of African Parliamentarians on 27-28 June 2002.
          *    Parliament  identifies  the  appropriate  mechanisms   to
              facilitate its interaction with  the  Executive  regarding
              the AU.
          *   The Working Group establishes  strategies  and  mechanisms
              for  effective  engagement  with  Members  of  Parliament,
              media and civil society on matters relating to the AU.
          *    Parliament  embarks  on  an  audit  of   South   Africa's
              international   obligations    in    terms    of    public
              international law.
          *   The Working Group, on behalf  of  Parliament,  commissions
              research on matters relevant to the AU  and  NEPAD.   This
              may include:


              #    The role of the African  Charter  and  Commission  on
                   Human and Peoples' Rights in relation to the  African
                   Union.
              #    A comparative analysis  of  rules  of  procedures  of
                   multinational legislatures and parliamentary forums.
              #    Oversight  of  multinational  institutions/structures
                   by national parliaments.
              #    Economic integration in  Africa  -  mapping  the  way
                   forward for the AU: Identification  and  analysis  of
                   models of economic integration and  proposals  on  an
                   appropriate strategy for Africa.
              #     Sovereignty  and  the  full  implementation  of  the
                   African  Union:  Constitutional,  legal  and   policy
                   questions.
              #     Developing  a  comprehensive  strategy  for   public
                   awareness   and   civil   society   involvement    in
                   Parliament's engagement with matters related  to  the
                   implementation of the Constitutive Act of the African
                   Union and the processes for the full establishment of
                   the African Union.
              #    The African Court vis-à-vis national judiciaries  and
                   constitutions.

Report to be considered.

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Social Development on the Probation Services Amendment Bill [B 18 - 2002] (National Assembly - sec 75), dated 15 May 2002:

   The Portfolio Committee on Social Development, having considered the subject of the Probation Services Amendment Bill [B 18 - 2002] (National Assembly - sec 75), referred to it and classified by the Joint Tagging Mechanism as a section 75 Bill, reports the Bill with an amendment [B 18A - 2002].

2. Report of the Portfolio Committee on Agriculture and Land Affairs on the KwaZulu Cane Growers’ Association Act Repeal Bill [B 48 - 2001] (National Assembly - sec 75), dated 14 May 2002:

   The Portfolio Committee on Agriculture and Land Affairs, having considered the subject of the KwaZulu Cane Growers’ Association Act Repeal Bill [B 48 - 2001] (National Assembly - sec 75), referred to it and classified by the Joint Tagging Mechanism as a section 75 Bill, reports the Bill with amendments [B 48A - 2001].

   The Committee further reports that in the course of its deliberations on the Bill, it took a resolution to invite the KwaZulu-Natal Cane Growers’ Association and the South African Cane Growers (whose membership includes members of the aforementioned Association) to appear before the Committee. It transpired that there was disagreement over the balance of the money collected as levies, as well as on the purposes for which the levies were used. Despite several attempts to obtain full information on the accumulated assets of the Association, the Department of Agriculture did not succeed.

   The Committee therefore recommends that the National Assembly request the Auditor-General to conduct a full audit of the financial books and assets of the KwaZulu-Natal Cane Growers’ Association pertaining to the levies collected by the Association in terms of the KwaZulu-Cane Growers’ Association Act, 1981 (Act No. 12 of 1981), and that a report be presented to the House.

 Report to be considered.

1. Report of the Portfolio Committee on Sport and Recreation on study tour to Eastern Cape, dated 30 October 2001:

 INDEX


 Item   Paragraph


 Introduction A


 Delegation   B


 Areas and facilities visited  C


 Welcoming by MEC  D


 Visits to facilities and meetings
 held with sports bodies and communities  E


 Overall observation     F


 Conclusion   G


 A.  Introduction


     The delegation visited the Eastern Cape from 3  to  6  March  2001.
     The purpose of the visit was to assess progress by  the  provincial
     department with regard to development and transformation  of  sport
     in South Africa. The Committee wanted to  understand  the  problems
     and challenges that are experienced by the province. The  Committee
     also  wanted  to  assess  the  link  and  congruence  between   the
     programme of the provincial department of  sport  to  the  national
     vision on sport and recreation.


     The  delegation  representing  the   Committee   focused   on   the
     following:


     1. Availability of sports  facilities  to  all  communities,  which
          include the following:


          (a) Provision of sports facilities to  communities  that  were
              previously disadvantaged.


          (b) Accessibility of sports  facilities  to  all  and  in  all
              areas.


          (c)  Sensitivity  to  disabled  people  when  building  sports
              facilities.


          (d) The standard of facilities within different communities.


          (e) The ownership of sport facilities by communities.


          (f) The maintenance of facilities by both  the  community  and
              the municipalities.


     2. Accessibility of all sports to all  communities,  including  the
          following:


          (a) The integration of all to sports, irrespective of race and
              gender.


          (b)  The  representativity  of  the  previously  disadvantaged
              people in the provincial and regional teams  of  different
              sports codes.


          (c) The back  up  support  that  is  given  to  the  financial
              disadvantaged  sports  people   who   are   selected   for
              participation   in   the   national   and    international
              tournaments.


          (d) The promotion of the disabled  people's  participation  on
              sport and recreation activities.
          (e) The recognition of deserving sports people as role  models
              and  use  of  such  people  as  human  resources  by   the
              communities.


          (f) The utilisation of sports  people  by  the  community  and
              various structures in the programme of Nation Building.


     3. Sport Development Programmmes that are run in the province.


     4.  The  availability,  accessibility  and  impact  of  the  sports
          Academies.


     5.  The  relationship  between  the  provincial   department,   the
          Standing  Committee  on  Sport  and   the   local   government
          structures.
     6. Accessibility of all sports to all  communities,  including  the
          following:


          (a) The relationship between the government  departments,  the
              sports bodies and other role players in sport such as  the
              business sector.
          (b) The role of the community on sports issues.


          (c)  Challenges  that  are  encountered  by  the  Sports   and
              Recreation Departments.


 B.     Delegation


     The delegation consisted of Ms  R  Bhengu  (chairperson),  Mr  Z  I
     Ncinane, Mr C T Frolick, Mr J T Louw  and  Mr  L  Myoli,  Committee
     Secretary.


 C.     Areas and facilities visited


     The delegation visited the following areas:


     Debenek Sport Facility
     Port Elizabeth Sport Academy
     Kariga Game Reserve
     Mqanduli
     Ngqeleni
     KuTsolo
     Idutywa
     Park Side Sports Field
     Schoeman Sport Ground
     Duncan Village
     Orlando Stadium in Mdantsane
     Sisa Dukashe Stadium
     High Way


 D.     Welcoming by MEC


     The delegation was met and welcomed, at the Provincial  Legislative
     Building, by the MEC  for  Sport,  Arts  and  Culture,  Mrs  Nosimo
     Balindlela, and officials of the department.


     The meeting was opened with  a  prayer,  after  which  Mr  Nkwinti,
     Director  for  Sport  in  the   Department,   also   welcomed   the
     delegation.


     The leader of the delegation, Ms Bhengu, introduced her  delegation
     and proceeded to explain the purpose of the visit.  The  delegation
     was there to:


     1. Ascertain whether provincial programmes are  in  line  with  the
          national vision.


     2. Find out if there were hindrances to the programme.


     3. Find out the progress that  has  been  made  by  the  department
          regarding the provision of sports facilities, particularly  in
          the previously disadvantaged and rural areas.


     4.  Assess  the  level   of   participation   of   the   previously
          disadvantaged people in sports codes that were known to be for
          whites only and what integration programmes were there.


     5.  Assess  how  accessible   sports   facilities   were   to   the
          communities.


     6. Assess the involvement of communities with  sports  matters  and
          community ownership of facilities.


     7. Establish the kind  of  relationship  that  exists  between  the
          three spheres of government regarding sports and recreation in
          the province.
     8. Find out what plans were in place  for  skills  development  and
          capacity  building  of  sport  managers,  administrators   and
          players.


     She also added  that  the  delegation  intended  to  interact  with
     communities and structures, so as to get a feel  of  the  level  of
     utilisation of the facilities and protection of facilities  by  the
     community from being vandalised.


     The delegation was then briefed by the MEC  on  activities  of  her
     department. These included:


     (a)     The second consultative meeting, which was scheduled for  9
          March 2000. The  aim  of  that  consultative  meeting  was  to
          culminate a  process  designed  to  develop  a  plan  for  the
          province.


     (b)     The Eastern Cape sports  indaba/forum  that  was  scheduled
          for 8 March 2000.


     (c)     A conference  on  sport  for  disabled  people,  which  was
          scheduled for 4 March 2000.


     The MEC went on to indicate that the province  was  represented  in
     six national events and in world events,  including  softball.  She
     also pointed out  that  although  the  Eastern  Cape  had  produced
     boxing champions, the lack of adequate boxing facilities was  still
     a problem. She also mentioned that there were  disparities  between
     sports associations and provincialisation of sports regions.


     The MEC spoke about the province's international relations and  the
     relations between  the  department  and  other  stakeholders,  i.e.
     USSASA, Eastern Cape Sports Council, PROREC, Eastern  Cape  Amateur
     Boxing Union,  and  the  Sports  Academy  in  Port  Elizabeth.  She
     indicated that the issue of the  South  African  Sports  Commission
     and its relationship with the NSC structures in the  provinces  was
     still being debated in the Eastern  Cape  province.  She  expressed
     the hope that the South African Sports Commission was going to  get
     off the ground in the near future.


     At the conclusion of the session,  the  leader  of  the  delegation
     expressed her appreciation for the  existence  of  the  study  tour
     programme and the ability  of  the  department  to  coordinate  the
     visit  and  creation  of  conditions  conducive  for  carrying  the
     programme forward.


 E.     Visits to sports facilities


     1. Debenek Sports Facility


          The delegation met with community  representatives  under  the
          leadership of Rev D D Ngcuka, at the Debenek Sports  Facility.
          Also present in the meeting was the provincial chairperson  of
          the  standing  committee  on  Sport,  Arts  and  Culture,   Mr
          Mazosiwe, and departmental officials.


          The  facility  was  built  at  Debe  Valley.  Because  of  its
          centrality, an extensive consultative process involving the 26
          surrounding communities was done prior to the building of  the
          facility. The facility  is  being  utilised  by  26  villages.
          Although the  facility  is  incomplete,  the  communities  who
          attended the meeting stated that the MEC had committed herself
          to ensuring that the facility was completed.


          The discussions in the meeting included:


          (a) The expression by  the  community  of  the  high  rate  of
              unemployment in the area.


          (b) The lack of understanding  by  the  community  on  who  is
              responsible for the maintenance of  the  facility  between
              the three spheres of government, as well as the  situation
              of   rural   areas   outside   the   boundaries   of   the
              municipality. It was however impressing  to  observe  that
              the community in  spite  of  very  limited  resources  was
              actually looking after the  facility.  This  facility  was
              the best in the province in terms of cleanliness, with  no
              vandalism whatsoever.


          (c) The commitment made by the Border Cricket Region and other
              codes in helping the community by cutting the grass.


          (d) The lack of co-operation by the Alice Region in as far  as
              the usage of the facility for community events other  than
              sport. An example of the  AIDS  day  was  made  where  the
              Alice Region had problems in  allowing  the  community  to
              use the facility for the AIDS education campaign.


          (e) The community praised the department of sport in Bisho for
              its efforts in building the capacity of the community  for
              the maintenance of the facilities.


          (f) The community expressed that the facility has  contributed
              positively  in  making  the  youth  from  the  surrounding
              villages  to  spend  their  time  constructively.  Mothers
              pointed out that children who are involved in  sport  have
              very little opportunities of getting involved in  criminal
              activities. Women who attended the  meeting  also  praised
              adult members of the community  who  avail  themselves  to
              train and coach the youth in sports.
          The meeting ended with the leader of the  delegation  thanking
          the community for its warm reception and for the fact that the
          facility was not vandalised as in some  other  townships.  She
          pleaded  with  the  community  to  continue  co-operating  and
          liaising with the department and requesting the department  to
          assist where possible.


     2. Port Elizabeth Sport Academy


          The  delegation  held  an  informal  meeting  at  Holiday  Inn
          Summerstrand in Port Elizabeth with Dr R  Stretcher,  Director
          of the Sport Academy in Port Elizabeth. This academy  is  said
          to be the initiative of the University of Port Elizabeth.


          The  delegation  was  informed  that  a  delegation  from  the
          University of Port Elizabeth had visited Australia and brought
          back a model of a sport academy, which  was  approved  by  the
          NSC. The delegation was also informed that Makhaya  Ntini  and
          Mark Boucher, both cricketers from the Eastern Cape, who  were
          now playing for the national team, represented the success  of
          the sport academy.


          The problems mentioned in the meeting by Dr R  Stretcher  were
          centred on funding, which had put the development programme in
          jeopardy. One of the problems around funding was the fact that
          it was not consistent, resulting in the academy  being  unable
          to plan for programmes.


          Dr  Stretcher  informed  the  delegation   that   the   sports
          federations supplied  the  academy  with  talented  previously
          disadvantaged sports  persons.  It  was  also  mentioned  that
          sports development progammes of the academy were intensive and
          residential. Fees for trainees with a disadvantaged background
          were absorbed by the sports academy.


          On the following day, the delegation held a meeting  with  the
          representatives of the  provincial  2006  Bid  Committee,  the
          Sports Council, the NSC and USSASA. Issues  of  discussion  in
          this meeting was sports in general including:


          (a) The 2006 Bid, particularly the support of the bid  in  the
              province.


          (b) The Sport Academy, particularly the supply of trainees  to
              the academy and the impact of the academy on the issue  of
              skills development as well  as  the  relationship  between
              the sports federations and the Sport Academy.


          (c)  The  relationship  between  the  sports  bodies  and  the
              provincial department of sport.


          In this meeting the Sports Council addressed the thorny  issue
          of the Sport Academy and the commercialisation of  sport.  The
          council called for a review of how the academy  was  run.  The
          council also pointed out  that  insufficient  funding  of  the
          Sports Academy was creating a problem for the  Sports  Academy
          not to reach out to the intended target group  of  development
          programmes. The Sports Council representatives went on to  say
          that most of the trainees in the Sports Academy were those who
          could afford to pay.


          The situation presented was that the  objectives  of  building
          the capacity and the development of skills of  the  previously
          disadvantaged people could not be realised under  the  current
          situation within the Sport Academy.


          The Committee was urged  to  intervene,  particularly  on  the
          issue of selection panels for channeling  the  talented  sport
          people to the  Sport  Academy.  It  was  also  argued  by  the
          representatives of sports federations  that  the  municipality
          should not charge exorbitant funds to  local  clubs,  who  are
          financially weak, for the use of facilities.  This  issue  was
          mentioned within  the  context  of  making  sports  facilities
          accessible to communities.


          The delegation identified that some of the  issues  raised  in
          the meeting were actually related to  a  lack  of  coordinated
          efforts by different stakeholders around sports  issues.  Most
          of the issues raised did not need intervention  by  structures
          outside the region.  The  meeting  was  then  advised  by  the
          delegation to open channels of communication between different
          sports bodies and with the government departments dealing with
          sports, including the local government.


          The delegation however promised to  raise  the  issue  of  the
          sport academy with the MEC for Sport,  Arts  and  Culture  and
          also with  the  South  African  Sports  Commission,  once  the
          Commission is up and running. This was going  to  be  done  in
          order to ensure that the objectives of the Sports Academy  are
          actually realised.


          The delegation felt that the whole Portfolio  Committee  would
          need a special session with the Chief Executive Officer of the
          South African Sports Commission  where  the  issue  of  Sports
          Academies would be discussed. Included in the discussion would
          be:
          *   The target group for the existing academies.


          *   The funding for the academies.


          *    The  involvement  of  local  sports  structure  and   the
              community within which the academy is located.


          *   The impact made by the sport academies in as far as skills
              development and breeding of competent  sports  people  are
              concerned.


          The issue of lack of support by the Department of Education in
          relation to school sport was raised. One of  the  concerns  on
          this issue was the problem of not knowing which department  is
          the custodian of school sport between the Department of Sport,
          Art and  Culture  and  the  Department  of  Education.  USSASA
          mentioned that the current situation leaves USSASA not knowing
          which of the two departments should be approached for problems
          affecting school sports.
          The leader of the delegation reported to the meeting that  the
          Portfolio Committee was planning to invite the  national  body
          of USSASA to brief the Portfolio Committee on  the  programmes
          of USSASA and problems that are  experienced  by  USSASA.  She
          then informed the meeting that the Portfolio  Committee  would
          then analise the information presented by the national body of
          USSASA against the information gathered during study tours  to
          various   provinces.   The   Committee   would    then    make
          recommendations  to  the  national  Department  of  Sport  and
          Recreation and also to the relevant sports bodies.


          The meeting ended with the leader of the delegation responding
          to issues raised and addressing the meeting on the legislation
          which were in the pipeline, including what  those  legislation
          aimed to address.


          The meeting was asked by the leader of the delegation to  look
          on the  issue  of  establishing  exchange  programmes  between
          provinces for the purpose of learning from  one  another.  She
          mentioned that it is not only the foreign countries that could
          provide us with answers to our problems, some answers could be
          found from other provinces in South Africa  as  weaknesses  of
          one province could be the strengths of another province.


     3. Kariga (in Port Alfred near Grahamstown)


          On Saturday the delegation visited  the  Kariga  Game  Reserve
          where a workshop on sport for the disabled  people  was  held.
          The MEC for Sport, Arts and Culture  together  with  officials
          from her department were part of the workshop. It became clear
          to the delegation as to why this workshop was held  in  Kariga
          Game Reserve, as the facility was accessible to the  disabled,
          more especially those who were physically challenged.


          The delegation did not stay long in the workshop to understand
          issues  that  were  being  discussed  at  the  workshop.   The
          delegation was however satisfied by the fact that Eastern Cape
          was taking  sports  for  disabled  people  seriously  and  was
          engaging  the  disabled  people  as   full   participants   in
          workshops. This was seen as a very important aspect of  making
          sport accessible to all. What was also  remarkable  about  the
          workshop  was  that  the  disabled  people  were  representing
          themselves, unlike the usual trend where those affected by the
          problem would be represented by people who would speak from  a
          perceived need instead of a felt need.


          This was seen by the  delegation  as  a  strength  that  other
          provinces could learn from.


          The leader  of  the  delegation  addressed  the  workshop  and
          expressed the joy of the delegation related to  the  workshop.
          She also encouraged the participants to claim  their  rightful
          positions as equal partners in the society. She also mentioned
          that the President of the country, Mr Thabo Mbeki, was  taking
          the needs of the disabled people  seriously.  The  sports  for
          disabled people were a special project to the  President,  and
          therefore all of us have no other choice but to make sure that
          it becomes a success. The delegation then left for Umtata.


     4. Botha Sigcawu Building


          The delegation was received and welcomed by Mr Tambodala,  the
          acting regional head of the  Department  of  Sport,  Arts  and
          Culture.  Mr  Tambodala  introduced  the  officials   of   the
          department, and then gave a  brief  overview  of  the  sports-
          related activities of  the  department.  In  his  briefing  he
          mentioned that the region was made of eight  districts,  which
          included nine magisterial districts, meaning that  the  region
          was very big.


          After a briefing by  the  leader  of  the  delegation  on  the
          purpose of the visit and areas  of  focus,  officials  of  the
          department told the delegation that  there  were  basic  sport
          facilities at eMqanduli, eNgqeleni  and  KuTsolo,  which  were
          semi-complete. It was also mentioned that these facilities did
          not have ablution blocks, ticket rooms, security  offices  and
          proper grass. It was reported that there was co-operation with
          relevant transitional rural councils. It  was  also  mentioned
          that there was a facility earmarked for eNgcobo, but that  the
          facility had not been built yet, due to a lack  of  funds  for
          the provision of sport facilities in that financial year.


          Satellite sport academies that are based at Unitra, Fort  Hare
          and  Border  Technikon  were  alluded  to,  though   community
          linkages with these was academies was seen to be not as  sound
          as supposed to be.


          It was however acknowledged that despite structural  problems,
          the relations between the academies  and  some  of  the  sport
          codes - boxing, netball  and  athletics  -  were  said  to  be
          cordial. Money was said to be the main inhibitor  for  use  of
          academy facilities by the intended target group.


          The Committee concluded the session with  an  indication  that
          the visit was not the last one to the province. The leader  of
          the delegation highlighted the legislation that  were  on  the
          pipeline and how those legislation  relate  to  the  situation
          that is found on the ground regarding sport issues.


          The delegation then split into two, the  one  group  going  to
          eNgqeleni and the other to kuTsolo.


     5. Ngqeleni


          The group of the delegation visited a sport facility, which is
          at eNgqeleni and was met by Mr L  Debwa,  a  local  government
          councillor. The facility was in  clean  condition  with  short
          grass. The grass was however not the lawn type  of  grass  and
          therefore not suitable for a sports field. The ground  retains
          water, thereby making it impossible to use the facility for  a
          few days after the rain.  The  RDP  and  the  Premier  jointly
          funded the building of the facility.


          This facility is a multi-purpose facility that could  be  used
          for  soccer  and  rugby.  It  is  however  not  suitable   for
          athletics, hockey and other similar sports,  because  of  this
          type of grass.


          It would be recommended that a suitable  type  be  planted  in
          this facility so as to make it accessible to quite a number of
          sports codes.


     6. KuTsolo


          The local government councillors and members of the  community
          met the group that visited a sports facility at  KuTsolo.  The
          facility was seen to be clean and well looked after and  there
          were no incidents of vandalism. The facility  was  incomplete.
          It was reported to the delegation by the local community  that
          the local youth and local  clubs  utilise  the  facility.  The
          community valued the facility very highly, linking it  to  the
          constructive engagement of youth.


     7. Idutywa


          The delegation made a brief stopover at a facility in  Idutywa
          to see a rugby match between Abahlobo and Comrades, two  local
          teams who were playing to celebrate  a  sponsorship  from  DMJ
          Transport  Services.  The  sponsorship  was  in  the  form  of
          jerseys, track suits, kit bags, and golf T-shirts to Abahlobo.




          The delegation also went to  a  nearby  sport  facility  where
          there was a soccer match played by other two local teams.  The
          facility on which the soccer match was being played, was huge.
          It was however disappointing to witness that this facility was
          not well looked after. The grass was very tall.  Change  rooms
          and toilets were very dirty.  It  was  even  difficult  to  go
          nearer to the pitch because of tall grass.


          It was however remarkable impressive to see the high level  of
          sports activities that were  taking  place  in  the  province.
          There were sports activities in each  and  every  village  the
          delegation passed through. There  were  sports  activities  in
          almost all the facilities the delegation passed through.


     8. Park Side Sports Field in Buffalo Flats


          The delegation visited a sport facility in  Park  Side,  which
          hosted the head quarters of the East London Rugby  Union.  The
          facility was previously  maintained  by  the  old  structures,
          which were racially based - the CMCs. The delegation was  then
          informed that  the  facility  was  now  under  the  Parks  and
          Amenities division of the East  London  municipality.  It  was
          also reported that there was a plan to upgrade the facility at
          a cost of R800 000. The upgrading would include the  extension
          of the field and the provision  of  floodlights  to  make  the
          facility usable at night.


          The problems that  were  mentioned  was  that  the  facility's
          change rooms were not usable due to lack  of  maintenance.  It
          was also mentioned that the facility was over-utilised to  the
          point that school children from a nearby school were only able
          to make use the facility  during  school  hours,  other  times
          being reserved for local clubs.


     9. Schoeman Sports Ground in Buffalo Flats


          This facility was in an impeccable condition. It was  reported
          to the delegation that the East London municipality maintained
          it. The facility had clean change rooms  and  floodlights.  It
          was said that Border  Cricket  used  the  facility  for  their
          development programme.


     10.     Duncan Village


          The delegation visited Lujiza Primary School in Duncan Village
          to  see  a  Presidential  Project  that  is  a   multi-purpose
          facility. It was reported that two schools use  the  facility,
          as the facility is located between them. This facility was  in
          good condition with no vandalism.


     11.     Orlando Stadium in Mdatsane


          This facility is located behind Sisa Dukashe Stadium. It is  a
          massive facility with three netball courts, six tennis courts,
          a clubhouse,  the  caretaker's  house,  a  practice  wall  for
          tennis, and a pump house for an  Olympic-size  swimming  pool,
          change rooms and toilets. The sad thing about this facility is
          that it stands derelict and is being vandalised.


     12.     Sisa Dukashe Stadium


          This is a complete facility, which is used mostly for  soccer.
          This facility is suitable for other codes as well. It is  also
          used for open-air boxing tournaments.


          The problem highlighted there was over-usage of the  facility.
          The delegation was also informed  that  there  were  plans  to
          enlarge the stand  but  problems  were  being  encountered  in
          raising the funds.


          The Committee recommends that, whatever plans exist  that  are
          related to enlarging this facility, such plans  should  viewed
          against the conditions of both the Orlando  Stadium  and  Sisa
          Dukashe stadium so as to arrive at a decision that would avoid
          duplication,  waste  of  limited  resources  and  maintenance-
          related challenges to local municipalities.


     13.     High Way Indoor Facility


          The delegation visited a multi purpose indoor facility,  which
          was built from funds donated  by  Sun  International  and  the
          Sports Trust. It was reported that the facility was  used  for
          volleyball, karate, aerobics and other  social  activities  of
          the  community.  The  facility  was  also  in  an   impeccable
          condition.


          The delegation then drove to Bisho for  a  debriefing  session
          with the department of Sport, Arts and Culture. The  MEC,  Mrs
          Nosimo  Balindlela,  at  her  office,   again   received   the
          delegation. The leader of the delegation shared with  the  MEC
          and officials from  the  department  the  experiences  of  the
          delegation  during  the  study  tour.  Issues  raised  by  the
          communities  particularly  around  the  sport   academy,   the
          custodian department for school sport  were  reported  to  the
          MEC.


          The leader of the delegation expressed the appreciation of the
          delegation for the manner in which the delegation was  treated
          by the MEC and officials of  the  department.  The  fact  that
          there were sports activities in almost all villages  was  also
          appreciated. The leader of the  delegation  pointed  out  that
          there seemed to be problems around the staff complement of the
          department, which could be attributed to  the  fact  that  the
          provincial  department  absorbed  two  structures  with  their
          entire staff, namely the former Ciskei  and  former  Transkei.
          The leader of the delegation asked the  MEC  to  look  at  the
          staff  structure  to  see  whether  there  was  a   need   for
          maintaining it.


 F.     Overall observation


     The Department Sport, Arts and Culture absorbed all the staff  from
     the  former  Ciskei  and  Transkei   departments;   therefore   the
     delegation recommends that a staff audit should be  done  in  order
     to assess what staff positions should be kept in future.


 G.     Conclusion


     The MEC was seen to be on top of sports  issues  and  had  a  clear
     plan of action. Eastern Cape  had  demonstrated  to  the  whole  of
     South  Africa  that  given  the  opportunity,   people   from   the
     disadvantaged communities are capable of  excelling  in  any  sport
     code. This was more visible on the level of  participation  of  the
     black people, particularly in rugby and cricket. The  Eastern  Cape
     was  also   acknowledged   for   its   performance   in   producing
     professional champions in boxing.


     It is recommended that the MEC meet  with  the  sports  federations
     and the NSC to begin with the process of ensuring  that  the  sport
     academy in Port Elizabeth  works  towards  the  attainment  of  the
     initial objectives.


                        TUESDAY, 21 MAY 2002

ANNOUNCEMENTS:

National Assembly:

1. The Speaker:

(1) Message from National Council of Provinces to National Assembly:

     Bill, as amended, passed by National Council  of  Provinces  on  21
     May  2002  and   transmitted   for   consideration   of   Council's
     amendments:


     (i)     Mental Health Care Bill [B 69D - 2001]  (National  Assembly
          - sec 76).


     The amended Bill has been referred to the  Portfolio  Committee  on
     Health  for  a  report  and  recommendations   on   the   Council's
     amendments.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Finance:

 (a)     Annual  Report  of  the  South  African  Reserve  Bank  -  Bank
     Supervision Department for 2001 [RP 10-2002].


 (b)    Government Notice No 483  published  in  Government  Gazette  No
     23330 dated 15 April 2002, Transfers to Local Government, in  terms
     of the Division of Revenue Act, 2002 (Act No 5 of 2002).

1. The Minister of Transport:

 Annual Report and Financial Statements of the  South  African  Commuter
 Corporation Limited for 1999-2000, including the Report of the Auditor-
 General on the Financial Statements for 1999-2000.

1. The Minister of Sport and Recreation:

 Annual Report and Financial  Statements  of  the  South  African  Sport
 Commission for 2000-2001, including the Report of  the  Auditor-General
 on the Financial Statements for 2000-2001.